Exhibit GG
SECURITY INTEREST AGREEMENT
BY ____________
SECURITY INTEREST AGREEMENT, dated as of 26 November, 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
the individual whose name appears at the end of this Agreement ("the Obligor").
RECITALS
1. Covenants and IPO Pledge. In connection with the Obligor's
participation in the Amended and Restated Plan of Incorporation (the
"Plan") of The Xxxxxxx Sachs Group, L.P., the Obligor 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, the Obligor'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 the Obligor's employment. In addition, the
Obligor 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, the Obligor agreed to pay a certain amount of liquidated
damages (the "Liquidated Damages") to GS Inc. in respect of any breach
by the Obligor of certain of the Obligations set forth in the
Noncompetition Agreement. As security for the timely payment of the
Liquidated Damages, the Obligor and GS Inc. entered into a Pledge
Agreement, dated as of May 7, 1999 (the "IPO Pledge Agreement"),
pursuant to which the Obligor pledged to GS Inc. shares (the "IPO
Pledge Shares") of common stock of GS Inc. ("Common Stock").
2. Transfer and Pledge. The Obligor transferred on June 26th 2000 shares
of Common Stock to the corporation whose name is set forth in
definition (a) (the "Corporation"). In order to permit this Transfer,
GS Inc. released the IPO Pledged Shares from the pledge imposed by the
IPO Pledge Agreement and, pursuant to a Security Interest Agreement
dated as of June 26th 2000 (the "June 2000 Agreement"), the Obligor
pledged all of the shares or interests in shares issued or to be issued
(collectively, the "Corporation Stock") to GS Inc. as security for the
timely payment of the Liquidated Damages and the performance by the
Transferor of certain other covenants and agreements
3. On the date hereof, the Obligor transferred the Corporation Stock to
the __________ Trust of which Obligor is a beneficiary. Pursuant to
Section 1(c) of this Agreement, the Obligor 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 the Obligor of the
Covenants (the "Secured Obligations"), the Obligor has agreed to grant
a security interest to GS Inc. of all his rights and other current and
future interests as a beneficiary of the ________ Trust, and, except as
set forth in Clause 2(a) hereof, all distributions thereon
(collectively, the "Secured Assets").
4. This Agreement includes the terms of and constitutes a security
agreement in accordance with the provisions of the Security Interests
(Jersey) Law 1983 (the "1983 Law") and the purposes of Article 3
thereof the Obligor is the debtor.
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;
INTERPRETATION
Definitions
In this Agreement:
(a) the "Corporation" means ____________ a company incorporated
under the law of the Island of Jersey whose registered office
is situate at 00 Xxx Xxxxxx, Xx. Xxxxxx, Xxxxxx;
(b) "Event of Default" shall mean the failure by the Obligor to
make any payment of Liquidated Damages upon demand by GS Inc.
therefore as provided in the Noncompetition Agreement or a
breach by the Obligor of any of the Covenants.
(c) the "_________ Trust" means the Trust dated 26 November, 2001
between ____________ and _____________ and _____________.
INTERPRETATION
In this Agreement, unless the context otherwise requires:
(a) words in the singular shall include the plural and words in
the plural shall include the singular;
(b) words denoting any gender shall include all genders;
(c) headings are used for convenience only and shall not affect
the interpretation of this Agreement;
(d) references to Clauses are to be construed as references to
clauses of this Agreement;
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(e) references to any agreement or document (including, without
limitation, references to this Agreement) shall be deemed to
include references to such agreement or document as from time
to time varied, amended, supplemented or replaced;
(f) references to any enactment shall be deemed to include
references to such enactment as from time to time amended,
extended, re-enacted or consolidated;
(g) references to a person shall include any body or persons
corporate or unincorporate;
(h) words and expressions defined in the 1983 Law, the
Interpretation Law or the Powers of Attorney Law shall have
the same meanings and bear the same interpretations when used
in this Agreement;
1. Security Interest.
(a) In order to provide continuing security for the payment or
performance of the Secured Obligations, the Obligor hereby
pledges and assigns to GS Inc. the Secured Assets and GS Inc.
shall have a first priority security interest (the "Security
Interest") in and lien on the Secured Assets. Until the
termination of this Agreement, Obligor shall have no right to
substitute, withdraw, transfer or otherwise dispose of the
Secured Assets. (GS Inc. shall not in any circumstances incur
any liability or be under any obligations whatsoever in
connection with the Secured Assets). The Obligor 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 Secured Assets, including,
without limitation, the filing of a Uniform Commercial Code
financing statement in the appropriate filing office.
(b) The Obligor hereby represents and warrants to GS Inc. that,
except for the security interest granted hereby, the Obligor
is the beneficial owner of all Secured Assets free from any
adverse claim, security interest, encumbrance, lien, charge or
other right of interest of any person; that, other than the
Secured Assets, the interests of the Trustees of Koala Trust,
and the beneficial interests the Obligor's spouse and
children, there are no other legal or beneficial interests in
the ____ Trust, and no right, options, warrants, or other
agreements or instruments to acquire any legal or beneficial
interest in _____ Trust, and that no person other than the
Trustees of the Trust, the Obligor, the Obligor's spouse and
the Obligor's children possesses, directly or indirectly, any
voting, economic or other interest in the _____ Trust.
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(c) The Obligor hereby covenants and agrees with GS Inc. that
until the termination of this Agreement as provided in Clause
6:
PROVIDED THAT for the avoidance of doubt this provision will
not prevent the distribution by the Trustees of assets other
than the GS Stock to beneficiaries permitted by the Guidelines
to Documentation for Non-U.S. Trusts Holding Stock of Non-U.S.
