EXHIBIT 27
STOCK PURCHASE AGREEMENT
dated as of
November 14, 2001
between
GSB INVESTMENTS CORP.
and
JPMORGAN CHASE BANK,
by ▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as its Agent
TABLE OF CONTENTS
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PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.........................................1
ARTICLE 2
SALE AND PURCHASE; PAYMENT; ESTABLISHMENT OF TRANCHES
SECTION 2.01. Sale and Purchase...................................7
SECTION 2.02. Payment, Establishment of Tranches..................7
SECTION 2.03. Settlement Date....................................10
SECTION 2.04. Cash Settlement Option.............................11
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of Seller...........13
SECTION 3.02. Representations and Warranties of Buyer............16
ARTICLE 4
CONDITIONS
SECTION 4.01. Conditions to Effectiveness of this Agreement......17
SECTION 4.02. Conditions to Buyer's Obligations..................18
ARTICLE 5
COVENANTS
SECTION 5.01. Taxes..............................................19
SECTION 5.02. Forward Contract...................................21
SECTION 5.03. Notices............................................21
SECTION 5.04. Further Assurances.................................22
SECTION 5.05. No Sales of Common Stock...........................22
SECTION 5.06. Securities Contract................................22
SECTION 5.07. Borrow Cost Adjustment.............................23
ARTICLE 6
ADJUSTMENTS
SECTION 6.01. Dilution Adjustments...............................24
SECTION 6.02. Merger Events......................................26
SECTION 6.03. Nationalization and Insolvency.....................28
SECTION 6.04. Termination and Payment............................28
ARTICLE 7
ACCELERATION
SECTION 7.01. Acceleration.......................................29
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Notices............................................32
\ SECTION 8.02. Governing Law; Severability;
Submission to Jurisdiction;
Waiver of Jury Trial..............................32
SECTION 8.03. Set-off............................................33
SECTION 8.04. Entire Agreement...................................33
SECTION 8.05. Amendments, Waivers................................33
SECTION 8.06. Assignment by Buyer; No Third Party Rights,
Successors and Assigns............................33
SECTION 8.07. Counterparts.......................................34
SECTION 8.08. Non-confidentiality................................34
SECTION 8.09. Overdue Amounts....................................34
SECTION 8.10. Matters Related to Agent...........................34
SECTION 8.11. Calculation Agent..................................34
EXHIBIT A Form of Pre-pricing Acknowledgment
EXHIBIT B Form of Pricing Schedule
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of this 14th day of November, 2001
between GSB INVESTMENTS CORP., a Delaware corporation ("Seller"), and
JPMORGAN CHASE BANK ("Buyer"), by ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
a Delaware corporation, as its agent ("Agent").
WHEREAS, Seller owns shares of common stock, par value $1.00 per
share, or security entitlements in respect thereof ("Common Stock"), of Golden
State Bancorp Inc., a Delaware corporation (the "Issuer");
WHEREAS, Seller and Buyer are willing to sell and purchase shares of
Common Stock at the times and on the terms set forth herein; and
WHEREAS, Seller has agreed, pursuant to the Pledge Agreement (as
defined herein), to grant Buyer a security interest in certain Common Stock to
secure the obligations of Seller hereunder;
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"Business Day" means any day on which commercial banks are open for
business in New York City and the Exchange is not closed.
"Calculation Agent" means JPMorgan Chase Bank.
"Cash Settlement Amount" means, with respect to any Tranche, an
amount of cash equal to the product of the Settlement Price for such Tranche
and the number of Contract Shares required to be delivered for such Tranche,
but for Section 2.04, pursuant to Section 2.03(a) on the Settlement Date for
such Tranche.
"Closing Price" means, with respect to any security on any Valuation
Date or any other Trading Day and subject to adjustment as a result of certain
events as provided in Article 6, the closing sale price (or, if no closing
sale price is reported, the last reported sale price) of such security on the
Exchange on such day or, if such security is not so reported, the last quoted
bid price for such security in the over-the-counter market on such day as
reported by Pink Sheets LLC (formerly known as the National Quotation Bureau)
or similar organization or, if such bid price is not available, the market
value of such security on such day as determined by the Calculation Agent (in
each of the foregoing circumstances, the price determination being made as of
the close of regular session trading on the relevant market); provided that if
the trading hours on the Exchange are extended to later than 4:00 p.m. (New
York time), then the time as of which the closing sale price or the last
quoted bid price shall be determined shall be selected by the Calculation
Agent in its sole discretion; provided further that the proviso contained in
the definition of Valuation Date shall apply to the price determined on any
other Trading Day mutatis mutandis.
"Collateral Agent" has the meaning provided in the Pledge Agreement.
"Dividend Period" means, with respect to a Dividend Period End Date
for any Tranche, the period commencing on the date immediately following the
preceding Dividend Period End Date for such Tranche, and ending on such
Dividend Period End Date for such Tranche, provided that with respect to the
first Dividend Period End Date for such Tranche, such period shall commence on
the day immediately following the last day of the Hedging Period for such
Tranche.
"Dividend Period End Date" means, with respect to any Tranche, each
of the dates that follow the last day of the Hedging Period for such Tranche
by a multiple of three months.
"Effective Date" means the later of the date hereof and such
subsequent date on which all the conditions set forth in Section 4.01 are
either satisfied or waived.
"Exchange" means, at any time, the principal national securities
exchange or automated quotation system, if any, on which the Common Stock is
listed or quoted at such time.
"Free Stock" means Common Stock that is not subject to any Transfer
Restrictions in the hands of Seller immediately prior to delivery to an
affiliate of Buyer designated by Buyer hereunder; provided that such Common
Stock would not be subject to any Transfer Restrictions in the hands of such
affiliate of Buyer upon delivery to such affiliate of Buyer.
"Hedging Termination Date" means the date one month from the date
hereof.
"Insolvency Proceeding" means any case or any judicial,
administrative or other proceeding, or the filing of any petition or the
taking of any similar action, (i) seeking a judgment of or arrangement for
insolvency, bankruptcy, winding-up, liquidation, reorganization, composition,
rehabilitation, administration or similar relief with respect to Seller or its
debts or assets, (ii) seeking the appointment or election of a conservator,
trustee, receiver, liquidator, administrator, custodian or similar official
for Seller or any substantial part of its assets, or (iii) which has an effect
similar or analogous to the foregoing.
"Lien" means any lien, mortgage, security interest, pledge, charge,
adverse claim or encumbrance of any kind.
"Mafco Credit Agreement" means the New Amended and Restated Revolving
Credit and Term Loan Agreement dated as of August 15, 2001 among Mafco Finance
Corp., a Delaware corporation, as borrower, the banks, financial institutions
and other institutional lenders named therein (the "Lenders"), Citibank, N.A.
("Citibank"), as administrative agent and collateral agent, The Chase
Manhattan Bank, as syndication agent, ING (U.S.) Capital LLC, as documentation
agent, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and ▇.▇. ▇▇▇▇▇▇ Securities Inc., as joint
book managers and joint lead arrangers.
"Market Disruption Event" means, with respect to any Tranche, in
relation to any Valuation Date for such Tranche, as determined by the
Calculation Agent, the occurrence or existence during the one-half hour period
that ends at the close of the regular session of trading on the Exchange of
the material suspension of or material limitation imposed on trading on (i)
the Exchange in Common Stock or in stocks generally or (ii) the primary
exchange on which options contracts or futures contracts related to Common
Stock are traded; provided that a limitation on the hours and number of days
of trading resulting from a change in the regular business hours of the
Exchange or such options exchange will not constitute a "Market Disruption
Event."
"Market Value" means, as of any date with respect to any share of
Common Stock, the Closing Price per share of Common Stock for the Trading Day
prior to such date.
"Ordinary Dividend Amount" means with respect to any Tranche, $0.10
per share of Common Stock with respect to each Dividend Period for such
Tranche, as adjusted on account of any Potential Adjustment Event, in
accordance with the provisions of Article 6.
"Parent" means Mafco Holdings Inc., a Delaware corporation, and its
successors.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Pledge Agreement" means the Pledge Agreement dated as of the date
hereof among Seller, Buyer and the Collateral Agent, as amended from time to
time.
"Publicly-Traded Entity" means a corporation incorporated under the
laws of the United States or any state thereof the common stock of which is
(i) distributed in a Spinoff or issued in connection with a Merger Event and
(ii) listed or traded on any national securities exchange in the United States
or on the NASDAQ National Market System.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Pledge Agreement" means the New Amended and Restated Pledge
Agreement dated as of August 15, 2001 among the pledgors named therein
(including, without limitation, Seller) and Citibank, as collateral agent for
the benefit of the Lenders, as amended.
"Settlement Date" means, with respect to any Tranche, the third
Business Day immediately following the last Valuation Date for such Tranche.
"Settlement Price" means, with respect to any Tranche, the arithmetic
mean of the relevant Closing Prices per share of Common Stock on each
Valuation Date for such Tranche.
"Trading Day" means, with respect to any security, a day on which the
Exchange is open for trading or quotation.
"Transfer Restriction" means, with respect to any security or other
property pledged under the Pledge Agreement, any condition to or restriction
on the ability of the holder thereof to sell, assign or otherwise transfer
such security or other property or to enforce the provisions thereof or of any
document related thereto whether set forth in such security or other property
itself or in any document related thereto, including, without limitation, (i)
any requirement that any sale, assignment or other transfer or enforcement of
such security or other property be consented to or approved by any Person,
including, without limitation, the issuer thereof or any other obligor
thereon, (ii) any limitations on the type or status, financial or otherwise,
of any purchaser, pledgee, assignee or transferee of such security or other
property, (iii) any requirement of the delivery of any certificate, consent,
agreement, opinion of counsel, notice or any other document of any Person to
the issuer of, any other obligor on or any registrar or transfer agent for,
such security or other property, prior to the sale, pledge, assignment or
other transfer or enforcement of such security or other property and (iv) any
registration or qualification requirement or prospectus delivery requirement
for such security or other property pursuant to any federal, state or foreign
securities law (including, without limitation, any such requirement arising as
a result of Rule 144 or Rule 145 under the Securities Act); provided that the
required delivery of any assignment, instruction or entitlement order from the
seller, pledgor, assignor or transferor of such security or other property,
together with any evidence of the corporate or other authority of such Person,
shall not constitute a "Transfer Restriction".
