<PAGE> 1
As filed with the Securities and Exchange Commission on January 14, 2000
Securities Act File No. 333-77563
Investment Company Act File No. 811-09323
================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-2
[X] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X] Pre-Effective Amendment No. 1
[ ] Post-Effective Amendment No.
and/or
[X] REGISTRATION STATEMENT UNDER THE
[X] INVESTMENT COMPANY ACT OF 1940
Amendment No. 1
-------------
NBCi
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:
<TABLE>
<S> <C> <C>
Bruce Alan Mann, Esq. Nora Gibson, Esq.
P. Rupert Russell, Esq. Laura M. De Petr, Esq.
Kristian E. Wiggert, Esq. Lora D. Blum, Esq.
Robert E. Buckholz, Jr., Esq. Brian D. Lewandowski, Esq. Brobeck, Phleger & Harrison, LLP
Sullivan & Cromwell Morrison & Foerster LLP One Market
125 Broad Street 425 Market Street Spear Street Towers
New York, New York 10004 San Francisco, California 94105 San Francisco, California 94105
</TABLE>
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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-________.
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CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
====================================================================================================================================
Title of Securities Amount To Be Proposed Maximum Proposed Maximum Amount of
Being Registered Registered Offering Price Per Unit(1) Aggregate Offering Price(1) Registration Fee (1)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$__Trust Automatic Common
Exchange Securities $100,000,000 $23,760
====================================================================================================================================
</TABLE>
<PAGE> 2
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended,
based upon the average of high and low prices of the Class A Common
Stock on the price of which the offering price per unit of the
Securities will be based as reported on The Nasdaq Market-National
Market ("Nasdaq") on February , 2000.
(2) A registration fee of $2,780 was previously paid by the Registrant in
connection with the initial filing of this registration statement for
a proposed maximum aggregate offering price of $10,000,000 on May 3,
1999.
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
===============================================================================
<PAGE> 3
NBCi 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
------ ------- ----------------------
<S> <C> <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> 4
The information in this prospectus is not complete and may be changed. A
registration statement relating to the securities has been filed with the
Securities and Exchange Commission. We may not sell these securities until this
registration statement is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where the offer, solicitation or sale is not permitted.
<PAGE> 5
SUBJECT TO COMPLETION, DATED JANUARY , 2000
Securities
NBCi
AUTOMATIC COMMON EXCHANGE SECURITY TRUST
$____ Trust Automatic Common Exchange Securities (TRACES(TM)/SM) (Subject to
exchange into Shares of Class A Common Stock of NBC Internet, Inc.)
----------------
The $____ Trust Automatic Common Exchange Securities are a new series
of securities issued by the NBCi Automatic Common Exchange Security Trust.
The Trust will pay quarterly distributions of $____ on each Security. On
February __, 2003, the Trust will exchange each Security for either:
- Between 0.___ shares and one share of Class A Common Stock
of NBC Internet, Inc.,
- Cash equal to the value of those shares, or
- A combination of shares and cash.
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 Class A Common Stock during the
twenty business days before February __, 2003.
Under the circumstances described in this prospectus, some or all of
the shares or cash may be delivered between February __, 2003 and May __,
2003 instead of on February __, 2003. In that case, holders of the
Securities may receive part of the cash or shares on February __, 2003
and the rest between February __, 2003 and May __, 2003.
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 "___".
The Class A Common Stock is currently traded on The Nasdaq
Market-National Market ("Nasdaq") and on the European Association of Securities
Dealers Automated Quotation System under the symbol "NBCi". The last reported
sale price of the Class A Common Stock on the Nasdaq on February __, 2000,
was $_____ per share. The Company is not affiliated with the Trust.
The Trust is a newly organized, finite term closed-end investment
company. Shares of this type of fund frequently trade at a discount from net
asset value. This risk is separate from the risk that the Trust's net asset
value will fall. The Trust cannot predict whether the Securities will trade at,
below or above net asset value. The risk of purchasing investments in a
closed-end company that might trade at a discount may be greater for investors
who wish to sell their investments soon after completion of this offering.
----------------
This prospectus sets forth concisely information about the Trust that
you should know before investing. You are advised to read this prospectus and to
retain it for future reference. Additional information about the Trust has been
filed with the Securities and Exchange Commission and is available upon written
or oral request and without charge. See "Further Information".
----------------
Consider carefully the "risk factors" beginning on page [__] of
this prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER
REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
----------------
<TABLE>
<CAPTION>
Per Security Total
------------ -----
<S> <C> <C>
Initial Public Offering Price...........$________ $________
Sales Load..............................Not applicable Not applicable
Proceeds to the Trust...................$________ $________
</TABLE>
The Underwriters may, under certain circumstances, purchase up to an
additional __________ 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 February __, 2000.
GOLDMAN, SACHS & CO.
Prospectus dated _______, 2000.
<PAGE> 6
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 [__].
This prospectus includes a Glossary, beginning on page [__]. 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 contracts 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 February __,
2003 (the "Exchange Date"), between 0.____ shares and 1 share of Class A
Common Stock (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 Class A Common
Stock 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 shares of Class A
Common Stock 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.__
shares of Class A Common Stock.
- If the average market price is less than $_______, the
holder of each Security will receive one share of Class A
Common Stock.
This formula will be adjusted if the Company takes certain steps that combine,
split or dilute the value of the Class A Common Stock. If this formula would
require the Trust to deliver a fraction of a share of Class A Common Stock 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 Class A Common Stock above $_____.
However, the holders of the Securities will not receive any increase in the
value of the Class A Common Stock unless that value rises higher than $____. The
holders will bear the entire amount of any decrease in the value of the Class A
Common Stock.
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:
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<PAGE> 7
- "Stripped" U.S. Treasury securities that will mature during each
quarter through February __, 2003. 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 stockholder of
the Company (the "Seller"). The Seller will be required to
deliver shares of Class A Common Stock 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 shares of Class A Common Stock 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 its
Contract to May __, 2003. If the Seller extends the Exchange Date under the
Contract, the Seller will not be required to deliver the shares of Class A
Common Stock or cash under the Contract until May __, 2003. However, the Seller
can then accelerate the delivery of shares or cash to any date between February
__, 2003 and May __, 2003. If the Seller extends or accelerates the Exchange
Date under the Contract, the holders of the Securities will not receive the
corresponding portion of the shares or cash until the extended or accelerated
Exchange Date, and the number of shares or amount of cash included in that
delivery 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 Class A
Common Stock. 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
shares of Class A Common Stock 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 shares of
Class A Common Stock.
The Trust will not change its investments, even if the value of the
Contract or the Class A Common Stock 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 ___________ Securities to the public at a
purchase price of $____ per Security. This price is equal to the last reported
sale price of the Class A Common Stock on the date of this prospectus. The
Securities are being offered through Goldman, Sachs & Co. ("Goldman Sachs"), 85
Broad Street, New York, New York 10004 (the "Underwriters").
In addition, the Trust has granted the Underwriters an option to
purchase up to __________ additional Securities. These Securities may be
used only to cover over-allotments. For more detail, please see "Underwriting".
3
<PAGE> 8
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 shares of Class A Common Stock, cash or other securities,
that it receives from the Sellers under the Contract.
DISTRIBUTIONS. The holder of each Security will receive a
distribution of $____ each quarter. The Trust will pay these distributions on
each February __, May __, August __ and November __. 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 May __, 2000 to holders of record on
the previous business day.
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 CLASS A COMMON STOCK. On the Exchange Date, each
Security will be exchanged automatically for between 0.__ shares and one share
of Class A Common Stock, as determined by the formula described under "-The
Trust's Investment Objective". However, if the Seller delivers cash instead of
Class A Common Stock under the Contract, the holders of the Securities will
receive cash instead of the Class A Common Stock. The amount of cash will be
based on the average market price of the Class A Common Stock during the twenty
business days before the cash is delivered. The number of shares of Class A
Common Stock 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 Class A Common
Stock.
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 Class A Common Stock, or the
holders of the Securities may receive some or all of the Class A Common Stock,
cash or other securities on a date other than February __, 2003:
- 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 Class A
Common Stock under the Contract. If the Seller decides to
deliver cash instead of Class A Common Stock under the
Contract, it may do so 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
4
<PAGE> 9
pays it to the Trust. If the Seller elects to carry out a
rollover offering, it must give notice of its election to
all holders of the Securities, no less than 30 days and no
more than 90 days prior to the Exchange Date as then in
effect. For further detail, please see "Investment
Objective and Policies--The Contract--Cash Settlement;
Rollover Offerings".
- If the Company merges with another entity, the Company is
liquidated, or certain similar events occur, 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 stockholders in
that transaction, rather than shares of Class A Common
Stock. If at least 30% of the consideration received by
the Company's stockholders in the merger 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 merger consideration.
In this case, the holders of the Securities would receive
cash or other property representing part of the merger
consideration on a date before the scheduled Exchange
Date, and common equity securities representing the rest
of the merger consideration on the Exchange Date.
Instead of delivering any non-cash consideration at the
time of the merger, 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.
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 Class A Common Stock. In this
case, the holders of Securities will receive both shares
of Class A Common Stock 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 shares of
Class A Common Stock, cash or other common equity
securities, instead of receiving the Class A Common
Stock, 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 a 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 the
Trust's custodian, paying agent, transfer agent, registrar and other agents, 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 Class A Common Stock until they actually
receive shares of Class A Common Stock 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 ___.
5
<PAGE> 10
THE COMPANY
The Company is a global integrated media company which combines
portal, information, entertainment, community and e-commerce services through
its NBCi Web sites to deliver a comprehensive, next-generation broadband
experience to its users. The Company is aggressively upgrading, expanding and
integrating its portfolio of services to grow its registered user base, increase
the level of Internet traffic on its properties, and develop its proprietary
consumer database for advertisers and e-commerce partners. The Company is
actively expanding its e-commerce activities through investments in current
initiatives, strategic partnerships and complementary acquisitions and is
developing its business-to-business and business-to-consumer businesses by
leveraging its auction, business portal, business directory and database
services.
