<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 7, 1999
SECURITIES ACT FILE NO. 333-73265
INVESTMENT COMPANY ACT FILE NO. 811-09245
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-2
[X] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X] PRE-EFFECTIVE AMENDMENT NO. 3
[ ] POST-EFFECTIVE AMENDMENT NO.
AND/OR
[X] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X] AMENDMENT NO. 3
------------------------
AMDOCS AUTOMATIC
COMMON EXCHANGE SECURITY TRUST
(Exact Name of Registrant as Specified in 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, ESQ.
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. [ ]
It is proposed that this filing will become effective when declared
effective pursuant to section 8(c).
If appropriate, check the following box:
[ ] This amendment designates a new effective date for a previously filed
registration statement.
[ ] 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 333- .
------------------------
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES BEING REGISTERED REGISTERED PER UNIT(1) PRICE(1) REGISTRATION FEE(1)(2)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ Trust Automatic Common Exchange
Securities.................................. 11,500,000 $26.78 $307,970,000 $85,616
- ---------------------------------------------------------------------------------------------------------------------------------
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</TABLE>
(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933, as amended, based upon the
average of the high and low prices of the Ordinary Shares on the price of
which the offering price per unit of the Securities will be based as
reported on the New York Stock Exchange on May 3, 1999.
(2) Previously paid.
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.
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<PAGE> 2
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
CROSS-REFERENCE SHEET
(PURSUANT TO RULE 481(a) 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. Cover Pages; Other Offering Information........ Front Cover Page; Underwriting
3. Fee Table and Synopsis......................... Prospectus Summary
4. Financial Highlights........................... Not Applicable
5. Plan of Distribution........................... Front Cover Page; Prospectus Summary;
Underwriting
6. Selling Shareholders........................... Not Applicable
7. Use of Proceeds................................ Prospectus Summary -- The Trust's Investment
Policies; 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..................................... 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..................................... The Trust
19. Control Persons and Principal Holders of
Securities................................... The Trust
20. Investment Advisory and Other Services......... 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> 3
The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell nor does it seek an offer to
buy these securities in any jurisdiction where the offer or sale is not
permitted.
Subject to Completion. Dated June 7, 1999.
10,000,000 Securities
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
$ Trust Automatic Common Exchange Securities (TRACES(TM))
(Subject to exchange into Ordinary Shares of Amdocs Limited)
---------------------
The $ Trust Automatic Common Exchange Securities are a new series
of securities issued by the Amdocs Automatic Common Exchange Security Trust. The
Trust will pay quarterly distributions of $ on each Security. On June
, 2002, the Trust will exchange each Security for either:
- Between 0. and one Ordinary Share of Amdocs Limited, or
- Cash equal to the value of those shares.
The number of shares or amount of cash that will be delivered in exchange
for each Security will be based on the price of the Ordinary Shares during the
twenty business days before June , 2002.
Under the circumstances described in this prospectus, the shares or cash
may be delivered between June , 2002 and September , 2002 instead of
on June , 2002.
This is the first issuance of Securities by the Trust. As a result, there
is currently no public market for the Securities. The Trust will apply to list
the Securities on the New York Stock Exchange under the symbol "AAE".
The Ordinary Shares are currently traded on the New York Stock Exchange
under the symbol "DOX". The last reported sale price of the Ordinary Shares on
the New York Stock Exchange on June 4, 1999, was $ per share. The Company is
not affiliated with the Trust.
The Trust is a newly organized, finite term closed-end investment company.
Shares of this type of fund frequently trade at a discount from net asset value.
This risk is separate from the risk that the Trust's net asset value will fall.
The Trust cannot predict whether the Securities 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 this offering.
This prospectus sets forth information about the Trust that you should know
before investing. You are advised to read this prospectus and to retain it for
future reference. Additional information about the Trust has been filed with the
Securities and Exchange Commission and is available upon written or oral request
and without charge. See "Further Information".
Consider carefully the "risk factors" beginning on page 26 of this
prospectus.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
---------------------
<TABLE>
<CAPTION>
Per Security Total
------------ -----
<S> <C> <C>
Initial Public Offering Price........................ $ $
Sales Load........................................... Not applicable Not applicable
Proceeds to the Trust................................ $ $
</TABLE>
The Underwriters may, under certain circumstances, purchase up to an
additional 1,500,000 Securities from the Trust at the Initial Public Offering
Price.
---------------------
The Underwriters expect to deliver the Securities against payment in New
York, New York on June , 1999.
GOLDMAN, SACHS & CO.
DEUTSCHE BANC ALEX. BROWN
LEHMAN BROTHERS
---------------------
Prospectus dated , 1999.
<PAGE> 4
PROSPECTUS SUMMARY
This summary is not a complete description of the Trust or the Securities.
It does not contain all the information that may be important to you. To
understand this offering fully, you must read this entire prospectus carefully,
including the Risk Factors beginning on page 26.
This prospectus includes a Glossary, beginning on page 36. You should refer
to the Glossary if you wish to understand the terms used in this prospectus in
detail.
THE TRUST
The Trust is a newly organized trust that exists only to offer the
Securities. The Trust's only activities will be to issue the Securities and to
invest in the U.S. Treasury securities and stock purchase contract described in
this prospectus.
THE TRUST'S INVESTMENT OBJECTIVE
The Trust's investment objective is to give the holder of each Security a
quarterly cash distribution of $ and, on June , 2002 (the
"Exchange Date"), between 0. and 1 Ordinary Share (or cash equal to the
value of those shares). The number of shares, or amount of cash, that a holder
will receive in exchange for a single Security will vary, depending on the
average market price of the Ordinary Shares over the twenty business days before
the Exchange Date.
- If the average market price is less than $ but equal to or
greater than $ , the holder of each Security will receive the
number of Ordinary Shares that has a value equal to $ .
- If the average market price is equal to or greater than $ , the
holder of each Security will receive 0. Ordinary Shares.
- If the average market price is less than $ , the holder of each
Security will receive one Ordinary Share.
This formula will be adjusted if the Company takes certain steps that combine,
split or dilute the value of the Ordinary Shares. If this formula would require
the Trust to deliver a fraction of an Ordinary Share to any holder, the Trust
will instead deliver cash equal to the value of that fraction of a share.
Because of this formula, the holders of the Securities will receive part of
any increase in the value of the Ordinary Shares above $ . However, the
holders of the Securities will not receive any increase in the value of the
Ordinary Shares unless that value rises higher than $ . The holders
will bear the entire amount of any decrease in the value of the Ordinary Shares.
For more detail, please see "Investment Objective and Policies".
THE TRUST'S INVESTMENT POLICIES
To achieve its investment objective, the Trust will invest all the proceeds
of the Securities in:
- "Stripped" U.S. Treasury securities that will mature during each quarter
through June , 2002. The Trust will use the payments it receives as
these U.S. Treasury securities mature to pay the quarterly distributions
on the Securities.
- A stock purchase contract (the "Contract") with a shareholder of the
Company (the "Seller"). The Seller will be required to deliver Ordinary
Shares to the Trust on the Exchange Date. Alternatively, the Seller may
choose to deliver the equivalent amount of cash. If the Seller performs
its obligations, the Contract will provide the Trust with the
2
<PAGE> 5
Ordinary Shares or cash that the Trust must deliver to the holders of the
Securities on the Exchange Date.
The Seller has the right to extend the Exchange Date under the Contract to
September , 2002. If the Seller extends the Exchange Date under the
Contract, the Seller will not be required to deliver the Ordinary Shares or cash
under the Contract until September , 2002. However, the Seller can then
accelerate the delivery of shares or cash to any date between June , 2002
and September , 2002. If the Seller extends or accelerates the
Exchange Date under the Contract, the holders of the Securities will not receive
the shares or cash in exchange for the Securities until the extended or
accelerated Exchange Date, and the number of shares or amount of cash would be
calculated as of the extended or accelerated Exchange Date. However, the holders
of the Securities would receive an additional, partial cash distribution on the
Securities for the period of the delay.
In some circumstances, the holders of the Securities may receive cash or
other common equity securities instead of or in addition to the Ordinary Shares.
For more detail, please see "-- The Securities -- Modifications to Delivery
Requirements".
The Seller will pledge collateral to the Trust to secure the Seller's
obligations under the Contract. The collateral will initially be the Ordinary
Shares that the Seller must deliver under the Contract. However, if the Seller
complies with its obligations under the Contract and its pledge, the Seller may
pledge U.S. Treasury securities instead of the Ordinary Shares.
The Trust will not change its investments, even if the value of the
Contract or the Ordinary Shares falls significantly or the financial condition
of the Company suffers. Furthermore, because the Trust is a grantor trust for
purposes of the U.S. federal tax laws, the trustees of the Trust will not have
the power to change the Trust's investments.
For more detail, please see "Investment Objective and Policies".
THE OFFERING
The Trust is offering 10,000,000 Securities to the public at a purchase
price of $ per Security. This price is equal to the last reported sale price
of the Ordinary Shares on the New York Stock Exchange on the date of this
prospectus. The Securities are being offered through Goldman, Sachs & Co.
("Goldman Sachs"), BT Alex. Brown Incorporated and Lehman Brothers Inc. (the
"Underwriters").
In addition, the Trust has granted the Underwriters an option to purchase
up to 1,500,000 additional Securities. These Securities may be used only to
cover over-allotments. For more detail, please see "Underwriting".
THE SECURITIES
The Trust will pass through to the holders of the Securities all payments
that it receives on the U.S. Treasury securities that it purchases with the
proceeds of the Securities. Similarly, the Trust will deliver to the holders of
the Securities all Ordinary Shares, cash or other securities, that it receives
from the Seller under the Contract.
DISTRIBUTIONS. The holder of each Security will receive a distribution of
$ each quarter. The Trust will pay these distributions on each March
, June , September and December . However, if the Trust
would be required to make a distribution on a Saturday, Sunday or legal holiday,
the Trust will pay that distribution on the next business day instead. The Trust
will make each payment to the holder of the Security whose name appears in the
Trust's books on the business day before the applicable payment date. The first
distribution will be payable on September , 1999 to holders of record on
the previous business day.
3
<PAGE> 6
The only source of cash for the quarterly distributions on the Securities
will be the cash received from the U.S. Treasury securities purchased by the
Trust with the proceeds of the Securities. Part of each year's distributions on
the Securities will be treated as a return of capital under the U.S. federal
income tax laws. For more detail, please see "Description of Securities --
Distributions -- Tax Treatment of Distributions" and "Certain Federal Income Tax
Considerations".
EXCHANGE FOR ORDINARY SHARES. On the Exchange Date, each Security will be
exchanged automatically for between 0. Ordinary Shares and one Ordinary
Share, as determined by the formula described under "-- The Trust's Investment
Objective". However, if the Seller delivers cash instead of Ordinary Shares
under the Contract, the holders of the Securities will receive cash instead of
the Ordinary Shares. The amount of cash will be based on the average market
price of the Ordinary Shares during the twenty business days before the cash is
delivered. The number of Ordinary Shares or amount of cash that will be
delivered in exchange for the Securities will be adjusted if the Company takes
certain actions that have the effect of combining, splitting or diluting the
value of the Ordinary Shares.
MODIFICATIONS TO DELIVERY REQUIREMENTS. In some circumstances, the holders
of the Securities may receive cash, other common equity securities or other
property instead of or in addition to the Ordinary Shares, or the holders of the
Securities may receive the Ordinary Shares, cash or other securities on a date
other than June , 2002:
- The Exchange Date for the shares and cash may be extended and then
accelerated by the Seller under the Contract as described above. In this
case, the holders of the Securities would not receive the shares and
cash until the extended or accelerated date, but the holders would
receive an additional, partial cash distribution on the Securities for
the period of delay. For further detail, please see "Investment
Objective and Policies -- The Contract -- Extension and Acceleration of
the Exchange Date at the Option of the Seller".
- The Seller may elect to deliver cash instead of Ordinary Shares under
the Contract, including in connection with a "rollover offering" -- that
is, an offering of securities that refinances the Securities. If the
Seller completes a rollover offering, the Seller will deliver the cash
under the Contract by the fifth business day after completing that
offering. In this case, the holders of the Securities would not receive
the cash payable on exchange of the Securities until the Seller pays it
to the Trust. For further detail, please see "Investment Objective and
Policies -- The Contract -- Cash Settlement; Rollover Offerings".
- If the Company merges or amalgamates with another entity, the Company is
liquidated, or certain similar events occur, including a transfer in
which substantially all of the Company's shareholders exchange their
Ordinary Shares for cash or other consideration, holders of Securities
may receive other common equity securities, cash or other property equal
to the value of the other consideration received by the Company's
shareholders in that transaction, rather than Ordinary Shares. If at
least 30% of the consideration received by the Company's shareholders in
the transaction consists of cash or cash equivalents, then the Seller
will be required to deliver any consideration other than common equity
securities to the Trust within five business days after the Seller
receives that consideration. On the Exchange Date, the Seller would be
required to deliver the common equity securities included in the
transaction consideration. In this case, the holders of the Securities
will receive cash or other property representing part of the transaction
consideration on a date before the scheduled Exchange Date, and common
equity securities representing the rest of the transaction consideration
on the Exchange Date.
Instead of delivering any non-cash consideration at the time of the
transaction, the Seller may choose to deliver cash equal to the value of
those assets. Similarly, instead of delivering the common equity
securities on the Exchange Date, the Seller may choose to deliver cash
equal to the value of those securities.
4
<PAGE> 7
For further detail, please see "Investment Objective and Policies -- The
Contract -- Reorganization Events".
- If the Company declares a dividend consisting of the shares of common
stock of another issuer, the Seller will be required to deliver the
shares received in the dividend, together with the Ordinary Shares. In
this case, the holders of Securities will receive both Ordinary Shares
and shares of the other issuer, or cash equal to the value of those
shares. For further detail, please see "Investment Objective and
Policies -- The Contract -- Spin-Off Distributions".
- If the Seller defaults under the Contract or its collateral
arrangements, the Contract would be accelerated. In this case, the
holder of each Security would then receive an early distribution of the
Ordinary Shares, cash or other common equity securities, instead of
receiving the Ordinary Shares, cash or other securities that would
otherwise be delivered on the Exchange Date. For further detail, please
see "Investment Objective and Policies -- The Contract -- Collateral
Arrangements; Acceleration Upon Default By the Seller".
For more detail, please see "Investment Objective and Policies".
VOTING RIGHTS. Holders will have the right to vote on changes to the terms
of the Securities, on the replacement of the trustees of the Trust and on other
matters affecting the Trust, as described below under the caption "Description
of Securities". However, holders of the Securities will not have any voting
rights with respect to the Ordinary Shares until they actually receive Ordinary
Shares in exchange for the Securities. For more detail, please see "Description
of Securities -- Voting".
LISTING. The Trust will apply to list the Securities on the New York Stock
Exchange (the "NYSE") under the symbol "AAE".
THE COMPANY
The Company is a leading provider of product-driven information system
solutions to major telecommunications companies in North America, Europe and
around the world. Its Business Support Systems consist of families of products
designed to meet the mission-critical needs of specific market sectors. It
provides integrated, comprehensive customer care and billing systems for
wireline and wireless network operators and service providers. The Company also
provides customer care and billing systems to companies that offer multiple
service packages, commonly referred to as convergent services, such as local,
long distance, international, data, Internet, Voice Over Internet Protocol,
cellular, personal communications services and paging. In addition, the Company
provides a full-range of directory sales and publishing systems to publishers of
both traditional printed yellow page and white page directories and Internet
directories.
The Company has prepared a prospectus that describes the Company and the
Ordinary Shares (the "Company Prospectus"). The Company Prospectus is attached
as Annex A to this prospectus. The Company is not affiliated with the Trust and
will not receive any of the proceeds from the sale of the Securities.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The Trust will be treated as a grantor trust under the U.S. federal income
tax laws. This means that under these laws, each holder will be treated as if it
owned directly its proportionate share of the assets held by the Trust.
Similarly, income and original issue discount received by the Trust will
generally be treated as income of the holders.
Under the U.S. federal income tax laws, the U.S. Treasury securities held
by the Trust will be treated as having "original issue discount" that the
holders will be required to include in income as the original issue discount
accrues over the term of the U.S. Treasury securities. However, when
5
<PAGE> 8
the Trust actually receives cash on these U.S. Treasury securities, these cash
payments will not be included in the holders' income. Instead, these payments
will reduce the holders' aggregate tax basis in the Securities. A holder will
have taxable gain or loss if the Trust receives cash instead of Ordinary Shares.
Holders should be aware that the Trust's assets could be characterized
differently under the federal income tax laws. Other characterizations could
require holders to include more interest in income than they would under the
analysis outlined above. For more detail, please see "Certain Federal Income Tax
Considerations".
The tax considerations relating to an investment in the Ordinary Shares are
described in the Company Prospectus, which is attached as Annex A to this
prospectus, under the heading "Taxation of Holders of Ordinary Shares".
RISK FACTORS
An investment in the Securities involves risk. Some of the risks of an
investment in the Securities are described under "Risk Factors", beginning on
page 26. These risks include the following:
- The Trust will not dispose of the Contract even if the price of the
Ordinary Shares falls significantly or the financial condition of the
Company suffers. The holders will bear the entire amount of any decrease
in the value of the Ordinary Shares.
- Similarly, the Trust will not dispose of the U.S. Treasury securities
before they mature or the Trust terminates, whichever comes first, even
if their value falls significantly.
- If the price of the Ordinary Shares rises, a holder of a Security will
not receive all of this increase in value. Holders will not receive any
of this increase if the average market price of the Ordinary Shares at
the Exchange Date is below $ . Holders will receive only %
of any increase in the value of the Ordinary Shares over $ . On
the other hand, holders of Securities will bear all of any decrease in
the value of the Ordinary Shares.
- The Company has never paid a dividend on the Ordinary Shares.
Accordingly, the distributions on the Securities will be higher than the
annual dividends paid on the Ordinary Shares in the past year. However,
the distributions on the Securities will remain fixed. As a result, if
the Company were to begin paying dividends on the Ordinary Shares, the
distributions on the Securities may then be lower than the dividends
paid on the Ordinary Shares.
- The number of Ordinary Shares or amount of cash that holders may receive
on the Exchange Date will be adjusted if the Company takes certain
actions, described in this prospectus, that have the effect of
combining, splitting or diluting the value of the Ordinary Shares. The
number of shares to be received by holders may not be adjusted for other
events that may adversely affect the price of the Ordinary Shares, such
as offerings of Ordinary Shares for cash or in connection with
acquisitions.
- The only assets held by the Trust will be the U.S. Treasury securities
and the Contract. An investment in the Trust will be riskier than an
investment in an investment company with diversified investments.
- The trading prices of the Securities in the secondary market will be
directly affected by the trading prices of the Ordinary Shares in the
secondary market. The trading prices of the Ordinary Shares will be
influenced by the Company's operating results and prospects and by
economic, financial and other factors and market conditions. The trading
prices of the Securities will also be affected by fluctuations in
interest rates and other factors that are difficult to predict and
beyond the Trust's control.
6
<PAGE> 9
- The Ordinary Shares are issued by Amdocs Limited, which is a corporation
formed under the laws of the Island of Guernsey. As a result, the rights
of holders of the Ordinary Shares differ from those of holders of most
shares issued by U.S. corporations in ways that may be material. In
addition, holders of the Ordinary Shares are subject to tax
considerations that differ from those applicable to shares issued by
most U.S. corporations. Please refer to the Company Prospectus, which is
attached as Annex A to this prospectus, for further information about
the terms and conditions of the Ordinary shares and the risks and
considerations relating to holding the Ordinary Shares.
- There can be no assurance that a secondary market will develop for the
Securities. If a secondary market does develop, there can be no
assurance that it will provide the holders with liquidity for their
investment or that it will continue for the life of the Securities.
- Holders of the Securities will not be entitled to any rights with
respect to the Ordinary Shares unless they actually receive Ordinary
Shares in exchange for the Securities. For example, holders of
Securities will not be entitled to vote the Ordinary Shares or receive
dividends.
FEES AND EXPENSES
UNDERWRITERS' COMPENSATION. The Seller will compensate the Underwriters
for the offering of the Securities because a significant portion of the proceeds
of the sale of the Securities will be used by the Trust to purchase the Contract
from the Seller. The Underwriting Agreement requires the Seller to pay the
Underwriters $ for each Security sold in the offering.
ORGANIZATIONAL AND OFFERING COSTS. The Trust's organizational costs will
be approximately $10,000. The Trust's costs in connection with the offering of
the Securities will be approximately $ . Goldman Sachs will pay these
organizational and offering costs.
COSTS OF OTHER SERVICE PROVIDERS. At the closing of the offering of the
Securities, Goldman Sachs will make a one-time, up-front payment of $
to the Trust's administrator, custodian, paying agent and trustees as
compensation for their services to the Trust. Goldman Sachs will also pay the
Trust's administrator $ to cover the Trust's anticipated expenses.
Goldman Sachs will pay any ongoing expenses of the Trust above these estimated
amounts and the Seller will reimburse the Trust for any amounts it may pay as
indemnification to the Trust's administrator, custodian, paying agent or any
trustee. If Goldman Sachs or the Seller does not pay these expenses and
obligations, the Trust will have to pay them, and this will reduce the amount
available to distribute to holders.
DISCLOSURE REQUIRED BY THE SECURITIES AND EXCHANGE COMMISSION. The
Securities and Exchange Commission (the "SEC") requires the Trust to present its
expenses in the following format. The SEC has stated that it intends this
requirement to assist investors in understanding the various costs and expenses
that an investor in the Securities will bear directly or indirectly.
Because the Trust will not bear any fees or expenses, investors will not
bear any expenses directly.
<TABLE>
<S> <C>
INVESTOR TRANSACTION EXPENSES
Maximum Sales Load (as a percentage of the Initial Public
Offering Price)........................................... %(a)
Dividend Reinvestment and Cash Purchase Plan Fees........... N/A
ANNUAL EXPENSES (AS A PERCENTAGE OF NET ASSETS)
Management Fees(b).......................................... 0%
Other Expenses(c)........................................... 0%
-----
Total Annual Expenses(c)............................... 0%
=====
</TABLE>
- ---------------
(a) See "Underwriting".
7
<PAGE> 10
(b) See "The Trust". The Trust will be internally managed; consequently, there
will be no separate investment advisory fee paid by the Trust. The Chase
Manhattan Bank will act as the administrator of the Trust.
(c) The organizational costs of the Trust in the amount of $10,000, compensation
payable to the Trust's administrator, custodian, paying agent and trustees
in the amount of $ and approximately $ in costs in
connection with the offering of the Securities will be paid by Goldman
Sachs. Anticipated ongoing expenses of the Trust over the term of the Trust,
estimated to be approximately $ , as well as any unanticipated
operating expenses of the Trust, will also be paid by Goldman Sachs. See
"The Trust -- Expenses of the Trust". Absent these arrangements, the Trust's
"Other Expenses" and "Total Annual Expenses" would be approximately %
of the Trust's net assets.
The SEC also requires that closed-end investment companies present an
illustration of cumulative expenses (both direct and indirect) that an investor
would bear. The example must factor in the applicable Sales Load and must assume
that investors will receive a 5% annual return and will reinvest all
distributions at net asset value. PLEASE NOTE THAT THE ASSUMPTION OF A 5% ANNUAL
RETURN DOES NOT ACCURATELY REFLECT THE TRUST'S TERMS. SEE "INVESTMENT OBJECTIVE
AND POLICIES". ALSO, THE TRUST DOES NOT PERMIT HOLDERS TO REINVEST THE
DISTRIBUTIONS ON THE SECURITIES.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
- ------- ------- -------
<S> <C> <C>
You would bear the following expenses on a $1,000
investment, including the applicable Sales Load of
$ and assuming
(1) no annual expenses and (2) a 5% annual return
throughout the period..................................... $ $
</TABLE>
8
<PAGE> 11
THE TRUST
CREATION AND FORM OF THE TRUST
The Trust is a newly organized New York trust. It is a registered,
non-diversified, closed-end management investment company under the Investment
Company Act of 1940 (the "Investment Company Act"). The Trust was formed on
March 2, 1998 under a trust agreement, which was amended and restated as of June
, 1999 to reflect the terms of this offering (the "Trust Agreement"). The
Trust's address is 85 Broad Street, New York, New York 10004 (telephone no.
(212) 902-1000).
THE TRUSTEES
The Trust will be internally managed by three trustees (the "Trustees").
One of the Trustees will be designated as the Trust's "Managing Trustee". The
Trustees will be responsible for the Trust's general management and operations.
However, the Trustees will not have the power to vary the investments held by
the Trust. See "Investment Objective and Policies". Goldman Sachs will pay each
Trustee, on behalf of the Trust, a one-time, up-front fee to cover the Trustee's
annual fee and anticipated out-of-pocket expenses. The Managing Trustee will
also receive an additional up-front fee for serving in that capacity.
Goldman Sachs, as the Trust's sponsor and the initial holder of the Trust's
Securities, has elected three individuals to serve as the Trustees. Their names,
ages, addresses and titles, their principal occupations during the past five
years and their compensation are as follows:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
DURING
NAME, AGE AND ADDRESS TITLE PAST FIVE YEARS COMPENSATION
- --------------------- ----- -------------------- ------------
<S> <C> <C> <C>
Donald J. Puglisi, 53.............. Managing Trustee Professor of Finance $14,400
Department of Finance University of Delaware
University of Delaware
Newark, DE 19716
William R. Latham III, 54.......... Trustee Professor of Economics $10,800
Department of Economics University of Delaware
University of Delaware
Newark, DE 19716
James B. O'Neill, 59............... Trustee Professor of Economics $10,800
Center for Economic University of Delaware
Education & Entrepreneurship
University of Delaware
Newark, DE 19716
</TABLE>
None of the Trustees is an "interested person" of the Trust as defined in
the Investment Company Act. Furthermore, none of the Trustees is a director,
officer or employee of any Underwriter or of the Trust's administrator, or of
any affiliate of any Underwriter or the Trust's administrator. Each of the
Trustees serves as a trustee of other similar trusts, but none of the Trustees
receives any compensation for serving as a trustee or director of any other
affiliated investment company.
OTHER SERVICE PROVIDERS
ADMINISTRATOR. The Trust's day-to-day affairs will be managed by The Chase
Manhattan Bank as Administrator under an Administration Agreement, dated as of
June , 1999 (the "Administration Agreement"). Under the Administration
Agreement, the Trustees have delegated most of their operational duties to the
Administrator, including the duties to:
- receive and pay invoices for expenses incurred by the Trust;
9
<PAGE> 12
- with the approval of the Trustees, engage legal and other professional
advisors (other than the independent public accountants for the Trust);
- instruct the Trust's paying agent to pay the distributions on the
Securities;
- prepare, mail, file and publish all notices, proxies, reports, tax
returns and other documents for the Trust, or direct the Trust's paying
agent to do so, and keep the Trust's books and records;
- select and engage an independent investment banking firm (after
consultation with the Seller), when the Trust is required to do so under
the Contract;
- at the direction of the Trustees, institute and prosecute legal and
other appropriate proceedings to enforce the Trust's rights and
remedies, but the Administrator is required to do so only if it receives
any indemnity that it requests; and
- make all necessary arrangements for meetings of the Trustees and any
meetings of holders.
The Administrator will not select the independent public accountants for
the Trust. The Administrator also will not sell any of the Trust's assets, or
permit any other agent of the Trust to do so, except when the Contract requires
the Trust to make a delivery, when the Trust is required to sell fractional
shares, when the collateral agreement securing the Contract requires the Trust
to sell collateral posted by the Seller, and when the Trust terminates.
CUSTODIAN. The Trust's assets will be held by The Chase Manhattan Bank as
the Trust's custodian (the "Custodian") under a Custodian Agreement, dated as of
June , 1999 (the "Custodian Agreement").
COLLATERAL AGENT. The Custodian will also act as collateral agent (the
"Collateral Agent") under the collateral agreement among the Collateral Agent,
the Trust and the Seller (the "Collateral Agreement"). The Collateral Agent will
hold a perfected security interest in the Ordinary Shares and U.S. Government
obligations or other assets pledged by the Seller under the Collateral
Agreement. If the Seller defaults under the Contract or the Collateral
Agreement, it will be the Collateral Agent that sells the collateral posted by
the Seller and pays the proceeds of that sale to the Custodian for distribution
to the holders of the Securities.
PAYING AGENT. ChaseMellon Shareholder Services, L.L.C. will serve as the
transfer agent, registrar and paying agent (the "Paying Agent") for the
Securities under a Paying Agent Agreement, dated as of June , 1999 (the
"Paying Agent Agreement").
OTHER INFORMATION CONCERNING THE TRUST'S AGENTS. The Administrator, the
Custodian, the Collateral Agent and the Paying Agent each have the right to
resign at any time on 60 days' notice to the Trust. The Trustees have the right
to remove any of these agents of the Trust at any time on 60 days' notice or
immediately if the agent defaults under the applicable agreement or the
Investment Company Act, suffers a bankruptcy, merges without the Trust's consent
or under several other circumstances. In order to ensure that all the agents of
the Trust are the same financial institution or affiliate financial
institutions, if any of these agents resigns or is removed, the appointment of
each of the other agents automatically terminates. However, no resignation or
removal of any of these agents will be effective until a successor is appointed.
If any of these agents resigns or is removed, the Trustees are required to
appoint a successor with the qualifications specified in the Trust Agreement.
Except for their respective roles as Administrator, Custodian, Collateral
Agent and Paying Agent, The Chase Manhattan Bank and ChaseMellon Shareholder
Services, L.L.C. have no other affiliation with, and are not engaged in any
other transactions with, the Trust.
10
<PAGE> 13
INDEMNIFICATION
The Trust will indemnify each Trustee, the Administrator, the Custodian,
the Collateral Agent and the Paying Agent against any liabilities or costs
(including the costs of defending against any liability) that it may incur in
acting in that capacity, except for willful misfeasance, bad faith, gross
negligence or reckless disregard of their respective duties or where applicable
law prohibits that indemnification. The Seller has agreed to reimburse the Trust
for any amounts it may be required to pay under these indemnifications. If the
Seller does not pay these amounts, the Trust will have to pay them, and this
will reduce the amount available to distribute to holders.
EXPENSES OF THE TRUST
At the closing of the offering of the Securities, Goldman Sachs will pay to
the Administrator, the Custodian, the Collateral Agent and the Paying Agent a
one-time, up-front payment of $ to cover their fees and the Trustees'
compensation described above. Goldman Sachs will also pay the Administrator a
one-time up-front payment of $ to cover the Trust's anticipated
expenses. The anticipated Trust expenses to be paid by the Administrator out of
this amount include, among other things:
- expenses for legal and independent accountants' services;
- costs of printing proxies, Securities certificates and holder reports;
and
- fidelity bond coverage for the Trustee.
In addition, Goldman Sachs will pay the Trust's organizational costs of
approximately $10,000 and estimated costs in connection with the initial
registration and public offering of the Securities in the amount of $ .
The amount that Goldman Sachs will pay to the Administrator to cover the
Trust's ongoing expenses 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. It is possible, however, that the actual
operating expenses of the Trust will be substantially more than this amount.
Goldman Sachs has agreed to pay any excess expenses beyond this amount. If
Goldman Sachs does not pay those excess expenses, the Trust will have to pay
them, and this will reduce the amount available to distribute to holders.
TRUST TERMINATION
The Trust will terminate automatically ten business days after the final
Exchange Date. However, if the Contract is accelerated, then the Trust will
terminate 10 business days after the Ordinary Shares, cash or other common
equity securities required to be delivered under the Contract are delivered. If
the Trust terminates before all the distributions on the Securities have been
paid, the Trust's Administrator will sell any U.S. Treasury securities then held
in the Trust and distribute the proceeds pro rata to the holders of the
Securities, together with the shares or cash delivered under the Contract.
VALUATION FOR INVESTMENT COMPANY ACT PURPOSES
In calculating the Trust's net asset value as required by the Investment
Company Act, the Trust Agreement provides that (i) the U.S. Treasury securities
held by the Trust 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 on the basis of the
bid price received by the Trust for the Contract, or any portion of the Contract
covering not less than 1,000 shares, from an independent broker-dealer firm
unaffiliated with the Trust to be named by the Trustees who is in the business
of
11
<PAGE> 14
making bids on financial instruments similar to the Contract and with comparable
terms, or if such a bid quotation is not available, as determined in good faith
by the Trustees.
INVESTMENT COMPANY ACT EXEMPTION
The SEC has issued an order that exempts the Trust from the requirements of
Section 12(d)(1) of the Investment Company Act that restrict the amount of
Securities that registered investment companies could otherwise own.
Accordingly, registered investment companies may hold Securities in excess of
the limits imposed by Sections 12(d)(1)(A)(i) and 12(d)(1)(C) of the Investment
Company Act. However, any such investment company will be required to vote its
Securities in proportion to the votes of all other holders.
USE OF PROCEEDS
The net proceeds of this offering will be used immediately upon the closing
of this offering to:
- purchase a portfolio of stripped U.S. Treasury securities with face
amounts and maturities corresponding to the quarterly distributions
payable with respect to the Securities; and
- pay the purchase price to the Seller under the Contract.
INVESTMENT OBJECTIVE AND POLICIES
This prospectus includes a Glossary that states the definitions given to
some of the capitalized terms used in this prospectus in the Contract, the Trust
Agreement and the Collateral Agreement. You should refer to the Glossary if you
wish to understand the terms used in this prospectus in detail. Some of these
definitions are summarized in the descriptions below.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS; FUNDAMENTAL POLICIES
The Trust's investment objective is to give the holder of each Security a
quarterly cash distribution of $ and, on the Exchange Date, between
0. and 1 Ordinary Shares (or cash equal to the value of those shares).
The number of shares, or amount of cash, that a holder will receive in exchange
for a single Security will vary, depending on the average market price of the
Ordinary Shares over the twenty business days before the Exchange Date. The
value of the Ordinary Shares (or cash or Marketable Securities received in lieu
of Ordinary Shares) that will be received by a holder under the Securities may
be more or less than the amount the holder paid for the Securities.
To achieve its investment objective, the Trust will use the proceeds of the
Securities to buy and hold:
- a portfolio of stripped U.S. Treasury securities that will mature during
each quarter through June , 2002; and
- the Contract.
The Trust has adopted the following fundamental policies:
- the Trust will invest at least 70% of its total assets in the Contract;
- the Contract may not be disposed of during the term of the Trust;
- the U.S. Treasury securities held by the Trust may not be disposed of
before the earliest of their respective maturities, the occurrence of a
Reorganization Event where the consideration does not include any
Marketable Securities, a default by the Seller under the Contract, and
the termination of the Trust; and
12
<PAGE> 15
- the Trust may not purchase any securities or instruments other than the
U.S. Treasury securities, the Contract and the Ordinary Shares or other
assets received pursuant to the Contract and, for cash management
purposes, the short-term obligations of the U.S. Government described
under " -- Temporary Investments" below; issue any securities or
instruments except for the Securities; make short sales or purchases on
margin; write put or call options; borrow money; underwrite securities;
purchase or sell real estate, commodities or commodities contracts; make
loans (other than the purchase of stripped U.S. Treasury securities as
described in this prospectus); or take any action that would or could
cause the Trust not to be a "grantor trust" for purposes of the U.S.
federal income tax laws.
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
Trust's outstanding Securities. A "majority of the Trust'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.
Because of the foregoing limitations, the Trust's investments will be
concentrated in the information systems industry, which is the industry in which
the Company operates. The Trust is not permitted to purchase restricted
securities.
THE COMPANY AND THE ORDINARY SHARES
The Company is a leading provider of product-driven information system
solutions to major telecommunications companies in North America, Europe and
around the world. Its Business Support Systems consist of families of products
designed to meet the mission-critical needs of specific market sectors. It
provides integrated, comprehensive customer care and billing systems for
wireline and wireless network operators and service providers. The Company also
provides customer care and billing systems to companies that offer multiple
service packages, commonly referred to as convergent services, such as local,
long distance, international, data, Internet, Voice Over Internet Protocol,
cellular, personal communications services and paging. In addition, the Company
provides a full-range of directory sales and publishing systems to publishers of
both traditional printed yellow page and white page directories and Internet
directories.
The Ordinary Shares are traded on the NYSE. The following table sets forth,
for the calendar quarters indicated, the reported high and low sales prices of
the Ordinary Shares on the NYSE Consolidated Tape and the cash dividends per
Ordinary Share. As of June , 1999, there were record holders of the
Ordinary Shares, including The Depository Trust Company, which holds Ordinary
Shares on behalf of an indeterminate number of beneficial owners.
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------ ------ ---------
<S> <C> <C> <C>
Fiscal year 1998:
Third Quarter 1998 (since June 19, 1998).................. $16.50 $14.00 --
Fourth Quarter 1998....................................... $15.50 $ 8.38 --
Fiscal year 1999:
First Quarter 1999........................................ $17.25 $ 8.88 --
Second Quarter 1999....................................... $25.81 $15.06 --
Third Quarter 1999 (through June 4, 1999)................. $28.88 $21.00 --
</TABLE>
Holders will not be entitled to any rights with respect to the Ordinary
Shares (including voting rights and rights to receive dividends or other
distributions on the Ordinary Shares) unless they actually receive Ordinary
Shares in exchange for the Securities.
Please refer to the Company Prospectus, which is attached as Annex A to
this prospectus, which describes the Company and the Ordinary Shares. The
Company is not affiliated with the Trust
13
<PAGE> 16
and will not receive any of the proceeds from the sale of the Securities. The
Company Prospectus relates to an aggregate of 10,000,000 Ordinary Shares (and an
additional aggregate 1,500,000 shares if the Underwriters exercise their
over-allotment option).
THE CONTRACT
The Trust will enter into a Contract with the Seller obligating the Seller
to deliver to the Trust on the Exchange Date a number of Ordinary Shares equal
to the product of the Exchange Rate (as defined below) times the initial number
of Ordinary Shares covered by the Contract. The aggregate initial number of
Ordinary Shares under the Contract will equal the aggregate number of Securities
offered by this prospectus (and will be increased if the Underwriters exercise
their over-allotment option).
The aggregate purchase price that the Trust will pay under the Contract
will be $ . The Trust will pay this purchase price on the closing date
of this offering (or, for the portion of the Contract relating to the Securities
to be sold under the Underwriters' over-allotment option, on the closing date
for the exercise of that option). This purchase price was arrived at by
arm's-length negotiation between the Trust and the Seller, taking into
consideration factors including the price, the expected dividend level and
volatility of the Ordinary Shares, current interest rates, the term of the
Contract, current market volatility generally, the collateral pledged by the
Seller, the value of other similar instruments and the costs and anticipated
proceeds of the offering of the Securities.
The Contract provides that if the Seller delivers Securities to the Trust
for cancellation on or before the Exchange Date, the Seller's obligation to
deliver Ordinary Shares (or cash) will be proportionately reduced. The delivery
of Securities in partial or complete satisfaction of the Seller's obligations
will not, however, affect the amount of Ordinary Shares or cash that will be
received by the holder of each Security that remains outstanding on the Exchange
Date.
All matters relating to the administration of the Contract will be the
responsibility of either the Administrator or the Custodian.
THE EXCHANGE RATE. The "Exchange Rate" will be calculated by a formula
based on the "Average Market Price" of the Ordinary Shares on the Exchange Date:
- If the Average Market Price is less than $ (the "Appreciation
Threshold Price") but equal to or greater than $ (the "Initial
Price"), the Exchange Rate will be the number of Ordinary Shares having
a value (determined at the Average Market Price) equal to the Initial
Price.
- If the Average Market Price is equal to or greater than the Appreciation
Threshold Price, the Exchange Rate will be Ordinary Shares.
- If the Average Market Price is less than the Initial Price, the Exchange
Rate will be one Ordinary Share.
This formula will be adjusted if the Company takes certain steps that combine,
split or dilute the value of the Ordinary Shares. See " -- The Contract --
Dilution Adjustments". 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). If this formula would require the Trust to deliver a fraction of an
Ordinary Share to any holder, the Trust will instead deliver cash equal to the
value of that fraction of a share.
The "Average Market Price" per Ordinary Share on any date means the average
Closing Price of an Ordinary Share on the 20 Trading Days immediately before but
not including that date. The Average Market Price will be calculated in a
different manner if the Seller carries out a Rollover Offering (as defined
below), as described under " -- Cash Settlement; Rollover Offerings".
14
<PAGE> 17
The "Closing Price" of the Ordinary Shares (or any other common equity
security) on any date means the closing sale price (or, if no closing sale price
is reported, the last reported sale price) of that security as reported on the
NYSE Consolidated Tape on that date or, if the security is not listed for
trading on the NYSE on that date, as reported in the composite transactions for
the principal United States national or regional securities exchange on which
the security is so listed, or if the security is not listed on a United States
national or regional securities exchange on that date, as reported by the NASDAQ
National Market or, if the security is not reported by that market on that date,
the last quoted bid price for the security in the over-the-counter market as
reported by the National Quotation Bureau or any similar organization. However,
if any event that results in an adjustment to the number of Ordinary Shares
deliverable under the Contract, as described under " -- The Contract -- Dilution
Adjustments", occurs before the Exchange Date, the Closing Price as determined
pursuant to the foregoing will be appropriately adjusted, in the manner
described under " -- The Contract -- Dilution Adjustments", to reflect the
occurrence of that event.
A "Trading Day" for any common equity security means a day on which the
security (A) is not suspended from trading on any United States 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 United States national
or regional securities exchange or association or over-the-counter market that
is the primary market for the trading of that security.
For illustrative purposes only, the following chart shows the number of
Ordinary Shares that a holder would receive for each Security at various Average
Market Prices. The chart assumes that there would be no adjustments to the
number of Ordinary Shares 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 Average Market Price on the
Exchange Date will be within the range set forth below. Given the Initial Price
of $ per Security and the Appreciation Threshold Price of $ ,
a holder would receive in connection with the exchange of Securities on the
Exchange Date the following number of Ordinary Shares:
<TABLE>
<CAPTION>
AVERAGE MARKET PRICE NUMBER OF ORDINARY
OF ORDINARY SHARES SHARES PER SECURITY
- -------------------- -------------------
<S> <C>
</TABLE>
EXTENSION AND ACCELERATION OF THE EXCHANGE DATE AT THE OPTION OF THE
SELLER. The Seller has the right to extend the Exchange Date under the Contract
to September , 2002. If the Seller extends the Exchange Date, the Seller will
not be required to deliver the Ordinary Shares or cash under the Contract until
September , 2002. However, once the Seller extends the Exchange Date, the
Seller can then accelerate the delivery of shares or cash to any date between
June , 2002 and September , 2002. If the Seller extends or accelerates
the Exchange Date, the holders of the Securities will not receive the shares or
cash in exchange for the Securities until the extended or accelerated Exchange
Date, and the number of shares and amount of cash would be calculated as of the
extended or accelerated Exchange Date. However, the holders of the Securities
would receive an additional, partial cash distribution on the Securities on the
extended or accelerated Exchange Date.
The amount of the additional, partial distribution that would be paid on
the Securities would be a portion of the regular quarterly distribution on the
Securities pro-rated to reflect the number of days by which the Exchange Date is
extended. For example, if the Exchange Date is extended to September , 2002
and then accelerated to August , 2002 (i.e., two-thirds of the time between
June , 2002 and September , 2002), the additional distribution would be
equal to two-thirds of the regular quarterly distribution.
15
<PAGE> 18
CASH SETTLEMENT; ROLLOVER OFFERINGS. The Seller may elect to deliver cash,
instead of Ordinary Shares, on the Exchange Date (whether or not extended or
accelerated) under the Contract. If the Seller chooses to deliver cash instead
of Ordinary Shares, the amount of that cash will be equal to the value, based on
the Average Market Price at the Exchange Date, of the number of shares that the
Seller would otherwise be required to deliver on the Exchange Date.
The Seller may also choose to deliver cash, instead of Ordinary Shares, in
connection with a "Rollover Offering". A "Rollover Offering" is a reoffering or
refinancing of Securities effected by the Seller not earlier than June , 2002,
by means of a completed public offering or offerings or another similar offering
(which may include one or more exchange offers), by or on behalf of the Seller.
If the Seller chooses to carry out a Rollover Offering, the "Average Market
Price" will be the Closing Price per Ordinary Share on the Trading Day
immediately before the date that the Rollover Offering is priced (the "Pricing
Date") or, if the Rollover Offering is priced after 4:00 P.M., New York City
time, on the Pricing Date, the Closing Price per share on the Pricing Date.
