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Exhibit 2.k.(iv)
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COLLATERAL AGREEMENT
Among
NYLIFE LLC
As Pledgor,
THE CHASE MANHATTAN BANK,
As Collateral Agent
and
EXPRESS SCRIPTS AUTOMATIC EXCHANGE SECURITY TRUST
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Dated as of November , 2000
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS; INTERPRETATION
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Section 1.1. Defined Terms...........................................................1
Section 1.2. Interpretation..........................................................7
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...............................9
Section 3.2. Representations and Warranties of the Collateral Agent..................9
ARTICLE IV
CERTAIN COVENANTS OF PLEDGOR
Section 4.1. Certain Covenants of Pledgor...........................................10
ARTICLE V
ADMINISTRATION OF THE COLLATERAL AND
VALUATION OF THE SECURITIES
Section 5.1. Valuation of Collateral................................................11
Section 5.2. Substitution of Collateral.............................................11
Section 5.3. Additional Collateral..................................................12
Section 5.4. Delivery of Collateral.................................................13
Section 5.5. Insufficiency Determination............................................14
Section 5.6. Release of Excess Collateral...........................................15
Section 5.7. Delivery of Contract Consideration.....................................15
Section 5.8. Investment of Cash Collateral..........................................16
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ARTICLE VI
INCOME AND VOTING RIGHTS ON COLLATERAL
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Section 6.1. Income on Collateral...................................................16
Section 6.2. Voting of Collateral...................................................16
ARTICLE VII
REMEDIES UPON EVENTS OF DEFAULT
Section 7.1. Rights of Secured Party................................................17
Section 7.2. Power of Attorney......................................................18
Section 7.3. Application of Collateral and Proceeds.................................18
ARTICLE VIII
THE COLLATERAL AGENT
Section 8.1. Conditions to Duties of the Collateral Agent...........................19
Section 8.2. Merger.................................................................21
Section 8.3. Resignation............................................................21
Section 8.4. Removal................................................................22
Section 8.5. Effectiveness of Resignation or Removal................................22
Section 8.6. Appointment of Successor...............................................22
Section 8.7. Acceptance by Successor................................................22
Section 8.8. Compensation...........................................................23
Section 8.9. Indemnification........................................................23
ARTICLE IX
MISCELLANEOUS
Section 9.1. Termination............................................................23
Section 9.2. No Assumption of Liability.............................................24
Section 9.3. Notices................................................................24
Section 9.4. Governing Law; Severability............................................24
Section 9.5. Entire Agreement.......................................................24
Section 9.6. Amendments; Waivers....................................................25
Section 9.7. Non-Assignability......................................................25
Section 9.8. No Third Party Rights; Successors and Assigns..........................25
Section 9.9. Counterparts...........................................................25
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EXHIBITS
Exhibit A - Notice of Pledge Value
Exhibit B - Certificate for Substituted Collateral
Exhibit C - Certificate for Additional Collateral
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COLLATERAL AGREEMENT
COLLATERAL AGREEMENT, dated as of November ____, 2000, among NYLIFE LLC,
a limited liability company organized under the laws of the State of Delaware
("Pledgor"), The Chase Manhattan Bank, a New York banking corporation, as
collateral agent hereunder for the benefit of Express Scripts Automatic 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 November
__ , 2000 (such trust and the trustees thereof acting in their capacity as such
being referred to in this Agreement as "Purchaser"), and Purchaser.
W I T N E S S E T H:
WHEREAS, pursuant to the Purchase Agreement, dated as of November __ ,
2000 (the "Contract"), between Pledgor and Purchaser, Pledgor has agreed to sell
and Purchaser has agreed to purchase shares of Class A Common Stock, par value
$0.01 per share (the "Class A Common Stock"), of Express Scripts, 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
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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 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 shares 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 shares of Class A Common Stock or
Marketable Securities) equal in each case to (x) the Maximum Deliverable
Number of such securities minus (y) the number of
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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).
"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
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shares of Class A Common Stock or 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.
"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.
"Indemnity Agreement" means the Fund Indemnity Agreement, date
November ____, 2000 among Seller, The Chase Manhattan Bank and
Purchaser.
"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 shares 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
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of Securities Dealers, Inc. and (y) the number of such units comprised
of the outstanding principal amount of such security; and (c) with
respect to any Marketable Securities, the Closing Price of such
Marketable Securities on the Trading Day prior to such date multiplied
by the number of shares of such Marketable Securities; 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 share of
Class A Common Stock, 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 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 Value 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
shares 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.
