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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 12)*
DOLE FOOD COMPANY, INC.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
256605-10-5
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(CUSIP Number)
Roberta Wieman
10900 Wilshire Boulevard, 16th Floor
Los Angeles, CA 90024
(213) 879-6600
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 6, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
Check the following box if a fee is being paid with this statement / /.
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
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SCHEDULE 13D
CUSIP No. 256605-10-5 Page 2 of 8 Pages
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(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
David H. Murdock
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(2) Check the Appropriate Box if a Member of a Group* (a) / /
(b) /X/
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(3) SEC Use Only
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(4) Source of Funds*
N/A
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(5) Check box if Disclosure of Legal Proceedings is Required / /
Pursuant to Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization
U.S.
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(7) Sole Voting Power
13,864,278
NUMBER OF ---------------------------------------------
SHARES (8) Shared Voting Power
BENEFICIALLY
OWNED BY ---------------------------------------------
EACH (9) Sole Dispositive Power
REPORTING
PERSON 13,864,278
WITH ---------------------------------------------
(10) Shared Dispositive Power
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
13,864,278
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(12) Check box if the Aggregate Amount in Row (11) Excludes / /
Certain Shares*
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(13) Percent of Class Represented by Amount in Row (11)
23.0%
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(14) Type of Reporting Person*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 256605-10-5 Page 3 of 8 Pages
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(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Flexi-Van Corporation
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(2) Check the Appropriate Box if a Member of a Group* (a) / /
(b) /X/
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(3) SEC Use Only
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(4) Source of Funds*
N/A
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(5) Check box if Disclosure of Legal Proceedings is Required / /
Pursuant to Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization
Delaware
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(7) Sole Voting Power
1,240,310
NUMBER OF ---------------------------------------------
SHARES (8) Shared Voting Power
BENEFICIALLY
OWNED BY ---------------------------------------------
EACH (9) Sole Dispositive Power
REPORTING
PERSON 1,240,310
WITH ---------------------------------------------
(10) Shared Dispositive Power
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,240,310
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(12) Check box if the Aggregate Amount in Row (11) Excludes / /
Certain Shares*
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(13) Percent of Class Represented by Amount in Row (11)
2.1%
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(14) Type of Reporting Person*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 256605-10-5 Page 4 of 8 Pages
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(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Flexi-Van Leasing, Inc.
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(2) Check the Appropriate Box if a Member of a Group* (a) / /
(b) /X/
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(3) SEC Use Only
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(4) Source of Funds*
N/A
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(5) Check box if Disclosure of Legal Proceedings is Required / /
Pursuant to Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization
Delaware
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(7) Sole Voting Power
1,240,310
NUMBER OF ---------------------------------------------
SHARES (8) Shared Voting Power
BENEFICIALLY
OWNED BY ---------------------------------------------
EACH (9) Sole Dispositive Power
REPORTING
PERSON 1,240,310
WITH ---------------------------------------------
(10) Shared Dispositive Power
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,240,310
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(12) Check box if the Aggregate Amount in Row (11) Excludes / /
Certain Shares*
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(13) Percent of Class Represented by Amount in Row (11)
2.1%
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(14) Type of Reporting Person*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 256605-10-5 Page 5 of 8 Pages
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(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Flexi-Van Delaware, Inc.
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(2) Check the Appropriate Box if a Member of a Group* (a) / /
(b) /X/
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(3) SEC Use Only
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(4) Source of Funds*
N/A
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(5) Check box if Disclosure of Legal Proceedings is Required / /
Pursuant to Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization
Delaware
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(7) Sole Voting Power
1,240,310
NUMBER OF ---------------------------------------------
SHARES (8) Shared Voting Power
BENEFICIALLY
OWNED BY ---------------------------------------------
EACH (9) Sole Dispositive Power
REPORTING
PERSON 1,240,310
WITH ---------------------------------------------
(10) Shared Dispositive Power
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,240,310
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(12) Check box if the Aggregate Amount in Row (11) Excludes / /
Certain Shares*
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
2.1%
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(14) Type of Reporting Person*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Page 6 of 8 Pages
This Schedule 13D, as previously amended, relating to the Common Stock of Dole
Food Company, Inc., is hereby further amended with respect to the items
set forth below. This amendment is being filed to update certain information
from the previous amendment, including certain changes in the information
provided regarding the purpose of the transaction.
ITEM 1. SECURITY AND ISSUER.
Item 1 is hereby amended in its entirety by substituting the following:
This Statement relates to the Common Stock of Dole Food Company, Inc. ("Dole"),
a Hawaii corporation, whose principal executive offices are located at 31365 Oak
Crest Drive, Westlake Village, California 91361. On August 2, 1996, Dole had
outstanding 60,074,421 shares of Common Stock, according to information provided
by Dole as of such date.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended in its entirety by substituting the following:
Mr. Murdock intends to offer for sale up to 2,500,000 shares (2,875,000 if the
underwriting over-allotment option is exercised in full) of Common Stock of Dole
directly to investors. In addition, Mr. Murdock intends to offer up to 2,500,000
additional shares (2,875,000 if the underwriting over-allotment option is
exercised in full) of Common Stock of Dole that may be delivered by the Dole
Food Automatic Common Exchange Security Trust (the "Trust") to holders of
Automatic Common Exchange Securities of the Trust upon exchange of such
securities in 1999. An amended Registration Statement with respect to such
offerings was filed on August 5, 1996 with the Securities and Exchange
Commission. The Trust is a newly organized, three-year term trust established to
hold a portfolio of stripped U.S. Treasury securities maturing quarterly during
the term of the Trust and a forward purchase contract with Mr. Murdock relating
to the shares of Common Stock of Dole. The respective closings of the offerings
of the Automatic Common Exchange Securities and the Common Stock are not
dependent on one another. These shares are being sold to afford Mr. Murdock more
liquidity in his real estate and investment portfolio and to reduce debt.
Mr. Murdock continues to regard the Dole stock as an attractive investment.
Based on his continuing evaluation of Dole, alternative investment opportunities
and all other factors deemed relevant, he may in the future elect to sell all or
a portion of his remaining Dole shares or, assuming the availability of
additional shares at prices regarded as acceptable, and subject to applicable
law, elect to acquire additional shares of Dole for investment on the open
market or in privately negotiated transactions.
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Page 7 of 8 Pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Item 6 is amended by inserting the following:
The Murdock Trust and Mr. Murdock expect to enter into a firm commitment
underwriting agreement with Goldman, Sachs & Co. with respect to up to 2,875,000
shares to be offered to investors. In addition, Mr. Murdock also expects to
enter into a Purchase Agreement with the Trust relating to the 2,875,000
additional shares that may be delivered by the Trust. See Exhibit 3 for the
form of the Purchase Agreement. Mr. Murdock expects to be a party to the
Underwriting Agreement among the Trust, Goldman, Sachs & Co. and himself
relating to the Automatic Common Exchange Securities. See Exhibit 4 for the
form of such Underwriting Agreement. Mr. Murdock expects to enter into a
Collateral Agreement with the Bank of New York as collateral agent. See
Exhibit 5 for the form of Collateral Agreement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 is amended by inserting the following paragraph:
Exhibit 3. Form of Purchase Agreement between the Trust and Mr. Murdock.
Exhibit 4. Form of Underwriting Agreement among Goldman, Sachs & Co., Mr.
Murdock and the Trust.
Exhibit 5. Form of Collateral Agreement among Mr. Murdock and the Bank of New
York, as collateral agent, and the Trust.
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Page 8 of 8 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
Dated this 6th day of August, 1996.
Flexi-Van Corporation
Flexi-Van Leasing, Inc.
Flexi-Van Delaware, Inc.
By: /s/ David H. Murdock
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David H. Murdock, as Chairman of the Board
and Chief Executive Officer of each of such
companies
By: /s/ David H. Murdock
---------------------------------
David H. Murdock, as an individual and as
Trustee of the David H. Murdock Living
Trust, dated May 28, 1996, as amended
<PAGE>
S&C Draft of August 1, 1996
PURCHASE AGREEMENT
THIS AGREEMENT is made as of this ___ day of August 1996 between David
H. Murdock, as trustee of the David H. Murdock Living Trust dated May 28, 1986,
as amended ("Seller") and Dole Food Automatic Common Exchange Security Trust
(such trust and the trustees thereof acting in their capacity as such being
referred to herein as "Purchaser").
WHEREAS, Seller owns shares of common stock, no par value (the "Common
Stock"), of Dole Food Company, Inc., a Hawaii corporation (the "Company");
WHEREAS, Purchaser has filed with the Securities and Exchange
commission a registration statement contemplating the offering of up to _______
Automatic Common Exchange Securities (the "Securities"), the terms of which
contemplate delivery by Purchaser to the holders thereof of a number of shares
of Common Stock (or, at the option of Seller, cash in lieu thereof) on
___________, _____ (the "Exchange Date");
WHEREAS, Seller has agreed, pursuant to the Collateral Agreement (the
"Collateral Agreement") dated as of August __, 1996, among Purchaser, Seller and
The Bank of New York, as collateral agent (the "Collateral Agent"), to grant
Purchaser a security interest in Common Stock and in certain other circumstances
certain other collateral to secure the obligations of Seller hereunder;
WHEREAS, Purchaser has agreed, pursuant to an underwriting agreement,
dated August __, 1996 (the "Underwriting Agreement"), among Purchaser, Seller,
the Company and Goldman Sachs & Co. as representatives of the several
underwriters named therein (the "Underwriters"), to issue and sell to the
Underwriters an aggregate of ________ Securities (the "Firm Securities") and, at
the Underwriters' option, up to _________ additional Securities (the "Optional
Securities") to cover overallotments;
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
<PAGE>
DEFINITIONS
As used herein, the following words and phrases shall have the
following meanings:
"Acceleration Amount" has the meaning provided in Article VII.
"Acceleration Amount Notice" has the meaning provided in Article VII.
"Acceleration Value" has the meaning provided in Article VII.
"Additional Purchase Price" has the meaning provided in Section
1.2(b).
"Additional Share Base Amount" means a number equal to the number of
Optional Securities that the Underwriters elect to purchase under the
Underwriting Agreement.
"Additional Shares" has the meaning provided in Section 1.1(b).
"Additional STRIPS" means the U.S. Treasury obligations purchased by
Purchaser for settlement at the Second Time of Delivery.
"Administrator" means The Bank of New York, administrator for
Purchaser under the Administration Agreement dated as of August__, 1996, or any
successor thereto.
"Aggregate Acceleration Value" has the meaning provided in
Article VII.
"Appreciation Threshold Price" has the meaning provided in
Section 1.1(c).
"Business Day" means any day on which commercial banks are open for
business in New York City and the New York Stock Exchange is not closed.
"Calculation Period" means any period of Trading Days for which an
average security price must be determined pursuant to this Agreement.
"Cash Settlement Alternative" has the meaning provided in
Section 1.2(d).
"Closing Price" of the Common Stock on any date of determination means
the daily closing sale price (or, if no closing sale price is reported, the last
reported sale price) of the Common Stock as reported on the NYSE Consolidated
Tape on such date of determination or, if the Common Stock is not listed for
trading on the NYSE on any such date, as reported in the composite transactions
for the principal United States securities exchange on which the Common Stock is
so listed, or if the Common Stock is not so listed
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on a United States national or regional securities exchange, as reported by The
Nasdaq National Market or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as reported
by the National Quotation Bureau or similar organization, provided that if any
event that results in an adjustment to the number of shares of Common Stock
deliverable hereunder pursuant to Section 6.1(e), occurs prior to the Exchange
Date, the Closing Price as determined pursuant to the foregoing will be
appropriately adjusted to reflect the occurrence of such event.
"Contract Shares" has the meaning provided in Section 1.1(b).
"Current Market Price" per share of Common Stock means the average
Closing Price of a share of Common Stock on the 20 Trading Days immediately
prior to but not including the Exchange Date.
"Custodian" means The Bank of New York, custodian for Purchaser under
the Custodian Agreement dated as of August __, 1996, or any successor thereto.
"Dilution Adjustment" means any fraction or number by which the
Exchange Rate shall be multiplied pursuant to Section 6.1(a), (b), (c) or (d).
"Event of Default" has the meaning provided in Article VII.
"Excess Purchase Payment" has the meaning provided in Section 6.1(d).
"Exchange Rate" has the meaning provided in Section 1.1(c).
"Firm Purchase Price" has the meaning provided in Section 1.2(a).
"Firm Share Base Amount" has the meaning provided in Section 1.1(a).
"Firm Shares" has the meaning provided in Section 1.1(a).
"First Time of Delivery" has the meaning provided in Section 1.3(a).
"Independent Dealers" has the meaning provided in Article VII.
"Initial Price" has the meaning provided in Section (1)(c).
"Marketable Securities" has the meaning provided in Section 6.2.
"Permitted Dividend" has the meaning provided in Section 6.1(d).
"Reorganization Event" has the meaning provided in Section 6.2.
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"Second Time of Delivery" has the meaning provided in Section 1.1(b).
"Then-Current Market Price" of the Common Stock, for the purpose of
applying any adjustment pursuant to Section 6.1, means the average Closing Price
per share of the Common Stock for the Calculation Period of 5 Trading Days
immediately prior to the time such adjustment is effected (or, in the case of an
adjustment effected at the opening of business on the Business Day next
following a record date as described in Section 6.1(f)(i), immediately prior to
the earlier of the time such adjustment is effected and the related ex-date);
provided that if no Closing Price for the Common Stock is determined for one or
more (but not all) of such Trading Days, such Trading Day shall be disregarded
in the calculation of the Then-Current Market Price (but no additional trading
days shall be added to the Calculation Period). If no Closing Price for the
Common Stock may be determined for any of such Trading Days, the Then-Current
Market Price shall be the Closing Price for the Common Stock for the most recent
Trading Day prior to such 5 Trading Days for which a Closing Price for the
Common Stock may be determined pursuant to clause (i), (ii) or (iv) of the
"Closing Price " definition. The "ex-date" with respect to any dividend,
distribution or issuance shall mean the first date on which the shares of Common
Stock trade regular way on their principal market without the right to receive
such dividend, distribution or issuance.
"Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of such security.
"Transaction Value" has the meaning provided in Section 6.2.
"Trust Agreement" means the Amended and Restated Trust Agreement
constituting Dole Food Automatic Common Exchange Security Trust dated as of
August __, 1996.
I.
SALE AND PURCHASE
1.1 Sale and Purchase. (a) Firm Shares. Upon the terms and subject
to the conditions of this Agreement, Seller agrees to sell to Purchaser, and
Purchaser agrees to purchase and acquire from Seller, the number of shares of
Common Stock (the "Firm Shares") equal to the product of ______ (the "Firm Share
Base Amount") and the Exchange Rate.
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(b) Additional Shares. Upon the terms and subject to the conditions
of this Agreement, Seller agrees to sell to Purchaser, and Purchaser shall have
a right to purchase, a number of additional shares of Common Stock (the
"Additional Shares") equal to the product of the Exchange Rate and the
Additional Share Base Amount. If the Underwriters exercise their option to
purchase Optional Securities pursuant to the Underwriting Agreement, Purchaser
shall notify Seller in writing that Purchaser will purchase the Additional
Shares, which notice shall specify the Additional Share Base Amount and the date
on which Purchaser shall deliver the purchase price for the Additional Shares,
which shall be the Second Time of Delivery specified pursuant to Section 2 of
the Underwriting Agreement (the "Second Time of Delivery"). The Firm Shares and
the Additional Shares (if any) are collectively referred to herein as the
"Contract Shares".
(c) Exchange Rate. The "Exchange Rate" shall be determined in
accordance with the following formula, subject to adjustment as a result of
certain events relating to the Common Stock as provided in Article VI: (i) if
the Current Market Price is less than $_______(the "Appreciation Threshold
Price") but equal to or greater than $_______ (the "Initial Price"), a fraction
(rounded upward or downward to the nearest 1/10,000th or, if there is not a
nearest 1/10,000th, to the next lower 1/10,000th) equal to the Initial Price
divided by the Current Market Price; (ii) if the Current Market Price is equal
to or greater than the Threshold Appreciation Price, 0.x and (iii) if the
Current Market Price is less than the Initial Price, 1.
1.2 Purchase Price. (a) Firm Purchase Price. The purchase price for
the Firm Shares (the "Firm Purchase Price") shall be $______ in cash.
(b) Additional Purchase Price. The purchase price for the Additional
Shares (the "Additional Purchase Price") shall be the difference between:
(i) the aggregate proceeds to Purchaser from the sale of the Optional
Securities; and (ii) the aggregate cost to Purchaser, as notified by Purchaser
to Seller at the Second Time of Delivery, of the Additional STRIPS.