If the Seller carries out a Rollover Offering that is consummated on or
before the Exchange Date, the cash payable by the Seller will be delivered to
the Trust within five Trading Days after the Exchange Date (which may be
extended and accelerated as described above), instead of on the Exchange Date
itself. Accordingly, the holders of the Securities may not receive a portion of
the cash deliverable in exchange for the Securities until the fifth Trading Day
after the Exchange Date.
The Trust will notify the holders of the Securities (i) if the Seller
elects to settle with cash, and whether it elects to do so in connection with a
Rollover Offering, not less than 30 days nor more than 90 days prior to the
Exchange Date, and (ii) if the Seller accelerates the Exchange Date in
connection with a Rollover Offering, not later than the Exchange Date as in
effect when the election is made.
DILUTION ADJUSTMENTS. The Exchange Rate will be adjusted if the Company
(i) pays a stock dividend or makes a distribution with respect to the Ordinary
Shares in shares of that stock, (ii) subdivides or splits its outstanding
Ordinary Shares, (iii) combines its outstanding Ordinary Shares into a smaller
number of shares, or (iv) issues by reclassification of its Ordinary Shares any
other ordinary shares of the Company. In any such event, the Exchange Rate will
be adjusted as follows: for each Ordinary Share that would have been deliverable
under a Security upon exchange before the adjustment, the holder of that
Security will receive the number of Ordinary Shares (or, in the case of a
reclassification referred to in clause (iv) above, the number of other ordinary
shares of the Company issued pursuant to that reclassification), or the fraction
of such shares, that a shareholder who held one Ordinary Share immediately
before that event would be entitled solely by reason of that event to hold
immediately after that event.
In addition, if the Company issues rights or warrants to all holders of
Ordinary Shares entitling them to purchase Ordinary Shares at a price per share
less than the Then-Current Market Price (as defined below) of the Ordinary
Shares (other than rights to purchase Ordinary Shares pursuant to a plan for the
reinvestment of dividends or interest), then the Exchange Rate will be adjusted
pursuant to the following formula:
<TABLE>
<S> <C>
OS + AS
A = ER X -------
OS + PS
</TABLE>
where
ER = the Exchange Rate before the adjustment;
OS = the number of Ordinary Shares outstanding immediately before the time
(determined as described below) the adjustment is effected by reason
of the issuance of those rights or warrants;
16
<PAGE> 19
AS = the number of additional Ordinary Shares offered for purchase pursuant
to those rights or warrants; and
PS = the number of additional Ordinary Shares that the aggregate offering
price of the total number of Ordinary Shares so offered for purchase
would purchase at the Then-Current Market Price.
To the extent that, after expiration of those rights or warrants, any of the
Ordinary Shares offered by such rights or warrants are not actually delivered,
the Exchange Rate will be further adjusted to equal the Exchange Rate that would
have been in effect if the foregoing adjustment had been made upon the basis of
delivery of only the number of Ordinary Shares actually delivered.
The "Then-Current Market Price" of the Ordinary Shares, for the purpose of
making any dilution adjustment, means the average Closing Price per Ordinary
Share for the five Trading Days immediately before the time that adjustment is
effected (or, in the case of an adjustment effected at the opening of business
on the business day after a record date, as described below, immediately before
the earlier of the time the adjustment is effected and the related "ex-date" on
which the Ordinary Shares first trade regular way on their principal market
without the right to receive the relevant dividend, distribution or issuance).
In addition, if the Company pays a dividend or makes a distribution to all
holders of Ordinary Shares of evidences of its indebtedness or other non-cash
assets (excluding any stock dividends or distributions in Ordinary Shares
described above and any Spin-Off Distributions (as defined below)) or issues to
all holders of Ordinary Shares rights or warrants to subscribe for or purchase
any of its securities (other than rights or warrants referred to in the second
paragraph of this subsection), then the Exchange Rate will be adjusted pursuant
to the following formula:
<TABLE>
<S> <C>
T
A = ER X -----
T - V
</TABLE>
where
ER = the Exchange Rate before the adjustment;
T = the Then-Current Market Price per Ordinary Share; and
V = 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 those evidences of indebtedness, non-cash assets or rights
or warrants applicable to one Ordinary Share.
In addition, if the Company distributes cash (other than any Permitted
Dividend (as defined below), any cash distributed in consideration of fractional
Ordinary Shares and any cash distributed in a Reorganization Event (as defined
below)), by dividend or otherwise, to all holders of Ordinary Shares or makes an
Excess Purchase Payment (as defined below), then the Exchange Rate will be
adjusted pursuant to the following formula:
<TABLE>
<S> <C>
T
A = ER X -----
T - D
</TABLE>
where
ER = the Exchange Rate before the adjustment;
T = the Then-Current Market Price per Ordinary Shares on the record date
for that distribution; and
D = the amount of that distribution applicable to one Ordinary Share that
would not be a Permitted Dividend or, in the case of an Excess
Purchase Payment, the aggregate
17
<PAGE> 20
amount of that Excess Purchase Payment divided by the number of outstanding
Ordinary Shares on that record date.
For purposes of these adjustments,
(a) the term "Permitted Dividend" means any quarterly cash dividend on the
Ordinary Shares, except to the extent that the per share amount of
that dividend results in an annualized dividend yield on the Ordinary
Shares above 12.5%; 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) of all other consideration paid by the Company with
respect to one Ordinary Share acquired in a tender offer or exchange
offer by the Company, over (ii) the Then-Current Market Price per
Ordinary Share.
If any adjustment in the Exchange Rate must be made pursuant to the
formulas described above, corresponding adjustments will be made to the Initial
Price and the Appreciation Threshold Price.
Dilution adjustments will be effected: (i) in the case of any dividend,
distribution or issuance described above, as of the opening of business on the
business day after the record date for determination of holders of Ordinary
Shares entitled to receive that dividend, distribution or issuance or, if the
announcement of any such dividend, distribution or issuance is after that record
date, at the time that dividend, distribution or issuance is announced by the
Company; (ii) in the case of any subdivision, split, combination or
reclassification described above, on the effective date of that transaction;
(iii) in the case of any Excess Purchase Payment for which the Company
announces, at or before the time it commences the relevant share repurchase, the
repurchase price for those shares to be repurchased, on the date of that
announcement; and (iv) in the case of any other Excess Purchase Payment, on the
date that the holders of Ordinary Shares become entitled to payment with respect
to that Excess Purchase Payment. There will be no adjustment under the Contract
for any dividends, distributions, issuances or repurchases that may be declared
or announced after the Exchange Date.
If an adjustment is made because the Company announces or declares a record
date for a dividend, distribution, issuance or repurchase, and the dividend,
distribution, issuance or repurchase does not actually occur, then the Exchange
Rate will be further adjusted to equal the Exchange Rate that would have been in
effect if the adjustment for that dividend, distribution, issuance or repurchase
had not been made. If an adjustment is made because the Company announces a
share repurchase, and the Company reduces the repurchase price or repurchases
fewer shares than announced, then upon completion of that share repurchase, the
Exchange Rate will be further adjusted to equal the Exchange Rate that would
have been in effect if the adjustment for that repurchase had been based on the
actual price and amount repurchased. All dilution adjustments 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). No adjustment in the Exchange Rate will
be required unless that adjustment would require an increase or decrease of at
least one percent in the Exchange Rate. However, any adjustments that are not
required to be made because of this limit will be carried forward and taken into
account in any subsequent adjustment.
REORGANIZATION EVENTS. If a Reorganization Event occurs, the Seller will
be required to deliver on the Exchange Date, in lieu of each Ordinary Share
subject to the Contract, cash in an amount equal to:
- 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.
- If the Transaction Value is greater than or equal to the Appreciation
Threshold Price, 0. multiplied by the Transaction Value.
18
<PAGE> 21
- If the Transaction Value is less than the Initial Price, the Transaction
Value.
This amount of cash is referred to as the "Basic Reorganization Event
Amount".
If the consideration received by the holders of Ordinary Shares in the
Reorganization Event (the "Merger Consideration") includes Marketable
Securities, the Seller may choose to deliver those Marketable Securities on the
Exchange Date in lieu of delivering the cash value of those Marketable
Securities as described above. If the Seller chooses to deliver Marketable
Securities on the Exchange Date, the holders of the Securities will be
responsible for paying all brokerage and other transaction costs when they
resell those securities.
Notwithstanding the foregoing, if at least 30% of the Merger Consideration
consists of cash or cash equivalents (a "Cash Merger"), then delivery of the
Merger Consideration, other than any consideration consisting of Marketable
Securities, will be accelerated as follows. The Seller will be required:
- within five business days after the Seller receives the Merger
Consideration, to deliver to the Trust the portion of the Merger
Consideration, other than Marketable Securities, calculated as described
below (the "Accelerated Portion") (and the Trust will promptly
distribute this property to the holders of the Securities); and
- on the Exchange Date, to deliver to the Trust the number of Marketable
Securities calculated as described below.
Instead of delivering any non-cash consideration at the time of a
Reorganization Event, the Seller may choose to deliver cash equal to the Value
of those assets. Similarly, instead of delivering Marketable Securities on the
Exchange Date, the Seller may choose to deliver cash equal to the value, based
on the Average Market Price at the Exchange Date, of the number of Marketable
Securities that the Seller would otherwise be required to deliver on the
Exchange Date.
The Accelerated Portion per Security will be the portion of the Merger
Consideration, other than Marketable Securities, that has a Value (as defined
below) equal to the amount determined pursuant to the following formula:
<TABLE>
<S> <C>
BREA X OC
AP = ---------
TV
</TABLE>
where:
AP = the Value of the Accelerated Portion;
BREA = the Basic Reorganization Event Amount;
OC = the Value of the portion of the Merger Consideration received in
exchange for a single Ordinary Share that consists of assets other
than Marketable Securities; and
TV = the Transaction Value.
The number of Marketable Securities that the Trust will be required to
deliver on the Exchange Date in exchange for each Security will be determined by
applying the Exchange Rate, adjusted as described below, to the Average Market
Price of the Marketable Securities on the Exchange Date. To calculate the
Exchange Rate, the Initial Price will be adjusted pursuant to the following
formula:
<TABLE>
<S> <C>
MS
A = IP X ---
TV
</TABLE>
where
IP = the Initial Price before the adjustment;
19
<PAGE> 22
MS = the Value of a share of the Marketable Securities; and
TV = the Transaction Value.
Similarly, the Appreciation Threshold Price will be adjusted pursuant to
the following formula:
<TABLE>
<S> <C>
MS
A = ATP X ---
TV
</TABLE>
where
ATP = the Appreciation Threshold Price before the adjustment;
MS = the Value of a share of the Marketable Securities; and
TV = the Transaction Value.
The Exchange Rate will be adjusted pursuant to the following formula:
<TABLE>
<S> <C>
SC
A = ER X ---
MS
</TABLE>
where
ER = the Exchange Rate (computed on the basis of the adjusted Initial Price
and Appreciation Threshold Price and the Average Market Price of the
Marketable Securities);
SC = the aggregate Value of the Marketable Securities included in the
Merger Consideration received in exchange for a single Ordinary Share;
and
MS = the Value of a share of the Marketable Securities.
For purposes of the foregoing formulas, "Value" means (i) in respect of
cash, the amount of such cash; (ii) in respect of any property other than cash
or Marketable Securities, an amount equal to the market value on the date the
Reorganization Event is consummated (as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Administrator); and (iii) in respect of any share of Marketable Securities, an
amount equal to the average Closing Price per share of those Marketable
Securities for the 20 Trading Days immediately before the date the
Reorganization Event is consummated.
A "Reorganization Event" is (A) any consolidation, amalgamation 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 Ordinary Shares outstanding immediately before 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) (x) any statutory exchange of
securities of the Company or any Company Successor with another corporation or
(y) any sale of all or substantially all of the outstanding equity securities of
the Company or any Successor Company, including pursuant to any plan of
arrangement or similar scheme with the Company's shareholders under any
applicable law, rule or regulation or order of any court or governmental
authority (in the case of each of the preceding clauses (x) and (y), other than
in connection with a merger or acquisition) or (D) any liquidation, dissolution
or winding up of the Company or any Company Successor.
"Transaction Value" means the sum of (i) for any cash received in the
Reorganization Event, the amount of such cash received per Ordinary Share, (ii)
for any property other than cash or Marketable Securities received in the
Reorganization Event, an amount equal to the market value on the date the
Reorganization Event is consummated of the property received per Ordinary Share
20
<PAGE> 23
(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 the Reorganization Event, an amount equal to the average
Closing Price per share of those Marketable Securities for the 20 Trading Days
immediately before the Exchange Date (or, in the case of a Cash Merger, for the
20 Trading Days immediately before the date the Reorganization Event is
consummated) multiplied by the number of those Marketable Securities received
for each Ordinary Share.
The number of shares of Marketable Securities included in the calculation
of Transaction Value for purposes of the preceding clause (iii) will be adjusted
if a dilution event of the type described under "-- Dilution Adjustments" occurs
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 (whether voting
or non-voting) listed on a U.S. national or regional 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 Ordinary Shares (other than through the issuance of
rights or warrants described above) for cash or in connection with acquisitions.
SPIN-OFF DISTRIBUTIONS. If the Company makes a "Spin-Off Distribution"
during the term of the Contract, then the Seller will be required to deliver on
the Exchange Date, together with each Ordinary Share delivered under the
Contract, the number of Marketable Securities distributed in respect of a single
Ordinary Share in that Spin-Off Distribution. After the Company makes such a
distribution, the "Closing Price" of the Ordinary Shares, for purposes of
calculating the Exchange Rate and for all other purposes under the Contract,
will be determined by reference to (A) the Closing Price per Ordinary Share and
(B) the product of (x) the Closing Price per share of the spun-off Marketable
Securities and (y) the number of shares of such Marketable Securities
distributed per Ordinary Share in the Spin-Off Distribution. The number of
shares of Marketable Securities that the Seller is required to deliver, and the
formula for determining the "Closing Price" in the preceding sentence, will be
adjusted if any event that would, if it had occurred with respect to the
Ordinary Shares or the Company, have required an adjustment pursuant to the
provisions described under " -- Dilution Adjustments" occurs with respect to
those Marketable Securities or their issuer between the time of the Spin-Off
Distribution and the Exchange Date.
A "Spin-Off Distribution" means a distribution by the Company to holders of
Ordinary Shares of Marketable Securities issued by an issuer other than the
Company.
COLLATERAL ARRANGEMENTS; ACCELERATION UPON DEFAULT BY THE SELLER. The
Seller's obligations under the Contract initially will be secured by a security
interest in the maximum number of Ordinary Shares deliverable under the Contract
(adjusted in accordance with the dilution adjustment provisions of the Contract,
described above), pursuant to the Collateral Agreement.
If a Reorganization Event occurs, the Collateral Agreement will require the
Seller to pledge as alternative collateral all Marketable Securities deliverable
in such event in exchange for the maximum number of Ordinary Shares deliverable
under the Contract at the time of the Reorganization Event, plus cash in an
amount equal to 100% of the Seller's Cash Delivery Obligations (as defined
below). Instead of delivering cash, the Seller may choose to deliver U.S.
Government obligations with an aggregate market value, when pledged and at daily
mark-to-market valuations after that time, of not less than 105% of those Cash
Delivery Obligations. The Collateral Agent will be required, under the
Collateral Agreement, to invest any such cash in U.S. Treasury securities
maturing on or before June , 2002. The Seller's "Cash Delivery Obligations"
will be the Transaction Value of any Merger Consideration, other than Marketable
Securities, in respect of the maximum number of shares covered by the Contract
at the time of the Reorganization Event. The number of shares of Marketable
Securities required to be pledged will be adjusted if any event requiring a
dilution adjustment under the Contract occurs. If the Reorganization Event is a
Cash
21
<PAGE> 24
Merger, the collateral in respect of the Seller's Cash Delivery Obligations will
be released when the Seller delivers the Accelerated Portion.
If the Company makes a Spin-Off Distribution, the Collateral Agreement will
require the Seller to pledge as additional collateral all Marketable Securities
deliverable in such distribution in respect of the maximum number of Ordinary
Shares deliverable under the Contract at the time of such Spin-Off Distribution.
The number of these Marketable Securities required to be pledged will also be
adjusted if any event requiring a dilution adjustment under the Contract occurs.
Unless the Seller is in default in its obligations under the Collateral
Agreement, the Seller will be permitted to substitute for the pledged Ordinary
Shares collateral consisting of short-term, direct obligations of the U.S.
Government. The Seller may substitute short-term, direct U.S. Government
obligations in substitution for the pledge shares of Marketable Securities at
any time. Any U.S. Government obligations pledged as substitute collateral for
the Ordinary Shares, or for Marketable Securities received in a Reorganization
Event or Spin-Off Distribution, will be required to have an aggregate market
value at the time of delivery and at daily mark-to-market valuations after that
time of not less than 150% (or, from and after any Insufficiency Determination
that is not cured by the close of business on the next business day, as
described below, 200%) of the product of the market price of the Ordinary Shares
or Marketable Securities at the time of each valuation times the number of
Ordinary Shares or Marketable Securities for which those 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 on any
collateral pledged by the Seller, including any substitute collateral, unless
the Seller is in default in its obligations under the Collateral Agreement, or
unless the payment of that amount to the Seller would cause the collateral to
become insufficient under the Collateral Agreement. The Seller will have the
right to vote any pledged shares of Marketable Securities for so long as those
shares are owned by it and pledged under the Collateral Agreement, unless an
event of default occurs under the Contract or the Collateral Agreement.
If the Collateral Agent determines (an "Insufficiency Determination") that
the collateral pledged by the Seller fails to meet the foregoing requirements at
any valuation, and that failure is not cured by the close of business on the
business day after that determination, then, unless a Collateral Event of
Default (as defined below) under the Collateral Agreement has occurred and is
continuing, the Collateral Agent will commence (i) sales of the collateral
consisting of U.S. Government obligations and (ii) purchases, using the proceeds
of those sales, of Ordinary Shares or Marketable Securities in an amount
sufficient to cause the collateral to meet the requirements under the Collateral
Agreement. The Collateral Agent will discontinue those sales and purchases if a
Collateral Event of Default occurs under the Collateral Agreement.
A "Collateral Event of Default" under the Collateral Agreement means, at
any time, (A) if no U.S. Government obligations are pledged as substitute
collateral at that time, failure of the collateral to include at least the
maximum number of Ordinary Shares covered by the Contract at that time (or, if a
Reorganization Event or Spin-Off Distribution has occurred at or before that
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 are pledged as substitute collateral for Ordinary
Shares (or shares of Marketable Securities) at that time, failure of those U.S.
Government obligations to have a market value at that time of at least 105% of
the market price per Ordinary Shares (or Shares of Marketable Securities) times
the difference between (x) the maximum number of Ordinary Shares (or shares of
Marketable Securities) deliverable under the Contract at that time and (y) the
number of Ordinary Shares (or shares of Marketable Securities) pledged as
collateral at that time; and (C) at any time after a Reorganization Event in
which consideration other than Marketable Securities was delivered, failure of
any U.S. Government obligations pledged as collateral for Cash Delivery
Obligations to have a market value at that time of
22
<PAGE> 25
at least 105% of those Cash Delivery Obligations, if that failure is not cured
within one business day after notice of that failure is delivered to the Seller.
If a Collateral Event of Default occurs under the Collateral Agreement, or
the Seller suffers a bankruptcy or insolvency, the Seller's obligations under
the Contract will automatically be accelerated. In that event, the Seller will
become obligated to deliver the number of Ordinary Shares (or, after a
Reorganization Event or Spin-Off Distribution, the Marketable Securities or cash
or a combination of Marketable Securities and cash deliverable instead of or in
addition to those Ordinary Shares) then deliverable under the Contract, or any
U.S. Government obligations then pledged as collateral for the Seller's
obligations.
If the Contract is accelerated, (i) the Collateral Agent will distribute to
the Trust, for distribution pro rata to the holders of the Securities, the
Ordinary Shares and Marketable Securities then pledged by the Seller and/or cash
generated from the sale of U.S. Government obligations then pledged by the
Seller and (ii) the Custodian will sell the stripped U.S. Treasury securities
acquired by the Trust at the closing of this offering and then held by the
Trust, and distribute the proceeds pro rata to the holders. In addition, if, by
the Exchange Date, any substitute collateral has not been replaced by Ordinary
Shares (or, after a Reorganization Event or Spin-Off Distribution, cash or
Marketable Securities, as applicable) sufficient to meet the Seller's
obligations under the Contract, the Collateral Agent will distribute to the
Trust for distribution pro rata to the holders the market value of the Ordinary
Shares and Marketable Securities required to be delivered under the Contract, in
the form of any Ordinary Shares or Marketable Securities then pledged by the
Seller plus cash generated from the sale 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 under the Contract, in the
form of any Marketable Securities then pledged, plus any cash then pledged, plus
cash generated from the sale of U.S. Government obligations then pledged).
CALCULATION OF MARKET PRICES. In calculating any market price, including
any Average Market Price, Then-Current Market Price, Value or Transaction Value:
- If no Closing Price for the Ordinary Shares is determined for one or
more (but not all) of the Trading Days during the relevant period, those
Trading Days will be disregarded in the calculation of the market price.
No additional Trading Days will be added to the calculation period.
- If no Closing Price for the Ordinary Shares is determined for any of the
Trading Days during the relevant period, the market price will be the
most recently available Closing Price for the Ordinary Shares before
that period began.
THE SELLER. The Seller is Amdocs International Limited. Please see the
caption "Principal and Selling Shareholders" in the Company 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 under
the Securities. See "Description of Securities -- Distributions". Up to 30% of
the Trust's total assets may be invested in these U.S. Treasury securities. If
the Contract is accelerated, then the Administrator will sell the U.S. Treasury
securities then held in the Trust and distribute the proceeds of that sale pro
rata to the holders, together with the other amounts distributed upon
acceleration. See "-- Collateral Arrangements; Acceleration Upon Default By the
Seller" and "The Trust -- Trust Termination".
If the Seller extends the Exchange Date, it will be required to deliver
additional U.S. Treasury securities to the Trust to pay the additional, partial
distribution described above under "-- The Contract -- Extension and
Acceleration of the Exchange Date at the Option of the Seller". If the Seller
later accelerates the Exchange Date, the Seller will be required to repurchase
those additional
23
<PAGE> 26
U.S. Treasury securities from the Trust on or before the Exchange Date, at a
price equal to the unpaid distributions on the Securities through the Exchange
Date.
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
before the next distribution date. Under the Paying Agent Agreement, the Paying
Agent is responsible for investing, as instructed by the Trustees, all such cash
that is not paid to cover Trust expenses in short-term U.S. Treasury securities
maturing on or shortly before the next quarterly distribution date. Not more
than 5% of the Trust's total assets will be invested in those short-term
obligations or held in cash at any one time.
DESCRIPTION OF SECURITIES
Each Security represents an equal proportional interest in the Trust, and a
total of 10,000,000 Securities will be issued (assuming that the Underwriters do
not exercise their over-allotment option). The Securities have no preemptive,
redemption or conversion rights. When issued, the Securities will be 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".
DISTRIBUTIONS
AMOUNT AND TIMING. The Trust intends to distribute to holders on a
quarterly basis an amount equal to $ per Security. This 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
will be made on September , 1999 to holders of record as of the preceding
business day. Distributions will then be made on March , June , September
and December of each year to holders of record as of the preceding business
day. Part of each distribution will be treated as a tax-free return of the
holder's investment. See "-- Tax Treatment of Distributions" and "Certain
Federal Income Tax Considerations -- Recognition of Original Issue Discount on
the U.S. Treasury Securities".
Upon termination of the Trust, as described under the caption "The Trust --
Trust Termination", each holder will receive any remaining net assets of the
Trust.
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 Ordinary Shares. See "Risk Factors --
Shareholder Rights".
The Trust does not permit the reinvestment of distributions.
TAX TREATMENT OF DISTRIBUTIONS. The following table sets forth information
regarding the distributions to be received on the stripped U.S. Treasury
securities described under "Investment Objective and Policies" above (assuming
that the Underwriters do not exercise their over-allotment option), the portion
of each year's distributions that will constitute a return of capital for U.S.
federal income tax purposes and the amount of original issue discount accruing
(assuming a yield-to-maturity accrual election in respect of any short-term U.S.
Treasury securities) on those U.S. Treasury securities with respect to a holder
that acquires its Securities at the issue price from
24
<PAGE> 27
an Underwriter pursuant to the original offering. See "Certain Federal Income
Tax Considerations -- Recognition of Original Issue Discount on the U.S.
Treasury Securities".
<TABLE>
<CAPTION>
ANNUAL GROSS
ANNUAL GROSS DISTRIBUTIONS ANNUAL INCLUSION OF
DISTRIBUTIONS FROM ANNUAL ORIGINAL ISSUE
FROM U.S. TREASURY RETURN OF DISCOUNT
U.S. TREASURY SECURITIES CAPITAL PER IN INCOME PER
YEAR SECURITIES PER SECURITY SECURITY SECURITY
- ---- ------------- ------------- ----------- -------------------
<S> <C> <C> <C> <C>
1999..............................
2000..............................
2001..............................
2002..............................
</TABLE>
VOTING
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 have been selected initially by Goldman
Sachs, as the Trust's sponsor and the initial holder of the Trust's Securities.
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
previous 12 months). The Trustees will establish, and notify the holders in
writing of, the record date for each such meeting. The record date must 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
Trust will also assist in communications with other holders as required by the
Investment Company Act.
BOOK-ENTRY-ONLY ISSUANCE
The Depository Trust Company ("DTC") will act as securities depository for
the Securities. The information in this section concerning DTC and DTC's
book-entry system is based upon information obtained from DTC. The Securities
will be issued only as fully-registered securities registered in the name of
Cede & Co. (as nominee for DTC). One or more fully-registered global Security
certificates will be issued, representing in the aggregate the total number of
Securities, and will be deposited with DTC or ChaseMellon Shareholder Services,
L.L.C., as DTC's custodian.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, eliminating the need
for physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations ("Direct Participants"). Access to the DTC
system is also available to others such as securities brokers and dealers, banks
and trust companies that clear through or maintain a custodial relationship with
a Direct Participant, either directly or indirectly ("Indirect Participants").
25
<PAGE> 28
Purchases of Securities within the DTC system must be made by or through a
Direct Participant, which will receive a credit for the Securities on DTC's
records. The ownership interest of each actual purchaser of a Security
("Beneficial Owner") is in turn to be recorded on the Direct or Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Securities. Transfers of ownership
interests in Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in Securities,
except upon a resignation of DTC.
DTC has no knowledge of the actual Beneficial Owners of the Securities;
DTC's records reflect only the identity of the Direct Participants to whose
accounts those Securities are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Payments on the Securities will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on the relevant payment date in accordance with
their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on that payment date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices and will be the responsibility of that Participant and not
of DTC or the Trust, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of dividends to DTC is the
responsibility of the Trust, disbursement of those payments to Direct
Participants is the responsibility of DTC, and disbursement of those payments to
the Beneficial Owners is the responsibility of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a global
Security will not be entitled to receive physical delivery of Securities.
Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the Securities.
DTC may discontinue providing its services as securities depository with
respect to the Securities at any time by giving reasonable notice to the Trust.
Under those circumstances, if a successor securities depository is not obtained,
certificates representing the Securities will be printed and delivered in
accordance with DTC's instructions.
RISK FACTORS
INTERNAL MANAGEMENT; NO PORTFOLIO MANAGEMENT AND NO CHANGE IN ASSETS
The Trust will not be managed like a typical closed-end investment company.
The Trust will be internally managed by its Trustees and will not have any
separate investment adviser.
The Trust will not dispose of the Contract even if the price of the
Ordinary Shares falls significantly or the financial condition of the Company
suffers (or if, after a Reorganization Event or Spin-Off Distribution,
comparable developments occur affecting any Marketable Securities or the issuer
of those Marketable Securities).
Similarly, the Trust will not dispose of the U.S. Treasury securities held
by the Trust before they mature or the Trust terminates, whichever comes first,
even if their value falls significantly.
26
<PAGE> 29
LIMITED OPPORTUNITY FOR INCREASE IN VALUE; RISK OF DECREASE IN VALUE OF ORDINARY
SHARES
Because the Contract allows the Seller to deliver less than a full Ordinary
Share for each outstanding Security if the Average Market Price is higher than
the Initial Price, the Securities have more limited appreciation potential than
the Ordinary Shares. If the price of Ordinary Shares rises, a holder of a
Security will not receive all of this increase in value. Holders will not
receive any of this increase if the average market price of the Ordinary Shares
at the Exchange Date is below $ . Holders will receive only % of
any increase in the value of the Ordinary Shares over $ . On the other
hand, holders of Securities will bear all of any decrease in the value of the
Ordinary Shares. The value of the Ordinary Shares to be received by holders on
the Exchange Date (and any cash received in lieu of those shares) may be less
than the amount paid for the Securities. Furthermore, the Securities may trade
below the value of the Ordinary Shares if the Ordinary Shares appreciate in
value.
FIXED RATE OF DISTRIBUTIONS
The distributions on the Securities will be at a fixed rate for the entire
term of the Trust. If the Company begins to pay dividends on the Ordinary Shares
is raised, distributions on the Securities may be lower than the dividends paid
on the Ordinary Shares.
DILUTION ADJUSTMENTS
The number of Ordinary Shares that holders are entitled to receive at the
termination of the Trust will be adjusted for some events, like 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 Ordinary
Shares for cash or in connection with acquisitions, that may adversely affect
the price of the Ordinary Shares. These 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
Ordinary Shares, or that major shareholders will not sell any Ordinary Shares,
in the future, or as to the amount of any such offerings or sales.
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. The only assets held by
the Trust will be the U.S. Treasury securities and the Contract, and potentially
a small amount of other short-term investments. As a result, an investment in
the Trust will be riskier than an investment in an investment company with
diversified investments.
TRADING VALUE AFFECTED BY ORDINARY SHARE PRICE AND OTHER FACTORS
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 prices of the Securities in the secondary market will be
directly affected by the trading prices of the Ordinary Shares in the secondary
market. The trading prices of the Ordinary Shares may fluctuate, 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 Ordinary Shares are traded and the market segment
of which the Company is a part. The trading price of the Securities may also
fluctuate due to, among other things, fluctuations in interest rates and other
factors that are difficult to predict and beyond the Trust's control. The Trust
believes,
27
<PAGE> 30
however, that because of the yield on the Securities and the formula for
determining the number of Ordinary Shares to be delivered on the Exchange Date,
the Securities will tend to trade at a premium to the market value of the
Ordinary Shares if the Ordinary Share price falls and at a discount to the
market value of the Ordinary Shares if the Ordinary Share price rises. There
can, however, be no assurance that the Securities will trade at a premium to the
market value of the Ordinary Shares.
Shares of closed-end investment companies frequently trade at a 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 fall. 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 investment 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.
THE RIGHTS OF HOLDERS OF ORDINARY SHARES DIFFER FROM THOSE OF HOLDERS OF MOST
SHARES ISSUED BY U.S. CORPORATIONS AND INVOLVE DIFFERENT TAX CONSIDERATIONS
The Ordinary Shares are issued by Amdocs Limited, which is a corporation
formed under the laws of the Island of Guernsey. As a result, the rights of
holders of the Ordinary Shares differ from those of holders of most shares
issued by U.S. corporations in ways that may be material. In addition, holders
of the Ordinary Shares are subject to tax considerations that differ from those
applicable to shares issued by most U.S. corporations. Please refer to the
Company Prospectus, which is attached as Annex A to this prospectus, for further
information about the terms and conditions of the Ordinary Shares and the risks
and considerations relating to holding the Ordinary Shares.
LIMITED TRADING MARKET FOR SECURITIES
Goldman Sachs currently intends, but is 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.
Goldman Sachs may stop making a market in the Securities at any time without
notice. The Trust will apply to list the Securities on the NYSE. If that
application is accepted, 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. If the Securities are delisted or suspended from trading on that
exchange, the Trust will apply for listing of the Securities on another national
or regional securities exchange or for quotation on another trading market. If
the Securities are not listed or traded on any securities 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.
SHAREHOLDER RIGHTS
Holders of the Securities will not be entitled to any rights with respect
to the Ordinary Shares unless and until they actually receive Ordinary Shares in
exchange for the Securities. For example, holders of Securities will not be
entitled to vote the Ordinary Shares or receive dividends.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion of the principal United States federal income tax
consequences of ownership of Securities represents the opinion of Sullivan &
Cromwell, 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
28
<PAGE> 31
as dealers in securities or currencies, traders that elect to mark to market,
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 under the Code, published rulings and court decisions, all
as currently in effect and all subject to change or different interpretation at
any time, perhaps with retroactive effect. It should be noted that the Trust has
not sought a ruling from the Internal Revenue Service with respect to the
federal income tax consequences of ownership of Securities, and the Internal
Revenue Service is not required to agree with the opinion of Sullivan &
Cromwell.
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 STATE, LOCAL OR OTHER TAXING JURISDICTION, OF OWNERSHIP OF
SECURITIES.
A "United States Holder" is a beneficial owner of Securities who or that is
(i) a citizen or resident of the United States, (ii) a domestic corporation,
(iii) an estate the income of which is subject to United States federal income
tax without regard to its source or (iv) a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have the authority to control all
substantial decisions of the trust.
Holders should be aware that there are alternative characterizations of the
Trust's assets 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, under the grantor trust rules of the Code, 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. Income received by the
Trust will be treated as income of the holders in the manner set forth below.
RECOGNITION OF ORIGINAL ISSUE DISCOUNT 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 initially acquired by the Trust as a bond
that was originally issued on the date the Trust acquired such security. A
holder will include original issue discount in income over the life of the U.S.
Treasury securities in an amount equal to the holder's pro rata portion of the
excess of the amounts payable on those U.S. Treasury securities over the amount
paid for the U.S. Treasury securities by the Trust. The amount of that excess
will constitute only part of the total amounts payable in respect of U.S.
Treasury securities held by the Trust, however. 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
"Description of Securities -- Distributions -- Tax Treatment of Distributions".
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
29
<PAGE> 32
method based on daily compounding, that original issue discount will be accrued
on a straight-line basis.
EXTENSION OF THE EXCHANGE DATE. Holders should not be required to include
any amounts in income upon the Trust's receipt of additional U.S. Treasury
securities as a result of an extension of the Exchange Date under the Contract
and should not be required to include any original issue discount in respect of
such U.S. Treasury securities. See "Investment Objective and Policies -- The
Contract".
Although there is no direct authority for the treatment of the cash
distribution paid on the Securities on the extended Exchange Date, it is likely
that such distribution should not be considered income to a holder upon receipt,
but instead should be considered to reduce a holder's basis with respect to such
holder's pro rata portion of the Contract held by the Trust, by analogy to the
treatment of rebates or option premiums. If this treatment is respected, receipt
of the cash distribution on the extended Exchange Date will increase the amount
of gain (or decrease the amount of loss) recognized by a holder on a sale or
other disposition of the Contract (including a disposition pursuant to cash
settlement of such Contract) or on a subsequent sale or other disposition of the
Ordinary Shares delivered pursuant to such Contract. Because there can be no
assurance that the Internal Revenue Service will agree with this
characterization of the cash distribution paid on the extended Exchange Date,
holders are urged to consult their tax advisors concerning the tax consequences
of receiving such payment.
TAX BASIS OF THE U.S. TREASURY SECURITIES AND THE CONTRACT. A holder's
initial 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 payment for the Contract, respectively. A holder's tax basis
in the U.S. Treasury securities will be increased by the amounts of original
issue discount included in income in respect of U.S. Treasury securities and
decreased by each amount of cash received in respect of U.S. Treasury
securities.
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 Ordinary Shares or cash, Marketable
Securities or combination of Ordinary Shares, Marketable Securities and cash
delivered to the Trust.
DISTRIBUTION OF THE ORDINARY SHARES. The delivery of Ordinary Shares to
the Trust pursuant to the Contract and the Trust's distribution of Ordinary
Shares to the holders will not be taxable to the holders. Each holder's basis in
its Ordinary Shares will be equal to its basis in its pro rata portion of the
Contract less the portion of that basis allocable to any fractional Ordinary
Shares for which cash is received. A holder will recognize short-term capital
gain or loss upon receipt by the Trust of cash in lieu of fractional Ordinary
Shares equal to the difference between the holder's allocable portion of the
amount of cash received and the holder's basis in those fractional shares. The
holding period for the Ordinary Shares will begin on the day after it is
acquired by the Trust. For the United States federal tax consequences to holders
of the Ordinary Shares, please refer to "Taxation of Holders of Ordinary Shares"
in the Company Prospectus, which is attached as Annex A to this prospectus.
DISTRIBUTION OF CASH. If the Trust receives cash upon settlement of the
Contract, a holder will recognize capital gain or loss equal to the difference
between the holder's allocable portion of the amount of cash received and the
holder's basis in the Contract. Any gain or loss will be capital gain or loss
which is taxable to holders as described below under "-- Sale of Securities".
SALE OF SECURITIES. A holder who sells Securities will be treated as
having sold its pro rata portions of the U.S. Treasury securities and the
Contract underlying the Securities. As a result, the holder will recognize
capital 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
30
<PAGE> 33
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. Long-term capital gain of an
individual holder will be subject to a maximum tax rate of 20%.
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 Ordinary Shares.
The Internal Revenue Service could conceivably seek to treat the Contract
differently. The Internal Revenue Service might, for example, seek to treat the
cash paid to the Seller pursuant to the Contract as loans to the Seller in
exchange for contingent debt obligations of the Seller. If the Internal Revenue
Service were to prevail in making such an assertion, a holder might be required
to include original issue discount in income over the life of the Securities at
a market rate of interest for the Seller, taking account of all the relevant
facts and circumstances. In addition, a holder would be required to include
interest (rather than capital gain) in income on the Exchange Date in an amount
equal to the excess, if any, of the value of the Ordinary Shares received on the
Exchange Date (or the proceeds from cash settlement of the Contract) over the
aggregate of the basis of the Contract and any interest on the Contract
previously included in income (or might be entitled to an ordinary deduction to
the extent of interest previously included in income and not ultimately
received) and any gain or loss attributable to the sale of the Contract could be
treated as ordinary income or loss. The Internal Revenue Service could also
conceivably take the view that a holder should include in income the amount of
cash actually received each year on the Securities.
BACKUP WITHHOLDING AND INFORMATION REPORTING. The payments of principal
and original issue discount on the U.S. Treasury securities, and the proceeds
received from cash settlement of the Contract or the sale of Securities, may be
subject to U.S. backup withholding tax at the rate of 31% if the holder of those
Securities 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 that
holder's U.S. federal income tax liability and may entitle that 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.
31
<PAGE> 34
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Trust has agreed to sell to each of the Underwriters named below, and each of
such Underwriters has severally agreed to purchase from the Trust, the
respective number of Securities set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SECURITIES
----------- ----------
<S> <C>
Goldman, Sachs & Co.........................................
BT Alex. Brown Incorporated.................................
Lehman Brothers Inc.........................................
----------
Total.................................................. 10,000,000
==========
</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.
Securities sold by the Underwriters to the public will initially be offered
at the initial public offering price set forth on the cover of this prospectus.
Any Securities sold by the Underwriters to securities dealers may be sold at a
discount of up to $ per Security from the initial public offering price. Any
such securities dealers may resell any Securities purchased from the
Underwriters to certain other brokers or dealers at a discount of up to $
per Security from the initial public offering price. If all the Securities are
not sold at the initial public offering price, the Underwriters may change the
initial public offering price and the other selling terms. The sales load of
$ per Security is equal to % of the initial public offering price.
Investors must pay for any Securities purchased in the initial public offering
on or before June , 1999.
In connection with the offering, the Underwriters may purchase and sell
Securities in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the Underwriters of a greater number of
Securities than it is required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the Securities while
the offering is in progress.
These activities by the Underwriters may stabilize, maintain or otherwise
affect the market price of the Securities. As a result, the price of the
Securities may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by the
Underwriters at any time. These transactions may be effected on the NYSE, in the
over-the-counter market or otherwise.
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 1,500,000 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.
The Company and the Seller have agreed that, during the period beginning
from the date of this prospectus and continuing to and including the date 90
days after the date of this prospectus, they will not offer, sell, contract to
sell or otherwise dispose of any Ordinary Shares or other securities that are
substantially similar to the Ordinary Shares, including but not limited to any
securities that are convertible or exchangeable for, or that represent the right
to receive, Ordinary Shares or any such substantially similar securities, or
enter into any swap, option future, forward or other agreement that transfers,
in whole or in part, the economic consequences of ownership of Ordinary
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<PAGE> 35
Shares or such other substantially similar securities, without the prior written
consent of Goldman Sachs and except as otherwise provided in the Underwriting
Agreement.
The Securities will be a new issue of securities with no established
trading market. Application has been made to list the Securities on the NYSE
under the symbol "AAE". Goldman Sachs has advised the Company that it intends to
make a market in the Securities, but it is 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.
Goldman Sachs has informed the Trust that it does not expect sales to any
accounts over which it exercises discretionary authority to exceed 5% of the
total Securities offered by this prospectus.
The Company and the Seller have agreed to indemnify the Underwriters
against certain liabilities, including certain liabilities under the Securities
Act of 1933.
Goldman Sachs has subscribed for one Security at a purchase price of
$100.00. Goldman Sachs will surrender this Security upon the closing of the
offering made by this prospectus. No Securities will be sold to the public until
the Securities subscribed for have been purchased and the purchase price of the
Securities paid in full to the Trust.
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for the Trust by
Sullivan & Cromwell, New York, New York, and for the Underwriters by Skadden,
Arps, Slate, Meagher & Flom LLP, New York, New York.
EXPERTS
The financial statement included in this prospectus has been audited by
PricewaterhouseCoopers LLP, independent accountants, as stated in their opinion
appearing herein, and has been so included in reliance upon that 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. More
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 of the Registration
Statement may be obtained from that office after payment of the fees prescribed
by the Commission. The Registration Statement is also available on the
Commission's website (http://www.sec.gov). The Securities will be listed on the
NYSE and information concerning the Trust and the Securities may also be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005.
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<PAGE> 36
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Securityholder of
Amdocs Automatic Common Exchange Security Trust:
In our opinion, the accompanying statement of assets and liabilities
presents fairly, in all material respects, the financial position of Amdocs
Automatic Common Exchange Security Trust (the "Trust") at May 3, 1999, in
conformity with generally accepted accounting principles. 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 of this financial statement in accordance with generally
accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by the Trust's management and evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
/s/ PricewaterhouseCoopers LLP
New York, New York
May 5, 1999
34
<PAGE> 37
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
MAY 3, 1999
<TABLE>
<S> <C>
ASSETS
Cash........................................................ $ 100
------
Total assets................................................ $ 100
======
LIABILITIES
............................................................ $ 0
------
NET ASSETS
Balance applicable to 1 Security outstanding................ $ 100
------
Net asset value per Security................................ $ 100
======
</TABLE>
- ---------------
(1) Amdocs Automatic Common Exchange Security Trust (the "Trust") was
established on March 2, 1999 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, as amended. Costs incurred in connection with the Trust's organization
will be paid by the Seller referred to below.
(2) The Trust proposes to sell Trust Automatic Common Exchange Securities (the
"Securities") to the public pursuant to a Registration Statement on Form N-2
under the Securities Act of 1933, as amended, and the Investment Company Act
of 1940.
The Trust is a newly organized, finite-term trust established to purchase
and hold a portfolio of stripped U.S. treasury securities and a forward
purchase contract with a shareholder of Amdocs Limited (the "Seller")
relating to the Ordinary Shares of Amdocs Limited. The Trust will be
internally managed and will not have an investment adviser. The Trust's
administration, which will be overseen by the trustees, will be carried out
by The Chase Manhattan Bank as administrator of the Trust. The Chase
Manhattan Bank will also serve as the Trust's custodian, and its affiliate,
ChaseMellon Shareholder Services, L.L.C., will serve as paying agent,
registrar and transfer agent with respect to the Securities. Ongoing fees
and anticipated expenses for the term of the Trust will be paid for by the
Seller.
(3) The Trust issued one Security on May 3, 1999 to Goldman, Sachs & Co. in
consideration for a purchase price of $100. The Trust Agreement provides
that before the offering, the Trust will split the outstanding Security as
of the date that the price and underwriting discount of the Securities being
offered to the public is determined, but before the sale of the Securities
to the Underwriters. The initial Security will be split into the smallest
whole number of Securities that would result in the per Security amount
recorded as shareholders' equity after effecting the split not exceeding the
public offering price per Security.
35
<PAGE> 38
GLOSSARY
"Administration Agreement" means the Administration Agreement, dated as of
June , 1999, between the Trust and The Chase Manhattan Bank, as Administrator.
