EXHIBIT 10
SAILS PLEDGE AGREEMENT
dated as of
December 19, 2000
among
GSB INVESTMENTS CORP.,
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
and
CREDIT SUISSE FIRST BOSTON CORPORATION, as Agent
TABLE OF CONTENTS
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PAGE
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SECTION 1. The Security Interests.............................................1
SECTION 2. Definitions........................................................3
SECTION 3. Representations and Warranties of Pledgor..........................5
SECTION 4. Certain Covenants of Pledgor.......................................6
SECTION 5. Administration of the Collateral and Valuation of the
Securities........................................................7
SECTION 6. Income and Voting Rights in Collateral............................10
SECTION 7. Remedies upon Acceleration Events.................................11
SECTION 8. Miscellaneous.....................................................14
SECTION 9. Termination of Pledge Agreement...................................15
SECTION 10. Set-off...........................................................16
PLEDGE AGREEMENT
THIS AGREEMENT is made as of this 19th day of December, 2000 among GSB
INVESTMENTS CORP, a Delaware corporation ("PLEDGOR"), CREDIT SUISSE FIRST BOSTON
CORPORATION, as agent (in such capacity, the "AGENT") hereunder, and CREDIT
SUISSE FIRST BOSTON INTERNATIONAL ("SECURED PARTY").
WHEREAS, Pledgor owns shares of common stock, par value $1.00 per
share, of Golden State Bancorp Inc., a Delaware corporation (the "ISSUER"), or
security entitlements in respect thereof (the "COMMON STOCK");
WHEREAS, Pledgor, Mafco Holdings Inc., Secured Party and the Agent have
entered into an agreement entitled "Terms and Conditions for Private SAILS" (the
"TERM SHEET") dated as of December 12, 2000, pursuant to which Pledgor and
Secured Party have agreed to enter into certain transactions relating to the
Common Stock at the time and on the terms set forth therein;
WHEREAS, the Term Sheet provides that the transactions described
therein may be executed in one or more tranches (each, a "TRANCHE");
WHEREAS, the Term Sheet provides that the parties thereto will enter
into final documentation, consisting of a SAILS Mandatorily Exchangeable
Securities Contract and a SAILS Pledge Agreement, relating to each Tranche;
WHEREAS, it is a condition to the obligations of Secured Party under
the Securities Contract that Pledgor and Secured Party enter into this
Agreement;
NOW, THEREFORE, in consideration of their mutual covenants contained
herein and to secure the performance by Pledgor of Pledgor's obligations under
the Securities Contract and the observance and performance of the covenants and
agreements contained herein and in the Securities Contract, the parties hereto,
intending to be legally bound, hereby mutually covenant and agree as follows:
SECTION 1. The Security Interests. In order to secure the full and
punctual observance and performance of the covenants and agreements of Pledgor
contained herein and in the Securities Contract:
(a) Pledgor hereby assigns and pledges to Secured Party, and grants to
Secured Party, security interests in and to, and a lien upon and right of
set-off against, and transfers to Secured Party, as and by way of a security
interest having priority over all other security interests, with power of sale,
all of Pledgor's right,
title and interest in and to (i) the Initial Pledged Items; (ii) all additions
to and substitutions for the Initial Pledged Items (including, without
limitation, any securities, instruments or other property delivered or pledged
pursuant to Section 4(a), 5(b) or 5(i)) (such additions and substitutions, the
"ADDITIONS AND SUBSTITUTIONS"); (iii) all income, proceeds and collections
received or to be received, or derived or to be derived, now or any time
hereafter (whether before or after the commencement of any proceeding under
applicable bankruptcy, insolvency or similar law, by or against Pledgor, with
respect to Pledgor) from or in connection with the Initial Pledged Items or the
Additions and Substitutions (excluding Ordinary Cash Dividends but including,
without limitation, any shares of capital stock issued by the Issuer in respect
of any Common Stock constituting Collateral or any cash, securities or other
property distributed in respect of or exchanged for any Common Stock or
Government Securities constituting Collateral (other than Ordinary Cash
Dividends), or into which any such Common Stock is converted in connection with
any Reorganization Event or otherwise, and any security entitlements in respect
of any of the foregoing; (iv) the Collateral Account and all securities and
other financial assets (each as defined in Section 8- 102 of the UCC), including
the Initial Pledged Items and the Additions and Substitutions, and other funds,
property or assets from time to time held therein or credited thereto; and (v)
all powers and rights now owned or hereafter acquired under or with respect to
the Initial Pledged Items or the Additions and Substitutions (such Initial
Pledged Items, Additions and Substitutions, proceeds, collections, powers,
rights, Collateral Account and assets held therein or credited thereto being
herein collectively called the "COLLATERAL"). Secured Party shall have all of
the rights, remedies and recourses with respect to the Collateral afforded a
secured party by the UCC, in addition to, and not in limitation of, the other
rights, remedies and recourses afforded to Secured Party by this Agreement. The
parties hereto agree that, neither Secured Party nor the Agent shall at any time
sell, lend, pledge, rehypothecate, assign, invest, use, commingle or otherwise
dispose of, or otherwise use in its business, any of the Collateral.