1.3 Payment for and Delivery of Contract Shares. (a) First Time of
Delivery. Upon the terms and subject to the conditions of this Agreement,
Purchaser shall deliver to Seller the Firm Purchase Price on August __, 1996
(the "First Time of Delivery") at the offices of Sullivan & Cromwell, 125 Broad
Street, New York, New York 10004, or at such other place as shall be agreed upon
by Purchaser and Seller, paid by wire transfer to an account designated by
Seller, in Federal (immediately available) funds.
(b) Second Time of Delivery. Upon the terms and subject to the
conditions of this Agreement, Purchaser shall deliver to Seller the Additional
Purchase Price at the Second Time of Delivery at the offices of Sullivan &
Cromwell, 125 Broad Street, New York, New York 10004, or at such other place as
shall be agreed upon by Purchaser
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and Seller, paid by wire transfer to an account designated by Seller, in Federal
(immediately available) funds.
(c) Delivery of Contract Shares. On _________________ (the "Exchange
Date"), Seller agrees to deliver the Contract Shares to Purchaser. Delivery
shall be effected by delivery by the Collateral Agent to the Custodian, for the
account of Purchaser, of shares of Common Stock then held by the Collateral
Agent as collateral under the Collateral Agreement, in an amount equal to the
number of Contract Shares, rounded down to the nearest whole number. Instead of
any fractional shares of Common Stock that would otherwise be deliverable to
Purchaser at the Exchange Date, Seller agrees to make a cash payment in respect
of such fractional shares of Common Stock in an amount equal to the value
thereof at the Current Market Price. Notwithstanding the foregoing, if a
Reorganization Event shall have occurred prior to the Exchange Date then, in
lieu of the foregoing, delivery shall be effected as follows: (i) in the case of
any cash required to be delivered on the Exchange Date as provided in
Section 6.2, by wire transfer of immediately available funds to an account
designated by Purchaser; or (ii) in the case of any Marketable Securities
elected by Seller to be delivered in lieu of cash as provided in Section 6.2, at
Seller's election, by instruction to the Collateral Agent to deliver to the
Custodian, for the account of Purchaser, a specified number of Marketable
Securities then held as collateral under the Collateral Agreement, as provided
in Section 6(g) of the Collateral Agreement.
(d) Cash Settlement Alternative. At its option, Seller may deliver
to Purchaser on the Exchange Date, in lieu of the Contract Shares, an amount in
cash equal to the Current Market Price of the Contract Shares (the "Cash
Settlement Alternative"), paid by wire transfer to an account designated by
Custodian, in Federal (immediately available) funds. Seller may elect the Cash
Settlement Alternative in respect of all, but not less than all, Contract Shares
by notice to Purchaser, the Collateral Agent and the Custodian not less than ten
days prior to the Exchange Date.
II.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that each representation
and warranty made by Seller pursuant to Section 1(b) of the Underwriting
Agreement is true and correct on the date hereof.
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<PAGE>
III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that each representation
and warranty made by Purchaser pursuant to Section 1(a) of the Underwriting
Agreement is true and correct on the date hereof.
IV.
CONDITIONS TO PURCHASER'S OBLIGATIONS
(a) The obligation of Purchaser to deliver the Firm Purchase Price at
the First Time of Delivery is subject to the condition that the purchase by the
Underwriters of the Firm Securities pursuant to the Underwriting Agreement shall
have been consummated as contemplated under the Underwriting Agreement.
(b) The obligation of Purchaser to deliver the Additional Purchase
Price at the Second Time of Delivery is subject to the condition that the
purchase by the Underwriters of the Optional Securities shall have been
consummated as contemplated under the Underwriting Agreement.
V.
COVENANTS
5.1 Taxes. Seller shall pay any and all documentary, stamp, transfer
or similar taxes and charges that may be payable in respect of the entry into
this Agreement and the transfer and delivery of the Contract Shares pursuant
hereto.
5.2 Forward Contract. Seller hereby agrees that: (i) he will not
treat this Agreement, any portion of this Agreement, or any obligation hereunder
as giving rise to any interest income or other inclusions of ordinary income;
(ii) he will not treat the delivery of any portion of the Contract Shares, cash
or Marketable Securities to be delivered pursuant to this Agreement as the
payment of interest or ordinary income; (iii) he will treat this Agreement in
its entirety as a forward contract for the delivery of such Contract Shares,
cash or Marketable Securities; and (iv) he will not take any action (including
filing any tax return or form or taking any position in any tax proceeding) that
is inconsistent with the obligations contained in clause (i) through (iii).
Notwithstanding the preceding sentence, Seller may take any action or position
required by law, provided that Seller delivers to Purchaser an unqualified
opinion of counsel, nationally recognized as expert in Federal tax
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<PAGE>
matters, to the effect that such action or position is required by a statutory
change, Treasury regulation, or applicable court decision published after the
date of this Agreement.
5.3 Limitations on Trading During Certain Days. Seller hereby agrees
that he will not buy shares of Common Stock for his own account during the 60
days prior to the Exchange Date.
5.4 Notices. Seller will cause to be delivered to Purchaser:
(a) Immediately upon the occurrence of any Event of Default hereunder
or under the Collateral Agreement, or upon Seller's obtaining knowledge that any
of the conditions or events described in paragraph (a) or (b) of Article VII
shall have occurred with respect to the Company, notice of such occurrence; and
(b) In case at any time prior to the Exchange Date Seller receives
notice, or otherwise obtains knowledge, that any event requiring that an
adjustment be effected pursuant to Article VI hereof shall have occurred or be
pending, then Seller shall promptly cause to be delivered to Purchaser a notice
identifying such event and stating, if known to Seller, the date on which such
event is to occur and, if applicable, the record date relating to such event.
Seller shall cause further notices to be delivered to Purchaser if Seller shall
subsequently receive notice, or otherwise obtain knowledge, of any further or
revised information regarding the terms or timing of such event or any record
date relating thereto.
5.5 Further Assurances. From time to time on and after the date
hereof through the Exchange Date, each of the parties hereto shall use its or
his reasonable best efforts to take, or cause to be taken, all action and to do,
or cause to be done, all things necessary, proper and advisable to consummate
and make effective as promptly as practicable the transactions contemplated by
this Agreement in accordance with the terms and conditions hereof, including
(i) using reasonable best efforts to remove any legal impediment to the
consummation of such transactions and (ii) the execution and delivery of all
such deeds, agreements, assignments and further instruments of transfer and
conveyance necessary, proper or advisable to consummate and make effective the
transactions contemplated by the Agreement in accordance with the terms and
conditions hereof.
VI.
ADJUSTMENT OF EXCHANGE RATE, APPRECIATION THRESHOLD PRICE,
INITIAL PRICE AND CLOSING PRICE
6.1 Dilution Adjustments. The Exchange Rate, Appreciation Threshold
Price and Initial Price shall be subject to adjustment from time to time as
follows:
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<PAGE>
(a) Stock Dividends, Splits, Reclassifications, Etc. If the Company
shall, after the date hereof,
(i) pay a stock dividend or make a distribution with respect to
Common Stock in shares of such stock;
(ii) subdivide or split the outstanding shares of Common Stock into a
greater number of shares of Common Stock;
(iii) combine the outstanding shares of Common Stock into a smaller
number of shares; or
(iv) issue by reclassification of shares of its Common Stock any
shares of other common stock of the Company;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of shares of Common Stock (or in the case of a
reclassification referred to in clause (iv) above, the number of shares of other
common stock of the Company issued pursuant thereto), or the fraction thereof,
that a holder who held one share of Common Stock immediately prior to such event
would be entitled solely by reason of such event to hold immediately after such
event. The Appreciation Threshold Price and Initial Price shall also be
adjusted in the manner described in paragraph (e).
(b) Right or Warrant Issuances. If the Company shall, after the date
hereof, issue, or declare a record date in respect of an issuance of, rights or
warrants to all holders of Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the Then-Current
Market Price of the Common Stock (other than rights to purchase Common Stock
pursuant to a plan for the reinvestment of dividends or interest), then, in each
such case, the Exchange Rate shall be multiplied by a Dilution Adjustment equal
to a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately prior to the time the adjustment is effected by
reason of the issuance of such rights or warrants, plus the number of additional
shares of Common Stock offered for subscription or purchase pursuant to such
rights or warrants, and of which the denominator shall be the number of shares
of Common Stock outstanding immediately prior to the time the adjustment is
effected, plus the number of additional shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so
offered for subscription or purchase pursuant to such rights or warrants would
purchase at the Then-Current Market Price of the Common Stock, which shall be
determined by multiplying the total number of shares so offered for subscription
or purchase by the exercise price of such rights or warrants and dividing the
product so obtained by such Then-Current Market Price. To the extent that,
after the expiration of such rights or warrants, the shares of Common Stock
offered thereby shall not have been delivered, the Exchange Rate shall be
further adjusted to equal the Exchange Rate which
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<PAGE>
would have been in effect had such adjustment for the issuance of such rights or
warrants been made upon the basis of delivery of only the number of shares of
Common Stock actually delivered. The Appreciation Threshold Price and Initial
Price shall also be adjusted in the manner described in paragraph (e).
(c) Distributions of Other Assets. If the Company shall, after the
date hereof, declare or pay a dividend or make a distribution to all holders of
Common Stock, in either case, of evidences of its indebtedness or other
non-cash assets (excluding any dividends or distributions referred to in
paragraph (a) above) or shall issue to all holders of Common Stock rights or
warrants to subscribe for or purchase any of its securities (other than rights
or warrants referred to in paragraph (b) above), then, in each such case, the
Exchange Rate shall be multiplied by a Dilution Adjustment equal to a fraction,
of which the numerator shall be the Then-Current Market Price per share of the
Common Stock, and of which the denominator shall be such Then-Current Market
Price per share less the fair market value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Administrator) as of the time the adjustment is effected of the portion of the
assets or evidences of Indebtedness so distributed or of such subscription
rights or warrants applicable to one share of Common Stock. The Appreciation
Threshold Price and Initial Price shall also be adjusted in the manner described
in subparagraph (e).
(d) Cash Dividends; Excess Purchase Payments. If, after the date
hereof, the Company declares a record date in respect of a distribution of cash
(other than any Permitted Dividend, any cash distributed in consideration of
fractional shares of Common Stock and any cash distributed in a Reorganization
Event), by dividend or otherwise, to all holders of Common Stock, or makes an
Excess Purchase Payment, then the Exchange Rate will be multiplied by a Dilution
Adjustment equal to a fraction, of which the numerator shall be the Then-Current
Market Price of the Common Stock on such record date, and of which the
denominator shall be such Then-Current Market Price less the amount of such
distribution applicable to one share of Common Stock which would not be a
Permitted Dividend (or in the case of an Excess Purchase Payment, less the
aggregate amount of such Excess Purchase Payment for which adjustment is being
made at such time divided by the number of shares of Common Stock outstanding on
such record date). For purposes of these adjustments, (A) "Permitted Dividend"
means any quarterly cash dividend in respect of the Common Stock to the extent
that the per share amount of such dividend does not exceed ______ and
(B) "Excess Purchase Payment" means the excess, if any, of (x) the cash and the
value (as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Administrator, whose determination shall
be final) of all other consideration paid by the Company with respect to one
share of Common Stock acquired in a tender offer or exchange offer by the
Company, over (y) the Then-Current Market Price of the Common Stock. The
Appreciation Threshold Price and Initial Price shall also be adjusted in the
manner described in subparagraph (e).
10
<PAGE>
(e) Corresponding Adjustments to Initial Price, Appreciation
Threshold Price and Closing Price; Change in Principal Market. (i) If any
adjustment is made to the Exchange Ratio pursuant to paragraph (a), (b), (c) or
(d) of this Section 6.1, an adjustment shall also be made to the Appreciation
Threshold Price and the Initial Price. The required adjustment shall be made by
dividing each of the Appreciation Threshold Price and the Initial Price by the
relevant Dilution Adjustment.
(ii) If, during any Calculation Period used in calculating the Current
Market Price, the Then-Current Market Price or the Transaction Value, there
shall occur any event requiring an adjustment to be effected pursuant to this
Section 6.1, then the Closing Price for each Trading Day in the Calculation
Period occurring prior to the day on which such adjustment is effected shall be
adjusted by being divided by the relevant Dilution Adjustment.
(f) Timing of Dilution Adjustments. Each Dilution Adjustment shall
be effected:
(i) in the case of any dividend, distribution or issuance, at the
opening of business on the Business Day next following the record date for
determination of holders of Common Stock entitled to receive such dividend,
distribution or issuance or, if the announcement of any such dividend,
distribution or issuance is after such record date, at the time such
dividend, distribution or issuance shall be announced by the Company;
(ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction;
(iii) in the case of any Excess Purchase Payment for which the
Company shall announce, at or prior to the time it commences the relevant
share repurchase, the repurchase price per share for shares proposed to be
repurchased, on the date of such announcement; and
(iv) in the case of any other Excess Purchase Payment, on the date
that the holders of the repurchased shares become entitled to payment in
respect thereof.
(g) General; Failure of Dilution Event to Occur. All Dilution
Adjustments shall be rounded upward or downward to the nearest 1/10,000th (or if
there is not a nearest 1/10,000th to the next lower 1/10,000th). No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this sentence are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
If any announcement or declaration of a record date in respect of a dividend,
distribution, issuance or repurchase requiring an adjustment pursuant to this
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<PAGE>
Section 6.1 shall subsequently be cancelled by the Company, or such dividend,
distribution, issuance or repurchase shall fail to receive requisite approvals
or shall fail to occur for any other reason, then, upon such cancellation,
failure of approval or failure to occur, the Exchange Rate shall be further
adjusted to the Exchange Rate which would then have been in effect had
adjustment for such event not been made. If a Reorganization Event shall occur
after the occurrence of one or more events requiring an adjustment pursuant to
this Section 6.1, the Dilution Adjustments previously applied to the Exchange
Rate in respect of such events shall not be rescinded but shall be applied to
the new Exchange Rate provided for under Section 6.2.
6.2 Adjustment for Consolidation, Merger or Other Reorganization
Event. In the event of (i) any consolidation or merger of the Company, or any
surviving entity or subsequent surviving entity of the Company (a "Company
Successor"), with or into another entity (other than a merger or consolidation
in which the Company is the continuing corporation and in which the Common Stock
outstanding immediately prior to the merger or consolidation is not exchanged
for cash, securities or other property of the Company or another corporation),
(ii) any sale, transfer, lease or conveyance to another corporation of the
property of the Company or any Company Successor as an entirety or substantially
as an entirety, (iii) any statutory exchange of securities of the Company or any
Company Successor with another corporation (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company or any Company Successor (any such event described in clause (i), (ii),
(iii) or (iv), a "Reorganization Event"), the Exchange Rate shall be adjusted so
that on the Exchange Date Purchaser shall receive, in lieu of the Contract
Shares, cash in an amount equal to the product of (x) the Firm Share Base Amount
plus the Additional Share Base Amount (if any) and (y)(i) if the Transaction
Value is less than the Appreciation Threshold Price but equal to or greater than
the Initial Price, the Initial Price, (ii) if the Transaction Value is equal to
or greater than the Appreciation Threshold Price, 0.x multiplied by the
Transaction Value, and (iii) if the Transaction Value is less than the Initial
Price, the Transaction Value. Notwithstanding the foregoing, if any Marketable
Securities are received by holders of Common Stock in such Reorganization Event,
Seller may, at its option, in lieu of delivering cash as described above,
deliver an equivalent amount (based on the value determined in accordance with
clause (z) of the following paragraph) of Marketable Securities, but not
exceeding, as a percentage of the total consideration required to be delivered,
the percentage of the total Transaction Value attributable to such Marketable
Securities.
"Transaction Value" means the sum of: (x) for any cash received in any
such Reorganization Event, the amount of cash received per share of Common
Stock; (y) for any property other than cash or Marketable Securities received in
any such Reorganization Event, an amount equal to the market value on the date
the Reorganization Event is consummated of such property received per share of
Common Stock, as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator; and (z) for any
Marketable Securities received in any such Reorganization
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<PAGE>
Event, an amount equal to the average Closing Price per share of such Marketable
Securities for the Calculation Period of 20 Trading Days immediately prior to
the Exchange Date multiplied by the number of such Marketable Securities
received for each share of Common Stock; provided that if no Closing Price for
such Marketable Securities may be determined for one or more (but not all) of
such Trading Days such Trading Day shall be disregarded in the calculation of
such average Closing Price (but no additional trading days shall be added to the
Calculation Period). If no Closing Price for the Marketable Securities may be
determined for all such Trading Days, the calculation in the preceding clause
(z) shall be based on the most recently available Closing Price for the
Marketable Securities prior to such 20 Trading Days.
"Marketable Securities" means any common equity securities listed on a
U.S. national securities exchange or reported by The Nasdaq National Market.