The Company has prepared a prospectus that describes the Company and
the Class A Common Stock (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 will
accrue over the term of the U.S. Treasury securities. However, when 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 Class A Common Stock.
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".
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 [__]. These risks include the following:
- The Trust will not dispose of the Contract even if
the price of the Class A Common Stock 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 Class A Common Stock.
- 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 Class A Common Stock 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 Class A Common Stock at the
Exchange Date is below $______. Holders will
6
<PAGE> 11
receive only ____% of any increase in the value of the
Class A Common Stock over $____. On the other hand,
holders of Securities will bear all of any decrease in the
value of the Class A Common Stock.
- The Company has never paid a dividend on the Class A
Common Stock. Accordingly, the distributions on the
Securities will be higher than the annual dividends paid
on the Class A Common Stock in the past year. However, the
distributions on the Securities will remain fixed. As a
result, if the Company were to begin paying dividends,
the distributions on the Securities may then be lower
than the dividends paid on the Class A Common Stock.
- The number of shares of Class A Common Stock or amount of
cash that holders may receive on the Exchange Date will be
adjusted if the Company takes certain actions that have
the effect of combining, splitting or diluting the value
of the Class A Common Stock. The number of shares to be
received by holders may not be adjusted for other events
that may adversely affect the price of the Class A Common
Stock, such as offerings of Class A Common Stock 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 Class A Common Stock in the secondary market. The
trading prices of the Class A Common Stock 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.
- 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 Class A Common Stock unless
they actually receive Class A Common Stock in exchange for
the Securities. For example, holders of Securities will
not be entitled to vote the shares of Class A Common Stock
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 $_______. The Seller will pay
these organizational and offering costs.
COSTS OF OTHER SERVICE PROVIDERS. At the closing of the offering of
the Securities, the Seller will make a one-time, up-front payment to the
Trust's administrator, custodian, paying agent and trustees as compensation for
their services to the Trust. The Seller will also pay the Trust's administrator
$_____ to cover the Trust's anticipated expenses. The Seller will pay
7
<PAGE> 12
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 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 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".
(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 the Seller. 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 the
Seller. 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 $10,000 investment, including the
applicable Sales Load of $300 and assuming (1) no annual expenses and (2) a 5%
annual return throughout the period............................................................... $ $
</TABLE>
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 May
3, 1999 under a trust agreement, which was amended and restated as of
February __, 2000 to reflect the terms of this offering
8
<PAGE> 13
(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". The
Seller 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, 54
Department of Finance
University of Delaware Professor of Finance
Newark, DE 19716 Managing Trustee University of Delaware $_____
William R. Latham, III, 55
Department of Economics
University of Delaware Professor of Economics
Newark, DE 19716 Trustee University of Delaware $_____
James B. O'Neill, 60
Center for Economic
Education & Entrepreneurship
University of Delaware Professor of Economics
Newark, DE 19716 Trustee University of Delaware $_____
</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 February __, 2000 (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;
- with the approval of the Trustees, engage legal and other
professional advisors (other than the independent public
accountants for the Trust);
9
<PAGE> 14
- 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 February __, 2000 (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 Class A Common Stock and
U.S. Government obligations or other assets pledged by the Seller under the
Collateral Agreement. If the Seller defaults under the Contract or 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 February __, 2000
(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 and
Collateral Agent and as 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> 15
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, the Seller
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. The Seller 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, the Seller will pay the costs of organizing the Trust in the
amount of $__________ and estimated costs in connection with the initial
registration and public offering of the Securities in the amount of $_______.
The amount that the Seller 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. The Seller has agreed to pay any excess expenses beyond this
amount. If the Seller 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 Class A Common Stock, 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
11
<PAGE> 16
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 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.____ shares and 1 share of Class A Common Stock (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 Class A Common Stock over the
twenty business days before the Exchange Date. The value of the Class A Common
Stock (or cash or Marketable Securities received in lieu of Class A Common
Stock) 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 February __, 2003; 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;
12
<PAGE> 17
- 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
- the Trust may not purchase any securities or instruments
other than the U.S. Treasury securities, the Contract and
the Class A Common Stock 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 Internet industry, which is the industry in which the
Company operates. The Trust is not permitted to purchase restricted securities.
THE COMPANY AND THE COMMON STOCK
The Company is a global integrated media company which combines
portal, information, entertainment, community and e-commerce services through
its NBCi Web sites to deliver a comprehensive, next-generation broadband
experience to its users. The Company is aggressively upgrading, expanding and
integrating its portfolio of services to grow its registered user base, increase
the level of Internet traffic on its properties, and develop its proprietary
consumer database for advertisers and e-commerce partners. The Company is
actively expanding its e-commerce activities through investments in current
initiatives, strategic partnerships and complementary acquisitions and is
developing its business-to-business and business-to-consumer businesses by
leveraging its auction, business portal, business directory and database
services.
The shares of Class A Common Stock have been traded on the Nasdaq
and on the European Association of Securities Dealers Automated Quotation
System under the symbol "NBCI" since November 30, 1999. The following table
sets forth, for the calendar quarters indicated, the reported high and low
sales prices of the shares of Class A Common Stock on Nasdaq. As of February
__, 2000, there were ____ record holders of the Class A Common
13
<PAGE> 18
Stock, including The Depository Trust Company, which holds shares of Class A
Common Stock on behalf of an indeterminate number of beneficial owners.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1999
Fourth Quarter (from November 30, 1999)........................
2000
First Quarter (through February __, 2000)......................
</TABLE>
Holders will not be entitled to any rights with respect to the
Class A Common Stock (including voting rights and rights to receive dividends or
other distributions on the Class A Common Stock) unless they actually receive
shares of Class A Common Stock in exchange for the Securities.
Please refer to the attached Company Prospectus, dated February __,
2000 (pages A-1 through A-_ hereto), which describes the Company and the Class
A Common Stock. The Company is not affiliated with the Trust and will not
receive any of the proceeds from the sale of the Securities. The Company
Prospectus relates to an aggregate of ______________ shares of Class A Common
Stock (and an additional aggregate ___________ 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 shares
of Class A Common Stock equal to the product of the Exchange Rate (as defined
below) times the initial number of shares of Class A Common Stock covered by
the Contract. The aggregate initial number of shares of Class A Common
Stock 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 Class A Common Stock, 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 on or before the Exchange Date, the Seller's obligation to deliver Class
A Common Stock (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 Class A Common Stock 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 Class A Common Stock 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
14
<PAGE> 19
number of shares of Class A Common Stock 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 _______ shares of Class A Common Stock.
- If the Average Market Price is less than the Initial
Price, the Exchange Rate will be one share of Class A
Common Stock.
This formula will be adjusted if the Company takes certain steps that combine,
split or dilute the value of the Class A Common Stock. 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 a share of Class A Common Stock to any holder, the Trust will
instead deliver cash equal to the value of that fraction of a share.
The "Average Market Price" per share of Class A Common Stock on any
date means the average Closing Price of a share of Class A Common Stock 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".
The "Closing Price" of the Class A Common Stock (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 Nasdaq 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 shares of
Class A Common Stock 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 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 shares of Class A Common Stock 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 shares of Class A Common Stock deliverable under
the Contract by reason of the occurrence of any of the events described under
"--The Contract-Dilution Adjustments". There can be no assurance that the
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 shares of
Class A Common Stock:
15
<PAGE> 20
Number of Shares
Average Market Price of Class A Common Stock
of Class A Common Stock Per Security
----------------------- -----------------------
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 May __, 2003. If the Seller extends the Exchange Date, the Seller
will not be required to deliver the shares of Class A Common Stock or cash under
the Contract until May __, 2003. However, once the Seller extends the Exchange
Date, the Seller can then accelerate the delivery of shares or cash to any date
between February __, 2003 and May __, 2003. If the Seller extends or accelerates
the Exchange Date, the holders of the Securities will not receive the
corresponding portion of the shares or cash until the extended or accelerated
Exchange Date, and the number of shares and amount of cash included in that
delivery 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 proportionate to the number of shares of Class A Common Stock
covered by the Contract. For example, if the Exchange Date is extended to
May __, 2003 for half the shares or cash deliverable on the Exchange Date, the
additional distribution would be equal to half the regular quarterly
distribution. If the final Exchange Date falls between February __, 2003 and
May __, 2003, the additional distribution will be pro-rated both to reflect the
number of securities covered by the extended and accelerated Contract and the
number of days by which the Exchange Date is extended. For example, if the
Exchange Date for half the shares or cash deliverable on the Exchange Date is
extended to May __, 2003 and then accelerated to March __, 2003 (i.e.,
one-third of the time between February __, 2003 and May __, 2003), the
additional distribution would be equal to one-third of one-half (or one-sixth)
of the regular quarterly distribution.
CASH SETTLEMENT; ROLLOVER OFFERINGS. The Seller may elect to
deliver cash, instead of shares of Class A Common Stock, on the Exchange Date
(whether or not extended or accelerated) under its Contract. If the Seller
chooses to deliver cash instead of shares of Class A Common Stock, 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 choose to deliver cash, instead of shares of
Class A Common Stock, in connection with a "Rollover Offering". A "Rollover
Offering" is a reoffering or refinancing of Securities effected by the Seller
not earlier than February __, 2003, 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
share of Class A Common Stock 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.
16
<PAGE> 21
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 of 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.
If the Seller chooses to carry out a Rollover Offering, it must give
notice of its election to all holders of the Securities, no less than 30 days
and no more than 90 days prior to the Exchange Date as then in effect.
