SAILS MANDATORILY EXCHANGEABLE SECURITIES CONTRACT
dated as of
January 29, 2002
among
GSB INVESTMENTS CORP.,
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
and
CREDIT SUISSE FIRST BOSTON CORPORATION, as Agent
TABLE OF CONTENTS
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PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.............................................................1
ARTICLE 2
SALE AND PURCHASE
SECTION 2.01. Sale and Purchase.......................................................9
SECTION 2.02. Purchase Price..........................................................9
SECTION 2.03. Payment for and Delivery of Contract Shares.............................9
SECTION 2.04. Cash Settlement Option.................................................10
SECTION 2.05. Dividend Payment.......................................................10
ARTICLE 3
TERMINATION BY SELLER
SECTION 3.01. Termination by Seller..................................................10
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER AND BUYER
SECTION 4.01. Representations and Warranties of Seller...............................11
SECTION 4.02. Representations and Warranties of Buyer................................14
ARTICLE 5
CONDITIONS TO BUYER'S OBLIGATIONS
SECTION 5.01. Conditions.............................................................15
ARTICLE 6
COVENANTS
SECTION 6.01. Taxes..................................................................16
SECTION 6.02. Forward Contract.......................................................18
SECTION 6.03. Notices................................................................18
SECTION 6.04. Further Assurances.....................................................19
SECTION 6.05. Securities Contract....................................................19
SECTION 6.06. Sales of Securities....................................................19
ARTICLE 7
ADJUSTMENTS
SECTION 7.01. Dilution Adjustments...................................................20
SECTION 7.02. Reorganization Events..................................................21
SECTION 7.03. Provisions Relating to Reorganization Events
and Spin-Offs..........................................................22
SECTION 7.04. Termination and Payment................................................22
ARTICLE 8
ACCELERATION
SECTION 8.01. Acceleration...........................................................23
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices................................................................26
SECTION 9.02. Governing Law; Submission to Jurisdiction; Severability;
Waiver of Jury Trial; Service of Process...............................26
SECTION 9.03. Entire Agreement; Other................................................26
SECTION 9.04. Amendments, Waivers....................................................27
SECTION 9.05. No Third Party Rights, Successors and Assigns..........................27
SECTION 9.06. Calculation Agent.....................................................27
SECTION 9.07. Netting and Set-off....................................................27
SECTION 9.08. Matters Related to Credit Suisse First Boston Corporation,
as Agent...............................................................29
SECTION 9.09. Counterparts...........................................................29
SAILS MANDATORILY EXCHANGEABLE SECURITIES CONTRACT
THIS AGREEMENT is made as of this 29st day of January, 2002 among GSB
INVESTMENTS CORP., a Delaware corporation ("Seller"), CREDIT SUISSE FIRST
BOSTON CORPORATION, as agent (in such capacity, the "Agent") hereunder, and
CREDIT SUISSE FIRST BOSTON INTERNATIONAL ("Buyer").
WHEREAS, Seller owns shares of common stock, par value $1.00 per
share, of Golden State Bancorp Inc., a Delaware corporation (the "Issuer"), or
security entitlements in respect thereof (the "Common Stock");
WHEREAS, pursuant to the Pledge Agreement (as defined herein), Seller
has granted, at the time of delivery of the Initial Pledged Items (as defined
in the Pledge Agreement), Buyer a security interest in certain shares of
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. As used herein, the following words and
phrases shall have the following meanings:
"Acceleration Amount" has the meaning provided in Section 8.01.
"Acceleration Amount Notice" has the meaning provided in Section
8.01.
"Acceleration Date" has the meaning provided in Section 8.01.
"Acceleration Event" has the meaning provided in Section 8.01.
"Alternative Merger Payment" means the Replacement Value (expressed
as a cash amount and calculated in the manner set forth in Section 8.01 as if
the Reorganization Termination Date were the Acceleration Date and
representing the fair replacement value (including both intrinsic and time
value) to Buyer of an agreement with terms that would preserve for Buyer the
economic equivalent of the payments and deliveries that Buyer and its
affiliates would, but for the occurrence of the Reorganization Event, have
been entitled to receive after the Reorganization Termination Date hereunder;
provided that for purposes of such calculation, the Base Amount shall be equal
to the product of (I) the Base Amount immediately prior to consummation of the
Reorganization Event, times (II) the Non-Stock Percentage).
"Bankruptcy Code" has the meaning provided in Section 6.05
"Base Amount" has the meaning provided in Section 2.01.
"Business Day" means any day on which commercial banks are open for
business in New York City.
"Calculation Agent" means Credit Suisse First Boston International.
"Cash Settlement Amount" means an amount of cash equal to the product
of the Maturity Price and the number of shares of Common Stock equal to the
product of (i) the Base Amount and (ii) the Exchange Rate.
"Change in Tax Law" has the meaning provided in Section 6.01(a)(i).
"Closing Price" of any security on any date of determination means
the closing sale price (or, if no closing sale price is reported, the last
reported sale price) of such security on the Exchange for the regular trading
session on such date or, if such security is not listed on a national
securities exchange or quoted on a national automated quotation system, the
last quoted bid price for such security in the over-the-counter market for the
regular trading session on such date, as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of such security on such date as determined by the Calculation
Agent in a commercially reasonable manner.
"Collateral" has the meaning provided in the Pledge Agreement.
"Collateral Account" has the meaning provided in the Pledge
Agreement.
"Contract Share Amount" has the meaning provided in Section 2.03(b).
"Contract Shares" has the meaning provided in Section 2.03(b).
"CSFB" has the meaning provided in Section 6.01(a).
"CSFB Corp." has the meaning provided in Section 4.02(g).
"Custodian" has the meaning provided in the Pledge Agreement.
"Dividend Payment Amount" has the meaning provided in Section 2.05.
"Dividend Payment Date" has the meaning provided in Section 2.05.
"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.
"Exchange Business Day" means any day that is (or, but for the
occurrence of a Market Disruption Event, would have been) a trading day on the
Exchange, other than a day on which trading on the Exchange is scheduled to
close prior to its regular weekday closing time.
"Exchange Rate" has the meaning provided in Section 2.03(c).
"Extraordinary Cash Dividend" means, with respect to the Common Stock
for any given fiscal quarterly period, any cash dividends paid in respect of
the Common Stock during such period in excess of the maximum amount of
dividends per share that would constitute an Ordinary Cash Dividend.
"Free Stock" means Common Stock that is not subject to any Transfer
Restrictions in the hands of Seller immediately prior to delivery to Buyer
hereunder and would not upon delivery to Buyer be subject to any Transfer
Restrictions in the hands of Buyer.
"Government Securities" has the meaning provided in the Pledge
Agreement.
"Initial Pledged Items" has the meaning provided in the Pledge
Agreement.
"Initial Sold Shares" has the meaning provided in Section 4.02(g).