The number of shares of any Marketable Securities included in the calculation of
Transaction Value pursuant to the preceding clause (z) shall be subject to
adjustment if any event that would, had it occurred with respect to the Common
Stock or the Company, have required an adjustment pursuant to Section 6.1, shall
occur with respect to such Marketable Securities or the issuer thereof
subsequent to the date the Reorganization Event is consummated. Adjustment for
such subsequent events shall be as nearly equivalent as practicable to the
adjustments provided for in Section 6.1.
VII.
ACCELERATION
If one or more of the following events (each an "Event of Default")
shall occur:
(a) Seller, in his individual capacity or as trustee of the David H.
Murdock Living Trust dated May 28, 1986, shall commence a voluntary case or
other proceeding seeking a liquidation, reorganization or other relief with
respect to himself or his debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of him or any
substantial part of his property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against him, or shall take any action to authorize
any of the foregoing;
(b) an involuntary case or other proceeding shall be commenced
against the Seller, in his individual capacity or as trustee of the David H.
Murdock Living Trust dated May 28, 1986, seeking liquidation, reorganization or
other relief with respect to him or his debts under any bankruptcy, insolvency
or other similar law now or hereafter in
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<PAGE>
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of him or any substantial part of his property, and
such involuntary case or other proceeding shall remain undismissed and unstayed
for a period of 60 days; or an order for relief shall be entered against the
Seller under the federal bankruptcy laws as now or hereafter in effect; or
(c) a Collateral Event of Default within the meaning of the
Collateral Agreement;
then, upon the occurrence of any such event, an Acceleration Date shall occur,
and Seller shall become obligated to deliver, immediately upon receipt of the
Acceleration Amount Notice (as defined below), the Acceleration Amount of Common
Stock. The "Acceleration Amount" means the quotient obtained by dividing:
(i) the Aggregate Acceleration Value, as defined below, by (ii) the Current
Market Price on the Acceleration Date. If a Reorganization Event shall have
occurred on or before the Acceleration Date, then in lieu of the Acceleration
Amount of Common Stock, Seller shall deliver cash, Marketable Securities or a
combination thereof having an aggregate value, based on the Closing Price per
share of the Marketable Securities on the Acceleration Date, equal to the
Aggregate Acceleration Value; provided that the percentage of such aggregate
value that may be delivered in the form of Marketable Securities shall not
exceed the percentage of the Transaction Value that would be attributable to
Marketable Securities if the Exchange Date were the Acceleration Date.
The "Aggregate Acceleration Value" means the product obtained by
multiplying: (i) the quotient obtained by dividing (A) the Acceleration Value by
(B) 1,000 by (ii) the sum of the Firm Share Base Amount and the Additional Share
Base Amount (if any); except that, if no quotations for the determination of the
Acceleration Value are obtained as described below, the Aggregate Acceleration
Value shall be (A) the Current Market Price on the Acceleration Date times the
number of shares of Common Stock that would be required to be delivered by
Seller on such date under this Agreement if the Exchange Date were the
Acceleration Date or (B) after a Reorganization Event, the value of the
alternative consideration that would be required to be delivered by Seller on
such date under this Agreement if the Exchange Date were the Acceleration Date.
The "Acceleration Value" means an amount determined on the basis of
quotations from Independent Dealers, determined as follows. Each quotation will
be for the amount that would be paid to the relevant Independent Dealer in
consideration of an agreement between Purchaser and such Independent Dealer that
would have the effect of preserving Purchaser's right to receive the payments
and deliveries that Purchaser would, but for the occurrence of the Acceleration
Date, have been entitled to receive after the Acceleration Date under Article I
hereof (taking into account any adjustments to the Exchange Rate that may have
been effected on or prior to the Acceleration Date), provided that, for purposes
of determining the payments and deliveries to which Purchaser is entitled
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<PAGE>
under Article I hereof, the Additional Share Base Amount shall be redefined to
be zero and the Firm Share Base Amount shall be redefined to be 1,000. On or as
soon as reasonably practicable following the Acceleration Date, Purchaser will
request each Independent Dealer to provide its quotation as soon as reasonably
practicable, but in any event within two Business Days. Purchaser shall compute
the Acceleration Value upon receipt of each Independent Dealer's quotation,
provided that if, at the close of business on the fourth Business Day following
the Acceleration Date, Purchaser shall have received quotations from fewer than
four of the Independent Dealers, Purchaser shall compute the Acceleration Value
using the quotations, if any, it shall have received at or prior to such time.
If four quotations are provided, the Acceleration Value will be the arithmetic
mean of the two quotations remaining after disregarding the highest and lowest
quotations. (For this purpose, if more than one quotation has the same highest
or lowest value, then one of such quotations shall be disregarded.) If two or
three quotations are provided, the Acceleration Value will be the arithmetic
mean of such quotations. If one quotation is provided, the Acceleration Value
will be equal to such quotation. If no quotations are provided, the
Acceleration Value will not be determined and the Aggregate Acceleration Value
will be determined as provided above.
"Independent Dealers" means four nationally recognized independent
investment banking firms selected by the Administrator.
As promptly as reasonably practicable after receipt of the quotations
on which the Acceleration Value is based (or, as the case may be, after failure
to receive any such quotations within the time period prescribed above)
Purchaser shall deliver to Seller a notice (the "Acceleration Amount Notice")
specifying the Acceleration Amount of Common Stock (or, after a Reorganization
Event, the amount of cash and marketable Securities) required to be delivered by
Seller. Purchaser and Seller agree that the Aggregate Acceleration Value is a
reasonable pre-estimate of loss and not a penalty. Such amount is payable for
the loss of bargain and Purchaser will not be entitled to recover additional
damage as a consequence of loss resulting from an Event of Default.
VIII.
MISCELLANEOUS
8.1 Adjustments of Exchange Rate; Selection of Independent Investment
Banking Firm. Purchaser shall be responsible for the effectuation and
calculation of any adjustment pursuant to Article VI hereof and shall furnish
Seller notice of any such adjustment and shall provide Seller reasonable
opportunity to review the calculations pertaining to any such adjustment. If,
pursuant to the terms and conditions hereof, the Administrator shall be required
to retain a nationally recognized independent
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<PAGE>
investment banking firm for any purpose provided herein, such nationally
recognized independent investment banking firm shall be selected and retained by
the Administrator only after consultation with Seller.
8.2 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard forms of telecommunication. Notices to Purchaser shall be
directed to it in care of the Administrator for Purchaser, The Bank of New York,
at 101 Barclay Street, New York, New York 10286, Telecopy No: (212) 815-5999,
attention ________________, with a copy to _______________; notices to Seller
shall be directed to him at ____________________.
8.3 Governing Law; Severability. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York. To the
extent permitted by law, the unenforceability or invalidity of any provision or
provisions of this Agreement shall not render any other provision or provisions
herein contained unenforceable or invalid.
8.4 Entire Agreement. Except as expressly set forth herein, this
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements, understandings and
negotiations, both written an oral, among the parties with respect to the
subject matter of this Agreement.
8.5 Amendments; Waivers. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Purchaser and Seller or, in the case of
a waiver, by the party against whom the waiver is to be effective. No failure
or delay by either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
8.6 No Third Party Rights; Successors and Assigns. This Agreement is
not intended and shall not be construed to create any rights in any person other
than Seller and Purchaser and their respective successors and assigns and no
person shall assert any rights as third party beneficiary hereunder. Whenever
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party. All the covenants and
agreements herein contained by or on behalf of the Seller and Purchaser shall
bind, and inure to the benefit of, their respective successors and assigns
whether so expressed or not, and shall be enforceable by and inure to the
benefit of Purchaser and its successors and assigns.
8.7 Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.
SELLER:
David H. Murdock, as trustee of the
David H. Murdock Living Trust
---------------------------
PURCHASER:
, as trustee,
-------------------------
, as trustee, and
-------------------------
, as trustee,
-------------------------
each as trustee of Dole Food Automatic
Common Exchange Security Trust
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S&C DRAFT OF AUGUST 1, 1996
DOLE FOOD AUTOMATIC COMMON EXCHANGE SECURITY TRUST
$ . AUTOMATIC COMMON EXCHANGE SECURITIES
(SUBJECT TO EXCHANGE INTO SHARES OF
COMMON STOCK OF DOLE FOOD COMPANY, INC.)
UNDERWRITING AGREEMENT
---------------------------------------
. . . . . . , 1996
Goldman, Sachs & Co.,
As representatives of the several Underwriters
named in Schedule I hereto,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Dole Food Automatic Common Exchange Security Trust, a trust duly created
under the laws of the State of New York (such trust and the trustees thereof
acting in their capacities as such being referred to herein as the "Trust"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of .......... of the $ . Automatic Common Exchange Securities of the Trust
specified above (the "Firm Securities") and, at the election of the
Underwriters, up to an aggregate of additional $ . Automatic Common Exchange
Securities (the "Optional Securities") (the Firm Securities and the Optional
Securities which the Underwriters elect to purchase pursuant to Section 2 hereof
are herein collectively called the "Securities").
The $ . Automatic Common Exchange Securities of the Trust to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
called the "Automatic Common Exchange Securities." Each Automatic Common
Exchange Security will be exchanged for shares of Common Stock, no par value
("Stock"), of Dole Food Company, Inc. (the "Company") on .........., 1999 (the
"Exchange Date") to be delivered pursuant to a purchase agreement (the "Purchase
Agreement") among the Trust and David H. Murdock as trustee of the David H.
Murdock Living Trust dated May 28, 1986, as amended, and in his individual
capacity (together, the "Seller"). The Trust has entered into the Purchase
Agreement with the Seller pursuant to which the Seller has agreed to sell, and
the Trust has agreed to purchase, the number of shares of Stock deliverable by
the Seller on, or
<PAGE>
S&C DRAFT OF AUGUST 1, 1996
immediately prior to, the Exchange Date. The Seller's obligations under the
Purchase Agreement will be secured by a pledge of collateral pursuant to the
terms of a collateral agreement between the Seller and The Bank of New York, as
collateral agent (the "Collateral Agreement").
1. (a) The Trust represents and warrants to, and agrees with, each of
the Underwriters, the Seller and the Company that:
(i) A notification on Form N-8A (the "Notification") of
registration of the Trust as an investment company has been filed with the
Securities and Exchange Commission (the "Commission"); a registration
statement on Form N-2 (File No. 333-325) (the "Initial Trust Registration
Statement" in respect of the Securities has been filed with the Commission;
the Initial Trust Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto, to you for each of the other Underwriters, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Trust Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial Trust
Registration Statement has heretofore been filed with the Commission; and
no stop order suspending the effectiveness of the Initial Trust
Registration Statement, any post-effective amendment thereto or the Trust
Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Trust
Registration Statement or filed with the Commission pursuant to Rule 424(a)
of the rules and regulations of the Commission under the Act, is
hereinafter called a "Trust Preliminary Prospectus"; the various parts of
the Initial Trust Registration Statement and the Trust Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including the information contained in the form of final prospectus filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to
be part of the Initial Trust Registration Statement at the time it was
declared effective or such part of the Trust Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, each as amended
at the time such part of the registration statement became effective, are
hereinafter collectively called the "Trust Registration Statement"; and
such final prospectus, in the form first filed pursuant to Rule 424(b)
under the Act, is hereinafter called the "Trust Prospectus";
(ii) No order preventing or suspending the use of any Trust
Preliminary Prospectus has been issued by the Commission, and each Trust
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the Investment Company
Act of 1940 as amended (the "Investment Company Act" and together with the
"Act", the "Acts"), and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED, HOWEVER, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Trust by the Underwriters expressly for use therein;
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<PAGE>
(iii) The Notification and the Trust Registration Statement
conform, and the Trust Prospectus and any further amendments or supplements
to the Notification, the Trust Registration Statement or the Trust
Prospectus will conform, in all material respects to the requirements of
the Acts and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the Trust
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Trust Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Trust by the Underwriters expressly for use therein;
(iv) Since the respective dates as of which information is
given in the Trust Registration Statement and the Trust Prospectus, there
has not been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, results of operations, prospects,
investment objectives, investment policies, liabilities of the Trust,
otherwise than as set forth or contemplated in the Trust Prospectus and
there have been no transactions entered into by the Trust which are
material to the Trust other than those in the ordinary course of its
business or as described in the Trust Prospectus;
(v) The Trust has been duly created, is validly existing as a
trust under the laws of the State of New York, with power and authority to
own its properties and conduct its business as described in the Trust
Prospectus and to enter into and perform its obligations under this
Agreement and the Amended and Restated Trust Agreement, dated as of
............, 1996 among the trustees of the Trust (the "Trustees") and
Goldman, Sachs & Co., as Sponsor (the "Trust Agreement"); the Trust has all
necessary consents, approvals, authorizations, orders, registrations or
qualifications, of and from, and has made all declarations and filings
with, all courts and governmental agencies and bodies, to own and use its
assets and to conduct its business in the manner described in the Trust
Prospectus, except to the extent that the failure to obtain or file the
foregoing would not have a material adverse effect on the Trust and except
such as may be required by the NASD or the registration under the Act of
the Securities and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities by
the Underwriters; the Trust has no subsidiaries;
(vi) The Trust is registered with the Commission as a
non-diversified, closed-end management investment company under the
Investment Company Act and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to the
knowledge of the Trust, threatened by the Commission; no person is serving
or acting as an officer or trustee of, the Trust except in accordance with
the provisions of the Investment Company Act;
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<PAGE>
(vii) Each of the Purchase Agreement, the Collateral
Agreement, the Administration Agreement between The Bank of New York
("BONY") and the Trust (the "Administration Agreement"), the Custodian
Agreement between BONY and the Trust (the "Custodian Agreement"), the
Paying Agent Agreement between BONY and the Trust (the "Paying Agent
Agreement"), the Fund Expense Agreement between Goldman, Sachs & Co. and
BONY (the "Fund Expense Agreement") and the Fund Indemnity Agreement
between Goldman, Sachs & Co. and the Trust (the "Fund Indemnity Agreement")
(the Purchase Agreement, the Collateral Agreement, the Administration
Agreement, the Custodian Agreement, the Paying Agent Agreement, the Fund
Expense Agreement and the Fund Indemnity Agreement are herein collectively
called the "Fundamental Agreements") has been duly authorized, executed and
delivered by the Trust and, assuming due authorization, execution and
delivery by the other parties thereto, constitutes a valid and legally
binding agreement of the Trust, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(viii) The Trust Agreement and the Fundamental Agreements
comply with all applicable provisions of the Acts, and all approvals of
such documents required under the Investment Company Act by the holders of
the Automatic Common Exchange Securities and the Trustees have been
obtained and are in full force and effect;
(ix) All of the outstanding Automatic Common Exchange
Securities have been duly and validly authorized and issued and are fully
paid and non-assessable and the form of certificates used to evidence the
Automatic Common Exchange Securities is in due and proper form and complies
with all provisions of applicable law; the Trust Agreement and the
Fundamental Agreements conform to the description thereof contained in the
Trust Prospectus;
(x) The Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will be validly issued, fully paid
and non-assessable; the Securities will conform to the description thereof
in the Trust Prospectus; no person has rights to registration of any
securities because of the filing of the Trust Registration Statement;
(xi) The issue and sale of the Securities and the compliance
by the Trust with all of the provisions of the Securities, this Agreement
and each Fundamental Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, the Trust Agreement or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Trust is a party or
by which the Trust is bound or to which any of the property or assets of
the Trust is subject, nor will such action result in any violation of any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Trust or any of its properties;
and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
the Trust of the transactions contemplated by this Agreement or the
Fundamental Agreements, except such as may be required by the NASD and
except the registration under
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the Act of the Securities and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters;
(xii) The Fundamental Agreements are in full force and effect
and the Trust is not in default in the performance or observance of any
obligation, covenant or condition thereunder and, to the knowledge of the
Trust, no event has occurred which with the passage of time or the giving
of notice or both would constitute a default thereunder; the Trust is not
in default in the performance or observance of any obligation, covenant or
condition contained in any other agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(xiii) The statements set forth in the Trust Prospectus under
the caption "Description of the Securities", insofar as they purport to
constitute a summary of the terms of the Securities, under the caption
"Certain Federal Income Tax Considerations", and under the caption
"Underwriting", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate, complete and fair;
(xiv) Other than as set forth in the Trust Prospectus, there
are no legal or governmental proceedings pending to which the Trust is a
party or of which any property of the Trust is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
current or future financial position, or results of operations of the
Trust; and, to the best of the Trust's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(xv) There are no material restrictions, limitations or
regulations with respect to the ability of the Trust to invest its assets
as described in the Trust Prospectus, other than as described therein;
(xvi) The Securities and any Automatic Common Exchange
Securities outstanding prior to the issuance of the Securities have been
approved for listing on the New York Stock Exchange, subject to notice of
issuance; the Trust's Registration Statement on Form 8-A under the
Exchange Act of 1934, as amended (the "Exchange Act") is effective;
(xvii) The Trust does not do business with the government of
Cuba or with any person or affiliate located in Cuba within the meaning of
Section 517.075, Florida Statutes; and
(xviii) [Name of Accountants,] who have certified certain
financial statements and supporting schedules included in Trust
Registration Statement, are independent public accountants as required by
the Act and the rules and regulations of the Commission thereunder.