(b) Immediately upon payment of the Purchase Price, Pledgor shall
deliver to the Custodian in pledge hereunder Eligible Collateral consisting of a
number of shares of Common Stock equal to the Base Amount as of the Closing Date
(the "INITIAL PLEDGED ITEMS"), in the manner provided in Section 5(c). Upon
delivery of the Purchase Price, Pledgor shall cause to be delivered to Secured
Party any documents as Secured Party may reasonably request to evidence that the
Initial Pledged Items have been delivered free and clear from any Lien or
Transfer Restrictions to which such Initial Pledged Items may have been subject
prior to the delivery of the Purchase Price.
(c) In the event that the Issuer at any time issues in respect of any
Common Stock constituting Collateral hereunder, or comprising financial assets
underlying security entitlements constituting Collateral hereunder, any
additional
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or substitute shares of capital stock of any class, Pledgor shall immediately
pledge and deliver to Secured Party in accordance with Section 5(c) all such
shares or security entitlements in respect thereof as additional Collateral
hereunder.
(d) The Security Interests are granted as security only and shall not
subject Secured Party to, or transfer or in any way affect or modify, any
obligation or liability of Pledgor or the Issuer with respect to any of the
Collateral or any transaction in connection therewith.
(e) The parties hereto expressly agree that all rights, assets and
property at any time held in or credited to the Collateral Account shall be
treated as financial assets (as defined in Section 8-102 of the UCC).
SECTION 2. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to them in the Securities
Contract. As used herein, the following words and phrases shall have the
following meanings:
"ADDITIONS AND SUBSTITUTIONS" has the meaning provided in Section 1(a).
"AUTHORIZED OFFICER" of Pledgor means any officer as to whom Pledgor
shall have delivered notice to Secured Party that such officer is authorized to
act hereunder on behalf of Pledgor.
"COLLATERAL" has the meaning provided in Section 1(a).
"COLLATERAL ACCOUNT" has the meaning provided in Section 5(c).
"COLLATERAL EVENT OF DEFAULT" means, the occurrence of either of the
following: (i) at any time, failure of the Collateral to include, as Eligible
Collateral, (A) at least the Maximum Deliverable Number of shares of Common
Stock or (B) if Pledgor shall have elected to substitute Government Securities
for Share Collateral in accordance with Section 5(i) , Government Securities
having a value (as determined by the Calculation Agent) equal to 150% of the
Market Value at such time of the Maximum Deliverable Number of shares of Common
Stock at such time (provided that, in the case of this clause (B), the
Calculation Agent shall promptly notify Pledgor of its determination of any such
failure and (x) if such notice is received by Pledgor prior to 11:00 a.m., New
York City time, on any Business Day, such failure shall not be a Collateral
Event of Default if remedied prior to the close of business on such Business Day
and (y) if such notice is received by Pledgor on a day that is not a Business
Day or after 11:00 a.m., New York City time, on any Business Day, such failure
shall not be a Collateral Event of Default if remedied prior to the close of
business on the Business Day immediately following such day) or (ii) at any
time, failure of the
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Security Interests to constitute valid and perfected security interests in all
of the Collateral, subject to no prior or equal Lien, and, with respect to any
Collateral consisting of securities or security entitlements (each as defined in
Section 8-102 of the UCC), as to which Secured Party has Control, or, in each
case, assertion of such by Pledgor in writing.
"CONTROL" means "control" as defined in Section 8-106 and Section 9-115
of the UCC.
"CUSTODIAN" means The Bank of New York, or any other custodian
appointed by Secured Party and identified to Pledgor.
"DEFAULT SETTLEMENT DATE" has the meaning provided in Section 7(a).
"ELIGIBLE COLLATERAL" means Common Stock or, if Pledgor shall have
elected to substitute Government Securities for Share Collateral in accordance
with Section 5(i), Government Securities; provided that Pledgor has good and
marketable title thereto, free of all Liens (other than the Security Interests)
and Transfer Restrictions and that Secured Party has a valid, first priority
perfected security interest therein, a first lien thereon and Control with
respect thereto.