DILUTION ADJUSTMENTS. The Exchange Rate will be adjusted if the
Company (i) pays a stock dividend or makes a distribution with respect to the
Class A Common Stock in shares of that stock, (ii) subdivides or splits its
outstanding shares of Class A Common Stock, (iii) combines its outstanding
shares of Class A Common Stock into a smaller number of shares, or (iv) issues
by reclassification of its shares of Class A Common Stock any shares of other
common stock of the Company. In any such event, the Exchange Rate will be
adjusted as follows: for each share of Class A Common Stock that would have been
deliverable under a Security upon exchange before the adjustment, the holder of
that Security will receive the number of shares of Class A Common Stock (or, in
the case of a reclassification referred to in clause (iv) above, the number of
shares of other common stock of the Company issued pursuant to that
reclassification), or the fraction of such shares, that a stockholder who held
one share of Class A Common Stock 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 Class A Common Stock entitling them to purchase shares of Class A Common
Stock at a price per share less than the Then-Current Market Price (as defined
below) of the Class A Common Stock (other than rights to purchase Class A Common
Stock pursuant to a plan for the reinvestment of dividends or interest), then
the Exchange Rate will be adjusted pursuant to the following formula:
A = ER x OS + AS
-------
OS + PS
where
ER = the Exchange Rate before the adjustment;
OS = the number of shares of Class A Common Stock outstanding
immediately before the time (determined as described below) the
adjustment is effected by reason of the issuance of those
rights or warrants;
AS = the number of additional shares of Class A Common Stock offered
for purchase pursuant to those rights or warrants; and
PS = the number of additional shares of Class A Common Stock that
the aggregate offering price of the total number of shares of
Class A Common Stock 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
shares of Class A Common Stock 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 shares of Class A
Common Stock actually delivered.
The "Then-Current Market Price" of the Class A Common Stock, for the
purpose of making any dilution adjustment, means the average Closing Price per
share of Class A Common Stock for the five Trading Days immediately before the
time that adjustment is effected (or, in the case of an
17
<PAGE> 22
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 shares of Class A
Common Stock 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 Class A Common Stock of evidences of its indebtedness or other
non-cash assets (excluding any stock dividends or distributions in shares of
Class A Common Stock described above and any Spin-Off Distributions (as defined
below)) or issues to all holders of Class A Common Stock 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:
A = ER x T
-----
T - V
where
ER = the Exchange Rate before the adjustment;
T = the Then-Current Market Price per share of Class A Common
Stock; 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 share of Class A Common Stock.
In addition, if the Company distributes cash (other than any
Permitted Dividend (as defined below), any cash distributed in consideration of
fractional shares of Class A Common Stock and any cash distributed in a
Reorganization Event (as defined below), by dividend or otherwise, to all
holders of Class A Common Stock or makes an Excess Purchase Payment (as defined
below), then the Exchange Rate will be adjusted pursuant to the following
formula:
A = ER x T
-----
T - D
where
ER = the Exchange Rate before the adjustment;
T = the Then-Current Market Price per share of Class A Common Stock
on the record date for that distribution; and
D = the amount of that distribution applicable to one share of
Class A Common Stock that would not be a Permitted Dividend
or, in the case of an Excess Purchase Payment, the aggregate
amount of that Excess Purchase Payment divided by the number
of outstanding shares of Class A Common Stock on that record
date.
For purposes of these adjustments,
(a) the term "Permitted Dividend" means any quarterly cash
dividend on the Class A Common Stock, other than a
quarterly cash dividend that exceeds the immediately
preceding quarterly cash dividend, and then only to the
extent that the per share amount of that dividend results
in an annualized dividend yield on the Class A Common
Stock above ___%; and
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<PAGE> 23
(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 share of Class A Common Stock acquired in a tender
offer or exchange offer by the Company, over (ii) the
Then-Current Market Price per share of Class A Common
Stock.
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 Class A Common Stock 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 Class A Common Stock 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 share
of Class A Common Stock 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.
- 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 Class A Common Stock
in the Reorganization Event (the "Merger Consideration") includes Marketable
Securities, the Seller may choose to
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<PAGE> 24
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
merger, 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:
AP = BREA x OC
---------
TV
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 share of Class A
Common Stock 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:
A = IP x MS
--
TV
where
IP = the Initial Price before the adjustment;
MS = the Value of a share of the Marketable Securities; and
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<PAGE> 25
TV = the Transaction Value.
Similarly, the Appreciation Threshold Price will be adjusted pursuant to the
following formula:
A = ATP x MS
--
TV
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:
A = ER x SC
--
MS
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
share of Class A Common Stock; 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 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 Class A Common Stock 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) any statutory exchange of
securities of the Company or any Company Successor with another corporation
(other than in connection with a merger or acquisition) or (D) any liquidation,
dissolution or winding up of the Company or any Company Successor.
"Transaction Value" means the sum of (i) for any cash received in the
Reorganization Event, the amount of such cash received per share of Class A
Common Stock, (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 share
of Class A Common Stock (as determined by a nationally recognized independent
21
<PAGE> 26
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 share of Class A Common Stock.
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 Nasdaq.
No dilution adjustments will be made for events, other than those
described above, such as offerings of Class A Common Stock (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 share of Class A Common
Stock delivered under the Contract, the number of Marketable Securities
distributed in respect of a single share of Class A Common Stock in that
Spin-Off Distribution. After the Company makes such a distribution, the
"Closing Price" of Class A Common Stock, 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 share of the Class A Common Stock 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 share of Class A Common Stock 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 Class A Common Stock 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 Class A Common Stock 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 between the Seller and the
Trust initially will be secured by a security interest in the maximum number of
shares of Class A Common Stock deliverable under the Contract (adjusted in
accordance with the dilution adjustment provisions of the Contract, described
above), pursuant to a Collateral Agreement among the Trust, the Seller and the
Collateral Agent.
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
shares of Class A Common Stock 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
February __, 2003. 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
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<PAGE> 27
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 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 shares of Class A Common Stock 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 shares of Class A Common Stock 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 pledged
shares of Marketable Securities at any time. Any U.S. Government obligations
pledged as substitute collateral for the Class A Common Stock, 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 Class A Common Stock or Marketable Securities at the time of each
valuation times the number of shares of Class A Common Stock 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 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 shares of Class A Common Stock 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 shares of Class A Common Stock 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 shares of Class A Common Stock (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 share of Class A Common Stock (or Shares of Marketable Securities)
times the difference between (x) the maximum number of shares of Class A Common
Stock (or shares of Marketable Securities) deliverable under the
23
<PAGE> 28
Contract at that time and (y) the number of shares of Class A Common Stock (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 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 shares of
Class A Common Stock (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 shares of Class A Common
Stock) 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 shares of Class A Common Stock 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. After any distribution in accordance with the previous sentence,
the number of shares of Class A Common Stock or Marketable Securities, as
applicable, deliverable to holders on the Exchange Date will be proportionately
reduced. In addition, if, by the Exchange Date, any substitute collateral has
not been replaced by Class A Common Stock (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 Class A Common Stock and Marketable Securities required to be
delivered under the Contract, in the form of any shares of Class A Common Stock
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 Class A Common Stock 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 Class A Common Stock 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 Class A Common Stock
before that period began.
THE SELLERS. The Seller is CNET Investments II, Inc., a Delaware
corporation. Please see the caption "Principal and Selling Stockholders" 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
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<PAGE> 29
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
a proportionate amount of those U.S. Treasury securities then held in the Trust
will be sold by the Administrator and the proceeds of that sale will be
distributed pro rata to the holders, together with the 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 under the Contract, it will
be required to deliver additional U.S. Treasury securities to the Trust to pay
the Seller's proportionate share of 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 U.S.
Treasury securities from the Trust on or before the Exchange Date, at a price
equal to the Seller's proportionate share of 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 __________ Securities will be issued (assuming that the
Underwriters do not exercise their over-allotment option). The Securities have
no preemptive, redemption or conversion rights. The Securities are fully paid
and nonassessable by the Trust. The only securities that the Trust is authorized
to issue are the Securities offered hereby and those sold to the initial holder
referred to below. See "Underwriting".
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 May __, 2000 to holders of record as of the preceding business
day. Distributions will then be made on February __, May __, August __ and
November __ 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 Class A Common Stock. See "Risk
Factors--Shareholder Rights".
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<PAGE> 30
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 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 ANNUAL INCLUSION OF
DISTRIBUTIONS DISTRIBUTIONS FROM ANNUAL RETURN ORIGINAL ISSUE
FROM U.S. TREASURY OF DISCOUNT
U.S. TREASURY SECURITIES CAPITAL PER IN INCOME PER
SECURITIES PER SECURITY SECURITY SECURITY
------------- ----------------- ------------- -------------------
<S> <C> <C> <C> <C>
Year
2000...............................
2001...............................
2002...............................
2003...............................
</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,
26
<PAGE> 31
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").
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 Class A Common Stock falls significantly or the financial condition of the
Company suffers (or if, after a
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<PAGE> 32
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.
LIMITED OPPORTUNITY FOR INCREASE IN VALUE; RISK OF DECREASE IN VALUE OF CLASS A
COMMON STOCK
Because the Contract allows the Seller to deliver less than a full
share of Class A Common Stock for each outstanding Security if the Average
Market Price is higher than the Initial Price, the Securities have more limited
appreciation potential than the Class A Common Stock. If the price of Class A
Common Stock 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 Class A Common Stock at the Exchange Date is below $______.
Holders will receive only ____% of any increase in the value of the Class A
Common Stock over $____. On the other hand, holders of Securities will bear all
of any decrease in the value of the Class A Common Stock. The value of the
Class A Common Stock 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 Class
A Common Stock if the Class A Common Stock appreciates 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
Class A Common Stock, distributions on the Securities may be lower than
the dividends paid on the Class A Common Stock.
DILUTION ADJUSTMENTS
The number of shares of Class A Common Stock 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 Class A Common Stock for cash or in connection with acquisitions,
that may adversely affect the price of the Class A Common Stock. 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 Class A Common Stock, or that major stockholders
will not sell any Class A Common Stock, 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 CLASS A COMMON STOCK 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.