(b) The Seller represents and warrants to, and agrees with, each
of the Underwriters, the Company and the Trust that:
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(i) The David H. Murdock Living Trust dated May 28, 1986, as
amended, has been duly created, is validly existing as a trust under the
laws of the State of [California], has the power and authority to own its
property and to conduct its business and has been duly qualified for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any
such jurisdiction;
(ii) Each of the Purchase Agreement and the Collateral
Agreement has been duly authorized, executed and delivered by the Seller
and, assuming due authorization, execution and delivery by the other parties
thereto, constitutes a valid and legally binding agreement of the Seller,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(iii) The compliance by the Seller with all of the provisions
of this Agreement, the Purchase Agreement and the Collateral Agreement and
the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, the constitutive documents of
the David H. Murdock Living Trust dated May 28, 1986, as amended, or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Seller is a party or by which the Seller is bound
or to which any of the property or assets of the Seller is subject, nor
will such action result in any violation of any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Seller or any of the Seller's properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
compliance by the Seller with or the consummation by the Seller of the
transactions contemplated by this Agreement, the Purchase Agreement or the
Collateral Agreement, except such as may be required by the NASD and except
the registration under the Act of the Securities and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of Stock by the Trust pursuant to the Purchase
Agreement;
(iv) The Seller has, and immediately prior to each Time of
Delivery (as defined in Section 4 hereof) the Seller will have, good and
valid title to the shares of Stock to be pledged and assigned by it under
the Collateral Agreement, free and clear of all liens, encumbrances,
equities or claims other than such liens as have been disclosed to you in
writing and as will be released at or before the relevant Time of Delivery
and other than those created pursuant to the Collateral Agreement; all
consents, approvals, authorizations and orders necessary for the Seller to
pledge and assign the shares of Stock to be pledged and assigned by the
Seller pursuant to the Collateral Agreement have been obtained; the Seller
has full right, power and authority to pledge and assign the shares of
Stock to be pledged and assigned by the Seller pursuant to the Collateral
Agreement; and, upon delivery of such shares of Stock and payment therefor
pursuant to the Purchase Agreement, good and valid title to such shares of
Stock, free and clear of all liens, encumbrances, equities or claims, will
pass to the holders of the Securities;
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<PAGE>
(v) The representations and warranties of the Seller set
forth in Section 3 of the Collateral Agreement are true and correct on and
as of the date hereof with the same effect as though such representations
and warranties had been set forth in full in this Agreement;
(vi) No order preventing or suspending the use of any Trust
Preliminary Prospectus has been issued by the Commission, and each Trust
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust by the Underwriters expressly
for use therein; and
(vii) The Trust Registration Statement conforms, and the
Trust Prospectus and any further amendments or supplements to the Trust
Registration Statement or the Trust Prospectus will conform, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and does not and will not, as of
the applicable effective date as to the Trust Registration Statement and
any amendment thereto and as of the applicable filing date as to the Trust
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Trust by the
Underwriters expressly for use therein.
(c) The Company represents and warrants to, and agrees with, each of
the Underwriters, the Trust and the Sellers that:
(i) A registration statement on Form S-3 (File No. 333-....)
(the "Initial Company Registration Statement") in respect of the shares of
Stock deliverable pursuant to the Purchase Agreement has been filed with
the Commission; the Initial Company Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered to
you, and, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, to you for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Company Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Act, which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Company Registration Statement, any
post-effective amendment thereto or the Company Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Company Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Company Preliminary
Prospectus"; the various parts of the
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<PAGE>
Initial Company Registration Statement and the Company Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including (i) the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under
the Act to be part of the Initial Registration Statement at the time it was
declared effective and (ii) the documents incorporated by reference in the
prospectus contained in the registration statement at the time such part of
the Initial Company Registration Statement became effective or such part of
the Company Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, each as amended at the time such part of the
registration statement became effective or such part of the Company Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Company Registration
Statement"; such final prospectus, in the form first filed pursuant to Rule
424(b) under the Act, is hereinafter called the "Company Prospectus"; the
Trust Registration Statement and the Company Registration Statement are
hereinafter collectively called the "Registration Statements" and the Trust
Prospectus and the Company Prospectus are hereinafter collectively called
the "Prospectuses"; any reference herein to any Company Preliminary
Prospectus or the Company Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Act, as of the date of such Company Preliminary
Prospectus or Company Prospectus, as the case may be; any reference to any
amendment or supplement to any Company Preliminary Prospectus or the
Company Prospectus shall be deemed to refer to and include any documents
filed after the date of such Company Preliminary Prospectus or Company
Prospectus, as the case may be, under the Exchange Act, and incorporated by
reference in such Company Preliminary Prospectus or Company Prospectus, as
the case may be; and any reference to any amendment to the Company
Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Initial Company Registration
Statement that is incorporated by reference in the Company Registration
Statement);
(ii) No order preventing or suspending the use of any Company
Preliminary Prospectus has been issued by the Commission, and each Company
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters
expressly for use therein or by the Seller expressly for use in the
preparation of the answers therein to Item 7 of Form S-3;
(iii) The documents incorporated by reference in the Company
Prospectus, when they became effective or were filed with the Commission,
as the case may be, conformed in all material respects to the requirements
of the Act or the Exchange Act and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or
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<PAGE>
necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Company Prospectus
or any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters
expressly for use therein;
(iv) The Company Registration Statement conforms, and the
Company Prospectus and any further amendments or supplements to the Company
Registration Statement or the Company Prospectus will conform, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and does not and will not, as of
the applicable effective date as to the Company Registration Statement and
any amendment thereto and as of the applicable filing date as to the
Company Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriters expressly for use therein or by the Seller expressly for use
in the preparation of the answers therein to Item 7 of Form S-3;
(v) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Company Prospectus any
material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Company Prospectus; and, since the
respective dates as of which information is given in the Company
Registration Statement and the Company Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development relating
specifically to the Company which the Company reasonably believes will
involve a prospective material adverse change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Company Prospectus;
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Company Prospectus;
(vii) The Company has an authorized capitalization as set
forth in the Company Prospectus, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description of the Stock
contained in the Company Prospectus;
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<PAGE>
(viii) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the transactions
herein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company
is subject or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties (with such exceptions as would not have a material adverse
effect on the transactions contemplated hereby or on the Company and its
subsidiaries taken as a whole), nor will such action result in any
violation of the provisions of the Articles of Association or By-laws of
the Company; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body
is required for sale of the Stock or the consummation by the Company of the
transactions contemplated by this Agreement, except such as may be required
by the NASD or the registration under the Act of the Stock and such
consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the shares of Stock pursuant to the Purchase
Agreement;
(ix) Other than as set forth in the Company Prospectus, there
are no legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(x) The Stock is listed on the New York Stock Exchange and
the Pacific Stock Exchange; and
(xi) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate located
in Cuba within the meaning of Section 517.075, Florida Statutes.
2. Subject to the terms and conditions herein set forth, (a) the Trust
agrees, to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Trust, at a
purchase price of $..... per security, the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule I hereto, and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Securities as provided below, the Seller agrees to cause the Trust, and
the Trust agrees, to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Trust, at
the same purchase price set forth in clause (a) of this Section 2, that portion
of the aggregate number of Optional Securities as to which such election shall
have been exercised (to be adjusted by you so as to eliminate fractional
securities) determined by multiplying such aggregate number of Optional
Securities by a fraction, the numerator of which is the maximum aggregate number
of Optional Securities which such Underwriter is entitled to purchase as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum aggregate number of Optional Securities
which all of the Underwriters are entitled to purchase
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<PAGE>
hereunder. The agreements in this Section made by the Trust are for the benefit
of and enforceable by the Underwriters. The agreements in this Section made by
the Underwriters are for the benefit of and enforceable by the Seller and the
Trust.
The Trust hereby grants to the Underwriters the right to purchase at their
election up to ........ Optional Securities, at the purchase price set forth in
clause (a) of the first paragraph of this Section 2, for the sole purpose of
covering overallotments in the sale of Firm Securities. Any such election to
purchase Optional Securities may be exercised by written notice from you to the
Trust, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate principal amount of Optional Securities
to be purchased and the date on which such Optional Securities are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as defined in Section (4) hereof) or, unless you and the Trust
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
As compensation to the Underwriters for their commitments hereunder, and in
view of the fact that the proceeds of the sale of the Securities will be used by
the Trust as specified in the Purchase Agreement, the Seller hereby agrees to
pay at each Time of Delivery (as defined in Section 4 hereof) to Goldman, Sachs
& Co., for the accounts of the several Underwriters, an amount equal to $......
per Security for the Securities to be delivered at such Time of Delivery.
Alternatively, as a matter of convenience, Goldman, Sachs & Co. may deduct such
amount from the purchase price of the Securities and in such event the Seller
shall be deemed to have paid the same.
3. Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Trust, shall be delivered by or on behalf of the Trust to Goldman,
Sachs & Co. for the account of such Underwriter, against payment by or on behalf
of such Underwriter of the purchase price therefor in Federal (same day) funds.
The Trust will cause the certificates representing the Securities to be made
available for checking and packaging at least twenty-four hours prior to the
Time of Delivery (as defined below) at the office of Goldman, Sachs & Co., 85
Broad Street, New York, New York 10004 (the "Designated Office"). The time and
date of such delivery and payment shall be, with respect to the Firm Securities,
9:30 a.m., New York City time, on ................, 1996 or such other time and
date as Goldman, Sachs & Co. and the Trust may agree upon in writing, and, with
respect to the Optional Securities, 9:30 a.m., New York City time, on the date
specified by Goldman, Sachs & Co. in the written notice given by Goldman, Sachs
& Co. of the Underwriters' election to purchase such Optional Securities, or
such other time and date as the Underwriters and the Trust may agree upon in
writing. Such time and date for delivery of the Firm Securities is herein
called the "First Time of Delivery", such time and date for delivery of the
Optional Securities, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(l) hereof, will be delivered at the offices
of Sullivan & Cromwell, 444 South Flower Street, Los Angeles, California 90071
(the "Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery.
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A meeting will be held at the Closing Location at ......... p.m., Los Angeles
time, on the New York Business Day next preceding such Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York City are generally authorized or obligated by law or
executive order to close.
5. (a) The Trust agrees with each of the Underwriters:
(i) To prepare the Trust Prospectus in a form approved by you and to
file such Trust Prospectus pursuant to Rule 497(h) under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Trust Registration Statement or Trust
Prospectus which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of the time
when any amendment to the Trust Registration Statement has been filed or becomes
effective or any supplement to the Trust Prospectus or any amended Prospectus
has been filed and to furnish you with copies thereof; to advise you, promptly
after it receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Trust Preliminary
Prospectus or prospectus or any order pursuant to Section 8(e) of the Investment
Company Act, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Trust Registration Statement or Trust
Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any Trust
Preliminary Prospectus or prospectus or suspending any such qualification or
order pursuant to Section 8(e) of the Investment Company Act, to promptly use
its best efforts to obtain the withdrawal of such order;
(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Trust shall not be
required to qualify as a foreign trust or association or to file a general
consent to service of process in any jurisdiction;
(iii) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with copies of the Trust Prospectus in New York City
in such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months after
the time of issue of the Trust Prospectus in connection with the offering or
sale of the Securities and if at such time any event shall have occurred as a
result of which the Trust Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Trust Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Trust Prospectus in order to
comply with the Act, to notify you and upon your request to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as you may from time to
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time reasonably request of an amended Trust Prospectus or a supplement to the
Trust Prospectus which will correct such statement or omission or effect such
compliance; and in case any Underwriter is required to deliver a prospectus in
connection with sales of any of the Securities at any time nine months or more
after the time of issue of the Trust Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as many
copies as you may request of an amended or supplemented Trust Prospectus
complying with Section 10(a)(3) of the Act;
(iv) To make generally available to the Trust's securityholders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Trust Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Trust (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations of the
Trust thereunder (including, at the option of the Trust, Rule 158);
(v) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Trust
Prospectus under the caption "Use of Proceeds";
(vi) To use its best efforts to list, subject to notice of issuance,
the Securities on the New York Stock Exchange (the "Exchange"); and
(vii) If the Trust elects to rely upon Rule 462(b), the Trust
shall file a Trust Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement, and the Trust shall at the time of the filing either pay to the
Commission the filing fee for the Trust Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
(b) The Company agrees with each of the Underwriters:
(i) To prepare the Company Prospectus in a form approved by you and
to file such Company Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Company Registration Statement or Company
Prospectus prior to such Time of Delivery which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Company
Registration Statement has been filed or becomes effective or any supplement to
the Company Prospectus or any amended Company Prospectus has been filed and to
furnish you with copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Company Prospectus and for so long as the delivery
of a prospectus is required in connection with the offering or sale of the
Securities; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Company Preliminary Prospectus or prospectus, of the
suspension of the qualification of the shares of Stock to be delivered pursuant
to the Purchase Agreement for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Company
Registration Statement or Company Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Company Preliminary Prospectus or prospectus or
suspending any such qualification, to promptly use its best efforts to obtain
the withdrawal of such order;
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(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the shares of Stock for offering and sale under
the securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Stock, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(iii) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with copies of the Company Prospectus in New York
City in such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months after
the time of issue of the Company Prospectus in connection with the offering or
sale of the Securities and if at such time any event shall have occurred as a
result of which it is necessary to amend or supplement the Company Prospectus in
order that the Trust Prospectus as then amended or supplemented would not
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Trust Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Company Prospectus or to file
under the Exchange Act any document incorporated by reference in the Company
Prospectus in order to comply with the Act or the Exchange Act, to notify you
and upon your request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as you
may from time to time reasonably request of an amended Company Prospectus or a
supplement to the Company Prospectus which will correct such statement or
omission or effect such compliance; and in case any Underwriter is required to
deliver a prospectus in connection with sales of any of the Securities at any
time nine months or more after the time of issue of the Trust Prospectus, upon
your request but at the expense of such Underwriter, to prepare and deliver to
such Underwriter as many copies as you may request of an amended or supplemented
Company Prospectus complying with Section 10(a)(3) of the Act;
(iv) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Company Registration Statement (as defined in Rule 158(c) of the
Act), an earnings statement of the Company and its subsidiaries (which need not
be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(v) During the period beginning from the date hereof and continuing
to and including the date 90 days after the date of the Company Prospectus, not
to offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any Stock or any securities of the Company that are substantially
similar to the Stock, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to receive,
Stock or any such substantially similar securities (other than pursuant to
employee stock option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of this
Agreement), without your prior written consent;
(vi) To furnish to the holders of the Securities and to its
shareholders as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, shareholders' equity
and cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and to make available to its shareholders,
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as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Company Registration Statement), consolidated summary financial
information of the Company and its subsidiaries for such quarter in reasonable
detail;
(vii) During a period of five years from the effective date of the
Company Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which the Stock or any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished to its
shareholders generally or to the Commission); and
(viii) If the Company elects to rely upon Rule 462(b), the Company
shall file a Company Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement, and the Company shall at the time of filing either pay or cause
to be paid to the Commission the filing fee for the Company Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the Act.
(c) The Seller agrees with each of the Underwriters, during the
period beginning from the date hereof and continuing to and including the date
180 days after the date of the Company Prospectus, not to offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder, any Stock or any
securities of the Company that are substantially similar to the Stock, including
but not limited to any securities that are convertible into or exchangeable for,
or that represent the right to receive, Stock or any such substantially similar
securities, without your prior written consent.
6. The Trust, the Company and the Seller covenant and agree with one
another and with the several Underwriters that (a) the Seller will pay or cause
to be paid (i) the fees, disbursements and expenses of the Company's counsel and
the Seller's counsel and the Company's accountants in connection with the
registration of the Securities and the Stock under the Act; (ii) all other
expenses in connection with the preparation, printing and filing of the
Notification, the Registration Statements, any Trust Preliminary Prospectus and
Company Preliminary Prospectus and the Prospectuses and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers which are not otherwise specifically provided for in
this section; (iii) the cost of printing or producing Blue Sky Memoranda in
connection with the offering, purchase, sale and delivery of the Securities and
Stock; (iv) all expenses in connection with the qualification of the Securities
and Stock for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey; (v) the filing fees incident to, and the fees and disbursements
of counsel for the Underwriters in connection with, securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the Securities; (vi) all fees and expenses in connection with the preparation
and filing of a registration statement under the Exchange Act relating to the
Securities and all costs and expenses incident to the listing of the Securities
on the New York Stock Exchange; (vii) the cost of preparing certificates
representing the Securities; (viii) the cost and charges of any transfer agent
or registrar for the Securities; (ix) all
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expenses and taxes incident to the sale and delivery of the shares of Stock to
be sold or pledged by the Seller; and (x) all other costs and expenses incident
to the performance by the Trust, the Company and the Seller of their respective
obligations hereunder which are not otherwise specifically provided for in this
Section; (b) the Company will pay or cause to be paid (i) the cost of preparing
stock certificates; and (ii) the cost and charges of any transfer agent or
registrar for the Stock and (c) Goldman, Sachs & Co. will pay or cause to be
paid all fees, disbursements and expenses of the Trust's counsel and the Trust's
accountants in connection with the registration of the Securities under the Act.