"GOVERNMENT SECURITIES" means securities issued by the United States
Government.
"INITIAL PLEDGED ITEMS" has the meaning provided in Section 1(b).
"LOCATION" means, with respect to any party, the place such party is
"deemed located" within the meaning of Section 9-103(3)(d) of the UCC.
"MAXIMUM DELIVERABLE NUMBER" means, on any date, the Base Amount
on such date.
"PLEDGED ITEMS" means, as of any date, any and all securities and
instruments delivered by Pledgor to be held by or on behalf of Secured Party
under this Agreement as Collateral.
"SECURITIES CONTRACT" means the SAILS Mandatorily Exchangeable
Securities Contract dated as of the date hereof among Pledgor, Secured Party and
the Agent, as amended from time to time.
"SECURITY INTERESTS" means the security interests in the Collateral
created hereby.
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"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
SECTION 3. Representations and Warranties of Pledgor. Pledgor hereby
represents and warrants to Secured Party that:
(a) Pledgor's holding period (calculated in accordance with Rule 144(d)
under the Securities Act) with respect to the Initial Pledged Items commenced on
or before May 23, 2000, and Pledgor (i) owns and, at all times prior to the
release of the Collateral pursuant to the terms of this Agreement, will own the
Collateral free and clear of any Liens (other than the Security Interests) or
Transfer Restrictions and (ii) is not and will not become a party to or
otherwise bound by any agreement, other than this Agreement, that (x) restricts
in any manner the rights of any present or future owner of the Collateral with
respect thereto or (y) provides any person other than Pledgor, Secured Party or
any securities intermediary through whom any Collateral is held (but, in the
case of any such securities intermediary, only with respect to Collateral held
through it) with Control with respect to any Collateral.
(b) Other than financing statements or other similar or equivalent
documents or instruments with respect to the Security Interests, after delivery
of the Purchase Price no financing statement, security agreement or similar or
equivalent document or instrument covering all or any part of the Collateral is
on file or of record in any jurisdiction in which such filing or recording would
be effective to perfect a lien, security interest or other encumbrance of any
kind on such Collateral.
(c) All Collateral consisting of securities and all financial assets
underlying Collateral consisting of security entitlements (each as defined in
Section 8-102 of the UCC) (other than Collateral consisting of Government
Securities) at any time pledged hereunder is and will be issued by an issuer
organized under the laws of the United States, any State thereof or the District
of Columbia and (i) certificated (and the certificate or certificates in respect
of such securities or financial assets are and will be located in the United
States) and registered in the name of Pledgor or held through a securities
intermediary whose securities intermediary's jurisdiction (within the meaning of
Section 8-110(e) of the UCC) is located in the United States or (ii)
uncertificated and either registered in the name of Pledgor or held through a
securities intermediary whose securities intermediary's jurisdiction (within the
meaning of Section 8-110(e) of the UCC) is located in the United States;
provided that this representation shall not be deemed to be breached if, at any
time, any such Collateral is issued by an issuer that is not organized under the
laws of the United States, any State thereof or the District of Columbia, and
the parties hereto agree to procedures or amendments hereto necessary to enable
Secured Party to maintain a valid and continuously
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perfected security interest in such Collateral, in respect of which Secured
Party will have Control, subject to no prior Lien. The parties hereto agree to
negotiate in good faith any such procedures or amendments.
(d) Upon (A) the delivery of certificates evidencing investment
property (as defined in Section 9-115 of the UCC) consisting of certificated
securities to the Custodian in accordance with Section 5(c)(i), (B) the
registration of any such investment property consisting of uncertificated
securities in the name of the Custodian or its nominee in accordance with
Section 5(c)(ii) or (C) the crediting of any securities or other financial
assets underlying any such investment property consisting of security
entitlements to a securities account of the Custodian in accordance with Section
5(c)(iii) and, in each case, the crediting of such securities or financial
assets to the Collateral Account, Secured Party will have a valid and perfected
security interest in such Collateral, in respect of which Secured Party will
have Control, subject to no prior Lien.
(e) No registration, recordation or filing with any governmental body,
agency or official is required in connection with the execution and delivery of
this Agreement or necessary for the validity or enforceability hereof or for the
perfection or enforcement of the Security Interests.
(f) Pledgor has not performed and will not perform any acts that might
prevent Secured Party from enforcing any of the terms of this Agreement or that
might limit Secured Party in any such enforcement.
(g) The Location of Pledgor is the address set forth in Section 8(c),
and under the Uniform Commercial Code as in effect in such Location.