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<PAGE> 33
The trading prices of the Securities in the secondary market will be
directly affected by the trading prices of the Class A Common Stock in the
secondary market. The trading prices of the Class A Common Stock 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 Class A Common Stock is 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, however, that because of the yield on the
Securities and the formula for determining the number of shares of Class A
Common Stock to be delivered on the Exchange Date, the Securities will tend to
trade at a premium to the market value of the Class A Common Stock if the Class
A Common Stock price falls and at a discount to the market value of the Class A
Common Stock if the Class A Common Stock price rises. There can, however, be no
assurance that the Securities will trade at a premium to the market value of the
Class A Common Stock.
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.
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 Class A Common Stock unless and until they actually receive Class
A Common Stock in exchange for the Securities. For example, holders of
Securities will not be entitled to vote the shares of Class A Common Stock 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 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
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<PAGE> 34
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 method based on daily compounding, that original issue discount
will be accrued on a straight-line basis.
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<PAGE> 35
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
Class A Common Stock 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 payments 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 under
the Contract, as having received a pro rata portion of the Class A Common Stock
or cash, Marketable Securities or a combination of Class A Common Stock,
Marketable Securities and cash delivered to the Trust.
DISTRIBUTION OF THE CLASS A COMMON STOCK. The delivery of Class A
Common Stock to the Trust pursuant to the Contract and the Trust's
distribution of Class A Common Stock to the holders will not be taxable to the
holders. Each holder's basis in its Class A Common Stock will be equal to its
basis in its pro rata portion of the Contract which are settled in Class A
Common Stock less the portion of that basis allocable to any fractional shares
of Class A Common Stock 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 shares of Class A Common Stock 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 Class A Common Stock will
begin on the day after it is acquired by the Trust.
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 settled for cash. 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 Contract. Any gain or loss will be long-term capital
gain or loss if the holder has held
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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 prepaid forward
contracts for the purchase of a variable number of shares of Class A Common
Stock.
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
Class A Common Stock 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.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement,
the Trust has agreed to sell the Securities to the Underwriters, and the
Underwriters have agreed to purchase the Securities from the Trust. 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 February __, 2000.
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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 _____________ 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 ____ days after the date of this prospectus, they will not offer, sell,
contract to sell or otherwise dispose of any Class A Common Stock or other
securities that are substantially similar to the Class A Common Stock,
including but not limited to any securities that are convertible or
exchangeable for, or that represent the right to receive, Class A Common Stock
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 Class A Common Stock 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. An application will be made to list the Securities on the
NYSE under the symbol "___". 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.
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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 Brobeck,
Phleger & Harrison, 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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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Securityholders of
NBCi 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 NBCi Automatic
Common Exchange Security Trust (the "Trust") as of February __, 2000, in
conformity with generally accepted accounting principles in the United States.
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 in the United States 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.
PricewaterhouseCoopers
New York, New York
February __, 2000
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NBCi
AUTOMATIC COMMON EXCHANGE SECURITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
February __, 2000
ASSETS
<TABLE>
<S> <C>
Cash....................................................... $ 100
------------
Total assets............................................... $ 100
============
LIABILITIES
........................................................... $ 0
------------
NET ASSETS
Balance applicable to 1 Security outstanding............... $ 100
------------
Net asset value per Security............................... $ 100
============
- -------------------
</TABLE>
(1) NBCi Automatic Common Exchange Security Trust (the
"Trust") was established on May 3, 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 CNET Investments II, Inc. (the "Seller") relating to
the Class A Common Stock of NBC Internet, Inc. 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 and ChaseMellon Shareholder Services,
L.L.C., will act as paying agent with respect to the
Securities and will also serve as custodian, 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 January __, 2000
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.
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GLOSSARY
"Administration Agreement" means the Administration Agreement, dated
as of February __, 2000, 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 share of Class A Common Stock or
Marketable Securities on any date means the average Closing Price per share of
Class A Common Stock 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 Class A Common Stock 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 Class A Common Stock or
Marketable Securities may be determined for any of such Trading Days, the
Average Market Price shall be the Closing Price for the Class A Common Stock or
Marketable Securities for the most recent Trading Day prior to such 20 Trading
Days for which a Closing Price for the Class A Common Stock 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 share of Class A Common Stock
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 in such
Reorganization Event, multiplied by the maximum number of shares of Class A
Common Stock 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.
"Class A Common Stock" means the Class A Common Stock, par value
$0.01 per share, of the Company.
"Closing Price" of any common equity security (including the Class A
Common Stock 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 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
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<PAGE> 42
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 shares of Class A Common Stock or Marketable Securities
deliverable under the Contract, as described under "-The Contract-Dilution
Adjustments", 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 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 Agreements.
"Collateral Agreement" means the Collateral Agreement, dated as of
February __, 2000, 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 shares of Class A Common Stock 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 shares of Class A Common Stock (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 share of Class A Common Stock (or shares of
Marketable Securities, as the case may be) times the difference between (x) the
maximum number of shares of Class A Common Stock (or shares of Marketable
Securities) covered by the Contract at that time and (y) the number of shares
of Class A Common Stock (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 NBC Internet, Inc., a Delaware corporation.
"Company Prospectus" means the prospectus of the Company, dated
February __, 2000 (attached as pages A-1 through A-__ hereof), which
describes the Company and the Class A Common Stock.
"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 Class A Common Stock.
"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
February __, 2000, 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.
38
<PAGE> 43
"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 the Company with respect to
one share of Class A Common Stock acquired in a tender offer or exchange offer
by the Company, over (ii) the Then-Current Market Price per share of Class A
Common Stock.
"Exchange Date" means February __, 2003, subject to extension and
acceleration by the Seller under their respective Contract.
"Exchange Rate" means the rate of exchange of Class A Common Stock
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.____ shares of Class A Common Stock.
(iii) If the Average Market Price is less than the Initial
Price, the Exchange Rate will be one share of Class A
Common Stock.
"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 any 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.
"Nasdaq" means The NASDAQ Market-National Market.
"NYSE" means the New York Stock Exchange, Inc.
"Participants" means participants of DTC.
39
<PAGE> 44
"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 February __, 2000, 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 Class A Common Stock, other than a quarterly cash dividend that exceeds the
immediately preceding quarterly cash dividend, and then only to the extent that
the per share amount of such dividend results in an annualized dividend yield on
the Class A Common Stock in excess of ___%.
"Pricing Date" means the date that a Rollover Offering is priced.
"Reorganization Event" means (A) any consolidation 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 Class A Common Stock 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) any statutory
exchange of securities of the Company or any Company Successor with another
corporation (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 February __, 2003, 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 CNET Investments II, Inc., a Delaware corporation.
"Spin-Off Distribution" means a distribution by the Company to
holders of Class A Common Stock of Marketable Securities issued by an issuer
other than the Company.
"Then-Current Market Price" of the Class A Common Stock, for the
purpose of applying any adjustment described in "Investment Objective and
Policies-The Contract-Dilution Adjustments", means the average Closing
Price per share of Class A Common Stock 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 Class A Common Stock 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 Class A Common Stock may
be determined for any of such Trading Days, the Then-Current Market Price shall
be the Closing Price for the Class A Common Stock for the most recent Trading
Day prior to five Trading Days for which a Closing Price for the Class A Common
Stock 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 shares of Class A Common Stock 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
40
<PAGE> 45
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 share of Class A Common Stock; (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 share of Class A Common Stock 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 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 share
of Class A Common Stock; provided that if no Closing Price for such Marketable
Securities may be determined for one or more (but not all) of such Trading Days,
such Trading 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 NBCi Automatic Common Exchange Security Trust.
"Trust Agreement" means the trust agreement dated as of May 3, 1999
pursuant to which the Trust was formed, as amended and restated as of
February __, 2000.
"Trustees" means the three trustees who will internally manage the
Trust.
"Underwriters" means Goldman, Sachs & Co., 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 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; 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".
41
<PAGE> 46
================================================================================
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...................................................................
The Trust............................................................................
Use of Proceeds......................................................................
Investment Objective and Policies....................................................
Description of Securities............................................................
Risk Factors.........................................................................
Certain Federal Income Tax Considerations............................................
Underwriting.........................................................................
Validity of Securities...............................................................
Experts..............................................................................
Further Information..................................................................
Report of Independent Accountants....................................................
Statement of Assets and Liabilities..................................................
Glossary.............................................................................
Appendix A: Prospectus of NBC Internet, Inc.......................................... A-1
</TABLE>
-----------------------
Through and including ________, 2000 (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.
Shares
NBCi Automatic
Common Exchange
Security Trust
$____ Trust Automatic Common
Exchange Securities
(TRACES(TM)/(SM))
----------
PROSPECTUS
----------
Goldman, Sachs & Co.
================================================================================
<PAGE> 47
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<S> <C> <C>
(a) Financial Statements
Part A - Report of Independent Accountants.
Statement of Assets and Liabilities.
Part B - None.
(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 Form of Subscription Agreement
2.r Financial Data Schedule*
2.s Powers of Attorney (included on Signature Page)
</TABLE>
+ Filed previously.
- -----------------------
* To be filed by amendment.
ITEM 25. MARKETING ARRANGEMENTS
See the Form of Underwriting Agreement to be filed as Exhibit 2.h
to this Registration Statement.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be
incurred in connection with the offering described in this Registration
Statement:
<TABLE>
<S> <C>
Registration fees......................................................... $
New York Stock Exchange listing fee.......................................
Printing (other than certificates)........................................
Fees and expenses of qualification under state securities laws
(excluding fees of counsel).............................................
Accounting fees and expenses..............................................
Legal fees and expenses...................................................
NASD fees.................................................................
Miscellaneous.............................................................
Total..................................................................... $
</TABLE>
C-1
<PAGE> 48
ITEM 27. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Before May 3, 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. 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 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, 450
West 33rd Street, 10th Floor, New York, New York 10001, the Registrant's
administrator.