"Administrator" means The Chase Manhattan Bank (or its successor) in its
capacity as Administrator under the Administration Agreement.
"Appreciation Threshold Price" means $ , subject to adjustment as
described under "-- The Contract -- Dilution Adjustments".
"Average Market Price" per Ordinary Share or Marketable Securities on any
date means the average Closing Price per Ordinary Share or Marketable Securities
for the Calculation Period consisting of the 20 Trading Days immediately prior
to but not including such date; provided that if no Closing Price for the
Ordinary Shares or 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 the Average Market Price (but no additional Trading Days will be
added to the Calculation Period). If no Closing Price for the Ordinary Shares or
Marketable Securities may be determined for any of such Trading Days, the
Average Market Price shall be the Closing Price for the Ordinary Shares or
Marketable Securities for the most recent Trading Day prior to such 20 Trading
Days for which a Closing Price for the Ordinary Shares or Marketable Securities
may be determined pursuant to the definition of "Closing Price". Notwithstanding
the foregoing, for purposes of determining the payment required upon cash
settlement of a Contract in connection with a Rollover Offering, "Average Market
Price" means the Closing Price per Ordinary Share or Marketable Securities on
the Trading Day immediately prior to the date that the Rollover Offering is
priced (the "Pricing Date") or, if the Rollover Offering is priced after 4:00
P.M., New York City time, on the Pricing Date, the Closing Price per share on
the Pricing Date.
"Beneficial Owner" means an actual purchaser of a Security, which will not
receive written confirmation from DTC of its purchases of Securities but which
is expected to receive written confirmations providing details of the
transactions, as well as periodic statements of its holdings, from the Direct or
Indirect Participants through which the Beneficial Owner purchased Securities.
"Calculation Period" means any period of Trading Days for which an average
security price must be determined pursuant to the Contract.
"Cash Delivery Obligations" means, at any time, (A) if no Reorganization
Event has occurred, zero, and (B) from and after any Reorganization Event, the
Transaction Value of any Consideration other than Marketable Securities included
in the Merger Consideration delivered in the related Reorganization Event,
multiplied by the maximum number of Ordinary Shares covered by the Contract at
the time of the Reorganization Event; provided that if the Reorganization Event
is a Cash Merger, the Seller's Cash Delivery Obligation will be zero after the
Seller delivers the Accelerated Portion as required under the Contract.
"Closing Price" of any common equity security (including the Ordinary
Shares or any Marketable Securities) on any date of determination means the
closing sale price (or, if no closing sale price is reported, the last reported
sale price) of such common equity security as reported on the NYSE Consolidated
Tape on such date of determination or, if such common equity security is not
listed for trading on the NYSE on such date, as reported in the composite
transactions for the principal United States national or regional securities
exchange on which such common equity security is so listed, or if such common
equity security is not so listed on a United States national or regional
securities exchange on such date, as reported by the NASDAQ National Market or,
if such common equity security is not so reported on such date, the last quoted
bid price for such common equity security in the over-the-counter market as
reported by the National Quotation Bureau or any similar organization; provided
that if any event that results in an adjustment to the number of Ordinary Shares
or Marketable Securities deliverable under the Contract, as described under "--
The Contract -- Dilution Adjustments", occurs during any Calculation Period, the
Closing Price
36
<PAGE> 39
as determined pursuant to the foregoing for each Trading Day in the Calculation
Period occurring prior to the date on which such adjustment is effected will be
appropriately adjusted to reflect the occurrence of such event.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means The Chase Manhattan Bank (or its successor) in its
capacity as Collateral Agent under the Collateral Agreement.
"Collateral Agreement" means the Collateral Agreement, dated as of June ,
1999, among the Seller, The Chase Manhattan Bank, as Collateral Agent, and the
Trust, securing the Seller's obligations under the Contract.
"Collateral Event of Default" under the Collateral Agreement means, at any
time, (A) if no U.S. Government obligations are pledged as substitute collateral
at or before that time, failure of the collateral to include at least the
maximum number of Ordinary Shares covered by the Contract at that time (or, if a
Reorganization Event or Spin-Off Distribution has occurred at or before that
time, failure of the collateral to include the maximum number of shares of any
Marketable Securities required to be pledged as described under "Investment
Objective and Policies -- The Contract -- Collateral Arrangements; Acceleration
Upon Default By the Seller" above); (B) if any U.S. Government obligations are
pledged as substitute collateral for Ordinary Shares (or shares of Marketable
Securities deliverable pursuant to the Contract) at that time, failure of those
U.S. Government obligations to have a market value at that time of at least 105%
of the market price per Ordinary Share (or shares of Marketable Securities, as
the case may be) times the difference between (x) the maximum number of Ordinary
Shares (or shares of Marketable Securities) covered by the Contract at that time
and (y) the number of Ordinary Shares (or shares of Marketable Securities)
pledged as collateral at that time; and (C) at any time after a Reorganization
Event in which consideration other than Marketable Securities has been
delivered, failure of any U.S. Government obligations pledged as collateral for
Cash Delivery Obligations to have a market value at that time of at least 105%
of those Cash Delivery Obligations, if that failure is not cured within one
business day after notice of that failure is delivered to the Seller.
"Company" means Amdocs Limited, a corporation organized under the laws of
the Island of Guernsey.
"Company Prospectus" means the prospectus of the Company, dated June ,
1999, which is attached as Annex A to this prospectus, and which describes the
Company and the Ordinary Shares.
"Company Successor" means a surviving entity or subsequent surviving entity
of the Company.
"Contract" means the forward purchase contract between the Seller and the
Trust relating to the Ordinary Shares.
"Custodian" means The Chase Manhattan Bank (or its successor) in its
capacity as Custodian under the Custodian Agreement.
"Custodian Agreement" means the Custodian Agreement, dated as of June ,
1999, between the Trust and The Chase Manhattan Bank, as Custodian.
"Direct Participants" means Participants of DTC, including brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations, that are direct Participants of DTC.
"DTC" means The Depository Trust Company.
"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 final) of all other consideration paid by
37
<PAGE> 40
the Company with respect to one Ordinary Share acquired in a tender offer or
exchange offer by the Company, over (ii) the Then-Current Market Price per
Ordinary Share.
"Exchange Date" means June , 2002, subject to extension and acceleration
by the Seller under the Contract.
"Exchange Rate" means the rate of exchange of Ordinary Shares for
Securities on the Exchange Date, and will be determined as follows (adjusted in
certain events):
(i) If the Average Market Price is less than the Appreciation Threshold
Price but equal to or greater than the Initial Price, the Exchange
Rate will be 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 Average Market
Price.
(ii) If the Average Market Price is equal to or greater than the
Appreciation Threshold Price, the Exchange Rate will be 0.
Ordinary Shares.
(iii) If the Average Market Price is less than the Initial Price, the
Exchange Rate will be one Ordinary Share.
"holders" means the registered holders of the Securities.
"Indirect Participants" means Participants of DTC, such as securities
brokers and dealers, banks and trust companies, that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly.
"Initial Price" means $ , subject to adjustment as described under
"-- The Contract -- Dilution Adjustments".
"Insufficiency Determination" means a determination by the Collateral Agent
that the collateral pledged by the Seller fails to meet the requirements
described under "Investment Objective and Policies -- The Contract -- Collateral
Arrangements; Acceleration Upon Default By the Seller".
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"majority of the Trust'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.
"Managing Trustee" means the Trustee designated to serve as Managing
Trustee.
"Marketable Securities" means any common equity securities (whether voting
or non-voting) listed on a U.S. national or regional securities exchange or
reported by the NASDAQ National Market.
"NYSE" means the New York Stock Exchange, Inc.
"Ordinary Shares" means the ordinary shares, par value L0.01 per share, of
the Company.
"Participants" means participants of DTC.
"Paying Agent" means ChaseMellon Shareholder Services, L.L.C., (or its
successor) in its capacity as transfer agent, registrar and paying agent under
the Paying Agent Agreement.
"Paying Agent Agreement" means the Paying Agent Agreement, dated as of June
, 1999, between the Trust and ChaseMellon Shareholder Services, L.L.C., as
transfer agent, registrar and paying agent.
"Permitted Dividend" means any quarterly cash dividend in respect of the
Ordinary Shares, except to the extent that the per share amount of such dividend
results in an annualized dividend yield on the Ordinary Shares in excess of
12.5%.
"Pricing Date" means the date that a Rollover Offering is priced.
38
<PAGE> 41
"Reorganization Event" means (A) any consolidation, amalgamation or merger
of the Company, or any Company Successor, with or into another entity (other
than a consolidation or merger in which the Company is the continuing
corporation and in which the Ordinary Shares outstanding immediately prior to
the consolidation or merger 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) (x) any
statutory exchange of securities of the Company or any Company Successor with
another corporation or (y) any sale of all or substantially all of the
outstanding equity securities of the Company or any Successor Company, including
pursuant to any plan of arrangement or similar scheme with the Company's
shareholders under any applicable law, rule or regulation or order of any court
or governmental authority (in the case of each of the preceding clauses (x) and
(y), other than in connection with a consolidation or merger referred to in
clause (A)) or (D) any liquidation, dissolution or winding up of the Company or
any Company Successor.
"Rollover Offering" means a reoffering or refinancing of Securities
effected not earlier than June , 2002, by means of a completed public offering
or offerings, or another similar offering (which may include one or more
exchange offers), by or on behalf of the Seller.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Trust's $ Trust Automatic Common Exchange
Securities.
"Seller" means Amdocs International Limited.
"Spin-Off Distribution" means a distribution by the Company to holders of
Ordinary Shares of Marketable Securities issued by an issuer other than the
Company.
"Then-Current Market Price" of the Ordinary Shares, for the purpose of
applying any adjustment described in "Investment Objective and Policies -- The
Contract -- Dilution Adjustments", means the average Closing Price per Ordinary
Share for the Calculation Period consisting of five 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 after a record date,
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 Ordinary Shares is
determined for one or more (but not all) of such Trading Days, such Trading Days
will be disregarded in the calculation of the Then-Current Market Price (but no
additional Trading Days will be added to the Calculation Period). If no Closing
Price for the Ordinary Shares may be determined for any of such Trading Days,
the Then-Current Market Price shall be the Closing Price for the Ordinary Shares
for the most recent Trading Day prior to five Trading Days for which a Closing
Price for the Ordinary Shares may be determined pursuant to the definition of
"Closing Price". The ex-date with respect to any dividend, distribution or
issuance shall mean the first date on which the Ordinary Shares trade regular
way on their principal market without the right to receive such dividend,
distribution or issuance.
"Trading Day" in respect of any common equity security means a day on which
such common equity security (A) is not suspended from trading on any United
States 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 United States national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of that security.
"Transaction Value" means, with respect to any Reorganization Event, the
sum of: (i) for any cash received in such Reorganization Event, the amount of
such cash received per Ordinary Share; (ii) for any property other than cash or
Marketable Securities received in such Reorganization Event, an amount equal to
the market value on the date such Reorganization Event is consummated of such
property received per Ordinary Share as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Administrator, whose determination shall be final; and (iii) for any Marketable
Securities received in such Reorganization Event, an
39
<PAGE> 42
amount equal to the average Closing Price per share of these Marketable
Securities for the Calculation Period of 20 Trading Days immediately prior to
the Exchange Date (or, in the case of a Cash Merger, for the 20 Trading Days
immediately before the date the Reorganization Event is consummated), multiplied
by the number of such Marketable Securities received for each Ordinary Share;
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 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 may be determined for any of such Trading
Days, the calculation in the preceding clause (iii) will be based on the Closing
Price for the Marketable Securities for the most recent Trading Day prior to
such 20 Trading Days for which a Closing Price for the Marketable Securities may
be determined pursuant to the definition of "Closing Price".
"Trust" means the Amdocs Automatic Common Exchange Security Trust.
"Trust Agreement" means the trust agreement dated as of March 2, 1998
pursuant to which the Trust was formed, as amended and restated as of June ,
1999.
"Trustees" means the three trustees who will internally manage the Trust.
"Underwriters" means Goldman, Sachs & Co., BT Alex. Brown Incorporated and
Lehman Brothers Inc., the Underwriters of the Securities.
"Underwriters' Compensation" means the compensation of $ per Security
payable to the Underwriters by the Seller pursuant to the Underwriting
Agreement.
"United States Holder" means a beneficial owner of Securities who or that
is (i) a citizen or resident of the United States, (ii) a domestic corporation
or (iii) otherwise covered by United States federal income taxation on a net
income basis in respect of Securities.
"Value" means (i) in respect of cash, the amount of such cash; (ii) in
respect of any property other than cash or Marketable Securities, an amount
equal to the market value on the date the relevant Reorganization Event is
consummated (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator); and (iii) in
respect of any share of Marketable Securities, an amount equal to the average
Closing Price per share of those Marketable Securities for the 20 Trading Days
immediately before the date the relevant Reorganization Event is consummated;
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 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 may be determined for any of such Trading
Days, the calculation in the preceding clause (iii) will be based on the Closing
Price for the Marketable Securities for the most recent Trading Day prior to
such 20 Trading Days for which a Closing Price for the Marketable Securities may
be determined pursuant to the definition of "Closing Price".
40
<PAGE> 43
- ---------------------------------------------------------
- ---------------------------------------------------------
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the Securities offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of its date.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................... 2
The Trust................................ 9
Use of Proceeds.......................... 12
Investment Objective and Policies........ 12
Description of Securities................ 24
Risk Factors............................. 26
Certain Federal Income Tax
Considerations......................... 28
Underwriting............................. 32
Validity of Securities................... 33
Experts.................................. 33
Further Information...................... 33
Report of Independent Accountants........ 34
Statement of Assets and Liabilities...... 35
Glossary................................. 36
Appendix A: Prospectus of Amdocs
Limited................................ A-1
</TABLE>
------------------------
Through and including , 1999 (the 25th day after the date of this
prospectus), all dealers effecting transactions in these Securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to a dealer's obligation to deliver a prospectus when acting
as an Underwriter and with respect to an unsold allotment or subscription.
- ---------------------------------------------------------
- ---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
10,000,000 Securities
AMDOCS AUTOMATIC
COMMON EXCHANGE
SECURITY TRUST
$ Trust Automatic Common
Exchange Securities
(TRACES(TM))
------------------
PROSPECTUS
------------------
GOLDMAN, SACHS & CO.
DEUTSCHE BANC ALEX. BROWN
LEHMAN BROTHERS
---------------------------------------------------------
---------------------------------------------------------
<PAGE> 44
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<S> <C>
(a) Financial Statements
Part A
-- Report of Independent Accountants.
Statement of Assets and Liabilities.
Part B
-- None.
(b) Exhibits
2.a.(i) Trust Agreement*
2.a.(ii) Form of Amended and Restated Trust Agreement
2.d Form of Specimen Certificate of $ Trust 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 and Consent of Counsel to the Trust
2.n.(ii) Consent of Independent Public Accountants
2.n.(iii) Consents to Being Named as Trustee*
2.p Subscription Agreement
2.r Financial Data Schedule
</TABLE>
- ---------------
* Previously filed.
ITEM 25. MARKETING ARRANGEMENTS
See the Form of Underwriting Agreement to be filed as Exhibit 2.h to this
Registration Statement.
C-1
<PAGE> 45
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........................................... $ 85,616
New York Stock Exchange listing fee......................... 22,610
Printing (other than certificates).......................... 40,000
Fees and expenses of qualification under state securities
laws (excluding fees of counsel).......................... 0
Accounting fees and expenses................................ 50,000
Legal fees and expenses..................................... 200,000
NASD fees................................................... 30,500
Miscellaneous............................................... 21,274
--------
Total....................................................... $450,000
========
</TABLE>
ITEM 27. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Before March 2, 1999 the Trust had no existence. As of the effective date,
the Trust will have entered into a Subscription Agreement for one Security with
Goldman, Sachs & Co. and an Underwriting Agreement with Goldman, Sachs & Co., BT
Alex. Brown Incorporated and Lehman Brothers Inc. with respect to the Securities
offered by the prospectus.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
- -------------- --------------
<S> <C>
$ Trust Automatic Common Exchange Securities....... 1
</TABLE>
ITEM 29. INDEMNIFICATION
The Underwriting Agreement, to be filed as Exhibit 2.h to this Registration
Statement, provides for indemnification of the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act").
The Amended and Restated Trust Agreement filed as Exhibit 2.a.(ii) to this
Registration Statement provides for indemnification to each Trustee against any
claim or liability incurred in acting as Trustee of the Trust, except in the
case of willful misfeasance, bad faith, gross negligence or reckless disregard
of the Trustee's duties. The Custodian Agreement, Administration Agreement and
Paying Agent Agreement filed as Exhibits 2.j, 2.k.(i) and 2.k.(ii) to this
Registration Statement provide for indemnification to the Custodian,
Administrator and Paying Agent against any loss or expense incurred in the
performance of their obligations under the respective agreements, unless such
loss or expense is due to willful misfeasance, bad faith, gross negligence or
reckless disregard of their obligations. The Fund Indemnity Agreement filed as
Exhibit 2.k.(vi) to this Registration Statement provides that the Seller will
indemnify the Trust for certain indemnification expenses incurred under the
Trust Agreement, the Custodian Agreement, the Administration Agreement and the
Paying Agent Agreement.
Insofar as indemnification for liability 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. If a claim for indemnification against such
liabilities (other than the
C-2
<PAGE> 46
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 Chase Manhattan Bank, the
Registrant's administrator, at 450 West 33rd Street, New York, New York.
ITEM 32. MANAGEMENT SERVICES
Not applicable.
ITEM 33. UNDERTAKINGS
(a) The Registrant hereby undertakes to suspend offering of the Securities
until it amends its prospectus if (1) subsequent to the effective date of its
Registration Statement, the net asset value falls 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-3
<PAGE> 47
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
be signed on its behalf by the undersigned, thereto duly authorized, in the City
of New York, State of New York, on the 7th day of June, 1999.
AMDOCS AUTOMATIC COMMON EXCHANGE
SECURITY TRUST
By: /s/ PAUL S. EFRON
------------------------------------
Paul S. Efron
Trustee
Pursuant to the requirements of the Securities Act of 1933, this amendment
has been signed below by the following person, in the capacities and on the date
indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ PAUL S. EFRON Principal Executive Officer, June 7, 1999
- --------------------------------------------------- Principal Financial Officer,
Paul S. Efron Principal Accounting Officer
and Trustee
</TABLE>
<PAGE> 48
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT 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 $--Trust 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 Agreement..................................
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 and Consent of Counsel to the Trust.............
2.n.(ii) Consent of Independent Public Accountants...................
2.n.(iii) Consents to Being Named as Trustee*.........................
2.p Subscription Agreement......................................
2.r Financial Data Schedule.....................................
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
Exhibit 2.a.(ii)
S&C Draft of June 6, 1999
AMENDED AND RESTATED
TRUST AGREEMENT
CONSTITUTING
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
Dated as of [Pricing Date]
<PAGE> 2
Table of Contents
Page
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms............................................. 1
Section 1.2. Interpretation............................................ 6
ARTICLE II
TRUST DECLARATION; PURPOSES, POWERS
AND DUTIES OF THE TRUSTEES; ADMINISTRATION
Section 2.1. Declaration of Trust; Purposes of the Trust;
Resignation and Appointment of Trustees................... 6
Section 2.2. General Powers and Duties of the Trustees................. 7
Section 2.3. Portfolio Acquisition..................................... 8
Section 2.4. Portfolio Administration.................................. 9
Section 2.5. Manner of Sales........................................... 13
Section 2.6. Limitations on Trustees' Powers........................... 13
ARTICLE III
ACCOUNTS AND PAYMENTS
Section 3.1. The Trust Account......................................... 14
Section 3.2. Payment of Fees and Expenses.............................. 14
Section 3.3. Distributions to Holders.................................. 14
Section 3.4. Segregation............................................... 14
Section 3.5. Temporary Investments..................................... 14
ARTICLE IV
REDEMPTION
Section 4.1. Redemption................................................ 15
ARTICLE V
ISSUANCE OF CERTIFICATES; REGISTRY; TRANSFER OF SECURITIES
Section 5.1. Form of Certificate....................................... 15
<PAGE> 3
Section 5.2. Transfer of Securities; Issuance, Transfer and
Interchange of Certificates............................... 16
Section 5.3. Replacement of Certificates............................... 17
ARTICLE VI
EXECUTION OF THE CONTRACT
Section 6.1. Execution of the Contract................................. 17
ARTICLE VII
TRUSTEES
Section 7.1. Trustees.................................................. 18
Section 7.2. Vacancies................................................. 18
Section 7.3. Powers.................................................... 18
Section 7.4. Meetings.................................................. 19
Section 7.5. Resignation and Removal................................... 19
Section 7.6. Liability................................................. 19
Section 7.7. Compensation.............................................. 19
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Meetings of Holders....................................... 20
Section 8.2. Books and Records; Reports................................ 20
Section 8.3. Termination............................................... 21
Section 8.4. No Assumption of Liability................................ 22
Section 8.5. Amendment and Waiver...................................... 22
Section 8.6. Accountants............................................... 23
Section 8.7. Nature of Holder's Interest............................... 24
Section 8.8. Governing Law; Severability............................... 24
Section 8.9. Notices................................................... 24
Section 8.10. Entire Agreement......................................... 25
Section 8.11. Non-Assignability........................................ 25
Section 8.12. No Third Party Rights; Successors and Assigns............ 25
Section 8.13. Counterparts............................................. 25
<PAGE> 4
AMENDED AND RESTATED TRUST AGREEMENT
AMENDED AND RESTATED TRUST AGREEMENT, dated as of [Pricing Date], among
Goldman, Sachs & Co., as sponsor (the "Sponsor"), Paul S. Efron, as the prior
trustee, and Donald J. Puglisi, William R. Latham III and James B. O'Neill, as
trustees (the "Trustees"), constituting Amdocs Automatic Common Exchange
Security Trust (the "Trust").
W I T N E S S E T H:
WHEREAS, the Sponsor and Paul S. Efron, as trustee, have previously
entered into a Trust Agreement, dated as of March 2, 1999 (the "Original
Agreement"), creating Eighth Automatic Common Exchange Security Trust; and
WHEREAS, upon the execution of this Agreement, Paul S. Efron wishes to
resign as trustee and the Sponsor wishes to appoint the Trustees as the trustees
of the Trust; and
WHEREAS, the parties hereto wish to change the name of the Trust to
Amdocs Automatic Common Exchange Security Trust; and
WHEREAS, the parties hereto wish to amend and restate the Original
Agreement in certain other respects; and
WHEREAS, the Trust has previously issued to the Sponsor one Security in
consideration of a purchase price of $100.00;
NOW, THEREFORE, the parties hereto agree to amend and restate the
Original Agreement as provided in this Agreement and, upon the execution and
delivery of this Agreement by the parties to this Agreement, the Original
Agreement will be automatically amended and restated in its entirety to read as
provided in this Agreement.
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms. As used in this Agreement, the following
terms have the following meanings:
"Accelerated Portion" has the meaning specified in the
Contract.
"Additional Purchase Price" has the meaning specified in the
Contract.
<PAGE> 5
"Administration Agreement" means the Administration Agreement,
dated as of [Pricing Date], between the Administrator and the Trust,
and any substitute agreement therefor entered into pursuant to Section
2.2(a).
"Administrator" means The Chase Manhattan Bank, or its
successor as permitted under Article IV of the Administration Agreement
or appointed pursuant to Section 2.2(a).
"Agreement" means this Amended and Restated Trust Agreement.
"Average Market Price" has the meaning specified in the
Contract.
"Business Day" means a day on which the New York Stock
Exchange, Inc. is open for trading and that is not a day on which
commercial banks in The City of New York are authorized or obligated by
law to close.
"Cash Merger" has the meaning specified in the Contract.
"Cash Settlement Alternative" has the meaning specified in the
Contract.
"Certificate" means any certificate evidencing the ownership
of Securities substantially in the form of Exhibit A.
"Code" means the Internal Revenue Code of 1986.
"Collateral Agent" means The Chase Manhattan Bank, or its
successor as permitted under Article VIII of the Collateral Agreement
or appointed pursuant to Section 2.2(a).
"Collateral Agreement" means the Collateral Agreement, dated
as of [Pricing Date], among Seller, the Collateral Agent and the Trust,
securing Seller's obligations under the Contract, substantially in the
form of Exhibit B.
"Commencement Date" means the day on which the Underwriting
Agreement is executed.
"Commission" means the United States Securities and Exchange
Commission.
"Company" means Amdocs Limited, a corporation formed under the
laws of the Island of Guernsey.
"Contract" means the Purchase Agreement, dated as of [Pricing
Date], entered into by the Trust with the Seller, substantially in the
form of Exhibit C.
-2-
<PAGE> 6
"Custodian" means The Chase Manhattan Bank, or its successor
as permitted under Section 11 of the Custodian Agreement or appointed
pursuant to Section 2.2(a).
"Custodian Agreement" means the Custodian Agreement, dated as
of [Pricing Date], between the Custodian and the Trust, and any
substitute agreement therefor entered into pursuant to Section 2.2(a).
"Depositary" means The Depository Trust Company, or any
successor depositary appointed pursuant to Section 5.1.
"Distribution Date" means each [QUARTERLY ANNIVERSARIES OF
PRICING DATE] of each year commencing [FIRST QUARTERLY ANNIVERSARY OF
PRICING DATE] to and including the Exchange Date, or if any such date
is not a Business Day, then the first Business Day thereafter.
"Excess Purchase Payment" has the meaning specified in the
Contract.
"Exchange" means the delivery of Shares by the Trustees to the
Holders, subject to the adjustments and exceptions set forth in the
Contract (or, if Seller elect the Cash Settlement Alternative, 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" has the meaning specified in the Contract.
"Exchange Rate" has the meaning specified in the Contract.
"Expense Agreement" means the Fund Expense Agreement, dated as
of [Pricing Date], among Seller, The Chase Manhattan Bank, as Service
Provider, and the Trust substantially in the form of Exhibit D.
"Event of Default" has the meaning specified in the Contract.
"Firm Purchase Price" has the meaning specified in the
Contract.
"First Time of Delivery" has the meaning specified in the
Underwriting Agreement.
"Holder" means the registered owner of any Security as
recorded on the books of the Paying Agent.
"Indemnity Agreement" means the Fund Indemnity Agreement,
dated as of [Pricing Date], among Seller, The Chase Manhattan Bank, as
Service Provider, and the Trust substantially in the form of Exhibit E.
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"Investment Company" means an investment company as defined in
Section 3 of the Investment Company Act.
"Investment Company Act" means 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" means the Trustee designated as the
Managing Trustee by resolution of the Trustees.
"Marketable Securities" has the meaning specified in the
Contract.
"Merger Consideration" has the meaning specified in the
Contract.
"Ordinary Shares" means the Ordinary Shares, par value pound
sterling 0.01 per share, of the Company.
"Original Agreement" has the meaning specified in the recitals
to this Agreement.
"Participant" means a Person having a book-entry only system
account with the Depositary.
"Paying Agent" means ChaseMellon Shareholder Services, L.L.C.,
or its successor as permitted under Section 6.6 of the Paying Agent
Agreement or appointed pursuant to Section 2.2(a).
"Paying Agent Agreement" means the Paying Agent Agreement,
dated as of [Pricing Date], between the Paying Agent and the Trust, and
any substitute agreement therefor entered into pursuant to Section
2.2(a).
"Person" means an individual, a partnership, a corporation, a
limited liability company, a trust, an unincorporated association, a
joint venture or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"Prospectus" means the prospectus relating to the Securities
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" means $______ per Security paid to
each Holder on each Distribution Date.
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"Record Date" means the Business Day preceding each
Distribution Date.
"Registration Statement" means the Registration Statement on
Form N-2 (Registration Nos. 333-73265 and 811-09245) of the Trust, as
amended.
"Reorganization Event" has the meaning specified in the
Contract.
"Second Time of Delivery" has the meaning specified in the
Underwriting Agreement.
"Securities Act" means the Securities Act of 1933.
"Security" means a $____ Trust 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" means Amdocs International Limited, a corporation
formed under the laws of the Island of Guernsey.
"Shares" means Ordinary Shares to be exchanged by the Trustees
for the Securities on the Exchange Date; provided that after a Spin-Off
Distribution, all references to "Shares" shall include the shares
distributed in such event; and provided further that after any
Reorganization Event, all references to "Shares" shall refer to the
Marketable Securities received in such event in lieu of referring to
the Ordinary Shares.
"Spin-Off Distribution" has the meaning specified in the
Contract.
"Sponsor" has the meaning specified in the preamble to this
Agreement.
"Temporary Investments" means direct short-term U.S.
government obligations, as specified from time to time as provided in
Section 3.5.
"Transfer Agent and Registrar" means, at any time, the
transfer agent and registrar for the Ordinary Shares or Marketable
Securities, as applicable, at such time.
"Treasury Securities" means the U.S. Government Securities
purchased by the Trustees at the First Time of Delivery and, if
applicable, the Second Time of Delivery as provided in Section 2.3(b)
and, if applicable, the U.S. Government Securities delivered to the
Trust by Seller pursuant to Section 2.1(e) of the Contract.
"Trust" has the meaning specified in the preamble to this
Agreement.
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"Trust Account" means the account created pursuant to Section
3.1.
"Trust Estate" means the Contract and the U.S. Government
Securities held at any time by the Trust, together with any Temporary
Investments held at any time pursuant to Section 3.5, and any proceeds
of or from such U.S. Government Securities or Temporary Investments and
any other moneys held at any time in the Trust Account.
"Trustees" has the meaning specified in the preamble to this
Agreement.
"Underwriters" means the Underwriters named in the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement,
dated [Pricing Date], as described in the Prospectus.
"U.S. Government Securities" means direct obligations of the
United States of America.
Section 1.2. Interpretation.
(a) When a reference is made in this Agreement to Articles, Sections,
Exhibits or Schedules, such reference is to Articles or Sections of, or Exhibits
or Schedules to, this Agreement unless otherwise indicated.
(b) The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement, and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.
(c) Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
(d) Any reference to any statute, regulation or agreement shall be a
reference to such statute, regulation or agreement as supplemented or amended
from time to time.
ARTICLE II
TRUST DECLARATION; PURPOSES, POWERS
AND DUTIES OF THE TRUSTEES; ADMINISTRATION
Section 2.1. Declaration of Trust; Purposes of the Trust; Resignation
and Appointment of Trustees.
(a) 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
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Underwriters the Securities, receive and redeliver additional U.S. Government
Securities upon an extension of the Exchange Date pursuant to the Contract, 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 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.
(b) Paul S. Efron hereby resigns as trustee of the Trust, in accordance
with the provisions of Section 4 of the Original Agreement, and the Sponsor, as
the sole holder of any beneficial interest in the Trust as of the date of this
Agreement, hereby accepts the resignation of Paul S. Efron and appoints Donald
J. Puglisi, William R. Latham III and James B. O'Neill to be the Trustees of the
Trust under this Agreement.
(c) Upon the execution of this Agreement, the name of the Trust shall
be changed to Amdocs Automatic Common Exchange Securities Trust.
Section 2.2. General Powers and Duties of the Trustees. In furtherance
of the provisions of Section 2.1, the Sponsor authorizes and directs the
Trustees:
(a) to enter into and perform (and, in accordance with Section
8.5, amend) the Contract, the Collateral Agreement, the Underwriting
Agreement, the Expense 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 institution qualified in all
respects to carry out its obligations under the Administration
Agreement or the Collateral Agreement, as the case may be;
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(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;
(c) to issue and sell to the Underwriters an aggregate of up
to [TOTAL NUMBER OF SECURITIES UNDER UNDERWRITING AGREEMENT, INCLUDING
THE OVER-ALLOTMENT OPTION] 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 Security 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;
(d) to select independent public accountants and, subject to
the provisions of Section 8.5, to engage such independent public
accountants;
(e) to engage legal counsel and, to the extent required by
Section 2.4, 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 Collateral Agreement, the Custodian Agreement,
the Paying Agent Agreement and the Administration Agreement, to the
extent permitted by applicable law; and
(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 of this Agreement and applicable law,
including, without limitation, the Investment Company Act.
Section 2.3. Portfolio Acquisition. In furtherance of the provisions of
Section 2.1, the Sponsor further specifically authorizes and directs the
Trustees:
(a) to enter into the Contract with Seller on the Commencement
Date for settlement on the date or dates provided thereunder and,
subject to satisfaction
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of the conditions set forth in the Contract, 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 the fees and expenses of
the Trust incurred in connection with the public offering of the
Securities and the costs and expenses incurred in connection with the
organization of the Trust as described in the first sentence of Section
3.2 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 Seller on the Exchange Date the Shares subject
thereto (or, if Seller elects the Cash Settlement Alternative, the
amount in cash specified in the Contract) so that the Trust may execute
the Exchange with the Holders; and
(b) to purchase for settlement (i) at the First Time of
Delivery, with the proceeds of the sale of the Securities issued by the
Trust at such First Time of Delivery, U.S. Government Securities having
the terms set forth on Schedule I(a), from such brokers or dealers as
the Trustees shall designate in writing to the Administrator, and (ii)
at the Second Time of Delivery, if any, with the proceeds of the sale
of the Securities issued by the Trust at such Second Time of Delivery,
U.S. Government Securities that, through the scheduled payment of
principal and interest in accordance with their terms, will provide,
not later than one Business Day before each Distribution Date cash in
an amount equal to not less than the product of $___ and the Additional
Share Base Amount (after taking into account any prior payments under
such U.S. Government Securities and any prior distributions made by the
Trust), and otherwise having such terms as may be determined by the
Sponsor (which terms shall be set forth on a new Schedule I(b), which
shall be attached to and form a part of this Agreement from and after
such Second Time of Delivery), from such brokers or dealers as the
Trustees shall designate in writing to the Administrator.
Section 2.4. Portfolio Administration. In furtherance of the provisions
of Section 2.1, the Sponsor further specifically authorizes and directs the
Trustees:
(a) Determination of Dilution, Merger or Acceleration
Adjustments. Upon receipt of any notice pursuant to Section 5.1(d)(ii)
of the Contract of an event requiring an adjustment to the Exchange
Rate, or upon otherwise acquiring knowledge of such an event, to
calculate the required adjustment and furnish notice thereof to the
Collateral Agent and Seller, or to request from 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 Ordinary Shares as described in Section 6.2 of the
Contract, (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, or (iii) the declaration or payment of
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a dividend or distribution to all holders of Ordinary Shares of
evidences of its indebtedness or other non-cash assets or the issuance
of Ordinary Shares rights or warrants as described in Section 6.1(c) of
the Contract, to retain the nationally recognized investment banking
firm selected by the Administrator to determine the market value of
such property as provided in the Contract, and to deliver to Seller
notice pursuant to Section 8.1 of the Contract identifying the firm
proposed to be selected and retained, and to cause the Administrator to
consult with Seller on such selection and retention as provided in such
Section 8.1;
(c) Application to List Securities. If the Securities are
delisted or suspended from trading on the New York Stock Exchange,
Inc., to apply for listing of the Securities on another national or
regional securities exchange or for quotation on another trading
market; and
(d) Additional U.S. Government Securities. To accept
additional U.S. Government Securities delivered to the Trust in
connection with an extension of the Exchange Date at Seller's election
in accordance with Section 2.3(c) of the Contract, and to redeliver
such U.S. Government Securities in connection with an acceleration of
the Exchange Date at Seller's election in accordance with Section
2.3(f) of the Contract;
(e) Delivery of Cash Settlement Alternative Election Notice to
Holders of Securities. Upon receipt of a notice from Seller of its
election of the Cash Settlement Alternative, as provided by Section
2.3(d) of the Contract, of the extension of the Exchange Date, as
provided by Section 2.3(e) of the Contract, or of the acceleration of
the Exchange Date, as provided by Section 2.3(f) of the Contract, to
give notice of such election, extension or acceleration as provided in
the Contract;
(f) Acceleration. In the event (i) an acceleration of the
Contract shall occur due to an Event of Default as provided in Article
VII of the Contract, or (ii) a Cash Merger shall occur in which all of
the Merger Consideration is included in the Accelerated Portion, to
liquidate or cause the Custodian to liquidate all the Treasury
Securities;
(g) Determination of Amounts to be Delivered under the
Contract. (i) To calculate, on the Exchange Date, upon the acceleration
of Seller's obligations under the Contract pursuant to Section 7.1 of
the Contract and upon the occurrence of a Cash Merger, the number of
Shares or amount in cash required to be delivered by Seller under the
Contract on such date or as a result of such event, and (ii) to furnish
notice of the amounts so determined to the Collateral Agent and Seller;
(h) Distribution of Exchange Consideration. Unless a
Reorganization Event shall occur in which the Merger Consideration does
not include any Marketable Securities (in which event the distribution
of proceeds shall be
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governed by Section 2.4(i) or 2.4(j), as applicable) or Seller elects
the Cash Settlement Alternative (in which event the distribution of
proceeds shall be governed by Section 2.4(i)), or the Contract shall be
accelerated pursuant to Section 7.1 of the Contract (in which event the
distribution of proceeds shall be governed by Section 2.4(k)):
(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 Average Market Price; and, in
accordance with Section 2.3 of the Indemnity Agreement, to pay
such difference, if positive, to Seller, or to request payment
of such difference, if negative, from Seller;
(iii) Delivery of Shares. To deliver the remaining
Shares to the Transfer Agent and Registrar for such Shares 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 for such Shares 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
Trust under the Contract on the Exchange Date, rounded down to
the nearest integral number; (B) the Transfer Agent and
Registrar 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
delivered to the Trust under the Contract on the Exchange
Date, reduced by the aggregate fractional shares allocable to
beneficial owners of Securities who own through 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 Average Market Price;
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(v) Record Date. The distributions described in this
paragraph (g) shall be made to Holders of record as of the
close of business on the Business Day preceding the Exchange
Date; and
(vi) Reorganization Events. If a Reorganization Event
occurs in which the Merger Consideration includes Marketable
Securities, this Section 2.4(h) shall relate to the portion of
the Merger Consideration that consists of Marketable
Securities.
(i) Distribution of Cash Upon Seller's Election of Cash
Settlement Alternative or Following a Reorganization Event. If Seller
elects the Cash Settlement Alternative, or if Seller is required or
elects to deliver cash on the Exchange Date following a Reorganization
Event pursuant to Section 6.2(a) of the Contract, to distribute to each
Holder of record as of the close of business on the Business Day
preceding the Exchange Date such Holder's pro rata share of any cash
received by the Trust from the Seller in connection therewith;
(j) Distribution of Accelerated Portion. If a Cash Merger
shall occur, to distribute promptly to each Holder of record as of the
close of business on the Business Day preceding the distribution date
such Holder's pro rata share of the Accelerated Portion delivered under
the Contract together with, if applicable, such Holder's pro rata share
of the proceeds of the liquidation of the Treasury Securities pursuant
to Section 2.4(f); and
(k) Distribution of Cash and Shares Received upon Acceleration
of Exchange Date Following a Default by Seller . If the obligations of
Seller are accelerated pursuant to Section 7.1 of the Contract:
(i) Determination of Fractional Shares. To determine,
on the Business Day following the date on which Seller or the
Collateral Agent delivers Ordinary Shares and Marketable
Securities to the Trust, as provided in Section 7.1 of the
Contract or Section 7.1 of the Collateral Agreement: (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 Average Market Price; and, in
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accordance with Section 2.3 of the Indemnity Agreement, to pay
such difference, if positive, to Seller, or to request payment
of such difference, if negative, from Seller or from the
Collateral Agent from the proceeds of the collateral under the
Collateral Agreement;
(iii) Delivery of Shares. To deliver the remaining
Shares to the Transfer Agent and Registrar for such Shares the
Business Day following the date on which Seller or the
Collateral Agent delivers Ordinary Shares and Marketable
Securities to the Trust, 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 for such Shares 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
Trust under the Contract on the Exchange Date, rounded down to
the nearest integral number; (B) the Transfer Agent and
Registrar for such 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 delivered to the Trust under the Contract on such
Business Day, reduced by the aggregate fractional shares
allocable to beneficial owners of Securities who own through
such Participant;
(iv) Distribution of Cash in Respect of Fractional
Shares and Treasury Securities. To distribute to each Holder
of Securities (x) 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 Average Market Price,
together with (y) such Holder's pro rata share of the proceeds
of the liquidation of the Treasury Securities pursuant to
Section 2.4(f); and
(v) Record Date. The distributions described in this
paragraph (h) shall be made to Holders of record as of the
close of business on the Business Day following the date on
which Seller or the Collateral Agent delivers Ordinary Shares
and Marketable Securities to the Trust.
Section 2.5. Manner of Sales. Any sale of Trust property permitted or
required under this Agreement 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:
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(a) to purchase or hold any securities or instruments except
for the Shares, the Contract, the Treasury Securities, any additional
U.S. Government Securities delivered to the Trust in connection with an
extension of the Exchange Date pursuant to Section 2.3(e) of the
Contract, the Temporary Investments contemplated by Section 3.5 and, in
the event of a Reorganization Event or a Spin-Off Distribution,
Marketable Securities or any other property received in such event;
(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;
(h) to purchase or sell real estate, commodities or
commodities contracts;
(i) to purchase restricted securities;
(j) to make loans (other than the purchase of the Treasury
Securities pursuant to Section 2.3); 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, any other U.S. Government Securities delivered to the
Trust and any Temporary Investments held pursuant to Section 3.5, all moneys
received from the sale of the
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Securities to the Sponsor, and any proceeds from the sale to the Underwriters of
the Securities remaining after the purchase of the Contract and the Treasury
Securities shall be credited to the Trust Account.
Section 3.2. Payment of Fees and Expenses. If so directed by Seller,
the Administrator is authorized to pay, from the amounts payable to Seller
pursuant to the Contract, the fees and expenses of the Trust incurred in
connection with the public offering of the Securities and the costs and expenses
incurred in connection with the organization of the Trust. In addition, the
Administrator is authorized to pay, from the assets of the Trust, the fees and
expenses of the Trust incurred in connection with the public offering of the
Securities and the costs and expenses incurred in connection with the
organization and operation of the Trust, to the extent that such fees, costs and
expenses are not paid by third parties.
Section 3.3. Distributions to Holders. On 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 Paying Agent or by any other means mutually agreed upon by the
Holder and the Trust, an amount equal to the Quarterly Distribution with respect
to all Securities held by such Holder computed as of the close of business on
such Distribution Date.
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 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. Temporary 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 Investment 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 the payment or
performance of 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
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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.
ARTICLE V
ISSUANCE OF CERTIFICATES; REGISTRY; TRANSFER OF SECURITIES
Section 5.1. Form of Certificate.
(a) Each Certificate evidencing Securities shall be executed manually
or in facsimile by the Managing Trustee and countersigned manually by the Paying
Agent in substantially the form of Exhibit A with the blanks appropriately
filled in, shall be dated the date of countersignature 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.
(b) The Certificates delivered to the Underwriters at the First Time of
Delivery and the Second Time of Delivery (if any) will be issued in the form of
a global Certificate or Certificates representing the Securities issued to the
Underwriters, to be delivered to the Depositary, or its custodian, by or on
behalf of the Trust. Such Certificate or Certificates shall initially be
registered on the books and records of the Trust in the name of Cede & Co., the
nominee of the Depositary, and no beneficial owner of such Securities will
receive a definitive Certificate representing such beneficial owner's interest
in such Securities, except as provided in the next paragraph. Unless and until
definitive, fully registered Certificates have been issued pursuant to the next
paragraph, the Trust shall be entitled to deal with the Depositary for all
purposes of this Agreement as the Holder and the sole holder of the Certificates
and shall have no obligation to the beneficial owners thereof, and none of the
Trust, the Trustees, or any agent of the Trust or the Trustees shall have any
liability with respect to or responsibility for the records of the Depositary.
(c) If the Depositary elects to discontinue its services as securities
depository, then definitive Certificates shall be prepared by the Trustees as
provided above. Upon surrender of the global Certificate or Certificates
accompanied by registration instructions, the Trustees shall cause definitive
Certificates to be delivered to the
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beneficial owners in accordance with the instructions of the Depositary. Neither
the Trustees nor the Trust shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions.
(d) Pending the preparation of definitive Certificates, the Managing
Trustee may execute and the Paying Agent shall countersign 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 countersigned manually 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 to the
Paying Agent 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 countersign 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.
(a) 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 Agreement are
interchangeable for one or more other Certificates in an equal aggregate number
of Securities and all Certificates issued 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 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.
(b) 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.
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(c) All Certificates canceled pursuant to this 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 canceled Certificates.