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"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.
"Transfer Restriction" means, with respect to any item of
Collateral, 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".
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"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.
ARTICLE II
THE SECURITY INTERESTS
Section 2.1. Grant of Security Interests. Effective upon and subject to
the receipt by Pledgor of the Firm Purchase Price at the First Time of Delivery
(except as provided in Section 2.1(c)), 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
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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 _____ shares 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 shares of 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 shares of 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 shares of Class A Common Stock are not held in
certificated form but is held in book-entry form by The Depository Trust
Company or any other comparable depositary, transfer such shares of
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.
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:
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(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. At the
First Time of Delivery, Pledgor will have good and marketable title to
the Pledged Items, free of all Liens (other than the Lien created by
this Agreement) and Transfer Restrictions. Upon delivery of the Pledged
Items pursuant to Sections 2.1(b) and (c), the Collateral Agent will
obtain a valid, first priority perfected security interest in, and a
first lien upon, such Pledged Items 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
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Collateral to include, on the Exchange Date, (i) unless a Reorganization
Event shall have occurred, a number of shares of Class A Common Stock at
least equal to the number of shares of Class A Common Stock (and, if a
Spin-Off Distribution has occurred, the number of shares of Marketable
Securities distributed in such Spin-Off Distribution) required to be
delivered under the Contract on the Exchange Date, and (ii) if a
Reorganization Event has occurred, any Marketable Securities or other
property required to be delivered under the Contract on the Exchange
Date.
(f) Further Assurances. Pledgor shall, at its expense and in
such manner and form as Purchaser or the Collateral Agent may reasonably
require, give, execute, deliver, file and record any financing
statement, notice, instrument, document, agreement or other papers that
may be necessary or desirable in order to create, preserve, perfect,
substantiate or validate any security interest granted pursuant to this
Agreement or to enable the Collateral Agent to exercise and enforce its
rights and the rights of Purchaser hereunder with respect to such
security interest. To the extent permitted by applicable law, Pledgor
hereby authorizes the Collateral Agent to execute and file, in the name
of Pledgor or otherwise, UCC financing or continuation statements (which
may be carbon, photographic, photostatic or other reproductions of this
Agreement or of a financing statement relating to this Agreement) which
the Collateral Agent may reasonably deem necessary or appropriate to
further perfect, or maintain the perfection of, the security interests
granted hereby.
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 shares of Class A Common
Stock or 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:
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(a) Unless an Event of Default or a failure by Pledgor to meet
any of its obligations under Article IV or V has occurred and is
continuing, Pledgor shall have the right at any time and from time to
time to deposit Eligible Collateral with the Collateral Agent in
substitution for Pledged Items previously deposited hereunder ("Prior
Collateral") and to obtain the release of such Prior Collateral from the
Lien created by this Agreement.
(b) If Pledgor wishes to deposit Eligible Collateral with the
Collateral Agent in substitution for Prior Collateral, it shall (i) give
written notice from an Authorized Representative to the Collateral Agent
identifying the Prior Collateral to be released from the Lien created by
this Agreement, (ii) deliver to the Collateral Agent concurrently with
such Eligible Collateral a certificate of Pledgor substantially in the
form of Exhibit B and dated the date of such delivery, (A) identifying
the items of Eligible Collateral being substituted for the Prior
Collateral and the Prior Collateral that is to be transferred to Pledgor
and (B) certifying that with respect to such items of additional Pledged
Collateral 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 with respect to such
items of additional Pledged Collateral 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
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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 shares of Class A Common Stock, by either (1) delivery to
the Collateral Agent of one or more certificates representing such
shares 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 shares of Class A
Common Stock are not held in certificated form but is held in book-entry
form by The Depository Trust Company or any other comparable depositary,
transfer of such shares of 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
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in connection therewith to determine that they comply as to form with the
requirements for Eligible Collateral. Pledgor hereby designates the Collateral
Agent as the Person in whose name any Collateral held in book-entry form in the
Federal Reserve System shall be registered.
Section 5.5. Insufficiency Determination.
(a) If as of 4:00 p.m., New York City time, on any Business Day the
Collateral Agent determines that the aggregate Pledge Value of the Collateral is
less than the Pledge Value Requirement (any such determination, an
"Insufficiency Determination"), the Collateral Agent shall promptly notify
Pledgor of such determination by telephone call to an Authorized Representative
of Pledgor followed by a written confirmation of such call.