C-2
<PAGE> 49
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> 50
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 No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of New York, State of New
York, on the 13th day of January, 2000.
NBCi AUTOMATIC COMMON
EXCHANGE SECURITY TRUST
By: /s/ Rizwan Jamal
-------------------------------
(Rizwan Jamal
as Attorney-in-Fact for
Paul S. Efron
Sole Trustee)
KNOW ALL PERSONS BY THESE PRESENTS, that Paul S. Efron, whose
signature appears below makes, constitutes and appoints Rizwan Jamal, Michael E.
Kaine, Lisa Kijewski and Matthew D. Leavitt, and each of them, as his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for them and in their name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and to sign any registration statement for the
same offering covered by the registration statement that is to be effective upon
filing pursuant to Rule 462(b) promulated under the Securities Act of 1933 and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of the them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed below by the
following person, in the capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> * <C> <C>
- ------------------------------
Paul S. Efron Sole Trustee January 13, 2000
* By: /s/ Rizwan Jamal
- ------------------------------
(Rizwan Jamal as
Attorney-in-Fact for
the person indicated)
</TABLE>
<PAGE> 51
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 Form of Subscription Agreement
2.r Financial Data Schedule*
2.s Powers of Attorney (included on Signature Page)
</TABLE>
+ Filed previously.
- ----------------
* To be filed by amendment.
<PAGE> 1
Exhibit 2.a.(ii)
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
CONSTITUTING
NBCi AUTOMATIC COMMON EXCHANGE SECURITY TRUST
--------------------------------
Dated as of February __, 2000
--------------------------------
================================================================================
<PAGE> 2
Table of Contents
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS; INTERPRETATION
<S> <C> <C>
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.................................................................15
ARTICLE IV
REDEMPTION
Section 4.1. Redemption............................................................................15
ARTICLE V
ISSUANCE OF CERTIFICATES; REGISTRY; TRANSFER OF SECURITIES
Section 5.1. Form of Certificate...................................................................15
Section 5.2. Transfer of Securities; Issuance, Transfer and Interchange
of Certificates....................................................................16
Section 5.3. Replacement of Certificates...........................................................17
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE VI
EXECUTION OF THE CONTRACT
<S> <C> <C>
Section 6.1. Execution of the Contract.............................................................18
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..........................................................................20
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Meetings of Holders...................................................................20
Section 8.2. Books and Records; Reports............................................................21
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
</TABLE>
Exhibits
Exhibit A - Form of Certificate Evidencing the Securities
Exhibit B - Form of Collateral Agreement
Exhibit C - Form of Contract
Exhibit D - Form of Expense Agreement
Exhibit E - Form of Indemnity Agreement
<PAGE> 4
AMENDED AND RESTATED TRUST AGREEMENT
AMENDED AND RESTATED TRUST AGREEMENT, dated as of February __, 2000,
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 NBCi 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 May 3, 1999 (the "Original
Agreement"), creating Tenth 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
NBCi 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.
"Administration Agreement" means the Administration
Agreement, dated as of February __, 2000, between the Administrator
and the Trust, and any substitute agreement therefor entered into
pursuant to Section 2.2(a).
<PAGE> 5
"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.
"Class A Common Stock" means the Class A Common Stock, par
value $0.0001 per share, of the Company.
"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 February __, 2000, 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 NBC Internet, Inc., a Delaware corporation.
"Contract" means the Purchase Agreement, dated as of February
__, 2000, entered into by the Trust with the Seller, substantially in
the form of Exhibit C.
"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).
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"Custodian Agreement" means the Custodian Agreement, dated as
of February __, 2000, 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 February __, May _, August __
and November __ of each year, commencing May __, 2000, 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 February __, 2000, 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 February __, 2000, among Seller, The Chase Manhattan Bank,
as Service Provider, and the Trust substantially in the form of
Exhibit E.
"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.
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"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.
"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 February __, 2000, 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.
"Record Date" means the Business Day preceding each
Distribution Date.
"Registration Statement" means the Registration Statement on
Form N-2 (Registration Nos. 333-77563 and 811-09323) 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.
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"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 CNET Investments II, Inc., a Delaware
corporation.
"Shares" means Class A Common Stock 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 Class A Common Stock.
"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 Class A Common Stock 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 2.3(e) of the Contract.
"Trust" has the meaning specified in the preamble to this
Agreement.
"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 February __, 2000, as described in the Prospectus.
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"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 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 5 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.
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(c) Upon the execution of this Agreement, the name of the Trust shall
be changed to NBCi 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 (or, in the case of the initial Paying Agent, a
limited liability company affiliate with such a commercial bank or
trust company), 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;
(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 ______ 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;
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(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 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 as close as practicable to (but in
no event 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
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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 Class A Common Stock 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 a
dividend or distribution to all holders of Class A Common Stock of
evidences of its indebtedness or other non-cash assets or the issuance
of Class A Common Stock 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. To apply for listing of
the Securities on the New York Stock Exchange, Inc. 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;
(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
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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 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
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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;
(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 Class A Common Stock
and Marketable Securities to the Trust,
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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 such 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 Business Day following the
date on which Seller or the Collateral Agent delivers Class A
Common Stock and Marketable Securities to the Trust, 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 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 Class A Common Stock 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
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(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 Class A Common
Stock 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:
(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.
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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 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
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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 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.
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(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 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 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
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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 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
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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 $10,800, in respect of its annual fee and anticipated out-of-pocket
expenses. In addition, the Managing Trustee shall receive an additional
one-time, up-front fee of $3,600 for serving in such capacity. The Trustees
will not receive any pension or retirement benefits. In the event of the
resignation or removal of a Trustee, such Trustee shall remit to the Trust the
portion of its fee ratable for the period from the day of such resignation or
removal through the Exchange Date.
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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.
(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
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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 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.
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(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 governmental agency exercising similar
authority; or (iii) to make such other provisions in regard to matters or
questions arising hereunder or thereunder as shall not materially adversely
affect the interests of the Holders (as determined in good faith by the
Trustees, who may rely on an opinion of counsel).
(b) This 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 all Securities then outstanding, if such
amendment would effect a change in the voting requirements set forth in Section
8.1 or this Section 8.5, 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.
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(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
accountants 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 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 8.6 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
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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 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: Pledged Collateral Control Services
and to each Trustee at the address specified in clause (iii) of this paragraph;
(iii) notices to the Trustees shall be directed to the Trustees at 850 Library
Avenue, Suite 204, Newark Delaware 19715, Telecopier No. (302) 738-7210,
Attention: Donald J. Puglisi or the applicable Trustee and (iv) 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.
(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 (with
electronic confirmation of transmission or verbal confirmation of receipt); 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.
-24-
<PAGE> 28
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.
-25-
<PAGE> 29
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> 30
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
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PAR ZERO-COUPON STRIP RATE PRICE COST CUSIP
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
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</TABLE>
SETTLEMENT DATE:
<PAGE> 31
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
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PAR ZERO-COUPON STRIP RATE PRICE COST CUSIP
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
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==============================================================================================================
</TABLE>
SETTLEMENT DATE:
<PAGE> 32
Exhibit A
Form of Certificate Evidencing the Securities
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to NBCi 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
NBCi 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 NBCi AUTOMATIC COMMON
EXCHANGE SECURITY TRUST CONSTITUTING FRACTIONAL UNDIVIDED INTERESTS IN NBCi
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.
THIS CERTIFICATE IS NOT VALID UNLESS MANUALLY COUNTERSIGNED BY THE
PAYING AGENT.
<PAGE> 33
WITNESS THE FACSIMILE SIGNATURE OF THE MANAGING TRUSTEE.
NBCi 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.j.
================================================================================
CUSTODIAN AGREEMENT
Between
THE CHASE MANHATTAN BANK,
As Custodian,
--------------------------
and
NBCi AUTOMATIC COMMON EXCHANGE SECURITY TRUST
--------------------------
Dated as of February __, 2000
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I DEFINITIONS; INTERPRETATION
<S> <C> <C>
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
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
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
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
</TABLE>
-ii-
<PAGE> 4
CUSTODIAN AGREEMENT
CUSTODIAN AGREEMENT, dated as of February __, 2000, between The Chase
Manhattan Bank, a New York banking corporation (the "Custodian"), and NBCi
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 February __, 2000 (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 NBCi Internet, Inc. (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.
"Company" has the meaning specified in the recitals to this Agreement.
<PAGE> 5
"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 February __, 2000, 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 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
-2-
<PAGE> 6
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
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
-3-
<PAGE> 7
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.
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.
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.
-4-
<PAGE> 8
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 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
-5-
<PAGE> 9
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.
Section 5.3. Notices.
-6-
<PAGE> 10
(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: Pledged Asset Control Services; and (ii) notices to the
Trust or the Trustees shall be directed to the Trustees at 850 Library Avenue,
Suite 204, Newark, Delaware 19711, 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 (with electronic
confirmation of transmission or verbal confirmation of receipt); 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.
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
-7-
<PAGE> 11
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:
NBCi 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)
================================================================================
ADMINISTRATION AGREEMENT
Between
THE CHASE MANHATTAN BANK,
As Administrator,
and
NBCi AUTOMATIC COMMON EXCHANGE SECURITY TRUST
-----------------------------
Dated as of February __, 2000
-----------------------------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS; INTERPRETATION
<S> <C> <C>
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...........................................................................4
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. ....................................................................................5
Section 3.3. Compensation................................................................................5
Section 3.4. Indemnification.............................................................................5
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.....................................................7
Section 4.5. Acceptance by Successor.....................................................................7
ARTICLE V
RECORDS AND REPORTS
Section 5.1. Books and Records; Inspection and Copying...................................................7
Section 5.2. Access to Information.......................................................................7
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE VI
MISCELLANEOUS
<S> <C> <C>
Section 6.1. Term of Contract............................................................................7
Section 6.2. No Assumption of Liability..................................................................7
Section 6.3. Notices.....................................................................................8
Section 6.4. Governing Law; Severability.................................................................8
Section 6.5. Amendments; Waivers.........................................................................8
Section 6.6. Non-Assignability...........................................................................8
Section 6.7. Provisions of Law to Control................................................................8
Section 6.8. No Third Party Rights; Successors and Assigns...............................................9
Section 6.9. Counterparts................................................................................9
</TABLE>
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<PAGE> 4
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, dated as of February __, 2000, between The
Chase Manhattan Bank, a New York banking corporation (the "Administrator"), and
NBCi 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 February __, 2000 (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 NBC
Internet, Inc. (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.