SECTION 4. Certain Covenants of Pledgor. Pledgor agrees that, so long
as any of Pledgor's obligations under the Securities Contract remain
outstanding:
(a) Pledgor shall ensure at all times that a Collateral Event of
Default shall not occur, and shall pledge additional Collateral in the manner
described in Sections 5(b) and 5(c) as necessary to cause such requirement to be
met.
(b) Pledgor shall, at the expense of Pledgor and in such manner and
form as Secured Party 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 (i) create, preserve, perfect,
substantiate or validate any security interest granted pursuant hereto, (ii)
create or maintain Control with respect to any such security interests in any
investment property (as defined in Section 9-115 of the UCC) or (iii) enable
Secured Party to exercise and enforce its rights hereunder with respect to such
security interest. To the extent permitted by applicable law, Pledgor hereby
authorizes Secured Party to execute
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and file, in the name of Pledgor or otherwise, UCC financing or continuation
statements (which may be carbon, photographic, photostatic or other
reproductions of this Agreement or of a financing statement relating to this
Agreement) that Secured Party in its sole discretion may deem necessary or
appropriate to further perfect, or maintain the perfection of, the Security
Interests.
(c) Pledgor shall warrant and defend Pledgor's title to the Collateral,
subject to the rights of Secured Party, against the claims and demands of all
persons. Secured Party may elect, but without an obligation to do so, to
discharge any Lien of any third party on any of the Collateral.
(d) Unless Pledgor shall have given Secured Party not less than 30 days
prior notice thereof, Pledgor shall not change (i) Pledgor's name, identity or
corporate structure in any manner or (ii) Pledgor's Location if such change
could cause any of the Security Interests to become unperfected, cause Secured
Party to cease to have Control in respect of any of the Security Interests in
any Collateral consisting of investment property (as defined in Section 9-115 of
the UCC) or subject any Collateral to any other Lien.
(e) Pledgor shall not (i) create or permit to exist any Lien (other
than the Security Interests) or any Transfer Restriction upon or with respect to
the Collateral, (ii) sell or otherwise dispose of, or grant any option with
respect to, any of the Collateral or (iii) enter into or consent to any
agreement pursuant to which any person other than Pledgor, Secured Party and any
securities intermediary through whom any of the Collateral is held (but in the
case of any such securities intermediary only in respect of Collateral held
through it) has or will have Control in respect of any Collateral.
SECTION 5. Administration of the Collateral and Valuation of the
Securities. (a) Secured Party shall determine on each Business Day whether a
Collateral Event of Default shall have occurred.
(b) Pledgor may pledge additional Eligible Collateral hereunder at any
time. Concurrently with the delivery of any additional Eligible Collateral,
Pledgor shall deliver to Secured Party a certificate of an Authorized Officer of
Pledgor substantially in the form of Exhibit A hereto and dated the date of such
delivery, (i) identifying the additional items of Eligible Collateral being
pledged and (ii) certifying that with respect to such items of additional
Eligible Collateral the representations and warranties contained in paragraphs
(a), (b), (c) and (d) of Section 3 are true and correct with respect to such
Eligible Collateral on and as of the date thereof. Pledgor hereby covenants and
agrees to take all actions required under Section 5(c) and any other actions
necessary to create for the benefit of Secured Party a valid, first priority,
perfected security interest in, and a first lien
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upon, such additional Eligible Collateral, as to which Secured Party will have
Control.
(c) Any delivery of any securities or security entitlements (each as
defined in Section 8-102 of the UCC) as Collateral to Secured Party by Pledgor
shall be effected (i) in the case of Collateral consisting of certificated
securities registered in the name of Pledgor, by delivery of certificates
representing such securities to the Custodian, accompanied by any required
transfer tax stamps, and in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in blank,
with signatures appropriately guaranteed, all in form and substance satisfactory
to Secured Party, and the crediting by the Custodian of such securities to a
securities account (as defined in Section 8-501 of the UCC) (the "COLLATERAL
ACCOUNT") of Secured Party maintained by the Custodian, (ii) in the case of
Collateral consisting of uncertificated securities registered in the name of
Pledgor, by transmission by Pledgor of an instruction to the issuer of such
securities instructing such issuer to register such securities in the name of
the Custodian or its nominee, accompanied by any required transfer tax stamps,
the issuer's compliance with such instructions and the crediting by the
Custodian of such securities to the Collateral Account, (iii) in the case of
securities in respect of which security entitlements are held by Pledgor through
a securities intermediary, by the crediting of such securities, accompanied by
any required transfer tax stamps, to a securities account of the Custodian at
such securities intermediary or, at the option of Secured Party, at another
securities intermediary satisfactory to Secured Party and the crediting by the
Custodian of such securities to the Collateral Account or (iv) in any case, by
complying with such alternative delivery instructions as Secured Party shall
provide to Pledgor in writing. Upon delivery of any such Pledged Item under this
Agreement, Secured Party shall examine (or cause the Custodian to examine) such
Pledged Item and any certificates delivered pursuant to Section 5(b) or
otherwise pursuant to the terms hereof in connection therewith to determine that
they comply as to form with the requirements for Eligible Collateral.
