Exhibit EE
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of _____, 2001 (the "Agreement"), by
and between The Xxxxxxx Xxxxx Group, Inc., a Delaware corporation ("GS Inc."),
on its behalf and on behalf of its subsidiaries and affiliates (collectively
with GS Inc., and its and their predecessors and successors, the "Firm"), and
[name of individual] ("Pledgor").
RECITALS
A. Covenants and IPO Pledge. In connection with Pledgor's
participation in the Amended and Restated Plan of Incorporation (the "Plan") of
The Xxxxxxx Sachs Group, L.P., Pledgor and GS Inc. entered into an Agreement
Relating to Noncompetition and Other Covenants (the "Noncompetition Agreement"),
dated as of May 7, 1999, in respect of, inter alia, Pledgor's obligations (the
"Obligations") to keep information concerning the Firm confidential, not to
engage in competitive activities, not to solicit the Firm's clients or
employees, and to cooperate with the Firm in maintaining certain relationships
following the termination of Pledgor's employment. In addition, Pledgor agreed
under the Plan and the Noncompetition Agreement to certain provisions regarding
arbitration, choice of law and choice of forum, injunctive relief and submission
to jurisdiction with respect to the enforcement of the Obligations. Pursuant to
the Noncompetition Agreement, Pledgor agreed to pay a certain amount of
liquidated damages (the "Liquidated Damages") to GS Inc. in respect of any
breach by Pledgor of certain of the Obligations set forth in the Noncompetition
Agreement. As security for the timely payment of the Liquidated Damages, Pledgor
and GS Inc. entered into a Pledge Agreement, dated as of May 7, 1999 (the "IPO
Pledge Agreement"), pursuant to which Pledgor pledged to GS Inc. shares (the
"IPO Pledged Shares") of common stock of GS Inc. ("Common Stock").
B. Transfer and Pledge. Pledgor transferred (the "Transfer") on
the date hereof shares of Common Stock to [name of Trust] (the "Trust"). In
order to permit the Transfer, GS Inc. released the IPO Pledged Shares from the
pledge imposed by the IPO Pledge Agreement. Pursuant to Section 1(c) of this
Agreement, Pledgor is entering into certain covenants and agreements (the
"Covenants"). As security for the timely payment of the Liquidated Damages and
the full and timely performance by Pledgor of the Covenants (the "Secured
Obligations"), Pledgor has agreed to pledge to GS Inc. all of his current and
future beneficial ownership interests in the Trust, together with all
instruments or documents evidencing such interests and, except as set forth in
Section 2(a), all distributions thereon (collectively, the "Pledged Interests").
NOW, THEREFORE, in consideration of the premises contained herein
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
1. Pledge.
(a) As collateral security for the full and timely performance of
the Secured Obligations, Pledgor hereby delivers, deposits, pledges, transfers
and assigns to GS Inc., and creates for the benefit of GS Inc. a perfected first
priority security interest in, the Pledged Interests and, except as set forth in
Section 2(a), all proceeds thereof (the "Collateral"). Until the termination of
this Agreement, Pledgor shall have no right to substitute, withdraw, transfer or
otherwise dispose of the Collateral. Pledgor agrees to execute, acknowledge,
deliver or file all notices, agreements or other instruments and take all
actions as GS Inc. may reasonably require in order to perfect, confirm and
assure GS Inc.'s security interest in the Collateral including, without
limitation, the filing of a UCC financing statement in the appropriate filing
office.
(b) Pledgor hereby represents and warrants to GS Inc. that,
except for the lien and security interest granted hereby, Pledgor is the
beneficial owner of all Pledged Interests free from any adverse claim, security
interest, encumbrance, lien, charge, or other right or interest of any person;
that, other than the Pledged Interests, the interests of the trustees of the
Trust, and the interests of any contingent beneficiaries of the Trust, there are
no other legal or beneficial interests in the Trust, and no rights, options,
warrants or other agreements or instruments to acquire any legal or beneficial
interest in the Trust; and that no person other than the trustees of the Trust
possesses, directly or indirectly, any voting, economic or other interest in the
Trust.