"Agreement" means this Administration 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.
"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 February __, 2000, 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.
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
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<PAGE> 6
(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
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;
-3-
<PAGE> 7
(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 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.
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<PAGE> 8
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.
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
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:
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<PAGE> 9
(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, (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.
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<PAGE> 10
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.
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.
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<PAGE> 11
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 850 Library Avenue, Suite 204, Newark, Delaware 19711, Telecopier:
(302) 738-7210; and (iii) notices to Seller shall be directed to it at CNET
Investments, Inc., 150 Chestnut Street, San Francisco, California 94111,
Telecopier No. (415) 395-9330, Attention: Chief Executive Officer.
(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 (with electronic confirmation of transmission or verbal
confirmation of receipt); 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 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.
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<PAGE> 12
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.
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<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:
NBCi 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)
================================================================================
PAYING AGENT AGREEMENT
Between
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
As Paying Agent,
and
NBCi AUTOMATIC COMMON EXCHANGE SECURITY TRUST
------------------------------
Dated as of February __, 2000
------------------------------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS; INTERPRETATION
<S> <C>
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.............................................3
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..........................................................5
Section 5.4. Disclaimer......................................................6
Section 5.5. Compensation....................................................6
Section 5.6. Indemnification.................................................6
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE VI
RESIGNATION AND REMOVAL OF THE PAYING AGENT
<S> <C>
Section 6.1. Removal.........................................................6
Section 6.2. Resignation.....................................................7
Section 6.3. Appointment of Successor........................................7
Section 6.4. Effectiveness of Resignation or Removal.........................7
Section 6.5. Acceptance by Successor.........................................8
Section 6.6. Survival........................................................8
ARTICLE VII
MISCELLANEOUS
Section 7.1. Term of Agreement...............................................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....................................................9
</TABLE>
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<PAGE> 4
PAYING AGENT AGREEMENT
PAYING AGENT AGREEMENT, dated as of February __, 2000, between
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability company
(the "Paying Agent"), and NBCi 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 February __, 2000 (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 NBC Internet,
Inc. (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.
"Company" has the meaning specified in the recitals to this
Agreement.
<PAGE> 5
"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 February __, 2000, 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 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.
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<PAGE> 6
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.
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.
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.
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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 (i) be unlawful, or (ii) expose it to
liability, unless the Trustees shall have offered indemnification satisfactory
to the Paying Agent.
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:
(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;
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(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 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, association or limited
liability company 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,
association or limited liability company 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, association or limited liability
company 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.
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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. In no case will the Paying Agent be liable
for special, indirect, incidental or consequential loss or damages of any kind
whatsoever (including but not limited to lost profits), even if the Paying Agent
has been advised of the possibility of such damages.
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:
(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
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(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.
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, and the Trust shall pay all
fees and expenses, including but not limited to the cost of legal counsel,
reasonably incurred by the Paying Agent in applying to such court 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
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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.
Section 6.6. Survival. The Trust's representations, warranties,
covenants and obligations to the Paying Agent under Article IV and Sections 5.5
and 5.6 shall survive the termination of this Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Term of Agreement. 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 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 850
Library Avenue, Suite 204, Newark, Delaware 19711, 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:
Pledged Asset Control 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
(with electronic confirmation of transmission or verbal confirmation of
receipt); 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
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<PAGE> 12
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. The Trustees shall notify the Paying Agent of any
change in the Trust Agreement prior to the effective date of any such change.
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 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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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:
NBCi 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)
================================================================================
PURCHASE AGREEMENT
Between
CNET INVESTMENTS II, INC.
As Seller
and
NBCi AUTOMATIC COMMON EXCHANGE SECURITY TRUST,
As Purchaser
----------------------------------------------
Dated as of February __, 2000
----------------------------------------------
================================================================================
<PAGE> 2
Table of Contents
<TABLE>
<CAPTION>
Page
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ARTICLE I
DEFINITIONS; INTERPRETATION
<S> <C> <C>
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..........................................12
Section 4.2. Condition to Delivery of Additional Purchase Price....................................12
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; REORGANIZATION EVENTS
Section 6.1. Dilution Adjustments..................................................................14
Section 6.2. Adjustment for Consolidation, Merger or Other Reorganization Event....................17
Section 6.3. Spin-Off Distributions................................................................18
</TABLE>
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<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 6.4. Adjustments with Respect to Marketable Securities.....................................19
ARTICLE VII
ACCELERATION UPON AN EVENT OF DEFAULT
Section 7.1. Events of Default.....................................................................19
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Adjustments of Exchange Rate; Selection of Independent
Investment Banking Firm......................................................20
Section 8.2. No Assumption of Liability............................................................20
Section 8.3. Notices...............................................................................20
Section 8.4. Governing Law; Severability...........................................................21
Section 8.5. Entire Agreement......................................................................21
Section 8.6. Amendments; Waivers...................................................................21
Section 8.7. Non-Assignability.....................................................................21
Section 8.8. No Third Party Rights; Successors and Assigns.........................................21
Section 8.9. Counterparts..........................................................................21
</TABLE>
Exhibits
Exhibit A - Form of Certificate for Extension of Exchange Date
-ii-
<PAGE> 4
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of February __, 2000, between CNET
Investments II, Inc., a Delaware corporation ("Seller"), and NBCi 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 February __, 2000 (such trust and the trustees thereof acting in their
capacity as such being referred to in this Agreement as "Purchaser").
WITNESSETH:
WHEREAS, Seller owns Class A common stock, par value Pound Sterling
0.0001 per share (the "Class A Common Stock"), of NBC Internet, Inc., a Delaware
corporation (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 ______________ $____ 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 Class A Common Stock (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 February __, 2000 (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
Class A Common Stock 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 February __, 2000 (the "Underwriting Agreement"), among Purchaser,
Seller, the Company, and Goldman Sachs & Co., as representatives of the several
underwriters named in such agreement (the "Underwriters"), to issue and sell to
the Underwriters an aggregate of ______________ Securities (the "Firm
Securities") and, at the Underwriters' option, up to ____________ additional
Securities (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 February
__, 2000, 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 Class A Common Stock 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 the Class A Common Stock or
Marketable Securities may be
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<PAGE> 6
determined for any of such Trading Days, the Average Market Price
shall be the Closing Price for the Class A Common Stock or Marketable
Securities for the most recent Trading Day prior to such 20 Trading
Days for which a Closing Price for the Class A Common Stock 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).
"Class A Common Stock" has the meaning specified in the
recitals to this Agreement.
"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 Class A
Common Stock 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
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<PAGE> 7
such 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 February __,
2000, 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 Class A Common Stock.
"Exchange Date" means February __, 2003, 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).
"Firm Purchase Price" has the meaning specified in Section
2.2(a).
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<PAGE> 8
"Firm Securities" has the meaning specified in the recitals
to this Agreement.
"Firm Share Base Amount" means ___________ Class A Common
Stock.
"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.
"Permitted Dividend" means any quarterly cash dividend in
respect of the Class A Common Stock, except to the extent that the per
share amount of such dividend results in an annualized dividend yield
on the Class A Common Stock 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 February __, 2003 and not later
than April __, 2003 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 Seller.
"Second Time of Delivery" means the Second Time of Delivery
specified pursuant to Section 2 of the Underwriting Agreement.
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"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 Class A Common Stock of Marketable Securities issued by
an issuer other than the Company.
"Then-Current Market Price" of the Class A Common Stock 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 Class A Common
Stock 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 Class A
Common Stock may be determined for any of such Trading Days, the
Then-Current Market Price shall be the Closing Price for the Class A
Common Stock for the most recent Trading Day prior to such 5 Trading
Days for which a Closing Price for the Class A Common Stock 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 Class A Common Stock 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 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
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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 February __, 2000, constituting NBCi 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 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".
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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
Class A Common Stock (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 Class A Common Stock (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 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
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<PAGE> 12
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, _________; 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 Morrison &
Foerster LLP, 425 Market Street, San Francisco, California 94105, 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 Morrison &
Foerster LLP, 425 Market Street, San Francisco, California 94105, 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 by delivery by the Collateral Agent to the
Custodian, for the account of Purchaser, of Class A Common Stock then held by
the Collateral Agent as collateral under the Collateral Agreement, in an amount
equal to the number of Contract Shares, rounded down to the nearest whole
number. 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 Class A Common Stock 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 Class A Common Stock or
Marketable Securities so sold and
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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). Any such notice of cash
settlement shall be irrevocable, except that a notice electing cash settlement
in connection with a Rollover Offering may be conditioned on consummation of
such 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 in Connection with Rollover Offering.
If Seller proposes to effect a Rollover Offering, Seller may, at its option, by
notice to Purchaser not earlier than December __, 2002, and not later than
January __, 2003, (which notice shall state Seller's intention to effect such
Rollover Offering), elect to extend the Exchange Date to May __, 2003, 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
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one Business Day before May __, 2003, cash in an amount equal to not
less than the product of (1) $________ 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 January
__, 2032.
(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), if
Seller has duly elected cash settlement, to be effected in connection with a
Rollover Offering, pursuant to Section 2(d), then Seller may, at its option in
connection with the consummation of such Rollover Offering, accelerate the
Exchange Date to any date on or after February __, 2003 and before April __,
2003, by notice to Purchaser not later than 10:00 a.m. on the date to which the
Exchange Date is accelerated, and the 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 distributions on each Security
(computed on the basis of a quarterly distribution of $_________ 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
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<PAGE> 15
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.