"Interpolated LIBOR Rate" means, (i) for any period of less than 12
months, the rate determined by the Calculation Agent using linear
interpolation between USD-LIBOR-BBA for the Designated Maturity (as such terms
are defined in the 1991 ISDA Definitions published by the International Swaps
and Derivatives Association, Inc.) that corresponds most closely to, but is
longer than, such period, and USD-LIBOR-BBA for the Designated Maturity that
corresponds most closely to, but is shorter than, such period and (ii) for any
period of more than 12 months, the rate determined by the Calculation Agent
using linear interpolation between the "offer side" U.S. Dollar Swap rate
posted on Bloomberg Financial Markets ("Bloomberg") Page "SWYC23" (or any
successor or replacement page) for the Designated Maturity that corresponds
most closely to, but is longer than, such period, and the "offer side" U.S.
Dollar Swap rate posted on Bloomberg Page "SWYC23" for the Designated Maturity
that corresponds most closely to, but is shorter than, such period; provided
that, in either case, the Calculation Agent shall make such adjustments to
such rates as are appropriate to reflect continuous compounding (and not
semi-annual, or other method of, compounding) over such period.
"Investment Company Act" means the Investment Company Act of
1940, as amended
"Lien" means any lien, mortgage, security interest, pledge, charge or
encumbrance of any kind.
"Mafco" has the meaning provided in Section 8.01(h).
"Market Disruption Event" means the occurrence or the existence on
any Exchange Business Day during the one-half hour period ending at the close
of the regular trading session on the relevant exchange of any suspension of
or limitation in trading (by reason of movements in price exceeding limits
permitted by the relevant exchange or otherwise) in the Common Stock or in
listed options on the Common Stock, if any, if, in the determination of the
Calculation Agent, such suspension or limitation is material.
"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 Exchange
Business Day prior to such date.
"Marketable Securities" means shares of common stock of a Publicly-
Traded Entity that are not subject to any Transfer Restrictions.
"Maturity Date" means January 31, 2004, or, if such day is not a
Trading Day, the next succeeding Trading Day.
"Maturity Price" means the average of the Closing Prices per share of
the Common Stock on the 20 Trading Days beginning 30 Exchange Business Days
immediately prior to the Maturity Date; provided that if there are not 20
Trading Days during the period beginning 30 Exchange Business Days immediately
prior to the Maturity Date and ending on the Exchange Business Day immediately
prior to the Maturity Date, the Maturity Price shall be 1/20th of the sum of
(i) the Closing Prices per share of the Common Stock on each of the Trading
Days during such period and (ii) the product of (x) the market value of the
Common Stock as of the Maturity Date as determined by the Calculation Agent
and (y) the difference between 20 and the number of Trading Days during such
period.
"Merger Payment" means an amount equal to:
(SA x BA x NSP) + (PV x NSP)
where:
SA = the Supplemental Amount;
BA = the Base Amount immediately prior to consummation of
the Reorganization Event;
NSP = the Non-Stock Percentage; and
PV = the present value on the Reorganization
Termination Date, as determined by the Calculation
Agent using the Interpolated LIBOR Rate, of a
payment on the Maturity Date of an amount equal to
the product of (A) the Base Amount immediately
prior to consummation of the Reorganization Event,
times (B) the Reference Price.
"Merger Payment Amount Notice" has the meaning provided in Section
7.04.
"New Common Stock" has the meaning provided in Section 7.01(c).
"Non-Stock Consideration" has the meaning provided in Section 7.02.
"Non-Stock Percentage" means, with respect to any Reorganization
Event in which the consideration received by holders of Common Stock includes,
or consists solely of, Non-Stock Consideration, an amount equal to the
percentage of the value of the per share consideration received by holders of
Common Stock represented by Non-Stock Consideration, as determined by the
Calculation Agent.
"Optional Termination Date" has the meaning provided in Section 3.01.
"Ordinary Cash Dividends" means, with respect to the Common Stock for
any given quarterly fiscal period, cash dividends paid in respect of the
Common Stock during such period, but only to the extent that the aggregate per
share amount paid during such period does not exceed $0.10.
"Original Common Stock" has the meaning provided in Section 7.01(c).
"Payment Date" has the meaning provided in Section 2.03(a).
"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 SAILS Pledge Agreement dated as of the
date hereof among Seller, Buyer and the Agent, as amended from time to time.
"Potential Adjustment Event" has the meaning provided in Section
7.01.
"Publicly-Traded Entity" means a surviving or continuing corporation
of the Issuer (or any successor) following a Reorganization Event, or a
corporation the capital stock of which is distributed in a Spin-Off, the
common stock of which is traded on any national securities exchange or
automatic interdealer quotation system in the United States; provided that in
the case of a Reorganization Event, the product of (i) the Closing Price of
such surviving or continuing corporation's common stock on the Exchange
Business Day immediately succeeding such Reorganization Event multiplied by
(ii) the number of shares of such surviving or continuing corporation's common
stock held by non-affiliates of such corporation shall not be less than the
product of (A) the Closing Price of the Common Stock on the Exchange Business
Day immediately preceding such Reorganization Event and (B) the number of
shares of Common Stock held by non-affiliates of the Issuer.
"Purchase Price" has the meaning provided in Section 2.02.
"Registration Agreement" means the Registration Agreement dated as of
January 29, 2002 among Seller, Mafco, the Issuer, Buyer and Credit Suisse
First Boston Corporation, as amended from time to time.
"Reference Price" has the meaning provided in Section 2.03(c).
"Reimbursement Amount" has the meaning provided in the Pledge
Agreement.
"Reimbursement Payment Date" has the meaning provided in the Pledge
Agreement.
"Reorganization Event" has the meaning provided in Section 7.02.
"Reorganization Termination Date" has the meaning provided in Section
7.02.
"Replacement Value" has the meaning provided in Section 8.01.
"Required Payment Date" has the meaning provided in Section
6.01(a)(i).
"Secured Party" has the meaning provided in the Pledge Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Spin-Off" has the meaning provided in Section 7.01.
"Supplemental Amount" means (x) if the value of the consideration
received per share of Common Stock in a Reorganization Event, as determined by
the Calculation Agent (the "Consideration Amount"), is greater than the
Threshold Price, the Consideration Amount minus the Threshold Price, (y) if
the Consideration Amount is less than the Reference Price, the Consideration
Amount minus the Reference Price and (z) if the Consideration Amount is less
than or equal to the Threshold Price and greater than or equal to the
Reference Price, zero (0).
"Taxes" has the meaning provided in Section 6.01(a).
"Termination Amount Notice" has the meaning provided in Section 7.04.
"Threshold Price" has the meaning provided in Section 2.03(c).
"Trading Day" is defined as any Exchange Business Day on which there
is not a Market Disruption Event.