"Valuation Date" means, with respect to any Tranche, each of the five
Trading Days preceding and including the Maturity Date for such Tranche;
provided that if there is a Market Disruption Event on any Valuation Date for
such Tranche, then such Valuation Date for such Tranche shall be the first
succeeding Trading Day on which there is no Market Disruption Event and on
which another Valuation Date does not or is not deemed to occur, unless such
first succeeding Trading Day has not occurred as of the fifth Trading Day
immediately following the Maturity Date for such Tranche, in which case (i)
that fifth Trading Day shall be deemed to be the last Valuation Date for such
Tranche, notwithstanding the Market Disruption Event and (ii) notwithstanding
the definition of "Closing Price", the Calculation Agent shall determine the
Closing Price for such Tranche as of that fifth Trading Day in its discretion.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Acceleration Amount.................................... 7.01
----
Acceleration Amount Notice............................. 7.01
----
Acceleration Date...................................... 7.01
----
Acceleration Value..................................... 7.01
----
Advance Rate........................................... 2.02(d)
-------
Bankruptcy Code........................................ 5.06
----
Base Amount............................................ 2.02(d)
-------
CEA.................................................... 3.01(n)
-------
Commission............................................. 2.02(b)
-------
Contract Share Amount.................................. 2.03(a)
-------
Contract Shares........................................ 2.03(a)
-------
Downside Rate.......................................... 2.02(d)
-------
Event of Default....................................... 7.01
----
Excess Borrow Cost..................................... 5.07(b)
-------
Extraordinary Dividend................................. 6.01(b)
-------
Fixed Borrow Cost...................................... 5.07(b)
-------
Hedged Value........................................... 2.02(d)
-------
Hedging Amount......................................... 2.02(d)
-------
Hedging Period......................................... 2.02(c)
-------
Initial Share Price.................................... 2.02(d)
-------
Initial Short Position................................. 2.02(d)
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Insolvency............................................. 6.03
----
Lender Consent......................................... 3.01(c)
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Maturity Date.......................................... 2.02(d)
-------
Maximum Base Amount.................................... 2.02(d)
-------
Maximum Number......................................... 2.02(b)
-------
Merger Date............................................ 6.02(c)
-------
Merger Event........................................... 6.02(c)
-------
Monthly Borrow Period.................................. 5.07(b)
-------
Nationalization........................................ 6.03
----
New Shares............................................. 6.02(c)
-------
Ordinary Dividend...................................... 6.01(b)
-------
Original Stock......................................... 6.01(c)
Other Consideration.................................... 6.02(c)
-------
Payment Date........................................... 2.02(d)
-------
Potential Adjustment Event............................. 6.01(b)
-------
Prepayment Amount...................................... 2.04
----
Prepayment Determination Price......................... 2.04
----
Prepayment Determination Ratio......................... 2.04
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Pre-pricing Acknowledgment............................. 2.02(b)
-------
Pricing Schedule....................................... 2.02(c)
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Purchase Price......................................... 2.02(d)
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Settlement Ratio....................................... 2.03(b)
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Share-for-Combined Merger Event........................ 6.02(c)
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Share-for-Share Merger Event........................... 6.02(c)
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Spinoff................................................ 6.01(c)
Spinoff Issuer......................................... 6.01(c)
Spinoff Stock.......................................... 6.01(c)
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Termination Amount..................................... 6.04
----
Termination Amount Notice.............................. 6.04
----
Termination Date....................................... 6.04
----
Terms of Tranche....................................... 2.02(c)
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Tranche................................................ 2.02(b)
-------
Upside Limit........................................... 2.02(d)
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Upside Rate............................................ 2.02(d)
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ARTICLE 2
SALE AND PURCHASE; PAYMENT; ESTABLISHMENT OF TRANCHES
SECTION 2.01. Sale and Purchase. Upon the terms and subject to the
conditions of this Agreement, Seller agrees to sell to Buyer, and Buyer agrees
to purchase and acquire from Seller, the number of shares of Common Stock for
each Tranche established hereunder, equal to the product of the Base Amount
for such Tranche and the Settlement Ratio for such Tranche.
SECTION 2.02. Payment, Establishment of Tranches.
(a) Payment. Upon the terms and subject to the conditions of this
Agreement, Buyer shall deliver to Citibank, as designee of Seller, in
immediately available funds by wire transfer to an account designated by
Citibank, the Purchase Price for each Tranche on the Payment Date for such
Tranche. Seller acknowledges and agrees that payment by Buyer of the Purchase
Price for any Tranche pursuant to this Section 2.02(a) shall constitute
payment in full of the Purchase Price for such Tranche.
(b) Establishment of Tranches. This Agreement may be effected in one
or more tranches (each, a "Tranche") with respect to up to an aggregate of
1,000,000 shares of Common Stock (as such number may be adjusted on account of
any Potential Adjustment Event in accordance with the provisions of Article 6,
the "Maximum Number"). The Advance Rate, the Downside Rate, the Hedging
Amount, the Maximum Base Amount, the Maturity Date and the Upside Rate for
each Tranche shall be specified in a pre-pricing acknowledgment substantially
in the form attached hereto as Exhibit A (for such Tranche, the "Pre-pricing
Acknowledgment") executed by Buyer and Seller; provided that:
(i) if at any time after the Pre-pricing Acknowledgment with
respect to any Tranche is delivered and prior to the establishment by
Buyer (or its affiliate) of Buyer's Initial Short Position with
respect to such Tranche, Seller becomes aware of any material
non-public information regarding the Issuer, Seller shall immediately
notify Buyer that it cannot make the representation and warranty set
forth in Section 3.01(k) without specification of the reason thereof
and shall direct Buyer (or its affiliate) to immediately cease
effecting any further short sales of the Common Stock; and
(ii) it is understood and acknowledged that, with respect to
each Tranche, in order to hedge Buyer's exposure with respect to the
Base Amount for such Tranche and as part of the proprietary trading
activities of Buyer or affiliates of Buyer unrelated to this
Agreement, in addition to short sales in connection with establishing
its Initial Short Position for such Tranche, Buyer and its affiliates
may from time to time effect for their own accounts purchases, long
sales or short sales of shares of Common Stock or options or other
derivatives in respect thereof (or combinations of such transactions)
that may affect the trading price of the Common Stock.
(c) Pricing Schedule. Following the execution and delivery of a
Pre- Pricing Acknowledgment for any Tranche, Buyer shall determine the Base
Amount, the Hedged Value, the Initial Share Price, the Initial Short Position,
the Maturity Date, the Payment Date, the Purchase Price, and the Upside Limit
for such Tranche (collectively, the "Terms of Tranche") based on the amounts
and prices at which, and dates, all occurring on or prior to the Hedging
Termination Date, on which an affiliate of Buyer effects, for the account of
Buyer, short sales of shares of Common Stock in establishing Buyer's Initial
Short Position for such Tranche (the dates on which such short sales for such
Tranche are effected being collectively referred to as the "Hedging Period"
for such Tranche) and otherwise in accordance with the respective formulas for
Terms of Tranche set forth below. Within two Business Days after the
establishment of its Initial Short Position for each Tranche, Buyer shall
deliver to Seller the related pricing schedule (the "Pricing Schedule"),
substantially in the form attached hereto as Exhibit B, setting forth the
Terms of Tranche for such Tranche.
(d) Related Definitions. As used herein, the following words and
phrases have the following meanings:
(i) "Advance Rate" means, with respect to any Tranche, the
percentage rate set forth as such in the Pre-pricing Acknowledgment
for such Tranche.
(ii) "Base Amount" means, with respect to any Tranche, as set
forth in the Pricing Schedule for such Tranche, a number of shares of
Common Stock as determined by Buyer with respect to which Buyer (or
an affiliate of Buyer) has established an Initial Short Position for
such Tranche on or prior to the Hedging Termination Date but in no
event in excess of the Maximum Base Amount for such Tranche, as
adjusted in accordance with the provisions of Article 6.
(iii) "Downside Rate" means, with respect to any Tranche, the
percentage rate set forth as such in the Pre-pricing Acknowledgment
for such Tranche.
(iv) "Hedged Value" per share means, with respect to any
Tranche, as set forth in the Pricing Schedule for such Tranche, the
Initial Share Price for such Tranche, multiplied by the Downside Rate
for such Tranche, as adjusted in accordance with the provisions of
Article 6.
(v) "Hedging Amount" means, as set forth in the Pre-pricing
Acknowledgment, a dollar amount.
(vi) "Initial Share Price" means, with respect to any
Tranche, as set forth in the Pricing Schedule for such Tranche, the
volume weighted average of the per share prices at which Buyer (or an
affiliate of Buyer) sells short shares of Common Stock in
establishing Buyer's Initial Short Position pursuant to the last
sentence of Section 3.02(d).
(vii) "Initial Short Position" means, with respect to any
Tranche, as set forth in the Pricing Schedule for such Tranche, the
number of shares of Common Stock that Buyer (or an affiliate of
Buyer) sells short on or prior to the Hedging Termination Date to
establish its initial hedge of the price and market risk undertaken
by Buyer with respect to such Tranche under this Agreement, but, for
the avoidance of doubt, shall not include any additional shares of
Common Stock introduced into the market with respect to such Tranche
in excess of Buyer's initial hedge in order to ensure compliance with
Buyer's representation in Section 3.02(d).
(viii) "Maturity Date" means, with respect to any Tranche,
the date designated as the Maturity Date for such Tranche in the
Pricing Schedule for such Tranche (or, if such a date is not a
Trading Day, the next following Trading Day).
(ix) "Maximum Base Amount" means, with respect to any
Tranche, as set forth in the Pre-pricing Acknowledgment for such
Tranche, a number of shares of Common Stock which, if added to the
Base Amounts for all the previously established Tranches, does not
exceed the Maximum Number.
(x) "Payment Date" means, with respect to any Tranche, as set
forth in the Pricing Schedule for such Tranche, the third Business
Day immediately following the last day of the Hedging Period for such
Tranche.