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.
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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 Class A Common Stock for its own account during the 60
days prior to the Exchange Date.
(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.
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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 reasonably 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 Class A Common Stock in the form of Class A Common Stock;
(ii) subdivide or split the outstanding Class A Common Stock
into a greater number of Class A Common Stock;
(iii) combine the outstanding Class A Common Stock into a
smaller number of shares; or
(iv) issue by reclassification of Class A Common Stock any
other Class A Common Stock of the Company;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of Class A Common Stock (or in the case of a
reclassification referred to in clause (iv) above, the number of other Class A
common stock 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 Class A Common Stock entitling them to
subscribe for or
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purchase Class A Common Stock at a price per share less than the Then-Current
Market Price of the Class A Common Stock (other than rights to purchase Class A
Common Stock pursuant to a plan for the reinvestment of dividends or interest),
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to a fraction, (i) the numerator of which shall be the number
of Class A Common Stock outstanding immediately prior to the time the
adjustment resulting from the issuance of such rights or warrants is effected,
plus the number of additional Class A Common Stock offered for subscription or
purchase pursuant to such rights or warrants, and (ii) the denominator of which
shall be the number of Class A Common Stock outstanding immediately prior to
the time such adjustment is effected plus the number of additional Class A
Common Stock that the aggregate offering price of the total number of Class A
Common Stock so offered for subscription or purchase pursuant to such rights or
warrants would purchase at the Then-Current Market Price of the Class A Common
Stock, which shall be determined by multiplying the total number of shares so
offered for subscription or purchase by the exercise price of such rights or
warrants and dividing the product so obtained by such Then-Current Market
Price. To the extent that, after the expiration of such rights or warrants, any
of the Class A Common Stock 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 Class A
Common Stock 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 Class A Common Stock, 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 Spin-Off Distributions)
or shall issue to all holders of Class A Common Stock 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 Class A Common Stock and any cash distributed in
a Reorganization Event), by dividend or otherwise, to all holders of Class A
Common Stock, 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 Class A Common Stock on
such record date, and the denominator of which shall be such Then-
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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 Class A Common Stock 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.
(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 Class A Common Stock
entitled to receive such dividend, distribution or issuance or, if the
announcement of any such dividend, distribution or issuance is after
such record date, at the time such dividend, distribution or issuance
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
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<PAGE> 20
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.
Section 6.2. Adjustment for Consolidation, Merger or Other
Reorganization Event.
(a) In the event of (i) 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
consolidation, amalgamation or merger in which the Company is the continuing
corporation and in which the Class A Common Stock outstanding immediately prior
to the consolidation, amalgamation or merger 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
consolidation, amalgamation or merger 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,
0.8403 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
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<PAGE> 21
consideration received by the holders of the Class A Common Stock 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 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 Class A Common Stock 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 Class A Common Stock
comprising the Contract Shares and the provisions of Section 2.3(c) shall apply
mutatis mutandis to such Marketable Securities;
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<PAGE> 22
and (iii) the "Closing Price" of the Class A Common Stock 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 Class A Common Stock 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.
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;
-19-
<PAGE> 23
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 pre-estimate of loss and not a penalty.
Such amount is payable for the loss of bargain and Purchaser will not be
entitled to recover additional damages as a consequence of any loss resulting
from an Event of Default.
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 g Firm 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: Pledge Asset Control Services; and (ii) notices to
Seller shall be directed to it at CNET Investments II, Inc., 150 Chestnut
Street, San Francisco, California 94111, Telecopier No. (415) 395-9330,
Attention: Sharon Le Duy.
(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 (with
electronic confirmation of transmission or verbal confirmation of receipt); 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
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<PAGE> 24
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.
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.
<PAGE> 25
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:
CNET INVESTMENTS II, INC.
By:
----------------------------------------
Name:
Title:
PURCHASER:
NBCi 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
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<PAGE> 26
Exhibit A
to
Purchase Agreement
CERTIFICATE FOR EXTENSION OF EXCHANGE DATE
The undersigned, CNET Investments II, Inc. ("Seller"), hereby
certifies, pursuant to Section 2.3(e) of the Purchase Agreement, dated as of
February __, 2000 (the "Contract"), between Seller and NBCi 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 May ___, 2003, cash in an
amount equal to not less than the product of (1) $________ 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.
IN WITNESS WHEREOF, the undersigned has executed this certificate this
____ day of____________, _____.
CNET INVESTMENTS II, INC.
By:
--------------------------------------
Name:
Title:
A-1
<PAGE> 1
EXHIBIT 2.k.(iv)
================================================================================
COLLATERAL AGREEMENT
Among
CNET INVESTMENTS II, INC.
AS PLEDGOR,
THE CHASE MANHATTAN BANK,
As Collateral Agent
and
NBCi AUTOMATIC COMMON EXCHANGE SECURITY TRUST
-----------------------------
Dated as of February __, 2000
-----------------------------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS; INTERPRETATION
<S> <C> <C>
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........................................10
Section 5.3. Additional Collateral.............................................11
Section 5.4. Delivery of Collateral............................................11
Section 5.5. Insufficiency Determination.......................................12
Section 5.6. Release of Excess Collateral......................................14
Section 5.7. Delivery of Contract Consideration................................14
Section 5.8. Investment of Cash Collateral.....................................14
ARTICLE VI
INCOME AND VOTING RIGHTS ON COLLATERAL
Section 6.1. Income on Collateral..............................................14
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Section 6.2. Voting of Collateral..............................................15
ARTICLE VII
REMEDIES UPON EVENTS OF DEFAULT
Section 7.1. Rights of Secured Party...........................................15
Section 7.2. Power of Attorney.................................................16
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............................................................19
Section 8.3. Resignation.......................................................20
Section 8.4. Removal...........................................................20
Section 8.5. Effectiveness of Resignation or Removal...........................20
Section 8.6. Appointment of Successor..........................................20
Section 8.7. 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...........................................................21
Section 9.4. Governing Law; Severability.......................................22
Section 9.5. Entire Agreement..................................................22
Section 9.6. Amendments; Waivers...............................................22
Section 9.7. Non-Assignability.................................................22
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
</TABLE>
-ii-
<PAGE> 4
COLLATERAL AGREEMENT
COLLATERAL AGREEMENT, dated as of February __, 2000, among CNET Investments
II, Inc., a Delaware corporation ("Pledgor"), The Chase Manhattan Bank, a New
York banking corporation, as collateral agent hereunder for the benefit of NBCi
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 February __, 2000 (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 February __, 2000
(the "Contract"), between Pledgor and Purchaser, Pledgor has agreed to sell and
Purchaser has agreed to purchase Class A common stock, par value $0.0001 per
share (the "Class A Common Stock"), of NBC Internet, Inc., a Delaware
corporation (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.
"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
<PAGE> 5
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.
"Class A Common Stock" has the meaning specified in the recitals to
this Agreement.
"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 Class A Common Stock 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 Class A
Common Stock 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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<PAGE> 6
"Collateral Requirement" means, as of any date and with respect to:
(i) any Class A Common Stock, 100%; (ii) any Marketable Securities, 100%;
(iii) any U.S. Government Securities pledged in respect of Cash Delivery
Obligations, 105%; and (iv) any other U.S. Government Securities, 150%,
provided that upon and after any failure to cure an Insufficiency
Determination by 4:00 p.m. New York City time on the 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, Class A Common Stock 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 Class A Common Stock 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.
"Exchange Date" has the meaning specified in the Contract.
-3-
<PAGE> 7
"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 Class A
Common Stock (except as otherwise provided in Section 5.5(b)), the Closing
Price of the Class A Common Stock on such date multiplied by the number of
such Class A Common Stock; (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 Class A Common Stock, 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 Class A
Common Stock shall have been multiplied on or prior to 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
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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.
"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 Class A
Common Stock 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, 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).
"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.
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"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 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.
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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.
(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 __________ Class A
Common Stock, 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 Class A Common Stock 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 Class A Common
Stock 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 Class A Common Stock, 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 Class A Common Stock 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 Class A Common Stock to an account of the
Collateral Agent or to an account (other than an
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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, 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.
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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.
(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 Class A Common Stock at least equal
to the number of Class A Common Stock (and, if a Spin-Off Distribution has
occurred, the number
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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.
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 Class A Common Stock 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
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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.
(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 Class A Common Stock. In the case of Collateral consisting
of Class A Common Stock, by either (1) delivery to the Collateral Agent of
one or more certificates representing such Class A Common Stock, 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 Class A Common Stock are not held in certificated form but are held
in book-entry form by The Depository Trust Company or any other comparable
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depositary, transfer of such Class A Common Stock 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 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
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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 Class A Common Stock 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 Class A Common Stock or, after a Reorganization Event or
Spin-Off Distribution, Marketable Securities of the applicable type,
in an amount sufficient to cause the aggregate Pledge Value of the
Collateral to be at least equal to the Pledge Value Requirement.
Notwithstanding the foregoing, the Collateral Agent shall discontinue sales and
purchases pursuant to the preceding clauses (i) and (ii), respectively, if at
any time a Collateral Event of Default shall have occurred and be continuing.
The Collateral Agent shall determine the Market Value and the Pledge Value of
the Collateral after each purchase of Class A Common Stock 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 Class A Common Stock 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 Class A Common
Stock 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 Class A Common Stock, the most
recent available Closing Price.
(c) Collateral sold and Class A Common Stock 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,
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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 Class A Common Stock and, if a Spin-Off Distribution has
occurred, Marketable Securities then held by it hereunder the number of Class A
Common Stock 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 Class A Common Stock,
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
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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
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 Class A Common Stock 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 Class A Common Stock 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
-15-
<PAGE> 19
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 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.