(d) 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 of the Trustees and the Paying Agent, 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). Any mutilated Certificate shall be
duly surrendered and canceled before any duplicate Certificate shall be issued
in exchange and substitution therefor. Upon issuance of any duplicate
Certificate pursuant to this Section 5.3, 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 as in effect in the State of New
York to a Holder presenting a Certificate for transfer in the case of an
overissue.
ARTICLE VI
EXECUTION OF THE CONTRACT
Section 6.1. Execution of the Contract. The Contract shall be executed
manually or in facsimile by the Managing Trustee and executed manually by Seller
and shall be dated the date of execution and delivery by 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
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Trustees and, then, until such Trustee's successor is duly elected and
qualified. 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 regular
annual or special meeting of Holders called for the purpose of electing any
Trustee. 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 Agreement and shall
evidence his consent by executing this Agreement or a supplement hereto. 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.
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 special meeting
of Holders for the purpose of electing Trustees in compliance with Sections 10
and 16 of the Investment Company Act. Any Trustee elected at such a meeting
shall have the qualifications specified in Section 7.1. Until a vacancy in the
office of any Trustee is filled as 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
Agreement. 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, 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 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
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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 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 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 taking any action 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 Agreement or for the due
execution hereof by any other Person, or for or in respect of the validity or
sufficiency of Securities or the 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 Estate 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.
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 $____________, 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 $____________ 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.
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ARTICLE VIII
MISCELLANEOUS
Section 8.1. Meetings of Holders. The Trustees shall hold annual
meetings of Holders to elect Trustees as provided in Section 7.1. 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 (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 meeting,
and no proxy shall be valid after eleven months following the date of its
execution. Any Investment Company owning Securities in excess of the limits
imposed by Sections 12(d)(1)(A)(i) and 12(d)(1)(C) of the Investment Company Act
shall vote its Securities in proportion to the votes of all other Holders.
Section 8.2. Books and Records; Reports.
(a) The Trustees shall keep a certified copy or duplicate original of
this Agreement on file at the office of the Trust, which shall be located at 450
West 33rd Street, New York, New York 10001, 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 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.
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(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 on the basis of the bid price received by the Trust
in respect of the Contract, or any portion thereof covering not less than 1,000
shares, from an independent broker-dealer firm unaffiliated with the Trust to be
named by the Trustees who is in the business of making bids on financial
instruments similar to the Contract and with terms comparable thereto, or if
such a bid quotation is not available, as determined in good faith by the
Trustees.
Section 8.3. Termination.
(a) This Agreement and the Trust created hereby shall terminate upon
the earliest of (i) the date 90 days after the execution of this Agreement if
(x) the Securities have not theretofore been issued to the Underwriters under
the Underwriting Agreement or (y) the net worth of the Trust is not at least
$100.00 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 Contract shall be accelerated pursuant to Article VII
thereof or if Section 6.2 thereof results in the acceleration of all the
obligations of Seller, 10 Business Days after the date on which the Trust shall
receive the Shares or other consideration then required to be delivered by
Seller, or the proceeds of any sale of collateral pursuant to Section 7.3 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 Agreement, nor
entitle his legal representatives or heirs to claim an accounting or to take any
action or proceeding
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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 shall be closed.
(c) For purposes of termination under Sections 8.3(a)(ii), (iii) and
(iv), within five Business Days after such termination, the Trustees shall,
subject to any applicable provisions of law, effect or cause the Custodian to
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. No Assumption of Liability. By executing this Agreement,
none of the Trustees assumes any personal liability under this Agreement except
as expressly set forth in this Agreement.
Section 8.5. Amendment and Waiver.
(a) This Agreement, and any of the agreements referred to in Section
2.2(a), may be amended from time to time by the Trustees for any purpose prior
to the issuance and sale to 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 govern mental 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 Agreement, and any of the agreements referred to in Section
2.2(a), may also be amended from time to time by the Trustees (or the
performance of any of the provisions of this Agreement or any of such other
agreements may be waived) with the consent by the required vote of the Holders
in accordance with Section 8.1; provided that this Agreement may not be amended,
(i) without the consent by vote of the Holders of all Securities then
outstanding, to increase the number of Securities issuable under this Agreement
above the number of Securities specified in Section 2.2(c) or such lesser number
as may be outstanding at any time during the term of this Agreement, (ii) to
reduce the interest in the Trust represented by any Security without the consent
of the Holder of such Security, (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
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all Securities then outstanding, if such amendment would effect a change in the
voting requirements set forth in Section 8.1 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.
(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 of this Agreement or the Agreements referred to in Section 2.2(a)
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 the Holders within the meaning of Treasury
Regulation Section 301.7701-4(c), or (ii) would or could cause the Trust, 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.
Section 8.6. 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, and thereafter as required by
the Investment Company Act and the rules and regulations thereunder. The
employment of any independent public accountant for the
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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.
(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 8.7. 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 Agreement, for
the Shares, the Contract, the Treasury Securities or other assets or monies 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 shall be construed to constitute
the Holders from time to time as partners or members of an association.
Section 8.8. Governing Law; Severability. 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 rights of the parties hereto and the
Holders and the construction, validity and effect of the provisions hereof. 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 contained in this Agreement unenforceable or invalid.
Section 8.9. Notices.
(a) All notices and other communications provided for in this
Agreement, unless otherwise specified, shall be in writing and shall be given at
the addresses set forth in the following sentence or at such other addresses as
may be designated by notice duly given in accordance with this Section 8.9 to
each other party to this Agreement. Until such notice is given, (i) notices to
Sponsor shall be directed to it at Goldman, Sachs & Co., 85 Broad Street, New
York, New York 10004, Attention: Registration Department; (ii) notices to the
Trust or the Trustees shall be directed to it in care of the Administrator for
Purchaser, The Chase Manhattan Bank, 450 West 33rd Street, New York, New York
10001, Telecopier No. (212) 946-3638, Attention: Collateral Management Services
and to each Trustee at such Trustee's address set forth beneath its signature
below; and (ii) notices to any 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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(b) Each notice given pursuant to Section 8.9(a) 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 8.9.
Section 8.10. Entire Agreement. Except as expressly set forth in this
Agreement, this Agreement constitutes the entire agreement among the parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements, understandings and negotiations, both written and oral, among the
parties with respect to the subject matter of this Agreement.
Section 8.11. Non-Assignability. This Agreement and the rights and
obligations of the parties under this Agreement may not be assigned or delegated
by either party without the prior written consent of the other party, and any
purported assignment without such consent shall be void.
Section 8.12. 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 Sponsor, the Trustees and the Holders and their respective
successors and assigns and no other person shall assert any rights as third
party beneficiary under this Agreement. Whenever any of the parties to this
Agreement is referred to, such reference shall be deemed to include the
successors and assigns of such party. All the covenants and agreements in this
Agreement contained by or on behalf of Sponsor and the Trustees 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
Trustees and their successors and assigns.
Section 8.13. Counterparts. This Agreement may be executed,
acknowledged and delivered in any number of counterparts, each of which shall be
an original, but all of which shall constitute a single agreement, with the same
effect as if the signatures on each such counterpart were upon the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Trust Agreement to be duly executed and delivered as of the date
hereof.
THE SPONSOR:
Goldman, Sachs & Co.,
as Sponsor
By:
THE RETIRING TRUSTEE:
Paul S. Efron
THE TRUSTEES:
By:
Donald J. Puglisi,
as Trustee
Address: Department of Economics
University of Delaware
Newark, Delaware 19716
By:
William R. Latham III,
as Trustee
Address: Department of Economics
University of Delaware
Newark, Delaware 19716
By:
James B. O'Neill,
as Trustee
Address: Department of Economics
University of Delaware
Newark, Delaware 19716
<PAGE> 31
Schedule I(a)
TREASURY SECURITIES
All terms specified are for stripped principal or interest
components of U.S. Treasury debt obligations.
<TABLE>
<CAPTION>
FIRST TIME OF DELIVERY
- -------------------------------------------------------------------------------------------------------------------
PAR ZERO-COUPON RATE PRICE COST CUSIP
STRIP
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
<S> <C> <C> <C> <C> <C>
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
========== ============================ ============ ================= ====================== ================
</TABLE>
SETTLEMENT DATE:
<PAGE> 32
Schedule I(b)
TREASURY SECURITIES
All terms specified are for stripped principal or interest
components of U.S. Treasury debt obligations.
<TABLE>
<CAPTION>
SECOND TIME OF DELIVERY
- -------------------------------------------------------------------------------------------------------------------
PAR ZERO-COUPON RATE PRICE COST CUSIP
STRIP
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
<S> <C> <C> <C> <C> <C>
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
- ---------- ---------------------------- ------------ ----------------- ---------------------- ----------------
========== ============================ ============ ================= ====================== ================
</TABLE>
SETTLEMENT DATE:
<PAGE> 33
Exhibit A
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Amdocs Automatic
Common Exchange Security Trust or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of
Cede & Co. (or in such other name as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein. This certificate may be exchanged by
an authorized representative of DTC in whole or in part for securities in
definitive form, registered in the names of such holders as such representative
of DTC shall specify, in which case, a new certificate will be issued in the
name of Cede & Co. (or in such other name as is requested by such authorized
representative of DTC) representing the securities not issued in definitive
form.
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.
$___ TRUST AUTOMATIC COMMON EXCHANGE SECURITIES
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
CUSIP NO. ____________
NO. _______ ____________ SHARES
THIS CERTIFIES THAT CEDE & CO. IS THE RECORD OWNER OF ____________ OF
THE $____ TRUST AUTOMATIC COMMON EXCHANGE SECURITIES OF AMDOCS AUTOMATIC COMMON
EXCHANGE SECURITY TRUST CONSTITUTING FRACTIONAL UNDIVIDED INTERESTS IN AMDOCS
AUTOMATIC COMMON EXCHANGE SECURITY TRUST, A TRUST CREATED UNDER THE LAWS OF THE
STATE OF NEW YORK PURSUANT TO A TRUST AGREEMENT AMONG 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, 450 WEST 33RD STREET, NEW YORK, NEW YORK 10001.
THIS CERTIFICATE IS TRANSFERABLE AND EXCHANGEABLE 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.
<PAGE> 34
THIS CERTIFICATE IS NOT VALID UNLESS MANUALLY COUNTERSIGNED BY
THE PAYING AGENT.
WITNESS THE FACSIMILE SIGNATURE OF THE MANAGING TRUSTEE.
AMDOCS AUTOMATIC COMMON
EXCHANGE SECURITY TRUST
DATED:
By:
[Name]
Managing Trustee
COUNTERSIGNED:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Paying Agent
By:_________________________________
Authorized Signature
-2-
<PAGE> 1
Exhibit 2.h
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
(subject to exchange into ordinary shares of Amdocs Limited)
$ TRUST AUTOMATIC COMMON EXCHANGE SECURITIES
Underwriting Agreement
June , 1999
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Lehman Brothers Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Amdocs 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 10,000,000 shares 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 1,500,000 additional shares of the $
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 one or fewer Ordinary Shares, par value
pound sterling 0.01 per share ("Stock"), of Amdocs Limited, a Guernsey
corporation (the "Company"), or for cash pursuant to the Cash Settlement
Alternative (as such term is defined in the Trust Prospectus) (as defined in
Section 1(c)(i) hereof) on June , 2002 (the "Exchange Date") to be delivered
pursuant to a forward purchase contract (the "Contract"), dated June
, 1999, among the Trust and an existing shareholder of the Company identified
in Schedule II hereto (the "Seller"). In lieu of delivery of shares of Stock,
the Contract provides that the Seller may elect (i) to pay cash or deliver other
securities on the Exchange Date for each share of Stock then deliverable and
(ii) to extend the Exchange Date to a date not later than September , 2002, in
each case subject to the terms and conditions of the Contract. The Trust has
<PAGE> 2
entered into a Contract with the Seller obligating that Seller to deliver to the
Trust on the Exchange Date a number of shares of Stock equal to the product of
the Exchange Rate (as such term is defined in the Trust Prospectus) times the
initial number of shares of Stock subject to such Contract. The Seller's
obligations under the Contract will be secured by pledge of collateral pursuant
to the terms of a collateral agreement, dated June , 1999, among the Seller,
The Chase Manhattan Bank ("Chase"), as collateral agent (in such capacity, the
"Collateral Agent"), and the Trust (the "Collateral Agreement").
It is understood by all the parties that the Company, the Seller and
certain other shareholders of the Company (together with the Seller, the
"Selling Stockholders") are concurrently entering into an agreement (the
"Underwriting Agreement") providing for the sale by the Company and the Selling
Stockholders of up to a total of 20,000,000 shares of Stock and, at the election
of the Underwriters, up to 3,000,000 additional shares of Stock, through
arrangements with certain underwriters, for whom Goldman, Sachs & Co., Banc of
America Securities LLC, BancBoston Robertson Stephens Inc., BT Alex. Brown
Incorporated, Lehman Brothers Inc. and SG Cowen Securities Corporation are
acting as representatives.
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters, the Trust and the Seller that:
(i) A registration statement on Form F-1 (File No.
333-75151) (the "Initial Company Registration Statement") in respect of
the shares of Stock deliverable pursuant to the Contract has been filed
with the Securities and Exchange Commission (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, or have been filed with,
as the case may be, 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"), to be filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended (the "Act"),
which will become effective upon filing, no other document with respect
to the Initial Company Registration Statement has heretofore been filed
with the Commission; and no stop order suspending the effectiveness of
the Initial Company Registration Statement or any post-effective
amendment thereto or the Company Rule 462(b) Registration Statement, if
any, has been issued and no notice has been received from the
Commission by the Company that any 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 Initial Company
Registration Statement and the Company 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 Company
<PAGE> 3
Registration Statement at the time it was declared 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"; and the Trust Registration Statement
(as defined in Section 1(c)(i) hereof) 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";
(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 or the Seller expressly for use
therein;
(iii) The Company Registration Statement conforms,
and the Company Prospectus and any further amendments or supplements to
the Company Registration Statement or the Company Prospectus, when they
become effective or are filed with the Commission, will conform, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and do 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 or the Seller
expressly for use therein;
(iv) Neither the Company nor any of its subsidiaries
has sustained since the date of the latest audited financial statements
included 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, net current assets, shareholders' equity or long-term
debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material
<PAGE> 4
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;
(v) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Company Prospectus or such as do not materially
affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries;
(vi) The Company has been duly incorporated and is
validly existing as a company under the laws of Guernsey, with power
and authority (corporate and other) to own its properties and conduct
its business as described in the Company Prospectus; the Company has
filed its most recent statutory annual return, has paid all fees due
thereon and there are no outstanding unsatisfied judgements registered
in Guernsey against the Company and there are no outstanding
applications, orders or resolutions for the winding-up of the Company;
the Company has been duly qualified as a foreign corporation 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; and each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in
good standing (where applicable) under the laws of its jurisdiction of
incorporation;
(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; and all
of the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and (except for directors' qualifying shares and except
as set forth in the Company Registration Statement) are owned directly
or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims; all of the shares of issued and
outstanding capital stock of the Company have been duly listed and
admitted for trading on the New York Stock Exchange ("NYSE"); the
holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to acquire the shares of Stock
to be pledged and assigned by the Seller under the Collateral
Agreement; there are no outstanding securities convertible into or
exchangeable for, or warrants, rights or options to purchase from the
Company, or obligations of the Company to issue, the Stock or any other
class of capital stock of the Company (except as set forth in the
Company Prospectus under "Management" and "Principal and Selling
Shareholders" ); and there are no restrictions on
<PAGE> 5
subsequent transfers of the Stock under the laws of Guernsey and of the
United States;
(viii) All dividends and other distributions declared
and payable on the shares of capital stock of the Company may under the
current laws and regulations of Guernsey be paid in U.S. dollars that
may be freely transferred out of Guernsey, and all such dividends and
other distributions will not be subject to withholding or other taxes
under the current laws and regulations of Guernsey and are otherwise
free and clear of any other tax, withholding or deduction in Guernsey
and without the necessity of obtaining any Governmental Authorization
in Guernsey;
(ix) 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 or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the Memorandum of Association and the Articles of
Association of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body (hereinafter
referred to as a "Governmental Agency") having jurisdiction over the
Company or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification
of or with any such Governmental Agency (hereinafter referred to as
"Governmental Authorizations") is required for the consummation by the
Company of the transactions contemplated by this Agreement, except (A)
the registration under the Act of the shares of Stock, (B) such
Governmental Authorizations as have been duly obtained and are in full
force and effect and copies of which have been furnished to you and (C)
such Governmental Authorizations as may be required under state
securities or Blue Sky laws or any laws of jurisdictions outside
Guernsey and the United States in connection with the purchase and
distribution of the shares of Stock pursuant to the Contract;
(x) Neither the Company nor any of its subsidiaries
is in violation of its constituent documents or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound;
(xi) The statements set forth in the Company
Prospectus under the caption "Description of Share Capital", insofar as
they purport to constitute a summary of the terms of the Stock, under
the caption "Taxation of the Company" and under the caption "Under
writing", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate, complete and
fair;
<PAGE> 6
(xii) 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 current or future 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 any Governmental
Agency or threatened by others;
(xiii) The Company is not an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act" and, together with the Act, the "Acts");
(xiv) The Company and each of its subsidiaries have
all licenses, franchises, permits, authorizations, approvals and
orders and other concessions of and from all Governmental Agencies that
are necessary to own or lease their other properties and conduct their
businesses as described in the Company Prospectus except where the
failure to have such licenses, franchises, permits, authorizations,
approvals and orders and other concessions would not, singly or in the
aggregate, result in a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries;
(xv) The Company is not a Passive Foreign Investment
Company ("PFIC") within the meaning of Section 1296 of the United
States Internal Revenue Code of 1986, as amended;
(xvi) The Company and its subsidiaries are in
compliance in all material respects with all conditions and
requirements stipulated by the instruments of approval granted to it
with respect to the "Approved Enterprise" status of any of the
Company's Israeli subsidiary's facilities as well as with respect to
the other tax benefits received by the Company's Israeli subsidiary as
set forth under the caption "Taxation of the Company" in the Company
Prospectus and by Israeli laws and regulations relating to such
"Approved Enterprise" status and the aforementioned other tax benefits
received by the Company's Israeli subsidiary; and neither the Company
nor the Israeli subsidiary has received any notice of any proceeding or
investigation relating to revocation or modification of any "Approved
Enterprise" status granted with respect to any of the Israeli
subsidiary's facilities;
(xvii) The Company qualifies as an "exempt company"
in Guernsey and is in compliance with all conditions and requirements,
whether imposed by applicable law or otherwise, to the extent necessary
to maintain its status as an exempt company;
(xviii) Ernst & Young LLP, who have certified certain
financial
<PAGE> 7
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xix) Neither the Company nor any of its affiliates
does business with the government of Cuba within the meaning of Section
517.075, Florida Statutes; and
(xx) The Company has reviewed its operations and
those of its subsidiaries and any third parties with which the Company
or any of its subsidiaries has a material relationship to evaluate the
extent to which the business or operations of the Company or any of its
subsidiaries will be affected by the Year 2000 Problem. As a result of
such review, the Company does not believe, that the Year 2000 Problem
will have a material adverse effect on the general affairs, management,
the current or future consolidated financial position, shareholders'
equity or results of operations of the Company and its subsidiaries or
result in any material loss or interference with the Company's business
or operations. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of
dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000.
(b) The Seller represents and warrants to, and agrees with,
each of the Underwriters, the Company and the Trust that:
(i) The Seller has been duly incorporated and is
validly existing as a company under the laws of Guernsey.
(ii) The compliance by the Seller with all of the
provisions of this Agreement, the Contract, the power of attorney in
connection with this transaction (the "Power of Attorney"), the Custody
Agreement in connection with this transaction (the "Custody 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, 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
the provisions of the constitutive documents of the Seller, or 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
property of the Seller; 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 Contract, the Collateral Agreement, the Power of
Attorney or the Custody Agreement, except such as may be required by
the NASD or the registration under the Act of the Stock
<PAGE> 8
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws or any laws of jurisdictions outside the United States in
connection with the purchase and distribution of the Stock by the Trust
pursuant to the Contract;
(iii) This Agreement has been duly authorized,
executed and delivered by the Seller; the Contract, the Collateral
Agreement, the Power of Attorney and the Custody Agreement have been
duly authorized, executed and delivered by the Seller and, assuming due
authorization, execution and delivery by the other parties thereto,
constitute valid and legally binding agreements of the Seller,
enforceable in accordance with their respective 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 and except as rights to indemnity and
contribution thereunder may be limited by state or federal securities
laws or the public policy underlying such laws;
(iv) The Seller has, and immediately prior to each
Time of Delivery (as defined in Section 4(a) 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 those created
pursuant to such 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 such 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 such Collateral
Agreement; and upon delivery of such shares of Stock to the Collateral
Agent, as defined in the Collateral Agreement, for the benefit of the
Trust pursuant to the Collateral Agreement, the Collateral Agent will
obtain a first priority perfected security interest in such shares of
Stock, and upon delivery of such shares of Stock by the Collateral
Agent to the Trust pursuant to the Collateral Agreement and payment
therefor pursuant to the Contract, good and valid title to such shares
of Stock, free and clear of all liens, encumbrances, equities or
claims, will pass to the Trust;
(v) The representations and warranties of the Seller
set forth in Section 3 of such 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) During the period beginning from the date hereof
and continuing to and including the date 90 days after the date of the
Trust Prospectus, the Seller will not offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder or in the
Underwriting Agreement, 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; provided, however, that
the Seller may sell or transfer Stock or any securities of the Company
that are substantially similar to the Stock to the shareholders of the
<PAGE> 9
Seller or to a trust for the benefit of such shareholders provided that
each such transferee undertakes in writing to comply with the foregoing
restrictions;
(vii) The Seller has not taken, nor will the Seller
take, directly or indirectly, any action which is designed to or which
has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities;
(viii) To the extent that any statements or omissions
made in the Registration Statements, any Preliminary Prospectus, the
Prospectuses or any amendment or supplement thereto are made in
reliance upon and in conformity with written information furnished to
the Company by the Seller expressly for use therein, (A) such
Preliminary Prospectus and the Registration Statements did, and the
Prospectuses and any further amendments or supplements to the
Registration Statements and the Prospectuses, when they become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Acts and
the rules and regulations of the Commission thereunder, (B) the
Registration Statements and any amendment or supplement thereto do not
and will not, as of the applicable effective date, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and (C) the Prospectuses do not, and as amended
or supplemented will not, as of the applicable filing date, 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 light of the circumstances under which they were made, not
misleading;
(ix) In order to document the Underwriters'
compliance with the reporting and withholding provisions of the Tax
Equity and Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated, the Seller agrees to deliver to you
prior to or at the First Time of Delivery (as hereinafter defined) a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof);
(x) Certificates in negotiable form and containing no
restrictive legends representing all of the shares of Stock to be
pledged and assigned by the Seller hereunder have been placed in
custody under the Custody Agreement, duly executed and delivered by the
Seller to Chase, as custodian (the "POA Custodian"), and the Seller has
duly executed and delivered the Power of Attorney, appointing the
persons indicated in Schedule II hereto, and each of them, as the
Seller's attorneys-in-fact (the "Attorneys-in-Fact") with authority to
execute and deliver this Agreement on behalf of the Seller, to execute
and deliver the Contract and the Collateral Agreement, to authorize the
delivery of the shares of Stock to be pledged and assigned by the
Seller hereunder and otherwise to act on behalf of the Seller in
connection with the transactions contemplated by this Agreement, the
Custody Agreement, the Contract and the Collateral Agreement; and
<PAGE> 10
(xi) The shares of Stock represented by the
certificates held in custody for the Seller under the Custody Agreement
are subject to the interests of the Collateral Agent for the benefit of
the Trust hereunder; the arrangements made by the Seller for such
custody, and the appointment by the Seller of the Attorneys-in-Fact by
the Power of Attorney, are to that extent irrevocable; the obligations
of the Seller hereunder shall not be terminated by operation of law,
whether by the dissolution of the Seller, or by the occurrence of any
other event; if the Seller should be dissolved, or if any other such
event should occur, before the delivery of the shares of Stock
hereunder, certificates representing the shares of Stock shall be
delivered by or on behalf of the Seller in accordance with the terms
and conditions of this Agreement, of the Contract, of the Collateral
Agreement and of the Custody Agreement, as appropriate; and actions
taken by the Attorneys-in-Fact pursuant to the Powers of Attorney shall
be as valid as if such dissolution or other event had not occurred,
regardless of whether or not the Custodian, the Attorneys-in-Fact, or
any of them, shall have received notice of such dissolution or other
event.
(c) The Trust represents and warrants to, and agrees with,
each of the Under writers, 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 Commission; a registration statement on Form N-2 (File No.
333-73265 and File No. 811-09245) (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, have been declared effective
by the Commission in such form; 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, or any post-effective amendment
thereto 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 497(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 including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 497(h) 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, 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 497(h) 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
<PAGE> 11
respects to the requirements of 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 or the Seller expressly for use therein;
(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 or the Seller 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,
or 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 Fundamental Agreements (as
defined in Section 1(c)(vii) hereof); 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;
<PAGE> 12
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;
(vii) Each of the Contract, the Collateral Agreement,
the Administration Agreement between Chase and the Trust (the
"Administration Agreement"), the Custodian Agreement between Chase and
the Trust (the "Custodian Agreement"), the Paying Agent Agreement
between Chase and the Trust (the "Paying Agent Agreement"), the Fund
Expense Agreement between Goldman, Sachs & Co. and Chase (the "Fund
Expense Agreement") and the Fund Expense and Indemnity Agreement
between the Seller, Chase and the Trust (the "Fund Indemnity
Agreement") (the Contract, 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 Amended and Restated Trust Agreement dated
May , 1999 (the "Trust Agreement") and the Fundamental Agreements
comply with all applicable provisions of the Acts, and all approvals of
such agreements 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 descriptions
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
<PAGE> 13
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 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;
(xii) Assuming due authorization, execution and
delivery by the parties other than the Trust, 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 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 agreements referred to therein, are
accurate, complete and fair;
(xiv) 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 Trust, 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;
<PAGE> 14
(xvi) 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 is
effective; and
(xvii) PricewaterhouseCoopers LLP, who have certified
certain financial statements and supporting schedules included in the
Trust Registration Statement, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder.
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 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
number of Optional Securities by a fraction, the numerator of which is the
maximum aggregate number of Optional Securities which such Under writer 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 that all of the Underwriters are entitled to purchase
hereunder. The agreements in this Section made by the Trust are for the benefit
of and enforceable by the Underwriters and the Seller. The agreements in this
Section made by the Underwriters are for the benefit of and are enforceable by
the Seller and the Trust.
The Trust hereby grants to the Underwriters the right to purchase at
their election up to 1,500,000 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 the Firm Securities. Any such
election to purchase Optional Securities may be exercised only by written notice
from you to the Trust (with copies to ), 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(a)
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 Contract, the Seller at each Time of
Delivery will pay 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.
<PAGE> 15
3. Upon the authorization by you of the release of the Firm Securities,
the several Under writers propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Trust 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 by wire transfer or
certified or official bank check or checks, payable to the order of the Trust 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 June , 1999 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 Goldman, Sachs & Co. 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(s) hereof, will be delivered at the offices
of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New
York 10022 (the "Closing Location"), and the Securities will be delivered at the
Designated Office, all at such Time of Delivery. A meeting will be held at the
Closing Location at 4:30 p.m., New York City 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
prior to the last
<PAGE> 16
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 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 file promptly all
reports and any definitive proxy or information statements required to
be filed by the Trust with the Commission pursuant to the Acts and the
Exchange Act subsequent to the date of the Trust 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 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, promptly to 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, at the expense of the Company, 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 the 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 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 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
<PAGE> 17
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
Commission 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";
and
(vi) To use its best efforts to list, subject to
notice of issuance, and to maintain the listing of the Securities on
the New York Stock Exchange.
(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 the last 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
Contract 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 any
order preventing or suspending the use of any
<PAGE> 18
Company Preliminary Prospectus or prospectus or suspending any such
qualification, to promptly use its best efforts to obtain the
withdrawal of such order;
(ii) If the Company elects to rely upon Rule 462(b),
to 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 at the time of filing
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act;
(iii) 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 Company shall not be required to
qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(iv) 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, at the expense of the Company, 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
events shall have occurred as a result of which the Company 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 Company 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, at the expense of the Company, 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 Company 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;
(v) To make generally available to its
securityholders as soon as practicable, but in any event not later
than eighteen months after the effective date
<PAGE> 19
of the Registration Statement (as defined in Rule 158(c) under 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);
(vi) During the period beginning from the date hereof
and continuing to and including the date 90 days after the date of the
Prospectuses, not to offer, sell, contract to sell or otherwise dispose
of, except as provided in the Underwriting Agreement, 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 the date of this Agreement), without your
prior written consent;
(vii) To furnish 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 prepared in conformity
with generally accepted accounting principles in the U.S. ("GAAP"))
and, as soon as practicable after the end of each of the first three
quarters of each fiscal year prepared in accordance with GAAP, to make
available to its shareholders consolidated summary financial
information of the Company and its subsidiaries for such quarter in
reasonable detail;
(viii) During a period of five years from the
effective date of the 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 securities exchange on which 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
(ix) To use its best efforts to maintain the listing
of the Stock on the NYSE.
6. Except as otherwise disclosed in the Prospectuses, the Trust, the
Company and the Seller covenant and agree with the several Underwriters that (a)
the Company will pay or cause to be paid (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Notification, the
Trust Registration Statement, any Trust Preliminary Prospectus and the Trust
Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any
<PAGE> 20
Agreement among Underwriters, this Agreement and Blue Sky Memorandum, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)(ii)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, securing any required review by the NASD of
the terms of the sale of the Securities; (v) 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 NYSE or other national or regional exchange;
(vi) the cost of preparing certificates representing the Securities; (vii) the
cost and charges of any transfer agent or registrar for the Securities; (viii)
the cost of preparing Stock certificates; (ix) the cost and charges of any
transfer agent or registrar for the Stock; (x) the fees and expenses of the
Attorneys-in-Fact and the POA Custodian; (xi) all fees, expenses and costs in
connection with the marketing of the Securities; (xii) all costs and expenses
incident to the performance of the Seller's obligations hereunder which are not
otherwise specifically provided for in this Section, including (A) any fees and
expenses of counsel for the Seller and (B) all expenses and taxes incident to
the sale and delivery of the shares of Stock to be sold or pledged by the
Seller; (xiii) 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; and (b)
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 Acts. In connection with clause
(a)(xii)(B) of the preceding sentence, Goldman, Sachs & Co. agrees to pay New
York State stock transfer tax, and the Seller agrees to reimburse Goldman, Sachs
& Co. for associated carrying costs if such tax payment is not rebated on the
day of payment and for any portion of such tax payment not rebated. 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 per formed, 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 Sections 5(a)(i) and 5(b)(i) hereof; if the Company
has elected to rely upon Rule 462(b), the Company 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
<PAGE> 21
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) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the
Underwriters, shall have furnished to you such written opinion or opinions,
dated such Time of Delivery, in form and substance satisfactory to you, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Sullivan & Cromwell, counsel for the Trust, 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 that:
(i) The Trust (x) has been duly formed and is validly
existing as a trust under the laws of the State of New York and (y) is
registered with the Commission under the Investment Company Act as a
non-diversified, closed-end management investment company;
(ii) The Securities have been duly authorized and
validly issued and are fully paid and non-assessable and are entitled
to the benefits provided by the Trust Agreement;
(iii) The Securities will be exchanged for shares of
Stock in accordance with the terms of the Trust Agreement and the
Contract (unless a Reorganization Event (as such term is defined in the
Contract) occurs or the Seller elects the Cash Settlement Alternative),
subject to bankruptcy, insolvency, reorganization and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles;
(iv) All regulatory consents, authorizations,
approvals and filings required to be obtained or made by the Trust
under the Federal laws of the United States and the laws of the State
of New York for the issuance, sale and delivery of the Securities by
the Trust to you have been obtained or made;
(v) This Agreement has been duly authorized, executed
and delivered by the Trust;
(vi) Each Fundamental Agreement 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 to bankruptcy,
insolvency, reorganization, and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
<PAGE> 22
(vii) The statements in the Trust Prospectus under
the caption "Certain Federal Income Tax Considerations", to the extent
that such statements constitute summaries of the legal matters
referred to therein, fairly represent their opinion as to such matters;
(viii) On the basis of information which was reviewed
in the course of the performance of the services referred to in their
opinion considered in the light of their understanding of the
applicable law and the experience they have gained through their
practice under the Acts, such counsel are of the opinion that the Trust
Registration Statement, as of its effective date, and the Trust
Prospectus, as of the date of the Trust Prospectus, appeared on their
face to be appropriately responsive in all material respects to the
requirements of the Acts and the applicable rules and regulations of
the Commission thereunder; and that nothing that came to their
attention in the course of such review has caused them to believe that
the Trust Registration Statement, as of its effective date, contained
any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Trust Prospectus, as of
the date of the Trust Prospectus, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; also, nothing that has come to
such counsel's attention in the course of certain procedures (as
described in such opinion) has caused such counsel to believe that the
Trust Prospectus, as of the date and time of delivery of such opinion,
contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that such opinion may state that the
limitations inherent in the independent verification of factual matters
and the character of determinations involved in the registration
process are such, however, that such counsel do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Trust Registration Statement or the Trust
Prospectus except for those made under the captions "Underwriting",
"Investment Objective and Policies", and "Descriptions of Securities"
in the Trust Prospectus insofar as they relate to provisions of
documents therein described, and such counsel need not express any
opinion or belief as to the financial statements or other financial
data; and provided further that such counsel may state that they have
not participated in the preparation of the Company Registration
Statement or the Company Prospectus, and need not express any opinion
or belief with respect thereto or with respect to information relating
to the Company contained in the Trust Prospectus under the captions
"Prospectus Summary--The Company" and "Investment Objectives and
Policies--The Company and the Ordinary Shares".
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the laws of the
State of New York and the Federal laws of the United States.
(d) Sullivan & Cromwell, counsel for the Trust, shall have
furnished to the
<PAGE> 23
Seller their written opinion, dated such Time of Delivery, with respect to
paragraphs (i)(y), (iv) and (vii) of subsection (c) above and, in addition, to
the effect that the statements in the Trust Prospectus under the captions
"Underwriting", "Investment Objective and Policies" and "Description of
Securities", 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.
(e) Reboul, MacMurray, Hewitt, Maynard & Kristol, counsel for
the Company, shall have furnished to you their written opinion (a draft of such
opinion is attached as Annex II(a) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each jurisdiction in the United States 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 failure to be so qualified in any such
jurisdiction (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company, provided
that such counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(ii) Each U.S. subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation; and all
of the issued shares of capital stock of each such subsidiary have been
duly and validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (such counsel being entitled to rely
in respect of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of officers of the
Company or its subsidiaries, provided that such counsel shall state
that they believe that both you and they are justified in relying upon
such opinions and certificates);
(iii) This Agreement has been duly executed and
delivered by the Company;
(iv) The statements in the Company Prospectus under
"Comparison of United States and Guernsey Corporate Law" to the extent
such statements relate to matters of United States law or regulation or
to the provisions of documents therein described, are accurate,
complete and fair in all material respects, and nothing has been
omitted from such statements which would make the same misleading in
any material respect;
(v) None of the Company's U.S. subsidiaries are in
violation of their respective constituent documents or, to the best of
such counsel's knowledge, in default in the performance or observance
of any material obligation, agreement,
<PAGE> 24
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
any of them is a party or by which any of them or any of their
properties may be bound;
(vi) The statements set forth in the Company
Prospectus under the captions "Underwriting" and "Taxation of Holders
of Ordinary Shares", insofar as they purport to describe provisions of
United States federal or New York law and documents referred to
therein, are accurate, complete and fair in all material respects;
(vii) Under the laws of the State of New York
relating to personal jurisdiction, the Company has, pursuant to
Section 14 of this Agreement, validly and irrevocably submitted to the
personal jurisdiction of any state or federal court located in the
Borough of Manhattan, The City of New York, New York (each a "New York
Court") in any action arising out of or relating to this Agreement or
the transactions contemplated hereby, has validly and irrevocably
waived any objection to the venue of a proceeding in any such court,
and has validly and irrevocably appointed the Authorized Agent (as
defined herein) as its authorized agent for the purpose described in
Section 14 hereof; and service of process effected on such agent in the
manner set forth in Section 14 hereof will be effective insofar as the
law of the State of New York is concerned to confer valid personal
jurisdiction over the Company;
(viii) To the best of such counsel's knowledge and
other than as set forth in the Company Prospectus, there are no legal
or governmental proceedings pending in any United States federal or
state court 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 be reasonably
likely to have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by any Governmental Agency or threatened by others;
(ix) 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 known to such counsel to which the Company or
any of the Company's U.S. subsidiaries is a party or by which the
Company or any of the Company's U.S. subsidiaries is bound or to which
any of the property or assets of the Company or any of such
subsidiaries is subject, nor will such action result in any violation
of any statute or any order, rule or regulation known to such counsel
of any United States Federal or New York Governmental Agency having
jurisdiction over the Company or any of its subsidiaries or any of
their properties;
(x) No Governmental Authorization of the United
States or the State
<PAGE> 25
of New York is required for the consummation by the Company of the
transactions contemplated by this Agreement, except the registration
under the Acts of the Securities and 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 Securities and the Stock or which have
been obtained and are in full force and effect;
(xi) The Company is not an "investment company", as
such term is defined in the Investment Company Act; and
(xii) The Company Registration Statement and the
Company Prospectus and any further amendments and supplements thereto
made by the Company prior to such Time of Delivery (other than the
financial statements and related schedules and other financial data
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Act and the
rules and regulations thereunder; although they do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Company Registration Statement or the
Company Prospectus, except for those referred to in the opinion in
subsections (iv) and (vi) of this Section 7(e), they have no reason to
believe that, as of its effective date, the Company Registration
Statement or any further amendment thereto made by the Company prior to
such Time of Delivery (other than the financial statements and related
schedules and other financial data therein, as to which such counsel
need express no opinion) contained an 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 or that, as
of its date, the Company Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules and other
financial data therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading
or that, as of such Time of Delivery, either the Company Registration
Statement or the Company Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules and other
financial data therein, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
and they do not know of any amendment to the Company Registration
Statement required to be filed or of any contracts or other documents
of a character required to be filed as an exhibit to the Company
Registration Statement or required to be described in the Company
Registration Statement or the Company Prospectus which are not filed or
described as required;
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States;
<PAGE> 26
(f) Carey Langlois, counsel for the Company, shall have furnished to
you their written opinion (a draft of such opinion is attached as Annex II(b)
hereto), dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a company under the laws of Guernsey, with power
and authority (corporate and other) to own its properties and conduct
its business as described in the Company Prospectus; and the Company
has filed its most recent statutory annual return, has paid all fees
due thereon and there are no outstanding unsatisfied judgements
registered in Guernsey against the Company and there are no outstanding
applications, orders or resolutions for the winding-up of the Company;
(ii) 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 and are fully paid and non-assessable; there are no restrictions
on subsequent transfers of the Stock; and the Stock conforms to the
description thereof contained in the Company Prospectus;
(iii) To the best of such counsel's knowledge and
other than as set forth in the Company Prospectus, there are no legal
or governmental proceedings pending in Guernsey 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 current or
future consolidated financial position, shareholders' equity or results
of operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by any Governmental Agency or threatened by others;
(iv) This Agreement has been duly authorized by the
Company;
(v) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the transactions
herein contemplated will not result in any violation of the provisions
of the Memorandum of Association and Articles of Association of the
Company or any Guernsey statute or any order, rule or regulation known
to such counsel of any Governmental Agency in Guernsey having
jurisdiction over the Company or any of its properties;
(vi) No Governmental Authorization of or with any
Governmental Agency is required in Guernsey for the consummation by the
Company of the transactions contemplated by this Agreement, except any
such consents, approvals, authorizations or orders which have been duly
obtained and are in full force and effect;
(vii) The statements in the Company Prospectus under
"Comparison of United States and Guernsey Corporate Law" to the extent
such statements relate to matters of Guernsey law or regulation or to
the provisions of documents therein
<PAGE> 27
described, are accurate, complete and fair in all material respects,
and nothing has been omitted from such statements which would make the
same misleading in any material respect;
(viii) Insofar as matters of Guernsey law are
concerned, the Company Registration Statement and the filing of the
Company Registration Statement with the Commission have been duly
authorized by and on behalf of the Company; and the Company
Registration Statement has been duly executed pursuant to such
authorization by and on behalf of the Company;
(ix) The Company's agreement to the choice of law
provisions set forth in Section 14 hereof will be recognized by the
courts of Guernsey; the Company can sue and be sued in its own name
under the laws of Guernsey; the irrevocable submission of the Company
to the exclusive jurisdiction of a New York Court, the waiver by the
Company of any objection to the venue of a proceeding of a New York
Court and the agreement of the Company that this Agreement shall be
governed by and construed in accordance with the laws of the State of
New York are legal, valid and binding; service of process effected in
the manner set forth in Section 14 hereof will be effective, insofar as
the law of Guernsey is concerned, to confer valid personal jurisdiction
over the Company; and judgment obtained in a New York Court arising out
of or in relation to the obligations of the Company under this
Agreement would be enforceable against the Company in the courts of
Guernsey;
(x) The indemnification and contribution provisions
set forth in Section 8 hereof do not contravene any statute or any
express statement of the public policy or laws of Guernsey;
(xi) All dividends and other distributions declared
and payable on the shares of capital stock of the Company may be paid
in U.S. dollars under the current laws and regulations of Guernsey and
may be freely transferred out of Guernsey, and all such dividends and
other distributions will not be subject to withholding or other taxes
under the current laws and regulations of Guernsey and are otherwise
free and clear of any other tax, withholding or deduction in Guernsey
and without the necessity of obtaining any Govern mental Authorization
in Guernsey; and
(xii) The statements set forth in the Company
Prospectus under the caption "Description of Share Capital", insofar as
they purport to constitute a summary of the terms of the Stock, and
under the captions "Taxation of the Company" and "Taxation of Holders
of Ordinary Shares", insofar as they purport to describe the provisions
of Guernsey law and documents referred to therein, are accurate,
complete and fair;
In giving such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than Guernsey;
(g) Meitar, Liquornik, Geva & Co., special Israeli counsel for the
Company, shall
<PAGE> 28
have furnished to you their written opinion (a draft of such opinion is attached
as Annex II(c) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company's Israeli subsidiary has been duly
incorporated and is validly existing under the laws of Israel, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Company Prospectus; and all of
the issued shares of capital stock of such subsidiary have been duly
and validly authorized and issued, are fully paid and non-assessable,
and are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims;
(ii) Any buildings held under lease by such
subsidiary are held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by such subsidiary (in giving the opinion in this clause,
such counsel may state that no examination of record titles for the
purpose of such opinion has been made, and that they are relying upon a
general review of the titles of such subsidiary, upon opinions of
counsel to the lessors of such property and, in respect of matters of
fact, upon certificates of officers of such subsidiary, provided that
such counsel shall state that they believe that both you and they are
justified in relying upon such opinions, abstracts, reports, policies
and certificates);
(iii) Other than as set forth in the Company
Prospectus, to the best of such counsel's knowledge, there are no legal
or governmental proceedings pending to which the Company's Israeli
subsidiary is a party or of which any property of the Company's Israeli
subsidiary is the subject which, if determined adversely to such
subsidiary, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial
position, shareholders' equity or results of operations of such
subsidiary; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by any Governmental Agency
or threatened by others;
(iv) 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 of the agreements set forth on Schedule 1 to such counsel's
opinion, nor will such action result in any violation of the provisions
of the constituent documents of such subsidiary or any statute or any
order, rule or regulation known to such counsel of any Israeli
Governmental Agency having jurisdiction over the Company's Israeli
subsidiary or any of its properties;
(v) No Governmental Authorization of or with any
Governmental Agency is required in Israel for the consummation by the
Company of the transactions contemplated by this Agreement, except any
such consents, approvals, authorizations or orders which have been duly
obtained and are in full force and effect;
<PAGE> 29
(vi) The Company's Israeli subsidiary has all
licenses and concessions of and from all Governmental Agencies that are
necessary to own or lease its properties and conduct its businesses as
described in the Company Prospectus; and the Company's Israeli
subsidiary has all franchises, permits, authorizations, approvals and
orders and other licenses and concessions of and from all Governmental
Agencies that are necessary to own or lease its other properties and
conduct its businesses as described in the Company Prospectus except
for such licenses, franchises, permits, authorizations, approvals and
orders the failure to obtain which will not have a material adverse
effect on the financial condition or results of operations of the
Company and its subsidiaries;
(vii) To the best of such counsel's knowledge, the
Company's Israeli subsidiary is not in violation of its constituent
documents or in default in the performance or observance of any of the
agreements set forth on Schedule 1 to such counsel's opinion;
(viii) The statements set forth in the Company
Prospectus under the caption "Taxation of the Company", insofar as they
purport to describe the provisions of Israeli law and documents
referred to therein, are accurate, fair and complete in all material
respects;
(ix) To the best knowledge of such counsel, the
Company and its Israeli subsidiary are in compliance in all material
respects with all conditions and requirements stipulated by the
instruments of approval granted to it with respect to the "Approved
Enterprise" status of any of the Company's Israeli subsidiary's
facilities as well as with respect to the other tax benefits received
by the Company's Israeli subsidiary as set forth under the caption
"Taxation of the Company" in the Company Prospectus and by Israeli laws
and regulations relating to such "Approved Enterprise" status and the
aforementioned other tax benefits received by the Company's Israeli
subsidiary; and, to the best knowledge of such counsel, neither the
Company nor the Israeli subsidiary has received any notice of any
proceeding or investigation relating to revocation or modification of
any "Approved Enterprise" status granted with respect to any of the
Israeli subsidiary's facilities; and
(x) Although they do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Company Registration Statement or the Company Prospectus, except
for those referred to in the opinion in subsection (viii) of this
Section 7(g), they have no reason to believe that, as of its effective
date, the Company Registration Statement or any further amendment
thereto made by the Company prior to such Time of Delivery (other than
the financial statements and related schedules and other financial data
therein, as to which such counsel need express no opinion) contained an
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 or that, as of its date, the Company Prospectus
or any further amendment or supplement thereto made by the
<PAGE> 30
Company prior to such Time of Delivery (other than the financial
statements and related schedules and other financial data therein, as
to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as of
such Time of Delivery, either the Company Registration Statement or the
Company Prospectus or any further amendment or supplement thereto made
by the Company prior to such Time of Delivery (other than the financial
statements and related schedules and other financial data therein, as
to which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
In giving such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than Israel;
(h) Olswang, special U.K. counsel for the Company, shall have furnished
to you their written opinion (a draft of such opinion is attached as Annex II(d)
hereto), dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company's U.K. subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of the U.K., with power and authority (corporate and
other) to own their properties and conduct their business as described
in the Company Prospectus; and all of the issued shares of capital
stock of each such subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and (except for directors'
qualifying shares) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(ii) Having searched its computer records, such
counsel is not currently acting in relation to any pending legal or
governmental proceedings to which the Company's U.K. subsidiaries are a
party or of which any property of the Company's U.K. subsidiaries are
the subject; and, the chief executive officers of each of the Company's
U.K. subsidiaries have certified to such counsel that, to the best of
their knowledge, no such proceedings are threatened or pending;
(iii) 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 reviewed by such counsel to which the Company's
U.K. subsidiaries are a party or by which the Company's U.K.