(xi) "Purchase Price" means, with respect to any Tranche, as
set forth in the Pricing Schedule for such Tranche, an amount equal
to (A) the product of (i) the Base Amount for such Tranche, (ii) the
Initial Share Price for such Tranche, and (iii) the Advance Rate for
such Tranche, minus (B) the product of (x) the Hedging Amount times
(y) the Base Amount for such Tranche minus the Initial Short Position
for such Tranche.
(xii) "Upside Limit" per share means, with respect to any
Tranche, as set forth in the Pricing Schedule for such Tranche, the
Initial Share Price for such Tranche, multiplied by the Upside Rate
for such Tranche, as adjusted in accordance with the provisions of
Article 6.
(xiii) "Upside Rate" means, with respect to any Tranche, the
percentage rate set forth as such in the related Pre-pricing
Acknowledgment for such Tranche.
SECTION 2.03. Settlement Date. (a) On the Settlement Date for each
Tranche, Seller agrees, subject to Section 2.04, to deliver to an affiliate of
Buyer designated by Buyer a number of shares of Free Stock (for each Tranche,
the "Contract Shares" for such Tranche) equal to the product of (A) the Base
Amount for such Tranche and (B) the Settlement Ratio for such Tranche, rounded
down to the nearest whole number (for each Tranche, the "Contract Share
Amount" for such Tranche), and cash in an amount equal to the value (based on
the Settlement Price for such Tranche) of any fractional share not delivered
as a result of such rounding. If (x) by 10:00 A.M., New York City time on the
Settlement Date for such Tranche, Seller has not otherwise effected such
delivery of Common Stock or delivered cash in lieu thereof pursuant to Section
2.04 and (y) the Common Stock then held by the Collateral Agent as collateral
under the Pledge Agreement is Free Stock, then (i) Seller shall be deemed not
to have elected to deliver cash in lieu of shares of Free Stock for such
Tranche, pursuant to Section 2.04 (notwithstanding any notice by Seller to the
contrary) and (ii) the delivery provided by this Section 2.03(a) shall be
effected by delivery by the Collateral Agent to an affiliate of Buyer
designated by Buyer of a number of shares of Free Stock then held by the
Collateral Agent as collateral under the Pledge Agreement equal to the number
of shares of Free Stock required to be delivered by Seller for such Tranche to
an affiliate of Buyer designated by Buyer pursuant to this Section 2.03(a);
provided that, notwithstanding the foregoing and without limiting the
generality of Section 7.01, if Seller gives notice of Seller's election to
deliver cash in lieu of shares of Free Stock on the Settlement Date for such
Tranche pursuant to Section 2.04 and fails to deliver the Cash Settlement
Amount for such Tranche on the Settlement Date for such Tranche as provided in
Section 2.04, Seller shall be in breach of this Agreement and shall be liable
to Buyer for any losses incurred by Buyer or such affiliate of Buyer as a
result of such breach, including, without limitation, aggregate net losses
incurred in connection with any decrease in the Closing Price of the Common
Stock subsequent to the last Valuation Date for such Tranche.
(b) With respect to any Tranche, the "Settlement Ratio" shall be
determined in accordance with the following formula, and is subject to
adjustment as a result of certain events as provided in Article 6: (i) if the
Settlement Price for such Tranche is less than the Upside Limit for such
Tranche but greater than the Hedged Value for such Tranche, the Settlement
Ratio for such Tranche shall be a ratio equal to the Hedged Value for such
Tranche divided by the Settlement Price for such Tranche; (ii) if the
Settlement Price for such Tranche is equal to or greater than the Upside Limit
for such Tranche, the Settlement Ratio for such Tranche shall be a ratio equal
to the sum of the Hedged Value for such Tranche divided by the Settlement
Price for such Tranche and a fraction the numerator of which is equal to the
difference between the Settlement Price for such Tranche and the Upside Limit
for such Tranche and the denominator of which is equal to the Settlement Price
for such Tranche and (iii) if the Settlement Price for such Tranche is equal
to or less than the Hedged Value for such Tranche, the Settlement Ratio for
such Tranche shall be one (1). The ratio expressed in clause (i) or (ii) above
shall be rounded upward or downward to the nearest 1/10,000th or, if there is
not a nearest 1/10,000th, to the next lower 1/10,000th.
SECTION 2.04. Cash Settlement Option. Seller may, with respect to any
Tranche, upon written notice delivered to Buyer at least ten calendar days
prior to the first Valuation Date for such Tranche, elect to settle its
delivery obligation for such Tranche pursuant to Section 2.03(a) in cash;
provided that, Seller shall have delivered to Buyer an amount of cash with
respect to such Tranche (the "Prepayment Amount") equal to the product of (i)
the Closing Price per share of Common Stock on the last Trading Day prior to
the delivery date of such notice on which there was no Market Disruption Event
(the "Prepayment Determination Price"), (ii) the Base Amount for such Tranche
and (iii) the Prepayment Determination Ratio for such Tranche, by wire
transfer of immediately available funds to an account designated by Buyer at
least seven calendar days prior to the first Valuation Date for such Tranche.
If the cash settlement option has been validly elected by Seller with respect
to any Tranche in accordance with the preceding sentence, then on the
Settlement Date for such Tranche, (i) if the Cash Settlement Amount for such
Tranche is greater than the Prepayment Amount for such Tranche, Seller shall
deliver to Buyer the amount of cash by which the Cash Settlement Amount for
such Tranche exceeds the Prepayment Amount for such Tranche, (ii) if the
Prepayment Amount for such Tranche is greater than the Cash Settlement Amount
for such Tranche, Buyer shall deliver to Seller the amount of cash by which
the Prepayment Amount for such Tranche exceeds the Cash Settlement Amount for
such Tranche and (iii) if the Prepayment Amount for such Tranche is equal to
the Cash Settlement Amount for such Tranche, no deliveries shall be made in
respect of such Tranche. In each case when deliveries are made such deliveries
shall be made by wire transfer of immediately available funds to an account
designated by Buyer or Seller, as the case may be, in lieu of the shares of
Common Stock for such Tranche to be delivered on the Settlement Date for such
Tranche pursuant to Section 2.03(a). The "Prepayment Determination Ratio"
shall be determined, with respect to any Tranche, in accordance with the
following formula, and is subject to adjustment as a result of certain events
as provided in Article 6: (i) if the Prepayment Determination Price for such
Tranche is less than the Upside Limit for such Tranche but greater than the
Hedged Value for such Tranche, the Prepayment Determination Ratio for such
Tranche shall be a ratio equal to the Hedged Value for such Tranche divided by
the Prepayment Determination Price for such Tranche; (ii) if the Prepayment
Determination Price for such Tranche is equal to or greater than the Upside
Limit for such Tranche, the Prepayment Determination Ratio for such Tranche
shall be a ratio equal to the sum of the Hedged Value for such Tranche divided
by the Prepayment Determination Price for such Tranche and a fraction the
numerator of which is equal to the difference between the Prepayment
Determination Price for such Tranche and the Upside Limit for such Tranche and
the denominator of which is equal to the Prepayment Determination Price for
such Tranche; and (iii) if the Prepayment Determination Price for such Tranche
is equal to or less than the Hedged Value for such Tranche, the Prepayment
Determination Ratio for such Tranche shall be one (1). The ratio expressed in
clause (i) or (ii) above shall be rounded upward or downward to the nearest
1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of Seller. Seller
represents and warrants to Buyer that:
(a) Seller has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(b) Seller has all corporate power to enter into this Agreement and
the Pledge Agreement and to consummate the transactions contemplated hereby
and thereby. Each of this Agreement and the Pledge Agreement has been duly
authorized, validly executed and delivered by Seller and constitutes a valid
and legally binding obligation of Seller enforceable against Seller in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general equitable
principles.
(c) The execution and delivery by Seller of, and the compliance by
Seller with all of the provisions of, this Agreement and the Pledge Agreement,
and the consummation of the transactions herein and therein contemplated, will
not (i) conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement, stockholders agreement, lock-up agreement, registration rights
agreement, co-sale agreement or any other agreement or instrument to which
Seller or any of its subsidiaries is a party or by which Seller or any of its
subsidiaries is bound or to which any of the property or assets of Seller or
any of its subsidiaries is subject (it being understood that the existence of
conditions precedent to the Lenders' consent to Seller entering into and
consummating the transactions contemplated hereby and by the Pledge Agreement
as set forth in Section 2 of the Consent dated as of September 28, 2001 by the
Lenders (the "Lender Consent") shall not be deemed to give rise to any breach
of the representation and warranty set forth in this clause (i)), nor will
such action result in any breach of trust by Seller or any violation of the
provisions of the certificate of incorporation or by-laws or other
constitutive documents of Seller or any statute or any order, judgment,
decree, rule or regulation of any court or governmental agency or body having
jurisdiction over Seller or any of its subsidiaries or any of their respective
properties or (ii) except for the Lender Consent, require any consent,
approval, authorization or order of, or filing or qualification with, any
governmental body, agency, official, self-regulatory organization or court or
other tribunal, whether foreign or domestic, or any other Person.
(d) There is not pending or, to Seller's knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or
in equity or before any court, tribunal, governmental body, agency or official
or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or the Pledge Agreement or its
ability to perform its obligations hereunder or thereunder.
(e) Seller is acting for Seller's own account, and has made Seller's
own independent decision to enter into this Agreement and the Pledge Agreement
and as to whether this Agreement and the Pledge Agreement are appropriate or
proper for Seller based upon Seller's own judgment and upon advice of such
advisors as Seller deems necessary. Seller acknowledges and agrees that Seller
is not relying, and has not relied, upon any communication (written or oral)
of Buyer or any affiliate of Buyer with respect to the legal, accounting, tax
or other implications of this Agreement and the Pledge Agreement and that
Seller has conducted Seller's own analysis of the legal, accounting, tax and
other implications hereof and thereof; it being understood that information
and explanations related to the terms and conditions of this Agreement or the
Pledge Agreement shall not be considered investment advice or a recommendation
to enter into this Agreement or the Pledge Agreement. No communication
(written or oral) received from Buyer or any affiliate of Buyer shall be
deemed to be an assurance or guarantee as to the expected results of this
Agreement.