"Transfer Restriction" means, with respect to any share of Common
Stock or item of collateral pledged under the Pledge Agreement, any condition
to or restriction on the ability of the owner thereof to sell, assign or
otherwise transfer such share of Common Stock or item of collateral or to
enforce the provisions thereof or of any document related thereto whether set
forth in such item of collateral itself or in any document related thereto,
including, without limitation, (i) any requirement that any sale, assignment
or other transfer or enforcement of such share of Common Stock or item of
collateral be consented to or approved by any Person, including, without
limitation, the issuer thereof or any other obligor thereon, (ii) any
limitations on the type or status, financial or otherwise, of any purchaser,
pledgee, assignee or transferee of such share of Common Stock or item of
collateral, (iii) any requirement of the delivery of any certificate, consent,
agreement, opinion of counsel, notice or any other document of any Person to
the issuer of, any other obligor on or any registrar or transfer agent for,
such share of Common Stock or item of collateral, prior to the sale, pledge,
assignment or other transfer or enforcement of such share of Common Stock or
item of collateral and (iv) any prospective registration or qualification
requirement or prospectus delivery requirement for such share of Common Stock
or item of collateral 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 share of Common Stock or item of
collateral, together with any evidence of the corporate or other authority of
such Person, shall not constitute a "Transfer Restriction".
"Treasury Rate" means, on any given date for any given period, the
rate for the auction held on such date of direct obligations of the United
States ("Treasury Bills") having a maturity comparable to such period that
appears on Telerate Page 56 (or such other page as may replace such page on
such service for the purpose of displaying such rate) or Page 57 (or such
other page as may replace such page on such service for the purpose of
displaying such rate) by 3:00 p.m., New York City time, on such date or, if
such period does not so appear, the rate obtained by linear interpolation
between the rates that appear for the next longer period and the next shorter
period. If the Treasury Rate does not appear on Telerate Page 56 or Page 57 by
3:00 p.m. on such date, the Treasury Rate for such date will be the auction
rate of such Treasury Bills, as published in H.15(519) under the heading
"Treasury Bills-auction average (investment)" or, if not so published by 3:00
p.m., New York City time, on such date, the auction average rate on such date
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) as otherwise announced by the United
States Department of the Treasury. In the event that the results of the
auction of Treasury Bills having a maturity comparable to such period is not
displayed, published or reported as provided above by 3:00 p.m., New York City
time, on such date or if no such auction is held on such date, then the
Treasury Rate will be calculated by the Calculation Agent and shall be a yield
to maturity (expressed as a bond equivalent, on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) calculated using the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
p.m., New York City time, on such date, of three leading primary United States
government securities dealers selected by the Calculation Agent for the issue
of Treasury Bills with a remaining maturity closest to such period.
ARTICLE 2
SALE AND PURCHASE
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
equal to the product of 1,585,000 (the "Base Amount") and the Exchange Rate.
SECTION 2.02. Purchase Price. The purchase price (the "Purchase
Price") shall be $28,162,676 in cash.
SECTION 2.03. Payment for and Delivery of Contract Shares. (a) Upon
the terms and subject to the conditions of this Agreement, Buyer shall deliver
the Purchase Price to, or for the account of, Seller on January 31, 2002 (the
"Payment Date") at the offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other place as shall be agreed upon by
Buyer and Seller, paid by certified or official bank check or checks duly
endorsed to, or payable to the order of, Seller, or in immediately available
funds by wire transfer to an account designated by Seller.
(b) On the Maturity Date, Seller agrees, subject to Section 2.04, to
deliver to Buyer (i) a number of shares of Free Stock (the "Contract Shares")
equal to the product (the "Contract Share Amount"), rounded down to the
nearest whole number, of (A) the Base Amount and (B) the Exchange Rate and
(ii) cash in an amount equal to the value (based on the Maturity Price) 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 Maturity Date, 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 or on behalf of
Secured Party 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 pursuant to Section 2.04 (notwithstanding any notice by Seller
to the contrary) and (ii) the delivery provided by this Section 2.03(b) shall
be effected by delivery to Buyer from the Collateral Account in the manner set
forth in the Pledge Agreement of a number of shares of Free Stock then held by
or on behalf of Secured Party as collateral under the Pledge Agreement equal
to the number thereof required to be delivered by Seller to Buyer pursuant to
this Section 2.03(b); provided that, notwithstanding the foregoing and without
limiting the generality of Section 8.01, if Seller gives notice of Seller's
election to deliver cash in lieu of shares of Free Stock on the Maturity Date
pursuant to Section 2.04 and fails to deliver the Cash Settlement Amount on
the Maturity Date 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 its affiliates as a result of such breach, including without limitation any
aggregate net losses incurred in connection with any decrease in the Closing
Price of the Common Stock subsequent to the 30th Exchange Business Day
immediately preceding the Maturity Date.
(c) The "Exchange Rate" shall be determined by the Calculation Agent
in accordance with the following formula: (i) if the Maturity Price is less
than or equal to $45.05 (the "Threshold Price") but greater than $22.525 (the
"Reference Price"), the Exchange Rate shall be a ratio (rounded upward or
downward to the nearest 1/10,000th or, if there is not a nearest 1/10,000th,
to the next lower 1/10,000th) equal to the Reference Price divided by the
Maturity Price, (ii) if the Maturity Price is greater than the Threshold
Price, the Exchange Rate shall be a ratio (rounded upward or downward to the
nearest 1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th) equal to one (1) minus a fraction, the numerator of which shall
equal the excess of the Threshold Price over the Reference Price and the
denominator of which shall equal the Maturity Price and (iii) if the Maturity
Price is equal to or less than the Reference Price, the Exchange Rate shall be
one (1).
SECTION 2.04. Cash Settlement Option. Seller may, upon written notice
delivered to Buyer at least 35 Exchange Business Days prior to the Maturity
Date, elect to deliver the Cash Settlement Amount to Buyer on the Maturity
Date by wire transfer of immediately available funds to an account designated
by Buyer, in lieu of the shares of Common Stock to be delivered on the
Maturity Date pursuant to Section 2.03(b).
SECTION 2.05. Dividend Payment. Seller shall pay to Buyer on the
Business Day following the payment of any Extraordinary Cash Dividend (each, a
"Dividend Payment Date") with respect to the Common Stock an amount in cash
equal to the product (the "Dividend Payment Amount" with respect to such
Dividend Payment Date) of (i) the per share amount of such dividend and (ii)
the Base Amount on the ex-dividend date for such dividend.