subsidiaries are bound or to which any of the property or assets of the
Company or such subsidiaries are subject, nor will such action result
in any violation of the provisions of the constituent documents of such
subsidiaries or any statute or any order, rule or regulation known to
such counsel of any U.K. Governmental Agency having jurisdiction over
the Company's U.K. subsidiaries or any of their properties;
<PAGE> 31
and, the chief executive officers of each of the Company's U.K.
subsidiaries have certified to such counsel that, to the best of their
knowledge, there are no such material agreements (other than those
which have been reviewed by such counsel);
(iv) No Governmental Authorization of or with any
Governmental Agency is required in the U.K. for the consummation by the
Company of the transactions contemplated by this Agreement, except any
such consents, approvals, authorizations or orders which have been duly
obtained and are in full force and effect; and
(v) The Company's U.K. subsidiaries have all powers
and licenses necessary to own or lease their properties and conduct
their businesses as described in the Company Prospectus; and the
Company's U.K. subsidiaries have all franchises, permits,
authorizations, approvals and orders and other licenses and concessions
of and from all Governmental Agencies that are necessary to own or
lease its other properties and conduct its businesses as described in
the Company Prospectus except for such licenses, franchises, permits,
authorizations, approvals and orders the failure to obtain which will
not have a material adverse effect on the financial condition or
results of operations of the Company and its subsidiaries;
In giving such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the U.K.;
(i) Carey Langlois, as Guernsey counsel for the Seller, shall
have furnished to you their written opinion (a draft of such opinion is attached
as Annex II(e) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Seller has been duly incorporated and is
validly existing as a company under the laws of Guernsey, with power
and authority (corporate and other) to enter into this Agreement, the
Power of Attorney, the Custody Agreement, the Contract and Collateral
Agreement, and to consummate the transactions contemplated hereby and
thereby; and the Seller has filed its most recent statutory annual
return, has paid all fees due thereon and there are no outstanding
unsatisfied judgements registered in Guernsey against the Company and
there are no outstanding applications, orders or resolutions for the
winding-up of the Company;
(ii) This Agreement has been duly authorized,
executed and delivered by or on behalf of the Seller; the Power of
Attorney, the Custody Agreement, the Contract and the Collateral
Agreement have been duly authorized, executed and delivered by or on
behalf of the Seller; and the compliance by the Seller with all of the
provisions of this Agreement, the Power of Attorney, the Custody
Agreement, the Contract and the Collateral Agreement and the
consummation of the transactions herein and therein contemplated will
not breach or result in a default under any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known to
such counsel 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 violate the provisions of the Memorandum
of Association and Articles of Association of the Seller or any
Guernsey statute or any order, rule or
<PAGE> 32
regulation known to such counsel of any Governmental Agency in Guernsey
having jurisdiction over the Seller or any of its properties;
(iii) No Governmental Authorization of or with any
Governmental Agency is required in Guernsey for the compliance by the
Seller with all of the provisions of this Agreement, the Contract and
the Collateral Agreement, except any such consents, approvals,
authorizations or orders which have been duly obtained and are in full
force and effect;
(iv) The Seller's agreement to the choice of law
provisions set forth in Section 14 hereof will be recognized by the
courts of Guernsey; the Seller can sue and be sued in its own name
under the laws of Guernsey; the irrevocable submission of the Seller
to the exclusive jurisdiction of a New York Court, the waiver by the
Seller of any objection to the venue of a proceeding of a New York
Court and the agreement of the Seller that this Agreement shall be
governed by and construed in accordance with the laws of the State of
New York are legal, valid and binding; service of process effected in
the manner set forth in Section 14 hereof will be effective, insofar as
the law of Guernsey is concerned, to confer valid personal jurisdiction
over the Seller; and judgment obtained in a New York Court arising out
of or in relation to the obligations of the Seller under this Agreement
would be enforceable against the Seller in the courts of Guernsey; and
(v) In the event of the commencement of any
insolvency, liquidation, bankruptcy or reorganization proceeding
against the Seller under Guernsey law, neither the Seller nor a
receiver, administrator, conservator or similar official would be
permitted to terminate, revoke, abrogate or avoid the obligations of
the Seller under the Contract and the Collateral Agreement and the
Trust would be able to exercise its rights under the Contract and the
Collateral Agreement without delay notwithstanding the commencement of
any such proceeding;
In giving such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than Guernsey;
(j) Debevoise & Plimpton, New York counsel for the Seller,
shall have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(f) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) This Agreement has been duly executed and
delivered by or on behalf of the Seller; the Power of Attorney, the
Custody Agreement, the Contract and the Collateral Agreement have been
duly executed and delivered by or on behalf of the Seller and, assuming
due authorization, execution and delivery by the other parties thereto,
each constitutes a valid and legally binding agreement of the Seller,
enforceable against the Seller in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law); and the compliance by the
<PAGE> 33
Seller with all of the provisions of this Agreement, the Power of
Attorney, the Custody Agreement, the Contract and the Collateral
Agreement and the consummation of the transactions herein and therein
contemplated will not breach or result in a default under any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel 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 violate any Federal or
New York statute or any rule or regulation issued pursuant to any
Federal or New York statute or any order known to such counsel issued
pursuant to any Federal or New York statute by any court or
governmental agency or body having jurisdiction over the Seller or any
of its properties;
(ii) No Governmental Authorization of the United
States or the State of New York is required for the compliance by the
Seller with all of the provisions of this Agreement, the Contract and
the Collateral Agreement, except for the registration of the Securities
and the Stock under the Acts 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 and the Stock;
(iii) Assuming due authorization, execution and
delivery thereof by the Trust and the Collateral Agent, the Collateral
Agreement, together with the delivery of (x) the certificates in
registered form representing the Stock pledged thereunder by the Seller
and (y) undated stock powers with respect thereto duly endorsed in
blank, to the Collateral Agent for the benefit of the Trust in the
State of New York creates in favor of the Collateral Agent for the
benefit of the Trust a perfected security interest in such Stock under
the Uniform Commercial Code as in effect in the State of New York (the
"New York UCC"); upon such delivery, at the First Time of Delivery,
assuming that (A) the Collateral Agent and the Trust will acquire the
security interest in such shares in good faith and without notice of
any adverse claim (within the meaning of the New York UCC) and (B) the
Seller has rights in the shares of Stock subject to the Collateral
Agreement, the Collateral Agent will acquire such security interest in
such shares of Stock for the benefit of the Trust free of any adverse
claims (within the meaning of the New York UCC); and
(iv) Upon payment for and delivery of certificates
representing the shares of Stock together with undated stock powers
with respect thereto duly endorsed in blank in accordance with the
Contract and Collateral Agreement, assuming due authorization,
execution and delivery thereof by the Trust and, in the case of the
Collateral Agreement, the Collateral Agent, and assuming that (A) the
Seller continues to be the sole registered owner of the shares of Stock
to be sold by it, (B) the certificates representing such shares do not
contain any notation of liens or restrictions and (C) the purchasers of
Securities will acquire such shares in good faith and without notice of
any adverse claims (within the meaning of the New York UCC), the
purchasers acquire all of the rights of the Seller in such shares and
will also acquire their interest in such shares free of any adverse
claims (within the meaning of the New York UCC);
<PAGE> 34
In rendering such opinion, such counsel may state that (a) with respect
to the opinion in clause (i) above, they rely on matters of Guernsey law on the
opinion of Carey Langlois, and (b) they express no opinion as to the laws of any
jurisdiction outside the United States.
(k) 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,
PricewaterhouseCoopers LLP shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you;
(l) 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, the accounting firm listed in Section 1(a)(xviii) hereof shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and sub stance satisfactory to you, to the effect set forth in
Annex I hereto;
(m) (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, net current assets,
shareholders' equity 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 Underwriters 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;
(n) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities 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
<PAGE> 35
has under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities;
(o) 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 NYSE; (ii) a suspension or material limitation in
trading in the Company's securities on the NYSE; (iii) a general moratorium on
commercial banking activities in New York, London or Israel declared by the
relevant authorities; (iv) a change or development involving a prospective
change in Guernsey taxation affecting the Company, the Shares or the transfer
thereof or the imposition of exchange controls by the United States or Guernsey;
(v) the outbreak or escalation of hostilities involving the United States, the
United Kingdom or Israel or the declaration by the United States, the United
Kingdom or Israel of a national emergency or war, if the effect of any such
event specified in this clause (v) in the judgment of the Underwriters 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 or (vi) the occurrence of any
material adverse change in the existing financial, political or economic
conditions in the United States, the United Kingdom or Israel or elsewhere
which, in the judgment of the Underwriters, would materially and adversely
affect the financial markets or the market for the Securities and other equity
securities;
(p) The Securities shall have been duly listed, subject to
notice of issuance, on the NYSE;
(q) 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;
(r) The Trust and the Company shall have complied with the
provisions of Section 5(a)(iii) and 5(b)(ii) hereof with respect to the
furnishing of prospectuses on the New York Business Day next succeeding the date
of this Agreement; and
(s) 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 of the Trust, the Company and the Seller satisfactory to you as to the
accuracy of the representations and warranties of the Trust, the Company and the
Seller, respectively, herein and in the Contract 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 (m) of this Section (except
in the case of the Seller) and as to such other matters as you may reasonably
request.
8. (a) The Company and the Seller, jointly and severally, 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
<PAGE> 36
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 thereto, 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 in no event shall the Seller be liable under
this Section 8(a) for an amount in excess of the gross proceeds from the
transactions contemplated by this Agreement and the Fundamental Agreements
received by the Seller from the sale of the Securities.
(b) The Seller will indemnify and hold harmless the Trust, the
Company and each Underwriter against any losses, claims, damages or liabilities
to which the Trust, the Company 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
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, the Company and each Underwriter for any legal or
other expenses reasonably incurred by the Trust, the Company or such Underwriter
in connection with investigating or defending any such action or claim;
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 thereto,
in reliance upon and in conformity with written information furnished by any
Underwriter through Goldman, Sachs & Co. expressly for use therein; provided,
further, 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
relating only to the Company made in any Trust Preliminary Prospectus, the Trust
Registration Statement or the Trust Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with information furnished by the
Company expressly for use therein.
(c) 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
<PAGE> 37
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 amendment or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Trust or the Company by such Under writer 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.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) 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, 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 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.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) 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
<PAGE> 38
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 (e) 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
compensation received by the Underwriters, in each case as set forth in the
Trust 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 (f)
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 (e). 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 (e) 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 (e), 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 (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company, the Trust and the Seller
under this Section 8 shall be in addition to any liability which the Company,
the Trust and the Seller may otherwise have and shall extend, upon the 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 or the Seller (if any),
to each trustee of the Trust and to each person, if any, who controls the
Company, the Trust or the
<PAGE> 39
Seller within the meaning of the Act.
(g) Notwithstanding any other provision of this Section 8, and
without limitation of any other rights to contribution or indemnity which the
Seller may have hereunder or otherwise, the Company shall indemnify the Seller
with respect to any amounts that are paid by any the Seller under subsection (a)
above; provided, however, that the Company shall not be required to indemnify
the Seller to the extent that any such loss, claim, damage or liability arises
out of or is based upon a breach of any representation, warranty or covenant
made by the Seller in or pursuant to this Agreement and the Seller shall
indemnify the Company with respect to any amounts that are paid by the Company
under subsection (a) above to the extent that any such loss, claim, damage or
liability arises out of or is based upon a breach of any representation,
warranty or covenant made by the Seller in or pursuant to this Agreement. The
Company and the Seller agree that the foregoing indemnities shall not diminish
or reduce their respective obligations under subsection (a) above and if the
preceding sentence is held to be invalid or unenforceable for any reason, the
parties hereto agree that the respective indemnities in subsections (a), (b) and
(c) above shall remain in full force and effect, as if this Agreement had been
executed without this subsection (g).
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 Trust and the Seller
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 Trust and the Seller that you have so
arranged for the purchase of such Securities, or the Company, the Trust and the
Seller notify you that it has so arranged for the purchase of such Securities,
you or the Company, the Trust and the Seller 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 Trust and the Seller 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 Trust and the Seller 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 Trust and the
Seller 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
<PAGE> 40
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 Trust and the Seller as provided in subsection (a) above,
the aggregate principal amount of such 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 Trust and the
Seller 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 obligations 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 and the
Seller, except for the expenses to be borne by the Company, the Trust, the
Seller and the Underwriters as provided in Section 6 hereof and the indemnity
and contribution agreements 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 Company, the Trust or the Seller or any officer or director
or controlling person of the Company, the Trust 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 not so
delivered, but the Company, the Trust and the Seller shall then be under no
further liability to any Underwriter in respect of the Securities not so
delivered 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 85 Broad Street, New
York, New York 10004, Attention:
<PAGE> 41
Registration Department; if to the Trust shall be delivered or sent by mail,
telex or facsimile transmission in care of Donald J. Puglisi, Puglisi &
Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19711; if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the Company in care of Amdocs, Inc. 1610 Des Peres Road, St. Louis, Missouri,
63131-1831, Attention: Secretary; and if to the Seller shall be delivered or
sent by mail, telex or facsimile transmission to ; 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 Company, the Trust, 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. Each of the parties hereto irrevocably (i) agrees that any legal
suit, action or proceeding against the Company or the Seller brought by any
Underwriter or by any person who controls any Underwriter arising out of or
based upon this Agreement or the transactions contemplated hereby may be
instituted in any New York Court, (ii) waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such proceeding and (iii) submits to the exclusive
jurisdiction of such courts in any such suit, action or proceeding. Each of the
Company and the Seller has appointed Amdocs Inc., St. Louis, Missouri, as its
authorized agent (the "Authorized Agent") upon whom process may be served in any
such action arising out of or based on this Agreement or the transactions
contemplated hereby which may be instituted in any New York Court by any
Underwriter or by any person who controls any Underwriter, expressly consents to
the jurisdiction of any such court in respect of any such action, and waives any
other requirements of or objections to personal jurisdiction with respect
thereto. Such appointment shall be irrevocable. Each of the Company and the
Seller represents and warrants that the Authorized Agent has agreed to act as
such agent for service of process and agrees to take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company and the Seller, as applicable, shall be deemed, in every respect,
effective service of process upon the Company and the Seller, as the case may
be.
15. In respect of any judgment or order given or made for any amount
due hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company and the Seller, as the case may
be, will indemnify each Underwriter against any loss incurred by such
Underwriter as a result of any variation as
<PAGE> 42
between (i) the rate of exchange at which the United States dollar amount is
converted into the judgment currency for the purpose of such judgment or order
and (ii) the rate of exchange at which an Underwriter is able to purchase United
States dollars with the amount of the judgment currency actually received by
such Under writer. The foregoing indemnity shall constitute a separate and
independent obligation of the Company and the Seller and shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The
term "rate of exchange" shall include any premiums and costs of exchange payable
in connection with the purchase of or conversion into United States dollars.
16. 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.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
18. 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 counterparts shall together constitute one and the same
instrument.
<PAGE> 43
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 Trust, the Company 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,
Amdocs Limited
By :
-----------------------------------
Name:
Title:
Amdocs Automatic Common Exchange
Security Trust
By:
-----------------------------------
Name: Donald J. Puglisi
By:
-----------------------------------
Name: William R. Latham III
By:
-----------------------------------
Name: James B. O'Neill
each a trustee of Amdocs Automatic
Common Exchange Security Trust
Amdocs International Limited
By:
-----------------------------------
Name:
Title:
<PAGE> 44
Accepted as of the date hereof:
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Lehman Brothers Inc.
By:
-----------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE> 45
SCHEDULE I
<TABLE>
<CAPTION>
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
<S> <C> <C>
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Lehman Brothers Inc.
Total
</TABLE>
<PAGE> 46
SCHEDULE II
<PAGE> 47
ANNEX I
Pursuant to Section 7(l) 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
examined by them and included in the Prospectus or the
Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the
Act and the related published rules and regulations
thereunder;
(iii) They have made a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the unaudited condensed consolidated
statements of operations, consolidated balance sheets,
consolidated statement of changes in shareholders' equity and
consolidated statements of cash flows included in the
Prospectus; 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)(1)(i) below comply as to form in all
material respects with the applicable accounting requirements
of the 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 related
published rules and regulations;
(iv) 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 Item 8
of Form 20-F and of Regulation S-K;
(v) 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 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:
<PAGE> 48
(1) (i) the unaudited consolidated
statements of operations, consolidated
balance sheets, consolidated statement of
changes in shareholders' equity and
consolidated statements of cash flows
included in the Prospectus do not comply as
to form in all material respects with the
applicable accounting requirements of the
Act and the related published rules and
regulations, or (ii) any material
modifications should be made to the
unaudited consolidated statements of
operations, consolidated balance sheets,
consolidated statement of changes in
shareholders' equity and consolidated
statements of cash flows included in the
Prospectus for them to be in conformity with
generally accepted accounting principles;
(2) 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
in the Prospectus;
(3) the unaudited financial
statements which were not included in the
Prospectus but from which were derived any
unaudited condensed financial statements
referred to in Clause (1) and any unaudited
income statement data and balance sheet
items included in the Prospectus and
referred to in Clause (2) were not
determined on a basis substantially
consistent with the basis for the audited
consolidated financial statements included
in the Prospectus;
(4) as of , 1999, 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
financial statements included 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
shareholders' equity, in each case as
compared with amounts shown in the latest
balance sheet included 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;
(5) for the period from the date of
the latest financial statements included in
the Prospectus to the specified date
referred to in Clause (4) there were any
decreases in consolidated net revenues or
the total or per share amounts of
consolidated
<PAGE> 49
net income, in each case as compared with
the comparable period of the preceding year,
except in each case for decreases or
increases which the Prospectus discloses
have occurred or may occur or which are
described in such letter; and
(6) 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 financial statements included
in the Prospectus) or any increase in the
consolidated long-term debt of the Company
and its subsidiaries, in each case as
compared with amounts shown in the latest
balance sheet included in the Prospectus,
except in each case for changes or increases
which the Prospectus discloses have occurred
or may occur or which are described in such
letter; and
(vi) Although they are unable to and do not express
any opinion on the pro forma consolidated financial statements
of operations (the "Pro Forma Statements"), if any, included
in the Prospectus or on the pro forma adjustments applied to
the historical amounts included in the Pro Forma Statements;
for purposes of this letter they have performed the following
procedures:
1) read the Pro Forma Statements;
2) performed an audit of the financial
statements to which the pro forma
adjustments were applied;
3) made inquires of certain officials
of the Company who have
responsibility for financial and
accounting matters about the basis
for their determination of the pro
forma adjustments and whether the
Pro Forma Statements comply as to
form in all material respects with
the applicable accounting
requirements of Rule 11-02 of
Regulation S-X; and
4) proved the arithmetic accuracy of
the application of the pro forma
adjustments to the historical
amounts in the Pro Forma Statements;
and on the basis of such
procedures and such other inquiries
and procedures as specified herein,
nothing came to their attention that
caused them to believe that (i) the
Pro Forma Statements included in
the Prospectus do not comply as to
form in all material respects with
the applicable requirements of Rule
11-02 of Regulations S-X or (ii) the
pro forma adjustments have not been
properly applied to the historical
amounts in the compilation of those
statements.
<PAGE> 50
(vii) In addition to the examination
referred to in their report(s) included in the
Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred
to in paragraphs (iii) and (v) 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, or in Part II of, or in exhibits and
schedules to, the Registration Statement 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.
<PAGE> 1
Exhibit 2.j
S&C Draft of June 6, 1999
CUSTODIAN AGREEMENT
Between
THE CHASE MANHATTAN BANK,
As Custodian,
and
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
Dated as of [Pricing Date]
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms............................................ 1
Section 1.2. Interpretation........................................... 2
ARTICLE II
APPOINTMENT OF CUSTODIAN
Section 2.1. Appointment of Custodian; Acceptance of Appointment...... 2
Section 2.2. Transfer of Assets....................................... 3
Section 2.3. Authorized Actions....................................... 3
Section 2.4. Asset Disposition; Examinations.......................... 3
Section 2.5. Rights of Set-Off; Banker's Lien......................... 3
ARTICLE III
THE CUSTODIAN
Section 3.1. Conditions to Duties of the Custodian.................... 4
Section 3.2. Merger................................................... 4
Section 3.3. Compensation............................................. 4
Section 3.4. Trust Agreement Validity................................. 4
Section 3.5. Litigation Obligations, Costs and Indemnity.............. 4
Section 3.6. Indemnification.......................................... 4
Section 3.7. Section 17(f) Qualification.............................. 5
ARTICLE IV
RESIGNATION AND REMOVAL OF CUSTODIAN
Section 4.1. Removal.................................................. 5
Section 4.2. Resignation.............................................. 6
Section 4.3. Appointment of Successor................................. 6
Section 4.4. Effectiveness of Resignation or Removal.................. 6
Section 4.5. Acceptance by Successor.................................. 6
-i-
<PAGE> 3
ARTICLE V
MISCELLANEOUS
Section 5.1. Term of Contract......................................... 6
Section 5.2. No Assumption of Liability............................... 6
Section 5.3. Notices.................................................. 7
Section 5.4. Governing Law; Severability.............................. 7
Section 5.5. Amendments; Waivers...................................... 7
Section 5.6. Non-Assignability........................................ 7
Section 5.7. Provisions of Law to Control............................. 7
Section 5.8. No Third Party Rights; Successors and Assigns............ 8
Section 5.9. Counterparts............................................. 8
-ii-
<PAGE> 4
CUSTODIAN AGREEMENT
CUSTODIAN AGREEMENT, dated as of [Pricing Date], between The Chase
Manhattan Bank, a New York banking corporation (the "Custodian"), and Amdocs
Automatic Common Exchange Security 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 [Pricing Date] (such trust and the trustees thereof
acting in their capacity as such being referred to in this Agreement as the
"Trust").
WITNESSETH:
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
purchase contract (the "Contract") with an existing shareholder of Amdocs
Limited (the "Company"), and to issue $_____ Trust Automatic Common Exchange
Securities (the "Securities") to the public in accordance with the terms and
conditions of the Trust Agreement referred to below; and
WHEREAS, the Trust desires to engage the services of the Custodian to
perform certain custodial duties and provide certain related services for the
Trust under the Trust Agreement and the Investment Company Act; and
WHEREAS, the Custodian is qualified and willing to assume such duties
and provide such services, subject to the supervision of the Trustees, on the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, the parties, intending to be bound, agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms.
(a) Capitalized terms used and not otherwise defined in this Agreement
have the respective meanings specified in the Trust Agreement.
(b) As used in this Agreement, the following terms have the following
meanings:
"Agreement" means this Custodian Agreement.
"Assets" has the meaning specified in Section 2.1.
-1-
<PAGE> 5
"Company" has the meaning specified in the recitals to this
Agreement.
"Contract" has the meaning specified in the recitals to this
Agreement.
"Custodian" has the meaning specified in the preamble to this
Agreement.
"Investment Company Act" has the meaning specified in the
recitals to this Agreement.
"Securities" has the meaning specified in the recitals to this
Agreement.
"Treasury Securities" has the meaning specified in the
recitals to this Agreement.
"Trust" has the meaning specified in the preamble to this
Agreement.
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated as of [Pricing Date], constituting the Trust.
Section 1.2. Interpretation.
(a) When a reference is made in this Agreement to Articles, Sections,
Exhibits or Schedules, such reference shall be to Articles or Sections of, or
Exhibits or Schedules to, this Agreement unless otherwise indicated.
(b) The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.
(c) Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
(d) Any reference to any statute, regulation or agreement shall be a
reference to such statute, regulation or agreement as supplemented or amended
from time to time.
ARTICLE II
APPOINTMENT OF CUSTODIAN
Section 2.1. Appointment of Custodian; Acceptance of Appointment. The
Trust hereby appoints 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, any U.S. Government Securities delivered to the Trust
in connection with an
-2-
<PAGE> 6
extension of the Exchange Date, the Temporary Investments, any cash and any
other property at any time owned or held by the Trust (collectively, the
"Assets").
Section 2.2. Transfer of Assets. The Trust hereby deposits the Assets
with the Custodian and the Custodian hereby accepts such into its custody and
the Trust 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. The Custodian shall invest
monies on deposit in such custody account in the Temporary Investments at the
instruction of the Paying Agent in accordance with Section 3.5 of the Trust
Agreement.
Section 2.3. Authorized Actions. The Custodian shall take such actions
with respect to the Assets as are directed in writing, in accordance with the
provisions of Section 5.3 of this Agreement, by the Trustees or by any officer
of the Administrator or the Paying Agent and received by the Custodian from time
to time.
Section 2.4. 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 Section 2.3 of
this Agreement 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.
Section 2.5. 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.
ARTICLE III
THE CUSTODIAN
-3-
<PAGE> 7
Section 3.1. Conditions to Duties of the Custodian. The provisions of
Section 8.1(a) of the Collateral Agreement shall apply, mutatis mutandis, to the
Custodian in the performance of its duties hereunder as if it were the
Collateral Agent acting under the Collateral Agreement.
Section 3.2. Merger. Any corporation or association into which the
Custodian 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, merger, consolidation, sale or transfer to which it is a party,
shall be and become the successor Custodian hereunder without the execution or
filing of any instrument or any further act, deed or conveyance on the part of
any of the parties hereto, provided that such corporation or association meets
the requirements set forth in the Trust Agreement, and provided further that the
Trustees have given their prior written consent to the Custodian with respect to
any such merger, conversion, consolidation, sale or transfer.
Section 3.3. Compensation. For services to be rendered by the Custodian
pursuant to this Agreement, the Custodian shall receive only such fees and
expenses as shall be paid to it pursuant to the terms of the Indemnity Agreement
and shall have no recourse to the assets of the Trust for the payment of any
such amounts.
Section 3.4. 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 in this Agreement. The Custodian shall not be
responsible for or in respect of the validity of any signature by or on behalf
of the Trustees.
Section 3.5. 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.
Section 3.6. Indemnification. The Trust 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 Trust, 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 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. Such indemnity shall survive the resignation,
removal or discharge of the Custodian and the termination of this Agreement.
-4-
<PAGE> 8
Section 3.7. 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.
ARTICLE IV
RESIGNATION AND REMOVAL OF CUSTODIAN
Section 4.1. Removal.
(a) Subject to Section 4.4, the Trust may remove the Custodian by
written notice at any time if any of the following events shall occur:
(i) If the Custodian 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 Custodian ceases to meet the requirements set
forth in Section 2.2(a) of the Trust Agreement; or
(iii) If the Custodian shall be adjudged bankrupt or insolvent
by a court of competent jurisdiction, or a receiver, conservator,
liquidator, or trustee shall be appointed for or with respect to the
Custodian, or for all or substantially all of its property, or a court
of competent jurisdiction shall approve any petition filed against the
Custodian for its reorganization, and such adjudication or order shall
remain in force or unstayed for a period of 30 days; or
(iv) If the Custodian 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 or
conservator for or in respect of the Custodian for 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
(v) Upon the voluntary or involuntary dissolution of the
Custodian or, unless the Trust shall have given its prior written
consent thereto, the merger or consolidation of the Custodian with any
other entity; or
(vi) At any time upon 60 days' prior written notice.
If any of the events specified in clauses (ii), (iii), (iv) or (v) of this
Section 4.1(a) shall occur, the Custodian shall give immediate written notice
thereof to the Trust.
(b) The Custodian shall be removed immediately upon (i) termination of
the Trust Agreement, (ii) termination of the Paying Agent Agreement, (iii)
termination of the
-5-
<PAGE> 9
Collateral Agreement, (iv) termination of the Administration Agreement, or (v)
the resignation or removal of the Paying Agent, the Collateral Agent or the
Administrator.
Section 4.2. Resignation. The Custodian may at any time resign by
giving 60 days' written notice by registered or certified mail to the Trust in
accordance with the provisions of Section 5.3. Such resignation shall take
effect upon the appointment of a successor Custodian by the Trust.
Section 4.3. Appointment of Successor. If the Custodian hereunder shall
resign or be removed, a successor may be appointed by the Trust by an instrument
or concurrent instruments in writing signed by the Trustees. Every such
successor Custodian appointed pursuant to the provisions of this Agreement shall
satisfy the requirements set forth in Section 2.2(a) of the Trust Agreement.
Section 4.4. Effectiveness of Resignation or Removal. No resignation or
removal of the Custodian shall be effective until a successor Custodian shall
have been appointed and shall have accepted the duties of the Custodian. If,
within 30 days after notice by the Custodian to the Trust or by the Trust to the
Custodian of any such resignation or removal, no successor Custodian shall have
been selected and accepted the duties of the Custodian, the Custodian may apply
to a court of competent jurisdiction for the appointment of a successor
Custodian.
Section 4.5. Acceptance by Successor. Every successor Custodian
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and also to the Trust 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 Trust, execute and
deliver an instrument transferring to such successor all the estates,
properties, rights and powers of such predecessor hereunder. Every predecessor
Custodian shall forthwith deliver all records or other property of the Trust
then in its possession or custody to its successor.
ARTICLE V
MISCELLANEOUS
Section 5.1. Term of Contract. This Agreement shall continue in effect
until the completion of the liquidation of the Trust in accordance with Section
8.3(c) of the Trust Agreement.
Section 5.2. No Assumption of Liability. By executing this Agreement,
none of the Trustees assumes any personal liability hereunder.
-6-
<PAGE> 10
Section 5.3. Notices.
(a) All notices and other communications provided for in this
Agreement, unless otherwise specified, shall be in writing (including
transmittals by telex or telecopier) given at the addresses set forth in the
following sentences or at such other addresses as may be designated by notice
duly given in accordance with this Section 5.3 to each other party hereto. Until
such notice is given, (i) notices to the Custodian shall be directed to it at
The Chase Manhattan Bank, 450 West 33rd Street, New York, New York 10001,
Telecopier No. (212) 946-3638, Attention: Collateral Management Services; and
(ii) notices to the Trust or the Trustees shall be directed to the Trustees at
c/o Donald J. Puglisi, Managing Trustee, Puglisi & Associates, 850 Library
Avenue, Suite 204, Newark, Delaware 19711, Telephone: (302) 738-6680,
Telecopier: (302) 738-7210.
(b) Each such notice given pursuant to Section 5.3(a) 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 5.3.
Section 5.4. 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 contained in this Agreement unenforceable or invalid.
Section 5.5. 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 the Custodian and the Trust 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 provided in this
Agreement shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 5.6. 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, and any purported
assignment without such consent shall be void.
Section 5.7. 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
contained in this Agreement conflict with any applicable provisions of the
Investment Company Act or such rules and regulations, the latter shall control.
-7-
<PAGE> 11
Section 5.8. 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 the Custodian and the Trust 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 contained in this Agreement by or on behalf of the
Custodian and the Trust 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.
Section 5.9. Counterparts. This Agreement may be executed, acknowledged
and delivered in any number of counterparts, each of which shall be an original,
but all of which shall constitute a single agreement, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
-8-
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have caused this Custodian
Agreement to be duly executed and delivered as of the first date set forth
above.
THE CUSTODIAN
THE CHASE MANHATTAN BANK,
as Custodian
By:
---------------------------------
Name:
Title:
THE TRUST:
AMDOCS AUTOMATIC COMMON
EXCHANGE SECURITY TRUST
By:
---------------------------------
William R. Latham, III,
as Trustee
By:
---------------------------------
James B. O'Neill,
as Trustee
By:
---------------------------------
Donald J. Puglisi,
as Trustee
<PAGE> 1
Exhibit 2.k.(i)
S&C Draft of June 6, 1999
ADMINISTRATION AGREEMENT
Between
THE CHASE MANHATTAN BANK,
As Administrator,
and
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
Dated as of [Pricing Date]
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms............................................. 1
Section 1.2. Interpretation............................................ 2
ARTICLE II
APPOINTMENT OF ADMINISTRATOR
Section 2.1. Appointment of Administrator; Acceptance of Appointment... 2
Section 2.2. Services of Administrator................................. 2
Section 2.3. Power of Attorney......................................... 3
Section 2.4. Delivery of Certain Documents............................. 4
ARTICLE III
THE ADMINISTRATOR
Section 3.1. Conditions to Duties of the Administrator................. 4
Section 3.2. Merger. .................................................. 4
Section 3.3. Compensation.............................................. 4
Section 3.4. Indemnification........................................... 4
ARTICLE IV
RESIGNATION AND REMOVAL OF ADMINISTRATOR
Section 4.1. Removal................................................... 5
Section 4.2. Resignation............................................... 6
Section 4.3. Appointment of Successor.................................. 6
Section 4.4. Effectiveness of Resignation or Removal................... 6
Section 4.5. Acceptance by Successor................................... 6
ARTICLE V
RECORDS AND REPORTS
Section 5.1. Books and Records; Inspection and Copying................. 6
Section 5.2. Access to Information..................................... 6
-i-
<PAGE> 3
ARTICLE VI
MISCELLANEOUS
Section 6.1. Term of Contract.......................................... 6
Section 6.2. No Assumption of Liability................................ 7
Section 6.3. Notices................................................... 7
Section 6.4. Governing Law; Severability............................... 7
Section 6.5. Amendments; Waivers....................................... 7
Section 6.6. Non-Assignability......................................... 7
Section 6.7. Provisions of Law to Control.............................. 7
Section 6.8. No Third Party Rights; Successors and Assigns............. 7
Section 6.9. Counterparts.............................................. 8
-ii-
<PAGE> 4
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, dated as of [Pricing Date], between The Chase
Manhattan Bank, a New York banking corporation (the "Administrator"), and Amdocs
Automatic Common Exchange Security 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 [Pricing Date] (such trust and the trustees thereof
acting in their capacity as such being referred to in this Agreement as the
"Trust").
WITNESSETH:
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
purchase contract (the "Contract") with an existing shareholder of Amdocs
Limited (the "Company") and to issue $_____ Trust Automatic Common Exchange
Securities (the "Securities") to the public in accordance with the terms and
conditions of the Trust Agreement referred to below; and
WHEREAS, the Trust desires to engage the services of the Administrator
to assume certain duties and responsibilities of the Trustees of the Trust 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
in this Agreement; 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 set forth in this
Agreement;
NOW, THEREFORE, the parties, intending to be bound, agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms.
(a) Capitalized terms used and not otherwise defined in this Agreement
have the respective meanings specified in the Trust Agreement.
(b) As used in this Agreement, the following terms have the following
meanings:
"Administrator" has the meaning specified in the preamble to
this Agreement.
<PAGE> 5
"Agreement" means this Administration Agreement.
"Company" has the meaning specified in the recitals to this
Agreement.
"Contract" has the meaning specified in the recitals to this
Agreement.
"Indemnification Expenses" has the meaning specified in the
Indemnity Agreement.
"Investment Company Act" has the meaning specified in the
recitals to this Agreement.
"Securities" has the meaning specified in the recitals to this
Agreement.
"Treasury Securities" has the meaning specified in the
recitals to this Agreement.
"Trust" has the meaning specified in the preamble to this
Agreement.
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated as of [Pricing Date], constituting the Trust.
Section 1.2. Interpretation.
(a) When a reference is made in this Agreement to Articles, Sections,
Exhibits or Schedules, such reference is to Articles or Sections of, or Exhibits
or Schedules to, this Agreement unless otherwise indicated.
(b) The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.
(c) Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
(d) Any reference to any statute, regulation or agreement is a
reference to such statute, regulation or agreement as supplemented or amended
from time to time.
ARTICLE II
APPOINTMENT OF ADMINISTRATOR
Section 2.1. Appointment of Administrator; Acceptance of Appointment.
The Trust hereby appoints the Administrator, and the Administrator hereby
accepts such appointment, to provide the services enumerated in this Agreement.
--2--
<PAGE> 6
Section 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 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) if so directed by the Seller, instruct the Paying Agent to
pay, from the amounts payable to the Seller pursuant to the Contract,
the fees and expenses of the Trust incurred in connection with the
public offering of the Securities and the costs and expenses incurred
in connection with the organization of the Trust;
(b) instruct the Paying Agent to effect the transactions set
forth in Sections 2.3, 2.4 and 2.5 and Article III of the Trust
Agreement;
(c) with the approval of the Trustees, engage legal and other
professional advisors, subject to clause 2.2(iii) above;
(d) when the Trust is required to select and engage an
independent investment banking firm under the Contract, to select and
engage such a firm, subject to the requirements of the Contract
(including Section 8.1 thereof) and inform the Trustees promptly after
making such selection and engagement;
(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 Expense Agreement but in no event out of any assets of
the Trust, except as provided in Section 2.2(a), and give notice to the
Seller (as defined in the Expense Agreement) of any claim for
Indemnification Expenses or any threatened claim for Indemnification
Expenses as provided in Section 2.4(b) of the Indemnity Agreement;
(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 or the Investment
Company Act, (ii) keep (or cause to be kept) 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
--3--
<PAGE> 7
the adequacy and accuracy of any such notices, proxies, reports,
communications, books, records, returns and other documents shall be
that of the Trustees; and provided further, however, that the
Administrator shall have no liability for the adequacy or accuracy of
such notices, proxies, reports, communications, books, records, returns
and other documents;
(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
(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.
Section 2.3. Power of Attorney. The Trust hereby appoints the
Administrator, acting through any duly appointed officer, as its
attorney-in-fact and agent for the purpose of performing the duties prescribed
in Section 2.2(f)(iii) and 2.2(i).
Section 2.4. Delivery of Certain Documents. The Trust will deliver to
the Administrator, promptly following the execution of this Agreement: (a) a
complete conformed copy of the registration statement of the Trust under the
Securities Act and the Investment Company Act, including all amendments,
exhibits and schedules thereto and (b) the EDGAR access codes (Central Index
Key, CIK Confirmation Code, Password and Password Modification Access Code)
employed to file such registration statement.
ARTICLE III
THE ADMINISTRATOR
Section 3.1. Conditions to Duties of the Administrator. The provisions
of Section 8.1(a) of the Collateral Agreement shall apply, mutatis mutandis, to
the Administrator in the performance of its duties hereunder as if it were the
Collateral Agent acting under the Collateral Agreement. Without limiting the
generality of such provisions, the Administrator (i) at its own cost, may select
and employ independent accountants
--4--
<PAGE> 8
acceptable to the Trustees (other than the independent public accountants
referred to in clause 2.2(iii) of this Agreement and Section 2.2(d) of the Trust
Agreement) to keep the financial books and records of the Trust, to prepare the
financial statements of the Trust and to prepare Trust tax returns, and (ii)
should the Trustees fail to do so, may select and engage attorneys acceptable to
the Trustees to prepare annual, semiannual and periodical reports, notices of
meetings and proxy statements, annual reports to Holders of the Securities and
other documents required under the Investment Company Act or the Securities
Exchange Act of 1934.
Section 3.2. Merger. Any corporation or association into which the
Administrator 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, merger, consolidation, sale or transfer to which it is a party,
shall be and become the successor Administrator hereunder without the execution
or filing of any instrument or any further act, deed or conveyance on the part
of any of the parties hereto, provided that such corporation or association
meets the requirements set forth in 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, consolidation, sale or transfer.
Section 3.3. Compensation.
(a) For services to be rendered by the Administrator pursuant to this
Agreement, and for the payment of Trust expenses pursuant to Section 2.2(e) of
this Agreement, the Administrator shall receive only such fees and expenses as
shall be paid to it pursuant to the terms of the Expense Agreement and shall
have no recourse to the assets of the Trust for the payment of any such amounts.
(b) If and to the extent that the Trust 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 Trust from time to time.
Section 3.4. Indemnification. The Trust 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 Trust, 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. Such indemnity shall survive
--5--
<PAGE> 9
the resignation, removal or discharge of the Administrator and the termination
of this Agreement.
ARTICLE IV
RESIGNATION AND REMOVAL OF ADMINISTRATOR
Section 4.1. Removal.
(a) Subject to Section 4.4, the Trust may remove the Administrator by
written notice at any time 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 ceases to meet the requirements set
forth in Section 2.2(a) of the Trust Agreement; or
(iii) If the Administrator shall be adjudged bankrupt or
insolvent by a court of competent jurisdiction, or a receiver,
conservator, liquidator, or trustee shall be appointed for or with
respect to the Administrator, or for all or substantially all of its
property, or a court of competent jurisdiction shall approve 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
(iv) 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 or
conservator for or in respect of the Administrator for 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
(v) 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; or
(vi) At any time upon 60 days' prior written notice.
If any of the events specified in clauses (ii), (iii), (iv) or (v) of this
Section 4.1(a) shall occur, the Administrator shall give immediate written
notice thereof to the Trust.
(b) Subject to Section 4.4, the Administrator shall be removed
immediately upon (i) termination of the Trust Agreement, (ii) termination of the
Paying Agent Agreement,
--6--
<PAGE> 10
(iii) termination of the Collateral Agreement, (iv) termination of the Custodian
Agreement, or (v) the resignation or removal of the Paying Agent, the Collateral
Agent or the Custodian.
Section 4.2. Resignation. Subject to Section 4.4, the Administrator may
at any time resign by giving 60 days' written notice by registered or certified
mail to the Trust in accordance with the provisions of Section 6.3. Such
resignation shall take effect upon the appointment of a successor Administrator
by the Trust.
Section 4.3. Appointment of Successor. If the Administrator hereunder
shall resign or be removed, a successor may be appointed by the Trust by an
instrument or concurrent instruments in writing signed by the Trustees. Every
such successor Administrator appointed pursuant to the provisions of this
Agreement shall satisfy the requirements set forth in Section 2.2(a) of the
Trust Agreement.
Section 4.4. Effectiveness of Resignation or Removal. No resignation or
removal of the Administrator shall be effective until 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 Trust
or by the Trust to the Administrator of any such resignation or removal, 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.