(f) Seller is entering into this Agreement with a full understanding
of all of the terms and risks hereof (economic and otherwise) and is capable
of evaluating and understanding (on Seller's own behalf or through independent
professional advice), and understands and accepts, the terms, conditions and
risks. Seller is also capable of assuming (financially and otherwise), and
assumes, those risks.
(g) Seller acknowledges that neither Buyer nor any affiliate of Buyer
is acting as a fiduciary or agent for or an advisor to Seller in respect of
this Agreement or the Pledge Agreement, and all decisions of Seller have been
the result of arm's length negotiations between Seller and Buyer.
(h) Since the date three months prior to the date hereof, neither
Seller nor any Person who would be considered to be the same "Person" as
Seller or "acting in concert" with Seller (as such terms are used in clauses
(e)(3)(vi) or (a)(2) of Rule 144 under the Securities Act), individually or in
the aggregate, has, except on a registered-basis, sold a number of shares of
Common Stock or hedged (through swaps, options, short sales, stock loans or
otherwise) any long position in a number of shares of Common Stock that would,
if added to the Base Amount of shares of Common Stock specified in all Pricing
Schedules and the Maximum Base Amount of shares of Common Stock specified in
any Pre-Pricing Acknowledgments with respect to any Tranches for which no
Pricing Schedule has been delivered, have exceeded the number of shares of
Common Stock that Seller could have sold pursuant to Rule 144 under the
Securities Act on the date hereof. For the purposes of this Section 3.01(h)
and Section 5.05, Common Stock shall be deemed to include securities
convertible into, exchangeable or exercisable for Common Stock.
(i) Seller does not know or have any reason to believe that the
Issuer has not complied with the reporting requirements contained in Rule
144(c)(1) under the Securities Act.
(j) Delivery of shares of Common Stock by Seller pursuant to this
Agreement will pass to an affiliate of Buyer designated by Buyer title to such
shares free and clear of any Liens, except for those created pursuant to the
Pledge Agreement.
(k) Seller is not on the date hereof, and will not be during each
Hedging Period, aware of any material non-public information regarding the
Issuer. No blackout period with respect to the Common Stock is in effect on
the date hereof or will be in effect during each Hedging Period.
(l) Seller is and will be in compliance with his reporting
obligations under Section 16 of the Securities Exchange Act of 1934, as
amended, and Seller will provide Buyer with a copy of any report filed
thereunder in respect of the transactions contemplated hereby promptly upon
filing thereof.
(m) Seller is not and after giving effect to application of the
Purchase Price for any Tranche will not be, required to register as an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
(n) Seller is an "eligible contract participant" (as such term is
defined in Section 1(a)(12) of the Commodity Exchange Act, as amended (the
"CEA")) because it is a corporation, partnership, proprietorship,
organization, trust or other entity and:
(i) it has total assets in excess of $10,000,000;
(ii) its obligations hereunder are guaranteed, or otherwise
supported by a letter of credit or keep well, support or other
agreement, by an entity of the type described in Section 1a(12)(A)(i)
through (iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or 1a(12)(C) of the
CEA; or
(iii) it has a net worth in excess of $1,000,000 and has
entered into this Agreement in connection with the conduct of its
business or to manage the risk associated with an asset or liability
owned or incurred or reasonably likely to be owned or incurred by it
in the conduct of its business.
(o) Seller has not solicited or arranged for the solicitation of, and
will not solicit or arrange for the solicitation of, orders to buy shares of
Common Stock in anticipation of or in connection with any short sales of
shares of Common Stock which an affiliate of Buyer effects, for the account of
Buyer, in establishing Buyer's Initial Short Position for any Tranche.
(p) Except as provided herein, Seller has not made, will not make,
and has not arranged for, any payment to any Person in connection with the
short sales of shares of Common Stock which an affiliate of Buyer effects, for
the account of Buyer, in establishing Buyer's Initial Short Position for any
Tranche.
SECTION 3.02. Representations and Warranties of Buyer. Buyer
represents and warrants to Seller that:
(a) Buyer is a banking corporation, duly formed, validly existing and
in good standing under the laws of the State of New York, and has all powers
and all material governmental licenses, authorizations, consents and approvals
required to enter into, and perform its obligations under, this Agreement.
(b) Each of this Agreement and the Pledge Agreement has been duly
authorized and validly executed and delivered by Buyer and constitutes a valid
and legally binding obligation of Buyer enforceable against Buyer in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general equitable
principles.
(c) The execution and delivery by Buyer of, and the compliance by
Buyer with all of the provisions of, this Agreement and the Pledge Agreement,
and the consummation of the transactions herein and therein contemplated, will
not require any consent, approval, authorization or order of, or filing or
qualification with, any governmental body, agency, official, self-regulatory
organization or court or other tribunal, whether foreign or domestic.
(d) Buyer (or its affiliate) will conduct its hedging activities as
described herein in accordance with the interpretive letter from the
Securities and Exchange Commission to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. dated December 20,
1999, it being understood that Buyer will introduce into the public market a
quantity of securities of the same class as the Common Stock equal to the Base
Amount in a manner consistent with the manner-of-sale conditions described in
Rule 144(f) and (g) under the Securities Act. In conducting its hedging
activities with respect to each Tranche, Buyer will first sell shares of
Common Stock to establish its Initial Short Position, and thereafter will sell
an additional number of shares such that the total number of shares shall
equal the Base Amount for such Tranche.
(e) The execution and delivery by Buyer of, and the compliance by
Buyer with all of the provisions of, this Agreement and the Pledge Agreement,
and the consummation of the transactions herein and therein contemplated, will
not violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other agency
of government applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets.
(f) There is not pending or, to Buyer's knowledge, threatened against
it or any of its Affiliates any action, suit or proceeding at law or in equity
or before any court, tribunal, governmental body, agency or official or any
arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or the Pledge Agreement or its ability to perform
its obligations hereunder or thereunder.
(g) Buyer acknowledges that neither Buyer nor any affiliate of Buyer
is acting as a fiduciary or agent for or an advisor to Seller in respect of
this Agreement or the Pledge Agreement.
ARTICLE 4
CONDITIONS
SECTION 4.01. Conditions to Effectiveness of this Agreement. This
Agreement shall become effective on the Effective Date upon satisfaction or
waiver of each of the following conditions:
(a) The Pledge Agreement shall have been executed by the parties
thereto;
(b) Seller shall have received a consent (in form and substance
reasonably satisfactory to Buyer) of the Lenders under the Mafco Credit
Agreement consenting to the transactions contemplated hereby and by the Pledge
Agreement and shall have delivered a true and correct copy thereof to Buyer,
and such consent shall be in full force and effect as of the Effective Date
(it being understood that the existence of conditions precedent to the
Lenders' consent to Seller entering into and consummating the transactions
contemplated hereby and by the Pledge Agreement as set forth in Section 2 of
the Lender Consent shall not be deemed to give rise to any failure by Seller
to meet the condition precedent set forth in this paragraph (b));
(c) Seller shall have delivered to Buyer an agreement (in form and
substance reasonably satisfactory to Buyer), dated as of a date on or prior to
the Effective Date, of Citibank, as agent under the Mafco Credit Agreement and
collateral agent under the Seller Pledge Agreement, Seller and Buyer to the
effect that, upon receipt of the Purchase Price for each Tranche pursuant to
Section 2.01(a) and the satisfaction of other applicable conditions precedent
set forth in Sections 2 and 3 of the Lender Consent, Citibank shall promptly
(i) release a number of shares of Common Stock equal to the Base Amount for
such Tranche from the security interest granted under the Seller Pledge
Agreement, (ii) deliver the certificate or certificates representing such
shares to the Collateral Agent, and (iii) execute and deliver such other
documents as Buyer may reasonably request to evidence the release of such
shares from the security interest granted under the Seller Pledge Agreement
and the satisfaction of the conditions precedent set forth in Section 3 of the
Consent; and
(d) Buyer shall have received an opinion (in form and substance
satisfactory to Buyer and its counsel), dated as of the date hereof, of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for Seller, to the effect
set forth in Annex A.
(e) Seller shall have delivered to Buyer a signed, true and complete
copy of an amended notice on Form 144 relating to the transactions
contemplated hereunder, as of the date of the Pre-pricing Acknowledgment,
naming Seller as seller and ▇.▇. ▇▇▇▇▇▇ Securities Inc. and Credit Suisse
First Boston Corporation as brokers, and containing a footnote next to the
amount in column 3(c) of Form 144 to the following effect: "Pursuant to a
secured pre-paid variable share forward contract," three copies of which shall
have been mailed to the Securities and Exchange Commission, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ and one copy of which shall have been mailed to
the Exchange not later than on the Effective Date, all in the manner
contemplated by Rule 144(h). Alternatively, Seller shall have delivered to
Buyer sufficient signed copies of such amended Form 144 to be filed by Buyer
(or its affiliate) as set forth above, prior to the execution and delivery of
the Pre-pricing Acknowledgment.
SECTION 4.02. Conditions to Buyer's Obligations. Without limiting the
generality of Section 4.01, the obligation of Buyer to deliver any portion of
the aggregate Purchase Price for any Tranche hereunder on any day pursuant to
Section 2.02(a) is subject to the satisfaction of the following conditions:
(a) The representations and warranties of Seller contained in Article
3 and in the Pledge Agreement shall be true and correct as of such day.
(b) No Event of Default shall have occurred and be continuing.
(c) Seller shall have performed all of the covenants and obligations
to be performed by it hereunder and under the Pledge Agreement and each of the
conditions in Section 4.01 shall have been satisfied or waived on or prior to
such day.