(d) If on any Business Day Secured Party determines that a Collateral
Event of Default shall have occurred, Secured Party shall promptly notify
Pledgor of such determination by telephone call to an Authorized Officer of
Pledgor followed by a written confirmation of such call.
(e) If on any Business Day Secured Party determines that no
Acceleration Event or failure by Pledgor to meet any of Pledgor's obligations
under Sections 4 or 5 hereof has occurred and is continuing, Pledgor may obtain
the release from the Security Interests of any Collateral upon delivery to
Secured Party of a written notice from an Authorized Officer of Pledgor
indicating the items of Collateral to be released so long as, after such
release, no Collateral Event of Default shall have occurred.
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(f) On the Maturity Date, unless (i) Pledgor shall have otherwise
effected the deliveries required by Section 2.03(b) of the Securities Contract
or shall have delivered the Cash Settlement Amount to Secured Party in lieu of
shares of Common Stock in accordance with Section 2.04 of the Securities
Contract on the Maturity Date or (ii) the Common Stock then held by or on behalf
of Secured Party hereunder is not Free Stock, Secured Party shall deliver or
cause to be delivered to itself from the Collateral Account in whole or partial,
as the case may be, satisfaction of Pledgor's obligations to deliver shares of
Common Stock to Secured Party on the Maturity Date pursuant to the Securities
Contract, shares of Common Stock then held by or on behalf of it hereunder
representing the number of shares of Common Stock required to be delivered under
the Securities Contract on the Maturity Date. Upon any such delivery, Secured
Party shall hold such shares of Common Stock absolutely and free from any claim
or right whatsoever (including, without limitation, any claim or right of
Pledgor).
(g) Secured Party may at any time or from time to time while an
Acceleration Event shall have occurred and is continuing, in its sole
discretion, cause any or all of the Collateral that is registered in the name of
Pledgor or Pledgor's nominee to be transferred of record into the name of the
Custodian, Secured Party or its nominee. Pledgor shall promptly give to Secured
Party copies of any notices or other communications received by Pledgor with
respect to Collateral that is registered, or held through a securities
intermediary, in the name of Pledgor or Pledgor's nominee and Secured Party
shall promptly give to Pledgor copies of any notices and communications received
by Secured Party with respect to Collateral that is registered, or held through
a securities intermediary, in the name of Custodian, Secured Party or its
nominee.
(h) Pledgor agrees that Pledgor shall forthwith upon demand pay to
Secured Party:
(i) the amount of any taxes that Secured Party or the Custodian
may have been required to pay by reason of the Security Interests or
to free any of the Collateral from any Lien thereon; and
(ii) the amount of any and all costs and expenses, including the
fees and disbursements of counsel and of any other experts, that
Secured Party or the Custodian may incur in connection with (A) the
enforcement of this Agreement, including such expenses as are incurred
to preserve the value of the Collateral and the validity, perfection,
rank and value of the Security Interests, (B) the collection, sale or
other disposition of any of the Collateral, (C) the exercise by
Secured Party of any of the rights conferred upon it hereunder or (D)
any Acceleration Event.
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Any such amount not paid on demand shall bear interest (computed on the basis of
a year of 360 days and payable for the actual number of days elapsed) at a rate
per annum equal to 5% plus the prime rate as published from time to time in The
Wall Street Journal, Eastern Edition.
(i) Pledgor may at any time, so long as no Acceleration Event has
occurred and is continuing, substitute Government Securities for all
(but not less than all) of the Collateral consisting of Common Stock
then held in or credited to the Collateral Account (the "SHARE
COLLATERAL") on the terms set forth below:
(i) At least fifteen Business Days prior to the date of any
such substitution, Pledgor shall notify Secured Party in writing
that Pledgor intends to effect such substitution;
(ii) Pledgor shall deliver to Secured Party, in a manner
reasonably acceptable to Secured Party, Government Securities
having a value (as determined by the Calculation Agent) at least
equal to 150% of the Market Value of the Maximum Deliverable
Number of shares of Common Stock on the date of such delivery;
(iii) Pledgor shall take all such other actions as Secured
Party may reasonably require to create for the benefit of Secured
Party a valid and perfected security interest in such Government
Securities, in respect of which Secured Party will have Control,
subject to no prior Lien; and
(iv) Pledgor shall make ▇▇▇▇ to market deliveries of
additional Government Securities on a daily basis, and upon the
request of Pledgor, Secured Party shall release Government
Securities previously pledged, so that the value (as determined
by the Calculation Agent) of the Government Securities pledged is
at all times at least equal to 150% of the Market Value of the
Maximum Deliverable Number of shares of Common Stock at such
time, in each case, pursuant to terms mutually acceptable to
Secured Party and Pledgor.