(b) If, by 4:00 p.m., New York City time on the next Business Day
following the day on which telephonic notice shall have been given pursuant to
the preceding paragraph 5.5(a), Pledgor shall have failed to deliver, in the
manner set forth in Sections 5.3 and 5.4, sufficient additional Eligible
Collateral so that, after giving effect to such delivery, the aggregate Pledge
Value of the Collateral, as of such next business day, is at least equal to the
Pledge Value Requirement, then (x) the Collateral Requirement with respect to
any U.S. Government Securities pledged hereunder (other than in respect of Cash
Delivery Obligations) shall be increased from 150% to 200%, 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 shares of 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 shares 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 shares of Class A Common Stock or
Marketable Securities pursuant to the preceding
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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 shares of Class A Common Stock or
Marketable Securities shall be: (A) the most recent sales price as reported in
the composite transactions for the principal securities exchange on which the
shares of Class A Common Stock or Marketable Securities, as the case may be, are
then listed or, if such securities are not so listed, the last quoted ask price
for such securities in the over-the-counter market as reported by the NASDAQ
National Market or, if not so reported, by the National Quotation Bureau or a
similar organization; or (B) if higher, in the case of Class A Common Stock, the
most recent available Closing Price.
(c) Collateral sold and shares of Class A Common Stock or Marketable
Securities purchased by the Collateral Agent pursuant to the preceding Sections
5.5(a) and (b) may be sold and purchased on any securities exchange or in any
over-the-counter market or in any private purchase transaction, and at such
price or prices, in each case as the Collateral Agent may deem satisfactory.
Pledgor covenants and agrees that it will execute and deliver such documents and
take such other action as the Collateral Agent deems necessary or advisable in
order that any such sales and purchases may be made in compliance with law.
Section 5.6. Release of Excess Collateral. If on any Business Day the
Collateral Agent determines that the aggregate Pledge Value of Pledgor's
Eligible Collateral exceeds the Pledge Value Requirement and no Event of Default
or failure by Pledgor to meet any of its obligations under Articles IV or V has
occurred and is continuing, Pledgor may obtain the release from the Lien created
by this Agreement of any Collateral having an aggregate Pledge Value on such
Business Day less than or equal to such excess, upon delivery to the Collateral
Agent of a written notice from an Authorized Representative of Pledgor
indicating the items of Collateral to be released. Such Collateral shall be
released only after the Collateral Agent shall have determined that the
aggregate Pledge Value of all of the Collateral remaining after such release as
determined on such Business Day is at least equal to the Pledge Value
Requirement.
Section 5.7. Delivery of Contract Consideration. On the Exchange Date,
unless (i) a Reorganization Event shall have occurred prior to the Exchange Date
or (ii) if permitted under the Contract, Seller shall have elected the Cash
Settlement Alternative pursuant to Section 2.3(d) of the Contract and made the
cash payment required by that Section, the Collateral Agent shall deliver to
Purchaser from the shares of Class A Common Stock and, if a Spin-Off
Distribution has occurred, Marketable Securities then held by it hereunder
representing the number of shares of Class A Common Stock and 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
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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 shares of Class A Common
Stock or 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 maturing before November ___, 2003.
ARTICLE VI
INCOME AND VOTING RIGHTS ON COLLATERAL
Section 6.1. Income on Collateral. Unless an Event of Default or failure
by Pledgor to meet any of its obligations under Article IV or V has occurred and
is continuing, Pledgor shall be entitled to receive for its own account all
dividends, interest and, if any, principal and premium relating to all of the
Collateral, unless the payment of such amounts to Pledgor would reduce the
aggregate Pledge Value of the Collateral below the Pledge Value Requirement. The
Collateral Agent agrees to remit to Pledgor on the Business Day received or the
first Business Day thereafter all such payments received by it. If an Event of
Default or failure by Pledgor to meet any of its obligations under Article IV or
V has occurred and is continuing, all such payments made or accrued after and
during the continuance of such default or failure shall be retained by the
Collateral Agent, and any such payments which are received by Pledgor shall be
received in trust for the benefit of Purchaser, shall be segregated from other
funds of Pledgor and shall forthwith be paid over to the Collateral Agent. Any
such payments so retained by, or paid over to, the Collateral Agent shall be
held by the Collateral Agent as Collateral hereunder.