ARTICLE 5
COVENANTS
SECTION 5.01. Taxes. (a) Seller shall pay any and all documentary,
stamp, transfer or similar taxes and charges that may be payable in respect of
the entry into this Agreement and the transfer and delivery of any Common
Stock pursuant hereto. Seller intends to make all payments in respect of this
Agreement free and clear of, and without withholding or deduction for or on
account of, any present or future taxes, duties, fines, penalties, assessments
or other governmental charges of whatsoever nature (or interest on any taxes,
duties, fines, penalties, assessments or other governmental charges of
whatsoever nature) ("Taxes") imposed, levied, collected, withheld or assessed
by, within or on behalf of the United States or any political subdivision or
governmental authority thereof or therein having power to tax. If any payment
or delivery that Seller is required to make to Buyer hereunder or under the
Pledge Agreement will be subject to such withholding or deduction (based on
law as in effect at the time such payment or delivery is required to be made),
the following provisions shall apply:
(i) Seller shall notify Buyer of such requirement at least
180 days prior to date on which such payment is required to be made
(the "Required Payment Date"); provided that if Seller is unable to
provide Buyer with 180 days' notice of such requirement as a result
of a statutory change or a Treasury regulation, notice, announcement,
ruling or other Treasury publication or applicable court decision
published after the date hereof (each, a "Change in Tax Law") or as a
result of a transfer by Buyer of its rights and obligations in
respect of this Agreement and the Pledge Agreement pursuant to
Section 8.06, (A) Seller shall notify Buyer of such requirement as
promptly as practicable following such Change in Tax Law or the
effective date of any such transfer and (B) Buyer shall have the
right to postpone the Required Payment Date for any such payment for
as long as reasonably necessary to effect the transfer contemplated
by paragraphs (ii) and (iv) below (but in no event shall Buyer
postpone the Required Payment Date to a date later than the date 180
days following the date such notice is given). In the event that the
Required Payment Date for any such payment is postponed, Seller shall
deliver such payment to Buyer on the postponed Required Payment Date,
together with interest thereon for the period from and including the
original Required Payment Date to but excluding such postponed
Required Payment Date at a per annum rate equal to the three-month
Treasury Rate as of the original Required Payment Date.
(ii) Upon receipt of such notice, Buyer shall use its
reasonable best efforts to transfer its rights and obligations in
respect of this Agreement and the Pledge Agreement to another entity
such that (A) such payment would not be subject to withholding or
deduction and (B) neither Buyer nor any of its affiliates would be
subject to increased costs (including balance sheet costs) as a
result of such transfer.
(iii) If Buyer is unable to effect a transfer of the type
contemplated by paragraph (ii) Seller shall indemnify Buyer for the
full amount of any withholding or deduction, as well as any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto; provided that if it is reasonably practicable
for Buyer to transfer its rights and obligations in respect of this
Agreement and the Pledge Agreement to another entity such that such
payment would not be subject to such withholding and deduction, then
(A) Buyer shall notify Seller of the aggregate amount of increased
costs (including balance sheet costs) to which Buyer and its
affiliate would be subject as a result of such transfer, (B) Seller
shall notify Buyer prior to the date sixty Business Days preceding
the Required Payment Date, whether or not Seller elects that such
transfer be effected and (C) if Seller elects that such transfer be
effected, Seller shall reimburse Buyer for the aggregate amount of
any increased costs (including balance sheet costs) to which Buyer
and its affiliates would be subject as a result of such transfer and,
if Seller does not elect that such transfer be effected, Seller shall
indemnify Buyer for the full amount of any withholding or deduction,
as well as any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto.
(b) If Seller makes any payment or delivery in respect of this
Agreement or the Pledge Agreement from or through any non-United States
jurisdiction, Seller shall make such payment or delivery free and clear of,
and without withholding or deduction for or on account of, any Taxes imposed,
levied, collected, withheld or assessed by, within or on behalf of such
non-United States jurisdiction, or any political subdivision or governmental
authority thereof or therein having power to tax. In the event such
withholding or deduction is imposed, Seller agrees to indemnify Buyer for the
full amount of such withholding or deduction, as well as any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto.
SECTION 5.02. Forward Contract. (a) Seller hereby agrees that: (i)
Seller will not treat this Agreement or any Tranche hereunder, any portion of
this Agreement or any Tranche hereunder, or any obligation hereunder as giving
rise to any interest income or other inclusions of ordinary income; (ii)
Seller will not treat the delivery of any portion of the shares of Common
Stock or cash to be delivered pursuant to this Agreement with respect to any
Tranche as the payment of interest or ordinary income; (iii) Seller will treat
this Agreement in its entirety as a forward contract for the delivery of such
shares of Common Stock or cash; and (iv) Seller will not take any action
(including filing any tax return or form or taking any position in any tax
proceeding) that is inconsistent with the obligations contained in (i) through
(iii). Notwithstanding the preceding sentence, Seller may take any action or
position required by law, provided that Seller delivers to Buyer an
unqualified opinion of counsel, nationally recognized as expert in Federal tax
matters and acceptable to Buyer, to the effect that such action or position is
required by a statutory change or a Treasury regulation or applicable court
decision published after the date of this Agreement.
(b) Buyer hereby agrees, for United States federal income tax
purposes (including, without limitation, tax information reporting purposes),
to treat this Agreement in a manner consistent with Seller's obligations under
this Section 5.02.
SECTION 5.03. Notices. Seller will cause to be delivered to Buyer:
(a) immediately upon the occurrence of any Event of Default hereunder
or under the Pledge Agreement, or upon any officer of Seller obtaining
knowledge that any condition or event of the type described in Section 7.01(a)
or 7.01(b) shall have occurred with respect to the Issuer, notice of such
occurrence; and
(b) promptly, in case at any time prior to the Settlement Date for
the last Tranche, Seller receives notice, or any officer of Seller obtains
knowledge, that any event requiring that an adjustment be calculated pursuant
to Section 6.01 or 6.02 hereof or any Nationalization or Insolvency shall have
occurred or be pending, a notice identifying such event and stating, if known
to Seller, the date on which such event occurred or is to occur and, if
applicable, the record date relating to such event. Seller shall cause further
notices to be delivered to Buyer if Seller shall subsequently receive notice,
or any officer of Seller shall obtain knowledge, of any further or revised
information regarding the terms or timing of such event or any record date
relating thereto.
SECTION 5.04. Further Assurances. From time to time from and after
the date hereof through the Settlement Date for the last Tranche, each of the
parties hereto shall use its reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary,
proper and advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and the Pledge
Agreement in accordance with the terms and conditions hereof and thereof,
including (i) using reasonable best efforts to remove any legal impediment to
the consummation of such transactions and (ii) the execution and delivery of
all such deeds, agreements, assignments and further instruments of transfer
and conveyance necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement and the Pledge Agreement in
accordance with the terms and conditions hereof and thereof.
SECTION 5.05. No Sales of Common Stock. From the date hereof until
the end of three months after the Hedging Termination Date, neither Seller nor
any Person who would be considered to be the same "Person" as Seller or
"acting in concert" with Seller (as such terms are used in clauses (e)(3)(vi)
or (a)(2) of Rule 144 under the Securities Act), individually or in the
aggregate, shall, except on a registered-basis, without the prior written
consent of Buyer (which shall not be unreasonably withheld, conditioned or
delayed), sell a number of shares of Common Stock or hedge (through swaps,
options, short sales, stock loans or otherwise), any long position in a number
of shares of Common Stock that would, at the time of such sale or hedge, if
added to the Maximum Base Amount of shares of Common Stock specified in all
Pre-Pricing Acknowledgments, exceed the number of shares of Common Stock that
Seller could have sold pursuant to Rule 144 under the Securities Act at such
time. For purposes of this Section 5.05 and Section 3.01(h), Common Stock
shall be deemed to include securities convertible into, exchangeable or
exercisable for Common Stock.
SECTION 5.06. Securities Contract. The parties hereto agree and
acknowledge that each of Buyer and the Collateral Agent is a "financial
institution" within the meaning of Section 101(22) of Title 11 of the United
States Code (the "Bankruptcy Code"), that the Collateral Agent is acting as
agent and custodian for Buyer in connection with this Agreement and that Buyer
is a "customer" of the Collateral Agent within the meaning of Section 741(2)
of the Bankruptcy Code. The parties hereto further agree and acknowledge that
this Agreement is a "securities contract," as such term is defined in Section
741(7) of the Bankruptcy Code, and the parties hereto are entitled to the
protections afforded by, among other Sections, Sections 362(b)(6), 546(e) and
555 of the Bankruptcy Code.
SECTION 5.07. Borrow Cost Adjustment. (a) With respect to any Tranche
and within two Business Days following its receipt of request from Buyer with
respect to such Tranche, Seller shall pay to Buyer (or an affiliate designated
by Buyer) the amount of Excess Borrow Cost for such Tranche with respect to
any Monthly Borrow Period for such Tranche.
(b) For the purposes of this Section 5.07, the following terms shall
have the following meanings:
"Excess Borrow Cost" means, with respect to any Tranche, as
determined by the Calculation Agent with respect to any Monthly Borrow Period
for such Tranche, an amount by which the direct or indirect aggregate cost of
borrowing shares of Common Stock for the purpose of hedging Buyer's (or its
affiliate's) risk with respect to such Tranche hereunder for such Monthly
Borrow Period exceeds the Fixed Borrow Cost for such Tranche for such Monthly
Borrow Period, irrespective of whether such borrowing is effected by Buyer, by
an affiliate of Buyer, or by a counterparty to a transaction entered into by
Buyer or such affiliate to hedge Buyer's (or its affiliate's) exposure to such
Tranche hereunder.
"Fixed Borrow Cost" means, with respect to any Tranche, as determined
by the Calculation Agent with respect to any Monthly Borrow Period for such
Tranche, an amount equal to the product of (i) 10 basis points per annum, (ii)
the weighted average number of shares of Common Stock borrowed (directly or
indirectly) by Buyer (or its affiliate) during such Monthly Borrow Period to
hedge Buyer's (or its affiliate's) risk with respect to such Tranche
hereunder, irrespective of whether such borrowing is effected by Buyer, by an
affiliate of Buyer, or by a counterparty to a transaction entered into by
Buyer or such affiliate to hedge Buyer's (or its affiliate's) exposure to such
Tranche hereunder, and (iii) the weighted average Closing Price per share of
Common Stock for each Trading Day during such Monthly Borrow Period.