(c) Pledgor hereby covenants and agrees with GS Inc. that until
the termination or waiver of all of the Transfer Restrictions (as defined in the
Shareholders' Agreement, dated as of May 7, 1999, among The Xxxxxxx Xxxxx Group,
Inc. and the individuals listed on Appendix A thereto, as in effect from time to
time):
(i) Pledgor will not take any action which would have the effect
of transferring or creating, directly or indirectly, any legal or
beneficial interest in the Trust other than those permitted by the
Guidelines to Documentation for U.S. Trusts of U.S. Citizens Resident in
the United Kingdom, dated ____, 2001 (the "Guidelines"); and
(ii) Pledgor will not, directly or indirectly, take any action
with respect to the Pledged Interests that Pledgor would not be
permitted to take if such Pledge Interests were the shares of Common
Stock received by Pledgor under the Plan.
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2. Administration of Security. The following provisions shall
govern the administration of the Collateral:
(a) So long as no Default Event (as defined below) has occurred
and is continuing, Pledgor shall be entitled to receive and retain all
distributions on Pledged Interests and to give consents, waivers and
ratifications in respect thereof. As used herein, a "Default Event" shall mean
the failure by Pledgor to make any payment of Liquidated Damages upon demand by
GS Inc. therefor as provided in the Noncompetition Agreement or a breach by
Pledgor of any of the Covenants.
(b) GS Inc. and its agents (and its and their assigns) shall have
no obligation in respect of the Collateral, except to hold and dispose of the
same in accordance with the terms of this Agreement.
(c) Pledgor agrees with GS Inc. that: (i) Pledgor will not, and
will not purport to, grant or suffer liens or encumbrances against, or sell,
transfer or dispose of, any part of the Collateral other than to or in favor of
GS Inc.; (ii) GS Inc. is authorized, at any time and from time to time, to file
financing statements and give notice to third parties regarding the Collateral
without Pledgor's signature to the extent permitted by applicable law, to
transfer all or any part of the Collateral to GS Inc.'s name or that of its
nominee, and, subject to the provisions of Section 2(a), to exercise all rights
as if the absolute owner thereof; and (iii) Pledgor has provided GS Inc. with
Pledgor's true legal name and principal residence, and Pledgor will not change
Pledgor's name without 30 days' prior written notice to GS Inc.
(d) Subject to the earlier disposition and application of the
Collateral pursuant to this Agreement following a Default Event, the Collateral
shall be released from the pledge hereunder, and the lien hereby created in the
Collateral shall simultaneously be released, upon the earliest to occur of (i)
Pledgor's death, (ii) the expiration of the twenty-four (24) month period
following Pledgor's Date of Termination (as defined in the Noncompetition
Agreement), (iii) payment in cash or other satisfaction by Pledgor of all
Liquidated Damages, or (iv) May 7, 2004, and all remaining Collateral shall be
thereupon released from the pledge hereunder and this Agreement shall terminate.
Notwithstanding the foregoing, (x) no Collateral shall be released from the
pledge hereunder pursuant to this Section 2(d), if there are one or more pending
disputes between Pledgor and GS Inc. as to the occurrence of a Default Event or
as to the right of GS Inc. or the Firm to exercise its remedies under this
Agreement or the Noncompetition Agreement, including realization against the
Collateral in accordance with Section 3 hereof, and this Agreement shall not
terminate until the resolution of all such disputes and (y) no Collateral shall
be released prior to the expiration of the term of the Covenants.
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(e) GS Inc. shall immediately upon request by Pledgor execute and
deliver to Pledgor such instruments, deeds, transfers, assurances and
agreements, in form and substance as Pledgor shall reasonably request, including
the withdrawal or termination of any financing statements and amendments
thereto, or the filing, withdrawal, termination or amendment of any other
document required under applicable law to evidence the termination of the
security interest created hereunder with respect to any interests that are
released from the pledge hereunder in accordance with the provisions of this
Agreement.
3. Remedies in Case of a Default Event. If a Default Event has
occurred and is continuing, GS Inc. shall have the rights and remedies of a
secured party under Article 9 of the UCC. To the extent required and permitted
by applicable law, GS Inc. will give Pledgor notice of the time and place of any
public sale or of the time after which any private sale or other disposition of
the Collateral is to be made, by sending notice at least three days before the
time of sale or disposition, which Pledgor hereby agrees is reasonable. GS Inc.
need not give such notice if not required by the UCC. Pledgor acknowledges the
possibility that the public sale of all or a portion of the Collateral by GS
Inc. may not be made without a then existing and effective registration
statement under the Securities Act of 1933, as amended. Pledgor acknowledges and
agrees with GS Inc. that GS Inc. has no affirmative obligation to prepare or
keep effective any such registration statement and agrees that at any private
sale the Collateral may be sold at a price that is less than the price which
might have been obtained at a public sale or that is less than the aggregate
outstanding amount of the Liquidated Damages.