SECTION 6. Income and Voting Rights in Collateral. (a) Secured Party
shall have the right to receive and retain as Collateral hereunder all proceeds
of the Collateral (excluding Ordinary Cash Dividends but including, without
limitation, Extraordinary Cash Dividends or interest), and Pledgor shall take
all such action as Secured Party shall deem necessary or appropriate to give
effect to such right. All such proceeds that are received by Pledgor shall be
received in trust for the benefit of Secured Party and, if Secured Party so
directs, shall be segregated from other funds of Pledgor and shall, forthwith
upon demand by Secured Party, be delivered over to the Custodian on behalf of
Secured Party as Collateral in the same form as received (with any necessary
endorsement).
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(b) Unless an Acceleration Event shall have occurred and be continuing,
Pledgor shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Collateral, and Secured Party
shall, upon receiving a written request from Pledgor accompanied by a
certificate of an Authorized Officer of Pledgor stating that no Acceleration
Event has occurred and is continuing, deliver to Pledgor or as specified in such
request such proxies, powers of attorney, consents, ratifications and waivers in
respect of any of the Collateral that is registered, or held through a
securities intermediary, in the name of the Custodian, Secured Party or its
nominee as shall be specified in such request and shall be in form and substance
satisfactory to Secured Party.
(c) If an Acceleration Event shall have occurred and be continuing,
Secured Party shall have the right, to the extent permitted by law, and Pledgor
shall take all such action as may be necessary or appropriate to give effect to
such right, to vote and to give consents, ratifications and waivers, and to take
any other action with respect to any or all of the Collateral with the same
force and effect as if Secured Party were the absolute and sole owner thereof.
SECTION 7. Remedies upon Acceleration Events. (a) On or after any
Acceleration Date, Secured Party may exercise all the rights of a secured party
under 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 or cause to be delivered to itself from
the Collateral Account all Collateral consisting of shares of Common Stock (but
not in excess of the number thereof deliverable under the Securities Contract at
such time) on the date of the Acceleration Amount Notice relating to such
Acceleration Date (the "DEFAULT SETTLEMENT DATE") in satisfaction of Pledgor's
obligations to deliver Common Stock under the Securities Contract, whereupon
Secured Party shall hold such shares of Common Stock absolutely free from any
claim or right of whatsoever kind, including any equity or right of redemption
of Pledgor that may be waived or any other right or claim of Pledgor, and
Pledgor, to the extent permitted by law, hereby specifically waives all rights
of redemption, stay or appraisal that Pledgor 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 Securities
Contract or hereunder, 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 Securities Contract or
hereunder, 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 Secured Party may deem satisfactory. Pledgor covenants and
agrees that Pledgor will execute and deliver such documents and take such other
action as Secured Party deems necessary or advisable in order that any such sale
may be made in compliance with law. Upon
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any such sale, Secured Party shall have the right to deliver, assign and
transfer to the buyer thereof the Collateral so sold. Each buyer at any such
sale shall hold the Collateral so sold absolutely and free from any claim or
right of whatsoever kind, including any equity or right of redemption of Pledgor
that may be waived or any other right or claim of Pledgor, and Pledgor, to the
extent permitted by law, hereby specifically waives all rights of redemption,
stay or appraisal that Pledgor has or may have under any law now existing or
hereafter adopted. The notice (if any) of such sale required by Section 9-504 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 Secured Party 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 Secured Party may determine. Secured Party shall not be obligated to
make any such sale pursuant to any such notice. Secured Party 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 Secured
Party until the selling price is paid by the buyer thereof, but Secured Party
shall not incur any liability in case of the failure of such buyer 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. Secured Party, 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) Pledgor hereby irrevocably appoints Secured Party Pledgor's true
and lawful attorney, with full power of substitution, in the name of Pledgor,
Secured Party or otherwise, for the sole use and benefit of Secured Party, but
at the expense of Pledgor, to the extent permitted by law, to exercise, at any
time and from time to time while an Acceleration Event has occurred and is
continuing, all or any of the following powers with respect to all or any of the
Collateral:
(i) to demand, ▇▇▇ for, collect, receive and give acquittance for
any and all monies due or to become due upon or by virtue thereof;
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto;
12
(iii) to sell, transfer, assign or otherwise deal in or with the
same or the proceeds or avails thereof, as fully and effectually as if
Secured Party were the absolute owner thereof (including, without
limitation, the giving of instructions and entitlement orders in
respect thereof); and
(iv) to extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference thereto;
provided that Secured Party shall give Pledgor not less than one day's prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral, except any Collateral that threatens to decline
speedily in value, including, without limitation, equity securities, or is of a
type customarily sold on a recognized market. Secured Party and Pledgor agree
that such notice constitutes "reasonable notification" within the meaning of
Section 9-504(3) of the UCC.