"Monthly Borrow Period" means, with respect to any Tranche, the
period beginning on the first day of the Hedging Period for such Tranche (in
the case of the first Monthly Borrow Period for such Tranche) or on the first
day of any calendar month (in the case of each subsequent Monthly Borrow
Period for such Tranche) and ending on the last day of such calendar month or
on the last Valuation Date for such Tranche (in the case of the last Monthly
Borrow Period for such Tranche).
ARTICLE 6
ADJUSTMENTS
SECTION 6.01. Dilution Adjustments. (a) Following the declaration by
the Issuer of the terms of any Potential Adjustment Event, (A) in the case of
each Potential Adjustment Event other than an Extraordinary Dividend, the
Calculation Agent will (i) determine whether such Potential Adjustment Event
has a diluting or concentrative effect on the theoretical value of the Common
Stock, and, if there is such an effect, the Calculation Agent will make
corresponding adjustment(s), if any, with respect to each Tranche, to any one
or more of the Base Amount for such Tranche, the Settlement Ratio for such
Tranche, the Upside Limit for such Tranche, the Hedged Value for such Tranche,
any Closing Price and any other variable relevant to the exercise, settlement
or payment terms of such Tranche, as the Calculation Agent determines
appropriate to account for that diluting or concentrative effect and (ii)
determine the effective date(s) of the adjustment(s) or (B) in the case of any
Potential Adjustment Event that is an Extraordinary Dividend, Seller shall pay
to Buyer or an affiliate of Buyer designated by Buyer (or, in the event such
Extraordinary Dividend consists of property other than cash, cause to be
distributed or delivered to Buyer or an affiliate of Buyer designated by
Buyer) such Extraordinary Dividend on the date such Extraordinary Dividend is
paid by the Issuer to holders of Common Stock. The Calculation Agent may (but
need not) determine the appropriate adjustment(s) by reference to the
adjustment(s) in respect of such Potential Adjustment Event made by an options
exchange to options on the Common Stock traded on that options exchange.
(b) For these purposes, "Potential Adjustment Event" means any of the
following:
(i) a subdivision, consolidation or reclassification of
shares of Common Stock (unless a Merger Event), or, a free
distribution or dividend of any shares of Common Stock to existing
holders of Common Stock by way of bonus, capitalization or similar
issue;
(ii) a distribution or dividend to existing holders of Common
Stock of (A) shares of Common Stock, or (B) other share capital or
securities granting the right to payment of dividends and/or the
proceeds of liquidation of the Issuer equally or proportionately with
such payments to holders of Common Stock, or (C) any other type of
securities, rights or warrants or other assets, in any case for
payment (cash or other) at less than the prevailing market price as
determined by the Calculation Agent;
(iii) a dividend or distribution (an "Extraordinary
Dividend") consisting of cash and/or any other property (other than
distributions or dividends of a type described in Section
6.01(b)(ii)), other than any cash dividend on the Common Stock to the
extent that, with respect to each Tranche, the aggregate cash
dividend per share of the Common Stock for the relevant period does
not exceed the greater of (x) the Ordinary Dividend for such Tranche
for that period and (y) if any, the most recent cash dividend on the
Common Stock that was an Ordinary Dividend for such Tranche for an
earlier corresponding period ("Ordinary Dividend" means, with respect
to each Tranche, a cash dividend that does not exceed the Ordinary
Dividend Amount for such Tranche, on an annualized basis; "relevant
period" means the fiscal period (e.g., quarter or six-month period)
for which the Issuer ordinarily declares a regular cash dividend; and
"earlier corresponding period" means a prior relevant period (whether
or not the next preceding relevant period));
(iv) a call by the Issuer in respect of shares of Common
Stock that are not fully paid;
(v) a repurchase by the Issuer of shares of Common Stock,
whether out of profits or capital and whether the consideration for
such repurchase is cash, securities or otherwise;
(vi) the happening of a contingency that causes rights
attached to shares of Common Stock to become exercisable in the hands
of less than all existing holders of Common Stock; or
(vii) any other similar event that may have a diluting or
concentrative effect on the theoretical value of the Common Stock.
(c) Notwithstanding the provisions of Section 6.01(a) and Section
6.01(b), in the event of a distribution (a "Spinoff") of shares of capital
stock of a subsidiary of the Issuer (a "Spinoff Issuer") that is a
Publicly-Traded Entity made to holders of shares of Common Stock, (i) the
"Contract Shares" for each Tranche shall include, in addition to the number of
shares of Free Stock equal to the Contract Share Amount, a number of shares of
Spinoff Stock equal to the product of (A) the Base Amount immediately prior to
the consummation of the Spinoff and (B) the number of shares of Spinoff Stock
that a holder of one share of Original Stock would have owned or been entitled
to receive immediately following such Spinoff and (ii) the "Settlement Price"
shall be equal to the sum of (A) the Settlement Price of the Original Stock
and (B) the product of (x) the Settlement Price of the Spinoff Stock and (y)
the number of shares of Spinoff Stock that a holder of one share of Original
Stock would have owned or been entitled to receive immediately following such
Spinoff. Following a Spinoff, "Original Stock" shall mean the common stock of
the entity that is the Issuer immediately prior to the Spinoff and "Spinoff
Stock" shall mean the common equity securities of the Publicly-Traded Entity
resulting from such Spinoff. If a Spinoff is effected with respect to more
than one Spinoff Stock at one time, the Calculation Agent shall, with respect
to each Tranche, follow the foregoing procedure with appropriate modifications
and adjustments to accommodate additional Spinoff Stocks. Notwithstanding the
foregoing, if any Spinoff Issuer is not, or as a result of the Spinoff does
not become, a Publicly-Traded Entity, such Spinoff shall be treated as an
Extraordinary Dividend in accordance with Section 6.01(a).
SECTION 6.02. Merger Events. (a) If a Share-for-Share-Merger Event
or a Share-for-Combined Merger Event shall occur, then,
(i) effective as of the Merger Date for such Merger Event,
with respect to each Tranche, (A) the number of New Shares to which a
holder of a number of shares of Common Stock equal to the Base Amount
for such Tranche would be entitled upon consummation of such Merger
Event will be deemed the "Base Amount" for such Tranche, (B) the New
Shares and their issuer will be deemed the "Common Stock" and the
"Issuer", respectively, and (C) the Calculation Agent will make
appropriate adjustments, if any, on account of such Merger Event
(including, without limitation, adjustments on account of changes in
volatility of the Common Stock during the period from the date of the
first public announcement of such Merger Event to the Merger Date
based on models that are customary for leading equity derivatives
dealers) to any one or more of the Base Amount for each Tranche, the
Settlement Ratio for each Tranche, the Upside Limit for each Tranche,
the Hedged Value for each Tranche, any Closing Price and any other
variable relevant to the exercise, settlement or payment terms of
each Tranche; and
(ii) if the consideration received by holders of Common Stock
includes Other Consideration, Seller shall make a cash payment, by
wire transfer of immediately available funds to an account designated
by Buyer, to Buyer on the Merger Date for such Merger Event in an
amount equal to the Acceleration Value for such Tranche (calculated,
for purposes of this Section 6.02(a)(ii), (A) as if (1) the
Termination Date for such Tranche were the Acceleration Date for such
Tranche and (2) the Base Amount for such Tranche were equal to the
product of (x) the Base Amount immediately prior to the consummation
of such Merger Event and (y) the percentage of the value of the
consideration received by holders of Common Stock represented by the
Other Consideration, as determined by the Calculation Agent, and (B)
on the basis of, in addition to the factors indicated in Section
7.01, a value ascribed to the Common Stock equal to the Other
Consideration, if any, paid in respect of the Common Stock at the
time of such Merger Event).
(b) If a Merger Event (other than a Share-for-Share Merger Event or a
Share-for-Combined Merger Event) shall occur, Buyer shall have the right, upon
becoming aware of the occurrence of such Merger Event, to notify Seller of
such event and terminate each remaining Tranche, following which Seller shall
make payment to Buyer as provided in Section 6.04.
(c) "Merger Event" means, in respect of shares of Common Stock, any
(A) reclassification or change of shares of Common Stock that results in a
transfer of or an irrevocable commitment to transfer 100% of the outstanding
shares of Common Stock, (B) consolidation, amalgamation or merger of the
Issuer with or into another entity (other than a consolidation, amalgamation
or merger in which the Issuer is the continuing entity and which does not
result in any such reclassification or change of 100% of the outstanding
shares of Common Stock), or (C) other takeover offer for shares of Common
Stock that results in a transfer of or an irrevocable commitment to transfer
100% of the shares of Common Stock (other than the shares of Common Stock
owned or controlled by the offeror), in each case if the Merger Date is on or
before the Settlement Date for the last Tranche hereunder. "Merger Date"
means, in respect of a Merger Event, the date upon which holders of the
necessary number of shares of Common Stock (other than, in the case of a
takeover offer, shares of Common Stock owned or controlled by the offeror)
have agreed or have irrevocably become obligated to transfer their shares of
Common Stock. In respect of each Merger Event, the following terms have the
meanings given below:
(i) "Share-for-Share Merger Event" means a Merger Event in
which the consideration for the Common Stock consists (or, at the
option of the holder of such Common Stock, may consist) solely of New
Shares;
(ii) "Share-for-Combined Merger Event" means a Merger Event
in which the consideration for the Common Stock consists of New
Shares and Other Consideration;
(iii) "New Shares" means shares of common stock (whether of
the offeror or a third party) issued by a Publicly-Traded Entity
received in connection with a Merger Event; and
(iv) "Other Consideration" means cash and/or any securities
(other than New Shares) or assets (whether of the offeror or a third
party).
SECTION 6.03. Nationalization and Insolvency. If, prior to the
Settlement Date for the last Tranche hereunder, all the shares of Common Stock
or all or substantially all the assets of the Issuer are nationalized,
expropriated or are otherwise required to be transferred to any governmental
agency, authority or entity (a "Nationalization"); or by reason of the
voluntary or involuntary liquidation, bankruptcy or insolvency of or any
analogous proceeding affecting the Issuer, (a) all the shares of Common Stock
are required to be transferred to a trustee, liquidator or other similar
official or (b) holders of the shares of Common Stock become legally
prohibited from transferring them (an "Insolvency"), then, in any such event,
Buyer shall have the right, upon becoming aware of the occurrence of a
Nationalization or Insolvency, as the case may be, to notify Seller of such
event and terminate each remaining Tranche as of the date set forth in such
notice, following which Seller shall make payment to Buyer as provided in
Section 6.04.
