-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LeQlkzsWsmLnQXjizaO8aDo/KrScp4VNOwj9XB4tuXx0FEvlkCwXy1ssN2CrIQkU 9oF4TjM4qw3DWEAgwdqjPQ== 0000912057-96-016358.txt : 19960807 0000912057-96-016358.hdr.sgml : 19960807 ACCESSION NUMBER: 0000912057-96-016358 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19960806 SROS: NYSE SROS: PSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DOLE FOOD COMPANY INC CENTRAL INDEX KEY: 0000018169 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 990035300 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-33795 FILM NUMBER: 96604504 BUSINESS ADDRESS: STREET 1: 31355 OAK CREST DRIVE CITY: WESTLAKE VILLAGE STATE: CA ZIP: 91361 BUSINESS PHONE: 8188796600 MAIL ADDRESS: STREET 1: 31355 OAK CREST DR CITY: WESTLAKE VILLAGE STATE: CA ZIP: 91361 FORMER COMPANY: FORMER CONFORMED NAME: CASTLE & COOKE INC DATE OF NAME CHANGE: 19910731 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MURDOCK DAVID H CENTRAL INDEX KEY: 0000875392 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 31355 OAK CREST DRIVE CITY: WESTLAKE VILLAGE STATE: CA ZIP: 91361 BUSINESS PHONE: 8188796812 SC 13D/A 1 SCHEDULE 13D/A 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. -------------------------------------------------------- (Name of Issuer) Common Stock -------------------------------------------------------- (Title of Class of Securities) 256605-10-5 -------------------------------------------------------- (CUSIP Number) Roberta Wieman 10900 Wilshire Boulevard, 16th Floor Los Angeles, CA 90024 (213) 879-6600 -------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 6, 1996 -------------------------------------------------------- (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). SCHEDULE 13D CUSIP No. 256605-10-5 Page 2 of 8 Pages ----------- - ------------------------------------------------------------------------------- (1) Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person David H. Murdock - ------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group* (a) / / (b) /X/ - ------------------------------------------------------------------------------- (3) SEC Use Only - ------------------------------------------------------------------------------- (4) Source of Funds* N/A - ------------------------------------------------------------------------------- (5) Check box if Disclosure of Legal Proceedings is Required / / Pursuant to Items 2(d) or 2(e) - ------------------------------------------------------------------------------- (6) Citizenship or Place of Organization U.S. - ------------------------------------------------------------------------------- (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 - ------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 13,864,278 - ------------------------------------------------------------------------------- (12) Check box if the Aggregate Amount in Row (11) Excludes / / Certain Shares* - ------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 23.0% - ------------------------------------------------------------------------------- (14) Type of Reporting Person* IN - ------------------------------------------------------------------------------- *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. SCHEDULE 13D CUSIP No. 256605-10-5 Page 3 of 8 Pages ----------- - ------------------------------------------------------------------------------- (1) Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Flexi-Van Corporation - ------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group* (a) / / (b) /X/ - ------------------------------------------------------------------------------- (3) SEC Use Only - ------------------------------------------------------------------------------- (4) Source of Funds* N/A - ------------------------------------------------------------------------------- (5) Check box if Disclosure of Legal Proceedings is Required / / Pursuant to Items 2(d) or 2(e) - ------------------------------------------------------------------------------- (6) Citizenship or Place of Organization Delaware - ------------------------------------------------------------------------------- (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 - ------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 1,240,310 - ------------------------------------------------------------------------------- (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% - ------------------------------------------------------------------------------- (14) Type of Reporting Person* CO - ------------------------------------------------------------------------------- *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. SCHEDULE 13D CUSIP No. 256605-10-5 Page 4 of 8 Pages ----------- - ------------------------------------------------------------------------------- (1) Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Flexi-Van Leasing, Inc. - ------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group* (a) / / (b) /X/ - ------------------------------------------------------------------------------- (3) SEC Use Only - ------------------------------------------------------------------------------- (4) Source of Funds* N/A - ------------------------------------------------------------------------------- (5) Check box if Disclosure of Legal Proceedings is Required / / Pursuant to Items 2(d) or 2(e) - ------------------------------------------------------------------------------- (6) Citizenship or Place of Organization Delaware - ------------------------------------------------------------------------------- (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 - ------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 1,240,310 - ------------------------------------------------------------------------------- (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% - ------------------------------------------------------------------------------- (14) Type of Reporting Person* CO - ------------------------------------------------------------------------------- *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. SCHEDULE 13D CUSIP No. 256605-10-5 Page 5 of 8 Pages ----------- - ------------------------------------------------------------------------------- (1) Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Flexi-Van Delaware, Inc. - ------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group* (a) / / (b) /X/ - ------------------------------------------------------------------------------- (3) SEC Use Only - ------------------------------------------------------------------------------- (4) Source of Funds* N/A - ------------------------------------------------------------------------------- (5) Check box if Disclosure of Legal Proceedings is Required / / Pursuant to Items 2(d) or 2(e) - ------------------------------------------------------------------------------- (6) Citizenship or Place of Organization Delaware - ------------------------------------------------------------------------------- (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 - ------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 1,240,310 - ------------------------------------------------------------------------------- (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% - ------------------------------------------------------------------------------- (14) Type of Reporting Person* CO - ------------------------------------------------------------------------------- *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 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. 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. 