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Exhibit 10.2
SAILS PLEDGE AGREEMENT
dated as of
May 22, 2000
among
▇▇▇▇▇▇▇ ENTERTAINMENT COMPANY,
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
and
CREDIT SUISSE FIRST BOSTON CORPORATION, as Agent
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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.......................................7
SECTION 5. Administration of the Collateral and Valuation of the
Securities............................................................8
SECTION 6. Income and Voting Rights in Collateral............................14
SECTION 7. Remedies upon Acceleration Events.................................15
SECTION 8. Miscellaneous.....................................................18
SECTION 9. Termination of Pledge Agreement...................................20
SECTION 10. Netting and Set-off..............................................20
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PLEDGE AGREEMENT
THIS AGREEMENT is made as of this 22nd day of May, 2000 among ▇▇▇▇▇▇▇
ENTERTAINMENT COMPANY, a Delaware corporation ("PLEDGOR"), CREDIT SUISSE FIRST
BOSTON CORPORATION, as agent (the "AGENT") hereunder, and CREDIT SUISSE FIRST
BOSTON INTERNATIONAL ("SECURED PARTY").
WHEREAS, pursuant to the SAILS Mandatorily Exchangeable Securities
Contract (as amended from time to time, the "SECURITIES CONTRACT") dated as of
the date hereof among Pledgor, OLH G.P., a Tennessee general partnership
("GUARANTOR"), the Agent and Secured Party, Pledgor has agreed to sell and
Secured Party has agreed to purchase shares of Class B Common Stock, par value
$0.01 per share, of Viacom Inc., a Delaware corporation (the "ISSUER") (or
security entitlements in respect thereof) (the "COMMON STOCK"), or cash in lieu
thereof, subject to the terms and conditions of the Securities Contract;
WHEREAS, it is a condition to the obligations of Secured Party under
the Securities Contract that Pledgor and Secured Party enter into this Agreement
and that Pledgor grant the pledge provided for herein;
NOW, THEREFORE, in consideration of their mutual covenants contained
herein and to secure the performance by Pledgor of its 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(j)) (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,
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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 with respect to the Common
Stock or the Preferred Stock but including, without limitation, (A) any shares
of capital stock issued by the Issuer in respect of any Common Stock or
Preferred Stock constituting Collateral or any cash, securities or other
property distributed in respect of or exchanged for any Common Stock, Preferred
Stock or Government Securities constituting Collateral (other than Ordinary Cash
Dividends with respect to the Common Stock or the Preferred Stock), or into
which any such Common Stock or Preferred Stock is converted in connection with
any Reorganization Event or otherwise, and any security entitlements in respect
of any of the foregoing, (B) any obligation of Secured Party to replace any
rehypothecated Collateral pursuant to Section 5(i) and (C) any amounts paid or
assets delivered to Pledgor by Secured Party in respect of dividends paid or
distributions made on shares of Common Stock constituting Collateral that have
been rehypothecated in accordance with Section 5(i)); (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.
(b) On or prior to the Closing Date, Pledgor shall deliver to the
Custodian in pledge hereunder Eligible Collateral consisting of a number of
shares of Preferred Stock equal to the quotient of (i) the Base Amount as of the
Closing Date divided by (ii) the Conversion Rate as of the Closing Date (the
"INITIAL PLEDGED ITEMS"), in the manner provided in Section 5(c).
(c) In the event that the Issuer at any time issues in respect of any
Common Stock or Preferred Stock constituting Collateral hereunder, or comprising
financial assets underlying security entitlements constituting Collateral
hereunder, any additional 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.
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(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.
"BALANCE SHEET COSTS" has the meaning provided in Section 5(i)).
"BORROW COSTS" has the meaning provided in Section 5(i).
"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 any of the
following: (i) at any time, failure of the Collateral to include, as Eligible
Collateral, (A) number of shares of Common Stock and/or a number of shares of
Preferred Stock such that the sum of (x) the Common Stock Equivalent of such
number of shares of Preferred Stock and (y) such number of shares of Common
Stock is at least equal to the Maximum Deliverable Number at such time or (B) if
Pledgor shall have elected to substitute Government Securities for Share
Collateral in accordance with Section 5(j), 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
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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 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.