SECTION 6.04. Termination and Payment. Following termination of any
Tranche as a result of any Merger Event, Nationalization or Insolvency, Seller
shall pay to Buyer an amount in cash (the "Termination Amount") equal to the
Acceleration Value for such Tranche (calculated, for purposes of this Section
6.04, as if the Termination Date for such Tranche were the Acceleration Date
for such Tranche, and on the basis of, in addition to the factors indicated in
Section 7.01, a value ascribed to the Common Stock equal to the consideration,
if any, paid in respect of the Common Stock at the time of the Merger Event,
Nationalization or Insolvency, as the case may be) in settlement of such
Tranche. As promptly as reasonably practicable after calculation of the
Acceleration Value for such Tranche, Buyer shall deliver to Seller a notice
(the "Termination Amount Notice" for such Tranche) specifying the Termination
Amount for such Tranche. Not later than three Business Days following delivery
of a Termination Amount Notice for such Tranche by Buyer, Seller shall make a
cash payment, by wire transfer of immediately available funds to an account
designated by Buyer, to Buyer in an amount equal to the Termination Amount for
such Tranche.
"Termination Date" means, with respect to each Tranche, (i) in
respect of a Merger Event, the Merger Date, (ii) in respect of a
Nationalization, the date of the first public announcement of a firm intention
to nationalize and (iii) in respect of an Insolvency, the earlier of the date
the shares of Common Stock are required to be transferred to a trustee,
liquidator or other similar official and the date the holders of shares of
Common Stock become legally prohibited from transferring the shares of Common
Stock that, in the case of a Nationalization or an Insolvency (whether or not
amended or on the terms originally announced), leads to the Nationalization or
the Insolvency, as the case may be, in each case as determined by Buyer.
ARTICLE 7
ACCELERATION
SECTION 7.01. Acceleration. If one or more of the following events
(each an "Event of Default") shall occur:
(a) any legal proceeding shall have been instituted or any other
event shall have occurred or condition shall exist that would be reasonably
likely to have a material adverse effect on the financial condition of Seller
or on Seller's ability to perform Seller's obligations hereunder, or that
calls into question the validity or binding effect of any agreement of Seller
hereunder or under the Pledge Agreement (which shall include, without
limitation, any repudiation by Seller of this Agreement or the Pledge
Agreement);
(b) Seller is adjudicated insolvent or bankrupt, Seller makes an
assignment for the benefit of creditors or commences an Insolvency Proceeding
with respect to itself or any of its debts or assets in any jurisdiction and
under any applicable law, whether now or hereafter in effect, or Seller
becomes insolvent or admits in writing its inability generally to pay its
debts as they become due.
(c) the commencement of any Insolvency Proceeding with respect to
Seller (i) by a governmental, regulatory or supervisory authority,
self-regulatory organization, government-sponsored corporation or similar
entity having primary jurisdiction over it or its assets, or over Insolvency
Proceedings in respect of it or its assets, in the jurisdiction of its
incorporation or organization or the jurisdiction of its head or home office;
or (ii) by any other Person if such Insolvency Proceeding (A) is consented to
or not timely contested by the party against whom it was commenced, (B)
results in the entry of a judgment of insolvency or bankruptcy or the entry of
an order for winding-up, liquidation, reorganization, composition,
rehabilitation, administration or other similar relief or the appointment of a
conservator, trustee, receiver, liquidator, administrator, custodian or
similar official, or (C) is not dismissed within 30 days;
(d) at any time, any representation made or repeated or deemed to
have been made or repeated by Seller under this Agreement or the Pledge
Agreement or any certificate delivered pursuant hereto or thereto would be
incorrect or misleading in any material respect if made or repeated as of such
time;
(e) (i) Seller fails to deliver (A) shares of Common Stock or cash
on the Settlement Date for any Tranche, (B) the Termination Amount on any
Termination Date for such Tranche, (C) any payment or delivery by Seller when
due pursuant to Sections 5.01, 5.07 or 6.01(a)(ii)(B) of this Agreement or (D)
the collateral and such other documents and instruments as are required to be
delivered pursuant to Section 1(b) of the Pledge Agreement, and in each case
such failure remains unremedied for 5 days following notice from Buyer; or
(ii) Seller fails to fulfill or discharge when due any of Seller's
obligations, covenants or agreements under or relating to this Agreement or
the Pledge Agreement (other than the obligations referred to in Section
7.01(e)(i)) and such failure remains unremedied for 30 days following notice
from Buyer;
(f) due to the adoption of, or any change in, any applicable law
after the date hereof, or due to the promulgation of, or any change in, the
interpretation by any court, tribunal or regulatory authority with competent
jurisdiction of any applicable law after the date hereof, it becomes unlawful
for Seller to perform any absolute or contingent obligation to make payment or
delivery hereunder or to comply with any other material provision of this
Agreement or the Pledge Agreement;
(g) Seller, Parent or any direct or indirect wholly-owned subsidiary
of Parent in the chain of ownership between Parent and Seller fails to make
any payment in respect of any debt or other obligation having a principal
amount or other amount payable of $10,000,000 or more in the aggregate, in
each case when due or within any applicable grace period, or any event or
condition shall occur which results in the acceleration of the maturity of any
such debt or such other obligation, as the case may be;
(h) one or more final judgments or orders for the payment of money
in excess of $10,000,000 in the aggregate shall be rendered against Seller and
there shall be a period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect unless such judgment or order shall have
been vacated, satisfied or dismissed or bonded pending appeal;
(i) Buyer determines in its discretion that it is unable to
establish, re-establish or maintain in an economically efficient manner any
hedging transactions necessary or desirable in the normal course of such
party's business of hedging the price and market risk of entering into and
performing under any Tranche hereunder, due to market illiquidity, illegality,
lack of availability of hedging transaction market participants or any other
factor (including, without limitation, the insufficient availability of stock
lenders willing and able to lend shares of Common Stock with a borrow cost not
significantly greater than the cost as of the date hereof and otherwise on
terms consistent with those as of the date hereof); or
(j) a Collateral Event of Default within the meaning of the Pledge
Agreement shall occur; then, upon notice to Seller from Buyer at any time
following an Event of Default (which, in the case of an Event of Default set
forth in Section 7.01(i), shall identify one or more Tranches to which that
notice relates), an "Acceleration Date" shall occur with respect to each
Tranche (or, in the case of an Event of Default set forth in Section 7.01(i),
each Tranche identified in such notice), and Seller shall become obligated to
deliver to an affiliate of Buyer designated by Buyer immediately upon receipt
of the Acceleration Amount Notice for all remaining Tranches (or, in the case
of an Event of Default set forth in Section 7.01(i), each Tranche identified
in such notice), a number of shares of Free Stock equal to the Acceleration
Amount for each such Tranche; provided that if the Collateral Agent proceeds
to realize upon any collateral pledged under the Pledge Agreement and to apply
the proceeds of such realization with respect to any such Tranche as provided
in paragraph second of Section 8(d) thereof, then, to the extent of such
application of proceeds, Seller's obligation to deliver Free Stock for such
Tranche pursuant to this paragraph shall be deemed to be an obligation to
deliver an amount of cash equal to the aggregate Market Value per share of
such Free Stock on the Acceleration Date for such Tranche. The "Acceleration
Amount" means, with respect to any Tranche, the quotient obtained by dividing:
(i) the Acceleration Value for such Tranche, as defined below, by (ii) the
Market Value per share of the Common Stock on the Acceleration Date for such
Tranche.
The "Acceleration Value" means, with respect to any Tranche, an
amount determined by the Calculation Agent representing the fair value to
Buyer and its affiliates of an agreement with terms that would preserve for
Buyer the economic equivalent of the payments and deliveries in respect of
such Tranche that Buyer and its affiliates would, but for the occurrence of
the Acceleration Date for such Tranche, have been entitled to receive after
such Acceleration Date under Article 2 (taking into account any adjustments
pursuant to Article 6 that may have been calculated with respect to such
Tranche on or prior to such Acceleration Date), including any loss of bargain,
cost of funding or, without duplication, aggregate net gain or loss or cost
incurred as a result of the termination, liquidation, establishment or
reestablishment of any hedge or related trading position (whether such hedge
or related trading position was maintained by Buyer or one of its affiliates
or by a counterparty to a transaction entered into by Buyer or one of its
affiliates to hedge Buyer's exposure to such Tranche) and, in determining any
amount pursuant to Section 6.02(a)(ii) or any Termination Amount pursuant to
Section 6.04, any aggregate net gain or loss incurred as a result of changes
in volatility of the Common Stock during the period from the date of the first
public announcement of such Merger Event to the Merger Date based on models
that are customary for leading equity derivatives dealers. The Calculation
Agent shall calculate such amount based on the following factors (and such
other factors as it deems appropriate): (i) the volatility of the Common
Stock, (ii) dividends on the Common Stock and (iii) prevailing interest rates.
As promptly as reasonably practicable after calculation of the
Acceleration Value with respect to any Tranche, the Calculation Agent shall
deliver to Seller a notice for such Tranche (the "Acceleration Amount Notice")
specifying the Acceleration Amount of shares of Common Stock required to be
delivered by Seller with respect to such Tranche.
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to Buyer shall
be directed to JPMorgan Chase Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: EDG Corporate Marketing (▇▇▇▇ ▇▇▇▇), Telephone: (212) 622-
5730, Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to JPMorgan Chase Bank, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Collateral Ops, 3
OPS 2, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇; notices to Seller
shall be directed to Seller at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇,
Telecopy No. 212-572-5965, Attention: Chief Financial Officer.
SECTION 8.02. Governing Law; Severability; Submission to
Jurisdiction; Waiver of Jury Trial. (a) This Agreement shall be governed by
and construed in accordance with the laws of the State of New York (without
reference to choice of law doctrine).
(b) 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.