Section 6.2. Voting of Collateral. Unless an Event of Default has
occurred and is continuing, Pledgor shall have the right, from time to time, to
vote and to give consents, ratifications and waivers with respect to the
Collateral, and the Collateral Agent shall, upon receiving a written request
from Pledgor, deliver to Pledgor or as specified in such request such proxies,
powers of attorney, consents, ratifications and waivers in respect of any of the
Collateral which is registered in the name of the Collateral Agent or its
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
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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 shares of Class A Common Stock or Marketable Securities
(but not, in either case, in excess of the number of shares 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 shares of
Class A Common Stock or Marketable Securities absolutely free from any claim or
right of whatsoever kind, including any equity or right of redemption of Pledgor
which may be waived, and Pledgor, to the extent permitted by law, hereby
specifically waives all rights of redemption, stay or appraisal which it has or
may have under any law now existing or hereafter adopted; and (ii) if such
delivery shall be insufficient to satisfy in full all of the obligations of
Pledgor under the Contract, sell all of the remaining Collateral, or such lesser
portion of the remaining Collateral as may be necessary to generate proceeds
sufficient to satisfy in full all of the obligations of Pledgor under the
Contract, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as the Collateral Agent may deem satisfactory. Pledgor covenants
and agrees that it will execute and deliver such documents and take such other
action as the Collateral Agent deems necessary or advisable in order that any
such sales may be made in compliance with law. Upon any such sale the Collateral
Agent shall have the right to deliver, assign and transfer the Collateral so
sold to the purchaser of such Collateral. Each purchaser at any such sale shall
hold the Collateral so sold absolutely and free from any claim or right of
whatsoever kind, including any equity or right of redemption of Pledgor which
may be waived, and Pledgor, to the extent permitted by law, hereby specifically
waives all rights of redemption, stay or appraisal which it has or may have
under any law now existing or hereafter adopted. The notice (if any) of such
sale required by Article 9 of the UCC shall (1) in case of a public sale, state
the time and place fixed for such sale, (2) in case of sale at a broker's board
or on a securities exchange, state the board or 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
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sale shall be held at such time or times within ordinary business hours and at
such place or places as the Collateral Agent may fix in the notice of such sale.
At any such sale the Collateral may be sold in one lot as an entirety or in
separate parcels, as the Collateral Agent may determine. The Collateral Agent
shall not be obligated to make any such sale pursuant to any such notice. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In case of any sale of all or
any part of the Collateral on credit or for future delivery, the Collateral so
sold may be retained by the Collateral Agent until the selling price is paid by
the purchaser of such Collateral, but the Collateral Agent shall not incur any
liability in case of the failure of such purchaser to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may again
be sold upon like notice. The Collateral Agent, instead of exercising the power
of sale conferred upon it in this Agreement, may proceed by a suit or suits at
law or in equity to foreclose the security interests and sell the Collateral, or
any portion of such Collateral, under a judgment or decree of a court or courts
of competent jurisdiction.
Section 7.2. Power of Attorney. Upon any delivery or sale of all or any
part of any Collateral made either under the power of delivery or sale given
hereunder or under judgment or decree in any judicial proceedings for
foreclosure or otherwise for the enforcement of this Agreement, the Collateral
Agent is hereby irrevocably appointed the true and lawful attorney of Pledgor,
in the name and stead of Pledgor, to make all necessary deeds, bills of sale and
instruments of assignment, transfer or conveyance of the property thus delivered
or sold. For that purpose the Collateral Agent may execute all such documents
and instruments. This power of attorney shall be deemed coupled with an
interest, and Pledgor hereby ratifies and confirms all that its attorneys acting
under such power, or such attorneys' successors or agents, shall lawfully do by
virtue of this Agreement. If so requested by the Collateral Agent, by the
Trustees or by any purchaser of the Collateral or a portion of the Collateral,
Pledgor shall further ratify and confirm any such delivery or sale by executing
and delivering to the Collateral Agent, to the Trustees or to such purchaser or
purchasers at the expense of Pledgor all proper deeds, bills of sale,
instruments of assignment, conveyance of transfer and releases as may be
designated in any such request.
Section 7.3. Application of Collateral and Proceeds. In the case of an
Event of Default, the Collateral Agent may proceed to realize upon the security
interest in the Collateral against any one or more of the types of Collateral,
at any one time, as the Collateral Agent shall determine in its sole discretion
subject to the foregoing provisions of this Article VII. The proceeds of any
sale of, or other realization upon, or other receipt from, any such Collateral
shall be applied by the Collateral Agent in the following order of priorities:
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first, to the payment to Purchaser of an amount equal to: (A) the
aggregate Market Value of a number of shares 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
shares 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 shares 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 shares of Marketable
Securities distributed in such Reorganization Event equal to (x) the
number of such shares of Marketable Securities permitted to be delivered
on the Delivery Date under Section 6.2 of the Contract minus (y) the
number of such shares of 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:
(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,
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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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(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 30 days'
written notice by
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registered or certified mail to Pledgor and notice to Purchaser in accordance
with the provisions of Section 9.3.