It is understood, however, that, except as provided in this Section, and
Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters hereunder, as to the Securities to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Trust, the Company and the Seller herein are, at and as of such Time of
Delivery, true and correct, the condition that the Trust, the Company and the
Seller shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectuses shall have been filed with the Commission
pursuant to Rule 424(b) or Rule 497(h), as applicable, within the applicable
time period prescribed for such filing by the rules and regulations under the
Act and in accordance with Section 5(a) hereof; if the Company and the Trust
have elected to rely upon Rule 462(b), the Company Rule 462(b) Registration
Statement and the Trust Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of this Agreement;
no stop order suspending the effectiveness of the Registration Statements or any
part thereof, and no order pursuant to Section 8(e) of the Investment Company
Act, shall have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to your
reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters and the Trust,
shall have furnished to you their opinion or opinions, dated such Time of
Delivery, with respect to such matters as you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Counsel for the Company and the Seller satisfactory to you, shall
have furnished to you their written opinion or opinions, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect set forth in
Annex I;
(d) On the date of the Trust Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Trust Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery,
........... shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to you,
in the form set forth as Annex II hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex II(a)
hereto and a draft of the form of letter to be delivered on the effective date
of any post-effective amendment to the Trust Registration Statement and as of
each Time of Delivery is attached as Annex II(b) hereto);
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(e) On the date of the Company Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Company Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery,
Arthur Andersen LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to you,
to the effect set forth in Annex III hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex III(a)
hereto and a draft of the form of letter to be delivered on the effective date
of any post-effective amendment to the Company Registration Statement and as of
each Time of Delivery is attached as Annex III(b) hereto);
(f) (i) Since the respective dates as of which information is given
in the Trust Registration Statement and the Trust Prospectus, there shall not
have been any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, results of
operations, prospects, investment objectives, investment policies or liabilities
of the Trust, otherwise than as set forth or contemplated in the Trust
Prospectus, (ii) neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Company Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Company Prospectus, and (iii) since the
respective dates as of which information is given in the Company Prospectus
there shall not have been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the Company
Prospectus, the effect of which, in any such case described in Clause (i), (ii)
or (iii), is in the judgment of the Representatives so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Securities being issued at such Time of Delivery on the
terms and in the manner contemplated in the Trust Prospectus;
(g) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or preferred stock
by any "nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities or preferred stock;
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the securities of the Company or the Trust on the New
York Stock Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York or California State authorities; or (iv)
the outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this Clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities being issued at such Time of Delivery
on the terms and in the manner contemplated in the Trust Prospectus;
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(i) The Securities shall have been duly listed, subject to notice of
issuance, on the New York Stock Exchange;
(j) Each Fundamental Agreement shall have been executed and delivered
by all parties thereto, and the Seller shall have delivered to the Collateral
Agent the number of shares of Stock required by the Collateral Agreement to be
initially pledged thereunder in accordance with the requirements of the
Collateral Agreement;
(k) The Trust and the Company shall have complied with the provisions
of Section 5(a)(iii) and 5(b)(iii) hereof with respect to the furnishing of
prospectuses on the New York Business Day next succeeding the date of this
Agreement; and
(l) The Trust, the Company and the Seller shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
or trustees of the Trust, the Company and the Seller, respectively, satisfactory
to you as to the accuracy of the representations and warranties of the Trust,
the Company and the Seller herein and in the Purchase Agreement and Collateral
Agreement at and as of such Time of Delivery, as to the satisfaction and
performance by the Trust, the Company and the Seller of all of their respective
obligations hereunder and thereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (f) of this Section
and as to such other matters as you may reasonably request.
8. (a) (i) The Company and the Seller will indemnify and hold harmless
the Trust and each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which the Trust or such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Company Preliminary Prospectus, the Company Registration Statement or the
Company Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Trust and each Underwriter for any legal or
other expenses reasonably incurred by the Trust or such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; PROVIDED, HOWEVER, that the Company and the Seller shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Company Preliminary
Prospectus, the Company Registration Statement or the Company Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Goldman, Sachs &
Co. expressly for use therein; PROVIDED, FURTHER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission relating only to the Seller made in
any Company Preliminary Prospectus, the Company Registration Statement or the
Company Prospectus or any such amendment or supplement in reliance upon and in
conformity with information furnished to the Company by the Seller expressly for
use therein. (ii) The Seller will indemnify and hold harmless the Trust and
each Underwriter against any losses, claims, damages or liabilities, joint or
several, to which the Trust or such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Trust
Preliminary Prospectus, the Trust Registration Statement or the Trust
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Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Trust and each Underwriter for any legal or other
expenses reasonably incurred by the Trust or such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Seller shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Trust Preliminary Prospectus, the Trust
Registration Statement or the Trust Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Trust by any Underwriter through Goldman, Sachs & Co. expressly for use
therein.
(b) Each Underwriter will indemnify and hold harmless the Company,
the Trust and the Seller against any losses, claims, damages or liabilities to
which the Company, the Trust or the Seller may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Company Preliminary
Prospectus or Trust Preliminary Prospectus, either of the Registration
Statements or either of the Prospectuses, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Company Preliminary Prospectus or Trust
Preliminary Prospectus, either of the Registration Statements or either of the
Prospectuses or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Trust or the Company by
such Underwriter through Goldman, Sachs & Co. expressly for use therein; and
will reimburse the Company, the Trust and the Seller for any legal or other
expenses reasonably incurred by the Company, the Trust or the Seller in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party (which consent shall not be
unreasonably withheld), be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the
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indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company, the Trust and the Seller on the one
hand and the Underwriters on the other from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, the Trust and the Seller on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company, the Trust and the Seller on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company, the Trust and the Seller bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Trust or the Seller on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Trust, the Seller and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by PRO
RATA allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and the Seller under this Section
8 shall be in addition to any liability which the Company and the Seller may
otherwise have and shall extend, upon the
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same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Trust, the Company or the Seller within the meaning of the
Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Securities on the terms contained herein at a Time of Delivery. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Securities, then the Company, the Seller and the Trust
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company, the Seller and the Trust that you have so
arranged for the purchase of such Securities, or the Company, the Seller and the
Trust notify you that it has so arranged for the purchase of such Securities,
you or the Company, the Seller and the Trust shall have the right to postpone
such Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statements or the Prospectuses, or in any other documents or arrangements, and
the Company, the Seller and the Trust agree to file promptly any amendments to
the Registration Statements or the Prospectuses which in your opinion may
thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company, the Seller and the Trust as provided in subsection (a) above, the
aggregate principal amount of such Securities which remains unpurchased does not
exceed one-eleventh of the aggregate principal amount of all the Securities to
be purchased at such Time of Delivery, then the Company, the Seller and the
Trust shall have the right to require each non-defaulting Underwriter to
purchase the principal amount of Securities which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Securities which such Underwriter agreed to purchase
hereunder) of the Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company, the Seller and the Trust as provided in subsection (a) above, the
aggregate principal amount of Securities which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of all the Securities to be
purchased at such Time of Delivery, or if the Company, the Seller and the Trust
shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Securities of a defaulting Underwriter
or Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligation of the Underwriters to purchase and of the Trust to
sell the Optional Securities) shall thereupon terminate, without liability on
the part of any non-defaulting Underwriter or the Company, the Trust or the
Seller, except for the expenses to be borne by the Company, the Trust or the
Seller and the Underwriters as provided in Section 6 hereof and the indemnity
and contribution agreements
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<PAGE>
in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Trust, the Seller and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Trust, the Company or the Seller or any officer or director
or controlling person of the Trust, the Company or the Seller and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company, the Trust nor the Seller shall then be under any liability
to any Underwriter except as provided in Sections 6 and 8 hereof; but, if for
any other reason, any Securities are not delivered by or on behalf of the Trust
as provided herein, the Seller will reimburse the Underwriters through you for
all out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Securities, but the
Company, the Trust and the Seller shall then be under no further liability to
any Underwriter except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you [jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives].
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives [at] [in care of Goldman,
Sachs & Co.,] 85 Broad Street, New York, New York 10004, Attention: Registration
Department; if to the Trust shall be delivered or sent by mail, telex or
facsimile transmission to ...........................; if to the Company shall
be delivered or sent by mail, telex or facsimile transmission to the address of
the Company set forth in the Registration Statement, Attention: Secretary; and
if to the Seller shall be delivered or sent by mail, telex or facsimile
transmission to O'Melveny & Myers, 153 E. 53rd Street, New York, New York 10022,
Attention: Charles F. Niemeth, Esq., counsel for the Seller; provided, however,
that any notice to an Underwriter pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied to the Company
by you upon request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Trust, the Company, the Seller and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company,
the Trust, the Seller and each person who controls the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
-22-
<PAGE>
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
-23-
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us ten counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters, the Company,
the Trust and the Seller. It is understood that your acceptance of this letter
on behalf of each of the Underwriters is pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination upon request, but without warranty on your part as
to the authority of the signers thereof.
Very truly yours,
Dole Food Company, Inc.
By:. . . . . . . . . . . . . . . . . .
Name:
Title:
Dole Food Automatic Common
Exchange Security Trust
By:. . . . . . . . . . . . . . . . . .
Name:
Title:
By:. . . . . . . . . . . . . . . . . .
Name:
Title:
By:. . . . . . . . . . . . . . . . . .
Name:
Title:
each a trustee of Dole Food Automatic
Common Exchange Security Trust
-24-
<PAGE>
David H. Murdock in his individual
capacity and as trustee of the David H.
Murdock Living Trust dated May 28, 1986,
as amended
By:. . . . . . . . . . . . . . . . . .
Name: David H. Murdock
Accepted as of the date hereof:
Goldman, Sachs & Co.
By:. . . . . . . . . . . . . . . . . . .
(Goldman, Sachs & Co.)
-25-
<PAGE>
SCHEDULE I
NUMBER OF
NUMBER OF OPTIONAL SECURITIES
FIRM SECURITIES TO BE PURCHASED
TO BE IF MAXIMUM OPTION
UNDERWRITER PURCHASED EXERCISED
----------- --------- ---------
Goldman, Sachs & Co.
[NAMES OF OTHER UNDERWRITERS]
Total
<PAGE>
Draft of July 29, 1996
ANNEX I
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of Hawaii with corporate power to
own or lease its properties and to carry on its business as described in the
Company Prospectus;
(ii) The Company has, as of the date of the consolidated balance sheet
of the Company included in the most recent Annual Report on Form 10-K filed
prior to the date of such opinion and incorporated by reference in the
Company Prospectus, the authorized capital stock as set forth in such balance
sheet; the Company has, as of December 30, 1995, authorized 80 million shares
of Stock, no par value, and 30 million shares of preferred stock, no par
value; the shares of Stock to be delivered by the Seller in pledge pursuant
to the Collateral Agreement have been duly authorized by all necessary
corporate action on the part of the Company and are validly issued, fully
paid and non-assessable; and the description of the capital stock of the
Company included in the Company Prospectus under the caption "Description of
Capital Stock" insofar as it summarizes provisions of the Articles of
Association and By-laws of the Company, fairly presents the information
required by Form S-3;
(iii) Except as disclosed in the Company Prospectus, such counsel has not
given substantive attention on behalf of the Company to, or represented the
Company in connection with, any actions, suits or proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any subsidiary is subject, before any
court, arbitrator or governmental agency which individually or in the
aggregate are material to the Company and its subsidiaries, taken as a whole;
(iv) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary corporate action on the part of the Company;
this Agreement has been duly executed and delivered by the Company;
(v) The Company's performance of its obligations under this Agreement
and consummation of the transactions contemplated hereby will not (a)
violate, breach or result in a default under any agreement filed as an
exhibit to the Company's Annual Report on Form 10-K for the Company's most
recent fiscal year, (b) violate the Company's Articles of Association or
By-laws, or (c) breach or otherwise violate any existing obligation of or
restriction on the Company under any order of any California, Hawaii or
federal court or governmental authority binding on the Company identified in
an attached certificate;
(vi) No consent, approval, permit or order of any federal, California or
New York governmental authority is required on the part of the Company for
the sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement, except such as may be required
by the NASD or the registration under the Act of the Securities or as may be
required under state or other securities or Blue Sky laws in connection with
the purchase and distribution of the Securities by the Underwriters;
(vii) Each of the Registration Statements has been declared effective
under the Act and, to the knowledge of such counsel, no stop order suspending
the effectiveness thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the Act;
(viii) Each of the Registration Statements and each of the Prospectuses
(excluding the documents incorporated by reference in the Company Prospectus
(the "Incorporated Documents")), and each amendment or supplement thereto,
as of their respective effective or issue dates and as of such Time of
Delivery, each appeared on its face to comply in all material respects with
the requirements as to form for registration statements on Form S-3 and Form
N-2, as applicable, under the Acts and the related rules and regulations of
the Commission thereunder (except that such need express no opinion as to the
financial statements or other financial data included or required to be
included therein); the Incorporated Documents, as of their respective dates,
each appeared on its face to comply in all material respects with the
requirements as to forms for reports on Form 10-K and Form 10-Q, as the case
may be, under the Exchange Act and the related rules and regulations of the
Commission thereunder in effect at the respective dates of their filing
(except that such counsel need express no opinion as to the financial
statements or other financial data included or required to be included
therein);
(ix) The statements included in the Prospectuses under the captions
"Underwriting", [other] insofar as such statements summarize
provisions of documents referred to therein, are accurate in all material
respects and fairly summarize the matters referred to therein;
(x) The David H. Murdock Living Trust dated May 28, 1986, as amended,
has been duly created, is validly existing as a trust under the laws of the
State of [California], has the power and authority to own its property and to
conduct its business and has been duly qualified for the transaction of
business and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction;
(xi) This Agreement has been duly authorized, executed and delivered by
the Seller; each of the Purchase Agreement and the Collateral Agreement has
been duly authorized, executed and delivered by the Seller and, assuming due
authorization, execution and delivery by the other parties thereto,
constitutes a valid and legally binding agreement of the Seller, enforceable
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles;
(xii) The compliance by the Seller with all of the provisions of this
Agreement, the Purchase Agreement and the Collateral Agreement and the
consummation of the transactions herein and therein contemplated will not
violate, breach or result in any default under, (a) any existing obligation
of the Seller under any agreement listed in the Seller's Certificate attached
to such opinion, or (b) any existing obligation of the Seller listed in the
Seller's Certificate under any order of any California or federal court or
governmental authority binding on the Seller or the property of the Seller,
or (c) the constitutive documents of the David H. Murdock Living Trust dated
May 28, 1986, as amended;
(xiii) No consent, approval, permit or order of any federal, California or
New York court or governmental authority is required on the part of the
Seller for the consummation of the transactions contemplated by this
Agreement, the Purchase Agreement and the Collateral Agreement in connection
with the Securities and Stock to be pledged, assigned or sold thereunder,
except such as have been obtained under the Act and such as may be required
by the NASD or under state securities laws in connection with the purchase
and distribution of the Securities and the Stock; the Seller has full right,
power and authority to pledge and assign the shares of Stock to be pledged
and assigned by the Seller pursuant to the Collateral Agreement;
(xiv) Seller has good and valid title to the shares of Stock pledged and
assigned by the Seller pursuant to the Collateral Agreement as of such Time
of Delivery, free and clear of any adverse claims; the shares of Stock
pledged by the Seller as of such Time of Delivery have been duly and validly
assigned, delivered and pledged by the Seller under the Collateral Agreement
and such Collateral Agreement, together with such assignment, delivery and
pledge, creates, as security for the performance of the obligations of the
Seller under the Purchase Agreement, a valid first priority and perfected
security interest in such shares of Stock prior to other liens;
(xv) Upon payment for and delivery of the shares of Stock pursuant to
this Agreement and the Purchase Agreement, the purchasers will own such
shares of Stock, free and clear of any adverse claim; and
(xvi) Upon the occurrence of an Event of Default specified in the
Collateral Agreement, the rights of the Collateral Agent with respect to the
Collateral, as set forth in the Collateral Agreement, shall immediately
become exercisable in accordance with the terms of the Collateral Agreement,
and such rights will be not be subject to any stay pursuant to Section 362(a)
of the Bankruptcy Code.