Section 4.5. Acceptance by Successor. Every successor Administrator
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and also to the Trust 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 Trust, execute and
deliver an instrument transferring to such successor all the estates,
properties, rights and powers of such predecessor hereunder. Every predecessor
Administrator shall forthwith deliver all records or other property of the Trust
then in its possession or custody to its successor.
ARTICLE V
RECORDS AND REPORTS
Section 5.1. Books and Records; Inspection and Copying. The
Administrator shall keep (or cause to be kept) 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 request, and to
make copies of the same at the expense of the Trust.
--7--
<PAGE> 11
Section 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 monies available to the
Trust, the financial condition of the Trust and all other relevant matters
concerning the Trust.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Term of Contract. This Agreement shall continue in effect
until the completion of the liquidation of the Trust in accordance with Section
8.3(c) of the Trust Agreement.
Section 6.2. No Assumption of Liability. By executing this Agreement,
none of the Trustees assumes any personal liability hereunder.
Section 6.3. Notices.
(a) All notices and other communications provided for in this
Agreement, unless otherwise specified, shall be in writing (including
transmittals by telex or telecopier) given at the addresses set forth in the
following sentences or at such other addresses as may be designated by notice
duly given in accordance with this Section 9.3 to each other party hereto. Until
such notice is given, (i) notices to the Administrator shall be directed to it
at The Chase Manhattan Bank, 450 West 33rd Street, New York, New York 10001,
Telecopier No. (212) 946-3638, Attention: Collateral Management Services; (ii)
notices to the Trust or the Trustees shall be directed to the Trustees at c/o
Donald J. Puglisi, Managing Trustee, Puglisi & Associates, 850 Library Avenue,
Suite 204, Newark, Delaware 19711, Telephone: (302) 738-6680, Telecopier: (302)
738-7210; and (iii) notices to Seller shall be directed to it at [INSERT
SELLER'S NOTICE ADDRESS].
(b) Each such notice given pursuant to Section 6.3(a) shall be
effective (i) if sent by certified mail (return receipt requested), 72 hours
after being deposited in the United States mail, postage prepaid or five days
after being deposited in the mail of another country, 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 6.3.
Section 6.4. 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 contained in this Agreement unenforceable or invalid.
Section 6.5. 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
--8--
<PAGE> 12
the case of an amendment, by the Administrator and the Trust 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 provided in this
Agreement shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 6.6. 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, and any purported
assignment without such consent shall be void.
Section 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
contained in this Agreement conflict with any applicable provisions of the
Investment Company Act or such rules and regulations, the latter shall control.
Section 6.8. 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 the Administrator and the Trust 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 contained in this Agreement by or on behalf of
the Administrator and the Trust 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.
Section 6.9. Counterparts. This Agreement may be executed, acknowledged
and delivered in any number of counterparts, each of which shall be an original,
but all of which shall constitute a single agreement, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
--9--
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this Administration
Agreement to be duly executed and delivered as of the first date set forth
above.
THE ADMINISTRATOR:
THE CHASE MANHATTAN BANK,
as Administrator
By:
---------------------------------
Name:
Title:
THE TRUST:
AMDOCS AUTOMATIC COMMON
EXCHANGE SECURITY TRUST
By:
---------------------------------
William R. Latham, III,
as Trustee
By:
---------------------------------
James B. O'Neill,
as Trustee
By:
---------------------------------
Donald J. Puglisi,
as Trustee
<PAGE> 1
Exhibit 2.k.(ii)
S&C Draft of June 6, 1999
PAYING AGENT AGREEMENT
Between
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
As Paying Agent,
and
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
Dated as of [Pricing Date]
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms.............................................. 1
Section 1.2. Interpretation............................................. 2
ARTICLE II
PAYING AGENT
Section 2.1. Appointment of Paying Agent; Acceptance of Appointment..... 2
Section 2.2. Certificates and Notices................................... 3
Section 2.3. Payments and Investments................................... 3
Section 2.4. Instructions from Administrator............................ 3
ARTICLE III
TRANSFER AGENT AND REGISTRAR
Section 3.1. Original Issue of Certificates............................. 3
Section 3.2. Registry of Holders........................................ 4
Section 3.3. Registration of Transfer of the Securities................. 4
Section 3.4. Lost Certificates.......................................... 4
Section 3.5. Disposition of Canceled Certificates; Records.............. 4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE TRUST
Section 4.1. Representations and Warranties of the Trust................ 4
ARTICLE V
DUTIES AND RIGHTS OF PAYING AGENT
Section 5.1. Duties..................................................... 5
Section 5.2. Conditions to the Duties of the Paying Agent............... 5
Section 5.3. Merger..................................................... 6
Section 5.4. Disclaimer................................................. 6
Section 5.5. Compensation............................................... 6
Section 5.6. Indemnification............................................ 6
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<PAGE> 3
ARTICLE VI
RESIGNATION AND REMOVAL OF THE PAYING AGENT
Section 6.1. Removal.................................................... 6
Section 6.2. Resignation................................................ 7
Section 6.3. Appointment of Successor................................... 8
Section 6.4. Effectiveness of Resignation or Removal.................... 8
Section 6.5. Acceptance by Successor.................................... 8
ARTICLE VII
MISCELLANEOUS
Section 7.1. Term of Contract........................................... 8
Section 7.2. No Assumption of Liability................................. 8
Section 7.3. Notices.................................................... 8
Section 7.4. Governing Law; Severability................................ 9
Section 7.5. Amendments; Waivers........................................ 9
Section 7.6. Non-Assignability.......................................... 9
Section 7.7. Provisions of Law to Control............................... 9
Section 7.8. No Third Party Rights; Successors and Assigns.............. 9
Section 7.9. Counterparts............................................... 10
-ii-
<PAGE> 4
PAYING AGENT AGREEMENT
PAYING AGENT AGREEMENT, dated as of [Pricing Date], between ChaseMellon
Shareholder Services, L.L.C., a New Jersey limited liability company (the
"Paying Agent"), and Amdocs Automatic Common Exchange Security 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 [Pricing Date] (such trust and
the trustees thereof acting in their capacity as such being referred to in this
Agreement as the "Trust").
WITNESSETH:
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
purchase contract (the "Contract") with an existing shareholder of Amdocs
Limited (the "Company") and to issue $_____ Trust Automatic Common Exchange
Securities (the "Securities") to the public in accordance with the terms and
conditions of the Trust Agreement referred to below; and
WHEREAS, the Trust desires to engage the services of the Paying Agent
to assume certain duties and responsibilities 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
duties and responsibilities, subject to the supervision of the Trustees, on the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, the parties, intending to be bound, agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms.
(a) Capitalized terms used and not otherwise defined in this Agreement
have the respective meanings specified in the Trust Agreement.
(b) As used in this Agreement, the following terms have the following
meanings:
"Agreement" means this Paying Agent Agreement.
<PAGE> 5
"Company" has the meaning specified in the recitals to this
Agreement.
"Contract" has the meaning specified in the recitals to this
Agreement.
"Investment Company Act" has the meaning specified in the
recitals to this Agreement.
"Paying Agent" has the meaning specified in the preamble to
this Agreement.
"Securities" has the meaning specified in the recitals to this
Agreement.
"Treasury Securities" has the meaning specified in the
recitals to this Agreement.
"Trust" has the meaning specified in the preamble to this
Agreement.
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated as of [Pricing Date], constituting the Trust.
Section 1.2. Interpretation.
(a) When a reference is made in this Agreement to Articles, Sections,
Exhibits or Schedules, such reference is to Articles or Sections of, or Exhibits
or Schedules to, this Agreement unless otherwise indicated.
(b) The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.
(c) Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
(d) Any reference to any statute, regulation or agreement is a
reference to such statute, regulation or agreement as supplemented or amended
from time to time.
ARTICLE II
PAYING AGENT
Section 2.1. Appointment of Paying Agent; Acceptance of Appointment.
The Trust hereby appoints the Paying Agent, and the Paying Agent hereby accepts
such appointment, to provide the services enumerated in this Agreement. The
Paying Agent agrees to act in accordance with its standard procedures and the
written instructions of the Administrator and the provisions set forth in this
Article II as Paying Agent with
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<PAGE> 6
respect to the Securities. Without limiting the generality of the foregoing,
ChaseMellon Shareholder Services, L.L.C., as Paying Agent, agrees that it shall
establish and maintain the Trust Account as provided in the Trust Agreement,
subject to the provisions of Section 2.3.
Section 2.2. Certificates and Notices. The Trustees shall deliver, or
cause to be delivered, 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 except as provided in the Trust Agreement.
Section 2.3. Payments and Investments. The Paying Agent shall make
payments out of the Trust Account as provided for in Article III 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 receipt of written
instructions to do so from the Administrator and shall invest monies on deposit
in the Trust Account in Temporary Investments in accordance with Section 3.5 of
the Trust Agreement. Except as otherwise specifically provided in this Agreement
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
thereof upon maturity to the payment of the next succeeding Quarterly
Distribution on the Securities. All such Temporary Investments shall be selected
from time to time by the Trustees or by the Administrator pursuant to standing
instructions from the Trustees to the Administrator, and the Paying Agent shall
have no liability to the Trust or any Holder or any other Person with respect to
the payment or performance of any such Temporary Investment.
Section 2.4. Instructions from Administrator. The Paying Agent shall
receive and execute all written instructions from the Administrator.
ARTICLE III
TRANSFER AGENT AND REGISTRAR
Section 3.1. Original Issue of Certificates. On the date the Securities
are originally issued and sold pursuant to the Underwriting Agreement,
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 manually 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.
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<PAGE> 7
Section 3.2. Registry of Holders. The Paying Agent shall maintain a
registry of the Holders of the Securities. In case of any written request or
demand for the inspection of the registry 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 whether to permit or refuse such inspection; provided,
however, that the Paying Agent reserves the right to exhibit the transfer books
or other books to any Person if it is advised by its counsel that its failure to
do so would be unlawful.
Section 3.3. Registration of Transfer of the Securities. The Paying
Agent shall register Securities for transfer or exchange, and shall countersign
and deliver new certificates in the name of the designated transferee or
transferees, upon surrender of the old certificates as provided in Section 5.2
of the Trust Agreement.
Section 3.4. Lost Certificates. The Paying Agent shall issue and
register replacement certificates for certificates represented to have been
destroyed, stolen or lost or for mutilated certificates, in each case as
provided in Section 5.3 of the Trust Agreement. 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 Trust to
the Paying Agent that such issuance will comply with any applicable provisions
of the law and the Trust Agreement and resolutions of the Trustees.
Section 3.5. Disposition of Canceled Certificates; Records. The Paying
Agent shall retain certificates that have been canceled 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; provided, however, that the Paying Agent reserves the right 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 be unlawful.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE TRUST
Section 4.1. Representations and Warranties of the Trust. The Trust
represents and warrants to the Paying Agent that:
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<PAGE> 8
(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 on behalf of the Trust
and to authorize, create and issue the Securities;
(b) this Agreement has been duly and validly authorized,
executed and delivered by the Trust and constitutes the valid and
binding agreement of the Trust enforceable against the Trust 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 Trust and are validly issued;
(e) the offer and sale of the Securities has been registered
under the Securities Act 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 Trust is a party or by
which it is bound; and
(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 OF PAYING AGENT
Section 5.1. Duties. The Paying Agent is acting solely as agent for the
Trust hereunder and owes no fiduciary duties to any other Person by reason of
this Agreement.
Section 5.2. Conditions to the Duties of the Paying Agent. The
provisions of Section 8.1(a) of the Collateral Agreement shall apply, mutatis
mutandis, to the Paying
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<PAGE> 9
Agent in the performance of its duties hereunder as if it were the Collateral
Agent acting under the Collateral Agreement.
Section 5.3. Merger. Any corporation or association into which the
Paying 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 resulting from any such conversion,
merger, consolidation, sale or transfer to which it is a party, shall be and
become the successor Paying Agent hereunder without the execution or filing of
any instrument or further act, deed or conveyance on the part of any of the
parties hereto, provided that such corporation or association meets the
requirements set forth in 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, consolidation, sale or transfer.
Section 5.4. 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.
Section 5.5. Compensation. For services to be rendered by the Paying
Agent pursuant to this Agreement, the Paying Agent shall receive only such fees
and expenses as shall be paid to it pursuant to the terms of the Expense
Agreement and the Indemnity Agreement and shall have no recourse to the assets
of the Trust for the payment of any such amounts.
Section 5.6. Indemnification. The Trust shall indemnify and hold the
Paying Agent 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 Paying Agent by the Trust, or any act
or omission in the course of, connected with or arising out of any services to
be rendered hereunder, provided that the Paying Agent 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. Such indemnity shall survive the
resignation, removal or discharge of the Paying Agent and the termination of
this Agreement.
ARTICLE VI
RESIGNATION AND REMOVAL OF THE PAYING AGENT
Section 6.1. Removal.
(a) Subject to Section 6.4, the Trust may remove the Paying Agent by
written notice at any time if any of the following events shall occur:
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<PAGE> 10
(i) If the Paying Agent 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 Paying Agent ceases to meet the requirements set
forth in Section 2.2(a) of the Trust Agreement; or
(iii) If the Paying Agent shall be adjudged bankrupt or
insolvent by a court of competent jurisdiction, or a receiver,
conservator, liquidator, or trustee shall be appointed for or with
respect to the Paying Agent, or for all or substantially all of its
property, or a court of competent jurisdiction shall approve any
petition filed against the Paying Agent for its reorganization, and
such adjudication or order shall remain in force or unstayed for a
period of 30 days; or
(iv) If the Paying Agent 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 or
conservator for or in respect of the Paying Agent for 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
(v) Upon the voluntary or involuntary dissolution of the
Paying Agent or, unless the Trust shall have given its prior written
consent thereto, the merger or consolidation of the Paying Agent with
any other entity; or
(vi) at any time upon 60 days' prior written notice.
If any of the events specified in clauses (ii), (iii), (iv) or (v) of this
Section 6.1(a) shall occur, the Paying Agent shall give immediate written notice
thereof to the Trust.
(b) Subject to Section 6.4, the Paying Agent shall be removed
immediately upon (i) termination of the Trust Agreement, (ii) termination of the
Administration Agreement, (iii) termination of the Collateral Agreement, (iv)
termination of the Custodian Agreement, or (v) the resignation or removal of the
Administrator, the Collateral Agent or the Custodian.
Section 6.2. Resignation. Subject to Section 6.4, the Paying Agent may
at any time resign by giving 60 days' written notice by registered or certified
mail to the Trust in accordance with the provisions of Section 6.3. Such
resignation shall take effect upon the appointment of a successor Paying Agent
by the Trust.
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<PAGE> 11
Section 6.3. Appointment of Successor. If the Paying Agent hereunder
shall resign or be removed, a successor may be appointed by the Trust by an
instrument or concurrent instruments in writing signed by the Trustees. Every
such successor Paying Agent appointed pursuant to the provisions of this
Agreement shall satisfy the requirements set forth in Section 2.2(a) of the
Trust Agreement.
Section 6.4. Effectiveness of Resignation or Removal. No resignation or
removal of the Paying Agent shall be effective until a successor Paying Agent
shall have been appointed and shall have accepted the duties of the Paying
Agent. If, within 30 days after notice by the Paying Agent to the Trust or by
the Trust to the Paying Agent of any such resignation or removal, 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.
Section 6.5. Acceptance by Successor. Every successor Paying Agent
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and also to the Trust 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 Trust, execute and
deliver an instrument transferring to such successor all the estates,
properties, rights and powers of such predecessor hereunder. Every predecessor
Paying Agent shall forthwith deliver to the Trust or to any successor Paying
Agent as requested by the Trust (i) copies of all books and records maintained
by it and (ii) any funds deposited with the Paying Agent by the Trust.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Term of Contract. This Agreement shall continue in effect
until the completion of the liquidation of the Trust in accordance with Section
8.3(c) of the Trust Agreement.
Section 7.2. No Assumption of Liability. By executing this Agreement,
none of the Trustees assumes any personal liability hereunder.
Section 7.3. Notices.
(a) All notices and other communications provided for in this
Agreement, unless otherwise specified, shall be in writing (including
transmittals by telex or telecopier) given at the addresses set forth in the
following sentences or at such other addresses as may be designated by notice
duly given in accordance with this Section 7.3 to each other party hereto. Until
such notice is given, (i) notices to the Paying Agent shall be directed to it at
ChaseMellon Shareholder Services, L.L.C. 450 West 33rd Street, New
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<PAGE> 12
York, New York 10001, Telecopier No. (212) 947-7628, Attention Robert Kavanagh;
and (ii) notices to the Trust or the Trustees shall be directed to the Trustees
at c/o Donald J. Puglisi, Managing Trustee, Puglisi & Associates, 850 Library
Avenue, Suite 204, Newark, Delaware 19711, Telephone: (302) 738-6680,
Telecopier: (302) 738-7210 with a copy to the Administrator at The Chase
Manhattan Bank, 450 West 33rd Street, New York, New York 10001, Telecopier No.
(212) 946-3638, Attention: Collateral Management Services.
(b) Each such notice given pursuant to Section 7.3(a) 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 7.3.
Section 7.4. 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 contained in this Agreement unenforceable or invalid.
Section 7.5. 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 the Paying Agent and the Trust 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 provided in this
Agreement shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 7.6. 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, and any purported
assignment without such consent shall be void.
Section 7.7. 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
contained in this Agreement conflict with any applicable provisions of the
Investment Company Act or such rules and regulations, the latter shall control.
Section 7.8. 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 the Paying Agent and the Trust 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
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<PAGE> 13
assigns of such party. All the covenants and agreements contained in this
Agreement by or on behalf of the Paying Agent and the Trust 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.
Section 7.9. Counterparts. This Agreement may be executed, acknowledged
and delivered in any number of counterparts, each of which shall be an original,
but all of which shall constitute a single agreement, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
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<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Paying Agent
Agreement to be duly executed and delivered as of the first date set forth
above.
THE PAYING AGENT:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., as Paying Agent
By:
----------------------------------
Name:
Title:
THE TRUST:
AMDOCS AUTOMATIC COMMON
EXCHANGE SECURITY TRUST
By:
----------------------------------
William R. Latham, III,
as Trustee
By:
----------------------------------
James B. O'Neill,
as Trustee
By:
----------------------------------
Donald J. Puglisi,
as Trustee
<PAGE> 1
Exhibit 2.k.(iii)
S&C Draft of June 6, 1999
PURCHASE AGREEMENT
Between
AMDOCS INTERNATIONAL LIMITED,
As Seller
and
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST,
As Purchaser
Dated as of [Pricing Date]
<PAGE> 2
Table of Contents
Page
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms........................................... 2
Section 1.2. Interpretation.......................................... 8
ARTICLE II
SALE AND PURCHASE
Section 2.1. Sale and Purchase....................................... 8
Section 2.2. Purchase Price.......................................... 9
Section 2.3. Payment for and Delivery of Contract Shares............. 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of Seller................ 12
Section 3.2. Representations and Warranties of Purchaser............. 12
ARTICLE IV
CONDITIONS TO PURCHASER'S OBLIGATIONS
Section 4.1. Condition to Delivery of Firm Purchase Price............ 13
Section 4.2. Condition to Delivery of Additional Purchase Price...... 13
ARTICLE V
COVENANTS
Section 5.1. Covenants of Seller..................................... 13
Section 5.2. Further Assurances...................................... 14
ARTICLE VI
ADJUSTMENTS TO EXCHANGE RATE, APPRECIATION THRESHOLD PRICE,
INITIAL PRICE AND CLOSING PRICE
Section 6.1. Dilution Adjustments.................................... 14
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<PAGE> 3
Page
Section 6.2. Adjustment for Consolidation, Merger or Other
Reorganization Event.................................... 18
Section 6.3. Spin-Off Distributions.................................. 19
Section 6.4. Adjustments with Respect to Marketable Securities....... 19
ARTICLE VII
ACCELERATION UPON AN EVENT OF DEFAULT
Section 7.1. Events of Default....................................... 20
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Adjustments of Exchange Rate; Selection of
Independent Investment Banking Firm..................... 20
Section 8.2. No Assumption of Liability.............................. 21
Section 8.3. Notices................................................. 21
Section 8.4. Governing Law; Severability............................. 21
Section 8.5. Entire Agreement........................................ 21
Section 8.6. Amendments; Waivers..................................... 21
Section 8.7. Non-Assignability....................................... 22
Section 8.8. No Third Party Rights; Successors and Assigns........... 22
Section 8.9. Counterparts............................................ 22
Exhibits
Exhibit A - Form of Certificate for Extension of Exchange Date
-ii-
<PAGE> 4
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of [Pricing Date], between Amdocs
International Limited, a corporation organized under the laws of the Island of
Guernsey ("Seller"), and Amdocs Automatic Common Exchange Security 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 [Pricing Date] (such trust
and the trustees thereof acting in their capacity as such being referred to in
this Agreement as "Purchaser").
WITNESSETH:
WHEREAS, Seller owns ordinary shares, par value pound sterling 0.01 per
share (the "Ordinary Shares"), of Amdocs Limited, a corporation organized under
the laws of the Island of Guernsey (the "Company"); and
WHEREAS, Purchaser has filed with the Securities and Exchange
Commission a registration statement on Form N-2 contemplating the offering of up
to 11,500,000 $______ Trust Automatic Common Exchange Securities (the
"Securities"), the terms of which contemplate delivery by Purchaser to the
holders of such Securities of a number of Ordinary Shares (or, in certain
circumstances, cash in lieu of such shares) on the Exchange Date referred to
below; and
WHEREAS, Seller has agreed, pursuant to the Collateral Agreement, dated
as of [Pricing Date] (the "Collateral Agreement"), among Seller, as Pledgor, The
Chase Manhattan Bank, as collateral agent, and Purchaser to grant to the
Collateral Agent, for the benefit of Purchaser, a security interest in Ordinary
Shares and, in certain circumstances, certain other collateral to secure the
obligations of Seller under this Agreement; and
WHEREAS, Purchaser has agreed, pursuant to an underwriting agreement,
dated [Pricing Date] (the "Underwriting Agreement"), among Purchaser, Seller,
the Company, and Goldman Sachs & Co., BT Alex. Brown Incorporated and Lehman
Brothers Inc., as representatives of the several underwriters named in such
agreement (the "Underwriters"), to issue and sell to the Underwriters an
aggregate of 10,000,000 Securities (the "Firm Securities") and, at the
Underwriters' option, up to 1,500,000 additional Securities (such additional
Securities as the Underwriters shall actually purchase pursuant to the
Underwriting Agreements, the "Optional Securities") to cover overallotments;
NOW, THEREFORE, the parties to this Agreement, intending to be bound,
agree as follows:
<PAGE> 5
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms. As used in this Agreement, the following
terms have the following meanings:
"Accelerated Portion" means, in relation to any Cash Merger,
the portion of the Merger Consideration, other than Marketable
Securities, that has a Value equal to the amount determined by
multiplying the Basic Reorganization Event Amount by a fraction, the
numerator of which is the Value of the portion of the Merger
Consideration delivered in exchange for a single Ordinary Share that
consists of assets other than Marketable Securities, and the
denominator of which is the aggregate Transaction Value of the Merger
Consideration received in exchange for a single Ordinary Share.
"Additional Purchase Price" has the meaning specified in
Section 2.2(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 specified in Section
2.1(b).
"Additional Treasury Securities" means the U.S. Government
Securities purchased by Purchaser pursuant to section 2.3(b)(ii) of the
Trust Agreement for settlement at the Second Time of Delivery.
"Administrator" means The Chase Manhattan Bank, administrator
for Purchaser under the Administration Agreement, dated as of [Pricing
Date], between the Administrator and Purchaser, or its successor in
such capacity, or any other Administrator appointed pursuant to the
Trust Agreement.
"Agreement" means this Purchase Agreement.
"Appreciation Threshold Price" has the meaning specified in
Section 2.1(c).
"Average Market Price" per Ordinary Share or share of
Marketable Securities on any date means the average Closing Price of an
Ordinary Share or share of Marketable Securities for the Calculation
Period consisting of the 20 Trading Days immediately prior to but not
including such date; provided that if no Closing Price for the Ordinary
Shares or 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 the Average Market Price (but no additional Trading
Days shall be added to the Calculation Period). If no Closing Price for
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<PAGE> 6
the Ordinary Shares or Marketable Securities may be determined for any
of such Trading Days, the Average Market Price shall be the Closing
Price for the Ordinary Shares or Marketable Securities for the most
recent Trading Day prior to such 20 Trading Days for which a Closing
Price for the Ordinary Shares or Marketable Securities may be
determined pursuant to the definition of "Closing Price".
Notwithstanding the foregoing, for purposes of determining the payment
required upon cash settlement of this Agreement in connection with a
Rollover Offering, "Average Market Price" means the Closing Price per
Ordinary Share or share of Marketable Securities on the Trading Day
immediately preceding the date that the Rollover Offering is priced
(the "Pricing Date") or, if the Rollover Offering is priced after 4:00
P.M., New York City time, on the Pricing Date, the Closing Price per
share on the Pricing Date.
"Basic Reorganization Event Amount" has the meaning provided
in Section 6.2(a).
"Business Day" means a day on which the NYSE is open for
trading and that is not a day on which commercial banks in The City of
New York are authorized or obligated by law to close.
"Calculation Period" means any period of Trading Days for
which an average security price must be determined pursuant to this
Agreement.
"Cash Merger" has the meaning specified in Section 6.2(b).
"Cash Settlement Alternative" has the meaning provided in
Section 2.3(d).
"Closing Price" of any common equity security on any date of
determination means the closing sale price (or, if no closing sale
price is reported, the last reported sale price) of such common equity
security as reported on the NYSE Consolidated Tape on such date of
determination or, if such common equity security is not listed for
trading on the NYSE on such date, as reported in the composite
transactions for the principal United States national or regional
securities exchange on which such common equity security is so listed,
or if such common equity security is not so listed on a United States
national or regional securities exchange on such date, as reported by
the NASDAQ National Market or, if such common equity security is not so
reported on such date, the last quoted bid price for such common equity
security in the over-the-counter market as reported by the National
Quotation Bureau or any similar organization; provided that if any
event that results in an adjustment to the number of Ordinary Shares or
shares of Marketable Securities deliverable under this Agreement
pursuant to Article VI occurs during any Calculation Period, the
Closing Price as determined pursuant to the foregoing for each Trading
Day in the Calculation Period occurring prior to the day on which such
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adjustment is effected will be adjusted in accordance with Article VI
to reflect the occurrence of such event.
"Collateral Agent" means The Chase Manhattan Bank, in its
capacity as Collateral Agent under the Collateral Agreement, or its
successor in such capacity, or any other Collateral Agent appointed
pursuant to the Trust Agreement.
"Collateral Agreement" has the meaning specified in the
recitals to this Agreement.
"common equity security" means any security of any class of
capital stock (whether voting or non-voting) that has no preference in
respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
issuer of such capital stock and that is not subject to redemption by
the issuer of such capital stock.
"Company" has the meaning specified in the recitals to this
Agreement.
"Company Successor" has the meaning specified in Section 6.2.
"Contract Shares" has the meaning specified in Section 2.1(b).
"Custodian" means The Chase Manhattan Bank, as custodian for
Purchaser under the Custodian Agreement, dated as of [Pricing Date],
between the Custodian and Purchaser, or its successor in such capacity,
or any other Custodian appointed pursuant to the Trust Agreement.
"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 specified in Section 7.1.
"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 Ordinary Share
acquired in a tender offer or exchange offer by the Company, over (y)
the Then-Current Market Price of the Ordinary Shares.
"Exchange Date" means [THIRD ANNIVERSARY OF PRICING DATE],
subject to (i) extension by Seller pursuant to Section 2.3(e) and (ii)
subsequent acceleration by Seller pursuant to Section 2.3(f).
"Exchange Rate" has the meaning specified in Section 2.1(c).
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"Firm Purchase Price" has the meaning specified in Section
2.2(a).
"Firm Securities" has the meaning specified in the recitals to
this Agreement.
"Firm Share Base Amount" means 10,000,000 Ordinary Shares.
"Firm Shares" has the meaning specified in Section 2.1(a).
"First Time of Delivery" means the First Time of Delivery
specified pursuant to section 2 of the Underwriting Agreement.
"Initial Price" has the meaning specified in Section 2.1(c).
"Liens" means any lien, mortgage, security interest, pledge,
charge, encumbrance or adverse claim of any kind.
"Marketable Securities" means any common equity securities
listed on a U.S. national or regional securities exchange or reported
by the NASDAQ National Market.
"Merger Consideration" has the meaning specified in Section
6.2(a).
"NYSE" means the New York Stock Exchange, Inc.
"Optional Securities" has the meaning specified in the
recitals to this Agreement.
"Ordinary Shares" has the meaning specified in the recitals to
this Agreement.
"Permitted Dividend" means any quarterly cash dividend in
respect of the Ordinary Shares, except to the extent that the per share
amount of such dividend results in an annualized dividend yield on the
Ordinary Shares in excess of 12.5%.
"Pricing Date" has the meaning specified in the definition of
"Average Market Price".
"Purchaser" has the meaning specified in the preamble to this
Agreement.
"Reorganization Event" has the meaning specified in Section
6.2.
"Rollover Offering" means a reoffering or refinancing of
Securities effected not earlier than [INSERT EXCHANGE DATE] by means of
a completed
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public offering or offerings, or another similar offering (which may
include one or more exchange offers), by or on behalf of Seller.
"Second Time of Delivery" means the Second Time of Delivery
specified pursuant to Section 2 of the Underwriting Agreement.
"Securities" has the meaning specified in the recitals to this
Agreement.
"Seller" has the meaning specified in the preamble to this
Agreement.
"Spin-Off Distribution" means a distribution by the Company to
holders of Ordinary Shares of Marketable Securities issued by an issuer
other than the Company.
"Then-Current Market Price" of the Ordinary Shares means the
average Closing Price per Ordinary Share for the Calculation Period
consisting 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 Ordinary Shares is
determined for one or more (but not all) of such Trading Days, such
Trading Days 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 Ordinary
Shares may be determined for any of such Trading Days, the Then-Current
Market Price shall be the Closing Price for the Ordinary Shares for the
most recent Trading Day prior to such 5 Trading Days for which a
Closing Price for the Ordinary Shares may be determined pursuant to the
definition of "Closing Price". The "ex-date" with respect to any
dividend, distribution or issuance shall mean the first date on which
the Ordinary Shares trade regular way on their principal market without
the right to receive such dividend, distribution or issuance.
"Trading Day" in respect of any common equity security means a
day on which such common equity security (A) is not suspended from
trading on any United States 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 United States 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" means, with respect to any Reorganization
Event, the sum of: (x) for any cash received in such Reorganization
Event, the amount of such cash received per Ordinary Share; (y) for any
property other than cash or Marketable Securities received in such
Reorganization Event, an amount equal to the market value on the date
such Reorganization Event is consummated of such property received per
Ordinary Share (as determined by a nationally
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recognized independent investment banking firm retained for this
purpose by the Administrator, whose determination shall be final); and
(z) for any Marketable Securities received in such Reorganization
Event, an amount equal to the average Closing Price per share of such
Marketable Securities for the Calculation Period consisting of 20
Trading Days immediately prior to the Exchange Date (or, in the case of
a Cash Merger, for the Calculation Period consisting of the 20 Trading
Days immediately prior to the date the Reorganization Event is
consummated), multiplied by the number of such Marketable Securities
received for each Ordinary Share; 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 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 may be determined for any of such
Trading Days, the calculation in the preceding clause (z) shall be
based on the Closing Price for the Marketable Securities for the most
recent Trading Day prior to such 20 Trading Days for which a Closing
Price for the Marketable Securities may be determined pursuant to the
definition of "Closing Price".
"Transfer Restrictions" has the meaning provided in the
Collateral Agreement.
"Transferred Securities" has the meaning specified in Section
2.3(g).
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated as of [Pricing Date], constituting Amdocs Automatic
Common Exchange Security Trust.
"Underwriters" has the meaning specified in the recitals to
this Agreement.
"Underwriting Agreement" has the meaning specified in the
recitals to this Agreement.
"U.S. Government Securities" means direct obligations of the
United States of America.
"Value" means (i) in respect of cash, the amount of such cash;
(ii) in respect of any property other than cash or Marketable
Securities, an amount equal to the market value on the date the
relevant Reorganization Event is consummated (as determined by a
nationally recognized independent investment banking firm retained for
this purpose by the Administrator, whose determination shall be final);
and (iii) in respect of any share of Marketable Securities, an amount
equal to the average Closing Price per share of such Marketable
Securities for the Calculation Period consisting of the 20 Trading Days
immediately prior to the date the relevant Reorganization Event is
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consummated; 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 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 may be determined for any of such Trading Days,
the calculation in the preceding clause (iii) shall be based on the
Closing Price for the Marketable Securities for which a Closing Price
for the Marketable Securities may be determined pursuant to the
definition of "Closing Price".
Section 1.2. Interpretation.
(a) When a reference is made in this Agreement to Articles, Sections,
Exhibits or Schedules, such reference is to Articles or Sections of, or Exhibits
or Schedules to, this Agreement unless otherwise indicated.
(b) The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement, and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.
(c) Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
(d) Any reference to any statute, regulation or agreement is a
reference to such statute, regulation or agreement as supplemented or amended
from time to time.
ARTICLE II
SALE AND PURCHASE
Section 2.1. Sale and Purchase.
(a) Firm Shares. Upon the terms and subject to the conditions of this
Agreement, Seller agrees to sell to Purchaser on the Exchange Date, and
Purchaser agrees to purchase from Seller on the Exchange Date, the number of
Ordinary Shares (the "Firm Shares") equal to the product of the Firm Share Base
Amount and the Exchange Rate.
(b) Additional Shares. Upon the terms and subject to the conditions of
this Agreement, if the Underwriters exercise the option to purchase Optional
Securities pursuant to the Underwriting Agreement, Seller agrees to sell to
Purchaser on the Exchange Date, and Purchaser agrees to purchase from Seller on
the Exchange Date, the number of additional Ordinary Shares (the "Additional
Shares") equal to the product of the Additional Share Base Amount and the
Exchange Rate. 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
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Additional Shares on the Exchange Date, which notice shall specify the
Additional Share Base Amount and the Second Time of Delivery. The Firm Shares
and the Additional Shares (if any) are collectively referred to in this
Agreement as the "Contract Shares".
(c) Exchange Rate. The "Exchange Rate" shall be the rate determined in
accordance with the following formula, subject to adjustment as provided in
Article VI:
(i) if the Average 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
Average Market Price;
(ii) if the Average Market Price is equal to or greater than
the Appreciation Threshold Price, 0.____; and
(iii) if the Average Market Price is less than the Initial
Price, 1.
Section 2.2. 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 an amount equal to 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 Treasury
Securities.
Section 2.3. 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 at the First Time of Delivery, at the offices of [SPECIFY CLOSING
LOCATION], 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 [SPECIFY CLOSING
LOCATION], 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.
(c) Sale and Delivery of Contract Shares. Seller agrees to sell and
deliver the Contract Shares to Purchaser on the Exchange Date. Unless Seller
elects the Cash Settlement Alternative as provided in Section 2.3(d), sale and
delivery shall be effected
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by delivery by the Collateral Agent to the Custodian, for the account of
Purchaser, of Ordinary Shares 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. Seller agrees to make a cash
payment in respect of any fractional shares included in the Contract Shares at
the Exchange Date, in an amount equal to the value of such fractional shares at
the Average Market Price. In addition, if the difference between (A) the
aggregate proceeds of any sale (net of any brokerage or related expenses) of any
Ordinary Shares [or Marketable Securities] sold by Purchaser pursuant to Section
2.4(g)(ii) of the Trust Agreement and (B) the product of the number of Ordinary
Shares [or Marketable Securities] so sold and the Average Market Price, is
negative, Seller shall pay such difference to Purchaser; if such difference is
positive, Purchaser shall pay the difference to Seller. 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 to an account designated by Purchaser,
in Federal (immediately available) funds; (ii) in the case of any Marketable
Securities to be delivered in lieu of cash as provided in Section 6.2, by
delivery by the Collateral Agent to the Custodian, for the account of Purchaser,
of the applicable number of Marketable Securities then held as collateral under
the Collateral Agreement, as provided in Section 5.7 of the Collateral
Agreement; and (iii) in the case of any cash included in the Accelerated Portion
as provided in Section 6.2(b), by wire transfer as provided in clause (i) above
or in the case of any non-cash assets included in such Accelerated Portion, by
delivery of such assets to the Custodian, for the account of Purchaser.
(d) Cash Settlement Alternative. At its option, Seller may deliver to
Purchaser on the Exchange Date (whether or not extended pursuant to Section
2.3(e) or accelerated pursuant to Section 2.3(f)), in lieu of the Contract
Shares, an amount in cash equal to the Average Market Price of the Contract
Shares on the Exchange Date (the "Cash Settlement Alternative"), paid by wire
transfer to an account designated by Purchaser, in Federal (immediately
available) funds; provided that if Seller elects the Cash Settlement Alternative
in connection with a Rollover Offering, as provided below, and such Rollover
Offering has been consummated on or before the Exchange Date, such cash payment
shall be made not later than the fifth Trading Day after the Exchange Date.
Seller may elect the Cash Settlement Alternative in respect of all, but not less
than all, Contract Shares and may do so by notice to Purchaser, the Collateral
Agent and the Custodian not less than 35 days prior to the Exchange Date as then
in effect (specifying whether such cash settlement is being made in connection
with a Rollover Offering). If Seller elects the Cash Settlement Alternative,
Purchaser shall provide notice of such election (specifying whether such cash
settlement is being made in connection with a Rollover Offering) to the holders
of the Securities, not less than 30 nor more than 90 days prior to the Exchange
Date as then in effect.
(e) Extension of Exchange Date at Election of Purchaser. Seller may, at
its option, by notice to Purchaser not earlier than [INSERT DATE TWO MONTHS
PRIOR TO ORIGINAL EXCHANGE DATE], and not later than [INSERT DATE ONE MONTH
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PRIOR TO ORIGINAL EXCHANGE DATE], elect to extend the Exchange Date to [INSERT
DATE THREE MONTHS AFTER ORIGINAL EXCHANGE DATE], and the number of Contract
Shares and amount of cash to be delivered pursuant to Section 2.3(c) shall be
calculated as of such extended Exchange Date; provided that such extension shall
be effective only if, on or before the date of such notice, Seller shall have:
(i) delivered to the Custodian, for the account of and subject
to the exclusive control of Purchaser, free and clear of any Liens and
Transfer Restrictions, U.S. Government Securities that, through the
scheduled payment of principal and interest in accordance with their
terms, will provide, not later than one Business Day before [INSERT
DATE THREE MONTHS AFTER ORIGINAL EXCHANGE DATE], cash in an amount
equal to not less than the product of (1) $[INSERT REGULAR QUARTERLY
DIVIDEND PER SECURITY] and (2) the sum of the Firm Share Base Amount;
and the Additional Share Base Amount; and
(ii) delivered to Purchaser (1) a certificate of Seller
substantially in the form of Exhibit A and dated the date of such
delivery (A) identifying the U.S. Government Securities being
transferred, (B) certifying that with respect to such U.S. Government
Securities the representations and warranties contained in Exhibit A
are true and correct on and as of the date of such transfer, and (C)
certifying that such U.S. Government Securities satisfy the conditions
set forth in Section 2.3(e)(i); and (2) an opinion, dated the date of
such delivery, of counsel addressed to Purchaser confirming the
representations contained in the second sentence of paragraph 2(c) of
Exhibit A.
In addition, Seller hereby covenants and agrees to take all other actions
necessary to cause Purchaser to be a protected purchaser of such U.S. Government
Securities, within the meaning of Article 8 of the New York Uniform Commercial
Code.
If Seller elects to extend the Exchange Date, Purchaser shall provide
notice of such election to the holders of the Securities not later than [INSERT
ORIGINAL EXCHANGE DATE].
(f) Acceleration of Exchange Date at Election of Purchaser. At any time
after the Exchange Date has been extended pursuant to Section 2.3(e), Seller
may, at its option in connection with the consummation of a Rollover Offering,
accelerate the Exchange Date to any date on or after [INSERT ORIGINAL EXCHANGE
DATE], by notice to Purchaser not later than 10:00 a.m. on the date to which the
Exchange Date is accelerated, and the number of Contract Shares and amount of
cash to be delivered pursuant to Section 2.3(c) shall be calculated as of such
accelerated Exchange Date; provided that such acceleration shall be effective
only if, at or prior to 10:00 a.m. on such accelerated Exchange Date, Seller
shall have paid to Purchaser, by wire transfer to an account designated by the
Custodian, in Federal (immediately available) funds, an amount equal to the
product of (i) the aggregate accrued and unpaid quarterly
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distributions on each Security (computed on the basis of a quarterly
distribution of $[INSERT REGULAR QUARTERLY DIVIDEND PER SECURITY] and a 360-day
year comprised of twelve 30-day months) and (ii) the sum of the Firm Share Base
Amount and the Additional Share Base Amount. Upon receipt of such amount in
Federal (immediately available) funds, Purchaser shall promptly deliver to
Seller, free and clear of any Liens and Transfer Restrictions, the U.S.
Government Securities previously delivered by Seller to Purchaser pursuant to
Section 2.3(e)(i) (together with any payments received by Purchaser before the
date of such transfer in respect of such U.S. Government Securities).
If Seller elects to accelerate the Exchange Date, Purchaser shall
provide notice of such election to the holders of the Securities not later than
the accelerated Exchange Date.
(g) Satisfaction of Obligations. Notwithstanding any other provision of
this Agreement, if on or prior to the Exchange Date as then in effect, Seller
transfers Securities to Purchaser, free and clear of any Liens and Transfer
Restrictions, for cancellation (any Securities so transferred being referred to
in this Agreement as the "Transferred Securities") then the number of Contract
Shares deliverable by Seller pursuant to this Agreement shall be reduced by a
number equal to the product of (i) the number of Contract Shares before giving
effect to any such transfers and (ii) a fraction, the numerator of which is the
number of Transferred Securities and the denominator of which is the sum of the
Firm Share Base Amount and the Additional Share Base Amount (rounded down to the
nearest whole share).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. 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 of this Agreement.
Section 3.2. 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 of this Agreement.
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ARTICLE IV
CONDITIONS TO PURCHASER'S OBLIGATIONS
Section 4.1. Condition to Delivery of Firm Purchase Price. 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.
Section 4.2. Condition to Delivery of Additional Purchase Price. 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.
ARTICLE V
COVENANTS
Section 5.1. Covenants of Seller.
(a) Taxes. Seller shall pay any and all documentary, stamp, transfer or
similar taxes and charges that may be payable in respect of the execution of
this Agreement and the transfer and delivery of the Contract Shares (or any cash
or Marketable Securities in lieu of the Contract Shares) pursuant to this
Agreement.
(b) Forward Contract. Seller hereby agrees that: (i) it will not treat
this Agreement, any portion of this Agreement, or any obligation under this
Agreement as giving rise to any interest income or other inclusions of ordinary
income; (ii) it will not treat the delivery of any portion of the Contract
Shares, cash, Marketable Securities or other property to be delivered pursuant
to this Agreement as the payment of interest or ordinary income; (iii) it will
treat this Agreement in its entirety as a forward contract for the delivery of
such Contract Shares, cash, Marketable Securities or other property; and (iv) it
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 clauses (i) through (iii) of this Section 5.1(b). 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 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.
(c) Limitations on Trading During Certain Days. Seller hereby agrees
that it will not buy Ordinary Shares for its own account during the 60 days
prior to the Exchange Date.
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(d) Notices. Seller will cause to be delivered to Purchaser:
(i) Immediately upon the occurrence of any Event of Default,
or upon Seller's obtaining knowledge that any of the conditions or
events described in Section 7.1(a) or (b) shall have occurred with
respect to the Company, notice of such occurrence; and
(ii) If at any time prior to the Exchange Date Seller receives
notice, or otherwise obtains knowledge, that any event requiring an
adjustment to be effected pursuant to Article VI 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 occurred or 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 to such event.
Section 5.2. Further Assurances. From time to time on and after the
date of this Agreement through the Exchange Date, each of the parties to this
Agreement shall use its reasonable best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement in accordance with the terms and
conditions of this Agreement, 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 this Agreement in
accordance with the terms and conditions of this Agreement.