ARTICLE 3
TERMINATION BY SELLER
SECTION 3.01. Termination by Seller. At any time on or after the date
six months following the Payment Date, Seller may terminate this Agreement in
whole or in part upon 35 Exchange Business Days' prior written notice to
Buyer. Any such notice shall specify (i) the date on which this Agreement is
to be terminated (the "Optional Termination Date"), (ii) whether Seller elects
to deliver cash or shares of Free Stock in respect of the portion of this
Agreement that is to be terminated and (iii) the number of shares of Common
Stock with respect to which this Agreement is to be terminated. If Seller
terminates this Agreement in whole, (A) the Calculation Agent shall deliver to
Seller a notice specifying the Replacement Value (calculated in the manner set
forth in Section 8.01 as if the Optional Termination Date were the
Acceleration Date, and expressed either as a cash amount or as a number of
shares of Common Stock, in accordance with Seller's election to deliver cash
or shares of Free Stock), (B) Seller shall deliver to Buyer on the Optional
Termination Date a cash payment, by wire transfer of immediately available
funds to an account designated by Buyer, in an amount equal to the Replacement
Value or a number of shares of Free Stock equal to the Replacement Value, as
the case may be. If Seller terminates this Agreement in part, (A) the
Calculation Agent shall deliver to Seller a notice specifying the Replacement
Value (calculated in the manner set forth in Section 8.01 as if the Optional
Termination Date were the Acceleration Date, and expressed either as a cash
amount or as a number of shares of Common Stock, in accordance with Seller's
election to deliver cash or shares of Free Stock), provided that for purposes
of such calculation, the Base Amount shall be deemed to be the number of
shares of Common Stock with respect to which this Agreement is to be
terminated), (B) Seller shall deliver to Buyer on the Optional Termination
Date a cash payment, by wire transfer of immediately available funds to an
account designated by Buyer, in an amount equal to the Replacement Value or a
number of shares of Free Stock equal to the Replacement Value, as the case may
be, and (C) the Base Amount shall be reduced by such number of shares of
Common Stock with respect to which this Agreement is to be terminated.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER AND BUYER
SECTION 4.01. Representations and Warranties of Seller. Seller
represents and warrants to Buyer that:
(a) Seller is a corporation duly organized and existing in good
standing under the laws of the State of Delaware and has the requisite
corporate power to own its properties and to carry on its business as now
being conducted.
(b) The execution and delivery of this Agreement and the Pledge
Agreement and the performance by Seller of Seller's obligations hereunder and
thereunder do not violate or conflict with any provision of the certificate of
incorporation or bylaws of Seller, any law applicable to Seller, any order or
judgment of any court or other agency of government applicable to Seller or
any of Seller's assets or any contractual restriction binding on or affecting
Seller or any of Seller's assets (it being understood that the existence at
any time prior to the payment of the Purchase Price pursuant to Section 2.03
of factual contingencies to the effectiveness of any consent required to be
obtained under any agreement binding on or affecting Seller or any of Seller's
assets shall not be deemed to give rise to a breach of this representation or
warranty).
(c) All government and other consents that are required to have been
obtained by Seller with respect to this Agreement or the Pledge Agreement have
been obtained and are in full force and effect and all conditions of any such
consents have been complied with (it being understood that the existence at
any time prior to the payment of the Purchase Price pursuant to Section 2.03
of factual contingencies to the effectiveness of any consent required to be
obtained under any agreement binding on or affecting Seller or any of Seller's
assets shall not be deemed to give rise to a breach of this representation or
warranty). Seller has complied and will comply in all material respects with
all applicable disclosure or reporting requirements in respect of the
transactions contemplated hereby and by the Pledge Agreement, including
without limitation any requirements imposed by Section 13 or Section 16 of the
Securities Exchange Act of 1934, as amended, or the rules and regulations
thereunder.
(d) Seller has the requisite corporate power and authority to enter
into and perform this Agreement and the Pledge Agreement and to deliver the
Contract Shares in accordance with the terms hereof. The execution and
delivery of this Agreement and the Pledge Agreement by Seller and the
consummation by Seller of the transactions contemplated hereby and thereby
(including the delivery by Seller of the Contract Shares) have been duly
authorized by all necessary corporate action. This Agreement and the Pledge
Agreement have been duly executed and delivered by Seller. Seller's
obligations under this Agreement and the Pledge Agreement constitute Seller's
legal, valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally
and subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in
equity or at law)).
(e) No Acceleration Event or event that, with the giving of notice or
the lapse of time or both, would constitute an Acceleration Event has occurred
and is continuing and no such event would occur as a result of Seller's
entering into or performing Seller's obligations under this Agreement or the
Pledge Agreement.
(f) There is not pending or, to Seller's knowledge, threatened
against Seller 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 (including without limitation any bankruptcy,
insolvency or similar proceeding) that is likely to affect the legality,
validity or enforceability against Seller of this Agreement or the Pledge
Agreement or Seller's ability to perform Seller's obligations under this
Agreement or the Pledge Agreement.
(g) 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, employee or agent 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 analyses 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. Seller
is entering into this Agreement and the Pledge Agreement with a full
understanding of all of the terms and risks hereof and thereof (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. Seller acknowledges
that neither Buyer nor any affiliate, employee or agent of Buyer is acting as
a fiduciary for or an advisor to Seller in respect of this Agreement or the
Pledge Agreement.
(h) Delivery of shares of Common Stock by Seller pursuant to this
Agreement will pass to Buyer title (or security entitlements) to such shares
free and clear of any Liens or Transfer Restrictions, except for those created
pursuant to the Pledge Agreement.
(i) Seller has a valid business purpose for entering into this
Agreement, and the transaction contemplated hereby is consistent with Seller's
overall investment strategy.
(j) The terms hereof have been negotiated, and the transactions
contemplated hereby shall be executed, on an arm's length basis.
(k) Seller is not in possession of any material non-public
information regarding the Issuer.
(l) Seller is not and, after giving effect to the transactions
contemplated hereby, will not be an "investment company", as such term is
defined in the Investment Company Act, required to be registered under the
Investment Company Act.
(m) Seller has total assets exceeding $10,000,000.
SECTION 4.02. Representations and Warranties of Buyer. Buyer
represents and warrants to Seller that:
(a) Buyer is a company duly organized and existing in good standing
under the laws of its jurisdiction of incorporation and has the requisite
corporate power to own its properties and to carry on its business as now
being conducted.
(b) The execution and delivery of this Agreement and the Pledge
Agreement and the performance by Buyer of Buyer's obligations hereunder and
thereunder do not violate or conflict with any provision of the constitutive
documents of Buyer, any law applicable to Buyer, any order or judgment of any
court or other agency of government, applicable to Buyer or any of Buyer's
assets or any contractual restriction binding on or affecting Buyer or any of
Buyer's assets.
(c) All government and other consents that are required to have been
obtained by Buyer with respect to this Agreement or the Pledge Agreement have
been obtained and are in full force and effect and all conditions of any such
consents have been complied with.
(d) Buyer has the requisite corporate power and authority to enter
into and perform this Agreement and the Pledge Agreement. The execution and
delivery by Buyer of this Agreement and the Pledge Agreement and the
consummation by Buyer of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action. This Agreement and the Pledge
Agreement have been duly executed and delivered by Buyer. Buyer's obligations
under this Agreement and the Pledge Agreement constitute Buyer's legal, valid
and binding obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or at law)).
(e) There is not pending or, to Buyer's knowledge, threatened against
Buyer any action, suit or proceeding at law or in equity or before any court,
tribunal, governmental body, agency or official or any arbitrator (including
without limitation any bankruptcy, insolvency or similar proceeding) that is
likely to affect the legality, validity or enforceability against Buyer of
this Agreement or the Pledge Agreement or Buyer's ability to perform Buyer's
obligations under this Agreement or the Pledge Agreement.
(f) Buyer has total assets exceeding $10,000,000.
(g) In connection with the transactions contemplated hereby, Credit
Suisse First Boston Corporation ("CSFB Corp."), an affiliate of Buyer
registered as a broker and dealer with the Securities and Exchange Commission,
has introduced into the public market a quantity of securities of the same
class as the Common Shares (the shares so introduced, the "Initial Sold
Shares") in transactions registered under the Securities Act.
ARTICLE 5
CONDITIONS TO BUYER'S OBLIGATIONS
SECTION 5.01. Conditions. The obligation of Buyer to deliver the
Purchase Price on the Payment Date is subject to the satisfaction of the
following conditions:
(a) The representations and warranties of Seller contained in Section
4.01 and in the Pledge Agreement shall be true and correct as of the Payment
Date.
(b) The representations and warranties of Seller and the Issuer
contained in the Registration Agreement and any certificate delivered pursuant
thereto shall be true and correct as if made as of the Payment Date and each
of Seller and the Issuer shall have performed all of the obligations required
to be performed by it under the Registration Agreement on or prior to the
Payment Date.
(c) On each Representation Date (as defined in the Registration
Agreement) that shall have occurred prior to the Payment Date, Xxxxx Xxxx &
Xxxxxxxx, counsel to Buyer, in its professional judgment, shall have been able
to provide an opinion to Buyer relating to the disclosure in the Registration
Statement (as defined in the Registration Agreement) in form and substance
acceptable to Buyer.
(d) The Pledge Agreement shall have been executed by the parties
thereto, and Seller shall have executed UCC-1 financing statements in the form
of Exhibit B to the Pledge Agreement for filing in the appropriate filing
offices in each jurisdiction identified in Parts 4 and 5 of Exhibit C to the
Pledge Agreement.
(e) Buyer shall have received evidence acceptable to Buyer that any
and all consents required to be obtained under any agreement in connection
with the execution of this Agreement and the Pledge Agreement and the
consummation by Seller of the transactions contemplated hereby and thereby
have been obtained and are in full force and effect and the conditions of any
such consent have been satisfied.
(f) Buyer shall have received evidence acceptable to Buyer that,
immediately upon delivery of the Purchase Price, a number of shares of Common
Stock equal to the Base Amount shall be delivered to Buyer as Collateral under
the Pledge Agreement free and clear from any Liens or Transfer Restrictions.
(g) Seller shall have performed all of the covenants and obligations
to be performed by Seller hereunder and under the Pledge Agreement on or prior
to the Payment Date.
(h) Seller shall have delivered to Buyer on or prior to the Payment
Date (i) an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP to the effect
set forth in Annex A hereto and (ii) an opinion of Xxxx, Weiss, Rifkind,
Xxxxxxx & Xxxxxxxx to the effect set forth in Annex B hereto.
ARTICLE 6
COVENANTS
SECTION 6.01. 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 9.05, (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 Credit Suisse First Boston ("CSFB") 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 CSFB 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 CSFB 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 6.02. Forward Contract. (a) Seller hereby agrees that: (i)
Seller will not treat this Agreement, any portion of this Agreement, or any
obligation hereunder as giving rise to any interest income or other inclusions
of ordinary income; (ii) Seller will not treat the delivery of any portion of
the shares of Common Stock or cash to be delivered pursuant to this Agreement
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 as a result of a Change in Tax Law 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 6.02.
SECTION 6.03. Notices. Seller will cause to be delivered to Buyer:
(a) Immediately upon the occurrence of any Acceleration Event
hereunder, notice of such occurrence; and
(b) In case at any time prior to the Maturity Date, Seller or any
officer of Seller receives notice that any event requiring that an adjustment
be calculated pursuant to Article 7 hereof shall have occurred or be pending,
then Seller shall promptly cause to be delivered to Buyer 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
or any officer of Seller shall subsequently receive notice of any further or
revised information regarding the terms or timing of such event or any record
date relating thereto.
SECTION 6.04. Further Assurances. From time to time from and after
the date hereof through the Maturity Date, each of the parties hereto shall
use such party's 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 in accordance with the terms and
conditions hereof, including (i) using reasonable best efforts to remove any
legal impediment to the consummation of such transactions and (ii) the
execution and delivery of all such deeds, agreements, assignments and further
instruments of transfer and conveyance necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement
in accordance with the terms and conditions hereof.
SECTION 6.05. Securities Contract. The parties hereto recognize that
the Custodian is a "financial institution" within the meaning of Section
101(22) of Title 11 of the United States Code (the "Bankruptcy Code") and is
acting as agent and custodian for Buyer in connection with this Agreement and
that Buyer is a "customer" of the Custodian within the meaning of said Section
101(22). The parties hereto further recognize that this Agreement is a
"securities contract", as such term is defined in Section 741(7) of the
Bankruptcy Code, entitled to the protection of, among other provisions,
Sections 555 and 362(b)(6) of the Bankruptcy Code, and that each payment or
delivery of cash, shares of Common Stock or other property or assets hereunder
is a "settlement payment" within the meaning of Section 741(8) of the
Bankruptcy Code.
SECTION 6.06. Sales of Securities. In connection with the
transactions contemplated hereby, CSFB Corp. promptly will introduce into the
public market a quantity of securities of the same class as the Common Stock
in transactions registered under the Securities Act that, when added to the
Initial Sold Shares, shall equal the Base Amount.
ARTICLE 7
ADJUSTMENTS
SECTION 7.01. Dilution Adjustments. (a) Following the declaration by
the Issuer of the terms of any Potential Adjustment Event occurring prior to
the Maturity Date, the Calculation Agent will determine whether such Potential
Adjustment Event has a diluting or concentrative effect on the theoretical
value of the Common Stock and, if so, will (i) make the corresponding
adjustment, if any, to any one or more of the Base Amount, the Exchange Rate,
the Threshold Price, the Reference Price, the Maturity Price, the Cash
Settlement Amount, any Closing Price and any other variable relevant to the
exercise, settlement or payment terms hereof or of the Pledge Agreement as the
Calculation Agent determines appropriate to account for that diluting or
concentrative effect and (ii) determine the effective date of the adjustment;
provided that in the case of a Potential Adjustment Event of the type
described in clause (iii) of Section 7.01(b), any such adjustment shall be
made to variables other than the Base Amount. The Calculation Agent may (but
need not) determine the appropriate adjustment by reference to the adjustment
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 (which does not constitute a Reorganization
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, (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) other types 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) an Extraordinary Cash Dividend;
(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; or
(vi) any other similar event that may have a diluting or
concentrative effect on the theoretical value of the Common Stock
(other than an Ordinary Cash Dividend).
Without limiting the foregoing, the parties acknowledge that the Calculation
Agent will make adjustments to the Exchange Rate, the Threshold Price, the
Reference Price, the Maturity Price, the Cash Settlement Amount, any Closing
Price and any other variable relevant to the exercise, settlement or payment
terms hereof or of the Pledge Agreement (other than the Base Amount) as the
Calculation Agent determines appropriate to account for the value of all
Extraordinary Cash Dividends.
(c) Notwithstanding the foregoing, in the event of a distribution of
shares of capital stock of a subsidiary of the Issuer that is a
Publicly-Traded Entity (a "Spin-Off") made to holders of shares of Common
Stock, (i) the "Contract Shares" shall include, in addition to the number of
shares of Free Stock equal to the Contract Share Amount, a number of shares of
New Common Stock equal to the product of (A) the Base Amount immediately prior
to the consummation of the Spin-Off and (B) the number of shares of New Common
Stock that a holder of one share of Original Common Stock would have owned or
been entitled to receive immediately following such Spin-Off and (ii) the
"Maturity Price" shall be equal to the sum of (A) the Maturity Price of the
Original Common Stock and (B) the product of (x) the Maturity Price of the New
Common Stock and (y) the number of shares of New Common Stock that a holder of
one share of Original Common Stock would have owned or been entitled to
receive immediately following such Spin-Off. Following a Spin-Off, "Original
Common Stock" shall mean the common stock of the entity that is the Issuer
immediately prior to the Spin-Off and "New Common Stock" shall mean the common
equity securities of the Publicly-Traded Entity resulting from such Spin-Off.
SECTION 7.02. Reorganization Events. In the event of (i) any
consolidation or merger of the Issuer with or into another entity (other than
a merger or consolidation in which the Issuer is the continuing corporation
and in which the Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, securities or other property of the
Issuer or another corporation), (ii) any sale, transfer, lease or conveyance
of the property of the Issuer as an entirety or substantially as an entirety,
(iii) any statutory exchange of securities of the Issuer with another
corporation (other than in connection with a merger or acquisition) or (iv)
any liquidation, dissolution or winding up of the Issuer (any such event, a
"Reorganization Event"), then (A) if there is a surviving or continuing
corporation and such surviving or continuing corporation is a Publicly-Traded
Entity, "Base Amount" shall mean the product of (x) the Base Amount
immediately prior to the consummation of the Reorganization Event and (y) the
number of shares of common stock of the Publicly-Traded Entity that a holder
of one share of Common Stock would have owned or been entitled to receive
immediately following such Reorganization Event and, if the consideration
received by holders of Common Stock includes cash or property other than
common stock of the Publicly-Traded Entity ("Non- Stock Consideration"),
Seller shall make a cash payment, by wire transfer of immediately available
funds to an account designated by Buyer, to Buyer on the date on which the
Reorganization Event is consummated (the "Reorganization Termination Date") in
an amount equal to the Merger Payment or (B) if there is no surviving or
continuing corporation in such Reorganization Event, if any surviving or
continuing corporation is not a Publicly-Traded Entity or if the consideration
received by holders of Common Stock consists solely of Non-Stock
Consideration, this Agreement shall terminate and Seller shall make a payment
or delivery to Buyer as provided in Section 7.04.
SECTION 7.03. Provisions Relating to Reorganization Events and
Spin-Offs. If a Reorganization Event occurs and clause (B) of Section 7.02
does not apply, (a) the surviving or continuing corporation shall be deemed to
be the "Issuer" and the common equity securities of such corporation shall be
deemed to be the "Common Stock" and (b) the Calculation Agent shall calculate
corresponding adjustments, if any, to the Base Amount, the Exchange Rate, the
Threshold Price, the Reference Price, the Maturity Price, the Cash Settlement
Amount, any Closing Price and any other variable relevant to the exercise,
settlement or payment terms hereof as the Calculation Agent determines
appropriate to account for such event. If a Spin-Off occurs, the entity that
is the Issuer immediately prior to the Spin-Off and the Publicly-Traded Entity
resulting from the Spin-Off shall each be deemed to be the "Issuer" and the
Original Common Stock and the New Common Stock shall each be deemed to be the
"Common Stock". Following any Spin-Off, the Calculation Agent shall calculate
further adjustments pursuant to this Article 7 by applying the methodology set
forth in this Article 7 to both the Original Common Stock and the New Common
Stock.
SECTION 7.04. Termination and Payment. Following termination of this
Agreement pursuant to clause (B) of Section 7.02 as a result of any
Reorganization Event, the Calculation Agent shall determine the Merger
Payment. As promptly as reasonably practicable after calculation of the Merger
Payment, the Calculation Agent shall deliver to Buyer and Seller a notice (the
"Merger Payment Amount Notice") specifying the Merger Payment. Not later than
three Business Days following delivery of a Merger Payment Amount Notice,
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
Merger Payment. Notwithstanding the foregoing, to the extent that any
Marketable Securities are received by holders of Common Stock in such
Reorganization Event, then in lieu of delivering cash as provided in the
immediately preceding sentence, Seller may deliver Marketable Securities with
an equal value (as determined by the Calculation Agent in its discretion in a
commercially reasonable manner).
ARTICLE 8
ACCELERATION
SECTION 8.01. Acceleration. If one or more of the following events
(each an "Acceleration Event") 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;
(b) Seller makes an assignment for the benefit of creditors, files a
petition in bankruptcy, is adjudicated insolvent or bankrupt, petitions or
applies to any tribunal for any receiver of or any trustee for Seller or any
substantial part of Seller's property, commences any proceeding relating to
Seller under any reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect, or there is commenced against or with respect to Seller
or any substantial portion of Seller's property any such proceeding and an
order for relief is issued or such proceeding remains undismissed for a period
of 30 days;
(c) at any time (i) any representation or warranty made by Seller
under this Agreement or the Pledge Agreement would be incorrect or misleading
in any material respect if made or repeated as of such time or (ii) any
certificate delivered by Seller pursuant to this Agreement or the Pledge
Agreement is incorrect or misleading in any respect that is material, in light
of the transactions contemplated hereby and by the Pledge Agreement taken as a
whole;
(d) Seller fails to deliver (i) shares of Common Stock (or the Cash
Settlement Amount) on the Maturity Date, (ii) the Replacement Value on any
Reorganization Termination Date or any Optional Termination Date, (iii) any
Reimbursement Amount on any Reimbursement Date, (iv) any Dividend Payment
Amount on any Dividend Payment Date or (v) any payment or delivery due on any
postponed Required Payment Date where the original Required Payment Date was
the Maturity Date, a Reorganization Termination Date, an Optional Termination
Date, a Dividend Payment Date or a Reimbursement Date, in any case, as
required by this Agreement;
(e) 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
8.01(d) and Section 8.01(f)) such failure remains unremedied for 60 days
following notice from Buyer;
(f) Seller fails to fulfill or discharge when due any of Seller's
obligations, covenants or agreements under or relating to Section 1(b) of the
Pledge Agreement;
(g) 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;
(h) there occurs a default under any indebtedness for money borrowed
that is incurred or guaranteed by Mafco Holdings Inc. ("Mafco"), Seller or any
direct or indirect wholly owned subsidiary of Mafco in the chain of ownership
between Mafco and Seller, whether such indebtedness now exists or shall
hereafter be created, which indebtedness, individually or in the aggregate, is
in excess of $10,000,000 principal amount, which default shall constitute a
failure to pay any portion of the principal of such indebtedness when due and
payable after the expiration of any applicable grace or cure period with
respect thereto or shall have resulted in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable;
(i) a Collateral Event of Default within the meaning of the Pledge
Agreement shall occur; or
(j) in the reasonable judgment of the Calculation Agent, Buyer is
unable to hedge Buyer's exposure to this Agreement because of the lack of
sufficient shares of Common Stock (not to exceed the Base Amount) being made
available for share borrowing by lenders, including, without limitation,
lenders identified by Seller with whom Buyer shall consult.
then, upon notice to Seller from Buyer at any time following an Acceleration
Event, an "Acceleration Date" shall occur, and Seller shall become obligated
to deliver to Buyer immediately upon receipt of the Acceleration Amount Notice
a number of shares of Free Stock equal to the Acceleration Amount; provided
that if Seller shall have elected to substitute Government Securities for
Share Collateral pursuant to Section 5(j) of the Pledge Agreement, Seller
shall be obligated to deliver an amount of cash equal to the Replacement Value
on the Acceleration Date in lieu of such shares; and provided further that if
Secured Party proceeds to realize upon any collateral pledged under the Pledge
Agreement and to apply the proceeds of such realization as provided in the
second paragraph of Section 7(d) thereof, then, to the extent of such
application of proceeds, Seller's obligation to deliver Free Stock pursuant to
this paragraph shall be deemed to be an obligation to deliver an amount of
cash equal to the aggregate market value (determined by reference to the
amount of such proceeds) of such Free Stock on the Acceleration Date. The
"Acceleration Amount" means the Replacement Value, expressed as a number of
shares of Common Stock.
The "Replacement Value" means an amount determined by the Calculation
Agent representing the fair replacement value (which may be expressed by the
Calculation Agent as a cash amount or as a number of shares of Common Stock,
and which shall include both intrinsic and time value) to Buyer of an
agreement with terms that would preserve for Buyer the economic equivalent of
the payments and deliveries that Buyer and its affiliates would, but for the
occurrence of the Acceleration Date, have been entitled to receive after the
Acceleration Date hereunder (taking into account any adjustments pursuant to
Section 7.01 that may have been calculated on or prior to the Acceleration
Date and determined as if all references in Sections 7.02 and 7.04 to "Merger
Payment" were references instead to "Alternative Merger Payment"), including
any loss of bargain, cost of funding or, without duplication, 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 by a counterparty to a
transaction entered into by Buyer to hedge Buyer's exposure to this Agreement)
(or any gain resulting from any of them).
As promptly as reasonably practicable after calculation of the
Replacement Value, the Calculation Agent shall deliver to Seller and Buyer a
notice (the "Acceleration Amount Notice") specifying the Acceleration Amount
of shares of Common Stock required to be delivered by Seller.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. 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 forms of telecommunication. Notices to Buyer shall
be directed to it care of Credit Suisse First Boston Corporation, Eleven
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopy No. (000) 000-0000,
Attention: Xxxxxxx Xxxxxxxx; notices to Seller shall be directed to Seller at
00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopy No. (000) 000-0000,
Attention: Chief Financial Officer.
SECTION 9.02. Governing Law; Submission to Jurisdiction;
Severability; Waiver of Jury Trial; Service of Process. (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 and each party hereto
submits to the jurisdiction of the Courts of the State of New York and the
United States District Court located in the Borough of Manhattan in New York
City and waives, to the fullest extent permitted by law, any objection that it
may now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or in connection with this Agreement in any such
court or that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum.
(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 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.
(d) The parties irrevocably consent to service of process given in
the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of either party to serve process in any other manner
permitted by law.
SECTION 9.03. Entire Agreement; Other. Except as expressly set forth
herein, this Agreement constitutes the entire agreement and understanding
among the parties with respect to the subject matter hereof and supersedes all
oral communications and prior writings with respect thereto. The parties
hereby agree that (i) Seller is not obligated to keep confidential or
otherwise limit the use of any element of any description contained in this
Agreement or the Pledge Agreement that is necessary to understand or support
any United States federal income tax treatment and (ii) Buyer does not assert
any claim of proprietary ownership in respect of any description contained
herein or therein relating to the use of any entities, plans or arrangements
to give rise to a particular United States federal income tax treatment for
Seller.
SECTION 9.04. 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 9.05. No Third Party Rights, Successors and Assigns. This
Agreement is not intended and shall not be construed to create any rights in
any person other than Seller, Buyer 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 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. The rights and duties
under this Agreement may not be assigned or transferred by any party hereto;
provided that (i) Buyer may assign any of its rights or duties hereunder with
the prior written consent of Seller (which consent shall not be unreasonably
withheld) and (ii) Agent may assign or transfer any of its rights or duties
hereunder without the prior written consent of the other parties hereto to any
affiliate of Credit Suisse First Boston, so long as such affiliate is a
broker-dealer registered with the Securities and Exchange Commission.
SECTION 9.06. 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. The
Calculation Agent will have no responsibility for good faith errors or
omissions in the determination of the Base Amount, the Exchange Rate, the
Threshold Price, the Reference Price, the Maturity Price, the Cash Settlement
Amount, any Closing Price or any other amount as provided herein.
SECTION 9.07. Netting and Set-off. (a) If on any date cash would
otherwise be payable or shares of Common Stock or other property would
otherwise be deliverable (including, for the avoidance of doubt, the return,
as required by Section 5(i) of the Pledge Agreement, of shares of Common Stock
that have been rehypothecated pursuant to such Section) pursuant to this
Agreement or the Pledge Agreement by Buyer to Seller and by Seller to Buyer
and the type of property required to be paid or delivered by each such party
on such date is the same, then, on such date, each such party's obligation to
make such payment or delivery will be automatically satisfied and discharged
and, if the aggregate amount that would otherwise have been payable or
deliverable by one such party exceeds the aggregate amount that would
otherwise have been payable or deliverable by the other such party, replaced
by an obligation upon the party by whom the larger aggregate amount would have
been payable or deliverable to pay or deliver to the other party the excess of
the larger aggregate amount over the smaller aggregate amount.