Corporations, dated the date hereof (the "Guidelines"):
(i) the Obligor will not take any action that would have
the effect of transferring or creating, directly or
indirectly, any legal or beneficial interest in the
_____ Trust except as permitted by the Guidelines;
and
(ii) the Obligor will not, directly or indirectly, take
any action with respect to the Secured Assets that
the Obligor would not be permitted to take if such
Secured Assets were the shares of Common Stock
received by the Obligor under the Plan.
2. Administration of Security. The following provisions shall govern the
administration of Secured Assets:
(a) So long as no Event of Default has occurred and is continuing,
the Obligor shall be entitled to receive and retain all
distributions on Secured Assets and to give consents, waivers
and ratifications in respect thereof and such distributions
shall, for the avoidance of doubt, on receipt by the Obligor
cease to be regarded as Secured Assets and shall be released
from the Security Interest and all other restrictions that
apply pursuant to this Agreement.
(b) GS Inc. and its agents (and its and their assigns) shall have
no obligation in respect of Secured Assets, except to hold and
dispose of the same in accordance with the terms of this
Agreement.
(c) The Obligor agrees with GS Inc. that
(i) the Obligor will not, and will not purport to, grant
or suffer liens or encumbrances against, or sell,
transfer or dispose of, any part of the Secured
Assets other than to or in favour 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 Secured Assets without the
Obligor's signature to the extent permitted by
applicable law, to transfer all or any part of
Secured Assets to GS Inc.'s name or that of its
nominee, and, subject to the provisions of Clause
2(a), to exercise all rights as if the absolute owner
thereof; and
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(iii) the Obligor has provided GS Inc. with the Obligor's
true legal name and principal residence.
(d) GS Inc. shall immediately upon request by the Obligor execute
and deliver to the Obligor such instruments, deeds, transfers,
assurances and agreements, in form and substance as the
Obligor shall reasonably request, including the withdrawal,
termination or amendment of any document required under
applicable law to evidence the termination of the Security
Interest created hereunder with respect to the Secured Assets
that are released from the Security Interest hereunder in
accordance with the provisions of this Agreement.
3. Remedies in Case of an Event of Default. If an Event of Default has
occurred and is continuing, GS Inc. subject to Articles 6(5) and 8(3)
of the 1983 Law, and without having to apply to the Royal Court for
authority to do so shall have the power of sale of the Secured Assets
and have all the rights and remedies of a secured party under the 1983
Law. To the extent required and permitted by applicable law, GS Inc.
will give the Obligor notice of the time and place of any public sale
or of the time after which any private sale or other disposition of
Secured Assets is to be made, by sending notice at least three days
before the time of sale or disposition, which the Obligor hereby agrees
is reasonable. The Obligor acknowledges the possibility that the public
sale of some or all Secured Assets by GS Inc. may not be made without a
then existing and effective registration statement under the United
States Securities Act of 1933, as amended. The Obligor 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 Secured Assets 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. The Obligor's Obligations Not Affected. Except as provided in Clause
9(b), the obligations of the Obligor 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 the Obligor shall
have notice or knowledge of any of the foregoing; (e) any other act or
omission to act or delay of any kind by the Obligor, 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 the Obligor's obligations hereunder.
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5. Attorney-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 the Obligor 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. Subject to the earlier disposition and application of
Secured Assets pursuant to this Agreement following an Event of
Default, Secured Assets shall be released from the Security Interest
hereunder and returned to the Obligor, and the lien hereby created in
such Secured Assets shall simultaneously be released, upon the earliest
to occur of (i) the Obligor's death, (ii) the expiration of the
twenty-four (24) month period following the Obligor's Date of
Termination (as defined in the Noncompetition Agreement), (iii) payment
in cash or other satisfaction by the Obligor of all Liquidated Damages,
or (iv) May 7, 2004, and all remaining Secured Assets shall be
thereupon released from the Security Interest hereunder and this
Agreement shall terminate. Notwithstanding the foregoing, (x) no
Secured Assets shall be released from the Security Interest hereunder
pursuant to this Clause 6, if there are one or more pending disputes
between the Obligor and GS Inc. as to the occurrence of a Event of
Default 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 Secured Assets in accordance with Clause
3 hereof, and this Agreement shall not terminate until the resolution
of all such disputes and (y) no Secured Assets shall be released prior
to the expiration of the term of the Covenants.
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 the
Obligor 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 Corporation, the
_____ Trust and the Obligor are parties, the Guarantee and
Security Interest Agreement, dated the date hereof, between GS
Inc. and the _____ Trust, the June 2000 Agreement and the
Guidelines, contain the entire understanding and agreement
between the Obligor and GS Inc. with respect to the matters
expressly covered therein and supersede any other agreement,
written or oral, pertaining to such matters.
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(b) This Agreement may not be amended or modified other than by a
written agreement executed by the Obligor and GS Inc. or its
successors, nor may any provision hereof be waived other than
by a writing executed by the Obligor 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. The Obligor may not, directly
or indirectly (including by operation of law), assign the
Obligor'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 the Obligor in violation of this Agreement shall
be void. This Agreement shall be binding upon the Obligor's
permitted successors and assigns. Without impairing the
Obligor'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 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 ISLAND OF JERSEY, CHANNEL
ISLANDS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS,
AND SHALL BE SUBJECT TO THE PROVISIONS OF SECTIONS 9, 10 AND
11 OF THE NON-COMPETITION AGREEMENT.
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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.
Signed by
For and on behalf of
THE XXXXXXX XXXXX GROUP, INC.
In the presence of:
Signed by
In the presence of:
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