In addition to the foregoing, such counsel shall state that while in
connection with their participation in the preparation of the Registration
Statements and the Prospectuses, such counsel have not independently verified
the accuracy or completeness or fairness of the statements contained or
incorporated therein, and the limitations inherent in the examination made by
such counsel and the knowledge available to such counsel are such that they
are unable to assume and they do not assume any responsibility for such
accuracy, completeness or fairness, on the basis of such counsel's review of
the Registration Statements, the Prospectuses and the Incorporated Documents
and such counsel's participation in conferences in connection with the
preparation of the Registration Statements and the Prospectuses, and relying
as to materiality to a large extent upon opinions of Company officers and
other representatives, such counsel do not believe that the Registration
Statements (excluding the Incorporated Documents) and the Incorporated
Documents, considered as whole, as of the effective date of the Registration
Statements, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and such counsel do not believe that the
Prospectuses and the Incorporated Documents, considered as a whole, on the
date of the Prospectuses or as of such Time of Delivery, contained or contain
any untrue statement of a material fact or omitted or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Such counsel shall also state that they do not know of
any contract or other document of a character required to be filed as an
exhibit to either of the Registration Statements which is not filed as
required. Such opinion may be limited to matters governed by Federal laws of
the United States or the laws of the States of Hawaii, California or New York.
<PAGE>
ANNEX III
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, prospective
financial statements and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations thereunder;
and, if applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the consolidated interim financial statements, selected financial data, pro
forma financial information, prospective financial statements and/or
condensed financial statements derived from audited financial statements of
the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statement of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly report on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which have been separately furnished to the Representatives; and on the
basis of specified procedures including inquiries of officials of the
Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in the related
in all material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
<PAGE>
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q incorporated
by reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
III-2
<PAGE>
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference) or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives
or in documents incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
III-3
<PAGE>
Draft of August 1, 1996
COLLATERAL AGREEMENT
Among
DAVID H. MURDOCK, as Trustee
for the DAVID H. MURDOCK LIVING TRUST, As Pledgor,
THE BANK OF NEW YORK, As Collateral Agent
and
DOLE FOOD AUTOMATIC COMMON EXCHANGE
SECURITY TRUST
Dated as of
August ___, 1996
<PAGE>
The following Table of Contents has been inserted for convenience of
reference only and does not constitute a part of the Collateral Agreement.
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
1. The Security Interests. . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Representations and Warranties of the Pledgor . . . . . . . . . . 6
4. Representations and Warranties of the Collateral Agent. . . . . . 6
5. Certain Covenants of the Pledgor. . . . . . . . . . . . . . . . . 7
6. Administration of the Collateral and Valuation of
the Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Income and Voting Rights on Collateral. . . . . . . . . . . . . . 13
8. Remedies upon Events of Default . . . . . . . . . . . . . . . . . 14
9. The Collateral Agent. . . . . . . . . . . . . . . . . . . . . . . 17
10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11. Termination of Collateral Agreement . . . . . . . . . . . . . . . 22
12. No Personal Liability of Trustees . . . . . . . . . . . . . . . . 22
Exhibit A - Certificate for Substituted Collateral
Exhibit B - Certificate for Additional Collateral
<PAGE>
COLLATERAL AGREEMENT
THIS COLLATERAL AGREEMENT (the "Agreement"), dated as of August __,
1996, among David H. Murdock, as Trustee for the David H. Murdock Living Trust
(the "Pledgor"), The Bank of New York, a New York banking corporation, as
collateral agent (the "Collateral Agent") hereunder for the benefit of Dole Food
Automatic Common Exchange Security Trust, a trust duly created under the laws of
the State of New York (such trust and the trustees thereof acting in their
capacity as such being referred to herein as the "Trust" or "Purchaser");
WITNESSETH:
WHEREAS, pursuant to the Purchase Agreement (the "Purchase
Agreement"), dated as of August __, 1996, between the Pledgor and Purchaser, the
Pledgor has agreed to sell and Purchaser has agreed to purchase Common Stock,
without par value (the "Common Stock"), of Dole Food Company, Inc., a Hawaii
corporation (the "Company"), subject to the terms and conditions of the Purchase
Agreement; and
NOW, THEREFORE, to secure the performance by the Pledgor of its
obligations under the Purchase Agreement and to secure the observance and
performance of the covenants and agreements contained herein and in the Purchase
Agreement, the parties hereto agree as follows:
1. THE SECURITY INTERESTS.
In order to secure the observance and performance of the covenants and
agreements contained herein and in the Purchase Agreement:
(a) Effective upon and subject to the receipt by Pledgor of the Firm
Purchase Price at the First Time of Delivery, the Pledgor hereby grants, sells,
conveys, assigns, transfers and pledges unto the Collateral Agent, as agent of
and for the benefit of the Trust, a security interest in and to, and a lien upon
and right of set-off against, all of his right, title and interest in and to (i)
the Pledged Items described in paragraph (b); (ii) all additions to and
substitutions for such Pledged Items; (iii) all income, proceeds and collections
received or to be received, or derived or to be derived, now or any time
hereafter from or in connection with the Pledged Items; and (iv) all powers and
rights now owned or hereafter acquired under or with respect to the Pledged
Items (such Pledged Items, additions, substitutions, proceeds, collections,
<PAGE>
powers and rights being herein collectively called the "Collateral"). The
Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the New York Uniform
Commercial Code, in addition to, and not in limitation of, the other rights,
remedies and recourses afforded to the Collateral Agent by this Agreement.
(b) At the First Time of Delivery, the Pledgor shall deliver, to the
Collateral Agent in pledge hereunder _____ shares of the Common Stock registered
in the name of the Collateral Agent or its nominee.
(c) Effective upon and subject to the receipt by the Pledgor of the
Additional Purchase Price, at the Second Time of Delivery, the Pledgor shall
deliver to the Collateral Agent in the pledge hereunder Common Stock
representing the Additional Share Base Amount of Common Stock, registered in the
name of the Collateral Agent or its nominee.
2. DEFINITIONS.
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Purchase Agreement. Capitalized terms used
herein shall have the meanings as follows:
"Authorized Representative" of the Pledgor means any trustee or other
representative as to whom Pledgor shall have delivered notice to the Collateral
Agent that such trustee or other representative is authorized to act hereunder
on behalf of Pledgor.
"Business Day" means any day except a Saturday, Sunday or other day on
which banking institutions in New York City are authorized or obligated by law
or regulation to close or a day on which the New York Stock Exchange, Inc. is
closed.
"Cash Delivery Obligations" means, at any time (A) if no
Reorganization Event shall have occurred prior to such time, zero, and (B) from
and after any Reorganization Event, the Dilution Adjustment that shall have been
applied to the Exchange Rate pursuant to Section 6.1 of the Purchase Agreement
at or prior to the Reorganization Event, times the product of: (i) the Firm
Share Base Amount plus the Additional Share Base Amount (if any); and (ii) the
Transaction Value of any property other than Marketable Securities received by
the Pledgor in such Reorganization Event.
-2-
<PAGE>
"Collateral" has the meaning specified in Section 1(a).
"Collateral Agent" means the financial institution identified as such
in the preliminary paragraph hereof, or any successor appointed in accordance
with Section 9.
"Collateral Agreement" means this Collateral Agreement and any
exhibits hereto.
"Collateral Event of Default" has the meaning specified in Section
6(e).
"Collateral Requirement" means, as of any date and with respect to:
(i) any Common Stock, 100%; (ii) any Marketable Securities, 100%; (iii) any U.S.
Government Securities pledged in respect of Cash Delivery Obligations, 105%; and
(iv) any other U.S. Government Securities, 150%, provided that upon and after
any failure to cure an Insufficiency Determination by 4:00 p.m. New York City
time on the tenth Business Day following telephonic notice of such Insufficiency
Determination as described in Section 6(e), which insufficiency shall be
continuing on such tenth business day, the Collateral Requirement relating to
any U.S. Government Securities shall be 200%. The portion of any pledged U.S.
Government Securities that shall be deemed at any time to be in respect of Cash
Delivery Obligations shall be as provided in Section 6(e).
"Eligible Collateral" means (i) Common Stock, (ii) U.S. Government
Securities, and (iii) from and after any Reorganization Event, Marketable
Securities, provided, in each case, that the Pledgor has good and marketable
title thereto, free of all Liens (other than the Liens created by this
Collateral Agreement) and Transfer Restrictions and that the Collateral Agent
has a valid, first priority perfected security interest therein and first lien
thereon, and provided further that to the extent the number of shares of
Marketable Securities pledged hereunder exceeds at any time the Maximum
Deliverable Number thereof, such excess shares shall not be Eligible Collateral.
"Event of Default" means the occurrence of: (i) an event described in
clause (a) or (b) of Article VII of the Purchase Agreement, (ii) a Collateral
Event of Default, (iii) a failure by Pledgor to have caused the Collateral to
meet the requirements described in Section 5(d) on the Exchange Date or (iv) if
a Reorganization Event shall have occurred prior to the Exchange Date, failure
by Pledgor to cause to be delivered to Purchaser on the Exchange Date the
consideration then required to be delivered pursuant to Section 6.2 of the
Purchase Agreement.
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"Ineligible Collateral" means Collateral that does not constitute
"Eligible Collateral".
"Lien" means any lien, mortgage, security interest, pledge, charge or
encumbrance of any kind.
"Market Value" means, as of any date: (a) with respect to any Common
Stock (except as otherwise provided in Section 6(e)(2)), the Closing Price on
such date; (b) with respect to any U.S. Government Security, the product of
(x)(i) the average unit bid price for such security as published on the Trading
Day prior to such date in the New York edition of The Wall Street Journal or The
New York Times or, if not so published, (ii) the lower bid price quoted (which
quotation shall be evidenced in writing) on the Trading Day prior to such date
by either of two nationally recognized dealers making a market in such security
which are members of the National Association of Securities Dealers, Inc. and
(y) the number of such units comprised in the outstanding principal amount of
such security; and (c) with respect to any share of Marketable Securities, the
Closing Price thereof on the Trading Day prior to such date; provided that the
"Market Value" of any Ineligible Collateral shall be zero.
"Maximum Deliverable Number" means, on any date, with respect to the
Common Stock, the product of the Firm Share Base Amount plus the Additional
Share Base Amount (if any), multiplied successively by each number by which the
Exchange Rate shall have been multiplied on or prior to such date pursuant to
the adjustments provided for under Section 6.1 of the Purchase Agreement. The
Maximum Deliverable Number of Marketable Securities means, on any date, the
product of (i) the Firm Share Base Amount plus the Additional Share Base Amount
(if any) and (ii) the number of Marketable Securities received by the Pledgor in
the Reorganization Event for each share of Common Stock, multiplied successively
by each number by which the Exchange Rate shall have been multiplied on or prior
to such date and after the date of such Reorganization Event pursuant to the
adjustments provided for under Article VI of the Purchase Agreement.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Pledge Value" means, as of any date and with respect to any
particular type of Collateral, an amount equal to the aggregate Market Value of
such Collateral divided by the Collateral Requirement for such Collateral.
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"Pledge Value Requirement" means, as of any date, (a) the aggregate
Market Value on such date of the Maximum Deliverable Number of shares of Common
Stock on such date or, from and after a Reorganization Event, Marketable
Securities, plus (b) from and after a Reorganization Event, the Cash Delivery
Obligations.
"Pledged Items" means, as of any date, any and all securities and
instruments delivered by the Pledgor to be held by the Collateral Agent under
this Collateral Agreement as Collateral, whether Eligible Collateral or
Ineligible Collateral.
"Prior Collateral" has the meaning specified in Section 6(b)(1).
"Responsible Officer" means, when used with respect to the Collateral
Agent, any vice president, assistant vice president, assistant treasurer or
assistant secretary located in the division or department of the Collateral
Agent responsible for performing the obligations of the Collateral Agent under
this Collateral Agreement, or in any other division or department of the
Collateral Agent performing operations substantially equivalent to those
performed by such division or department pursuant hereto, or any other officer
of the Collateral Agent or any successor Collateral Agent customarily performing
functions similar to those performed by any of the aforesaid officers, and also
means, with respect to any matter relating to this Collateral Agreement or the
Collateral, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Transfer Restriction" means, with respect to any item of Collateral,
any condition to or restriction on the ability of the holder thereof to sell,
assign or otherwise transfer such item of Collateral or to enforce the
provisions thereof or of any document related thereto whether set forth in such
item of Collateral itself or in any document related thereto, including, without
limitation, (i) any requirement that any sale, assignment or other transfer or
enforcement of such item of Collateral be consented to or approved by any
Person, including, without limitation, the issuer thereof or any other obligor
thereon, (ii) any limitations on the type or status, financial or otherwise, of
any purchaser, pledgee, assignee or transferee of such item of Collateral, (iii)
any requirement of the delivery of any certificate, consent, agreement, opinion
of counsel, notice or any other document of any Person to the issuer of, any
other obligor on or any registrar or transfer agent for, such item of
Collateral, prior to the sale, pledge, assignment or other transfer or
enforcement of such item of Collateral and (iv) any registration or
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qualification requirement for such item of Collateral pursuant to any federal or
state securities law; provided that the required delivery of any assignment from
the seller, pledgor, assignor or transferor of such item of Collateral, together
with any evidence of the corporate or other authority of such Person, shall not
constitute a "Transfer Restriction."
"Trustee" or "Trustees" means any trustee or trustees of the Trust
identified on the signature pages hereto, or any successor as such trustee or
trustees.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
"U.S. Government Securities" means direct obligations of the United
States of America that mature on a date that is one year or less from the date
such obligations are pledged hereunder, but in any event prior to the Exchange
Date.
3. REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR.
The Pledgor hereby represents and warrants to the Collateral Agent and
the Trust that:
(a) No Transfer Restrictions. No Transfer Restrictions exist with
respect to or otherwise apply to the assignment of, or transfer by the Pledgor
of possession of, any items of Collateral to the Collateral Agent hereunder, or
the subsequent sale or transfer of such items of Collateral by the Collateral
Agent pursuant to the terms hereof.
(b) Title to Collateral; Perfected Security Interest. The Pledgor
has good and marketable title to the Pledged Items, free of all Liens (other
than the Lien created by this Collateral Agreement) and Transfer Restrictions.
Upon delivery of the Collateral to the Collateral Agent hereunder, the
Collateral Agent will obtain a valid, first priority perfected security interest
in, and a first lien upon, such Collateral subject to no other Lien; none of
such Collateral is or shall be pledged by the Pledgor as collateral for any
other purpose.
4. REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL AGENT.
The Collateral Agent represents and warrants to the Pledgor and the
Trust that:
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(a) Corporate Existence and Power. The Collateral Agent is a banking
corporation, duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to enter into, and perform its obligations under, this Collateral
Agreement.
(b) Authorization and Non-Contravention. The execution, delivery and
performance by the Collateral Agent of this Collateral Agreement have been duly
authorized by all necessary corporate action on the part of the Collateral Agent
(no action by the shareholders of the Collateral Agent being required) and do
not and will not violate, contravene or constitute a default under any provision
of applicable law or regulation or of the charter or by-laws of the Collateral
Agent or of any material agreement, judgment, injunction, order, decree or other
instrument binding upon the Collateral Agent.
(c) Binding Effect. This Collateral Agreement constitutes a valid
and binding agreement of the Collateral Agent enforceable against the Collateral
Agent in accordance with its terms.
5. CERTAIN COVENANTS OF THE PLEDGOR.
The Pledgor agrees that, so long as any of its obligations under the
Purchase Agreement remain outstanding:
(a) Title to Collateral. The Pledgor shall at all times hereafter
have good and marketable title to the Collateral pledged by him, free of all
Liens (other than the Liens created by this Collateral Agreement) and Transfer
Restrictions, and, subject to the terms of this Collateral Agreement, will at
all times hereafter have good, right and lawful authority to assign, transfer
and pledge such Collateral and all such additions thereto and substitutions
therefor under this Collateral Agreement.
(b) Pledge Value Requirement. The Pledgor shall cause the aggregate
Pledge Value of the Collateral to be equal to or greater than the Pledge Value
Requirement at all times, and shall pledge additional Collateral in the manner
described in Section 6(d) as necessary to cause such requirement to be met.
(c) Pledge upon Reorganization Event. Upon the occurrence of a
Reorganization Event, the Pledgor shall immediately cause to be delivered to the
Collateral Agent, in the manner provided in Section 6(d): (i) U.S. Government
Securities having any aggregate Market Value at least equal
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to 105% of the Cash Delivery Obligations; and (ii) Marketable Securities in an
amount at least equal to the Maximum Deliverable Number thereof, or, at
Pledgor's election, U.S. Government Securities having an aggregate Market Value
at least equal to 150% of such Maximum Deliverable Number of Marketable
Securities; in each case to be held as substitute Collateral hereunder.