"COMMON STOCK EQUIVALENT" means, for any number of shares of Preferred
Stock, the product (rounded down to the nearest whole number) of (i) such number
of shares of Preferred Stock and (ii) the Conversion Rate.
"CONTROL" means "control" as defined in Section 8-106 and Section 9-115
of the UCC.
"CONVERSION RATE" means, at any time, the number of shares of Common
Stock into which one share of Preferred Stock may be converted at such time at
the option of the holder of such share of Preferred Stock.
"CUSTODIAN" means The Bank of New York, or any other custodian
appointed by Secured Party and identified to Pledgor. The Custodian shall act as
a securities intermediary (as defined in Section 8-102 of the UCC).
"DEFAULT SETTLEMENT DATE" has the meaning provided in Section 7(a).
"ELIGIBLE COLLATERAL" means Common Stock or Preferred Stock or, if
Pledgor shall have elected to substitute Government Securities for Share
Collateral in accordance with Section 5(j), 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.
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"MAXIMUM DELIVERABLE NUMBER" means, on any date, the Base Amount
on such date.
"PERMITTED PLEDGEE" has the meaning provided in Section 5(k).
"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.
"REHYPOTHECATION UNAVAILABILITY" has the meaning provided in
Section 5(i).
"REHYPOTHECATE" has the meaning provided in Section 5(i).
"SECURITY INTERESTS" means the security interests in the Collateral
created hereby.
"SHARE COLLATERAL" has the meaning provided in Section 5(j).
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York. In the event that the Uniform Commercial Code as in
effect in the State of New York on the date hereof is revised subsequent to the
date hereof, all references herein to sections of the UCC shall be deemed to be
references to the successor sections.
SECTION 3. Representations and Warranties of Pledgor. Pledgor hereby
represents and warrants to Secured Party that:
(a) Pledgor (i) owns and, except with respect to Collateral
rehypothecated pursuant to Section 5(i) 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
(including, without limitation, the right to convert into Common Stock any
Collateral consisting of shares of Preferred Stock) 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, upon the
delivery
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to Bank of America, N.A., of the Repayment Amount pursuant to Section 2.03(a)(i)
of the Securities Contract, no financing statement, security agreement or
similar or equivalent document or instrument covering all or any part of the
Collateral will be 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) Except as otherwise provided herein, 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 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 (i) in the case of Collateral consisting of investment
property (as defined in Section 9-115 of the UCC), (A) the delivery of
certificates evidencing any such investment property 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 or (ii) in the case of Collateral not
consisting of investment property, the filing of UCC-1 financing statements in
the form of Exhibit B hereto in the appropriate filing offices in each
jurisdiction identified in Parts 4 and 5 of Exhibit C hereto, Secured Party will
have a valid and perfected security interest in such Collateral, in respect of
which Secured Party
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will have (in the case of Collateral consisting of investment property) 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, other than the filing of
UCC-1 financing statements in the form of Exhibit B hereto in the appropriate
filing offices in each jurisdiction identified in Parts 4 and 5 of Exhibit C
hereto.
(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, no local
filing is required to perfect a security interest in collateral consisting of
general intangibles.
(h) Pledgor has delivered to Secured Party a perfection certificate
substantially in the form attached as Exhibit C hereto, completed and
supplemented with the schedules and attachments contemplated thereby to the
satisfaction of Secured Party, and signed by an Authorized Officer of Pledgor.
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), 5(c) and 5(j) 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 Secured Party in its reasonable judgment may deem necessary or that Secured
Party and Pledgor in good faith agree are appropriate 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 and file, in
the name of Pledgor or otherwise, UCC financing or continuation statements
(which may be carbon, photographic, photostatic or other
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reproductions of this Agreement or of a financing statement relating to this
Agreement) that Secured Party in its reasonable judgment 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) Pledgor agrees that Pledgor shall not change (i) Pledgor's name,
identity or corporate structure in any manner or (ii) Pledgor's Location, unless
in either case (A) Pledgor shall have used reasonable efforts to give Secured
Party not less than 30 days' prior notice thereof and (B) such change shall not
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 agrees that 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 consisting of
Common Stock or Preferred Stock hereunder at any time. Concurrently with the
delivery of any such 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
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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 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
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items of Collateral to be released so long as, after such release, no Collateral
Event of Default shall have occurred.
(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 Collateral 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
Free Stock to Secured Party on the Maturity Date pursuant to the Securities
Contract, shares of Free Stock then held by or on behalf of it hereunder
representing the number of shares of Free Stock required to be delivered under
the Securities Contract on the Maturity Date. Upon any such delivery, Secured
Party shall hold such shares of Free Stock absolutely and free from any claim or
right whatsoever (including, without limitation, any claim or right of Pledgor).
In the event that Secured Party shall have pledged any Share Collateral
consisting of shares of Free Stock to a Permitted Pledgee pursuant to Section
5(k), any delivery of such Collateral to Secured Party from the Collateral
Account pursuant to the second preceding sentence shall be deemed to have
occurred (regardless of whether such Permitted Pledgee returns such Collateral
to Secured Party).
(g) Secured Party may at any time or from time to time, in its sole
discretion, cause any or all of the Common Stock or Preferred Stock pledged
hereunder 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 Common Stock or
Preferred Stock pledged hereunder 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 Common Stock or Preferred Stock pledged
hereunder 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 (A) any taxes (other than income, franchise or
other similar taxes) that Secured Party or the Custodian may have been
required to pay by reason of the Security Interests or (B) any taxes
that
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Secured Party or the Custodian may have been required to pay to free
any of the Collateral from any Lien thereon; and
(ii) the amount of any and all costs and expenses, including the
reasonable 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.
Any such amount not paid on demand shall bear interest (computed on the basis of
a year of 365 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) Without limiting the rights and obligations of the parties under
this Agreement, at any time on or after June 22, 2000, upon the consent of
Pledgor (which consent shall be in writing and may be given or withheld in
Pledgor's sole and absolute discretion), Secured Party may, notwithstanding
Section 9-207 of the UCC, sell, lend, pledge, rehypothecate, assign, invest,
use, commingle or otherwise dispose of, or otherwise use in its business
(collectively, "REHYPOTHECATE"), any Collateral, free from any claim or right of
any nature whatsoever of Pledgor, including any equity or right of redemption by
Pledgor; provided that Secured Party will replace any rehypothecated Collateral
(with the same Collateral or identical substitute Collateral) (A) upon five
Business Days' notice from Pledgor or (B) if not already replaced, on the
Maturity Date, any Optional Termination Date, any Tax Event Termination Date or
any Reorganization Termination Date; provided further that in the case of any
Optional Termination Date on which the Securities Contract is terminated in part
pursuant to Section 3.01 of the Securities Contract, Secured Party will be
obligated to replace only an amount of rehypothecated Collateral sufficient to
ensure that on such date, the Collateral Account will contain a number of shares
of Common Stock at least equal to the number of shares of Common Stock with
respect to which the Securities Contract is to be terminated pursuant to Section
3.01 of the Securities Contract; provided further that in the case of any
Reorganization Termination Date relating to any Reorganization Event in which
the consideration received by holders of Common Stock does not consist solely of
Non-Stock Consideration, Secured Party will be obligated to replace only Non-
Stock Consideration in an amount and of the type that a holder of a number of
shares of Common Stock equal to the number of shares of Common Stock
rehypothecated by Secured Party immediately prior to such Reorganization
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Termination Date would have been entitled to receive in such Reorganization
Event. If at any time at which any shares of Common Stock constituting
Collateral have been rehypothecated pursuant to this Section 5(i) there shall
occur an event of a type that would, had Secured Party borrowed such shares of
Common Stock from Pledgor on terms customary for loans of equity securities (as
determined by the Calculation Agent), require either (i) an adjustment to the
number of shares of Common Stock or a change in the type of securities or other
property that Secured Party would be required to deliver to Pledgor to repay
such stock loan or (ii) a payment or delivery by Secured Party to Pledgor in
respect of dividends paid or distributions made on such shares of Common Stock,
then, in the case of clause (i), except as provided in the third proviso to the
immediately preceding sentence, such adjustment or change shall be applied to
the number of shares of Common Stock that Secured Party is required to replace
upon notice from Pledgor in accordance with the first proviso to the immediately
preceding sentence and, in the case of clause (ii), Secured Party shall make
such payment or delivery to Pledgor, whereupon the amount so paid or the assets
so delivered shall become Collateral hereunder. All determinations related to
the immediately preceding sentence shall be made by the Calculation Agent.
Notwithstanding the foregoing, if Eligible Collateral consisting of a number of
shares of Common Stock equal to the Maximum Deliverable Number is not available
for rehypothecation by Secured Party at any time after the date hereof (for the
avoidance of doubt, including without limitation at any time during the period
between the date hereof and June 22, 2000) ((1) as a result of Pledgor's
withholding Pledgor's consent to rehypothecation of such Collateral, (2) as a
result of Pledgor's causing Secured Party to replace such Collateral pursuant to
the first proviso to the first sentence in this Section 5(i), (3) as a result of
any Transfer Restrictions, (4) as a result of Pledgor's substitution of
Government Securities for Share Collateral pursuant to Section 5(j) or (5)
otherwise) (a "REHYPOTHECATION UNAVAILABILITY"), Pledgor shall be obligated to
reimburse Secured Party for (A) costs actually incurred in the borrowing of
shares of Common Stock ("BORROW COSTS") in connection with hedging Secured
Party's exposure to the Securities Contract (whether such borrowing is effected
by Secured Party or by a counterparty to a transaction entered into by Secured
Party to hedge Secured Party's exposure to the Securities Contract; provided
that Seller shall not be responsible for any Borrow Costs in excess of those
that would be incurred if such shares were borrowed by Secured Party) and (B)
any balance sheet costs ("BALANCE SHEET COSTS") incurred by Secured Party, CSFB
or any affiliate of CSFB as a result of any Rehypothecation Unavailability that
occurs or is continuing after October 31, 2000, as determined by the Calculation
Agent in each case. Pledgor may elect to fulfill Pledgor's reimbursement
obligations hereunder by making cash payments to Secured Party from time to time
within three Business Days of receipt of notice from Secured Party as to the
amounts of any Borrow Costs or Balance Sheet Costs incurred; provided that, to
the extent
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that Pledgor elects not to make any such payments or that any such payments are
not sufficient to satisfy in full Pledgor's reimbursement obligations hereunder,
the Calculation Agent shall adjust one or more of the Base Amount, the Exchange
Rate, the Conversion Rate, the Threshold Price, the Issue Price, the Maturity
Price, the Cash Settlement Amount, any Closing Price and any other variable
relevant to the exercise, settlement or payment terms hereof or of the
Securities Contract, as appropriate to make Secured Party whole for any Borrow
Costs or Balance Sheet Costs relating to any Rehypothecation Unavailability. For
purposes of determining the occurrence of a Collateral Event of Default, the
rehypothecation of any Collateral pledged hereunder shall not affect the status
of such Collateral as Collateral or Eligible Collateral hereunder. This Section
5(i) is intended to be an agreement that satisfies the requirements of Section
1058 of the Internal Revenue Code of 1986, as amended, and the regulations
(including proposed regulations) promulgated thereunder, and Secured Party and
Pledgor agree to treat this Section 5(i) as such an agreement for all federal
income tax purposes.
(j) 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 or Preferred 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
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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.
(k) Without limiting the rights and obligations of the parties under
this Agreement, Secured Party may, notwithstanding Section 9-207 of the UCC,
pledge to Credit Suisse Group or any of its subsidiaries (each, a "PERMITTED
PLEDGEE") any of Secured Party's rights in any Collateral; provided that Secured
Party shall grant no right to any such Permitted Pledgee to rehypothecate any
such Collateral, except for the right to pledge to another Permitted Pledgee
such first Permitted Pledgee's rights in such Collateral in a manner consistent
with this Section 5(k). For the avoidance of doubt, this Section 5(k) shall not
affect the rights and obligations of the parties hereunder and nothing in this
Section 5(k) shall be construed as permitting Secured Party or any Permitted
Pledgee to rehypothecate any Collateral in violation of Section 1058 of the
Internal Revenue Code of 1986, as amended.
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).
(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 (other than
Collateral that has been rehypothecated by Secured Party pursuant to Section
5(i)), 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
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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 and 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 provided herein or in the Securities Contract 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 (including shares of Common Stock that have been
converted pursuant to Section 7(b)(v)) (but not in excess of the number of
shares of Common Stock deliverable under the Securities Contract at such time)
on the date of the Acceleration Amount Notice relating to such Acceleration
Event (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; (ii) if such delivery shall be insufficient to satisfy in full all of
the obligations of Pledgor under the Securities Contract or hereunder, deliver
or cause to be delivered to itself from the Collateral Account all Collateral
consisting of shares of Preferred Stock (but not in excess of a number of shares
of Preferred Stock equal to the quotient of (A) the excess, if any, of (1) the
number of shares of Common Stock deliverable under the Securities Contract at
such time over (2) the number of shares of Common Stock delivered pursuant to
clause (i) above, divided by (B) the Conversion Rate at such time), whereupon
Secured Party shall hold such shares of Preferred 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 (iii) if the deliveries described in clauses
(i) and (ii) 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
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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 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 (except as provided in clause (v) below) 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:
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(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;
(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);
(iv) to extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference thereto; and
(v) if an Acceleration Event has occurred and is continuing, to
convert shares of Preferred Stock held as Collateral hereunder into
shares of Common Stock, as fully and effectually as if Secured Party
were the absolute owner thereof;
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,
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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
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 on 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 sum of (A) the number of
shares of Common Stock and (B) the Common Stock Equivalent of the
number of shares of Preferred Stock, in each case, 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
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(i) Secured Party may assign or transfer any of its rights or duties hereunder
without the prior written consent of Pledgor, so long as such assignee or
transferee assumes all of the obligations of Secured Party hereunder and (ii)
the 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 CSFB,
so long as such affiliate is a broker-dealer registered with the Securities and
Exchange Commission and such affiliate assumes all of the obligations of the
Agent hereunder.
(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 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. (615)
316-6105, Attention: Chief Financial Officer, with a copy to ▇▇▇▇▇▇▇▇ & ▇▇▇,
PLC, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopy (615)
742-4539, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq; 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
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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) Pledgor hereby agrees that it shall not institute against, or join
any other person in instituting against, Secured Party any bankruptcy,
reorganization, arrangement, insolvency, moratorium or liquidation proceedings.
Pledgor hereby acknowledges and agrees that Secured Party's obligations under
this Agreement will be solely the corporate obligations of Secured Party or any
assignee or transferee of Secured Party pursuant to Section 8(a), and that
Pledgor will not have any recourse to any of the directors, officers or
employees of Secured Party with respect to any claims, losses, damages,
liabilities, indemnities or other obligations in connection with any
transactions contemplated by this Agreement, other than in respect of any fraud
or willful default on the part of such directors, officers or employees.
Recourse in respect of any obligations of Secured Party under this Agreement
will be limited to the assets of Secured Party (excluding for those purposes
$2,000.00 in cash) and no debt shall be owed by Secured Party in respect of any
shortfall after realization of such assets.
(g) 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.
(h) The rights and obligations of the Agent shall be as set forth in
Section 10.08 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 and Guarantor under
the Securities 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. Netting and Set-off. (a) If on any date, cash would
otherwise be payable or shares of Common Stock or other property would otherwise
be deliverable (including, for the avoidance of doubt, the replacement, as
required by Section 5(i), of shares of Common Stock that have been
rehypothecated pursuant to such Section) pursuant to the Securities Contract or
this Agreement by Buyer to
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Seller and by Seller to Buyer and the type of property required to be paid or
delivered by each such party on such date is the same, then, on such date, each
such party's obligation to make such payment or delivery will be automatically
satisfied and discharged and, if the aggregate amount that would otherwise have
been payable or deliverable by one such party exceeds the aggregate amount that
would otherwise have been payable or deliverable by the other such party,
replaced by an obligation upon the party by whom the larger aggregate amount
would have been payable or deliverable to pay or deliver to the other party the
excess of the larger aggregate amount over the smaller aggregate amount.
(b) 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, a Tax Event Termination Date 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 (i) release from the
Security Interests or return to Pledgor any Collateral pursuant to Section 5(e)
or Section 9 or (ii) replace any rehypothecated Collateral pursuant to Section
5(i), against any right Secured Party 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 3.01, Section 6.01(b)(iv), 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.
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IN WITNESS WHEREOF, the parties have signed this Agreement as
of the date and year first above written.
PLEDGOR:
▇▇▇▇▇▇▇ ENTERTAINMENT
COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Financial Officer
SECURED PARTY:
CREDIT SUISSE FIRST BOSTON
INTERNATIONAL
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Attorney-In-Fact
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Vice President - Legal and
Compliance Department
AGENT:
CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director