4. Pledgor's Obligations Not Affected. Except as provided in
Section 9(b), the obligations of Pledgor under this Agreement shall remain in
full force and effect without regard to, and shall not be impaired or affected
by (a) any subordination, amendment or modification of or addition or supplement
to this Agreement, the Noncompetition Agreement, the Plan or any assignment or
transfer thereof; (b) any exercise or non-exercise by GS Inc. of any right,
remedy, power or privilege under or in respect of this Agreement, the
Noncompetition Agreement, the Plan or any waiver of any such right, remedy,
power or privilege; (c) any waiver, consent, extension, indulgence or other
action or inaction in respect of this Agreement, the Noncompetition Agreement,
the Plan or any assignment or transfer of any thereof; (d) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition, liquidation
or the like, of GS Inc., whether or not Pledgor shall have notice or knowledge
of any of the foregoing; or (e) any other act or omission to act or delay of any
kind by Pledgor, GS Inc. or any other person or any other circumstance
whatsoever which might, but for the provisions of this clause (e), constitute a
legal and equitable discharge of Pledgor's obligations hereunder.
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5. Attorneys-in-Fact. Each of GS Inc. and each General Counsel of
GS Inc. from time to time, acting separately, are hereby appointed the
attorneys-in-fact of Pledgor for the purpose of carrying out the provisions of
this Agreement and taking any action and executing any instrument that GS Inc.
reasonably may deem necessary or advisable to accomplish the purposes hereof,
which appointments as attorneys-in-fact are irrevocable as ones coupled with an
interest.
6. Termination. As and to the extent set forth in Section 2(d)
hereof, this Agreement shall terminate and GS Inc. shall return to Pledgor the
remaining Collateral, except as otherwise provided in such Section.
7. Notices. All notices or other communications required or
permitted to be given hereunder shall be delivered as provided in the
Noncompetition Agreement.
8. No Third Party Beneficiaries. Except as expressly provided
herein, this Agreement shall not confer on any person other than the Firm and
Pledgor any rights or remedies hereunder.
9. Miscellaneous.
(a) This Agreement, Section 8 of the Noncompetition Agreement,
the Counterpart to the Shareholders' Agreement, dated the date hereof, to which
the Trust is a party, the Written Consent, dated the date hereof, to which the
Trust and Pledgor are parties, the Written Custody Consent, dated the date
hereof, to which the Trust is a party, the Guarantee and Pledge Agreement, dated
the date hereof, between GS Inc. and the Trust, and the Guidelines contain the
entire understanding and agreement between Pledgor and GS Inc. with respect to
the matters expressly covered therein and supersede any other agreement, written
or oral, pertaining to such matters.
(b) This Agreement may not be amended or modified other than by a
written agreement executed by Pledgor and GS Inc. or its successors, nor may any
provision hereof be waived other than by a writing executed by Pledgor or GS
Inc. or its successors; provided, that any waiver, amendment or modification of
any of the provisions of this Agreement will not be effective against the Firm
without the written consent of the Chief Executive Officer of GS Inc. or its
successors, or such individual's designee. Pledgor may not, directly or
indirectly (including by operation of law), assign Pledgor's rights or
obligations hereunder without the prior written consent of the Chief Executive
Officer of GS Inc. or its successors, or such individual's designee, and any
such assignment by Pledgor in violation of this Agreement shall be void. This
Agreement shall be binding upon Pledgor's permitted successors and assigns.
Without impairing Pledgor's obligations hereunder, GS Inc. may at any time and
from time to time assign its rights and obligations hereunder to any of its
subsidiaries or affiliates (and have such
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rights and obligations reassigned to it or to any other subsidiary or
affiliate). This Agreement shall be binding upon and inure to the benefit of the
Firm and its assigns.
(c) If any provision of this Agreement is finally held to be
invalid, illegal or unenforceable (whether in whole or in part), such provision
shall be deemed modified to the extent, but only to the extent, of such
invalidity, illegality or unenforceability and the remaining provisions shall
not be affected thereby.
(d) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS, AND SHALL BE SUBJECT TO THE PROVISIONS OF SECTIONS 9, 10
AND 11 OF THE NONCOMPETITION AGREEMENT.
(e) The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered on the date first above written.
THE XXXXXXX XXXXX GROUP, INC.
By:________________________________
___________________________________
(Name of Individual Pledgor)
By:________________________________