Section 8.4. Removal.
(a) Subject to Section 8.5, the Collateral Agent may be removed at any
time by an instrument or concurrent instruments in writing delivered to the
Collateral Agent and to Pledgor and signed by Purchaser.
(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 temporary or permanent 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.
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Section 8.7. Acceptance by Successor. Every temporary or permanent
successor Collateral Agent appointed hereunder shall execute, acknowledge and
deliver to its predecessor and also to Pledgor and Purchaser an instrument in
writing accepting such appointment hereunder, whereupon such successor, without
any further act, deed or conveyance, shall become fully vested with all the
estates, properties, rights, powers, duties and obligations of its predecessors.
Such predecessor shall, nevertheless, on the written request of its successor or
Pledgor, execute and deliver an instrument transferring to such successor all
the estates, properties, rights and powers of such predecessor hereunder. Every
predecessor Collateral Agent shall deliver all Collateral held by it as the
Collateral Agent hereunder to its successor. Should any instrument in writing
from Pledgor be required by a successor Collateral Agent for more fully and
certainly vesting in such successor the estates, properties, rights, powers,
duties and 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 8.8. 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.
Section 8.9. Indemnification. The Trust shall indemnify and hold the
Collateral 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 Collateral 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 Collateral Agent shall not be
indemnified and held harmless from and against any such loss, damages, cost,
expense, liability or claim incurred by reason of its willful misfeasance, bad
faith or gross negligence in the performance of its duties, or its reckless
disregard of its duties and obligations hereunder. Such indemnity shall survive
the resignation, removal or discharge of the Collateral Agent and the
termination of this Agreement.
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
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hereunder upon such termination. Any Collateral remaining at the time of such
termination (including any shares of 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), shall be fully
released and discharged from the Lien created by this Agreement and delivered to
Pledgor by the Collateral Agent, all at the expense of Pledgor.
Section 9.2. No Assumption of Liability. By executing this Agreement,
none of the Trustees assumes any personal liability under this Agreement.
Section 9.3. Notices.
(a) All notices and other communications provided for in this
Agreement, unless otherwise specified, shall be in writing and shall be given at
the addresses set forth in the following sentence or at such other addresses as
may be designated by notice duly given in accordance with this Section 9.3 to
each other party to this Agreement. Until such notice is given, (i) notices to
Pledgor shall be directed to it at 51 Madison Avenue, New York, New York 10010,
Telecopier No. __________; (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; (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.
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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.
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> 30
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:
NYLIFE LLC
By:
------------------------------
Name:
Title:
THE COLLATERAL AGENT:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:
------------------------------
Name:
Title:
PURCHASER:
EXPRESS SCRIPTS AUTOMATIC
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> 31
Exhibit A
to
Collateral Agreement
NOTICE OF PLEDGE VALUE
To: __________ NYLIFE LLC
Telecopier No. __________
THE CHASE MANHATTAN BANK, as Collateral Agent (the "Collateral Agent")
under the Collateral Agreement, dated as of November ___, 2000 (the "Collateral
Agreement"), among you, as Pledgor, the Collateral Agent and Express Scripts
Automatic 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:
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<PAGE> 32
Exhibit B
to
Collateral Agreement
CERTIFICATE FOR SUBSTITUTED COLLATERAL
The undersigned, NYLIFE LLC (the "Pledgor"), hereby certifies, pursuant
to Section 5.2(b) of the Collateral Agreement, dated as of November __, 2000
(the "Collateral Agreement"), among Pledgor, The Chase Manhattan Bank, as
Collateral Agent, and Express Scripts Automatic 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
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<PAGE> 33
otherwise defined Certificate have the respective meanings specified in the
Collateral Agreement.
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<PAGE> 34
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of ____________, ____.
NYLIFE LLC
By:
-------------------------------
Name:
Title:
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<PAGE> 35
Exhibit C
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, NYLIFE LLC (the "Pledgor"), hereby certifies, pursuant
to Section 5.3 of the Collateral Agreement, dated as of November __, 2000 (the
"Collateral Agreement"), among Pledgor, The Chase Manhattan Bank, as Collateral
Agent, and Express Scripts Automatic 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.
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<PAGE> 36
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of ____________, ____.
NYLIFE LLC
By:
-----------------------------------
Name:
Title:
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