ARTICLE VI
ADJUSTMENTS TO EXCHANGE RATE, APPRECIATION THRESHOLD PRICE,
INITIAL PRICE AND CLOSING PRICE; REORGANIZATION EVENTS
Section 6.1. Dilution Adjustments. The Exchange Rate, Appreciation
Threshold Price and Initial Price shall be subject to adjustment from time to
time as follows:
(a) Stock Dividends, Splits, Reclassifications, Etc. If the Company
shall, after the date of this Agreement,
(i) pay a stock dividend or make a distribution with respect
to the Ordinary Shares in the form of Ordinary Shares;
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(ii) subdivide or split the outstanding Ordinary Shares into a
greater number of Ordinary Shares;
(iii) combine the outstanding Ordinary Shares into a smaller
number of shares; or
(iv) issue by reclassification of Ordinary Shares any other
ordinary shares of the Company;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of Ordinary Shares (or in the case of a
reclassification referred to in clause (iv) above, the number of other ordinary
shares of the Company issued pursuant to such reclassification), or the fraction
of such shares, that a shareholder who held one Ordinary Share 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 Section 6.1(e).
(b) Right or Warrant Issuances. If the Company shall, after the date of
this Agreement, issue, or declare a record date in respect of an issuance of,
rights or warrants to all holders of Ordinary Shares entitling them to subscribe
for or purchase Ordinary Shares at a price per share less than the Then-Current
Market Price of the Ordinary Shares (other than rights to purchase Ordinary
Shares 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, (i) the numerator of which shall be the number
of Ordinary Shares outstanding immediately prior to the time the adjustment
resulting from the issuance of such rights or warrants is effected, plus the
number of additional Ordinary Shares offered for subscription or purchase
pursuant to such rights or warrants, and (ii) the denominator of which shall be
the number of Ordinary Shares outstanding immediately prior to the time such
adjustment is effected plus the number of additional Ordinary Shares that the
aggregate offering price of the total number of Ordinary Shares so offered for
subscription or purchase pursuant to such rights or warrants would purchase at
the Then-Current Market Price of the Ordinary Shares, 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, any of the Ordinary Shares offered
thereby shall not have been delivered, the Exchange Rate shall be further
adjusted to equal the Exchange Rate which 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 Ordinary Shares actually delivered. The
Appreciation Threshold Price and Initial Price shall also be adjusted in the
manner described in Section 6.1(e).
(c) Distributions of Other Assets. If the Company shall, after the date
of this Agreement, declare or pay a dividend or make a distribution to all
holders of Ordinary Shares, in either case, of evidences of its indebtedness or
other non-cash assets (excluding (A) any dividends or distributions referred to
in Section 6.1(a) and (B) any
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<PAGE> 19
Spin-Off Distributions) or shall issue to all holders of Ordinary Shares rights
or warrants to subscribe for or purchase any of its securities (other than
rights or warrants referred to in Section 6.1(b)), then, in each such case, the
Exchange Rate shall be multiplied by a Dilution Adjustment equal to a fraction,
the numerator of which shall be the Then-Current Market Price per Ordinary
Share, and the denominator of which 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, whose determination shall be final) as of the time the adjustment
is effected of the portion of the evidences of indebtedness or assets so
distributed or of such subscription rights or warrants so issued applicable to
one Ordinary Share. The Appreciation Threshold Price and Initial Price shall
also be adjusted in the manner described in Section 6.1(e).
(d) Cash Dividends; Excess Purchase Payments. If the Company shall,
after the date of this Agreement, declare a record date in respect of a
distribution of cash (other than any Permitted Dividend, any cash distributed in
consideration of fractional Ordinary Shares and any cash distributed in a
Reorganization Event), by dividend or otherwise, to all holders of Ordinary
Shares, or make an Excess Purchase Payment, then the Exchange Rate will be
multiplied by a Dilution Adjustment equal to a fraction, the numerator of which
shall be the Then-Current Market Price of the Ordinary Shares on such record
date, and the denominator of which shall be such Then-Current Market Price less
the amount of such distribution applicable to one Ordinary Share 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 Ordinary Shares outstanding on such
record date. The Appreciation Threshold Price and Initial Price shall also be
adjusted in the manner described in Section 6.1(e).
(e) Corresponding Adjustments to Initial Price, Appreciation Threshold
Price and Closing Price.
(i) If any adjustment is made to the Exchange Rate pursuant to
Section 6.1(a), (b), (c) or (d), the Appreciation Threshold Price and
the Initial Price shall also be adjusted by dividing each of the
Appreciation Threshold Price and the Initial Price by the applicable
Dilution Adjustment.
(ii) If, during any Calculation Period used in calculating the
Average 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.
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<PAGE> 20
(f) Timing of Dilution Adjustments. Each Dilution Adjustment shall be
effected:
(i) in the case of any dividend, distribution or issuance, as
of the opening of business on the Business Day next following the
record date for determination of holders of Ordinary Shares 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 is 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 of such Excess Purchase Payment.
(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 in the Exchange Rate; provided,
however, that any adjustments that 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 Section 6.1 shall subsequently be canceled by the Company or shall fail
to occur for any other reason, then, upon such cancellation or failure to occur,
the Exchange Rate shall be further adjusted to the Exchange Rate that would then
have been in effect had adjustment for such event not been made. If, after an
announcement of a share repurchase requiring an adjustment pursuant to this
Section 6.1, the Company reduces the repurchase price or repurchases fewer
shares than announced, then upon completion of such share repurchase the
Exchange Rate shall be further adjusted to equal the Exchange Rate that would
have been in effect had the adjustment for such repurchase been based on the
actual price and amount repurchased. 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.
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<PAGE> 21
Section 6.2. Adjustment for Consolidation, Merger or Other
Reorganization Event.
(a) 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 Ordinary
Shares outstanding immediately prior to the merger or consolidation are 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)(x) any statutory exchange of
securities of the Company or any Company Successor with another corporation or
(y) any sale of all or substantially all of the outstanding equity securities of
the Company or any Successor Company, including pursuant to any plan of
arrangement or similar scheme with the Company's shareholders under any
applicable law, rule or regulation or order of any court or governmental
authority (in the case of each of the preceding clauses (x) and (y), other than
in connection with a merger or consolidation referred to in clause (i)
immediately above), 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"), Seller shall deliver on the Exchange
Date, in lieu of the Contract Shares, cash in an amount (the "Basic
Reorganization Event Amount") equal to the Dilution Adjustment (or successive
Dilution Adjustments), if any, that have been applied to the Exchange Rate
pursuant to Section 6.1 at or prior to the time of such Reorganization Event,
multiplied by the product of (x) the Firm Share Base Amount plus the Additional
Share Base Amount 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.____ multiplied by the Transaction Value, and
(iii) if the Transaction Value is less than the Initial Price, the Transaction
Value. Notwithstanding the foregoing, if the consideration received by the
holders of the Ordinary Shares in the Reorganization Event (the "Merger
Consideration") includes any Marketable Securities, 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 definition
of Transaction Value) of such 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.
(b) Notwithstanding Section 6.2(a), if at least 30% of the Merger
Consideration in any Reorganization Event consists of cash or cash equivalents
(a "Cash Merger"), then Seller shall be required (i) within five Business Days
after Seller receives the Merger Consideration, to deliver the Accelerated
Portion to Purchaser, provided that to the extent the Accelerated Portion
consists of property other than cash or cash equivalents, Seller may, at its
option, deliver, in lieu of such other property, cash in an amount equal to the
Value of such other property; and (ii) on the Exchange Date, to deliver to
Purchaser the number of Marketable Securities equal to the product of (x) the
sum of the Firm Share Base Amount and the Additional Share Base Amount and (y)
the
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<PAGE> 22
Exchange Rate, adjusted as described in the next sentence, and the provisions of
Section 2.3(c) shall apply mutatis mutandis to such Marketable Securities,
provided that Seller may exercise the Cash Settlement Alternative in respect of
such Marketable Securities, in which case Section 2.3(d) shall apply mutatis
mutandis to such Marketable Securities. For purposes of calculating such
Exchange Rate, (A) the Initial Price and Appreciation Threshold Price shall each
be adjusted by multiplying the Initial Price or Appreciation Threshold Price, as
applicable, as then in effect, by a fraction, the numerator of which is the
Value of a share of the Marketable Securities included in the Merger
Consideration on the date the Cash Merger is closed, and the denominator of
which shall be the Transaction Value; and (B) the Exchange Rate shall be
adjusted by multiplying the Exchange Rate (computed on the basis of the adjusted
Initial Price and Appreciation Threshold Price and the Average Market Price of
the Marketable Securities) by a fraction, the numerator of which is the
aggregate Value of the Marketable Securities included in the Merger
Consideration received in exchange for a single Ordinary Share, and the
denominator of which is the Value of a share of the Marketable Securities
included in the Merger Consideration on the date the Cash Merger is closed.
Section 6.3. Spin-Off Distributions. If the Company shall, after the
date of this Agreement, effect a Spin-Off Distribution, then for all purposes of
this Agreement, from and after the record date in respect of such Spin-Off
Distribution, (i) the Contract Shares shall be deemed to include both (A) that
number of Ordinary Shares equal to the product of (x) the sum of the Firm Share
Base Amount and the Additional Share Base Amount and (y) the Exchange Rate, and
(B) that number of Marketable Securities of the class distributed in respect of
the Contract Shares in such Spin-Off Distribution equal to the product of (x)
the sum of the Firm Share Base Amount and the Additional Share Base Amount, (y)
the Exchange Rate, and (z) the number of shares of such Marketable Securities
distributed per Ordinary Share in the Spin-Off Distribution; (ii) Seller's
obligations under Section 2.3 shall include delivery of such Marketable
Securities together with the Ordinary Shares comprising the Contract Shares and
the provisions of Section 2.3(c) shall apply mutatis mutandis to such Marketable
Securities; and (iii) the "Closing Price" of the Ordinary Shares shall
thereafter be deemed to be equal to the sum of (A) the Closing Price per
Ordinary Share and (B) the product of (x) the Closing Price per share of the
spun-off Marketable Securities and (y) the number of shares of such Marketable
Securities distributed per Ordinary Share in the Spin-Off Distribution.
Section 6.4. Adjustments with Respect to Marketable Securities. The
number of shares of any Marketable Securities included in any calculation
pursuant to this Agreement shall be subject to adjustment if any event that
would, had it occurred with respect to the Ordinary Shares or the Company, have
required an adjustment pursuant to Section 6.1 or Section 6.2, shall occur with
respect to such Marketable Securities or the issuer of such Marketable
Securities between the time of the Spin-Off Distribution or Reorganization Event
(or, in the case of any adjustment occurring during a Calculation Period, the
first day of such Calculation Period) and the Exchange Date. Adjustment for such
subsequent events shall be as nearly equivalent as practicable to the
adjustments provided for in Section 6.1 or Section 6.2.
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<PAGE> 23
ARTICLE VII
ACCELERATION UPON AN EVENT OF DEFAULT
Section 7.1. Events of Default. If one or more of the following events
(each an "Event of Default") shall occur:
(a) Seller shall commence a voluntary case or other proceeding
seeking a liquidation, reorganization or other relief with respect to
Seller or Seller's 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
Seller or any substantial part of Seller's 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 Seller, or shall make a general assignment for the benefit of
creditors, or shall take any action to authorize any of the foregoing;
or
(b) an involuntary case or other proceeding shall be commenced
against Seller seeking liquidation, reorganization or other relief with
respect to Seller or Seller's 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 Seller or any substantial part of Seller's 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 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 shall occur;
then, upon the occurrence of any such event, Seller shall become obligated to
deliver the Contract Shares (or the Marketable Securities or cash or combination
of Marketable Securities and cash deliverable in respect of such Contract
Shares), or any U.S. Government Securities then pledged under the Collateral
Agreement in respect such Contract Shares. Purchaser and Seller agree that such
amount is a reasonable preestimate of loss and not a penalty. Such amount is
payable for the loss of bargain and Purchaser will not be entitled to recover
additional damages as a consequence of any loss resulting from an Event of
Default.
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<PAGE> 24
ARTICLE VIII
MISCELLANEOUS
Section 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 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 of this Agreement, the Administrator shall be required to
retain a nationally recognized independent investment banking firm for any
purpose provided in this Agreement, such nationally recognized independent
investment banking firm shall be selected and retained by the Administrator only
after consultation with Seller.
Section 8.2. No Assumption of Liability. By executing this Agreement,
none of the Trustees assumes any personal liability under this Agreement.
Section 8.3. Notices.
(a) All notices and other communications provided for in this
Agreement, unless otherwise specified, shall be in writing and shall be given at
the addresses set forth in the following sentence or at such other addresses as
may be designated by notice duly given in accordance with this Section 8.3 to
each other party to this Agreement. Until such notice is given, (i) notices to
Purchaser shall be directed to it in care of the Administrator, The Chase
Manhattan Bank, 450 West 33rd Street, New York, New York 10001, Telecopier No.
(212) 946-3638, Attention: Collateral Management Services; and (ii) notices to
Seller shall be directed to it at [INSERT ADDRESS OF SELLER].
(b) Each notice given pursuant to Section 8.3(a) shall be effective (i)
if sent by certified mail (return receipt requested), 72 hours after being
deposited in the United States mail, postage prepaid or five days after being
deposited in the mail of another country, 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 8.3.
Section 8.4. 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 contained in this Agreement unenforceable or invalid.
Section 8.5. Entire Agreement. Except as expressly set forth in this
Agreement, this Agreement constitutes the entire agreement among the parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements, understandings and negotiations, both written and oral, among the
parties with respect to the subject matter of this Agreement.
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<PAGE> 25
Section 8.6. Amendments; Waivers. Any provision of this Agreement may
be amended or waived (either generally or in a particular instance and either
retrospectively or prospectively) 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. Purchaser agrees that it will not, without Seller's written consent,
agree to amend or waive any provision of the Trust Agreement in any manner that
materially and adversely affects the rights or obligations of Seller hereunder.
No failure or delay by either party in exercising any right, power or privilege
under this Agreement shall operate as a waiver of such right, power or privilege
nor shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. The rights and remedies
provided in this Agreement shall be cumulative and not exclusive of any rights
or remedies provided by law.
Section 8.7. Non-Assignability. This Agreement and the rights and
obligations of the parties under this Agreement may not be assigned or delegated
by either party without the prior written consent of the other party, and any
purported assignment without such consent shall be void.
Section 8.8. 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 under
this Agreement. Whenever any of the parties to this Agreement is referred to,
such reference shall be deemed to include the successors and assigns of such
party. All the covenants and agreements contained in this Agreement by or on
behalf of Seller and Purchaser shall bind and be enforceable by, 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.
Section 8.9. Counterparts. This Agreement may be executed, acknowledged
and delivered in any number of counterparts, each of which shall be an original,
but all of which shall constitute a single agreement, with the same effect as if
the signatures on each such counterpart were upon the same instrument.
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<PAGE> 26
IN WITNESS WHEREOF, the parties have caused this Purchase Agreement to
be duly executed and delivered as of the first date set forth above.
SELLER:
AMDOCS INTERNATIONAL LIMITED
By:
Name:
Title:
PURCHASER:
AMDOCS AUTOMATIC COMMON EXCHANGE
SECURITY TRUST
By:
Donald J. Puglisi,
as Trustee
By:
William R. Latham III,
as Trustee
By:
James B. O'Neill,
as Trustee
<PAGE> 27
Exhibit A
to
Purchase Agreement
CERTIFICATE FOR EXTENSION OF EXCHANGE DATE
The undersigned, Amdocs International Limited ("Seller"), hereby
certifies, pursuant to Section 2.3(e) of the Purchase Agreement, dated as of
[Pricing Date] (the "Contract"), between Seller and Amdocs Automatic Common
Exchange Security Trust, that:
1. Seller is transferring the following U.S. Government Securities to
Purchaser:
[INSERT LIST OF TRANSFERRED U.S. GOVERNMENT SECURITIES]
2. Seller hereby represents and warrants to Purchaser that:
(a) Consents to Transfer. No Transfer Restrictions exist with respect
to or otherwise apply to the transfer by Seller of such U.S. Government
Securities to Purchaser.
(b) Delivery. Seller has delivered to the Custodian, for the account of
and subject to the exclusive control of Purchaser, free and clear of any Liens
and Transfer Restrictions, U.S. Government Securities that, through the
scheduled payment of principal and interest in accordance with their terms, will
provide, not later than one Business Day before [INSERT DATE THREE MONTHS AFTER
ORIGINAL EXCHANGE DATE], cash in an amount equal to not less than the product of
(1) $[INSERT REGULAR QUARTERLY DIVIDEND PER SECURITY] and (2) the sum of the
Firm Share Base Amount and the Additional Share Base Amount.
(c) Title. Seller has good and marketable title to such U.S. Government
Securities, free and clear of all Liens and Transfer Restrictions. Upon delivery
of such U.S. Government Securities to Purchaser, Purchaser will obtain good and
marketable title to such U.S. Government Securities free and clear of all Liens
and Transfer Restrictions.
3. Such U.S. Government Securities satisfy the conditions set forth in
Section 2.3(e)(i) of the Contract.
Capitalized terms defined in the Contract are used in this Certificate
as defined in the Contract.
A-1
<PAGE> 28
IN WITNESS WHEREOF, the undersigned has executed this certificate this
____ day of ____________, _____.
AMDOCS INTERNATIONAL LIMITED
By:_____________________________
Name:
Title:
A-2
<PAGE> 1
Exhibit 2.k.(iv)
S&C Draft of June 6, 1999
COLLATERAL AGREEMENT
Among
AMDOCS INTERNATIONAL LIMITED,
As Pledgor,
THE CHASE MANHATTAN BANK,
As Collateral Agent
and
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
Dated as of [Pricing Date]
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms........................................... 1
Section 1.2. Interpretation.......................................... 6
ARTICLE II
THE SECURITY INTERESTS
Section 2.1. Grant of Security Interests............................. 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of Pledgor............... 8
Section 3.2. Representations and Warranties of the Collateral Agent.. 8
ARTICLE IV
CERTAIN COVENANTS OF PLEDGOR
Section 4.1. Certain Covenants of Pledgor............................ 9
ARTICLE V
ADMINISTRATION OF THE COLLATERAL AND
VALUATION OF THE SECURITIES
Section 5.1. Valuation of Collateral................................. 10
Section 5.2. Substitution of Collateral.............................. 11
Section 5.3. Additional Collateral................................... 11
Section 5.4. Delivery of Collateral.................................. 12
Section 5.5. Insufficiency Determination............................. 13
Section 5.6. Release of Excess Collateral............................ 14
Section 5.7. Delivery of Contract Consideration...................... 14
Section 5.8. Investment of Cash Collateral........................... 15
<PAGE> 3
ARTICLE VI
INCOME AND VOTING RIGHTS ON COLLATERAL
Section 6.1. Income on Collateral.................................... 15
Section 6.2. Voting of Collateral.................................... 15
ARTICLE VII
REMEDIES UPON EVENTS OF DEFAULT
Section 7.1. Rights of Secured Party................................. 16
Section 7.2. Power of Attorney....................................... 17
Section 7.3. Application of Collateral and Proceeds.................. 17
ARTICLE VIII
THE COLLATERAL AGENT
Section 8.1. Conditions to Duties of the Collateral Agent............ 18
Section 8.2. Merger.................................................. 20
Section 8.3. Resignation............................................. 20
Section 8.4. Removal................................................. 20
Section 8.5. Appointment of Successor................................ 20
Section 8.6. Acceptance by Successor................................. 21
Section 8.7. Compensation............................................ 21
ARTICLE IX
MISCELLANEOUS
Section 9.1. Termination............................................. 21
Section 9.2. No Assumption of Liability.............................. 21
Section 9.3. Notices................................................. 22
Section 9.4. Governing Law; Severability............................. 22
Section 9.5. Entire Agreement........................................ 22
Section 9.6. Amendments; Waivers..................................... 22
Section 9.7. Non-Assignability....................................... 23
Section 9.8. No Third Party Rights; Successors and Assigns........... 23
Section 9.9. Counterparts............................................ 23
Exhibits
Exhibit A - Notice of Pledge Value
Exhibit B - Certificate for Substituted Collateral
Exhibit C - Certificate for Additional Collateral
-ii-
<PAGE> 4
COLLATERAL AGREEMENT
COLLATERAL AGREEMENT, dated as of [Pricing Date], among Amdocs
International Limited, a corporation formed under the laws of the Island of
Guernsey ("Pledgor"), The Chase Manhattan Bank, a New York banking corporation,
as collateral agent hereunder for the benefit of Amdocs Automatic Common
Exchange Security 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
[Pricing Date] (such trust and the trustees thereof acting in their capacity as
such being referred to in this Agreement as "Purchaser"), and Purchaser.
WITNESSETH:
WHEREAS, pursuant to the Purchase Agreement, dated as of [Pricing Date]
(the "Contract"), between Pledgor and Purchaser, Pledgor has agreed to sell and
Purchaser has agreed to purchase Ordinary Shares, par value pound sterling 0.01
per share (the "Ordinary Shares"), of Amdocs Limited, a corporation formed under
the laws of the Island of Guernsey (the "Company"), subject to the terms and
conditions of the Contract;
NOW, THEREFORE, to secure the performance by Pledgor of its obligations
under the Contract and to secure the observance and performance of the covenants
and agreements contained in this Agreement and in the Contract, the parties,
intending to be bound, agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms. As used in this Agreement, the following
terms have the following meanings:
"Accelerated Portion" has the meaning specified in the
Contract.
"Additional Purchase Price" has the meaning specified in the
Contract.
"Additional Share Base Amount" has the meaning specified in
the Contract.
"Agreement" means this Collateral Agreement.
"Authorized Representative" of 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.
<PAGE> 5
"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
(or successive Dilution Adjustments) that shall have been applied to
the Exchange Rate pursuant to Section 6.1 of the Contract 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 (as defined in the Contract) of any Merger
Consideration other than Marketable Securities delivered in the related
Reorganization Event, provided that if the Reorganization Event is a
Cash Merger, the Cash Delivery Obligations shall again be zero after
Pledgor has delivered the Accelerated Portion to the Purchaser as
required under the Purchase Agreement.
"Cash Merger" has the meaning specified in the Contract.
"Closing Price" has the meaning specified in the Contract.
"Collateral" has the meaning specified in Section 2.1(a).
"Collateral Agent" means The Chase Manhattan Bank, in its
capacity as collateral agent under this Agreement, or its successor in
such capacity appointed in accordance with Section 8.5.
"Collateral Event of Default" means, at any time, the
occurrence of any of the following: (A) if no U.S. Government
Securities shall be pledged as substitute Collateral at such time,
failure of the aggregate Market Value of the Collateral to equal or
exceed the Pledge Value Requirement; (B) if any U.S. Government
Securities shall be pledged as substitute Collateral at such time,
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
Ordinary Shares and, from and after any Spin-Off Distribution, of the
Marketable Securities distributed in such Spin-Off Distribution (or,
from and after any Reorganization Event, the Marketable Securities
distributed in such Reorganization Event in lieu of such Ordinary
Shares or shares of Marketable Securities) equal in each case to (x)
the Maximum Deliverable Number of such securities minus (y) the number
of such securities pledged as Collateral hereunder at such time; or (C)
from and after any Reorganization Event in which consideration other
than Marketable Securities shall have been delivered, 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 next Business Day
following the day on which telephonic notice in respect of such failure
shall have been given pursuant to Section 5.5(a).
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"Collateral Requirement" means, as of any date and with
respect to: (i) any Ordinary Shares, 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 next Business Day following telephonic notice of such
Insufficiency Determination as described in Section 5.5(b), which
insufficiency shall be continuing on such next 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 to be pledged in respect of Cash Delivery Obligations
at any time shall be a portion having a Market Value equal to 105% of
the Cash Delivery Obligations at such time or, if less, the aggregate
Market Value of all U.S. Government Securities pledged at such time.
"Company" has the meaning specified in the recitals to this
Agreement.
"Contract" has the meaning specified in the recitals to this
Agreement.
"Delivery Date" has the meaning specified in Section 7.1.
"Dilution Adjustment" has the meaning specified in the
Contract.
"Distribution Date" has the meaning specified in the Trust
Agreement.
"Eligible Collateral" means (i) unless and until a
Reorganization Event shall occur, Ordinary Shares and, if a Spin-Off
Distribution occurs, the Marketable Securities distributed in such
Spin-Off Distribution; (ii) U.S. Government Securities, and (iii) from
and after any Reorganization Event, the Marketable Securities
distributed in such Reorganization Event; provided, in each case, that
Pledgor has good and marketable title to such securities, free of all
Liens (other than the Liens created by this 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 Ordinary Shares or
shares of Marketable Securities pledged hereunder exceeds at any time
the Maximum Deliverable Number of such securities, such excess shares
shall not be Eligible Collateral.
"Event of Default" means the occurrence of: (i) an event
described in Section 7.1(a) or (b) of the Contract, (ii) a Collateral
Event of Default, (iii) a failure by Pledgor to have caused the
Collateral to meet the requirements described in Section 4.1(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 Contract.
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"Exchange Date" has the meaning specified in the Contract.
"Exchange Rate" has the meaning specified in the Contract.
"Firm Purchase Price" has the meaning specified in the
Contract.
"Firm Share Base Amount" has the meaning specified in the
Contract.
"First Time of Delivery" has the meaning specified in the
Contract.
"Insufficiency Determination" has the meaning specified in
Section 5.5(a).
"Lien" means any lien, mortgage, security interest, pledge,
charge, encumbrance or adverse claim of any kind.
"Marketable Securities" has the meaning specified in the
Contract.
"Market Value" means, as of any date: (a) with respect to any
Ordinary Shares (except as otherwise provided in Section 5.5(b)), the
Closing Price of the Ordinary Shares on such date multiplied by the
number of such Ordinary Shares; (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 the
average unit bid price set forth on the applicable page of the
Bloomberg system, 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 of such security; and (c) with respect to any shares of
Marketable Securities, the Closing Price of such Marketable Securities
on the Trading Day prior to such date multiplied by the number of such
Shares; provided that the "Market Value" of any Collateral that does
not constitute Eligible Collateral shall be zero.
"Maximum Deliverable Number" means, on any date, (i) with
respect to the Ordinary Shares, the product of the Firm Share Base
Amount plus the Additional Share Base Amount (if any), multiplied
successively by each Dilution Adjustment by which the Exchange Rate
shall have been multiplied on or prior to such date pursuant to the
Dilution Adjustments provided for under Section 6.1 of the Contract;
and (ii) with respect to the Marketable Securities of any class or
series, the product of (A) the Firm Share Base Amount plus the
Additional Share Base Amount (if any) multiplied by (B) the number of
Marketable Securities included in the Merger Consideration in the
applicable Reorganization Event or distributed in the applicable
Spin-Off Distribution for each Ordinary Share, multiplied successively
by (x) each Dilution Adjustment by which the Exchange Rate with respect
to the Ordinary Shares shall have been multiplied on or prior to
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the date of such Reorganization Event or Spin-Off Distribution pursuant
to the adjustments provided for under Article VI of the Contract, and
(y) each Dilution Adjustment by which the Exchange Rate with respect to
such Marketable Securities shall have been multiplied on or prior to
such date and after the date of such Reorganization Event or Spin-Off
Distribution pursuant to the adjustments provided for under Article VI
of the Contract.
"Ordinary Shares" has the meaning specified in the recitals to
this Agreement.
"Person" means an individual, a corporation, a limited
liability company, 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, an amount equal to the
sum of the aggregate Market Values of each particular type of
Collateral, as of such date, in each case divided by the Collateral
Requirement for such type of Collateral.
"Pledge Value Requirement" means, as of any date, (a) the
aggregate Market Value on such date of the Maximum Deliverable Number
of Ordinary Shares on such date or, from and after a Reorganization
Event, the Maximum Deliverable Number of the Marketable Securities
included in the Merger Consideration in such Reorganization Event
(provided that when an adjustment in the Maximum Deliverable Number of
Ordinary Shares occurs as the result of a Dilution Adjustment that,
pursuant to the Contract, becomes effective prior to the date on which
the event giving rise to the Dilution Adjustment is made public, the
Pledge Value Requirement shall be adjusted as a result of such Dilution
Adjustment effective as of the earlier of (x) the first Business Day
following the public announcement of such event and (y) the first
Business Day following the date on which Pledgor first becomes aware of
such event or of the Company's intention to effectuate such event),
plus (b) from and after a Reorganization Event, the Cash Delivery
Obligations, plus (c) from and after a Spin-Off Distribution, the
Market Value on such date of the Maximum Deliverable Number of the
Marketable Securities distributed in such Spin-Off Distribution.
"Pledged Items" means, as of any date, any and all securities,
instruments, cash and other property delivered by Pledgor to be held by
the Collateral Agent under this Agreement as Collateral, whether or not
constituting Eligible Collateral and whether or not then required to be
held by the Collateral Agent hereunder.
"Pledgor" has the meaning specified in the preamble to this
Agreement.
"Prior Collateral" has the meaning specified in Section
5.2(a).
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"Purchaser" has the meaning specified in the preamble to this
Agreement.
"Reorganization Event" has the meaning specified in the
Contract.
"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 Agreement.
"Second Time of Delivery" has the meaning specified in the
Contract.
"Spin-off Distribution" has the meaning specified in the
Contract.
"Trading Day" has the meaning specified in the Contract.
"Transfer Restriction" means, with respect to any item, any
condition to or restriction on the ability of the holder of such item
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 (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 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 to deliver
any certificate, consent, agreement, opinion of counsel, notice or any
other document of any Person to the issuer of, any other obligor on or
any registrar or transfer agent for, such item of Collateral, prior to
the sale, pledge, assignment or other transfer or enforcement of such
item of Collateral, and (iv) any registration or qualification
requirement for such item of Collateral pursuant to any federal or
state securities law that has not been satisfied; provided, however,
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
Purchaser named in the Trust Agreement, 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
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<PAGE> 10
such obligations are pledged hereunder, but in any event prior to the
Exchange Date then in effect.
Section 1.2. Interpretation.
(a) When a reference is made in this Agreement to Articles, Sections,
Exhibits or Schedules, such reference is to Articles or Sections of, or Exhibits
or Schedules to, this Agreement unless otherwise indicated.
(b) The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement, and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.
(c) Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
(d) Any reference to any statute, regulation or agreement is a
reference to such statute, regulation or agreement as supplemented or amended
from time to time.
ARTICLE II
THE SECURITY INTERESTS
Section 2.1. Grant of Security Interests. In order to secure the
performance by Pledgor of its obligations under the Contract and to secure the
observance and performance of the covenants and agreements contained in this
Agreement and in the Contract:
(a) Security Interests. Pledgor hereby grants, sells, conveys,
assigns, transfers and pledges to the Collateral Agent, as agent of and
for the benefit of Purchaser, a security interest in and to, and a lien
upon and right of set-off against, all of its right, title and interest
in, to and under (i) the Pledged Items described in paragraphs (b) and
(c); (ii) all additions to and substitutions for such Pledged Items;
(iii) all income, products and 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, income,
products and proceeds, collections, powers and rights being
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 UCC, in addition to, and not
in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement.
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(b) First Time of Delivery. Effective upon and subject to
receipt by Pledgor of the Firm Purchase Price, at the First Time of
Delivery, Pledgor shall either (1) deliver to the Collateral Agent in
pledge hereunder one or more certificates representing in the
aggregate at least 10,000,000 Ordinary Shares, registered in the name
of the Collateral Agent or its nominee or duly endorsed in blank or
accompanied by undated stock powers duly endorsed in blank, or (2) if
such Ordinary Shares are not held in certificated form but are held in
book-entry form by The Depository Trust Company or any other comparable
depositary, transfer such Ordinary Shares to an account of the
Collateral Agent or to an account (other than an account of Pledgor)
designated by the Collateral Agent with The Depository Trust Company or
such other depositary, as applicable.
(c) Second Time of Delivery. Effective upon and subject to the
receipt by Pledgor of the Additional Purchase Price, at the Second Time
of Delivery, Pledgor shall either (1) deliver to the Collateral Agent
in pledge hereunder one or more certificates representing in the
aggregate at least the Additional Share Base Amount of Ordinary Shares,
registered in the name of the Collateral Agent or its nominee or duly
endorsed in blank or accompanied by undated stock powers duly endorsed
in blank, or (2) if such Ordinary Shares are not held in certificated
form but are held in book-entry form by The Depository Trust Company or
any other comparable depositary, transfer such Ordinary Shares to an
account of the Collateral Agent or to an account (other than an account
of Pledgor) designated by the Collateral Agent with The Depository
Trust Company or such other depositary, as applicable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of Pledgor. Pledgor hereby
represents and warrants to the Collateral Agent and Purchaser that:
(a) No Transfer Restrictions. No Transfer Restrictions exist
with respect to or otherwise apply to the pledge or assignment of, or
transfer by Pledgor 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 of this
Agreement.
(b) Title to Collateral; Perfected Security Interest. Pledgor
has good and marketable title to the Collateral, free of all Liens
(other than the Lien created by this Agreement) and Transfer
Restrictions and has good, right and lawful authority to assign,
transfer and pledge such Collateral and all additions to such
Collateral and substitutions for such Collateral under this Agreement.
Upon delivery of any Collateral to the Collateral Agent hereunder, the
Collateral Agent will obtain a valid, first priority perfected security
interest in, and a first lien upon,
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such Collateral subject to no other Lien. None of the Collateral is or
shall be pledged by Pledgor as collateral for any other purpose.
Section 3.2. Representations and Warranties of the Collateral Agent.
The Collateral Agent represents and warrants to Pledgor and Purchaser that:
(a) Corporate Existence and Power. The Collateral Agent is a
banking corporation, duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and
has all corporate powers and all governmental licenses, authorizations,
consents and approvals required to enter into, and perform its
obligations under, this 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 Agreement constitutes a valid and
binding agreement of the Collateral Agent enforceable against the
Collateral Agent in accordance with its terms.
ARTICLE IV
CERTAIN COVENANTS OF PLEDGOR
Section 4.1. Certain Covenants of Pledgor. Pledgor agrees that, so long
as any of its obligations under the Contract remain outstanding:
(a) Title to Collateral. Pledgor shall at all times hereafter
have and maintain good and marketable title to the Collateral pledged
by it, free of all Liens (other than the Lien created by this
Agreement) and Transfer Restrictions, and, subject to the terms of this
Agreement, will at all times hereafter have and maintain good, right
and lawful authority to assign, transfer and pledge such Collateral and
all such additions to such Collateral and substitutions for such
Collateral under this Agreement.
(b) Pledge Value Requirement. 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 5.4 as necessary to cause
such requirement to be met.
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(c) Pledge Upon Reorganization Event. Upon the occurrence of a
Reorganization Event, Pledgor shall immediately cause to be delivered
to the Collateral Agent, in the manner provided in Section 5.4: (i)
cash in an amount equal to 100% of Pledgor's Cash Delivery Obligations
(or U.S. Government Securities having an aggregate Market Value when
pledged and at daily mark-to-market valuations thereafter at least
equal to 105% of the Cash Delivery Obligations); and (ii) Marketable
Securities in an amount at least equal to the Maximum Deliverable
Number of such securities, or, at Pledgor's election, U.S. Government
Securities having an aggregate Market Value when pledged and at daily
mark-to-market valuations thereafter 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 Upon Spin-Off Distribution. Upon the occurrence of
a Spin-Off Distribution, Pledgor shall immediately cause to be
delivered to the Collateral Agent, in the manner provided in Section
5.4, Marketable Securities in an amount at least equal to the Maximum
Deliverable Number of such securities, 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 additional Collateral hereunder.
(e) Pledge of Contract Consideration. Notwithstanding
Pledgor's right to substitute Collateral pursuant to Section 5.2,
Pledgor shall cause the Collateral to include, on the Exchange Date,
(i) unless a Reorganization Event shall have occurred, a number of
Ordinary Shares at least equal to the number of Ordinary Shares (and,
if a Spin-Off Distribution has occurred, the number of shares of
Marketable Securities distributed in such Spin-Off Distribution)
required to be delivered under the Contract on the Exchange Date, and
(ii) if a Reorganization Event has occurred, any Marketable Securities
or other property required to be delivered under the Contract on the
Exchange Date.
(f) Further Assurances. Pledgor shall, at its expense and in
such manner and form as Purchaser or the Collateral Agent may
reasonably 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 to this Agreement or to enable the Collateral Agent to
exercise and enforce its rights and the rights of Purchaser hereunder
with respect to such security interest. To the extent permitted by
applicable law, Pledgor hereby authorizes the Collateral Agent to
execute and file, in the name of Pledgor or otherwise, UCC 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 may reasonably
deem necessary or appropriate to further perfect, or maintain the
perfection of, the security interests granted hereby.
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ARTICLE V
ADMINISTRATION OF THE COLLATERAL AND
VALUATION OF THE SECURITIES
Section 5.1. Valuation of Collateral. The Collateral Agent shall
determine as of 4:00 p.m., New York City time, 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 Reorganization Event, Spin-Off Distribution or
substitution of U.S. Government Securities for pledged Ordinary Shares or shares
of Marketable Securities pursuant to Section 5.2, shall determine the Pledge
Value and the Pledge Value Requirement on each Business Day and shall provide
written notice of the Pledge Value and the Pledge Value Requirement, in the form
of Exhibit A, to Pledgor.
Section 5.2. Substitution of Collateral. Pledgor may substitute
Collateral in accordance with the following provisions:
(a) Unless an Event of Default or a failure by Pledgor to meet
any of its obligations under Article IV or V has occurred and is
continuing, 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 of such Prior Collateral from
the Lien created by this Agreement.
(b) If Pledgor wishes to deposit Eligible Collateral with the
Collateral Agent in substitution for Prior Collateral, it shall (i)
give written notice from an Authorized Representative to the Collateral
Agent identifying the Prior Collateral to be released from the Lien
created by this Agreement, (ii) deliver to the Collateral Agent
concurrently with such Eligible Collateral a certificate of Pledgor
substantially in the form of Exhibit B 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 Pledgor and (B) certifying that the
representations and warranties contained in Exhibit B are true and
correct on and as of the date of such certificate, and (iii) deliver to
the Collateral Agent concurrently with such Eligible Collateral 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 3(b) of Exhibit B. Pledgor hereby covenants and
agrees to take all actions required under Section 5.4 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.
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(c) 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.
Section 5.3. Additional Collateral. Pledgor may pledge additional
Collateral hereunder at any time and shall pledge additional collateral when
required under this Agreement. Concurrently with the delivery of any additional
Eligible Collateral, Pledgor shall deliver (i) a certificate of Pledgor
substantially in the form of Exhibit C, signed by an Authorized Representative,
and dated the date of such delivery, (A) identifying the items of additional
Eligible Collateral being pledged and (B) certifying that the representations
and warranties contained in Exhibit C are true and correct on and as of the date
of such certificate, 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 C. Pledgor hereby
covenants and agrees to take all actions required under Section 5.4 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.
Section 5.4. Delivery of Collateral. Pledgor shall deliver the
Collateral to the Collateral Agent in accordance with the following provisions:
(a) Pledged Ordinary Shares. In the case of Collateral
consisting of Ordinary Shares, by either (1) delivery to the Collateral
Agent of one or more certificates representing such Ordinary Shares,
registered in the name of the Collateral Agent or its nominee or duly
endorsed in blank or accompanied by undated stock powers duly endorsed
in blank, or (2) if such Ordinary Shares are not held in certificated
form but are held in book-entry form by The Depository Trust Company or
any other comparable depositary, transfer of such Ordinary Shares to an
account of the Collateral Agent or to an account (other than an account
of Pledgor) designated by the Collateral Agent with The Depository
Trust Company or such other depositary, as applicable;
(b) Pledged U.S. Government Securities. In the case of
Collateral consisting of U.S. Government Securities, by transfer of
such U.S. Government Securities 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 Pledgor) designated by the Collateral
Agent; and
(c) Pledged Marketable Securities. In the case of Collateral
consisting of Marketable Securities, by either (1) delivery of
certificates evidencing such Marketable Securities, registered in the
name of the Collateral Agent or its nominee or duly endorsed in blank
or accompanied by stock powers duly executed in blank, or (2) if such
Marketable Securities are not held in certificated form but are held in
book-entry form by The Depository Trust Company or any other comparable
depositary, by transfer to an account of the Collateral Agent or to an
account (other than an account of Pledgor) designated by the Collateral
Agent or
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to an account (other than an account of Pledgor) designated by the
Collateral Agent with The Depository Trust Company or such other
depositary, as applicable. Each such delivery of Marketable Securities
shall be accompanied by an opinion of counsel satisfactory to the
Collateral Agent that the 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 Agreement, the Collateral Agent
shall examine such Pledged Item and any opinions and certificates delivered
pursuant to Sections 5.2 or 5.3, this Section 5.4 or otherwise pursuant to the
terms of this Agreement in connection therewith to determine that they comply as
to form with the requirements for Eligible Collateral. 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.
Section 5.5. Insufficiency Determination.
(a) If as of 4:00 p.m., New York City time, 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
Pledgor of such determination by telephone call to an Authorized Representative
of Pledgor followed by a written confirmation of such call.
(b) If, by 4:00 p.m., New York City time on the next Business Day
following the day on which telephonic notice shall have been given pursuant to
the preceding paragraph 5.5(a), Pledgor shall have failed to deliver, in the
manner set forth in Sections 5.3 and 5.4, sufficient additional Eligible
Collateral so that, after giving effect to such delivery, the aggregate Pledge
Value of the Collateral, as of such next 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% until the termination
of this Agreement, 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 Section 5.5(c),
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 Ordinary Shares or, after a Reorganization Event
or Spin-Off Distribution, Marketable Securities of the applicable type
as described in the following clause (ii); and
(ii) commence purchases, in the manner described in Section
5.5(c), of Ordinary Shares or, after a Reorganization Event or Spin-Off
Distribution, Marketable Securities of the applicable type, in an
amount sufficient to cause the
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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 Ordinary Shares or shares of 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
Ordinary Shares or shares of Marketable Securities shall be: (A) the most recent
sales price as reported in the composite transactions for the principal
securities exchange on which the Ordinary Shares or shares of 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 Ordinary Shares, the most recent available Closing Price.
(c) Collateral sold and Ordinary Shares or shares of Marketable
Securities purchased by the Collateral Agent pursuant to the preceding Sections
5.5(a) and (b) 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.
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.
Section 5.6. Release of Excess Collateral. If on any Business Day the
Collateral Agent determines that the aggregate Pledge Value of Pledgor's
Eligible Collateral exceeds the Pledge Value Requirement and no Event of Default
or failure by Pledgor to meet any of its obligations under Articles IV or V has
occurred and is continuing, Pledgor may obtain the release from the Lien created
by this Agreement 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 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.
Section 5.7. Delivery of Contract Consideration. On the Exchange Date,
unless (i) a Reorganization Event shall have occurred prior to the Exchange Date
or (ii) if permitted under the Contract, Seller shall have elected the Cash
Settlement Alternative pursuant to Section 2.3(d) of the Contract and made the
cash payment required by that Section, the Collateral Agent shall deliver to
Purchaser from the Ordinary Shares and, if a Spin-Off Distribution has occurred,
Marketable Securities then held by it hereunder the
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<PAGE> 18
number of Ordinary Shares and shares of Marketable Securities that were
distributed in such Spin-Off Distribution then required to be delivered by
Pledgor under the Contract. If a Reorganization Event shall have occurred prior
to the Exchange Date, then, (A) if so instructed by Pledgor by the close of
business on the Business Day preceding the Exchange Date, the Collateral Agent
shall deliver to Purchaser, to the extent Marketable Securities are to be
delivered on such date under Section 6.2 of the Contract, the Marketable
Securities then held by the Collateral Agent hereunder; and (B) if such
Reorganization Event is a Cash Merger, the Collateral Agent shall deliver to
Purchaser all cash or other assets then held by the Collateral Agent and
required to be delivered under the Contract at the time when such delivery is
required to be made under the Contract. Upon such delivery, Purchaser shall hold
such Ordinary Shares, shares of Marketable Securities, cash or other property,
as the case may be, absolutely and free from any claim or right whatsoever.
Section 5.8. Investment of Cash Collateral. The Collateral Agent shall
invest any cash received by it pursuant to Section 6.2 of the Contract in U.S.
Government Securities.
ARTICLE VI
INCOME AND VOTING RIGHTS ON COLLATERAL
Section 6.1. Income on Collateral. Unless an Event of Default or
failure by Pledgor to meet any of its obligations under Article IV or V has
occurred and is continuing, Pledgor shall be entitled to receive for its own
account all dividends, interest and, if any, principal and premium relating to
all of the Collateral, unless the payment of such amounts to Pledgor would
reduce the aggregate Pledge Value of the Collateral below the Pledge Value
Requirement. The Collateral Agent agrees to remit to 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 Pledgor to meet any of its obligations
under Article IV or V 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
Pledgor shall be received in trust for the benefit of Purchaser, shall be
segregated from other funds of 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.