(b) In addition to and without limiting any rights of set-off that a
party hereto may have as a matter of law, pursuant to contract or otherwise,
upon the occurrence of a Reorganization Termination Date to which clause (B)
of Section 7.02 applies or an Acceleration Date, Buyer shall have the right to
terminate, liquidate and otherwise close out the transactions contemplated by
this Agreement and the Pledge Agreement pursuant to the terms of this
Agreement and the Pledge Agreement, and to set off any obligation that Buyer
or any affiliate of Buyer may have to Seller, including without limitation any
obligation to make any release, delivery or payment to Seller pursuant to the
Pledge Agreement, against any right Buyer or any of its affiliates may have
against Seller, including without limitation any right to receive a payment or
delivery pursuant to Section 2.03(b), Section 2.04, Section 2.05, Section
3.01, Section 7.02, Section 7.04 or Section 8.01 or any other provision of
this Agreement. In the case of a set-off of any obligation to release, deliver
or pay assets against any right to receive assets of the same type, such
obligation and right shall be set off in kind. In the case of a set-off of any
obligation to release, deliver or pay assets against any right to receive
assets of any other type, the value of each of such obligation and such right
shall be determined by the Calculation Agent and the result of such set-off
shall be that the net obligor shall pay or deliver to the other party an
amount of cash or assets, at the net obligor's option, with a value
(determined, in the case of a delivery of assets, by the Calculation Agent)
equal to that of the net obligation. In determining the value of any
obligation to release or deliver Common Stock or right to receive Common
Stock, the value at any time of such obligation or right shall be determined
by reference to the market value of the Common Stock at such time. If an
obligation or right is unascertained at the time of any such set-off, the
Calculation Agent may in good faith estimate the amount or value of such
obligation or right, in which case set-off will be effected in respect of that
estimate, and the relevant party shall account to the other party at the time
such obligation or right is ascertained.
SECTION 9.08. Matters Related to Credit Suisse First Boston
Corporation, as Agent. (a) Credit Suisse First Boston Corporation shall act as
"agent" for Buyer and Seller within the meaning of Rule 15a-6 under the
Securities Exchange Act of 1934 in connection with the transactions
contemplated by this Agreement and by the Pledge Agreement.
(b) The Agent shall have no responsibility or liability (including,
without limitation, by way of guarantee, endorsement or otherwise) to Buyer or
Seller or otherwise in respect of this Agreement or the Pledge Agreement,
including, without limitation, in respect of the failure of Buyer or Seller to
pay or perform under this Agreement or the Pledge Agreement, except for its
gross negligence or willful misconduct in performing its duties as Agent
hereunder or thereunder.
(c) Each of Buyer and Seller agrees to proceed solely against the
other to collect or recover any securities or money owing to Buyer or Seller,
as the case may be, in connection with or as a result of this Agreement or the
Pledge Agreement.
(d) As a broker-dealer registered with the Securities and Exchange
Commission, Credit Suisse First Boston Corporation, in its capacity as Agent,
will be responsible for (i) effecting the transactions contemplated by this
Agreement and the Pledge Agreement, (ii) issuing all required notices,
confirmations and statements to Buyer and Seller and (iii) maintaining books
and records relating to this Agreement and the Pledge Agreement.
SECTION 9.09. 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.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.
SELLER:
GSB INVESTMENTS CORP.
By:-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
BUYER:
CREDIT SUISSE FIRST BOSTON
INTERNATIONAL
By:-------------------------------------
Name:
Title:
By:-------------------------------------
Name:
Title:
AGENT:
CREDIT SUISSE FIRST BOSTON
CORPORATION
By:-------------------------------------
Name:
Title:
ANNEX A
(a) Seller is a corporation duly organized and existing in good
standing under the laws of its jurisdiction of incorporation.
(b) The execution and delivery of this Agreement and the Pledge
Agreement and the performance by Seller of Seller's obligations hereunder and
thereunder do not violate or conflict with any provision of the certificate of
incorporation or bylaws of Seller, any law applicable to Seller, any order or
judgment of any court or other agency of government known to such counsel
applicable to Seller or any of Seller's assets or any contractual restriction
known to such counsel binding on or affecting Seller or any of Seller's
assets. Such counsel need not express any opinion with respect to whether the
execution or delivery by Seller of, or the performance by Seller of its
obligations under, this Agreement and the Pledge Agreement violates or
conflicts with any restriction or provision with respect to financial ratios
or tests any aspect of the financial condition or results of operations of
Seller.
(c) All government and other consents that are known to such counsel
to be required to have been obtained by Seller with respect to this Agreement
or the Pledge Agreement have been obtained and are in full force and effect
and all conditions of any such consents have been complied with.
(d) Seller has the requisite corporate power and authority to enter
into and perform this Agreement and the Pledge Agreement and to deliver the
Contract Shares in accordance with the terms hereof. The execution and
delivery of this Agreement and the Pledge Agreement by Seller and the
consummation by Seller of the transactions contemplated hereby and thereby
(including the delivery by Seller of the Contract Shares) have been duly
authorized by all necessary corporate action by Seller. This Agreement and the
Pledge Agreement have been duly executed and delivered by Seller. Seller's
obligations under this Agreement and the Pledge Agreement constitute Seller's
legal, valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally
and subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in
equity or at law)).
(e) No registration, recordation or filing with any governmental
body, agency or official is required in connection with the execution and
delivery of this Agreement or necessary for the validity or enforceability
hereof.
(f) Seller is not and, after giving effect to the transactions
contemplated hereby, will not be an "investment company", as such term is
defined in the Investment Company Act, required to be registered under the
Investment Company Act.
ANNEX B
(a) The execution and delivery of this Agreement and the Pledge
Agreement and the performance by Seller of Seller's obligations hereunder and
thereunder do not constitute a violation of, or result in a breach or default
under, any agreement or instrument listed on a schedule to such opinion.
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, 8.01(d), 8.01(d)......................................001
1.01.....................................................002
2........................................................003
2.01.....................................................004
2.02.....................................................005
2.03.....................................................006
2.03(a), 2.03(a).........................................007
2.03(b)..................................................008
2.03(c)..................................................009
2.04.....................................................010
2.05.....................................................070
3.01......................................termination.seller
4........................................................011
4.01.....................................................012
4.01(a)..................................................013
4.01(b)..................................................015
4.01(c)..................................................016
4.01(d)..................................................017
4.01(e)..................................................018
4.01(f)..................................................019
4.01(g)..................................................020
4.01(h)..................................................021
4.01(i)..................................................022
?...................................................ptce9560
5........................................................023
5.01.....................................................024
5.01(a)..................................................025
?........................................................026
5.01(g)..................................................027
6........................................................028
6.01.....................................................029
6.02.....................................................030
6.03.....................................................031
6.03(a)..................................................032
6.03(b)..................................................033
6.04.....................................................034
?........................................................035
6.05.....................................................037
7........................................................038
7.01.....................................................039
7.01(c)..................................................040
7.02...........................................xxxxxx.xxxxxx
7.04.....................................................047
8........................................................048
8.01.....................................................049
8.01(a)..................................................059
8.01(b)..................................................051
8.01(c)..................................................052
8.01(e)..................................................053
8.01(g)..................................................054
?........................................................055
?........................................................056
9........................................................057
9.01.....................................................058
9.02.....................................................059
9.02(a)..................................................060
9.02(b)..................................................061
9.02(c)..................................................063
9.02(d)..................................................064
?........................................................065
9.03.....................................................066
9.04.....................................................067
9.05.....................................................068
9.09.....................................................069