(d) Pledge of Purchase Agreement Consideration. Notwithstanding the
Pledgor's right to substitute Collateral pursuant to Section 6(b), the Pledgor
shall cause the Collateral to include, on the Exchange Date, unless a
Reorganization Event shall have occurred, a number of shares of Common Stock at
least equal to the number of shares of Common Stock required to be delivered
under the Purchase Agreement on the Exchange Date.
(e) Further Assurances. The Pledgor shall, at his expense and in
such manner and form as the Trust or the Collateral Agent may require, give,
execute, deliver, file and record any financing statement, notice, instrument,
document, agreement or other papers that may be necessary or desirable in order
to create, preserve, perfect, substantiate or validate any security interest
granted pursuant hereto or to enable the Collateral Agent to exercise and
enforce its rights and the rights of the Trust hereunder with respect to such
security interest. To the extent permitted by applicable law, the Pledgor
hereby authorizes the Collateral Agent to execute and file, in the name of the
Pledgor or otherwise, Uniform Commercial Code financing or continuation
statements (which may be carbon, photographic, photostatic or other
reproductions of this Agreement or of a financing statement relating to this
Agreement) which the Collateral Agent in its sole discretion may deem necessary
or appropriate to further perfect, or maintain the perfection of the security
interests granted hereby.
6. ADMINISTRATION OF THE COLLATERAL AND VALUATION OF THE SECURITIES.
(a) Valuation of Collateral. The Collateral Agent shall determine on
each Business Day whether the Pledge Value is at least equal to the Pledge Value
Requirement and whether an Insufficiency Determination or Collateral Event of
Default shall have occurred and, from and after any substitution of U.S.
Government Securities for pledged Common Stock or Marketable Securities pursuant
to paragraph (b) of this Section 6, shall determine the Pledge Value on each
Business Day and shall provide written notice of the Pledge Value to the
Pledgor.
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(b) Substitution of Collateral. The Pledgor may substitute
Collateral in accordance with the following provisions:
(1) Unless an Event of Default or a failure by the Pledgor to meet
any of its obligations under Section 5(b) or (c) hereof has occurred and is
continuing, the Pledgor shall have the right at any time and from time to
time to deposit Eligible Collateral with the Collateral Agent in
substitution for Pledged Items previously deposited hereunder ("Prior
Collateral") and to obtain the release from the Lien hereof of such Prior
Collateral.
(2) If a Pledgor wishes to deposit Eligible Collateral with the
Collateral Agent in substitution for Prior Collateral, he shall (i)
give written notice to the Collateral Agent identifying the Prior
Collateral to be released from the Lien hereof, (ii) deliver to the
Collateral Agent concurrently with such Eligible Collateral a
certificate of an Authorized Officer of the Pledgor substantially in
the form of Exhibit A hereto and dated the date of such delivery, (A)
identifying the items of Eligible Collateral being substituted for the
Prior Collateral and the Prior Collateral that is to be transferred to
the Pledgor and (B) certifying that the representations and warranties
contained in such Exhibit A hereto are true and correct on and as of
the date thereof and (iii) deliver to the Collateral Agent
concurrently with such Eligible Collateral an opinion (dated the date
of such delivery) of counsel (who may be an employee of the Pledgor)
addressed to the Collateral Agent confirming the representations
contained in the second sentence of paragraph 3(b) of
Exhibit A hereto. The Pledgor hereby covenants and agrees to take all
actions required under Section 6(d) and any other actions necessary to
create for the benefit of the Collateral Agent a valid, first priority
perfected security interest in, and a first lien upon, such Eligible
Collateral deposited with the Collateral Agent in substitution for Prior
Collateral.
(3) No such substitution shall be made unless and until the
Collateral Agent shall have determined that the aggregate Pledge Value of
all of the Collateral at the time of such proposed substitution, after
giving effect to the proposed substitution, shall at least equal the Pledge
Value Requirement.
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(c) Additional Collateral. The Pledgor may pledge additional
Collateral hereunder at any time. Concurrently with the delivery of any
additional Eligible Collateral, the Pledgor shall deliver (i) a certificate of
an Authorized Officer of the Pledgor substantially in the form of Exhibit B
hereto and dated the date of such delivery, (A) identifying the additional items
of Eligible Collateral being pledged and (B) certifying that with respect to
such items of additional Eligible Collateral the representations and warranties
contained in such Exhibit B hereto are true and correct on and as of the date
thereof and (ii) an opinion, dated the date of such delivery, of counsel
addressed to the Collateral Agent confirming the representations contained in
the second sentence of paragraph 2(b) of Exhibit B hereto. The Pledgor hereby
covenants and agrees to take all actions required under Section 6(d) and any
other actions necessary to create for the benefit of the Collateral Agent a
valid, first priority perfected security interest in, and a first lien upon,
such additional Eligible Collateral.
(d) Delivery of Collateral. The Pledgor shall deliver the Collateral
to the Collateral Agent in accordance with the following provisions:
(1) Pledged Common Stock. In the case of Collateral consisting of
Common Stock, by delivery to the Collateral Agent of Common Stock,
registered in the name of the Collateral Agent or its nominee;
(2) Pledged U.S. Government Securities. In the case of Collateral
consisting of U.S. Government Securities, by transfer thereof through the
Book Entry System of the Federal Reserve System to the account of the
Collateral Agent or to an account (other than an account of the Pledgor)
designated by the Collateral Agent; and
(3) Pledged Marketable Securities. In the case of Collateral
consisting of Marketable Securities, by delivery of certificates evidencing
such Marketable Securities, registered in the name of the Collateral Agent
or its nominee or, if such Marketable Securities are not issuable in
certificated form but are held in book entry form by The Depository Trust
Company, by transfer to an account of the Collateral Agent or to an account
(other than an account of the Pledgor) designated by the Collateral Agent
with The Depository Trust Company. Each such delivery of Marketable
Securities shall be accompanied by an opinion of counsel satisfactory to
the Collateral Agent that the
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Collateral Agent has obtained a valid, first priority perfected security
interest in, and a first lien upon, such Marketable Securities.
Upon delivery of any Pledged Item under this Collateral Agreement, the
Collateral Agent shall examine such Pledged Item and any opinions and
certificates delivered pursuant to Sections 6(b) or (c) or otherwise pursuant to
the terms hereof in connection therewith to determine that they comply as to
form with the requirements for Eligible Collateral. The Pledgor hereby
designates the Collateral Agent as the person in whose name any Collateral held
in book entry form in the Federal Reserve System shall be registered.
(e) Insufficiency Determination.
(1) If on any Business Day the Collateral Agent determines that the
aggregate Pledge Value of the Collateral is less than the Pledge Value
Requirement (any such determination, an "Insufficiency Determination"), the
Collateral Agent shall promptly notify the Pledgor of such determination by
telephone call to an Authorized Representative of the Pledgor followed by a
written confirmation of such call.
(2) If, by 4:00 p.m., New York City time on the tenth Business Day
following the day on which telephonic notice shall have been given pursuant to
the preceding paragraph (e)(1), the Pledgor shall have failed to deliver, in the
manner set forth in paragraphs (c) and (d) of this Section 6, sufficient
additional Eligible Collateral so that, after giving effect to such delivery,
the aggregate Pledge Value of the Collateral, as of such tenth business day, is
at least equal to the Pledge Value Requirement, then (x) the Collateral
Requirement with respect to any U.S. Government Securities pledged hereunder
(other than in respect of Cash Delivery Obligations) shall be increased from
150% to 200%, and (y) unless a Collateral Event of Default shall have occurred
and be continuing, the Collateral Agent shall:
(i) commence sales, in the manner described in paragraph (3) below,
of such portion of the Collateral consisting of U.S. Government Securities
as may be required to be sold in order to generate proceeds sufficient to
purchase Common Stock or, after a Reorganization Event, Marketable
Securities, as described in the following clause (ii); and
(ii) commence purchases, in the manner described in paragraph (3)
below, of Common Stock or, after a Reorganization Event, Marketable
Securities, in an
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amount sufficient to cause the aggregate Pledge Value of the Collateral to
be at least equal to the Pledge Value Requirement.
Notwithstanding the foregoing, the Collateral Agent shall discontinue sales and
purchases pursuant to the preceding clauses (i) and (ii), respectively, if at
any time a Collateral Event of Default shall have occurred and be continuing.
The Collateral Agent shall determine the Market Value and the Pledge Value of
the Collateral after each purchase of Common Stock or Marketable Securities
pursuant to the preceding clause (ii) in order to determine whether the Pledge
Value Requirement is met and whether a Collateral Event of Default has occurred.
Solely for purposes of such calculation, the Market Value of the Common Stock or
Marketable Securities shall be: (A) the most recent sales price as reported in
the composite transactions for the principal securities exchange on which the
Common Stock or Marketable Securities, as the case may be, are then listed or,
if such securities are not so listed, the last quoted ask price for such
securities in the over-the-counter market as reported by The NASDAQ National
Market or, if not so reported, by the National Quotation Bureau or a similar
organization; or (B) if higher, in the case of Common Stock, the most recent
available Closing Price.
A "Collateral Event of Default" shall mean, at any time, the
occurrence of any of the following: (A) failure of the aggregate Market Value of
the Collateral to equal or exceed the Pledge Value Requirement; (B) failure of
the Market Value of any U.S. Government Securities pledged at such time (not
including any U.S. Government Securities pledged in respect of Cash Delivery
Obligations at such time) to have an aggregate Market Value of at least 105% of
the Market Value of a number of shares of Common Stock (or, from and after any
Reorganization Event, Marketable Securities) equal to (x) the Maximum
Deliverable Number thereof minus (y) the number thereof pledged as Collateral
hereunder at such time; or (C) from and after any Reorganization Event, failure
of the U.S. Government Securities pledged in respect of Cash Delivery
Obligations to have an aggregate Market Value at least equal to 105% of the Cash
Delivery Obligations at such time, if, in the case of a failure described in
this clause (C), such failure shall continue to be in effect at 4:00 p.m., New
York City time, on the tenth Business Day following the day on which telephonic
notice in respect thereof shall have been given pursuant to paragraph (e)(1)
above. For purposes of this Agreement, the portion of any pledged U.S.
Government Securities that shall be deemed to be in respect of Cash Delivery
Obligations at any time shall be a portion having a Market Value equal to 105%
of the Cash Delivery Obligations
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at such time (or, if less, the aggregate Market Value of all U.S. Government
Securities pledged at such time).
(3) Collateral sold and Common Stock or shares of Marketable
Securities purchased by the Collateral Agent pursuant to the preceding
paragraphs (e)(i) and (ii) may be sold and purchased on any securities exchange
or in any over-the-counter market or in any private purchase transaction, and at
such price or prices, in each case as the Collateral Agent may deem
satisfactory. The Pledgor covenants and agrees that it will execute and deliver
such documents and take such other action as the Collateral Agent deems
necessary or advisable in order that any such sales and purchases may be made in
compliance with law.
(f) Release of Excess Collateral. If on any Business Day the
Collateral Agent determines that the aggregate Pledge Value of the Pledgor's
Eligible Collateral exceeds the Pledge Value Requirement and no Event of Default
or failure by the Pledgor to meet any of its obligations under Sections 5 or 6
hereof has occurred and is continuing, the Pledgor may obtain the release from
the Lien hereof of any Collateral having an aggregate Pledge Value on such
Business Day less than or equal to such excess, upon delivery to the Collateral
Agent of a written notice from an Authorized Representative of the Pledgor
indicating the items of Collateral to be released. Such Collateral shall be
released only after the Collateral Agent shall have determined that the
aggregate Pledge Value of all of the Collateral remaining after such release as
determined on such Business Day is at least equal to the Pledge Value
Requirement.
(g) Delivery of Purchase Agreement Consideration. On the Exchange
Date, unless a Reorganization Event shall have occurred prior thereto, the
Collateral Agent shall deliver to the Trust Common Stock then held by it
hereunder representing the number of shares of Common Stock then required to be
delivered under the Purchase Agreement. If a Reorganization Event shall have
occurred prior to the Exchange Date, then, if so instructed by the Pledgor by
the close of business on the Business Day preceding the Exchange Date, the
Collateral Agent shall deliver to the Trust, to the extent permitted to be
delivered in lieu of cash required to be delivered on such date under
Section 6.2 of the Purchase Agreement, the Marketable Securities then held by
the Collateral Agent hereunder. Upon such delivery, the Trust shall hold such
Common Stock or Marketable Securities, as the case may be, absolutely and free
from any claim or right whatsoever.
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7. INCOME AND VOTING RIGHTS ON COLLATERAL.
(a) Unless an Event of Default or failure by the Pledgor to meet any
of his obligations under Section 5(b) or (c) hereof has occurred and is
continuing, the Pledgor shall be entitled to receive for his own account all
dividends, interest and, if any, principal and premium relating to all of the
Collateral, unless the payment thereof to the Pledgor or would reduce the
aggregate Pledge Value of the Collateral below the Pledge Value Requirement.
The Collateral Agent agrees to remit to the Pledgor on the Business Day received
or the first Business Day thereafter all such payments received by it. If an
Event of Default or failure by the Pledgor to meet any of its obligations under
Section 5(b) or (c) hereof has occurred and is continuing, all such payments
made or accrued after and during the continuance of such default or failure
shall be retained by the Collateral Agent, and any such payments which are
received by the Pledgor shall be received in trust for the benefit of the Trust,
shall be segregated from other funds of the Pledgor and shall forthwith be paid
over to the Collateral Agent. Any such payments so retained by, or paid over
to, the Collateral Agent shall be held by the Collateral Agent as Collateral
hereunder.
(b) Unless an Event of Default has occurred and is continuing, the
Pledgor shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Collateral, and the Collateral
Agent shall, upon receiving a written request from the Pledgor, deliver to the
Pledgor or as specified in such request such proxies, powers of attorney,
consents, ratifications and waivers in respect of any of the Collateral which is
registered in the name of the Collateral Agent or its nominee as shall be
specified in such request and be in form and substance satisfactory to the
Collateral Agent.
If an Event of Default shall have occurred and be continuing, the
Collateral Agent shall have the right to the extent permitted by law, and the
Pledgor shall take all such action as may be necessary or appropriate to give
effect to such right, to vote and to give consents, ratifications and waivers,
and take any other action with respect to any or all of the Collateral with the
same force and effect as if the Collateral Agent were the absolute and sole
owner thereof.
8. REMEDIES UPON EVENTS OF DEFAULT.
(a) If any Event of Default shall have occurred and be continuing, the
Collateral Agent may exercise on behalf of the Trust all the rights of a secured
party under
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the Uniform Commercial Code (whether or not in effect in the jurisdiction where
such rights are exercised) and, in addition, without being required to give any
notice, except as herein provided or as may be required by mandatory provisions
of law, shall: (i) deliver all Collateral consisting of Common Stock or
Marketable Securities (but not, in either case, in excess of the number of
shares thereof deliverable under the Purchase Agreement at such time) to the
Trust on the date of the Acceleration Notice relating to such Event of Default
(or, in the case of an Event of Default described in clause (iii) or (iv) of the
definition thereof, on the Exchange Date) (in either case, the "Delivery Date"),
whereupon the Trust shall hold such Common Stock or Marketable Securities
absolutely free from any claim or right of whatsoever kind, including any equity
or right of redemption of the Pledgor which may be waived, and the Pledgor, to
the extent permitted by law, hereby specifically waives all rights of
redemption, stay or appraisal which he has or may have under any law now
existing or hereafter adopted; and (ii) if such delivery shall be insufficient
to satisfy in full all of the obligations of Pledgor under the Purchase
Agreement, sell all of the remaining Collateral, or such lesser portion thereof
as may be necessary to generate proceeds sufficient to satisfy in full all of
the obligations of Pledgor under the Purchase Agreement, at public or private
sale or at any broker's board or on any securities exchange, for cash, upon
credit or for future delivery, and at such price or prices as the Collateral
Agent may deem satisfactory. The Pledgor covenants and agrees that he will
execute and deliver such documents and take such other action as the Collateral
Agent deems necessary or advisable in order that any such sale may be made in
compliance with law. Upon any such sale the Collateral Agent shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral so
sold. Each purchaser at any such sale shall hold the Collateral so sold
absolutely and free from any claim or right of whatsoever kind, including any
equity or right of redemption of the Pledgor which may be waived, and the
Pledgor, to the extent permitted by law, hereby specifically waives all rights
of redemption, stay or appraisal which he has or may have under any law now
existing or hereafter adopted. The notice (if any) of such sale required by
Section 9 of the UCC shall (1) in case of a public sale, state the time and
place fixed for such sale, (2) in case of sale at a broker's board or on a
securities exchange, state the board or exchange at which such sale is to be
made and the day on which the Collateral, or the portion thereof so being sold,
will first be offered for sale at such board or exchange, and (3) in the case of
a private sale, state the day after which such sale may be consummated. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Collateral Agent
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may fix in the notice of such sale. At any such sale the Collateral may be sold
in one lot as an entirety or in separate parcels, as the Collateral Agent may
determine. The Collateral Agent shall not be obligated to make any such sale
pursuant to any such notice. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit
or for future delivery, the Collateral so sold may be retained by the Collateral
Agent until the selling price is paid by the purchaser thereof, but the
Collateral Agent shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may again be sold upon like notice. The Collateral
Agent, instead of exercising the power of sale herein conferred upon it, may
proceed by a suit or suits at law or in equity to foreclose the security
interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
(b) Power of Attorney. Upon any delivery or sale of all or any part
of any Collateral made either under the power of delivery or sale given
hereunder or under judgment or decree in any judicial proceedings for
foreclosure or otherwise for the enforcement of this Collateral Agreement, the
Collateral Agent is hereby irrevocably appointed the true and lawful attorney of
the Pledgor, in the name and stead of the Pledgor, to make all necessary deeds,
bills of sale and instruments of assignment, transfer or conveyance of the
property thus delivered or sold. For that purpose the Collateral Agent may
execute all such documents and instruments. This power of attorney shall be
deemed coupled with an interest, and the Pledgor hereby ratifies and confirms
all that his attorneys acting under such power, or such attorneys' successors or
agents, shall lawfully do by virtue of this Collateral Agreement. If so
requested by the Collateral Agent, by the Trustees or by any purchaser of the
Collateral or a portion thereof, the Pledgor shall further ratify and confirm
any such delivery or sale by executing and delivering to the Collateral Agent,
to the Trustees or to such purchaser or purchasers at the expense of the Pledgor
all proper deeds, bills of sale, instruments of assignment, conveyance of
transfer and releases as may be designated in any such request.