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 --------------------------------- 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 EX-3 2 EXHIBIT 3 - FORM OF PURCHASE AGREEMENT 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: 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 -2- 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. -3- "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. -4- (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 -5- 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. -6- 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 -7- 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: -8- (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 -9- 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 (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 -11- 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 -12- 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 -13- 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 -14- 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 -15- 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. -16- 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 -17- EX-4 3 EXHIBIT 4 - FORM OF UA AMONG GOLDMAN, SACHS & CO 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 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; -2- (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; -3- (vii) Each of the Purchase Agreement, the Collateral Agreement, the Administration Agreement between The Bank of New York ("BONY") and the Trust (the "Administration Agreement"), the Custodian Agreement between BONY and the Trust (the "Custodian Agreement"), the Paying Agent Agreement between BONY and the Trust (the "Paying Agent Agreement"), the Fund Expense Agreement between Goldman, Sachs & Co. and BONY (the "Fund Expense Agreement") and the Fund Indemnity Agreement between Goldman, Sachs & Co. and the Trust (the "Fund Indemnity Agreement") (the Purchase Agreement, the Collateral Agreement, the Administration Agreement, the Custodian Agreement, the Paying Agent Agreement, the Fund Expense Agreement and the Fund Indemnity Agreement are herein collectively called the "Fundamental Agreements") has been duly authorized, executed and delivered by the Trust and, assuming due authorization, execution and delivery by the other parties thereto, constitutes a valid and legally binding agreement of the Trust, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; (viii) The Trust Agreement and the Fundamental Agreements comply with all applicable provisions of the Acts, and all approvals of such documents required under the Investment Company Act by the holders of the Automatic Common Exchange Securities and the Trustees have been obtained and are in full force and effect; (ix) All of the outstanding Automatic Common Exchange Securities have been duly and validly authorized and issued and are fully paid and non-assessable and the form of certificates used to evidence the Automatic Common Exchange Securities is in due and proper form and complies with all provisions of applicable law; the Trust Agreement and the Fundamental Agreements conform to the description thereof contained in the Trust Prospectus; (x) The Securities have been duly authorized and, when issued and delivered pursuant to this Agreement, will be validly issued, fully paid and non-assessable; the Securities will conform to the description thereof in the Trust Prospectus; no person has rights to registration of any securities because of the filing of the Trust Registration Statement; (xi) The issue and sale of the Securities and the compliance by the Trust with all of the provisions of the Securities, this Agreement and each Fundamental Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, the Trust Agreement or any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Trust is a party or by which the Trust is bound or to which any of the property or assets of the Trust is subject, nor will such action result in any violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Trust or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by the Trust of the transactions contemplated by this Agreement or the Fundamental Agreements, except such as may be required by the NASD and except the registration under -4- 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: -5- (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; -6- (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 -7- 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 -8- 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; -9- (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 -10- 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. -11- 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 -12- 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; -13- (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, -14- 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 -15- 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); -16- (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; -17- (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 -18- 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 -19- 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 -20- 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 -21- 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- 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- 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- 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- 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 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. 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; (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 (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 EX-5 4 EXHIBIT 5 - FORM OF COLLATERAL AGREEMENT 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 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 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, 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- "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. -3- "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. -4- "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 -5- 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: -6- (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 -7- 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. -8- (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. -9- (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 -10- 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 -11- 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 -12- 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. -13- 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 -14- 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 -15- 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 -16- 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 -17- 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 -18- 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. -19- (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 -20- 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. -21- (f) Counterparts. This Collateral Agreement may be executed, acknowledged and delivered in any number of counterparts and such counterparts taken together shall constitute one and the same instrument. 11. TERMINATION OF COLLATERAL AGREEMENT. This Collateral Agreement and the rights hereby granted by the Pledgor in the Collateral shall cease, terminate and be void upon fulfillment of all of the obligations of the Pledgor under the Purchase Agreement, and the Pledgor shall have no further liability hereunder upon such termination. Any Collateral remaining at the time of such termination shall be fully released and discharged from the Lien hereof and delivered to the Pledgor by the Collateral Agent, all at the expense of the Pledgor. 12. NO PERSONAL LIABILITY OF TRUSTEES. By executing this Collateral Agreement none of the Trustees assumes any personal liability hereunder. IN WITNESS WHEREOF, the Pledgor has caused this Collateral Agreement to be duly executed on its behalf, and the Collateral Agent has caused this Collateral Agreement to be duly executed on its behalf, as of the date hereof. PLEDGOR: DAVID H. MURDOCK, as Trustee for the DAVID H. MURDOCK LIVING TRUST By -------------------------------- Name: Title: Address for Notices: ---------------------------------- ---------------------------------- ---------------------------------- ---------------------------------- ---------------------------------- Attention: ------------------------ -22- COLLATERAL AGENT: THE BANK OF NEW YORK, as Collateral Agent By -------------------------------- Name: Title: Address for Notices: 101 Barclay Street New York, New York 10286 Attention: [Theodore D. Parsons] THE TRUST: DOLE FOOD AUTOMATIC COMMON EXCHANGE SECURITY TRUST ------------------------------------ ------------------------------------, as Trustee ------------------------------------ ------------------------------------, as Trustee ------------------------------------ ------------------------------------, as Trustee _________________________________ Address for Notices: ---------------------------------- ---------------------------------- ---------------------------------- ---------------------------------- ---------------------------------- Attention: ------------------------ -23- 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. IN WITNESS WHEREOF, the undersigned has executed this Certificate this _______ day of _______________ , 199__. ------------------------------ Name: Title: -2- 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. IN WITNESS WHEREOF, the undersigned has executed this Certificate this ____ day of ______________ , 199___. -------------------------------- Name: Title: -2- -----END PRIVACY-ENHANCED MESSAGE-----