Section 6.2. Voting of Collateral. Unless an Event of Default has
occurred and is continuing, 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 Pledgor, deliver to 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
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<PAGE> 19
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
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 of the Collateral.
ARTICLE VII
REMEDIES UPON EVENTS OF DEFAULT
Section 7.1. Rights of Secured Party. If any Event of Default shall
have occurred and be continuing, the Collateral Agent may exercise on behalf of
Purchaser all the rights of a secured party under the UCC (whether or not in
effect in the jurisdiction where such rights are exercised) and, in addition,
without being required to give any notice, except as provided in this Agreement
or as may be required by mandatory provisions of law, shall: (i) deliver all
Collateral consisting of Ordinary Shares or shares of Marketable Securities (but
not, in either case, in excess of the number of shares of such securities
deliverable under the Contract at such time) to Purchaser on the date of such
Event of Default (in either case, the "Delivery Date"), whereupon Purchaser
shall hold such Ordinary Shares or shares of Marketable Securities absolutely
free from any claim or right of whatsoever kind, including any equity or right
of redemption of Pledgor which may be waived, and Pledgor, to the extent
permitted by law, hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or hereafter
adopted; and (ii) if such delivery shall be insufficient to satisfy in full all
of the obligations of Pledgor under the Contract, sell all of the remaining
Collateral, or such lesser portion of the remaining Collateral as may be
necessary to generate proceeds sufficient to satisfy in full all of the
obligations of Pledgor under the Contract, 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. 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 may be made in compliance with law. Upon
any such sale the Collateral Agent shall have the right to deliver, assign and
transfer the Collateral so sold to the purchaser of such Collateral. 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 Pledgor which may be waived, and Pledgor, to the extent permitted
by law, hereby specifically waives all rights of redemption, stay or appraisal
which it has or may have under any law now existing or hereafter adopted. The
notice (if any) of such sale required by Article 9 of the UCC shall (1) in case
of a public sale, state the time and place fixed for such sale, (2) in case of
sale at a broker's board or on a securities exchange, state the board or
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<PAGE> 20
exchange at which such sale is to be made and the day on which the Collateral,
or the portion of such Collateral so being sold, will first be offered for sale
at such board or exchange, and (3) in the case of a private sale, state the day
after which such sale may be consummated. Any such public sale shall be held at
such time or times within ordinary business hours and at such place or places as
the Collateral Agent may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may determine. The Collateral Agent shall not be obligated to
make any such sale pursuant to any such notice. The Collateral Agent may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Collateral Agent until the selling price is paid by the
purchaser of such Collateral, 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 conferred upon it in this Agreement, may proceed by a suit or suits at
law or in equity to foreclose the security interests and sell the Collateral, or
any portion of such Collateral, under a judgment or decree of a court or courts
of competent jurisdiction.
Section 7.2. 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 Agreement, the Collateral
Agent is hereby irrevocably appointed the true and lawful attorney of Pledgor,
in the name and stead of 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 Pledgor hereby ratifies and confirms all that its attorneys acting
under such power, or such attorneys' successors or agents, shall lawfully do by
virtue of this Agreement. If so requested by the Collateral Agent, by the
Trustees or by any purchaser of the Collateral or a portion of the Collateral,
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 Pledgor all proper deeds, bills of sale,
instruments of assignment, conveyance of transfer and releases as may be
designated in any such request.
Section 7.3. 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 Collateral,
at any one time, as the Collateral Agent shall determine in its sole discretion
subject to the foregoing provisions of this Article VII. The proceeds of any
sale of, or other realization upon, or other receipt from, any such Collateral
shall be applied by the Collateral Agent in the following order of priorities:
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<PAGE> 21
first, to the payment to Purchaser of an amount equal to: (A)
the aggregate Market Value of a number of Ordinary Shares and, if a
Spin-Off Distribution has occurred, Marketable Securities distributed
in such Spin-Off Distribution equal to (1) the number of Ordinary
Shares or shares of Marketable Securities, as the case may be, required
to be delivered under the Contract on the Delivery Date minus (2) the
number of Ordinary Shares or shares of Marketable Securities, as the
case may be, delivered by the Collateral Agent to Purchaser 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 distributed in such
Reorganization Event equal to (x) the number of such Marketable
Securities permitted to be delivered on the Delivery Date under Section
6.2 of the Contract minus (y) the number of such Marketable Securities
delivered by the Collateral Agent to Purchaser on the Delivery Date as
described above; together with, in either of cases (A) and (B), any
amounts due to Purchaser from Pledgor pursuant to Section 2.4(h)(ii) of
the Contract;
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 Pledgor hereunder and
under the Contract have been fully discharged or sufficient funds have
been set aside by the Collateral Agent at the request of Pledgor for
the discharge of such obligations, any remaining proceeds shall be
released to Pledgor.
ARTICLE VIII
THE COLLATERAL AGENT
Section 8.1. Conditions to Duties of the Collateral Agent. The
Collateral Agent accepts its duties and responsibilities hereunder as agent for
Purchaser, 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 in
this Agreement and, beyond the exercise of reasonable care in the
performance of such duties, no implied covenants or obligations shall
be read into this Agreement against the Collateral Agent. No provision
of this Agreement shall be construed to relieve the Collateral Agent
from liability for its own grossly negligent action, grossly
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<PAGE> 22
negligent failure to act, bad faith, wilful misconduct or reckless
disregard of its duties. In performing its duties, the following shall
apply:
(i) 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.
(ii) 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
Agreement or (ii) in accordance with any direction or request
of the Trustees.
(iii) 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.
(iv) 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.
(v) No provision of this 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.
(vi) 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 of the preceding sentence, any subsidiary owned or
controlled by the Collateral Agent, or its successors, as
agent for the Collateral Agent, may perform any or all of the
duties of the Collateral Agent relating to the valuation of
securities and other instruments constituting Collateral
hereunder.
(vii) 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.
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<PAGE> 23
(viii) Unless and until the Collateral Agent shall
have received notice from Pledgor, Purchaser or any other
Person, 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 Article V with respect to such
Collateral at the time of delivery of such Collateral.
The Collateral Agent shall not be responsible for the correctness of
the recitals and statements in this Agreement that are made by Pledgor
or for any statement or certificate delivered by Pledgor pursuant to
this Agreement, provided that the Collateral Agent has carried out the
duties specified in Article V with respect to such Collateral at the
time of delivery of such Collateral. Except as specifically provided in
this Agreement, 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 Contract 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 of such Event of Default or the
Collateral Agent shall have received written notice, delivered in
accordance with Section 9.3, of such Event of Default.
Section 8.2. 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 be and become the 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 to this Agreement, anything in this Agreement to the contrary
notwithstanding.
Section 8.3. Resignation. Subject to Section 8.5, 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 Pledgor and notice to
Purchaser in accordance with the provisions of Section 9.3.
Section 8.4. Removal.
(a) Subject to Section 8.5, the Collateral Agent may be removed at any
time by an instrument or concurrent instruments in writing delivered to the
Collateral Agent and to Pledgor and signed by Purchaser.
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<PAGE> 24
(b) Subject to Section 8.5, the Collateral Agent shall be removed
immediately upon (i) termination of the Trust Agreement, (ii) termination of the
Administration Agreement (as defined in the Trust Agreement), (iii) termination
of the Paying Agent Agreement (as defined in the Trust Agreement), (iv)
termination of the Custodian Agreement (as defined in the Trust Agreement), or
(v) the resignation or removal of the Administrator, the Paying Agent or the
Custodian (in each case as defined in the Trust Agreement).
Section 8.5. Effectiveness of Resignation or Removal. No resignation or
removal of the Collateral Agent shall be effective until a successor Collateral
Agent shall have been appointed and shall have accepted the duties of the
Collateral Agent. If, within 30 days after notice by the Collateral Agent to the
Trust or by the Trust to the Collateral Agent of any such resignation or
removal, no successor Collateral Agent shall have been selected and accepted the
duties of the Collateral Agent, the Collateral Agent may apply to a court of
competent jurisdiction for the appointment of a successor Collateral Agent.
Section 8.6. Appointment of Successor.
(a) 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 Purchaser by an instrument or concurrent
instruments in writing signed by Purchaser or by its attorneys in fact duly
authorized. A copy of such instrument or concurrent instruments shall be sent by
registered mail to Pledgor.
(b) Every such successor Collateral Agent appointed pursuant to the
provisions of this Agreement shall be a trust company or bank in good standing,
having a reported capital, surplus and retained earnings 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.
Section 8.7. Acceptance by Successor. Every temporary or permanent
successor Collateral Agent appointed hereunder shall execute, acknowledge and
deliver to its predecessor and also to Pledgor and Purchaser 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
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 Pledgor be required by a successor Collateral Agent for more fully and
certainly vesting in such successor the estates, properties, rights, powers,
duties and
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<PAGE> 25
obligations hereby vested or intended to be vested in the predecessor, any and
all such instruments in writing shall, at the request of the temporary or
permanent successor Collateral Agent, be forthwith executed, acknowledged and
delivered by Pledgor.
Section 8.7. Compensation. For services to be rendered by the
Collateral Agent pursuant to this Agreement, the Administrator shall receive
only such fees and expenses as shall be paid to it pursuant to the terms of the
Indemnity Agreement and shall have no recourse to the assets of Purchaser for
the payment of any such amounts.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Termination. This Agreement and the rights hereby granted
by Pledgor in the Collateral shall cease, terminate and be void upon fulfillment
of all of the obligations of Pledgor under the Contract, and Pledgor shall have
no further liability hereunder upon such termination. Any Collateral remaining
at the time of such termination (including any Ordinary Shares held following
Seller's election of the Cash Settlement Alternative and payment in respect of
the Cash Settlement Alternative pursuant to the Contract, if permitted
thereunder) shall be fully released and discharged from the Lien created by this
Agreement and delivered to Pledgor by the Collateral Agent, all at the expense
of Pledgor.
Section 9.2. No Assumption of Liability. By executing this Agreement,
none of the Trustees assumes any personal liability under this Agreement.
Section 9.3. Notices.
(a) All notices and other communications provided for in this
Agreement, unless otherwise specified, shall be in writing and shall be given at
the addresses set forth in the following sentence or at such other addresses as
may be designated by notice duly given in accordance with this Section 9.3 to
each other party to this Agreement. Until such notice is given, (i) notices to
Pledgor shall be directed to it at [INSERT SELLER NOTICE ADDRESS]; (ii) notices
to the Collateral Agent shall be directed to it at The Chase Manhattan Bank, 450
West 33rd Street, New York, New York 10001, Telecopier No. (212) 946-3638,
Attention: Collateral Management Services; and (iii) notices to Purchaser shall
be directed to it in care of the Administrator for Purchaser, The Chase
Manhattan Bank, 450 West 33rd Street, New York, New York 10001, Telecopier No.
(212) 946-3638, Attention: Collateral Management Services.
(b) Each notice given pursuant to Section 9.3(a) shall be effective (i)
if sent by certified mail (return receipt requested), 72 hours after being
deposited in the United States mail, postage prepaid or five days after being
deposited in the mail of another country, postage prepaid; (ii) if given by
telex or telecopier, when such telex or
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telecopied notice is transmitted; or (iii) if given by any other means, when
delivered at the address specified in this Section 9.3.
Section 9.4. Governing Law; Severability. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York;
provided that as to Collateral located in any jurisdiction other than the State
of New York, the Collateral Agent on behalf of Purchaser shall have all of the
rights to which a secured party is entitled under the laws of such other
jurisdiction.
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 contained in this Agreement unenforceable or invalid.
Section 9.5. Entire Agreement. Except as expressly set forth in this
Agreement, this Agreement constitutes the entire agreement among the parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements, understandings and negotiations, both written and oral, among the
parties with respect to the subject matter of this Agreement.
Section 9.6. Amendments; Waivers. Any provision of this Agreement may
be amended or waived (either generally or in a particular instance and either
retrospectively or prospectively) if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by Pledgor, the Collateral
Agent and Purchaser 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 under this Agreement shall operate as a waiver of such
right, power or privilege nor shall any single or partial exercise of any such
right, power or privilege preclude any other or further exercise of such right,
power or privilege or the exercise of any other right, power or privilege. The
rights and remedies provided in this Agreement shall be cumulative and not
exclusive of any rights or remedies provided by law.
Section 9.7. Non-Assignability. This Agreement and the rights and
obligations of the parties under this Agreement may not be assigned or delegated
by either party without the prior written consent of the other party, and any
purported assignment without such consent shall be void.
Section 9.8. 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 Pledgor, the Collateral Agent and Purchaser and their
respective successors and assigns and no person shall assert any rights as third
party beneficiary under this Agreement. Whenever any of the parties to this
Agreement is referred to, such reference shall be deemed to include the
successors and assigns of such party. All the covenants and agreements in this
Agreement contained by or on behalf of Pledgor, the Collateral Agent 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.
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<PAGE> 27
Section 9.9. Counterparts. This Agreement may be executed, acknowledged
and delivered in any number of counterparts, each of which shall be an original,
but all of which shall constitute a single agreement, with the same effect as if
the signatures on each such counterpart were upon the same instrument.
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<PAGE> 28
IN WITNESS WHEREOF, the parties have caused this Collateral Agreement
to be duly executed and delivered as of the first date set forth above.
PLEDGOR:
AMDOCS INTERNATIONAL LIMITED
By:
---------------------------------
Name:
Title:
THE COLLATERAL AGENT:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:
---------------------------------
Name:
Title:
PURCHASER:
AMDOCS AUTOMATIC COMMON EXCHANGE
SECURITY TRUST
By:
---------------------------------
Donald J. Puglisi,
as Trustee
By:
---------------------------------
William R. Latham III,
as Trustee
By:
---------------------------------
James B. O'Neill,
as Trustee
<PAGE> 29
Exhibit A
to
Collateral Agreement
NOTICE OF PLEDGE VALUE
To: AMDOCS INTERNATIONAL LIMITED
[INSERT ADDRESS]
THE CHASE MANHATTAN BANK, as Collateral Agent (the "Collateral Agent")
under the Collateral Agreement, dated as of [Pricing Date] (the "Collateral
Agreement"), among you, as Pledgor, the Collateral Agent and Amdocs Automatic
Common Exchange Security Trust, hereby notifies you, pursuant to Section 5.1 of
the Collateral Agreement, that as of 4:00 p.m. New York City time on _________
__, ____:
1. The Pledge Value was $__________; and
2. The Pledge Value Requirement was $__________.
Capitalized terms not otherwise defined in this Notice have the
respective meanings specified in the Collateral Agreement.
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:
---------------------------------
Name:
Title:
<PAGE> 30
Exhibit B
to
Collateral Agreement
CERTIFICATE FOR SUBSTITUTED COLLATERAL
The undersigned, Amdocs International Limited (the "Pledgor"), hereby
certifies, pursuant to Section 5.2(b) of the Collateral Agreement, dated as of
[Pricing Date] (the "Collateral Agreement"), among Pledgor, The Chase Manhattan
Bank, as Collateral Agent, and Amdocs Automatic Common Exchange Security Trust,
that:
1. Pledgor is delivering the following securities to the Collateral
Agent to be held by the Collateral Agent as substituted Collateral (the
"Substituted Collateral"):
[INSERT DESCRIPTION OF SUBSTITUTE COLLATERAL]
2. Pledgor requests that the Collateral Agent transfer to Pledgor the
following Prior Collateral, pursuant to Section 5.2 of the Collateral Agreement:
[INSERT DESCRIPTION OF PRIOR COLLATERAL]
3. Pledgor hereby represents and warrants to the Collateral Agent and
Purchaser that:
(a) Consents to Transfer. No Transfer Restrictions exist with
respect to or otherwise apply to the pledge or assignment of, or
transfer by Pledgor 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. 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 and has good, right and lawful authority to
assign, transfer and pledge such Substitute Collateral under the
Collateral Agreement. Upon delivery of the Substituted Collateral to
the Collateral Agent under 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
Pledgor as collateral for any other purpose.
This Certificate may be relied upon by Purchaser as fully and to the
same extent as if this Certificate had been specifically addressed to Purchaser.
Capitalized terms not otherwise defined Certificate have the respective
meanings specified in the Collateral Agreement.
<PAGE> 31
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of ____________, ____.
AMDOCS INTERNATIONAL LIMITED
By:
Name:
Title:
-2-
<PAGE> 32
Exhibit C
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, Amdocs International Limited (the "Pledgor"), hereby
certifies, pursuant to Section 5.3 of the Collateral Agreement, dated as of
[Pricing Date] (the "Collateral Agreement"), among Pledgor, The Chase Manhattan
Bank, as Collateral Agent and Amdocs Automatic Common Exchange Security Trust,
that:
1. Pledgor is delivering the following securities to the Collateral
Agent to be held by the Collateral Agent as additional Collateral (the
"Additional Collateral"):
[INSERT DESCRIPTION OF ADDITIONAL COLLATERAL]
2. Pledgor hereby represents and warrants to the Collateral Agent and
Purchaser that:
(a) Consents to Transfer. No Transfer Restrictions exist with
respect to or otherwise apply to the pledge or assignment of, or
transfer by Pledgor 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. 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 and has good, right and lawful authority to
assign, transfer and pledge such Additional Collateral under the
Collateral Agreement. Upon delivery of the Additional Collateral to the
Collateral Agent, the Collateral Agent will obtain a valid, first
priority perfected security interest in, and a first lien upon, such
Additional Collateral subject to no other Lien. None of such Additional
Collateral is or shall be pledged by Pledgor as collateral for any
other purpose.
This Certificate may be relied upon by Purchaser as fully and to the
same extent as if this Certificate had been specifically addressed to Purchaser.
Capitalized terms not otherwise defined Certificate have the respective
meanings specified in the Collateral Agreement.
<PAGE> 33
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of ____________, ____.
AMDOCS INTERNATIONAL LIMITED
By:
Name:
Title:
-2-
<PAGE> 1
Exhibit 2.k.(v)
S&C Draft of June 6, 1999
________________________________________________________________________________
FUND EXPENSE AGREEMENT
Among
GOLDMAN, SACHS & CO.,
THE CHASE MANHATTAN BANK,
for Itself and Its Affiliate
and
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
________________
Dated as of [Pricing Date]
________________
________________________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms............................................... 1
Section 1.2. Interpretation.............................................. 2
ARTICLE II
PAYMENTS BY GOLDMAN SACHS
Section 2.1. Agreement to Pay Up-Front Fees and Expenses................. 3
Section 2.2. Agreement to Pay Additional Expenses........................ 3
Section 2.3. Condition to Payments....................................... 3
ARTICLE III
CERTAIN AGREEMENTS OF THE SERVICE PROVIDER
Section 3.1. Statements and Reports...................................... 4
Section 3.2. Trust Termination; Refund of Unused Expense Funds........... 4
Section 3.3. Termination of Administration Agreement..................... 4
Section 3.4. Amendments.................................................. 5
Section 3.5. Payment to ChaseMellon Shareholder Services, L.L.C. ........ 5
ARTICLE IV
MISCELLANEOUS
Section 4.1. Term of Contract............................................ 5
Section 4.2. No Assumption of Liability.................................. 5
Section 4.3. Notice...................................................... 5
Section 4.4. Governing Law; Severability................................. 6
Section 4.5. Entire Agreement............................................ 6
Section 4.6. Amendments; Waivers......................................... 6
Section 4.7. Non-Assignability........................................... 6
Section 4.8. No Third Party Rights; Successors and Assigns............... 6
Section 4.9. Counterparts................................................ 6
</TABLE>
<PAGE> 3
FUND EXPENSE AGREEMENT
FUND EXPENSE AGREEMENT, dated as of [Pricing Date], among Goldman, Sachs &
Co. ("Goldman Sachs"), The Chase Manhattan Bank (the "Service Provider"), for
itself in its capacities as Administrator, Custodian and Collateral Agent and
for its affiliate, ChaseMellon Shareholder Services, L.L.C., in its capacity as
Paying Agent for Amdocs Automatic Common Exchange Security 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 [Pricing Date] (such trust
and the trustees thereof acting in their capacity as such being referred to in
this Agreement as the "Trust"), and the Trust.
WITNESSETH:
WHEREAS, the Trust is a trust organized under the laws of the State of New
York under and by virtue of the Amended and Restated Trust Agreement, dated as
of [Pricing Date] (the "Trust Agreement"); and
WHEREAS, Goldman Sachs desires to make provision for the payment of
certain initial and on-going expenses of the Trust;
NOW, THEREFORE, the parties to this Agreement, intending to be bound,
agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms.
(a) Capitalized terms used and not otherwise defined in this Agreement
have the respective meanings specified in the Trust Agreement.
(b) As used in this Agreement, the following terms have the following
meanings:
"Additional Expense" means the Ordinary Expense the incurrence of
which will require the Service Provider to provide the Additional Expense
Notice pursuant to Section 2.2(a) and any Ordinary Expense incurred
thereafter.
"Additional Expense Notice" has the meaning specified in Section
2.2(a).
"Agreement" means this Fund Expense and Indemnity Agreement.
"Goldman Sachs" has the meaning specified in the preamble to the
Agreement.
<PAGE> 4
"Ordinary Expense" of the Trust means any expense of the Trust other
than any expense of the Trust arising under Section 3.4 of the
Administration Agreement, Section 3.5 or 3.6 of the Custodian Agreement,
Section 5.4(b) of the Paying Agent Agreement or Section 7.6 of the Trust
Agreement.
"Service Provider" has the meaning specified in the preamble to this
Agreement.
"Trust" has the meaning specified in the preamble to this Agreement.
"Trust Agreement" has the meaning specified in the recitals to this
Agreement.
"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 services, as Administrator, Custodian and Collateral Agent, and
those of ChaseMellon Shareholder Services, L.L.C., as Paying 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.
Section 1.2. Interpretation.
(a) When a reference is made in this Agreement to Articles, Sections,
Exhibits or Schedules, such reference is to Articles or Sections of, or Exhibits
or Schedules to, this Agreement unless otherwise indicated.
(b) The table of contents and headings contained in this Agreement are for
reference purposes only and are not part of this Agreement, and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.
(c) Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
(d) Any reference to any statute, regulation or agreement is a reference
to such statute, regulation or agreement as supplemented or amended from time
to time.
-2-
<PAGE> 5
ARTICLE II
PAYMENTS BY GOLDMAN SACHS
Section 2.1. Agreement to Pay Up-Front Fees and Expenses. Goldman Sachs
agrees to pay or cause to be paid to the Service Provider in Federal
(immediately available) funds at the First Time of Delivery the Up-Front Fee
Amount and the Up-Front Expense Amount.
Section 2.2. Agreement to Pay Additional Expenses.
(a) Before incurring on behalf of the Trust any Ordinary Expense 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 (the "Additional Expense 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 $1,000
or (ii) in any calendar period, expenses aggregating in excess of $3,000.
Subject to the foregoing, the Service Provider shall give notice to Goldman
Sachs in writing promptly after incurring 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 Section 2.2(b), Goldman Sachs agrees
to pay to the Service Provider from time to time the amount of any Additional
Expense. Goldman Sachs shall pay any such Additional Expense in Federal
(immediately available) funds by the later of (i) five Business Days after the
receipt by Goldman Sachs from the Service Provider of notice of the incurrence
of such Additional Expense, 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 in good faith to resolve
amicably the disagreement; provided that if the parties cannot resolve the
dispute by the due date specified in Section 2.2(c) with respect to such
Additional Expense, then subject to the first sentence of Section 2.2(b),
Goldman Sachs shall pay the amount of such Additional Expense as provided in
Section 2.2(c) subject to later adjustment and credit if such dispute is
resolved in favor of Goldman Sachs.
Section 2.3. Condition to Payments. Goldman Sachs' obligations under
Sections 2.1 and 2.2 shall be subject to the condition that the Securities that
are
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<PAGE> 6
deliverable under the Underwriting Agreement at the First Time of Delivery
shall have been issued and paid for at the First Time of Delivery.
ARTICLE III
CERTAIN AGREEMENTS OF THE SERVICE PROVIDER
Section 3.1. Statements and Reports.
(a) The Service Provider shall
(i) 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
(ii) prepare and maintain adequate books and records showing all
receipts and disbursements of funds in connection therewith.
(b) 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.
Section 3.2. Trust Termination; Refund of Unused Expense Funds. In
consideration of the agreements of Goldman Sachs in this Agreement:
(a) 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 Expense Amount, the Service
Provider shall, promptly following the date of such termination, pay to
Goldman Sachs in Federal (immediately available) funds the amount of such
excess; and
(b) the Trust shall reimburse Goldman Sachs for any payments made by
Goldman Sachs under this Agreement by paying over to Goldman Sachs, prior
to the termination of the Trust, any funds held by the Trust after
satisfaction in full of the obligation of the Trust to pay distributions in
respect of the Securities, the obligation of the Trust to distribute cash,
Ordinary Shares, Marketable Securities and other property to the holders of
the Securities, and satisfaction of or provision for all other obligations
and liabilities of the Trust, whether present or future, contingent or
otherwise, as principal or surety or otherwise.
Section 3.3. Termination of Administration Agreement. If the Service
Provider shall resign or be removed as Administrator pursuant to the
Administration Agreement, the Service Provider shall promptly repay to Goldman
Sachs a ratable portion of the Up-Front Fee Amount for the period from the date
of such resignation or removal to the
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<PAGE> 7
Exchange Date, together with any unexpended portion of the Up-Front Expense
Amount.
Section 3.4. Amendments to Other Agreements. The Service Provider agrees
that it will not consent to any amendment of the Administration Agreement, the
Custodian Agreement or the Collateral Agreement without the prior written
consent of Goldman Sachs.
Section 3.5. Payment to ChaseMellon Shareholder Services, L.L.C. The
Service Provider agrees that it shall pay over to ChaseMellon Shareholder
Services, L.L.C. that portion of the payments made to the Service Provider
under this Agreement that is due and payable to ChaseMellon Shareholder
Services, L.L.C. in connection with its role as Paying Agent for the Trust.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Term of Contract. This Agreement shall continue in effect
until the completion of the liquidation of the Trust in accordance with Section
8.3(c) of the Trust Agreement.
Section 4.2. Assumption of Liability. By executing this Agreement, none
of the Trustees assumes any personal liability under this Agreement.
Section 4.3. Notices.
(a) All notices and other communications provided for in this Agreement,
unless otherwise specified, shall be in writing and shall be given at the
addresses set forth in the following sentence or at such other addresses as may
be designated by notice duly given in accordance with this Section 4.3 to each
other party to this Agreement. Until such notice is given, (i) notices to
Goldman Sachs shall be directed to it at 85 Broad Street, New York, New York
10004, Telecopier (212) 357-1500, Attention Paul S. Efron; (ii) notices to the
Service Provider (for itself or for the Paying Agent) shall be directed to it
at The Chase Manhattan Bank, 450 West 33rd Street, New York, New York 10001,
Telecopier No. (212) 946-3638, Attention: Collateral Management Services; and
(iii) notices to the Trust or the Trustees shall be directed to the Trustees at
Department of Economics, University of Delaware, Newark, Delaware 19716,
Telecopier No. ____________, Attention: Donald J. Puglisi.
(b) Each notice given pursuant to Section 4.3(a) 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 4.3.
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<PAGE> 8
Section 4.4. 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
contained in this Agreement unenforceable or invalid.
Section 4.5. Entire Agreement. Except as expressly set forth in this
Agreement, this Agreement constitutes the entire agreement among the parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements, understandings and negotiations, both written and oral, among the
parties with respect to the subject matter of this Agreement.
Section 4.6. Amendments; Waivers. Any provision of this Agreement may be
amended or waived (either generally or in a particular instance and either
retrospectively or prospectively) if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by Goldman Sachs, the
Service Provider and the Trust 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 under this Agreement shall operate as a
waiver of such right, power or privilege nor shall any single or partial
exercise of any such right, power or privilege preclude any other or further
exercise of such right, power or privilege or the exercise of any other right,
power or privilege. The rights and remedies in this Agreement provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 4.7. Non-Assignability. This Agreement and the rights and
obligations of the parties under this Agreement may not be assigned or delegated
by either party without the prior written consent of the other party, and any
purported assignment without such consent shall be void.
Section 4.8. 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 Goldman Sachs, the Service Provider, the Trust and their respective
successors and assigns and no person shall assert any rights as third party
beneficiary under this Agreement. Whenever any of the parties to this Agreement
is referred to, such reference shall be deemed to include the successors and
assigns of such party. All the covenants and agreements in this Agreement
contained by or on behalf of Goldman Sachs, the Service Provider, the Trust
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 Service Provider and its successors and assigns.
Section 4.9. Counterparts. This Agreement may be executed, acknowledged
and delivered in any number of counterparts, each of which shall be an original,
but all of which shall constitute a single agreement, with the same effect as if
the signatures on each such counterpart were upon the same instrument.
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<PAGE> 9
IN WITNESS WHEREOF, the parties have caused this Fund Expense and
Indemnity Agreement to be duly executed and delivered as of the first date set
forth above.
GOLDMAN, SACHS & CO.
By:____________________________
(Goldman, Sachs & Co.)
THE SERVICE PROVIDER:
THE CHASE MANHATTAN BANK,
as Service Provider
By:____________________________
Name:
Title:
THE TRUST:
AMDOCS AUTOMATIC COMMON EXCHANGE
SECURITY TRUST
By:_____________________________
Donald J. Puglisi,
as Trustee
By:_____________________________
William R. Latham III,
as Trustee
By:_____________________________
James B. O'Neill,
as Trustee
<PAGE> 10
SCHEDULE I
----------
Expenses of Organization of the Trust and the
Public Offering of the Securities
<TABLE>
<S> <C>
Up-Front Fee Amount: $230,000
Up-Front Expense Amount:
Trustees Fees 36,000
Wall Street Concepts Fees 3,000
Accounting Fees 96,500
Fidelity Bond 1,500
Other $ 15,000
--------
Total Up-Front Expense Amount $152,000
========
</TABLE>
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<PAGE> 1
Exhibit 2.k.(vi)
S&C Draft of June 7, 1999
FUND INDEMNITY AGREEMENT
Among
AMDOCS INTERNATIONAL LIMITED,
THE CHASE MANHATTAN BANK,
for Itself and Its Affiliate
and
AMDOCS AUTOMATIC COMMON EXCHANGE SECURITY TRUST
Dated as of [Pricing Date]
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms............................................. 1
Section 1.2. Interpretation............................................ 2
ARTICLE II
PAYMENTS BY SELLER
Section 2.1. Agreement to Pay Indemnification Expenses................. 2
Section 2.2. Condition to Payments..................................... 3
ARTICLE III
CERTAIN AGREEMENTS OF THE SERVICE PROVIDER
Section 3.1. Statements and Reports.................................... 3
Section 3.2. Amendments................................................ 3
Section 3.3. Payment to ChaseMellon Shareholder Services, L.L.C........ 4
ARTICLE IV
MISCELLANEOUS
Section 4.1. Term of Contract.......................................... 4
Section 4.2. No Assumption of Liability................................ 4
Section 4.3. Notice.................................................... 4
Section 4.4. Governing Law; Severability............................... 4
Section 4.5. Entire Agreement.......................................... 5
Section 4.6. Amendments; Waivers....................................... 5
Section 4.7. Non-Assignability......................................... 5
Section 4.8. No Third Party Rights; Successors and Assigns............. 5
Section 4.9. Counterparts.............................................. 5
<PAGE> 3
FUND INDEMNITY AGREEMENT
FUND INDEMNITY AGREEMENT, dated as of [Pricing Date], among Amdocs
International Limited, a corporation formed under the laws of the Island of
Guernsey ("Seller"), The Chase Manhattan Bank (the "Service Provider"), for
itself in its capacities as Administrator, Custodian and Collateral Agent and
for its affiliate, ChaseMellon Shareholder Services, L.L.C., in its capacity as
Paying Agent for Amdocs Automatic Common Exchange Security 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 [Pricing Date] (such trust and
the trustees thereof acting in their capacity as such being referred to in this
Agreement as the "Trust"), and the Trust.
WITNESSETH:
WHEREAS, the Trust is a trust organized under the laws of the State of
New York under and by virtue of the Amended and Restated Trust Agreement, dated
as of [Pricing Date] (the "Trust Agreement"); and
WHEREAS, Seller desires to make provision for the payment of certain
indemnification expenses of the Trust;
NOW, THEREFORE, the parties to this Agreement, intending to be bound,
agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms.
(a) Capitalized terms used and not otherwise defined in this Agreement
have the respective meanings specified in the Trust Agreement.
(b) As used in this Agreement, the following terms have the following
meanings:
"Agreement" means this Fund Indemnity Agreement.
"Claimant" has the meaning specified in Section 2.1(b).
"Indemnification Expenses" has the meaning specified in
Section 2.1(a).
"Seller" has the meaning specified in the preamble to this
Agreement.
"Service Provider" has the meaning specified in the preamble
to this Agreement.
<PAGE> 4
"Trust" has the meaning specified in the preamble to this
Agreement.
"Trust Agreement" has the meaning specified in the recitals to
this Agreement.
Section 1.2. Interpretation.
(a) When a reference is made in this Agreement to Articles, Sections,
Exhibits or Schedules, such reference is to Articles or Sections of, or Exhibits
or Schedules to, this Agreement unless otherwise indicated.
(b) The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement, and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.
(c) Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
(d) Any reference to any statute, regulation or agreement is a
reference to such statute, regulation or agreement as supplemented or amended
from time to time.
ARTICLE II
PAYMENTS BY SELLER
Section 2.1. Agreement to Pay Indemnification Expenses.
(a) Seller agrees to pay to and indemnify the Trust, and hold the Trust
harmless from, any expenses of the Trust arising under Section 2.2(g) or 3.4 of
the Administration Agreement, Section 8.1(a)(v) of the Collateral Agreement,
Section 3.5 or 3.6 of the Custodian Agreement, Section 5.6 of the Paying Agent
Agreement and the last sentence of Section 7.6 of the Trust Agreement
(collectively, "Indemnification Expenses"). Subject to Section 2.1(b), Seller
shall pay any Indemnification Expense in Federal (immediately available) funds
no later than five Business Days after the receipt by Seller, pursuant to
Section 2.1(b), of written notice of any claim for Indemnification Expenses.
(b) The Trustees shall give notice to, or cause notice to be given to,
Seller in writing of any claim for Indemnification Expenses or any threatened
claim for Indemnification Expenses immediately upon their acquiring knowledge of
such claim. 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.
-2-
<PAGE> 5
(c) The Trust agrees that Seller may, and Seller is authorized on
behalf of 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 the Trust shall determine to be reasonable, Seller and such
Claimant are unable to resolve amicably any disagreement regarding such claim
for Indemnification Expense, Seller shall retain counsel reasonably satisfactory
to the Trust to represent the Trust in any resulting proceeding and shall pay
the fees and disbursements of such counsel related to such proceeding. It is
understood that Seller 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). Seller 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,
Seller agrees to indemnify the Trustees and the Trust from and against any loss
or liability by reason of such settlement or judgment.
Section 2.2. Condition to Payments. Seller's obligations under Section
2.1 shall be subject to the condition that the Securities that are deliverable
under the Underwriting Agreement at the First Time of Delivery shall have been
issued and paid for at the First Time of Delivery.
ARTICLE III
CERTAIN AGREEMENTS OF THE SERVICE PROVIDER
Section 3.1. Statements and Reports.
(a) The Service Provider shall
(i) collect and safekeep all demands, bills, invoices or other
written communications received from third parties in connection with
any claim for Indemnification Expenses; and
(ii) prepare and maintain adequate books and records showing
all receipts and disbursements of funds in connection therewith.
(b) Seller 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.
Section 3.2. Amendments to Other Agreements. The Service Provider
agrees that it will not consent to any amendment of the Administration
Agreement, the Custodian Agreement or the Collateral Agreement without the prior
written consent of Seller.
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<PAGE> 6
Section 3.3. Payment to ChaseMellon Shareholder Services, L.L.C. The
Service Provider agrees that it shall pay over to ChaseMellon Shareholder
Services, L.L.C. that portion of the payments made to the Service Provider under
this Agreement that is due and payable to ChaseMellon Shareholder Services,
L.L.C. in connection with its role as Paying Agent for the Trust.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Term of Contract. This Agreement shall continue in effect
until the completion of the liquidation of the Trust in accordance with Section
8.3(c) of the Trust Agreement.
Section 4.2. No Assumption of Liability. By executing this Agreement,
none of the Trustees assumes any personal liability under this Agreement.
Section 4.3. Notices.
(a) All notices and other communications provided for in this
Agreement, unless otherwise specified, shall be in writing and shall be given at
the addresses set forth in the following sentence or at such other addresses as
may be designated by notice duly given in accordance with this Section 4.3 to
each other party to this Agreement. Until such notice is given, (i) notices to
Seller shall be directed to it at [INSERT ADDRESS OF SELLER]; (ii) notices to
the Service Provider (for itself or for the Paying Agent) shall be directed to
it at The Chase Manhattan Bank, 450 West 33rd Street, New York, New York 10001,
Telecopier No. (212) 946-3638, Attention: Collateral Management Services; and
(iii) notices to the Trust or the Trustees shall be directed to the Trustees at
Department of Economics, University of Delaware, Newark, Delaware 19716,
Telecopier No. __________, Attention: _________.
(b) Each notice given pursuant to Section 4.3(a) shall be effective (i)
if sent by certified mail (return receipt requested), 72 hours after being
deposited in the United States mail, postage prepaid or five days after being
deposited in the mail of another country, 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 4.3.
Section 4.4. 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 contained in this Agreement unenforceable or invalid.
-4-
<PAGE> 7
Section 4.5. Entire Agreement. Except as expressly set forth in this
Agreement, this Agreement constitutes the entire agreement among the parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements, understandings and negotiations, both written and oral, among the
parties with respect to the subject matter of this Agreement.
Section 4.6. Amendments; Waivers. Any provision of this Agreement may
be amended or waived (either generally or in a particular instance and either
retrospectively or prospectively) if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by Goldman Sachs, Seller,
the Service Provider and the Trust 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 under this Agreement shall operate
as a waiver of such right, power or privilege nor shall any single or partial
exercise of any such right, power or privilege preclude any other or further
exercise of such right, power or privilege or the exercise of any other right,
power or privilege. The rights and remedies in this Agreement provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 4.7. Non-Assignability. This Agreement and the rights and
obligations of the parties under this Agreement may not be assigned or delegated
by either party without the prior written consent of the other party, and any
purported assignment without such consent shall be void.
Section 4.8. 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 Goldman Sachs, Seller, the Service Provider, the Trust and
their respective successors and assigns and no person shall assert any rights as
third party beneficiary under this Agreement. Whenever any of the parties to
this Agreement is referred to, such reference shall be deemed to include the
successors and assigns of such party. All the covenants and agreements in this
Agreement contained by or on behalf of Goldman Sachs, Seller, the Service
Provider, the Trust 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 Service Provider and its successors and assigns.
Section 4.9. Counterparts. This Agreement may be executed, acknowledged
and delivered in any number of counterparts, each of which shall be an original,
but all of which shall constitute a single agreement, with the same effect as if
the signatures on each such counterpart were upon the same instrument.
-5-
<PAGE> 8
IN WITNESS WHEREOF, the parties have caused this Fund Expense and
Indemnity Agreement to be duly executed and delivered as of the first date set
forth above.
AMDOCS INTERNATIONAL LIMITED
By:
--------------------------------
Name:
Title:
THE SERVICE PROVIDER:
THE CHASE MANHATTAN BANK,
as Service Provider
By:
--------------------------------
Name:
Title:
THE TRUST:
AMDOCS AUTOMATIC COMMON EXCHANGE
SECURITY TRUST
By:
--------------------------------
Donald J. Puglisi,
as Trustee
By:
--------------------------------
William R. Latham III,
as Trustee
By:
--------------------------------
James B. O'Neill,
as Trustee
-6-
<PAGE> 1
Exhibit 2.l
SULLIVAN & CROMWELL
125 Broad Street
New York, New York 10004
(212) 558-3175
June 7, 1999
Amdocs Automatic Common Exchange Security Trust,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
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
the $ Trust Automatic Common Exchange Securities (the "Securities") of
Amdocs Automatic Common Exchange Security Trust, a New York trust (the
"Trust"), we, as your counsel, have examined such trust 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 a category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
/s/ SULLIVAN & CROMWELL
<PAGE> 1
Exhibit 2.n.(i)
SULLIVAN & CROMWELL
125 Broad Street
New York, New York 10004
(212) 558-4000
June 7, 1999
Amdocs 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 Amdocs 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 (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,
/s/ SULLIVAN & CROMWELL
<PAGE> 1
Exhibit 2.n.(ii)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form N-2
(Securities Act File No. 333-73265 and Investment Company Act File No.
811-09245) of our report dated May 5, 1999, on our audit of the statement of
assets and liabilities of Amdocs Automatic Common Exchange Security Trust. We
also consent to the reference to our firm under the caption "Experts".
/s/ PricewaterhouseCoopers LLP
New York, New York
June 4, 1999
<PAGE> 1
Exhibit 2.p
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT is entered into as of the 3rd day
of May, 1999, between Paul S. Efron (the "Trustee"), not in his individual
capacity, but solely as trustee of Amdocs Automatic Common Exchange Security
Trust (previously known as Eighth Automatic Common Exchange Security Trust), a
trust organized and existing under the laws of New York (the "Trust"), and
Goldman, Sachs & Co.
(the "Purchaser").
THE PARTIES HEREBY AGREE AS FOLLOWS:
PURCHASE AND SALE OF THE SECURITY
1.1 SALE AND ISSUANCE OF THE SECURITY. Subject to the terms
and conditions of this Agreement, the Trustee agrees to sell to the Purchaser,
and the Purchaser agrees to purchase from the Trustee, one Trust Automatic
Common Exchange Security, representing an undivided beneficial interest in the
Trust (the "Security") at an aggregate purchase price of $100.
1.2 CLOSING. The purchase and sale of the Security (the
"Closing") shall take place at the offices of Sullivan & Cromwell, 125 Broad
Street, New York, New York at 9:30 a.m., on May 3, 1999, or at such other time
(the "Closing Date") and place as the Trustee and the Purchaser mutually agree
upon. At or after the Closing, the Trustee shall deliver to the Purchaser a
certificate representing the Security, registered in the name of the Purchaser
or its nominee. Payment for the Security shall be made on or prior to 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 Security.
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 Trustee with the Purchaser in reliance upon the Purchaser's
representation to the Trustee, which by the Purchaser's execution of this
Agreement the
<PAGE> 2
Purchaser hereby confirms, that the Security is being acquired for investment
for the Purchaser's own account, and not as a nominee or agent and not with a
view to the resale or distribution by the Purchaser of the Security, and that
the Purchaser has no present intention of selling, granting any participation
in, or otherwise distributing the Security, 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 be 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 the
Security.
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 Security. The Purchaser
is an "accredited investor" as defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended (the "Act").
2.3 RESTRICTED SECURITIES. The Purchaser understands that the
Security is characterized as a "restricted security" under the United States
securities laws inasmuch as it is being acquired from the Trustee in a
transaction not involving a public offering and that under such laws and
applicable regulations the Security 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.
(a) The Purchaser further agrees not to make any disposition
directly or indirectly of all or any portion of the Security unless and until:
-2-
<PAGE> 3
(i) 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
(ii) The Purchaser shall have furnished the
Trustee with an opinion of counsel, reasonably satisfactory to the Trustee, that
such disposition will not require registration of such Securities under the Act;
or
(b) Notwithstanding the provisions of subsection (a) 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 Security 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 Trustee of Amdocs 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 Trustee agree that the legend contained
in the paragraph (a) above shall be removed at a holder's request when it is 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 Trustee and Goldman,
Sachs & Co., as sponsor of the Trust, of an Amended and Restated Trust Agreement
in such form as the Trustee may deem appropriate, and (b) the split of the
Purchaser's Security. Subsequent to the
-3-
<PAGE> 4
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, the 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.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
TRUSTEE
/s/ Paul S. Efron
-------------------------------------
Paul S. Efron
as Trustee
GOLDMAN, SACHS & CO.
/s/ Goldman, Sachs & Co.
-------------------------------------
Goldman, Sachs & Co.
as Purchaser
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMDOCS
AUTOMATIC COMMON EXCHANGE SECURITY TRUST STATEMENT OF ASSETS AND LIABILITIES AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> MAY-03-1999
<PERIOD-END> MAY-03-1999
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 100
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 100
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 100
<SHARES-COMMON-STOCK> 1
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 100
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
</TABLE>