(c) Application of Collateral and Proceeds. In the case of an Event
of Default, the Collateral Agent may proceed to realize upon the security
interest in the Collateral against any one or more of the types of
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Collateral, at any one time, as the Collateral Agent shall determine in its sole
discretion subject to the foregoing provisions of this Section 8. The proceeds
of any sale of, or other realization upon, or other receipt from, any of the
remaining Collateral shall be applied by the Collateral Agent in the following
order of priorities:
first, to the payment to the Trust of an amount equal to: (A) the
aggregate Market Value of a number of shares of Common Stock equal to (1)
the number of shares of Common Stock required to be delivered under the
Purchase Agreement on the Delivery Date minus (2) the number of shares of
Common Stock delivered by the Collateral Agent to the Trust on the Delivery
Date as described above; or (B) from and after a Reorganization Event, the
sum of (1) the Cash Delivery Obligations on the Delivery Date and (2) the
aggregate Market Value on the Delivery Date of a number of Marketable
Securities equal to (x) the number thereof permitted to be delivered on the
Delivery Date under Section 6(b) of the Purchase Agreement minus (y) the
number thereof delivered by the Collateral Agent to the Trust on the
Delivery Date as described above;
second, to the payment to the Collateral Agent of the expenses of such
sale or other realization, including reasonable compensation to the
Collateral Agent and its agents and counsel, and all expenses, liabilities
and advances incurred or made by the Collateral Agent in connection
therewith, including brokerage fees in connection with the sale by the
Collateral Agent of any Pledged Item; and
finally, if all of the obligations of the Pledgor hereunder and under
the Purchase Agreement have been fully discharged or sufficient funds have
been set aside by the Collateral Agent at the request of the Pledgor for
the discharge thereof, any remaining proceeds shall be released to the
Pledgor.
9. THE COLLATERAL AGENT.
The Collateral Agent accepts its duties and responsibilities hereunder
as agent for the Trust, on and subject to the following terms and conditions:
(a) Performance of Duties. The Collateral Agent undertakes to
perform such duties and only such duties as are expressly set forth herein and,
beyond the exercise of reasonable care in the performance of such duties, no
implied covenants or obligations shall be read into this Collateral Agreement
against the Collateral Agent. No provision hereof shall be construed to relieve
the
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Collateral Agent from liability for its own grossly negligent action, grossly
negligent failure to act or its own wilful misconduct, subject to the following:
(1) The Collateral Agent may consult with counsel, and the advice or
opinion of such counsel shall be full and complete authorization and
protection in respect of an action taken or suffered hereunder in good
faith and in accordance with such advice or opinion of counsel.
(2) The Collateral Agent shall not be liable with respect to any
action taken, suffered or omitted by it in good faith (i) reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred on it by this Collateral Agreement or (ii) in accordance
with any direction or request of the Trustees.
(3) The Collateral Agent shall not be liable for any error of
judgment made in good faith by any of its officers, unless the Collateral
Agent was grossly negligent in ascertaining the pertinent facts.
(4) In the absence of bad faith on its part, the Collateral Agent may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any note, notice, resolution, consent,
certificate, affidavit, letter, telegram, teletype message, statement,
order or other document believed by it to be genuine and correct and to
have been signed or sent by the proper Person or Persons.
(5) No provision of this Collateral Agreement shall require the
Collateral Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(6) The Collateral Agent may perform any duties hereunder either
directly or by or through agents or attorneys, and the Collateral Agent
shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder. In
furtherance thereof, any subsidiary owned or controlled by the Collateral
Agent, or its successors, as agent for the Collateral Agent, may perform
any or all of the duties of the Collateral
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Agent relating to the valuation of securities and other instruments
constituting Collateral hereunder.
(7) In no event shall the Collateral Agent be personally liable for
any taxes or other governmental charges imposed upon or in respect of
(i) the collateral or (ii) the income or other distributions thereon.
(8) Unless and until the Collateral Agent shall have received notice
from the Pledgor, or unless and until a Responsible Officer of the
Collateral Agent shall have actual knowledge to the contrary, the
Collateral Agent shall be entitled to deem and treat all Collateral
delivered to it hereunder as Eligible Collateral hereunder, provided that
the Collateral Agent has carried out the duties specified in Section 6 with
respect to such Collateral at the time of delivery thereof.
The Collateral Agent shall not be responsible for the correctness of the
recitals and statements herein which are made by the Pledgor or for any
statement or certificate delivered by the Pledgor pursuant hereto. Except as
specifically provided herein, the Collateral Agent shall not be responsible for
the validity, sufficiency, collectibility or marketability of any Collateral
given to or held by it hereunder or for the validity or sufficiency of the
Purchase Agreement or the Lien on the Collateral purported to be created hereby.
(b) Knowledge. The Collateral Agent shall not be deemed to have
knowledge of any Event of Default (except a Collateral Event of Default), unless
and until a Responsible Officer of the Collateral Agent shall have actual
knowledge thereof or shall have received written notice thereof.
(c) Merger. Any corporation or association into which the Collateral
Agent may be converted or merged, or with which it may be consolidated, or to
which it may sell or transfer its agency business and assets as a whole or
substantially as a whole, or any corporation or association resulting from any
such conversion, sale, merger, consolidation or transfer to which it is a party,
shall, subject to the prior written consent of the Trust, be and become a
successor Collateral Agent hereunder and vested with all of the title to the
Collateral and all of the powers, discretions, immunities, privileges and other
matters as was its predecessor without, except as provided above, the execution
or filing of any instrument or any further act, deed or conveyance on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.
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(d) Resignation. The Collateral Agent and any successor Collateral
Agent may at any time resign by giving thirty days' written notice by registered
or certified mail to the Pledgor and notice to the Trust in accordance with the
provisions of Section 10(d) hereof. Such resignation shall take effect upon the
appointment of a successor Collateral Agent by the Trust.
(e) Removal. The Collateral Agent may be removed at any time by an
instrument or concurrent instruments in writing delivered to the Collateral
Agent and to the Pledgor and signed by the Trust.
(f) Appointment of Successor. (1) If the Collateral Agent hereunder
shall resign or be removed, or be dissolved or shall be in the course of
dissolution or liquidation or otherwise become incapable of action hereunder, or
if it shall be taken under the control of any public officer or officers or of a
receiver appointed by a court, a successor may be appointed by the Trust by an
instrument or concurrent instruments in writing signed by the Trust or by its
attorneys in fact fully authorized. A copy of such instrument or concurrent
instruments shall be sent by registered mail to the Pledgor.
(2) Every such temporary or permanent successor Collateral Agent
appointed pursuant to the provisions hereof shall be a trust company or bank in
good standing, having a reported capital and surplus of not less than
$100,000,000 and capable of holding the Collateral in the State of New York, if
there be such an institution willing, qualified and able to accept the duties of
the Collateral Agent hereunder upon customary terms.
(g) Acceptance by Successor. Every temporary or permanent successor
Collateral Agent appointed hereunder shall execute, acknowledge and deliver to
its predecessor and also to the Pledgor an instrument in writing accepting such
appointment hereunder, whereupon such successor, without any further act, deed
or conveyance, shall become fully vested with all the estates, properties,
rights, powers, duties and obligations of its predecessors. Such predecessor
shall, nevertheless, on the written request of its successor or the Pledgor,
execute and deliver an instrument transferring to such successor all the
estates, properties, rights and powers of such predecessor hereunder. Every
predecessor Collateral Agent shall deliver all Collateral held by it as the
Collateral Agent hereunder to its successor. Should any instrument in writing
from the Pledgor be required by a successor Collateral Agent for more fully and
certainly vesting in such successor the estates, properties, rights, powers,
duties and obligations hereby vested or intended to be vested in the
predecessor, any and
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all such instruments in writing shall, at the request of the temporary or
permanent successor Collateral Agent, be forthwith executed, acknowledged and
delivered by the Pledgor.
10. MISCELLANEOUS.
(a) Benefit of Agreement; Successors and Assigns. Whenever any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party. All the covenants and agreements herein
contained by or on behalf of the Pledgor and the Collateral Agent shall bind,
and inure to the benefit of, their respective successors and assigns whether so
expressed or not, and shall be enforceable by and inure to the benefit of the
Trust and its successors and assigns.
(b) Separability. To the extent permitted by law, the
unenforceability or invalidity of any provision or provisions of this Collateral
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
(c) Amendments and Waivers. Any term, covenant, agreement or
condition of this Collateral Agreement may be amended or compliance therewith
may be waived (either generally or in a particular instance and either
retrospectively or prospectively) but only by a writing signed by the Collateral
Agent, the Pledgor and the Trust.
(d) Notices. (1) Any notice provided for herein, unless otherwise
specified, shall be in writing (including transmittals by telex or telecopier)
and shall be given to a party at the address set forth opposite such party's
name on the signature pages hereto or at such other address as may be designated
by notice duly given in accordance with this Section 10(d) to each other party
hereto.
(2) Each such notice given pursuant to paragraph (1) shall be
effective (i) if sent by certified mail (return receipt requested), 72 hours
after being deposited in the United States mail, postage prepaid; (ii) if given
by telex or telecopier, when such telex or telecopied notice is transmitted, or
(iii) if given by any other means, when delivered at the address specified in
this Section 10(d).
(e) Governing Law. This Collateral Agreement shall in all respects
be construed in accordance with and governed by the laws of the State of New
York; provided that as to Pledged Items located in any jurisdiction other than
the State of New York, the Collateral Agent on behalf of the Trust shall have
all of the rights to which a secured party is entitled under the laws of such
other jurisdiction.
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(f) Counterparts. This Collateral Agreement may be executed,
acknowledged and delivered in any number of counterparts and such counterparts
taken together shall constitute one and the same instrument.
11. TERMINATION OF COLLATERAL AGREEMENT.
This Collateral Agreement and the rights hereby granted by the Pledgor
in the Collateral shall cease, terminate and be void upon fulfillment of all of
the obligations of the Pledgor under the Purchase Agreement, and the Pledgor
shall have no further liability hereunder upon such termination. Any Collateral
remaining at the time of such termination shall be fully released and discharged
from the Lien hereof and delivered to the Pledgor by the Collateral Agent, all
at the expense of the Pledgor.
12. NO PERSONAL LIABILITY OF TRUSTEES.
By executing this Collateral Agreement none of the Trustees assumes
any personal liability hereunder.
IN WITNESS WHEREOF, the Pledgor has caused this Collateral Agreement
to be duly executed on its behalf, and the Collateral Agent has caused this
Collateral Agreement to be duly executed on its behalf, as of the date hereof.
PLEDGOR:
DAVID H. MURDOCK, as Trustee for
the DAVID H. MURDOCK LIVING TRUST
By
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Name:
Title:
Address for Notices:
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Attention:
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COLLATERAL AGENT:
THE BANK OF NEW YORK,
as Collateral Agent
By
--------------------------------
Name:
Title:
Address for Notices:
101 Barclay Street
New York, New York 10286
Attention: [Theodore D. Parsons]
THE TRUST:
DOLE FOOD AUTOMATIC COMMON EXCHANGE
SECURITY TRUST
------------------------------------
------------------------------------,
as Trustee
------------------------------------
------------------------------------,
as Trustee
------------------------------------
------------------------------------,
as Trustee
_________________________________
Address for Notices:
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Attention:
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Exhibit A
to
Collateral Agreement
CERTIFICATE FOR SUBSTITUTED COLLATERAL
The undersigned, DAVID H. MURDOCK, as Trustee for the DAVID H. MURDOCK
LIVING TRUST (the "Pledgor"), hereby certifies, pursuant to Section 6(b) of the
Collateral Agreement dated as of July __, 1996 among the Pledgor,
__________________________, as Collateral Agent, and DOLE FOOD AUTOMATIC COMMON
EXCHANGE SECURITY TRUST (the "Collateral Agreement"; terms defined in the
Collateral Agreement being used herein as defined therein), that:
1. The Pledgor is delivering the following securities to the
Collateral Agent to be held by the Collateral Agent as substituted Collateral
(the "Substituted Collateral"):
2. The Pledgor requests that the Collateral Agent transfer to the
Pledgor the following Prior Collateral, pursuant to Section 6(b) of the
Collateral Agreement:
3. The Pledgor hereby represents and warrants to the Collateral
Agent and the Trust that:
(a) Consents to Transfer. No Transfer Restrictions exist with
respect to or otherwise apply to the assignment of, or transfer by the Pledgor
of possession of, any items of Substituted Collateral to the Collateral Agent
under the Collateral Agreement, or the subsequent sale or transfer of such items
of Substituted Collateral by the Collateral Agent pursuant to the terms of the
Collateral Agreement.
(b) Title to Collateral; Perfected Security Interest. The Pledgor
has good and marketable title to the Substituted Collateral, free of all Liens
(other than the Lien created by the Collateral Agreement) and Transfer
Restrictions. Upon delivery of the Collateral to the Collateral Agent, the
Collateral Agent will obtain a valid, first priority perfected security interest
in, and a first lien upon, such Substituted Collateral subject to no other Lien.
None of such Substituted Collateral is or shall be pledged by the Pledgor as
collateral for any other purpose.
This Certificate may be relied upon by the Trust as fully and to the
same extent as if this Certificate had been specifically addressed to the Trust.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_______ day of _______________ , 199__.
------------------------------
Name:
Title:
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<PAGE>
Exhibit B
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, DAVID H. MURDOCK, as Trustee for the DAVID H. MURDOCK
LIVING TRUST (the "Pledgor"), hereby certifies, pursuant to Section 6(c) of the
Collateral Agreement, dated as of July __, 1996, among the Pledgor,
_________________________, as Collateral Agent and DOLE FOOD AUTOMATIC COMMON
EXCHANGE SECURITY TRUST (the "Collateral Agreement"; terms defined in the
Collateral Agreement being used herein as defined therein), that:
1. The Pledgor is delivering the following securities to the
Collateral Agent to be held by the Collateral Agent as additional Collateral
(the "Additional Collateral"):
2. The Pledgor hereby represents and warrants to the Collateral
Agent that:
(a) Consents to Transfer. No Transfer Restrictions exist with
respect to or otherwise apply to the assignment of, or transfer by the Pledgor
of possession of, any items of Additional Collateral to the Collateral Agent
under the Collateral Agreement, or the subsequent sale or transfer of such items
of Additional Collateral by the Collateral Agent pursuant to the terms of the
Collateral Agreement.
(b) Title to Collateral; Perfected Security Interest. The Pledgor
has good and marketable title to the Additional Collateral, free of all Liens
(other than the Lien created by the Collateral Agreement) and Transfer
Restrictions. Upon delivery of the Collateral to the Collateral Agent, the
Collateral Agent will obtain a valid, first priority perfected security interest
in, and a first lien upon, such additional Collateral subject to no other Lien.
None of such Additional Collateral is or shall be pledged by the Pledgor as
collateral for any other purpose.
This Certificate may be relied upon by the Trust as fully and to the
same extent as if this Certificate had been specifically addressed to the Trust.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
____ day of ______________ , 199___.
--------------------------------
Name:
Title:
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