(c) Upon any delivery or sale of all or any part of any Collateral made
either under the power of delivery or sale given hereunder or under judgment or
decree in any judicial proceedings for foreclosure or otherwise for the
enforcement of this Agreement, Secured Party is hereby irrevocably appointed the
true and lawful attorney of Pledgor, in the name and stead of Pledgor, to make
all necessary deeds, bills of sale, instruments of assignment, transfer or
conveyance of the property, and all instructions and entitlement orders in
respect of the property thus delivered or sold. For that purpose Secured Party
may execute all such documents, instruments, instructions and entitlement
orders. This power of attorney shall be deemed coupled with an interest, and
Pledgor hereby ratifies and confirms that which Pledgor's attorney acting under
such power, or such attorney's successors or agents, shall lawfully do by virtue
of this Agreement. If so requested by Secured Party or by any buyer of the
Collateral or a portion thereof, Pledgor shall further ratify and confirm any
such delivery or sale by executing and delivering to Secured Party or to such
buyer or buyers at the expense of Pledgor all proper deeds, bills of sale,
instruments of assignment, conveyance or transfer, releases, instructions and
entitlement orders as may be designated in any such request.
(d) In the case of an Acceleration Event, Secured Party may proceed to
realize upon the security interest in the Collateral against any one or more of
the types of Collateral, at any time, as Secured Party shall determine in its
sole discretion subject to the foregoing provisions of this Section 7. The
proceeds of any sale of, or other realization upon, or other receipt from, any
of the Collateral shall be applied by Secured Party in the following order of
priorities:
first, to the payment to Secured Party or the Custodian of the
expenses of such sale or other realization, including reasonable
13
compensation to the Custodian and the agents and counsel of the
Custodian and Secured Party, and all expenses, liabilities and advances
incurred or made by Secured Party or the Custodian in connection
therewith, including brokerage fees in connection with the sale by
Secured Party of any Collateral;
second, to the payment to Secured Party of an amount equal to
the aggregate market value (as determined by the Calculation Agent) as
of the Default Settlement Date of a number of shares of Common Stock
equal to (i) the number of shares of Common Stock that would be
required to be delivered under Section 8.01 of the Securities Contract
on the Default Settlement Date without giving effect to the proviso
therein minus (ii) the number of shares of Common Stock delivered to
Secured Party on the Default Settlement Date as described in Section
7(a);
finally, if all of the obligations of Pledgor hereunder and
under the Securities Contract have been fully discharged or sufficient
funds have been set aside by Secured Party, at the request of Pledgor
for the discharge thereof, any remaining proceeds shall be released to
Pledgor.
SECTION 8. Miscellaneous. (a) This Agreement is not intended and shall
not be construed to create any rights in any person other than Pledgor, Secured
Party and their respective successors and assigns and no other 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 Pledgor and Secured Party shall bind, and inure to
the benefit of, their respective successors and assigns whether so expressed or
not. The rights and duties under this Agreement may not be assigned or
transferred by any party hereto without the prior written consent of the other
parties hereto; provided that (i) Secured Party may assign or transfer any of
its rights or duties hereunder with the prior written consent of Pledgor (which
consent shall not be unreasonably withheld) and (ii) Agent may assign or
transfer any of its rights or duties hereunder without the prior written consent
of the other parties hereto to any affiliate of Credit Suisse First Boston, so
long as such affiliate is a broker-dealer registered with the Securities and
Exchange Commission.