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<PAGE> 20
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:
first, to the payment to Purchaser of an amount equal to: (A) the
aggregate Market Value of a number of Class A Common Stock and, if a
Spin-Off Distribution has occurred, Marketable Securities distributed in
such Spin-Off Distribution equal to (1) the number of Class A Common Stock
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
Class A Common Stock 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(k)(ii) of the Trust Agreement;
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:
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<PAGE> 21
(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 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.
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<PAGE> 22
(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.
(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.
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<PAGE> 23
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.
(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
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<PAGE> 24
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 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 Class A Common Stock 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. Notice.
(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 CNET Investments II, Inc., 150 Chestnut
Street, San Francisco, California 94111, Telecopier No. (415) 395-9330,
Attention: Sharon Le Duy; (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: Pledged Asset Control 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
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<PAGE> 25
country, postage prepaid; (ii) if given by telex or telecopier, when such telex
or telecopied notice is transmitted (with electronic confirmation of
transmission or verbal confirmation of receipt); 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> 26
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> 27
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:
CNET INVESTMENTS II, INC.
By:
-------------------------------
Name:
Title:
THE COLLATERAL AGENT:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:
-------------------------------
Name:
Title:
PURCHASER:
NBCi 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> 28
Exhibit A
to
Collateral Agreement
NOTICE OF PLEDGE VALUE
To: CNET Investments II, Inc.
[-]
THE CHASE MANHATTAN BANK, as Collateral Agent (the "Collateral Agent")
under the Collateral Agreement, dated as of February __, 2000 (the "Collateral
Agreement"), among you, as Pledgor, the Collateral Agent and NBCi 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> 29
Exhibit B
to
Collateral Agreement
CERTIFICATE FOR SUBSTITUTED COLLATERAL
The undersigned, CNET Investments II, Inc. (the "Pledgor"), hereby
certifies, pursuant to Section 5.2(b) of the Collateral Agreement, dated as of
February __, 2000 (the "Collateral Agreement"), among Pledgor, The Chase
Manhattan Bank, as Collateral Agent, and NBCi 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> 30
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of ____________, ____.
CNET INVESTMENTS II, INC.
By:
------------------------------
Name:
Title:
-2-
<PAGE> 31
Exhibit C
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, CNET Investments II, Inc. (the "Pledgor"), hereby
certifies, pursuant to Section 5.3 of the Collateral Agreement, dated as of
February __, 2000 (the "Collateral Agreement"), among Pledgor, The Chase
Manhattan Bank, as Collateral Agent and NBCi 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.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of ____________, ____.
CNET INVESTMENTS II, INC.
By:
------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 2.k.(v)
================================================================================
FUND EXPENSE AGREEMENT
Among
CNET INVESTMENTS II, INC.
THE CHASE MANHATTAN BANK,
for Itself and Its Affiliate
and
NBCi AUTOMATIC COMMON EXCHANGE SECURITY TRUST
-----------------------------
Dated as of February __ 2000
-----------------------------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS; INTERPRETATION
<S> <C> <C>
Section 1.1. Defined Terms..........................................................1
Section 1.2. Interpretation.........................................................2
ARTICLE II
PAYMENTS BY THE SELLER
Section 2.1. Agreement to Pay Up-Front Fees and Expenses............................2
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.............................................................4
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............................................5
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 February __, 2000, among CNET
Investments II, Inc. (the "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 NBCi 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 February
__, 2000 (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 February __, 2000 (the "Trust Agreement"); and
WHEREAS, the Seller 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.
"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 5.6 of the Paying Agent Agreement or Section 7.6 of the Trust
Agreement.
<PAGE> 4
"Seller" has the meaning specified in the preamble to this 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.
ARTICLE II
PAYMENTS BY THE SELLER
Section 2.1. Agreement to Pay Up-Front Fees and Expenses. The Seller 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.
-2-
<PAGE> 5
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 the Seller (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 the Seller, 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 the
Seller, 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 the Seller
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), the Seller agrees to
pay to the Service Provider from time to time the amount of any Additional
Expense. The Seller shall pay any such Additional Expense in Federal
(immediately available) funds by the later of (i) five Business Days after the
receipt by the Seller 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) The Seller 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), the
Seller 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 the Seller.
Section 2.3. Condition to Payments. The Seller's obligations under Sections
2.1 and 2.2 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.
-3-
<PAGE> 6
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) The 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. Trust Termination; Refund of Unused Expense Funds. In
consideration of the agreements of the Seller 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 the Seller in Federal
(immediately available) funds the amount of such excess; and
(b) the Trust shall reimburse the Seller for any payments made by the
Seller under this Agreement by paying over to the Seller, 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 the
Seller a ratable portion of the Up-Front Fee Amount for the period from the date
of such resignation or removal to the 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 the Seller.
-4-
<PAGE> 7
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. 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 the
Seller shall be directed to it at CNET Investments II, Inc., 150 Chestnut
Street, San Francisco, California 94111, Telecopier No. (415) 395-9330,
Attention: Chief Executive Officer; (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: Pledged Asset Control Services; and (iii) notices to the
Trust or the Trustees shall be directed to the Trustees at 850 Library Avenue,
Suite 204, Newark, Delaware 19715, Telecopier No. (302) 738-7210, Attention:
Donald J. Puglisi or the applicable Trustee.
(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 (with electronic
confirmation of transmission or verbal confirmation of receipt); 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.
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
-5-
<PAGE> 8
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 the 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 the 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 the 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.
-6-
<PAGE> 9
IN WITNESS WHEREOF, the parties have caused this Fund Expense Agreement to
be duly executed and delivered as of the first date set forth above.
CNET INVESTMENTS II, INC.
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
<PAGE> 10
SCHEDULE I
Expenses of Organization of the Trust and the
Public Offering of the Securities
Up-Front Fee Amount: $
Up-Front Expense Amount:
Trustees Fees
Wall Street Concepts Fees
Accounting Fees
Fidelity Bond
Other $
========
Total Up-Front Expense Amount $
========
-8-
<PAGE> 1
EXHIBIT 2.k.(vi)
================================================================================
FUND INDEMNITY AGREEMENT
Among
CNET INVESTMENTS II, INC.
THE CHASE MANHATTAN BANK,
for Itself and Its Affiliate
and
NBCi AUTOMATIC COMMON EXCHANGE SECURITY TRUST
--------------------------------
Dated as of February __, 2000
--------------------------------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS; INTERPRETATION
<S> <C> <C>
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...................3
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.....................................................4
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
</TABLE>
<PAGE> 3
FUND INDEMNITY AGREEMENT
FUND INDEMNITY AGREEMENT, dated as of February __, 2000, among CNET
Investments II, Inc., a Delaware corporation (the "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 NBCi 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
February __, 2000 (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 February __, 2000 (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.
"Trust" has the meaning specified in the preamble to this Agreement.
<PAGE> 4
"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.
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
-3-
<PAGE> 6
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 CNET Investments II, Inc., 150 Chestnut Street, San
Francisco, California 94111, Telecopier No. (415) 395-9330, Attention: Chief
Executive Officer; (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:
Pledged Asset Control Services; and (iii) notices to the Trust or the Trustees
shall be directed to the Trustees at 850 Library Avenue, Suite 204, Newark,
Delaware 19715, Telecopier No. (302) 738-6680, Attention: Donald J. Puglisi or
the applicable Trustee.
(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 (with
electronic confirmation of transmission or verbal confirmation of receipt); 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.
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.
-4-
<PAGE> 7
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 the 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 the 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 the 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 Indemnity Agreement
to be duly executed and delivered as of the first date set forth above.
CNET INVESTMENTS II, INC.
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.p
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT is entered into as of the __th day of
January 2000, between Paul S. Efron (the "Trustee"), not in his individual
capacity, but solely as trustee of Tenth Automatic Common Exchange Security
Trust, a trust organized and existing under the laws of New York (the "Trust"),
and Goldman, Sachs & Co. or one of its affiliates (the "Purchaser").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF THE SECURITIES
1.1 SALE AND ISSUANCE OF UNITS. Subject to the terms and conditions of
this Agreement, the 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 $100.00.
1.2 CLOSING. The purchase and sale of the Security shall take place at
the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York at 4:00
p.m., on January __, 2000, 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 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 purchased by the Purchaser.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER. The
Purchaser hereby represents and warrants to, and covenants for the benefit of,
the Trust that:
2.1 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made by the
Trustee with the Purchaser in reliance upon the Purchaser's representation to
the Trustee, which by the Purchaser's execution of this Agreement the Purchaser
hereby confirms, that the Securities are being acquired for investment for the
Purchaser's own account, and not as a nominee or agent and not with a view to
the resale or distribution by the Purchaser of any 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 any of the
Security.
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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
Securities are characterized as "restricted securities" under the United States
securities laws inasmuch as they are being acquired from the Trustee in a
transaction not involving a public offering and that under such laws and
applicable regulations such 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. The Purchaser further agrees
not to make any disposition directly or indirectly of all or any portion of the
Security unless and until:
(a) There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement;
(b) 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
(c) Notwithstanding the provisions of subsections (a) and (b) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by the Purchaser to any affiliate of the Purchaser, if the transferee
agrees in writing to be subject to the terms hereof to the same extent as if it
were the original Purchaser hereunder.
2.5 LEGENDS. It is understood that the certificate evidencing the
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 Trustees of Automatic Common Exchange
Security Trust II 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 they are no
longer necessary to ensure compliance with federal securities laws.
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2.6 AMENDMENT TO TRUST AGREEMENT; SPLIT OF THE SECURITY. 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 the
form attached hereto and (b) the split of the Purchaser's Security. Subsequent
to the determination of the public offering price per Security and related
underwriting discount for the Securities to be sold to the Underwriters (as
defined in the aforementioned Amended and Restated Trust Agreement) but prior to
the sale of the Securities to the Underwriters, 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.
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<PAGE> 4
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
TRUSTEE
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Paul S. Efron
as Trustee
GOLDMAN, SACHS & CO.
By:
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