(c) Seller and Buyer hereby irrevocably and unconditionally submit to
the non-exclusive jurisdiction of the Federal and state courts located in the
Borough of Manhattan in the City of New York in any suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby.
(d) Seller and Buyer hereby irrevocably and unconditionally waive 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.
SECTION 8.03. Set-off. The parties hereto acknowledge and agree that
each of them may elect to set-off any or all of its obligations to the other
party under any agreement between the parties against any or all of its rights
to obtain performance from such other party under any other agreement between
such parties.
SECTION 8.04. Entire Agreement. Except as expressly set forth herein,
this Agreement constitutes the entire agreement and understanding among the
parties with respect to its subject matter and supersedes all oral
communications and prior writings with respect thereto.
SECTION 8.05. Amendments, Waivers. Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by Buyer and Seller or, in
the case of a waiver, by the party against whom the waiver is to be effective.
No failure or delay by either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 8.06. Assignment by Buyer; No Third Party Rights, Successors
and Assigns. Neither Buyer nor Seller may assign its rights or delegate its
obligations under this Agreement or any Tranche hereunder, except with the
prior written consent of the other party hereto, and any purported assignment
or delegation without such prior written consent shall be void and of no
effect; provided that, so long as Buyer shall have satisfied its obligations
to pay the Purchase Price for each Tranche pursuant to Section 2.02(a),
notwithstanding any other provision of this Agreement or the Pledge Agreement
to the contrary requiring Buyer to purchase, sell, receive or deliver any
shares of Common Stock or other securities to or from Seller, Buyer may
designate any of its affiliates to purchase, sell, receive or deliver such
shares or other securities or otherwise to perform Buyer's obligations in
respect of the transactions contemplated hereunder and under the Pledge
Agreement and any such designee may assume such obligations, and Buyer shall
be discharged of its obligations to Seller to the extent of any such
performance. This Agreement is not intended and shall not be construed to
create any rights in any Person other than Seller, Buyer, an affiliate of
Buyer designated hereunder 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 the Seller and Buyer shall
bind, and inure to the benefit of, their respective successors and assigns
whether so expressed or not, and shall be enforceable by and inure to the
benefit of Buyer and its successors and assigns.
SECTION 8.07. Counterparts. This Agreement may be executed in any
number of counterparts, and all such counterparts taken together shall be
deemed to constitute one and the same agreement.
SECTION 8.08. Non-confidentiality. Seller and Buyer hereby
acknowledge and agree that Buyer has authorized Seller to disclose this
Agreement (and any materials of any kind provided to Seller in connection
herewith) to any and all Persons without limitation of any kind, and there are
no express or implied agreements, arrangements or understandings to the
contrary, and Buyer hereby waives any and all claims or any proprietary rights
with respect to this Agreement, and authorizes Seller to use any information
which Seller receives or has received with respect to this Agreement.
SECTION 8.09. Overdue Amounts. Any amounts not paid when due
hereunder 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 2%
plus the rate announced from time to time by JPMorgan Chase Bank as its prime
rate.
SECTION 8.10. Matters Related to Agent. Each party agrees and
acknowledges that (i) the Agent acts solely as agent on a disclosed basis with
respect to the transactions contemplated hereunder, and (ii) the Agent has no
obligation, by guaranty, endorsement or otherwise, with respect to the
obligations of either Seller or Buyer hereunder, either with respect to the
delivery of cash or shares of Common Stock, either at the beginning or the end
of the transactions contemplated hereby. In this regard, each of Seller and
Buyer acknowledges and agrees to look solely to the other for performance with
respect to each Tranche hereunder, and not to the Agent.
SECTION 8.11. Calculation Agent. The determinations and calculations
of the Calculation Agent shall be made in good faith and in a commercially
reasonable manner, and shall be binding in the absence of manifest error.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.
SELLER:
GSB INVESTMENTS CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
BUYER:
JPMORGAN CHASE BANK, by ▇.▇.
▇▇▇▇▇▇ SECURITIES INC., as its Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
EXHIBIT A
FORM OF PRE-PRICING ACKNOWLEDGMENT-- TRANCHE No.[___]
[Date]
This Pre-pricing Acknowledgment is a Pre-pricing Acknowledgment
within the meaning of Section 2.02(b) of the Stock Purchase Agreement dated as
of November 14, 2001 (the "Stock Purchase Agreement") between GSB Investments
Corp. ("Seller") and JPMorgan Chase Bank ("Buyer"), by ▇.▇. ▇▇▇▇▇▇ Securities
Inc., as its agent. This Pre-pricing Acknowledgment relates to Tranche No.
[__]. Capitalized terms used herein have the meanings set forth in the Stock
Purchase Agreement. The parties hereto hereby acknowledge and agree as follows
with respect to Tranche No. [___]:
(i) the Designation of Tranche: Tranche No. [___].
(ii) the "Advance Rate," as set forth in Section 2.02(d) of the Stock
Purchase Agreement, shall be equal to [___]%.
(iii) the "Downside Rate," as set forth in Section 2.02(d) of the Stock
Purchase Agreement, shall be equal to [___________]%.
(iv) the "Hedging Amount," as set forth in Section 2.02(d) of the Stock
-------
Purchase Agreement, shall be equal to $[___________].
(v) the "Maturity Date," as set forth in Section 2.02(d) of the Stock
Purchase Agreement, shall be [_________].
(vi) the "Maximum Base Amount," as set forth in Section 2.02(d) of
the Stock Purchase Agreement, shall be equal to [____________]
shares.
(vii) the "Upside Rate," as set forth in Section 2.02(d) of the Stock
Purchase Agreement, shall be equal to [___]%.
This Pre-pricing Acknowledgment shall be governed by the laws of New
York and may be executed in any number of counterparts, and all such
counterparts taken together shall be deemed to constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties have signed this Pre-pricing
Acknowledgment as of the date and year first above written.
SELLER:
GSB INVESTMENTS CORP.
By:
-----------------------------------
Name:
Title:
BUYER:
JPMORGAN CHASE BANK, by ▇.▇.
▇▇▇▇▇▇ SECURITIES INC., as its Agent
By:
-----------------------------------
Name:
Title:
EXHIBIT B
FORM OF PRICING SCHEDULE-- TRANCHE No. [___]
JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Date]
GSB Investments Corp.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇
Attention: Chief Financial Officer
Dear Sir:
This Pricing Schedule is a Pricing Schedule within the meaning of
Section 2.02(c) of the Stock Purchase Agreement dated as of November 14, 2001
(the "Stock Purchase Agreement") between GSB Investments Corp. ("Seller") and
JPMorgan Chase Bank ("Buyer"), by ▇.▇. ▇▇▇▇▇▇ Securities Inc., as its agent.
Capitalized terms used herein have the meanings set forth in the Stock
Purchase Agreement.
This Pricing Schedule relates to Tranche No. [__]. For all purposes
under the Stock Purchase Agreement, the Terms of Tranche with respect to
Tranche No. [___] shall be as follows:
1. Designation of Tranche: Tranche No. [___].
2. Purchase Price: [___________].
3. Payment Date: [___________].
4. Initial Share Price: [____________].
5. Initial Short Position: [_______________]
6. Hedged Value: [__________].
7. Upside Limit: [__________].
8. Maturity Date: [___________].
9. Base Amount: [____________].
10. The Last Day of Hedging Period: [________].
Very truly yours,
JPMORGAN CHASE BANK,
by ▇.▇. ▇▇▇▇▇▇ SECURITIES
INC., as its Agent
By:---------------------------
Name:
Title:
Acknowledged and Confirmed:
GSB INVESTMENTS CORP.
By:----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
ANNEX A
CROSS-REFERENCE TARGET LIST
NOTE: Due to the number of targets some target names
may not appear in the target pull-down list.
(This list is for the use of the wordprocessor only, is
not a part of this document and may be discarded.)
ARTICLE/SECTION TARGET NAME
===========================================================================
1, 7.01(e)(i), 7.01(e)(i)..............................................001
1.01...................................................................002
2......................................................................003
2.01...................................................................004
2.02...................................................................005
2.02(a)................................................................007
2.02(b)...................................................init.short.sales
2.02(c)................................................................074
2.02(d)................................................................075
2.02(d)(i)....................................................advance.rate
2.02(d)(ii)....................................................base.amount
2.03...................................................................006
2.03(a)................................................................008
2.03(b)................................................................009
2.04...................................................................010
3......................................................................011
3.01...................................................................012
3.01(a)................................................................013
3.01(b)................................................................014
3.01(c)................................................................015
3.01(e)................................................................016
3.01(f)................................................................017
3.01(g)................................................................018
3.01(h)................................................................019
3.01(i)................................................................020
3.01(j)................................................................021
3.01(k)................................................................070
3.01(n)................................................................CEA
3.02(d)................................................................073
4......................................................................023
4.01...................................................................024
4.01(a)................................................................025
4.02(b)................................................................026
4.02(c)................................................................027
5......................................................................028
5.01...................................................................029
5.02...................................................................030
5.03...................................................................031
5.03(a)................................................................032
5.03(b)................................................................033
5.04...................................................................034
5.05...................................................................036
5.06...................................................................076
5.07...................................................................077
5.07(b)................................................................037
?..........................................................form.144.filing
?..........................................................indemnification
6......................................................................038
6.01...................................................................039
6.01(a), 6.01(c).......................................................040
6.01(b)................................................................041
6.01(b)(ii)............................................................071
?......................................................................072
6.02...................................................................042
6.02(a)................................................................043
6.02(b)................................................................044
6.02(c)................................................................045
6.03...................................................................046
6.03(a)....................................shares.trans.trustee.liquidator
6.04...................................................................047
7......................................................................048
7.01...................................................................049
7.01(a)................................................................050
7.01(b)................................................................051
7.01(d)................................................................052
7.01(e)................................................................053
7.01(i)...................................................unable.establish
7.01(j)................................................................056
8......................................................................057
8.01...................................................................058
8.02...................................................................059
8.02(a)................................................................060
8.02(b)................................................................061
8.02(c)................................................................062
8.02(d)................................................................063
?......................................................................064
8.04...................................................................066
8.05...................................................................067
8.06...................................................................068
8.07...................................................................069