(b) 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 Pledgor and Secured Party 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
14
and remedies herein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
(c) 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 Pledgor shall be directed to
Pledgor at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Telecopy No. (212)
572-5965, Attention: Chief Financial Officer; notices to Secured Party shall be
directed to it in care of Credit Suisse First Boston Corporation, Eleven ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(d) This Agreement shall in all respects be construed in accordance
with and governed by the laws of the State of New York without reference to
choice of law doctrine (provided that as to Pledged Items located in any
jurisdiction other than the State of New York, Secured Party shall, in addition
to any rights under the laws of the State of New York, have all of the rights to
which a secured party is entitled under the laws of such other jurisdiction) and
each party hereto submits to the jurisdiction of the Courts of the State of New
York and waives, to the fullest extent permitted by law, any objection that it
may now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or in connection with this Agreement in any such court
or that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. The parties hereto hereby agree that the
Custodian's jurisdiction, within the meaning of Section 8-110(e) of the UCC,
insofar as it acts as a securities intermediary hereunder or in respect hereof,
is 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.
(e) EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(f) This Agreement may be executed, acknowledged and delivered in any
number of counterparts and all such counterparts taken together shall be deemed
to constitute one and the same agreement.
(g) The rights and obligations of the Agent shall be as set forth in
Section 9.08 of the Securities Contract.
SECTION 9. Termination of Pledge Agreement. This Agreement and the
rights hereby granted by Pledgor in the Collateral shall cease, terminate and be
void upon fulfillment of all of the obligations of Pledgor under the Securities
15
Contract and hereunder. Any Collateral remaining at the time of such termination
shall be fully released and discharged from the Security Interests and delivered
to Pledgor by Secured Party, all at the request and expense of Pledgor.
SECTION 10. Set-off. In addition to and without limiting any rights of
set-off that Secured Party may have as a matter of law, pursuant to contract or
otherwise, upon the occurrence of a Reorganization Termination Date to which
clause (B) of Section 7.02 of the Securities Contract applies or an Acceleration
Date, Secured Party shall have the right to terminate, liquidate and otherwise
close out the transactions contemplated by the Securities Contract and this
Agreement pursuant to the terms of the Securities Contract and this Agreement,
and to set off any obligation it may have to release from the Security Interests
or return to Pledgor any Collateral pursuant to Section 5(e) or Section 9,
against any right Secured Party or any of its affiliates may have against
Pledgor, including without limitation any right to receive a payment or delivery
pursuant to Section 2.03(b), Section 2.04, Section 2.05, Section 3.01, Section
7.02, Section 7.04 or Section 8.01 of the Securities Contract or any other
provision of the Securities Contract. In the case of a set-off of any obligation
to return or replace assets against any right to receive assets of the same
type, such obligation and right shall be set off in kind. In the case of a
set-off of any obligation to return or replace assets against any right to
receive assets of any other type, the value of each of such obligation and such
right shall be determined by the Calculation Agent and the result of such
set-off shall be that the net obligor shall pay or deliver to the other party an
amount of cash or assets, at the net obligor's option, with a value (determined,
in the case of a delivery of assets, by the Calculation Agent) equal to that of
the net obligation. In determining the value of any obligation to release or
deliver Common Stock or right to receive Common Stock, the value at any time of
such obligation or right shall be determined by reference to the market value of
the Common Stock at such time. If an obligation or right is unascertained at the
time of any such set-off, the Calculation Agent may in good faith estimate the
amount or value of such obligation or right, in which case set-off will be
effected in respect of that estimate, and the relevant party shall account to
the other party at the time such obligation or right is ascertained.
16
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.
PLEDGOR:
GSB INVESTMENTS CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
SECURED PARTY:
CREDIT SUISSE FIRST BOSTON
INTERNATIONAL
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director-Legal and Compliance
Department
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President-Legal and
Compliance Department
AGENT:
CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Director
EXHIBIT A
[Certificate for Additional Collateral]
The undersigned, an Authorized Officer of GSB Investments Corp.
("PLEDGOR"), hereby certifies, pursuant to Section 5(b) of the SAILS Pledge
Agreement dated as of December 19, 2000 among Pledgor, Credit Suisse First
Boston Corporation, as Agent, and Credit Suisse First Boston International (the
"PLEDGE AGREEMENT"; terms defined in the Pledge Agreement being used herein as
defined therein), that:
1. Pledgor is delivering, or causing to be delivered in
accordance with Section 5(c) of the Pledge Agreement, the following
securities (or security entitlements in respect thereof) to Secured
Party to be held by Secured Party as additional Collateral (the
"ADDITIONAL COLLATERAL"):
2. Pledgor hereby represents and warrants to Secured Party
that the Additional Collateral is Eligible Collateral and that the
representations and warranties contained in paragraphs (a), (b), (c)
and (d) of Section 3 of the Pledge Agreement are true and correct with
respect to the Additional Collateral on and as of the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
___ day of __________, ____.
By:
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Name:
Title: