-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RHdLbrrvdGwJ5pP78Mo7PMwu3Ocvp+bzYHGCGuvtLIYKBE6hHIaUEQtNwvkIgcDz IM5GYKsf7zBd4bc6it2RUQ== 0000950172-01-501211.txt : 20020412 0000950172-01-501211.hdr.sgml : 20020412 ACCESSION NUMBER: 0000950172-01-501211 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20011129 GROUP MEMBERS: GSB INVESTMENTS CORP. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GOLDEN STATE BANCORP INC CENTRAL INDEX KEY: 0001019508 STANDARD INDUSTRIAL CLASSIFICATION: COMMERCIAL BANKS, NEC [6029] IRS NUMBER: 954642135 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-52613 FILM NUMBER: 1802267 BUSINESS ADDRESS: STREET 1: 135 MAIN ST CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 8185002000 MAIL ADDRESS: STREET 1: 414 NORTH CENTRAL AVENUE CITY: GLENDALE STATE: CA ZIP: 91203 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MAFCO HOLDINGS INC CENTRAL INDEX KEY: 0000918939 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133603886 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 38 EAST 63RD STREET CITY: NEW YORK STATE: NY ZIP: 10021 BUSINESS PHONE: 2125728600 MAIL ADDRESS: STREET 1: 38 EAST 63RD STREET CITY: NEW YORK STATE: NY ZIP: 10021 SC 13D/A 1 s571190.txt SC 13D - AMENDMENT NO. 16 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 16) GOLDEN STATE BANCORP INC. ---------------------------------- (Name of issuer) Common Stock, par value $1.00 per share --------------------------------------------------- (Title of class of securities) 381197 10 2 ------------------------------------------ (CUSIP number) Barry F. Schwartz 35 East 62nd Street New York, New York 10021 (212) 572-8600 ------------------------------------------------- (Name, address and telephone number of person authorized to receive notices and communications) November 14, 2001 ------------------- (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|. Page 1 of 9 Pages Exhibit Index on Page 9 CUSIP No. 381197 10 2 - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS Mafco Holdings Inc. - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |_| - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF --------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 42,949,525 EACH --------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 --------------------------------------------------- 10 SHARED DISPOSITIVE POWER 42,949,525 - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 42,949,525 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES |_| CERTAIN SHARES* - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 31.6% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ------------------------------------------------------------------------------- CUSIP No. 381197 10 2 - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS GSB Investments Corp. - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |_| - ------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------- ---------------------------------- 4 SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF --------------------------------------------------- OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 42,949,525 OWNED BY --------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON 0 WITH --------------------------------------------------- 10 SHARED DISPOSITIVE POWER 42,949,525 - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 42,949,525 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES /_/ CERTAIN SHARES* - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 31.6% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ------------------------------------------------------------------------------- This statement amends and supplements the Statement on Schedule 13D, dated September 11, 1998, as amended by Amendment No. 1 thereto, dated December 30, 1998, Amendment No. 2 thereto, dated January 21, 1999 and Amendment No. 3 thereto, dated August 25, 1999, filed by (a) Mafco Holdings Inc., a Delaware corporation ("Mafco Holdings"), (b) GSB Investments Corp., a Delaware corporation and an indirect wholly owned subsidiary of Mafco Holdings ("Investments Corp."), (c) Ford Diamond Corporation, a Texas corporation ("FDC") and (d) Hunter's Glen/Ford, Ltd., a Texas limited partnership ("Hunter's Glen") and Amendment No. 4 thereto, dated December 17, 1999, Amendment No. 5 thereto, dated May 23, 2000, Amendment No. 6 thereto, dated August 30, 2000, Amendment No. 7 thereto, dated December 18, 2000, Amendment No. 8 thereto, dated December 20, 2000, Amendment No. 9 thereto dated December 21, 2000, Amendment No. 10 thereto dated December 29, 2000, Amendment No. 11 thereto dated January 3, 2001, Amendment No. 12 thereto dated March 9, 2001, Amendment No. 13 thereto dated September 28, 2001, Amendment No. 14 thereto dated October 26, 2001 and Amendment No. 14 thereto dated November 19, 2001 filed by (a) Mafco Holdings and (b) Investments Corp. (as so amended, the "Schedule 13D"), with respect to the common stock, par value $1.00 per share (the "Common Stock"), of Golden State Bancorp Inc., a Delaware corporation (the "Company"). The principal executive offices of the Company are located at 135 Main Street, San Francisco, California 94105. Capitalized terms used herein shall have the meanings ascribed to them in the Schedule 13D unless otherwise defined. Item 4. Purpose of Transaction. ---------------------- The following is added to the response to Item 4: On November 14, 2001 Investments Corp. entered into a stock purchase agreement with JPMorgan Chase Bank ("JPMCB")and J.P. Morgan Securities Inc. as its agent (the "Stock Purchase Agreement")and received acknowledgment of the execution and pricing of a transaction pursuant to the Stock Purchase Agreement (the "Pre-Pricing Acknowledgment") with respect to 1,000,000 shares of Common Stock, resulting in a payment to Investments Corp. of $20,274,030 (the "Proceeds Amount"). The Proceeds Amount is 80.4% of a $25,230,000 aggregate contract price ($25.23 per share), with the difference representing principally a financing cost to Investments Corp. over the two-year term of the transaction, as well as a fee component for JPMCB. The actual number of shares of Common stock (or cash equivalent thereof) to be delivered by Investments Corp. to JPMCB on November 16, 2003 (the "Maturity Date") will be determined pursuant to a formula described in Item 6 of this filing. The Reporting Persons acquired and continue to hold the shares of Common Stock reported herein for investment purposes. In this connection, the Reporting Persons expect to evaluate on an ongoing basis their investment in the Company, and may from time to time acquire or dispose of additional shares of Common Stock (in each case, depending upon general investment policies, market conditions and other factors) or formulate other purposes, plans or proposals regarding the Company or the Common Stock held by the Reporting Persons to the extent deemed advisable in light of general investment policies, market conditions and other factors. Any such acquisitions or dispositions may be made, subject to applicable law, in open market transactions, privately negotiated transactions or, in the case of dispositions, pursuant to a registration statement. Item 5. Interest in Securities of the Issuer. ------------------------------------ The following is added to the response to Item 5: (a) - (b) As of July 31, 2001, based upon the Company's quarterly report on Form 10-Q for the second quarter 2001, there were 135,666,624 outstanding shares of Common Stock. Subject to (i) the terms of the SAILS Agreement and the Pledge Agreement each dated December 19, 2000 with respect to 3,000,000 shares of Common Stock as reported in Amendment No. 8 to this Statement on Schedule 13D, (ii) the terms of the SAILS Agreement and the Pledge Agreement each dated December 28, 2000 with respect to 1,304,800 shares of Common Stock as reported in Amendment No. 10 to this Statement on Schedule 13D, (iii) the terms of the SAILS Agreement and the Pledge Agreement each dated March 8, 2001 with respect to 1,695,200 shares of Common Stock as reported in Amendment No. 12 to this Statement on Schedule 13D,(iv) the terms of the SAILS Agreement and the Pledge Agreement each dated September 28, 2001 with respect to 1,000,000 shares of Common Stock, (iv) the terms of the SAILS Agreement and the Pledge Agreement each dated October 24, 2001 with respect to 2,000,000 shares of Common Stock, (v) the terms of the SAILS Agreement and the Pledge Agreement each dated November 16, 2001 with respect to 1,000,000 shares of Common Stock, and (vi) the terms of the Stock Purchase Agreement and the Pledge Agreement each dated November 14, 2001, and the Pre-Pricing Acknowledgment dated November 14, 2001 and Pricing Schedule dated November 16, 2001 thereunder with respect to 1,000,000 shares of Common Stock, Mafco Holdings and Investments Corp. may be deemed to share beneficial ownership of 42,949,525 shares of Common Stock, representing 31.6% of the Common Stock outstanding. (c) Other than the transactions described in Item 4 of this Schedule 13D, there were no transactions by the Reporting Persons or, to the knowledge of the Reporting Persons, any of the persons named on Schedule I hereto during the past 60 days. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. ----------------------------------------------- The following is added to the response to Item 6: On November 14, 2001, Investments Corp. and JPMCB entered into a Pre-Pricing Acknowledgment for a transaction to be entered into under the Stock Purchase Agreement and the Pledge Agreement, each dated as of November 14, 2001, with respect to 1,000,000 shares of Common Stock. On November 16, 2001, JPMCB confirmed the execution and pricing of such transaction in a Pricing Schedule dated that date. On November 21, 2001, pursuant to the Pledge Agreement, Investments Corp. deposited into a collateral account with JPMCB 1,000,000 shares of Common Stock (the "Underlying Shares") and JPMCB paid to Investments Corp. $20,274,030. On the Maturity Date or earlier termination of this transaction pursuant to the Stock Purchase Agreement, Investments Corp. will have the right to settle its obligations to JPMCB with respect to the Underlying Shares by delivering to JPMCB from the collateral account a number of shares of Common Stock (or, at the option of Investments Corp., the cash equivalent of such shares) with a value equal to the product of (a) the number of Underlying Shares and (b) the Settlement Ratio. The Settlement Ratio will be determined as follows: (i) if the average closing price per share of Common Stock on the last five trading days up to and including the Maturity Date (the "Settlement Price") is less than $35.32 (the "Upside Limit") but greater than $25.23 (the "Hedged Value"), the Settlement Ratio will be a ratio equal to the Hedged Value divided by the Settlement Price; (ii) if the Settlement Price is equal to or greater than the Upside Limit, the Settlement Ratio shall be a ratio equal to the sum of (x) a fraction the numerator of which is the Hedged Value and the denominator of which is the Settlement Price and (y) a fraction the numerator of which is equal to the difference between the Settlement Price and the Upside Limit and the denominator of which is equal to the Settlement Price; or (iii) if the Settlement Price is equal to or less than the Hedged Value, the Settlement Ratio will be ONE (1). Item 7. Materials to be Filed as Exhibits. --------------------------------- Item 7 is hereby amended to add the following at the end thereof: Exhibit 27. Stock Purchase Agreement dated as of November 14, 2001 between GSB Investments Corp. and JPMorgan Chase Bank, acting through J.P. Morgan Securities Inc. as its agent Exhibit 28. Pledge Agreement dated as of November 14, 2001 among GSB Investments Corp., JPMorgan Chase Bank, as Secured Party, and JPMorgan Chase Bank, as Collateral Agent Exhibit 29. Pre-Pricing Acknowledgment dated November 14, 2001 between GSB Investments Corp. and JPMorgan Chase Bank, acting through J.P. Morgan Securities Inc. as its agent Exhibit 30. Pricing Schedule dated November 16, 2001 from JPMorgan Chase Bank, acting through J.P. Morgan Securities Inc. as its agent, to GSB Investments Corp. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. Date: November 29, 2001 MAFCO HOLDINGS INC. By: /s/ Barry F. Schwartz ---------------------------------- Barry F. Schwartz Executive Vice President and General Counsel GSB INVESTMENTS CORP. By: /s/ Barry F. Schwartz ---------------------------------- Barry F. Schwartz Executive Vice President and General Counsel EXHIBIT INDEX Exhibit 27 Stock Purchase Agreement dated as of November 14, 2001 between GSB Investments Corp. and JPMorgan Chase Bank, acting through J.P. Morgan Securities Inc. as its agent 28 Pledge Agreement dated as of November 14, 2001 among GSB Investments Corp., JPMorgan Chase Bank, as Secured Party, and JPMorgan Chase Bank, as Collateral Agent 29 Pre-Pricing Acknowledgment dated November 14, 2001 between GSB Investments Corp. and JPMorgan Chase Bank, acting through J.P. Morgan Securities Inc. as its agent 30 Pricing Schedule dated November 16, 2001 from JPMorgan Chase Bank, acting through J.P. Morgan Securities Inc. as its agent, to GSB Investments Corp. EX-99 3 s27950.txt EXHIBIT 27 - STOCK PURCHASE AGREEMENT EXHIBIT 27 STOCK PURCHASE AGREEMENT dated as of November 14, 2001 between GSB INVESTMENTS CORP. and JPMORGAN CHASE BANK, by J.P. MORGAN SECURITIES INC., as its Agent TABLE OF CONTENTS ---------------------- PAGE ARTICLE 1 DEFINITIONS SECTION 1.01. Definitions.........................................1 ARTICLE 2 SALE AND PURCHASE; PAYMENT; ESTABLISHMENT OF TRANCHES SECTION 2.01. Sale and Purchase...................................7 SECTION 2.02. Payment, Establishment of Tranches..................7 SECTION 2.03. Settlement Date....................................10 SECTION 2.04. Cash Settlement Option.............................11 ARTICLE 3 REPRESENTATIONS AND WARRANTIES SECTION 3.01. Representations and Warranties of Seller...........13 SECTION 3.02. Representations and Warranties of Buyer............16 ARTICLE 4 CONDITIONS SECTION 4.01. Conditions to Effectiveness of this Agreement......17 SECTION 4.02. Conditions to Buyer's Obligations..................18 ARTICLE 5 COVENANTS SECTION 5.01. Taxes..............................................19 SECTION 5.02. Forward Contract...................................21 SECTION 5.03. Notices............................................21 SECTION 5.04. Further Assurances.................................22 SECTION 5.05. No Sales of Common Stock...........................22 SECTION 5.06. Securities Contract................................22 SECTION 5.07. Borrow Cost Adjustment.............................23 ARTICLE 6 ADJUSTMENTS SECTION 6.01. Dilution Adjustments...............................24 SECTION 6.02. Merger Events......................................26 SECTION 6.03. Nationalization and Insolvency.....................28 SECTION 6.04. Termination and Payment............................28 ARTICLE 7 ACCELERATION SECTION 7.01. Acceleration.......................................29 ARTICLE 8 MISCELLANEOUS SECTION 8.01. Notices............................................32 \ SECTION 8.02. Governing Law; Severability; Submission to Jurisdiction; Waiver of Jury Trial..............................32 SECTION 8.03. Set-off............................................33 SECTION 8.04. Entire Agreement...................................33 SECTION 8.05. Amendments, Waivers................................33 SECTION 8.06. Assignment by Buyer; No Third Party Rights, Successors and Assigns............................33 SECTION 8.07. Counterparts.......................................34 SECTION 8.08. Non-confidentiality................................34 SECTION 8.09. Overdue Amounts....................................34 SECTION 8.10. Matters Related to Agent...........................34 SECTION 8.11. Calculation Agent..................................34 EXHIBIT A Form of Pre-pricing Acknowledgment EXHIBIT B Form of Pricing Schedule STOCK PURCHASE AGREEMENT THIS AGREEMENT is made as of this 14th day of November, 2001 between GSB INVESTMENTS CORP., a Delaware corporation ("Seller"), and JPMORGAN CHASE BANK ("Buyer"), by J.P. MORGAN SECURITIES INC., a Delaware corporation, as its agent ("Agent"). WHEREAS, Seller owns shares of common stock, par value $1.00 per share, or security entitlements in respect thereof ("Common Stock"), of Golden State Bancorp Inc., a Delaware corporation (the "Issuer"); WHEREAS, Seller and Buyer are willing to sell and purchase shares of Common Stock at the times and on the terms set forth herein; and WHEREAS, Seller has agreed, pursuant to the Pledge Agreement (as defined herein), to grant Buyer a security interest in certain Common Stock to secure the obligations of Seller hereunder; NOW, THEREFORE, in consideration of their mutual covenants herein contained, the parties hereto, intending to be legally bound, hereby mutually covenant and agree as follows: ARTICLE 1 DEFINITIONS SECTION 1.01. Definitions. (a) The following terms, as used herein, have the following meanings: "Business Day" means any day on which commercial banks are open for business in New York City and the Exchange is not closed. "Calculation Agent" means JPMorgan Chase Bank. "Cash Settlement Amount" means, with respect to any Tranche, an amount of cash equal to the product of the Settlement Price for such Tranche and the number of Contract Shares required to be delivered for such Tranche, but for Section 2.04, pursuant to Section 2.03(a) on the Settlement Date for such Tranche. "Closing Price" means, with respect to any security on any Valuation Date or any other Trading Day and subject to adjustment as a result of certain events as provided in Article 6, the closing sale price (or, if no closing sale price is reported, the last reported sale price) of such security on the Exchange on such day or, if such security is not so reported, the last quoted bid price for such security in the over-the-counter market on such day as reported by Pink Sheets LLC (formerly known as the National Quotation Bureau) or similar organization or, if such bid price is not available, the market value of such security on such day as determined by the Calculation Agent (in each of the foregoing circumstances, the price determination being made as of the close of regular session trading on the relevant market); provided that if the trading hours on the Exchange are extended to later than 4:00 p.m. (New York time), then the time as of which the closing sale price or the last quoted bid price shall be determined shall be selected by the Calculation Agent in its sole discretion; provided further that the proviso contained in the definition of Valuation Date shall apply to the price determined on any other Trading Day mutatis mutandis. "Collateral Agent" has the meaning provided in the Pledge Agreement. "Dividend Period" means, with respect to a Dividend Period End Date for any Tranche, the period commencing on the date immediately following the preceding Dividend Period End Date for such Tranche, and ending on such Dividend Period End Date for such Tranche, provided that with respect to the first Dividend Period End Date for such Tranche, such period shall commence on the day immediately following the last day of the Hedging Period for such Tranche. "Dividend Period End Date" means, with respect to any Tranche, each of the dates that follow the last day of the Hedging Period for such Tranche by a multiple of three months. "Effective Date" means the later of the date hereof and such subsequent date on which all the conditions set forth in Section 4.01 are either satisfied or waived. "Exchange" means, at any time, the principal national securities exchange or automated quotation system, if any, on which the Common Stock is listed or quoted at such time. "Free Stock" means Common Stock that is not subject to any Transfer Restrictions in the hands of Seller immediately prior to delivery to an affiliate of Buyer designated by Buyer hereunder; provided that such Common Stock would not be subject to any Transfer Restrictions in the hands of such affiliate of Buyer upon delivery to such affiliate of Buyer. "Hedging Termination Date" means the date one month from the date hereof. "Insolvency Proceeding" means any case or any judicial, administrative or other proceeding, or the filing of any petition or the taking of any similar action, (i) seeking a judgment of or arrangement for insolvency, bankruptcy, winding-up, liquidation, reorganization, composition, rehabilitation, administration or similar relief with respect to Seller or its debts or assets, (ii) seeking the appointment or election of a conservator, trustee, receiver, liquidator, administrator, custodian or similar official for Seller or any substantial part of its assets, or (iii) which has an effect similar or analogous to the foregoing. "Lien" means any lien, mortgage, security interest, pledge, charge, adverse claim or encumbrance of any kind. "Mafco Credit Agreement" means the New Amended and Restated Revolving Credit and Term Loan Agreement dated as of August 15, 2001 among Mafco Finance Corp., a Delaware corporation, as borrower, the banks, financial institutions and other institutional lenders named therein (the "Lenders"), Citibank, N.A. ("Citibank"), as administrative agent and collateral agent, The Chase Manhattan Bank, as syndication agent, ING (U.S.) Capital LLC, as documentation agent, and Salomon Smith Barney Inc. and J.P. Morgan Securities Inc., as joint book managers and joint lead arrangers. "Market Disruption Event" means, with respect to any Tranche, in relation to any Valuation Date for such Tranche, as determined by the Calculation Agent, the occurrence or existence during the one-half hour period that ends at the close of the regular session of trading on the Exchange of the material suspension of or material limitation imposed on trading on (i) the Exchange in Common Stock or in stocks generally or (ii) the primary exchange on which options contracts or futures contracts related to Common Stock are traded; provided that a limitation on the hours and number of days of trading resulting from a change in the regular business hours of the Exchange or such options exchange will not constitute a "Market Disruption Event." "Market Value" means, as of any date with respect to any share of Common Stock, the Closing Price per share of Common Stock for the Trading Day prior to such date. "Ordinary Dividend Amount" means with respect to any Tranche, $0.10 per share of Common Stock with respect to each Dividend Period for such Tranche, as adjusted on account of any Potential Adjustment Event, in accordance with the provisions of Article 6. "Parent" means Mafco Holdings Inc., a Delaware corporation, and its successors. "Person" means an individual, a corporation, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "Pledge Agreement" means the Pledge Agreement dated as of the date hereof among Seller, Buyer and the Collateral Agent, as amended from time to time. "Publicly-Traded Entity" means a corporation incorporated under the laws of the United States or any state thereof the common stock of which is (i) distributed in a Spinoff or issued in connection with a Merger Event and (ii) listed or traded on any national securities exchange in the United States or on the NASDAQ National Market System. "Securities Act" means the Securities Act of 1933, as amended. "Seller Pledge Agreement" means the New Amended and Restated Pledge Agreement dated as of August 15, 2001 among the pledgors named therein (including, without limitation, Seller) and Citibank, as collateral agent for the benefit of the Lenders, as amended. "Settlement Date" means, with respect to any Tranche, the third Business Day immediately following the last Valuation Date for such Tranche. "Settlement Price" means, with respect to any Tranche, the arithmetic mean of the relevant Closing Prices per share of Common Stock on each Valuation Date for such Tranche. "Trading Day" means, with respect to any security, a day on which the Exchange is open for trading or quotation. "Transfer Restriction" means, with respect to any security or other property pledged under the Pledge Agreement, any condition to or restriction on the ability of the holder thereof to sell, assign or otherwise transfer such security or other property or to enforce the provisions thereof or of any document related thereto whether set forth in such security or other property itself or in any document related thereto, including, without limitation, (i) any requirement that any sale, assignment or other transfer or enforcement of such security or other property be consented to or approved by any Person, including, without limitation, the issuer thereof or any other obligor thereon, (ii) any limitations on the type or status, financial or otherwise, of any purchaser, pledgee, assignee or transferee of such security or other property, (iii) any requirement of the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document of any Person to the issuer of, any other obligor on or any registrar or transfer agent for, such security or other property, prior to the sale, pledge, assignment or other transfer or enforcement of such security or other property and (iv) any registration or qualification requirement or prospectus delivery requirement for such security or other property pursuant to any federal, state or foreign securities law (including, without limitation, any such requirement arising as a result of Rule 144 or Rule 145 under the Securities Act); provided that the required delivery of any assignment, instruction or entitlement order from the seller, pledgor, assignor or transferor of such security or other property, together with any evidence of the corporate or other authority of such Person, shall not constitute a "Transfer Restriction". "Valuation Date" means, with respect to any Tranche, each of the five Trading Days preceding and including the Maturity Date for such Tranche; provided that if there is a Market Disruption Event on any Valuation Date for such Tranche, then such Valuation Date for such Tranche shall be the first succeeding Trading Day on which there is no Market Disruption Event and on which another Valuation Date does not or is not deemed to occur, unless such first succeeding Trading Day has not occurred as of the fifth Trading Day immediately following the Maturity Date for such Tranche, in which case (i) that fifth Trading Day shall be deemed to be the last Valuation Date for such Tranche, notwithstanding the Market Disruption Event and (ii) notwithstanding the definition of "Closing Price", the Calculation Agent shall determine the Closing Price for such Tranche as of that fifth Trading Day in its discretion. (b) Each of the following terms is defined in the Section set forth opposite such term: Term Section - ---- ------- Acceleration Amount.................................... 7.01 ---- Acceleration Amount Notice............................. 7.01 ---- Acceleration Date...................................... 7.01 ---- Acceleration Value..................................... 7.01 ---- Advance Rate........................................... 2.02(d) ------- Bankruptcy Code........................................ 5.06 ---- Base Amount............................................ 2.02(d) ------- CEA.................................................... 3.01(n) ------- Commission............................................. 2.02(b) ------- Contract Share Amount.................................. 2.03(a) ------- Contract Shares........................................ 2.03(a) ------- Downside Rate.......................................... 2.02(d) ------- Event of Default....................................... 7.01 ---- Excess Borrow Cost..................................... 5.07(b) ------- Extraordinary Dividend................................. 6.01(b) ------- Fixed Borrow Cost...................................... 5.07(b) ------- Hedged Value........................................... 2.02(d) ------- Hedging Amount......................................... 2.02(d) ------- Hedging Period......................................... 2.02(c) ------- Initial Share Price.................................... 2.02(d) ------- Initial Short Position................................. 2.02(d) ------- Insolvency............................................. 6.03 ---- Lender Consent......................................... 3.01(c) ------- Maturity Date.......................................... 2.02(d) ------- Maximum Base Amount.................................... 2.02(d) ------- Maximum Number......................................... 2.02(b) ------- Merger Date............................................ 6.02(c) ------- Merger Event........................................... 6.02(c) ------- Monthly Borrow Period.................................. 5.07(b) ------- Nationalization........................................ 6.03 ---- New Shares............................................. 6.02(c) ------- Ordinary Dividend...................................... 6.01(b) ------- Original Stock......................................... 6.01(c) Other Consideration.................................... 6.02(c) ------- Payment Date........................................... 2.02(d) ------- Potential Adjustment Event............................. 6.01(b) ------- Prepayment Amount...................................... 2.04 ---- Prepayment Determination Price......................... 2.04 ---- Prepayment Determination Ratio......................... 2.04 ---- Pre-pricing Acknowledgment............................. 2.02(b) ------- Pricing Schedule....................................... 2.02(c) ------- Purchase Price......................................... 2.02(d) ------- Settlement Ratio....................................... 2.03(b) ------- Share-for-Combined Merger Event........................ 6.02(c) ------- Share-for-Share Merger Event........................... 6.02(c) ------- Spinoff................................................ 6.01(c) Spinoff Issuer......................................... 6.01(c) Spinoff Stock.......................................... 6.01(c) ------- Termination Amount..................................... 6.04 ---- Termination Amount Notice.............................. 6.04 ---- Termination Date....................................... 6.04 ---- Terms of Tranche....................................... 2.02(c) ------- Tranche................................................ 2.02(b) ------- Upside Limit........................................... 2.02(d) ------- Upside Rate............................................ 2.02(d) ------- ARTICLE 2 SALE AND PURCHASE; PAYMENT; ESTABLISHMENT OF TRANCHES SECTION 2.01. Sale and Purchase. Upon the terms and subject to the conditions of this Agreement, Seller agrees to sell to Buyer, and Buyer agrees to purchase and acquire from Seller, the number of shares of Common Stock for each Tranche established hereunder, equal to the product of the Base Amount for such Tranche and the Settlement Ratio for such Tranche. SECTION 2.02. Payment, Establishment of Tranches. (a) Payment. Upon the terms and subject to the conditions of this Agreement, Buyer shall deliver to Citibank, as designee of Seller, in immediately available funds by wire transfer to an account designated by Citibank, the Purchase Price for each Tranche on the Payment Date for such Tranche. Seller acknowledges and agrees that payment by Buyer of the Purchase Price for any Tranche pursuant to this Section 2.02(a) shall constitute payment in full of the Purchase Price for such Tranche. (b) Establishment of Tranches. This Agreement may be effected in one or more tranches (each, a "Tranche") with respect to up to an aggregate of 1,000,000 shares of Common Stock (as such number may be adjusted on account of any Potential Adjustment Event in accordance with the provisions of Article 6, the "Maximum Number"). The Advance Rate, the Downside Rate, the Hedging Amount, the Maximum Base Amount, the Maturity Date and the Upside Rate for each Tranche shall be specified in a pre-pricing acknowledgment substantially in the form attached hereto as Exhibit A (for such Tranche, the "Pre-pricing Acknowledgment") executed by Buyer and Seller; provided that: (i) if at any time after the Pre-pricing Acknowledgment with respect to any Tranche is delivered and prior to the establishment by Buyer (or its affiliate) of Buyer's Initial Short Position with respect to such Tranche, Seller becomes aware of any material non-public information regarding the Issuer, Seller shall immediately notify Buyer that it cannot make the representation and warranty set forth in Section 3.01(k) without specification of the reason thereof and shall direct Buyer (or its affiliate) to immediately cease effecting any further short sales of the Common Stock; and (ii) it is understood and acknowledged that, with respect to each Tranche, in order to hedge Buyer's exposure with respect to the Base Amount for such Tranche and as part of the proprietary trading activities of Buyer or affiliates of Buyer unrelated to this Agreement, in addition to short sales in connection with establishing its Initial Short Position for such Tranche, Buyer and its affiliates may from time to time effect for their own accounts purchases, long sales or short sales of shares of Common Stock or options or other derivatives in respect thereof (or combinations of such transactions) that may affect the trading price of the Common Stock. (c) Pricing Schedule. Following the execution and delivery of a Pre- Pricing Acknowledgment for any Tranche, Buyer shall determine the Base Amount, the Hedged Value, the Initial Share Price, the Initial Short Position, the Maturity Date, the Payment Date, the Purchase Price, and the Upside Limit for such Tranche (collectively, the "Terms of Tranche") based on the amounts and prices at which, and dates, all occurring on or prior to the Hedging Termination Date, on which an affiliate of Buyer effects, for the account of Buyer, short sales of shares of Common Stock in establishing Buyer's Initial Short Position for such Tranche (the dates on which such short sales for such Tranche are effected being collectively referred to as the "Hedging Period" for such Tranche) and otherwise in accordance with the respective formulas for Terms of Tranche set forth below. Within two Business Days after the establishment of its Initial Short Position for each Tranche, Buyer shall deliver to Seller the related pricing schedule (the "Pricing Schedule"), substantially in the form attached hereto as Exhibit B, setting forth the Terms of Tranche for such Tranche. (d) Related Definitions. As used herein, the following words and phrases have the following meanings: (i) "Advance Rate" means, with respect to any Tranche, the percentage rate set forth as such in the Pre-pricing Acknowledgment for such Tranche. (ii) "Base Amount" means, with respect to any Tranche, as set forth in the Pricing Schedule for such Tranche, a number of shares of Common Stock as determined by Buyer with respect to which Buyer (or an affiliate of Buyer) has established an Initial Short Position for such Tranche on or prior to the Hedging Termination Date but in no event in excess of the Maximum Base Amount for such Tranche, as adjusted in accordance with the provisions of Article 6. (iii) "Downside Rate" means, with respect to any Tranche, the percentage rate set forth as such in the Pre-pricing Acknowledgment for such Tranche. (iv) "Hedged Value" per share means, with respect to any Tranche, as set forth in the Pricing Schedule for such Tranche, the Initial Share Price for such Tranche, multiplied by the Downside Rate for such Tranche, as adjusted in accordance with the provisions of Article 6. (v) "Hedging Amount" means, as set forth in the Pre-pricing Acknowledgment, a dollar amount. (vi) "Initial Share Price" means, with respect to any Tranche, as set forth in the Pricing Schedule for such Tranche, the volume weighted average of the per share prices at which Buyer (or an affiliate of Buyer) sells short shares of Common Stock in establishing Buyer's Initial Short Position pursuant to the last sentence of Section 3.02(d). (vii) "Initial Short Position" means, with respect to any Tranche, as set forth in the Pricing Schedule for such Tranche, the number of shares of Common Stock that Buyer (or an affiliate of Buyer) sells short on or prior to the Hedging Termination Date to establish its initial hedge of the price and market risk undertaken by Buyer with respect to such Tranche under this Agreement, but, for the avoidance of doubt, shall not include any additional shares of Common Stock introduced into the market with respect to such Tranche in excess of Buyer's initial hedge in order to ensure compliance with Buyer's representation in Section 3.02(d). (viii) "Maturity Date" means, with respect to any Tranche, the date designated as the Maturity Date for such Tranche in the Pricing Schedule for such Tranche (or, if such a date is not a Trading Day, the next following Trading Day). (ix) "Maximum Base Amount" means, with respect to any Tranche, as set forth in the Pre-pricing Acknowledgment for such Tranche, a number of shares of Common Stock which, if added to the Base Amounts for all the previously established Tranches, does not exceed the Maximum Number. (x) "Payment Date" means, with respect to any Tranche, as set forth in the Pricing Schedule for such Tranche, the third Business Day immediately following the last day of the Hedging Period for such Tranche. (xi) "Purchase Price" means, with respect to any Tranche, as set forth in the Pricing Schedule for such Tranche, an amount equal to (A) the product of (i) the Base Amount for such Tranche, (ii) the Initial Share Price for such Tranche, and (iii) the Advance Rate for such Tranche, minus (B) the product of (x) the Hedging Amount times (y) the Base Amount for such Tranche minus the Initial Short Position for such Tranche. (xii) "Upside Limit" per share means, with respect to any Tranche, as set forth in the Pricing Schedule for such Tranche, the Initial Share Price for such Tranche, multiplied by the Upside Rate for such Tranche, as adjusted in accordance with the provisions of Article 6. (xiii) "Upside Rate" means, with respect to any Tranche, the percentage rate set forth as such in the related Pre-pricing Acknowledgment for such Tranche. SECTION 2.03. Settlement Date. (a) On the Settlement Date for each Tranche, Seller agrees, subject to Section 2.04, to deliver to an affiliate of Buyer designated by Buyer a number of shares of Free Stock (for each Tranche, the "Contract Shares" for such Tranche) equal to the product of (A) the Base Amount for such Tranche and (B) the Settlement Ratio for such Tranche, rounded down to the nearest whole number (for each Tranche, the "Contract Share Amount" for such Tranche), and cash in an amount equal to the value (based on the Settlement Price for such Tranche) of any fractional share not delivered as a result of such rounding. If (x) by 10:00 A.M., New York City time on the Settlement Date for such Tranche, Seller has not otherwise effected such delivery of Common Stock or delivered cash in lieu thereof pursuant to Section 2.04 and (y) the Common Stock then held by the Collateral Agent as collateral under the Pledge Agreement is Free Stock, then (i) Seller shall be deemed not to have elected to deliver cash in lieu of shares of Free Stock for such Tranche, pursuant to Section 2.04 (notwithstanding any notice by Seller to the contrary) and (ii) the delivery provided by this Section 2.03(a) shall be effected by delivery by the Collateral Agent to an affiliate of Buyer designated by Buyer of a number of shares of Free Stock then held by the Collateral Agent as collateral under the Pledge Agreement equal to the number of shares of Free Stock required to be delivered by Seller for such Tranche to an affiliate of Buyer designated by Buyer pursuant to this Section 2.03(a); provided that, notwithstanding the foregoing and without limiting the generality of Section 7.01, if Seller gives notice of Seller's election to deliver cash in lieu of shares of Free Stock on the Settlement Date for such Tranche pursuant to Section 2.04 and fails to deliver the Cash Settlement Amount for such Tranche on the Settlement Date for such Tranche as provided in Section 2.04, Seller shall be in breach of this Agreement and shall be liable to Buyer for any losses incurred by Buyer or such affiliate of Buyer as a result of such breach, including, without limitation, aggregate net losses incurred in connection with any decrease in the Closing Price of the Common Stock subsequent to the last Valuation Date for such Tranche. (b) With respect to any Tranche, the "Settlement Ratio" shall be determined in accordance with the following formula, and is subject to adjustment as a result of certain events as provided in Article 6: (i) if the Settlement Price for such Tranche is less than the Upside Limit for such Tranche but greater than the Hedged Value for such Tranche, the Settlement Ratio for such Tranche shall be a ratio equal to the Hedged Value for such Tranche divided by the Settlement Price for such Tranche; (ii) if the Settlement Price for such Tranche is equal to or greater than the Upside Limit for such Tranche, the Settlement Ratio for such Tranche shall be a ratio equal to the sum of the Hedged Value for such Tranche divided by the Settlement Price for such Tranche and a fraction the numerator of which is equal to the difference between the Settlement Price for such Tranche and the Upside Limit for such Tranche and the denominator of which is equal to the Settlement Price for such Tranche and (iii) if the Settlement Price for such Tranche is equal to or less than the Hedged Value for such Tranche, the Settlement Ratio for such Tranche shall be one (1). The ratio expressed in clause (i) or (ii) above shall be rounded upward or downward to the nearest 1/10,000th or, if there is not a nearest 1/10,000th, to the next lower 1/10,000th. SECTION 2.04. Cash Settlement Option. Seller may, with respect to any Tranche, upon written notice delivered to Buyer at least ten calendar days prior to the first Valuation Date for such Tranche, elect to settle its delivery obligation for such Tranche pursuant to Section 2.03(a) in cash; provided that, Seller shall have delivered to Buyer an amount of cash with respect to such Tranche (the "Prepayment Amount") equal to the product of (i) the Closing Price per share of Common Stock on the last Trading Day prior to the delivery date of such notice on which there was no Market Disruption Event (the "Prepayment Determination Price"), (ii) the Base Amount for such Tranche and (iii) the Prepayment Determination Ratio for such Tranche, by wire transfer of immediately available funds to an account designated by Buyer at least seven calendar days prior to the first Valuation Date for such Tranche. If the cash settlement option has been validly elected by Seller with respect to any Tranche in accordance with the preceding sentence, then on the Settlement Date for such Tranche, (i) if the Cash Settlement Amount for such Tranche is greater than the Prepayment Amount for such Tranche, Seller shall deliver to Buyer the amount of cash by which the Cash Settlement Amount for such Tranche exceeds the Prepayment Amount for such Tranche, (ii) if the Prepayment Amount for such Tranche is greater than the Cash Settlement Amount for such Tranche, Buyer shall deliver to Seller the amount of cash by which the Prepayment Amount for such Tranche exceeds the Cash Settlement Amount for such Tranche and (iii) if the Prepayment Amount for such Tranche is equal to the Cash Settlement Amount for such Tranche, no deliveries shall be made in respect of such Tranche. In each case when deliveries are made such deliveries shall be made by wire transfer of immediately available funds to an account designated by Buyer or Seller, as the case may be, in lieu of the shares of Common Stock for such Tranche to be delivered on the Settlement Date for such Tranche pursuant to Section 2.03(a). The "Prepayment Determination Ratio" shall be determined, with respect to any Tranche, in accordance with the following formula, and is subject to adjustment as a result of certain events as provided in Article 6: (i) if the Prepayment Determination Price for such Tranche is less than the Upside Limit for such Tranche but greater than the Hedged Value for such Tranche, the Prepayment Determination Ratio for such Tranche shall be a ratio equal to the Hedged Value for such Tranche divided by the Prepayment Determination Price for such Tranche; (ii) if the Prepayment Determination Price for such Tranche is equal to or greater than the Upside Limit for such Tranche, the Prepayment Determination Ratio for such Tranche shall be a ratio equal to the sum of the Hedged Value for such Tranche divided by the Prepayment Determination Price for such Tranche and a fraction the numerator of which is equal to the difference between the Prepayment Determination Price for such Tranche and the Upside Limit for such Tranche and the denominator of which is equal to the Prepayment Determination Price for such Tranche; and (iii) if the Prepayment Determination Price for such Tranche is equal to or less than the Hedged Value for such Tranche, the Prepayment Determination Ratio for such Tranche shall be one (1). The ratio expressed in clause (i) or (ii) above shall be rounded upward or downward to the nearest 1/10,000th or, if there is not a nearest 1/10,000th, to the next lower 1/10,000th. ARTICLE 3 REPRESENTATIONS AND WARRANTIES SECTION 3.01. Representations and Warranties of Seller. Seller represents and warrants to Buyer that: (a) Seller has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware. (b) Seller has all corporate power to enter into this Agreement and the Pledge Agreement and to consummate the transactions contemplated hereby and thereby. Each of this Agreement and the Pledge Agreement has been duly authorized, validly executed and delivered by Seller and constitutes a valid and legally binding obligation of Seller enforceable against Seller in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and to general equitable principles. (c) The execution and delivery by Seller of, and the compliance by Seller with all of the provisions of, this Agreement and the Pledge Agreement, and the consummation of the transactions herein and therein contemplated, will not (i) conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, stockholders agreement, lock-up agreement, registration rights agreement, co-sale agreement or any other agreement or instrument to which Seller or any of its subsidiaries is a party or by which Seller or any of its subsidiaries is bound or to which any of the property or assets of Seller or any of its subsidiaries is subject (it being understood that the existence of conditions precedent to the Lenders' consent to Seller entering into and consummating the transactions contemplated hereby and by the Pledge Agreement as set forth in Section 2 of the Consent dated as of September 28, 2001 by the Lenders (the "Lender Consent") shall not be deemed to give rise to any breach of the representation and warranty set forth in this clause (i)), nor will such action result in any breach of trust by Seller or any violation of the provisions of the certificate of incorporation or by-laws or other constitutive documents of Seller or any statute or any order, judgment, decree, rule or regulation of any court or governmental agency or body having jurisdiction over Seller or any of its subsidiaries or any of their respective properties or (ii) except for the Lender Consent, require any consent, approval, authorization or order of, or filing or qualification with, any governmental body, agency, official, self-regulatory organization or court or other tribunal, whether foreign or domestic, or any other Person. (d) There is not pending or, to Seller's knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or the Pledge Agreement or its ability to perform its obligations hereunder or thereunder. (e) Seller is acting for Seller's own account, and has made Seller's own independent decision to enter into this Agreement and the Pledge Agreement and as to whether this Agreement and the Pledge Agreement are appropriate or proper for Seller based upon Seller's own judgment and upon advice of such advisors as Seller deems necessary. Seller acknowledges and agrees that Seller is not relying, and has not relied, upon any communication (written or oral) of Buyer or any affiliate of Buyer with respect to the legal, accounting, tax or other implications of this Agreement and the Pledge Agreement and that Seller has conducted Seller's own analysis of the legal, accounting, tax and other implications hereof and thereof; it being understood that information and explanations related to the terms and conditions of this Agreement or the Pledge Agreement shall not be considered investment advice or a recommendation to enter into this Agreement or the Pledge Agreement. No communication (written or oral) received from Buyer or any affiliate of Buyer shall be deemed to be an assurance or guarantee as to the expected results of this Agreement. (f) Seller is entering into this Agreement with a full understanding of all of the terms and risks hereof (economic and otherwise) and is capable of evaluating and understanding (on Seller's own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks. Seller is also capable of assuming (financially and otherwise), and assumes, those risks. (g) Seller acknowledges that neither Buyer nor any affiliate of Buyer is acting as a fiduciary or agent for or an advisor to Seller in respect of this Agreement or the Pledge Agreement, and all decisions of Seller have been the result of arm's length negotiations between Seller and Buyer. (h) Since the date three months prior to the date hereof, neither Seller nor any Person who would be considered to be the same "Person" as Seller or "acting in concert" with Seller (as such terms are used in clauses (e)(3)(vi) or (a)(2) of Rule 144 under the Securities Act), individually or in the aggregate, has, except on a registered-basis, sold a number of shares of Common Stock or hedged (through swaps, options, short sales, stock loans or otherwise) any long position in a number of shares of Common Stock that would, if added to the Base Amount of shares of Common Stock specified in all Pricing Schedules and the Maximum Base Amount of shares of Common Stock specified in any Pre-Pricing Acknowledgments with respect to any Tranches for which no Pricing Schedule has been delivered, have exceeded the number of shares of Common Stock that Seller could have sold pursuant to Rule 144 under the Securities Act on the date hereof. For the purposes of this Section 3.01(h) and Section 5.05, Common Stock shall be deemed to include securities convertible into, exchangeable or exercisable for Common Stock. (i) Seller does not know or have any reason to believe that the Issuer has not complied with the reporting requirements contained in Rule 144(c)(1) under the Securities Act. (j) Delivery of shares of Common Stock by Seller pursuant to this Agreement will pass to an affiliate of Buyer designated by Buyer title to such shares free and clear of any Liens, except for those created pursuant to the Pledge Agreement. (k) Seller is not on the date hereof, and will not be during each Hedging Period, aware of any material non-public information regarding the Issuer. No blackout period with respect to the Common Stock is in effect on the date hereof or will be in effect during each Hedging Period. (l) Seller is and will be in compliance with his reporting obligations under Section 16 of the Securities Exchange Act of 1934, as amended, and Seller will provide Buyer with a copy of any report filed thereunder in respect of the transactions contemplated hereby promptly upon filing thereof. (m) Seller is not and after giving effect to application of the Purchase Price for any Tranche will not be, required to register as an "investment company" as such term is defined in the Investment Company Act of 1940, as amended. (n) Seller is an "eligible contract participant" (as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended (the "CEA")) because it is a corporation, partnership, proprietorship, organization, trust or other entity and: (i) it has total assets in excess of $10,000,000; (ii) its obligations hereunder are guaranteed, or otherwise supported by a letter of credit or keep well, support or other agreement, by an entity of the type described in Section 1a(12)(A)(i) through (iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or 1a(12)(C) of the CEA; or (iii) it has a net worth in excess of $1,000,000 and has entered into this Agreement in connection with the conduct of its business or to manage the risk associated with an asset or liability owned or incurred or reasonably likely to be owned or incurred by it in the conduct of its business. (o) Seller has not solicited or arranged for the solicitation of, and will not solicit or arrange for the solicitation of, orders to buy shares of Common Stock in anticipation of or in connection with any short sales of shares of Common Stock which an affiliate of Buyer effects, for the account of Buyer, in establishing Buyer's Initial Short Position for any Tranche. (p) Except as provided herein, Seller has not made, will not make, and has not arranged for, any payment to any Person in connection with the short sales of shares of Common Stock which an affiliate of Buyer effects, for the account of Buyer, in establishing Buyer's Initial Short Position for any Tranche. SECTION 3.02. Representations and Warranties of Buyer. Buyer represents and warrants to Seller that: (a) Buyer is a banking corporation, duly formed, validly existing and in good standing under the laws of the State of New York, and has all powers and all material governmental licenses, authorizations, consents and approvals required to enter into, and perform its obligations under, this Agreement. (b) Each of this Agreement and the Pledge Agreement has been duly authorized and validly executed and delivered by Buyer and constitutes a valid and legally binding obligation of Buyer enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and to general equitable principles. (c) The execution and delivery by Buyer of, and the compliance by Buyer with all of the provisions of, this Agreement and the Pledge Agreement, and the consummation of the transactions herein and therein contemplated, will not require any consent, approval, authorization or order of, or filing or qualification with, any governmental body, agency, official, self-regulatory organization or court or other tribunal, whether foreign or domestic. (d) Buyer (or its affiliate) will conduct its hedging activities as described herein in accordance with the interpretive letter from the Securities and Exchange Commission to Goldman, Sachs & Co. dated December 20, 1999, it being understood that Buyer will introduce into the public market a quantity of securities of the same class as the Common Stock equal to the Base Amount in a manner consistent with the manner-of-sale conditions described in Rule 144(f) and (g) under the Securities Act. In conducting its hedging activities with respect to each Tranche, Buyer will first sell shares of Common Stock to establish its Initial Short Position, and thereafter will sell an additional number of shares such that the total number of shares shall equal the Base Amount for such Tranche. (e) The execution and delivery by Buyer of, and the compliance by Buyer with all of the provisions of, this Agreement and the Pledge Agreement, and the consummation of the transactions herein and therein contemplated, will not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets. (f) There is not pending or, to Buyer's knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or the Pledge Agreement or its ability to perform its obligations hereunder or thereunder. (g) Buyer acknowledges that neither Buyer nor any affiliate of Buyer is acting as a fiduciary or agent for or an advisor to Seller in respect of this Agreement or the Pledge Agreement. ARTICLE 4 CONDITIONS SECTION 4.01. Conditions to Effectiveness of this Agreement. This Agreement shall become effective on the Effective Date upon satisfaction or waiver of each of the following conditions: (a) The Pledge Agreement shall have been executed by the parties thereto; (b) Seller shall have received a consent (in form and substance reasonably satisfactory to Buyer) of the Lenders under the Mafco Credit Agreement consenting to the transactions contemplated hereby and by the Pledge Agreement and shall have delivered a true and correct copy thereof to Buyer, and such consent shall be in full force and effect as of the Effective Date (it being understood that the existence of conditions precedent to the Lenders' consent to Seller entering into and consummating the transactions contemplated hereby and by the Pledge Agreement as set forth in Section 2 of the Lender Consent shall not be deemed to give rise to any failure by Seller to meet the condition precedent set forth in this paragraph (b)); (c) Seller shall have delivered to Buyer an agreement (in form and substance reasonably satisfactory to Buyer), dated as of a date on or prior to the Effective Date, of Citibank, as agent under the Mafco Credit Agreement and collateral agent under the Seller Pledge Agreement, Seller and Buyer to the effect that, upon receipt of the Purchase Price for each Tranche pursuant to Section 2.01(a) and the satisfaction of other applicable conditions precedent set forth in Sections 2 and 3 of the Lender Consent, Citibank shall promptly (i) release a number of shares of Common Stock equal to the Base Amount for such Tranche from the security interest granted under the Seller Pledge Agreement, (ii) deliver the certificate or certificates representing such shares to the Collateral Agent, and (iii) execute and deliver such other documents as Buyer may reasonably request to evidence the release of such shares from the security interest granted under the Seller Pledge Agreement and the satisfaction of the conditions precedent set forth in Section 3 of the Consent; and (d) Buyer shall have received an opinion (in form and substance satisfactory to Buyer and its counsel), dated as of the date hereof, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for Seller, to the effect set forth in Annex A. (e) Seller shall have delivered to Buyer a signed, true and complete copy of an amended notice on Form 144 relating to the transactions contemplated hereunder, as of the date of the Pre-pricing Acknowledgment, naming Seller as seller and J.P. Morgan Securities Inc. and Credit Suisse First Boston Corporation as brokers, and containing a footnote next to the amount in column 3(c) of Form 144 to the following effect: "Pursuant to a secured pre-paid variable share forward contract," three copies of which shall have been mailed to the Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and one copy of which shall have been mailed to the Exchange not later than on the Effective Date, all in the manner contemplated by Rule 144(h). Alternatively, Seller shall have delivered to Buyer sufficient signed copies of such amended Form 144 to be filed by Buyer (or its affiliate) as set forth above, prior to the execution and delivery of the Pre-pricing Acknowledgment. SECTION 4.02. Conditions to Buyer's Obligations. Without limiting the generality of Section 4.01, the obligation of Buyer to deliver any portion of the aggregate Purchase Price for any Tranche hereunder on any day pursuant to Section 2.02(a) is subject to the satisfaction of the following conditions: (a) The representations and warranties of Seller contained in Article 3 and in the Pledge Agreement shall be true and correct as of such day. (b) No Event of Default shall have occurred and be continuing. (c) Seller shall have performed all of the covenants and obligations to be performed by it hereunder and under the Pledge Agreement and each of the conditions in Section 4.01 shall have been satisfied or waived on or prior to such day. ARTICLE 5 COVENANTS SECTION 5.01. Taxes. (a) Seller shall pay any and all documentary, stamp, transfer or similar taxes and charges that may be payable in respect of the entry into this Agreement and the transfer and delivery of any Common Stock pursuant hereto. Seller intends to make all payments in respect of this Agreement free and clear of, and without withholding or deduction for or on account of, any present or future taxes, duties, fines, penalties, assessments or other governmental charges of whatsoever nature (or interest on any taxes, duties, fines, penalties, assessments or other governmental charges of whatsoever nature) ("Taxes") imposed, levied, collected, withheld or assessed by, within or on behalf of the United States or any political subdivision or governmental authority thereof or therein having power to tax. If any payment or delivery that Seller is required to make to Buyer hereunder or under the Pledge Agreement will be subject to such withholding or deduction (based on law as in effect at the time such payment or delivery is required to be made), the following provisions shall apply: (i) Seller shall notify Buyer of such requirement at least 180 days prior to date on which such payment is required to be made (the "Required Payment Date"); provided that if Seller is unable to provide Buyer with 180 days' notice of such requirement as a result of a statutory change or a Treasury regulation, notice, announcement, ruling or other Treasury publication or applicable court decision published after the date hereof (each, a "Change in Tax Law") or as a result of a transfer by Buyer of its rights and obligations in respect of this Agreement and the Pledge Agreement pursuant to Section 8.06, (A) Seller shall notify Buyer of such requirement as promptly as practicable following such Change in Tax Law or the effective date of any such transfer and (B) Buyer shall have the right to postpone the Required Payment Date for any such payment for as long as reasonably necessary to effect the transfer contemplated by paragraphs (ii) and (iv) below (but in no event shall Buyer postpone the Required Payment Date to a date later than the date 180 days following the date such notice is given). In the event that the Required Payment Date for any such payment is postponed, Seller shall deliver such payment to Buyer on the postponed Required Payment Date, together with interest thereon for the period from and including the original Required Payment Date to but excluding such postponed Required Payment Date at a per annum rate equal to the three-month Treasury Rate as of the original Required Payment Date. (ii) Upon receipt of such notice, Buyer shall use its reasonable best efforts to transfer its rights and obligations in respect of this Agreement and the Pledge Agreement to another entity such that (A) such payment would not be subject to withholding or deduction and (B) neither Buyer nor any of its affiliates would be subject to increased costs (including balance sheet costs) as a result of such transfer. (iii) If Buyer is unable to effect a transfer of the type contemplated by paragraph (ii) Seller shall indemnify Buyer for the full amount of any withholding or deduction, as well as any liability (including penalties, interest and expenses) arising therefrom or with respect thereto; provided that if it is reasonably practicable for Buyer to transfer its rights and obligations in respect of this Agreement and the Pledge Agreement to another entity such that such payment would not be subject to such withholding and deduction, then (A) Buyer shall notify Seller of the aggregate amount of increased costs (including balance sheet costs) to which Buyer and its affiliate would be subject as a result of such transfer, (B) Seller shall notify Buyer prior to the date sixty Business Days preceding the Required Payment Date, whether or not Seller elects that such transfer be effected and (C) if Seller elects that such transfer be effected, Seller shall reimburse Buyer for the aggregate amount of any increased costs (including balance sheet costs) to which Buyer and its affiliates would be subject as a result of such transfer and, if Seller does not elect that such transfer be effected, Seller shall indemnify Buyer for the full amount of any withholding or deduction, as well as any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. (b) If Seller makes any payment or delivery in respect of this Agreement or the Pledge Agreement from or through any non-United States jurisdiction, Seller shall make such payment or delivery free and clear of, and without withholding or deduction for or on account of, any Taxes imposed, levied, collected, withheld or assessed by, within or on behalf of such non-United States jurisdiction, or any political subdivision or governmental authority thereof or therein having power to tax. In the event such withholding or deduction is imposed, Seller agrees to indemnify Buyer for the full amount of such withholding or deduction, as well as any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. SECTION 5.02. Forward Contract. (a) Seller hereby agrees that: (i) Seller will not treat this Agreement or any Tranche hereunder, any portion of this Agreement or any Tranche hereunder, or any obligation hereunder as giving rise to any interest income or other inclusions of ordinary income; (ii) Seller will not treat the delivery of any portion of the shares of Common Stock or cash to be delivered pursuant to this Agreement with respect to any Tranche as the payment of interest or ordinary income; (iii) Seller will treat this Agreement in its entirety as a forward contract for the delivery of such shares of Common Stock or cash; and (iv) Seller will not take any action (including filing any tax return or form or taking any position in any tax proceeding) that is inconsistent with the obligations contained in (i) through (iii). Notwithstanding the preceding sentence, Seller may take any action or position required by law, provided that Seller delivers to Buyer an unqualified opinion of counsel, nationally recognized as expert in Federal tax matters and acceptable to Buyer, to the effect that such action or position is required by a statutory change or a Treasury regulation or applicable court decision published after the date of this Agreement. (b) Buyer hereby agrees, for United States federal income tax purposes (including, without limitation, tax information reporting purposes), to treat this Agreement in a manner consistent with Seller's obligations under this Section 5.02. SECTION 5.03. Notices. Seller will cause to be delivered to Buyer: (a) immediately upon the occurrence of any Event of Default hereunder or under the Pledge Agreement, or upon any officer of Seller obtaining knowledge that any condition or event of the type described in Section 7.01(a) or 7.01(b) shall have occurred with respect to the Issuer, notice of such occurrence; and (b) promptly, in case at any time prior to the Settlement Date for the last Tranche, Seller receives notice, or any officer of Seller obtains knowledge, that any event requiring that an adjustment be calculated pursuant to Section 6.01 or 6.02 hereof or any Nationalization or Insolvency shall have occurred or be pending, a notice identifying such event and stating, if known to Seller, the date on which such event occurred or is to occur and, if applicable, the record date relating to such event. Seller shall cause further notices to be delivered to Buyer if Seller shall subsequently receive notice, or any officer of Seller shall obtain knowledge, of any further or revised information regarding the terms or timing of such event or any record date relating thereto. SECTION 5.04. Further Assurances. From time to time from and after the date hereof through the Settlement Date for the last Tranche, each of the parties hereto shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper and advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement and the Pledge Agreement in accordance with the terms and conditions hereof and thereof, including (i) using reasonable best efforts to remove any legal impediment to the consummation of such transactions and (ii) the execution and delivery of all such deeds, agreements, assignments and further instruments of transfer and conveyance necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement and the Pledge Agreement in accordance with the terms and conditions hereof and thereof. SECTION 5.05. No Sales of Common Stock. From the date hereof until the end of three months after the Hedging Termination Date, neither Seller nor any Person who would be considered to be the same "Person" as Seller or "acting in concert" with Seller (as such terms are used in clauses (e)(3)(vi) or (a)(2) of Rule 144 under the Securities Act), individually or in the aggregate, shall, except on a registered-basis, without the prior written consent of Buyer (which shall not be unreasonably withheld, conditioned or delayed), sell a number of shares of Common Stock or hedge (through swaps, options, short sales, stock loans or otherwise), any long position in a number of shares of Common Stock that would, at the time of such sale or hedge, if added to the Maximum Base Amount of shares of Common Stock specified in all Pre-Pricing Acknowledgments, exceed the number of shares of Common Stock that Seller could have sold pursuant to Rule 144 under the Securities Act at such time. For purposes of this Section 5.05 and Section 3.01(h), Common Stock shall be deemed to include securities convertible into, exchangeable or exercisable for Common Stock. SECTION 5.06. Securities Contract. The parties hereto agree and acknowledge that each of Buyer and the Collateral Agent is a "financial institution" within the meaning of Section 101(22) of Title 11 of the United States Code (the "Bankruptcy Code"), that the Collateral Agent is acting as agent and custodian for Buyer in connection with this Agreement and that Buyer is a "customer" of the Collateral Agent within the meaning of Section 741(2) of the Bankruptcy Code. The parties hereto further agree and acknowledge that this Agreement is a "securities contract," as such term is defined in Section 741(7) of the Bankruptcy Code, and the parties hereto are entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 546(e) and 555 of the Bankruptcy Code. SECTION 5.07. Borrow Cost Adjustment. (a) With respect to any Tranche and within two Business Days following its receipt of request from Buyer with respect to such Tranche, Seller shall pay to Buyer (or an affiliate designated by Buyer) the amount of Excess Borrow Cost for such Tranche with respect to any Monthly Borrow Period for such Tranche. (b) For the purposes of this Section 5.07, the following terms shall have the following meanings: "Excess Borrow Cost" means, with respect to any Tranche, as determined by the Calculation Agent with respect to any Monthly Borrow Period for such Tranche, an amount by which the direct or indirect aggregate cost of borrowing shares of Common Stock for the purpose of hedging Buyer's (or its affiliate's) risk with respect to such Tranche hereunder for such Monthly Borrow Period exceeds the Fixed Borrow Cost for such Tranche for such Monthly Borrow Period, irrespective of whether such borrowing is effected by Buyer, by an affiliate of Buyer, or by a counterparty to a transaction entered into by Buyer or such affiliate to hedge Buyer's (or its affiliate's) exposure to such Tranche hereunder. "Fixed Borrow Cost" means, with respect to any Tranche, as determined by the Calculation Agent with respect to any Monthly Borrow Period for such Tranche, an amount equal to the product of (i) 10 basis points per annum, (ii) the weighted average number of shares of Common Stock borrowed (directly or indirectly) by Buyer (or its affiliate) during such Monthly Borrow Period to hedge Buyer's (or its affiliate's) risk with respect to such Tranche hereunder, irrespective of whether such borrowing is effected by Buyer, by an affiliate of Buyer, or by a counterparty to a transaction entered into by Buyer or such affiliate to hedge Buyer's (or its affiliate's) exposure to such Tranche hereunder, and (iii) the weighted average Closing Price per share of Common Stock for each Trading Day during such Monthly Borrow Period. "Monthly Borrow Period" means, with respect to any Tranche, the period beginning on the first day of the Hedging Period for such Tranche (in the case of the first Monthly Borrow Period for such Tranche) or on the first day of any calendar month (in the case of each subsequent Monthly Borrow Period for such Tranche) and ending on the last day of such calendar month or on the last Valuation Date for such Tranche (in the case of the last Monthly Borrow Period for such Tranche). ARTICLE 6 ADJUSTMENTS SECTION 6.01. Dilution Adjustments. (a) Following the declaration by the Issuer of the terms of any Potential Adjustment Event, (A) in the case of each Potential Adjustment Event other than an Extraordinary Dividend, the Calculation Agent will (i) determine whether such Potential Adjustment Event has a diluting or concentrative effect on the theoretical value of the Common Stock, and, if there is such an effect, the Calculation Agent will make corresponding adjustment(s), if any, with respect to each Tranche, to any one or more of the Base Amount for such Tranche, the Settlement Ratio for such Tranche, the Upside Limit for such Tranche, the Hedged Value for such Tranche, any Closing Price and any other variable relevant to the exercise, settlement or payment terms of such Tranche, as the Calculation Agent determines appropriate to account for that diluting or concentrative effect and (ii) determine the effective date(s) of the adjustment(s) or (B) in the case of any Potential Adjustment Event that is an Extraordinary Dividend, Seller shall pay to Buyer or an affiliate of Buyer designated by Buyer (or, in the event such Extraordinary Dividend consists of property other than cash, cause to be distributed or delivered to Buyer or an affiliate of Buyer designated by Buyer) such Extraordinary Dividend on the date such Extraordinary Dividend is paid by the Issuer to holders of Common Stock. The Calculation Agent may (but need not) determine the appropriate adjustment(s) by reference to the adjustment(s) in respect of such Potential Adjustment Event made by an options exchange to options on the Common Stock traded on that options exchange. (b) For these purposes, "Potential Adjustment Event" means any of the following: (i) a subdivision, consolidation or reclassification of shares of Common Stock (unless a Merger Event), or, a free distribution or dividend of any shares of Common Stock to existing holders of Common Stock by way of bonus, capitalization or similar issue; (ii) a distribution or dividend to existing holders of Common Stock of (A) shares of Common Stock, or (B) other share capital or securities granting the right to payment of dividends and/or the proceeds of liquidation of the Issuer equally or proportionately with such payments to holders of Common Stock, or (C) any other type of securities, rights or warrants or other assets, in any case for payment (cash or other) at less than the prevailing market price as determined by the Calculation Agent; (iii) a dividend or distribution (an "Extraordinary Dividend") consisting of cash and/or any other property (other than distributions or dividends of a type described in Section 6.01(b)(ii)), other than any cash dividend on the Common Stock to the extent that, with respect to each Tranche, the aggregate cash dividend per share of the Common Stock for the relevant period does not exceed the greater of (x) the Ordinary Dividend for such Tranche for that period and (y) if any, the most recent cash dividend on the Common Stock that was an Ordinary Dividend for such Tranche for an earlier corresponding period ("Ordinary Dividend" means, with respect to each Tranche, a cash dividend that does not exceed the Ordinary Dividend Amount for such Tranche, on an annualized basis; "relevant period" means the fiscal period (e.g., quarter or six-month period) for which the Issuer ordinarily declares a regular cash dividend; and "earlier corresponding period" means a prior relevant period (whether or not the next preceding relevant period)); (iv) a call by the Issuer in respect of shares of Common Stock that are not fully paid; (v) a repurchase by the Issuer of shares of Common Stock, whether out of profits or capital and whether the consideration for such repurchase is cash, securities or otherwise; (vi) the happening of a contingency that causes rights attached to shares of Common Stock to become exercisable in the hands of less than all existing holders of Common Stock; or (vii) any other similar event that may have a diluting or concentrative effect on the theoretical value of the Common Stock. (c) Notwithstanding the provisions of Section 6.01(a) and Section 6.01(b), in the event of a distribution (a "Spinoff") of shares of capital stock of a subsidiary of the Issuer (a "Spinoff Issuer") that is a Publicly-Traded Entity made to holders of shares of Common Stock, (i) the "Contract Shares" for each Tranche shall include, in addition to the number of shares of Free Stock equal to the Contract Share Amount, a number of shares of Spinoff Stock equal to the product of (A) the Base Amount immediately prior to the consummation of the Spinoff and (B) the number of shares of Spinoff Stock that a holder of one share of Original Stock would have owned or been entitled to receive immediately following such Spinoff and (ii) the "Settlement Price" shall be equal to the sum of (A) the Settlement Price of the Original Stock and (B) the product of (x) the Settlement Price of the Spinoff Stock and (y) the number of shares of Spinoff Stock that a holder of one share of Original Stock would have owned or been entitled to receive immediately following such Spinoff. Following a Spinoff, "Original Stock" shall mean the common stock of the entity that is the Issuer immediately prior to the Spinoff and "Spinoff Stock" shall mean the common equity securities of the Publicly-Traded Entity resulting from such Spinoff. If a Spinoff is effected with respect to more than one Spinoff Stock at one time, the Calculation Agent shall, with respect to each Tranche, follow the foregoing procedure with appropriate modifications and adjustments to accommodate additional Spinoff Stocks. Notwithstanding the foregoing, if any Spinoff Issuer is not, or as a result of the Spinoff does not become, a Publicly-Traded Entity, such Spinoff shall be treated as an Extraordinary Dividend in accordance with Section 6.01(a). SECTION 6.02. Merger Events. (a) If a Share-for-Share-Merger Event or a Share-for-Combined Merger Event shall occur, then, (i) effective as of the Merger Date for such Merger Event, with respect to each Tranche, (A) the number of New Shares to which a holder of a number of shares of Common Stock equal to the Base Amount for such Tranche would be entitled upon consummation of such Merger Event will be deemed the "Base Amount" for such Tranche, (B) the New Shares and their issuer will be deemed the "Common Stock" and the "Issuer", respectively, and (C) the Calculation Agent will make appropriate adjustments, if any, on account of such Merger Event (including, without limitation, adjustments on account of changes in volatility of the Common Stock during the period from the date of the first public announcement of such Merger Event to the Merger Date based on models that are customary for leading equity derivatives dealers) to any one or more of the Base Amount for each Tranche, the Settlement Ratio for each Tranche, the Upside Limit for each Tranche, the Hedged Value for each Tranche, any Closing Price and any other variable relevant to the exercise, settlement or payment terms of each Tranche; and (ii) if the consideration received by holders of Common Stock includes Other Consideration, Seller shall make a cash payment, by wire transfer of immediately available funds to an account designated by Buyer, to Buyer on the Merger Date for such Merger Event in an amount equal to the Acceleration Value for such Tranche (calculated, for purposes of this Section 6.02(a)(ii), (A) as if (1) the Termination Date for such Tranche were the Acceleration Date for such Tranche and (2) the Base Amount for such Tranche were equal to the product of (x) the Base Amount immediately prior to the consummation of such Merger Event and (y) the percentage of the value of the consideration received by holders of Common Stock represented by the Other Consideration, as determined by the Calculation Agent, and (B) on the basis of, in addition to the factors indicated in Section 7.01, a value ascribed to the Common Stock equal to the Other Consideration, if any, paid in respect of the Common Stock at the time of such Merger Event). (b) If a Merger Event (other than a Share-for-Share Merger Event or a Share-for-Combined Merger Event) shall occur, Buyer shall have the right, upon becoming aware of the occurrence of such Merger Event, to notify Seller of such event and terminate each remaining Tranche, following which Seller shall make payment to Buyer as provided in Section 6.04. (c) "Merger Event" means, in respect of shares of Common Stock, any (A) reclassification or change of shares of Common Stock that results in a transfer of or an irrevocable commitment to transfer 100% of the outstanding shares of Common Stock, (B) consolidation, amalgamation or merger of the Issuer with or into another entity (other than a consolidation, amalgamation or merger in which the Issuer is the continuing entity and which does not result in any such reclassification or change of 100% of the outstanding shares of Common Stock), or (C) other takeover offer for shares of Common Stock that results in a transfer of or an irrevocable commitment to transfer 100% of the shares of Common Stock (other than the shares of Common Stock owned or controlled by the offeror), in each case if the Merger Date is on or before the Settlement Date for the last Tranche hereunder. "Merger Date" means, in respect of a Merger Event, the date upon which holders of the necessary number of shares of Common Stock (other than, in the case of a takeover offer, shares of Common Stock owned or controlled by the offeror) have agreed or have irrevocably become obligated to transfer their shares of Common Stock. In respect of each Merger Event, the following terms have the meanings given below: (i) "Share-for-Share Merger Event" means a Merger Event in which the consideration for the Common Stock consists (or, at the option of the holder of such Common Stock, may consist) solely of New Shares; (ii) "Share-for-Combined Merger Event" means a Merger Event in which the consideration for the Common Stock consists of New Shares and Other Consideration; (iii) "New Shares" means shares of common stock (whether of the offeror or a third party) issued by a Publicly-Traded Entity received in connection with a Merger Event; and (iv) "Other Consideration" means cash and/or any securities (other than New Shares) or assets (whether of the offeror or a third party). SECTION 6.03. Nationalization and Insolvency. If, prior to the Settlement Date for the last Tranche hereunder, all the shares of Common Stock or all or substantially all the assets of the Issuer are nationalized, expropriated or are otherwise required to be transferred to any governmental agency, authority or entity (a "Nationalization"); or by reason of the voluntary or involuntary liquidation, bankruptcy or insolvency of or any analogous proceeding affecting the Issuer, (a) all the shares of Common Stock are required to be transferred to a trustee, liquidator or other similar official or (b) holders of the shares of Common Stock become legally prohibited from transferring them (an "Insolvency"), then, in any such event, Buyer shall have the right, upon becoming aware of the occurrence of a Nationalization or Insolvency, as the case may be, to notify Seller of such event and terminate each remaining Tranche as of the date set forth in such notice, following which Seller shall make payment to Buyer as provided in Section 6.04. SECTION 6.04. Termination and Payment. Following termination of any Tranche as a result of any Merger Event, Nationalization or Insolvency, Seller shall pay to Buyer an amount in cash (the "Termination Amount") equal to the Acceleration Value for such Tranche (calculated, for purposes of this Section 6.04, as if the Termination Date for such Tranche were the Acceleration Date for such Tranche, and on the basis of, in addition to the factors indicated in Section 7.01, a value ascribed to the Common Stock equal to the consideration, if any, paid in respect of the Common Stock at the time of the Merger Event, Nationalization or Insolvency, as the case may be) in settlement of such Tranche. As promptly as reasonably practicable after calculation of the Acceleration Value for such Tranche, Buyer shall deliver to Seller a notice (the "Termination Amount Notice" for such Tranche) specifying the Termination Amount for such Tranche. Not later than three Business Days following delivery of a Termination Amount Notice for such Tranche by Buyer, Seller shall make a cash payment, by wire transfer of immediately available funds to an account designated by Buyer, to Buyer in an amount equal to the Termination Amount for such Tranche. "Termination Date" means, with respect to each Tranche, (i) in respect of a Merger Event, the Merger Date, (ii) in respect of a Nationalization, the date of the first public announcement of a firm intention to nationalize and (iii) in respect of an Insolvency, the earlier of the date the shares of Common Stock are required to be transferred to a trustee, liquidator or other similar official and the date the holders of shares of Common Stock become legally prohibited from transferring the shares of Common Stock that, in the case of a Nationalization or an Insolvency (whether or not amended or on the terms originally announced), leads to the Nationalization or the Insolvency, as the case may be, in each case as determined by Buyer. ARTICLE 7 ACCELERATION SECTION 7.01. Acceleration. If one or more of the following events (each an "Event of Default") shall occur: (a) any legal proceeding shall have been instituted or any other event shall have occurred or condition shall exist that would be reasonably likely to have a material adverse effect on the financial condition of Seller or on Seller's ability to perform Seller's obligations hereunder, or that calls into question the validity or binding effect of any agreement of Seller hereunder or under the Pledge Agreement (which shall include, without limitation, any repudiation by Seller of this Agreement or the Pledge Agreement); (b) Seller is adjudicated insolvent or bankrupt, Seller makes an assignment for the benefit of creditors or commences an Insolvency Proceeding with respect to itself or any of its debts or assets in any jurisdiction and under any applicable law, whether now or hereafter in effect, or Seller becomes insolvent or admits in writing its inability generally to pay its debts as they become due. (c) the commencement of any Insolvency Proceeding with respect to Seller (i) by a governmental, regulatory or supervisory authority, self-regulatory organization, government-sponsored corporation or similar entity having primary jurisdiction over it or its assets, or over Insolvency Proceedings in respect of it or its assets, in the jurisdiction of its incorporation or organization or the jurisdiction of its head or home office; or (ii) by any other Person if such Insolvency Proceeding (A) is consented to or not timely contested by the party against whom it was commenced, (B) results in the entry of a judgment of insolvency or bankruptcy or the entry of an order for winding-up, liquidation, reorganization, composition, rehabilitation, administration or other similar relief or the appointment of a conservator, trustee, receiver, liquidator, administrator, custodian or similar official, or (C) is not dismissed within 30 days; (d) at any time, any representation made or repeated or deemed to have been made or repeated by Seller under this Agreement or the Pledge Agreement or any certificate delivered pursuant hereto or thereto would be incorrect or misleading in any material respect if made or repeated as of such time; (e) (i) Seller fails to deliver (A) shares of Common Stock or cash on the Settlement Date for any Tranche, (B) the Termination Amount on any Termination Date for such Tranche, (C) any payment or delivery by Seller when due pursuant to Sections 5.01, 5.07 or 6.01(a)(ii)(B) of this Agreement or (D) the collateral and such other documents and instruments as are required to be delivered pursuant to Section 1(b) of the Pledge Agreement, and in each case such failure remains unremedied for 5 days following notice from Buyer; or (ii) Seller fails to fulfill or discharge when due any of Seller's obligations, covenants or agreements under or relating to this Agreement or the Pledge Agreement (other than the obligations referred to in Section 7.01(e)(i)) and such failure remains unremedied for 30 days following notice from Buyer; (f) due to the adoption of, or any change in, any applicable law after the date hereof, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after the date hereof, it becomes unlawful for Seller to perform any absolute or contingent obligation to make payment or delivery hereunder or to comply with any other material provision of this Agreement or the Pledge Agreement; (g) Seller, Parent or any direct or indirect wholly-owned subsidiary of Parent in the chain of ownership between Parent and Seller fails to make any payment in respect of any debt or other obligation having a principal amount or other amount payable of $10,000,000 or more in the aggregate, in each case when due or within any applicable grace period, or any event or condition shall occur which results in the acceleration of the maturity of any such debt or such other obligation, as the case may be; (h) one or more final judgments or orders for the payment of money in excess of $10,000,000 in the aggregate shall be rendered against Seller and there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect unless such judgment or order shall have been vacated, satisfied or dismissed or bonded pending appeal; (i) Buyer determines in its discretion that it is unable to establish, re-establish or maintain in an economically efficient manner any hedging transactions necessary or desirable in the normal course of such party's business of hedging the price and market risk of entering into and performing under any Tranche hereunder, due to market illiquidity, illegality, lack of availability of hedging transaction market participants or any other factor (including, without limitation, the insufficient availability of stock lenders willing and able to lend shares of Common Stock with a borrow cost not significantly greater than the cost as of the date hereof and otherwise on terms consistent with those as of the date hereof); or (j) a Collateral Event of Default within the meaning of the Pledge Agreement shall occur; then, upon notice to Seller from Buyer at any time following an Event of Default (which, in the case of an Event of Default set forth in Section 7.01(i), shall identify one or more Tranches to which that notice relates), an "Acceleration Date" shall occur with respect to each Tranche (or, in the case of an Event of Default set forth in Section 7.01(i), each Tranche identified in such notice), and Seller shall become obligated to deliver to an affiliate of Buyer designated by Buyer immediately upon receipt of the Acceleration Amount Notice for all remaining Tranches (or, in the case of an Event of Default set forth in Section 7.01(i), each Tranche identified in such notice), a number of shares of Free Stock equal to the Acceleration Amount for each such Tranche; provided that if the Collateral Agent proceeds to realize upon any collateral pledged under the Pledge Agreement and to apply the proceeds of such realization with respect to any such Tranche as provided in paragraph second of Section 8(d) thereof, then, to the extent of such application of proceeds, Seller's obligation to deliver Free Stock for such Tranche pursuant to this paragraph shall be deemed to be an obligation to deliver an amount of cash equal to the aggregate Market Value per share of such Free Stock on the Acceleration Date for such Tranche. The "Acceleration Amount" means, with respect to any Tranche, the quotient obtained by dividing: (i) the Acceleration Value for such Tranche, as defined below, by (ii) the Market Value per share of the Common Stock on the Acceleration Date for such Tranche. The "Acceleration Value" means, with respect to any Tranche, an amount determined by the Calculation Agent representing the fair value to Buyer and its affiliates of an agreement with terms that would preserve for Buyer the economic equivalent of the payments and deliveries in respect of such Tranche that Buyer and its affiliates would, but for the occurrence of the Acceleration Date for such Tranche, have been entitled to receive after such Acceleration Date under Article 2 (taking into account any adjustments pursuant to Article 6 that may have been calculated with respect to such Tranche on or prior to such Acceleration Date), including any loss of bargain, cost of funding or, without duplication, aggregate net gain or loss or cost incurred as a result of the termination, liquidation, establishment or reestablishment of any hedge or related trading position (whether such hedge or related trading position was maintained by Buyer or one of its affiliates or by a counterparty to a transaction entered into by Buyer or one of its affiliates to hedge Buyer's exposure to such Tranche) and, in determining any amount pursuant to Section 6.02(a)(ii) or any Termination Amount pursuant to Section 6.04, any aggregate net gain or loss incurred as a result of changes in volatility of the Common Stock during the period from the date of the first public announcement of such Merger Event to the Merger Date based on models that are customary for leading equity derivatives dealers. The Calculation Agent shall calculate such amount based on the following factors (and such other factors as it deems appropriate): (i) the volatility of the Common Stock, (ii) dividends on the Common Stock and (iii) prevailing interest rates. As promptly as reasonably practicable after calculation of the Acceleration Value with respect to any Tranche, the Calculation Agent shall deliver to Seller a notice for such Tranche (the "Acceleration Amount Notice") specifying the Acceleration Amount of shares of Common Stock required to be delivered by Seller with respect to such Tranche. ARTICLE 8 MISCELLANEOUS SECTION 8.01. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to Buyer shall be directed to JPMorgan Chase Bank, 277 Park Avenue - 11th Floor, New York, NY 10172, Attention: EDG Corporate Marketing (Ross Gray), Telephone: (212) 622- 5730, Telecopy: (212) 622-0105, with a copy to JPMorgan Chase Bank, 500 Stanton Christiana Road, Newark, DE 19713-2107, Attention: Collateral Ops, 3 OPS 2, Telephone: (302) 634-3158, Telecopy: (302) 634-3208; notices to Seller shall be directed to Seller at 35 East 62nd Street, New York, NY, 10021, Telecopy No. 212-572-5965, Attention: Chief Financial Officer. SECTION 8.02. Governing Law; Severability; Submission to Jurisdiction; Waiver of Jury Trial. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without reference to choice of law doctrine). (b) To the extent permitted by law, the unenforceability or invalidity of any provision or provisions of this Agreement shall not render any other provision or provisions herein contained unenforceable or invalid. (c) Seller and Buyer hereby irrevocably and unconditionally submit to the non-exclusive jurisdiction of the Federal and state courts located in the Borough of Manhattan in the City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. (d) Seller and Buyer hereby irrevocably and unconditionally waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby. SECTION 8.03. Set-off. The parties hereto acknowledge and agree that each of them may elect to set-off any or all of its obligations to the other party under any agreement between the parties against any or all of its rights to obtain performance from such other party under any other agreement between such parties. SECTION 8.04. Entire Agreement. Except as expressly set forth herein, this Agreement constitutes the entire agreement and understanding among the parties with respect to its subject matter and supersedes all oral communications and prior writings with respect thereto. SECTION 8.05. Amendments, Waivers. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Buyer and Seller or, in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 8.06. Assignment by Buyer; No Third Party Rights, Successors and Assigns. Neither Buyer nor Seller may assign its rights or delegate its obligations under this Agreement or any Tranche hereunder, except with the prior written consent of the other party hereto, and any purported assignment or delegation without such prior written consent shall be void and of no effect; provided that, so long as Buyer shall have satisfied its obligations to pay the Purchase Price for each Tranche pursuant to Section 2.02(a), notwithstanding any other provision of this Agreement or the Pledge Agreement to the contrary requiring Buyer to purchase, sell, receive or deliver any shares of Common Stock or other securities to or from Seller, Buyer may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities or otherwise to perform Buyer's obligations in respect of the transactions contemplated hereunder and under the Pledge Agreement and any such designee may assume such obligations, and Buyer shall be discharged of its obligations to Seller to the extent of any such performance. This Agreement is not intended and shall not be construed to create any rights in any Person other than Seller, Buyer, an affiliate of Buyer designated hereunder and their respective successors and assigns and no other Person shall assert any rights as third party beneficiary hereunder. Whenever any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party. All the covenants and agreements herein contained by or on behalf of the Seller and Buyer shall bind, and inure to the benefit of, their respective successors and assigns whether so expressed or not, and shall be enforceable by and inure to the benefit of Buyer and its successors and assigns. SECTION 8.07. Counterparts. This Agreement may be executed in any number of counterparts, and all such counterparts taken together shall be deemed to constitute one and the same agreement. SECTION 8.08. Non-confidentiality. Seller and Buyer hereby acknowledge and agree that Buyer has authorized Seller to disclose this Agreement (and any materials of any kind provided to Seller in connection herewith) to any and all Persons without limitation of any kind, and there are no express or implied agreements, arrangements or understandings to the contrary, and Buyer hereby waives any and all claims or any proprietary rights with respect to this Agreement, and authorizes Seller to use any information which Seller receives or has received with respect to this Agreement. SECTION 8.09. Overdue Amounts. Any amounts not paid when due hereunder shall bear interest (computed on the basis of a year of 360 days and payable for the actual number of days elapsed) at a rate per annum equal to 2% plus the rate announced from time to time by JPMorgan Chase Bank as its prime rate. SECTION 8.10. Matters Related to Agent. Each party agrees and acknowledges that (i) the Agent acts solely as agent on a disclosed basis with respect to the transactions contemplated hereunder, and (ii) the Agent has no obligation, by guaranty, endorsement or otherwise, with respect to the obligations of either Seller or Buyer hereunder, either with respect to the delivery of cash or shares of Common Stock, either at the beginning or the end of the transactions contemplated hereby. In this regard, each of Seller and Buyer acknowledges and agrees to look solely to the other for performance with respect to each Tranche hereunder, and not to the Agent. SECTION 8.11. Calculation Agent. The determinations and calculations of the Calculation Agent shall be made in good faith and in a commercially reasonable manner, and shall be binding in the absence of manifest error. IN WITNESS WHEREOF, the parties have signed this Agreement as of the date and year first above written. SELLER: GSB INVESTMENTS CORP. By: /s/ Todd J. Slotkin ----------------------------------- Name: Todd J. Slotkin Title: Executive Vice President and Chief Financial Officer BUYER: JPMORGAN CHASE BANK, by J.P. MORGAN SECURITIES INC., as its Agent By: /s/ Neeraj Hora ----------------------------------- Name: Neeraj Hora Title: Vice President EXHIBIT A FORM OF PRE-PRICING ACKNOWLEDGMENT-- TRANCHE No.[___] [Date] This Pre-pricing Acknowledgment is a Pre-pricing Acknowledgment within the meaning of Section 2.02(b) of the Stock Purchase Agreement dated as of November 14, 2001 (the "Stock Purchase Agreement") between GSB Investments Corp. ("Seller") and JPMorgan Chase Bank ("Buyer"), by J.P. Morgan Securities Inc., as its agent. This Pre-pricing Acknowledgment relates to Tranche No. [__]. Capitalized terms used herein have the meanings set forth in the Stock Purchase Agreement. The parties hereto hereby acknowledge and agree as follows with respect to Tranche No. [___]: (i) the Designation of Tranche: Tranche No. [___]. (ii) the "Advance Rate," as set forth in Section 2.02(d) of the Stock Purchase Agreement, shall be equal to [___]%. (iii) the "Downside Rate," as set forth in Section 2.02(d) of the Stock Purchase Agreement, shall be equal to [___________]%. (iv) the "Hedging Amount," as set forth in Section 2.02(d) of the Stock ------- Purchase Agreement, shall be equal to $[___________]. (v) the "Maturity Date," as set forth in Section 2.02(d) of the Stock Purchase Agreement, shall be [_________]. (vi) the "Maximum Base Amount," as set forth in Section 2.02(d) of the Stock Purchase Agreement, shall be equal to [____________] shares. (vii) the "Upside Rate," as set forth in Section 2.02(d) of the Stock Purchase Agreement, shall be equal to [___]%. This Pre-pricing Acknowledgment shall be governed by the laws of New York and may be executed in any number of counterparts, and all such counterparts taken together shall be deemed to constitute one and the same agreement. IN WITNESS WHEREOF, the parties have signed this Pre-pricing Acknowledgment as of the date and year first above written. SELLER: GSB INVESTMENTS CORP. By: ----------------------------------- Name: Title: BUYER: JPMORGAN CHASE BANK, by J.P. MORGAN SECURITIES INC., as its Agent By: ----------------------------------- Name: Title: EXHIBIT B FORM OF PRICING SCHEDULE-- TRANCHE No. [___] JPMorgan Chase Bank 277 Park Avenue New York, New York 10172 [Date] GSB Investments Corp. 35 East 62nd Street New York, NY, 10021 Attention: Chief Financial Officer Dear Sir: This Pricing Schedule is a Pricing Schedule within the meaning of Section 2.02(c) of the Stock Purchase Agreement dated as of November 14, 2001 (the "Stock Purchase Agreement") between GSB Investments Corp. ("Seller") and JPMorgan Chase Bank ("Buyer"), by J.P. Morgan Securities Inc., as its agent. Capitalized terms used herein have the meanings set forth in the Stock Purchase Agreement. This Pricing Schedule relates to Tranche No. [__]. For all purposes under the Stock Purchase Agreement, the Terms of Tranche with respect to Tranche No. [___] shall be as follows: 1. Designation of Tranche: Tranche No. [___]. 2. Purchase Price: [___________]. 3. Payment Date: [___________]. 4. Initial Share Price: [____________]. 5. Initial Short Position: [_______________] 6. Hedged Value: [__________]. 7. Upside Limit: [__________]. 8. Maturity Date: [___________]. 9. Base Amount: [____________]. 10. The Last Day of Hedging Period: [________]. Very truly yours, JPMORGAN CHASE BANK, by J.P. MORGAN SECURITIES INC., as its Agent By:--------------------------- Name: Title: Acknowledged and Confirmed: GSB INVESTMENTS CORP. By:---------------------------------------- Name: Todd J. Slotkin Title: Executive Vice President and Chief Financial Officer ANNEX A CROSS-REFERENCE TARGET LIST NOTE: Due to the number of targets some target names may not appear in the target pull-down list. (This list is for the use of the wordprocessor only, is not a part of this document and may be discarded.) ARTICLE/SECTION TARGET NAME =========================================================================== 1, 7.01(e)(i), 7.01(e)(i)..............................................001 1.01...................................................................002 2......................................................................003 2.01...................................................................004 2.02...................................................................005 2.02(a)................................................................007 2.02(b)...................................................init.short.sales 2.02(c)................................................................074 2.02(d)................................................................075 2.02(d)(i)....................................................advance.rate 2.02(d)(ii)....................................................base.amount 2.03...................................................................006 2.03(a)................................................................008 2.03(b)................................................................009 2.04...................................................................010 3......................................................................011 3.01...................................................................012 3.01(a)................................................................013 3.01(b)................................................................014 3.01(c)................................................................015 3.01(e)................................................................016 3.01(f)................................................................017 3.01(g)................................................................018 3.01(h)................................................................019 3.01(i)................................................................020 3.01(j)................................................................021 3.01(k)................................................................070 3.01(n)................................................................CEA 3.02(d)................................................................073 4......................................................................023 4.01...................................................................024 4.01(a)................................................................025 4.02(b)................................................................026 4.02(c)................................................................027 5......................................................................028 5.01...................................................................029 5.02...................................................................030 5.03...................................................................031 5.03(a)................................................................032 5.03(b)................................................................033 5.04...................................................................034 5.05...................................................................036 5.06...................................................................076 5.07...................................................................077 5.07(b)................................................................037 ?..........................................................form.144.filing ?..........................................................indemnification 6......................................................................038 6.01...................................................................039 6.01(a), 6.01(c).......................................................040 6.01(b)................................................................041 6.01(b)(ii)............................................................071 ?......................................................................072 6.02...................................................................042 6.02(a)................................................................043 6.02(b)................................................................044 6.02(c)................................................................045 6.03...................................................................046 6.03(a)....................................shares.trans.trustee.liquidator 6.04...................................................................047 7......................................................................048 7.01...................................................................049 7.01(a)................................................................050 7.01(b)................................................................051 7.01(d)................................................................052 7.01(e)................................................................053 7.01(i)...................................................unable.establish 7.01(j)................................................................056 8......................................................................057 8.01...................................................................058 8.02...................................................................059 8.02(a)................................................................060 8.02(b)................................................................061 8.02(c)................................................................062 8.02(d)................................................................063 ?......................................................................064 8.04...................................................................066 8.05...................................................................067 8.06...................................................................068 8.07...................................................................069 EX-99 4 mafcopledge.txt EXHIBIT 28 - PLEDGE AGREEMENT EXHIBIT 28 PLEDGE AGREEMENT dated as of November 14, 2001 among GSB INVESTMENTS CORP., JPMORGAN CHASE BANK, as Secured Party and JPMORGAN CHASE BANK, as Collateral Agent TABLE OF CONTENTS ---------------------- PAGE SECTION 1. The Security Interests............................................1 SECTION 2. Definitions.......................................................3 SECTION 3. Representations and Warranties of Pledgor.........................6 SECTION 4. Representations, Warranties and Agreements of the Collateral Collateral Agent..................................................8 SECTION 5. Certain Covenants of Pledgor......................................8 SECTION 6. Administration of the Collateral and Valuation of the Securities.......................................................10 SECTION 7. Income and Voting Rights in Collateral...........................13 SECTION 8. Remedies upon Events of Default..................................14 SECTION 9. The Collateral Agent.............................................18 SECTION 10. Miscellaneous...................................................19 SECTION 11. Set-off.........................................................20 SECTION 12. Termination of Pledge Agreement.................................21 SECTION 13. Assignment......................................................21 Exhibit A Form of Opinion of Paul, Weiss, Rifkind, Wharton & Garrison Exhibit B Form of Certificate for Additional Collateral Exhibit C List of Locations PLEDGE AGREEMENT THIS AGREEMENT is made as of this 14th day of November, 2001, among GSB INVESTMENTS CORP., a Delaware corporation ("Pledgor"), JPMORGAN CHASE BANK, as collateral agent (the "Collateral Agent") hereunder for the benefit of JPMORGAN CHASE BANK ("Secured Party"), and Secured Party. WHEREAS, pursuant to the Stock Purchase Agreement (as amended from time to time, the "Stock Purchase Agreement") dated as of the date hereof between Pledgor and Secured Party, by J.P. Morgan Securities Inc., as its agent, Pledgor has agreed to sell and Secured Party has agreed to purchase, in one or more transactions executed in tranches (each, a "Tranche"), up to the Maximum Number (as defined in the Stock Purchase Agreement) of shares of common stock, par value $1.00 per share, or security entitlements in respect thereof (the "Common Stock"), of Golden State Bancorp Inc., a Delaware corporation (the "Issuer"), subject to the terms and conditions of the Stock Purchase Agreement; and WHEREAS, it is a condition to the obligations of Secured Party under the Stock Purchase Agreement that Pledgor, the Collateral Agent and Secured Party enter into this Agreement and that Pledgor grant the pledge provided for herein; NOW, THEREFORE, in consideration of their mutual covenants contained herein and to secure the performance by Pledgor of Pledgor's obligations under the Stock Purchase Agreement and the observance and performance of the covenants and agreements contained herein and in the Stock Purchase Agreement, the parties hereto, intending to be legally bound, hereby mutually covenant and agree as follows: SECTION 1. The Security Interests. In order to secure the full and punctual observance and performance of the covenants and agreements contained herein and in the Stock Purchase Agreement: (a) Pledgor hereby assigns, pledges and grants to the Collateral Agent, as agent of and for the benefit of Secured Party, security interests in and to, and a lien upon and right of set-off against, and transfers to the Collateral Agent, as agent of and for the benefit of Secured Party, as and by way of a security interest having priority over all other security interests, with power of sale, in each case effective as of the time of delivery of the Initial Pledged Items as provided in Section 1(b), all of Pledgor's right, title and interest in and to (i) the Pledged Items described in Section 1(b) and 1(c); (ii) all additions to and substitutions for such Pledged Items (including, without limitation, any securities, instruments or other property delivered or pledged pursuant to Section 5(a) or 6(b)) (such additions and substitutions, the "Additions and Substitutions"); (iii) all income, proceeds and collections received or to be received, or derived or to be derived, now or at any time hereafter (whether before or after the commencement of any proceeding under applicable bankruptcy, insolvency or similar law, by or against Pledgor, with respect to Pledgor) from or in connection with the Pledged Items or the Additions and Substitutions (including, without limitation, (A) any shares of capital stock issued by the Issuer in respect of any Common Stock constituting Collateral or any cash, securities or other property distributed in respect of or exchanged for any Common Stock constituting Collateral, or into which any such Common Stock is converted, in connection with any Merger Event, and any security entitlements in respect of any of the foregoing, (B) any obligation of the Collateral Agent to replace any rehypothecated Collateral and (C) any amounts paid or assets delivered to Pledgor by the Collateral Agent in respect of dividends paid or distributions made on shares of Common Stock constituting Collateral that have been rehypothecated); (iv) all securities and other financial assets (each as defined in Section 8-102 of the UCC) and other funds, property or assets from time to time held or credited as Collateral hereunder; and (v) all powers and rights now owned or hereafter acquired under or with respect to the Pledged Items or the Additions and the Substitutions (such Pledged Items, such Additions and Substitutions, proceeds, collections, powers, rights and assets held therein or credited thereto being herein collectively called the "Collateral"). The Collateral Agent shall have all of the rights, remedies and recourses with respect to the Collateral afforded a secured party by the UCC, in addition to, and not in limitation of, the other rights, remedies and recourses afforded to the Collateral Agent by this Agreement. (b) Immediately upon payment of the Purchase Price with respect to each Tranche on each Payment Date, Pledgor shall deliver to the Collateral Agent in pledge hereunder Eligible Collateral consisting of a number of shares of Common Stock equal to the Base Amount of such Tranche (all such shares delivered by Pledgor pursuant to this Section 1(c), the "Initial Pledged Shares"), in the manner provided in Section 6(c). Simultaneously with, or prior to the delivery of such Initial Pledged Shares to the Collateral Agent, Seller shall deliver to the Collateral Agent (i) an opinion (in form and substance satisfactory to Buyer and its counsel), dated as of such Payment Date, of Paul, Weiss, Rifkind, Wharton & Garrison, counsel for Seller, to the effect set forth in Exhibit A, (ii) a copy of such opinion or opinions under the Securities Act as may be required by the transfer agent for the Common Stock in connection with the de-legending of the certificate or certificates representing the Initial Pledged Shares, (iii) a document or documents in form and substance reasonably satisfactory to the Collateral Agent (A) evidencing the release of such shares from the security interest granted under the Seller Pledge Agreement and the termination of such security interest and (B) confirming the full force and effect of the Lender Consent (including a certificate of Pledgor as to the satisfaction of all applicable conditions precedent set forth in Section 2 thereof), and (iv) such UCC-3 termination statements, releases and such other documents and agreements as the Collateral Agent may reasonably request to evidence such release and termination. (c) In the event that the Issuer at any time issues to Pledgor in respect of any Common Stock constituting Collateral hereunder or comprising financial assets underlying security entitlements constituting Collateral hereunder, any additional or substitute shares of capital stock of any class or any cash, securities or other property distributed in respect of or exchanged for any Collateral, or into which any such Collateral is converted, whether in connection with any Merger Event or otherwise (or any security entitlements in respect of the foregoing), Pledgor shall immediately pledge and deliver to the Collateral Agent in accordance with Section 6(c) all such shares, cash, securities, other property and security entitlements in respect thereof as additional Collateral hereunder. (d) The Security Interests are granted as security only and shall not subject the Collateral Agent and Secured Party to, or transfer or in any way affect or modify, any obligation or liability of Pledgor or the Issuer with respect to any of the Collateral or any transaction in connection therewith. (e) The parties hereto expressly agree that all rights, assets and property at any time held or credited as Collateral hereunder shall be treated as financial assets (as defined in Section 8-102 of the UCC). SECTION 2. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Stock Purchase Agreement. As used herein, the following words and phrases shall have the following meanings: "Additions and Substitutions" has the meaning provided in Section 1(a). "Authorized Officer" of Pledgor means any officer as to whom Pledgor shall have delivered notice to the Collateral Agent that such officer is authorized to act hereunder on behalf of Pledgor. "Collateral" has the meaning provided in Section 1(a). "Collateral Agent" means the financial institution identified as such in the preliminary paragraph hereof, or any successor appointed in accordance with Section 9. "Collateral Event of Default" means, at any time, the occurrence of either of the following: (A) failure of the Collateral to include, as Eligible Collateral, (1) at least the Maximum Deliverable Number of shares of Common Stock or (2) if Pledgor shall have elected to substitute Government Securities for Share Collateral in accordance with Section 6(i), Government Securities having a value (as determined by the Calculation Agent) equal to 150% of the Market Value at such time of the Maximum Deliverable Number of shares of Common Stock at such time (provided that, in the case of this clause (2), the Calculation Agent shall promptly notify Pledgor of its determination of any such failure and (x) if such notice is received by Pledgor prior to 11:00 a.m., New York City time, on any Business Day, such failure shall not be a Collateral Event of Default if remedied prior to the close of business on such Business Day and (y) if such notice is received by Pledgor on a day that is not a Business Day or after 11:00 a.m., New York City time, on any Business Day, such failure shall not be a Collateral Event of Default if remedied prior to the close of business on the Business Day immediately following such day) or (B) failure at any time of the Security Interests to constitute valid and perfected security interests in all of the Collateral, subject to no prior or equal Lien, and, with respect to any Collateral consisting of securities or security entitlements (each as defined in Section 8-102 of the UCC), as to which Secured Party has Control, or, in each case, assertion of such by Pledgor in writing. "Control" means "control" as defined in Section 8-106 and Section 9-106 of the UCC. "Default Settlement Date" has the meaning provided in Section 8(a). "Dividend Proceeds" has the meaning provided in Section 7(a). "Eligible Collateral" means Common Stock or, if Pledgor shall have elected to substitute Government Securities for Share Collateral in accordance with Section 6(i), Government Securities; provided in each case that Pledgor has good and marketable title thereto, free of all Liens (other than the Security Interests) and Transfer Restrictions (other than Existing Transfer Restrictions, but with no legends thereon referring to any Transfer Restrictions) and that the Collateral Agent has a valid, first priority perfected security interest therein, a first lien thereon and Control with respect thereto, and provided further that (i) to the extent the number of shares of Common Stock pledged hereunder exceeds at any time the Maximum Deliverable Number thereof, such excess shares shall not be Eligible Collateral and (ii) to the extent the Government Securities pledged hereunder have a value (as determined by the Calculation Agent) at any time exceeding 150% of the Market Value at such time of the Maximum Deliverable Number of shares of Common Stock at such time, such excess Government Securities shall not be Eligible Collateral at such time. "Event of Default" means any condition or event which constitutes an Event of Default as defined in the Stock Purchase Agreement, or which with the giving of notice or the lapse of time or both would, unless cured or waived, become an Event of Default as defined in the Stock Purchase Agreement. "Existing Transfer Restrictions" means the Transfer Restrictions on the shares of Common Stock pledged hereunder arising solely from the fact that Seller is an "affiliate", within the meaning of Rule 144 under the Securities Act, of the Issuer. "Government Securities" means securities issued by the United States Government. "Initial Pledged Shares" has the meaning provided in Section 1(b). "Location" means, with respect to any party, the place such party is "located" within the meaning of Section 9-307 of the Uniform Commercial Code as in effect in each jurisdiction that may be deemed applicable to such party. "Maximum Deliverable Number" means, on any date, a number of shares of Common Stock equal to sum of the Base Amounts for all Tranches, each of them multiplied successively by each adjustment that shall have been calculated with respect thereto on or prior to such date pursuant to Article 6 of the Stock Purchase Agreement. "Other Liens" has the meaning provided in Section 4(e). "Pledged Items" means, as of any date, any and all securities and instruments delivered by Pledgor to be held by the Collateral Agent under this Agreement as Collateral. "Security Interests" means the security interests in the Collateral created hereby. "Share Collateral" has the meaning provided in Section 6(i). "UCC" means the Uniform Commercial Code as in effect in the State of New York. SECTION 3. Representations and Warranties of Pledgor. Pledgor hereby represents and warrants to the Collateral Agent and Secured Party that: (a) Pledgor (i) acquired and made full payment for all shares of Common Stock pledged hereunder more than two years ago and owns and, at all times after delivery of such Collateral pursuant to Section 1(b) and prior to the release of such Collateral pursuant to the terms of this Agreement, will own such Collateral free and clear of any Liens (other than the Security Interests) or Transfer Restrictions (other than the Existing Transfer Restrictions) and (ii) as of the date of delivery of such Collateral pursuant to Section 1(b) will not be, and until the release of such Collateral pursuant to the terms of this Agreement will not become, a party to or otherwise bound by any agreement, other than this Agreement, that (x) restricts in any manner the rights of any present or future owner of the Collateral with respect thereto or (y) provides any Person other than Pledgor, the Collateral Agent, Secured Party or any securities intermediary through which any Collateral is held (but, in the case of any such securities intermediary, only with respect to Collateral held through it) with Control with respect to any Collateral. (b) Other than financing statements or other similar or equivalent documents or instruments with respect to the Security Interests, no financing statement, security agreement or similar or equivalent document or instrument covering all or any part of (i) the Collateral or (ii) any other general intangibles of Pledgor relating to such Collateral will, at the time of delivery of such Collateral pursuant to Section 1(b), be on file or of record in any jurisdiction in which such filing or recording would be effective to perfect a lien, security interest or other encumbrance of any kind on such Collateral or such other general intangibles relating to such Collateral, as the case may be. (c) All Collateral consisting of securities and all financial assets underlying Collateral consisting of security entitlements (each as defined in Section 8-102 of the UCC) (other than Collateral consisting of Government Securities) at any time pledged hereunder will, at the time of delivery of such Collateral to the Collateral Agent pursuant to Section 1(b), be issued by an issuer organized under the laws of the United States, any State thereof or the District of Columbia and (i) certificated (and the certificate or certificates in respect of such securities or financial assets are and will be located in the United States) and registered in the name of the Collateral Agent or held through a securities intermediary whose jurisdiction (within the meaning of Section 8-110(e) of the UCC) is located in the United States or (ii) uncertificated and either registered in the name of the Collateral Agent or held through a securities intermediary whose jurisdiction (within the meaning of Section 8-110(e) of the UCC) is located in the United States; provided that this representation shall not be deemed to be breached if, at any time, any such Collateral is issued by an issuer that is not organized under the laws of the United States, any State thereof or the District of Columbia, and the parties hereto agree to procedures or amendments hereto necessary to enable the Collateral Agent to maintain, for the benefit of Secured Party, a valid and continuously perfected security interest in such Collateral, in respect of which Secured Party will have Control, subject to no prior Lien. The parties hereto agree to negotiate in good faith any such procedures or amendments. (d) Upon (i) the delivery of certificates evidencing investment property (as defined in Section 9-102(a)(49) of the UCC) consisting of securities to the Collateral Agent in accordance with Section 6(c)(i) or the registration of any such investment property consisting of uncertificated securities in the name of the Collateral Agent or its nominee in accordance with Section 6(c)(ii), the Collateral Agent will have, for the benefit of Secured Party, a valid and, as long as the Collateral Agent retains possession of such certificates or such uncertificated securities remain so registered, perfected security interest therein, in respect of which the Collateral Agent will have Control, subject to no prior Lien and (ii) the crediting of any securities or other financial assets underlying any such investment property consisting of security entitlements to a securities account of the Collateral Agent in accordance with Section 6(c)(iii), the Collateral Agent will have, for the benefit of Secured Party, a valid and, so long as such Common Stock continues to be credited to the account of the Collateral Agent with the applicable securities intermediary, perfected security interest in a securities entitlement in respect thereof, in respect of which the Collateral Agent will have Control subject to no prior Lien. (e) No registration, recordation or filing with any governmental body, agency or official is required in connection with the execution and delivery of this Agreement or necessary for the validity or enforceability hereof or for the perfection or enforcement of the Security Interests. (f) Pledgor has not performed and will not perform any acts that might prevent the Collateral Agent from enforcing any of the terms of this Agreement or that might limit the Collateral Agent in any such enforcement. (g) All possible Locations of the Pledgor are listed on Exhibit C hereto. SECTION 4. Representations, Warranties and Agreements of the Collateral Agent. The Collateral Agent represents and warrants to, and agrees with, Pledgor and Secured Party that: (a) The Collateral Agent is a banking corporation, duly formed, validly existing and in good standing under the laws of the State of New York, and has all powers and all material governmental licenses, authorizations, consents and approvals required to enter into, and perform its obligations under, this Agreement. (b) The execution, delivery and performance by the Collateral Agent of this Agreement have been duly authorized by all necessary action on the part of the Collateral Agent and do not and will not violate, contravene or constitute a default under any provision of applicable law or regulation or of the certificate of formation or by-laws of the Collateral Agent or of any material agreement, judgment, injunction, order, decree or other instrument binding upon the Collateral Agent. (c) This Agreement constitutes a valid and binding agreement of the Collateral Agent enforceable against the Collateral Agent in accordance with its terms. (d) The Collateral Agent has not and will not enter into any agreement pursuant to which any Person other than Pledgor, the Collateral Agent, Secured Party, or any securities intermediary through which any Collateral is held (but, in the case of any such securities intermediary, only in respect of Collateral held through it) has or will have Control with respect to any Collateral. (e) The Collateral Agent hereby agrees that all liens, pledges and other security interests of any kind or nature held by it (other than liens, pledges and security interests arising hereunder) in any of the Collateral securing any obligation to the Collateral Agent (either in such capacity or in any other capacity) (collectively, "Other Liens") shall be subordinate and junior to the liens, pledges and security interests in the Collateral arising hereunder and that the Collateral Agent will take no action to enforce any Other Liens so long as any obligation under the Stock Purchase Agreement or hereunder (whether or not then due) should remain unsatisfied. SECTION 5. Certain Covenants of Pledgor. Pledgor agrees that upon delivery of the Initial Pledged Items as provided in Section 1(b) and so long as any of Pledgor's obligations under the Stock Purchase Agreement remain outstanding thereafter: (a) Pledgor shall ensure at all times that a Collateral Event of Default shall not occur, and shall pledge additional Collateral in the manner described in Sections 6(b) and 6(c) as necessary to cause such requirement to be met. (b) Pledgor shall, at the expense of Pledgor and in such manner and form as Secured Party or the Collateral Agent may require, give, execute, deliver, file and record any financing statement, notice, instrument, document, agreement or other papers that may be necessary or desirable in order to (i) create, preserve, perfect, substantiate or validate any security interest granted pursuant hereto, (ii) create or maintain Control with respect to any such security interests in any investment property (as defined in Section 9-102(a)(49) of the UCC) or (iii) enable the Collateral Agent to exercise and enforce its rights and the rights of Secured Party hereunder with respect to such security interest. To the extent permitted by applicable law, Pledgor hereby authorizes the Collateral Agent to execute and file, in the name of Pledgor or otherwise, UCC financing or continuation statements (which may be carbon, photographic, photostatic or other reproductions of this Agreement or of a financing statement relating to this Agreement) that the Collateral Agent in its sole discretion may deem necessary or appropriate to further perfect, or maintain the perfection of, the Security Interests. (c) Pledgor shall warrant and defend Pledgor's title to the Collateral, subject to the rights of the Collateral Agent and Secured Party, against the claims and demands of all Persons. The Collateral Agent and Secured Party (or, as they may agree, one of them) may elect, but without an obligation to do so, to discharge any Lien of any third party on any of the Collateral. (d) Pledgor agrees (i) that Pledgor shall not change any of (A) Pledgor's name, identity or corporate structure in any manner or (B) Pledgor's Location, unless in any such case (x) Pledgor shall have given the Collateral Agent not less than 30 days' prior notice thereof and (y) such change shall not cause any of the Security Interests to become unperfected, cause Secured Party to cease to have Control in respect of any of the Security Interests in any Collateral consisting of investment property (as defined in Section 9-102(a)(49) of the UCC) or subject any Collateral to any other Lien. (e) Pledgor agrees that Pledgor shall not (i) create or permit to exist any Lien (other than the Security Interests) or any Transfer Restriction (other than the Existing Transfer Restrictions) upon or with respect to the Collateral, (ii) sell or otherwise dispose of, or grant any option with respect to, any of the Collateral or (iii) enter into or consent to any agreement pursuant to which any Person other than Pledgor, the Collateral Agent, Secured Party and any securities intermediary through which any of the Collateral is held (but, in the case of any such securities intermediary, only in respect of Collateral held through it) has or will have Control in respect of any Collateral. SECTION 6. Administration of the Collateral and Valuation of the Securities. (a) The Collateral Agent shall determine on each Business Day whether a Collateral Event of Default shall have occurred. (b) Pledgor may pledge hereunder additional Collateral acceptable to Secured Party at any time. Concurrently with the delivery of any additional Eligible Collateral, Pledgor shall deliver to the Collateral Agent a certificate of an Authorized Officer of Pledgor substantially in the form of Exhibit B hereto and dated the date of such delivery, (i) identifying the additional items of Eligible Collateral being pledged and (ii) certifying that with respect to such items of additional Eligible Collateral the representations and warranties contained in Section 3(a), 3(b), 3(c) and 3(d) are true and correct with respect to such Eligible Collateral on and as of the date thereof. Pledgor hereby covenants and agrees to take all actions required under Section 6(c) and any other actions necessary to create for the benefit of the Collateral Agent a valid, first priority, perfected security interest in, and a first lien upon, such additional Eligible Collateral, as to which the Collateral Agent will have Control. (c) Any delivery of any securities or security entitlements (each as defined in Section 8-102 of the UCC) as Collateral to the Collateral Agent by Pledgor shall be effected (i) in the case of Collateral consisting of certificated securities registered in the name of Pledgor, by delivery of such certificated securities, accompanied by any required transfer tax stamps, and in suitable form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank (including any related documentation required by the transfer agent for such securities in connection with effecting or registering transfer), with signatures appropriately guaranteed, all in form and substance satisfactory to the issuer of and the transfer agent for such securities, (ii) in the case of Collateral consisting of uncertificated securities registered in the name of Pledgor, by transmission by Pledgor of an instruction to the issuer of such securities instructing such issuer to register such securities in the name of the Collateral Agent or its nominee, accompanied by any required transfer tax stamps, and the issuer's compliance with such instructions or (iii) in the case of securities in respect of which security entitlements are held by Pledgor through a securities intermediary, by the crediting of such securities, accompanied by any required transfer tax stamps, to a securities account of the Collateral Agent at such securities intermediary or, at the option of the Collateral Agent, at another securities intermediary satisfactory to the Collateral Agent. Upon delivery of any such Pledged Item under this Agreement, the Collateral Agent shall examine such Pledged Item and any certificates delivered pursuant to Section 6(b) or otherwise pursuant to the terms hereof in connection therewith to determine that they comply as to form with the requirements for Eligible Collateral. (d) If on any Business Day the Collateral Agent determines that a Collateral Event of Default shall have occurred, the Collateral Agent shall promptly notify Pledgor of such determination by telephone call to an Authorized Officer of Pledgor followed by a written confirmation of such call. (e) If on any Business Day the Collateral Agent determines that no Event of Default or failure by Pledgor to meet any of Pledgor's obligations under Sections 5 or 6 hereof has occurred and is continuing, Pledgor may obtain the release from the Security Interests of any Collateral upon delivery to the Collateral Agent of a written notice from an Authorized Officer of Pledgor indicating the items of Collateral to be released so long as, after such release, no Collateral Event of Default shall have occurred. (f) On the Settlement Date for each Tranche, unless (i) Pledgor shall have otherwise effected the deliveries required by Section 2.03(a) of the Stock Purchase Agreement for such Tranche or shall have delivered the Cash Settlement Amount for such Tranche to Secured Party in lieu of shares of Common Stock in accordance with Section 2.04 of the Stock Purchase Agreement on the Settlement Date for such Tranche or (ii) the shares of Common Stock then held by the Collateral Agent hereunder are not Free Stock, the Collateral Agent shall deliver (and Pledgor hereby irrevocably instructs the Collateral Agent to deliver, in complete or partial, as the case may be, satisfaction of Pledgor's obligations to deliver shares of Common Stock to an affiliate of Secured Party designated by Secured Party on the Settlement Date for such Tranche pursuant to the Stock Purchase Agreement) to an affiliate of Secured Party designated by Secured Party shares of Common Stock that are Free Stock then held by the Collateral Agent hereunder representing the number of shares of Common Stock required to be delivered with respect to such Tranche under the Stock Purchase Agreement on the Settlement Date for such Tranche. Upon any such delivery, such affiliate of Secured Party shall hold such shares of Common Stock absolutely and free from any claim or right whatsoever (including, without limitation, any claim or right of Pledgor). (g) The Collateral Agent may at any time or from time to time, in its sole discretion, cause any or all of the Collateral that is registered in the name of Pledgor or Pledgor's nominee to be transferred of record into the name of the Collateral Agent or Pledgor's nominee. Pledgor shall promptly give to the Collateral Agent copies of any notices or other communications received by Pledgor with respect to Collateral that is registered, or held through a securities intermediary, in the name of Pledgor or Pledgor's nominee and the Collateral Agent shall promptly give to Pledgor copies of notices and communications received by the Collateral Agent, in accordance with the Collateral Agent's customary procedures, with respect to Collateral that is registered, or held through a securities intermediary, in the name of the Collateral Agent or its nominee. (h) Pledgor agrees that Pledgor shall forthwith upon demand pay to the Collateral Agent: (i) the amount of any taxes that the Collateral Agent or Secured Party may have been required to pay by reason of the Security Interests or to free any of the Collateral from any Lien thereon, and (ii) the amount of any and all out-of-pocket expenses, including the fees and disbursements of counsel and of any other experts, that the Collateral Agent or Secured Party may incur in connection with (A) the enforcement of this Agreement, including such expenses as are incurred to preserve the value of the Collateral and the validity, perfection, rank and value of the Security Interests, (B) the collection, sale or other disposition of any of the Collateral, (C) the exercise by the Collateral Agent of any of the rights conferred upon it hereunder or (D) any Event of Default. Any such amount not paid on demand shall bear interest (computed on the basis of a year of 360 days and payable for the actual number of days elapsed) at a rate per annum equal to 2% plus the rate announced from time to time by JPMorgan Chase Bank as its prime rate. (i) Pledgor may at any time, so long as no Acceleration Event has occurred and is continuing, substitute Government Securities for all (but not less than all) of the Collateral consisting of Common Stock (the "Share Collateral") on the terms set forth below: (i) At least fifteen Business Days prior to the date of any such substitution, Pledgor shall notify Secured Party in writing that Pledgor intends to effect such substitution; (ii) Pledgor shall deliver to Secured Party, in a manner reasonably acceptable to Secured Party, Government Securities having a value (as determined by the Calculation Agent) at least equal to 150% of the Market Value of the Maximum Deliverable Number of shares of Common Stock on the date of such delivery; (iii) Pledgor shall take all such other actions as Secured Party may reasonably require to create for the benefit of Secured Party a valid and perfected security interest in such Government Securities, in respect of which Secured Party will have Control, subject to no prior Lien; and (iv) Pledgor shall make mark to market deliveries of additional Government Securities on a daily basis, and upon the request of Pledgor, Secured Party shall release Government Securities previously pledged, so that the value (as determined by the Calculation Agent) of the Government Securities pledged is at all times at least equal to 150% of the Market Value of the Maximum Deliverable Number of shares of Common Stock at such time, in each case, pursuant to terms mutually acceptable to Secured Party and Pledgor. SECTION 7. Income and Voting Rights in Collateral. (a) The Collateral Agent shall have the right to receive and retain as Collateral hereunder (i) all proceeds (other than Ordinary Dividends or interest ("Dividend Proceeds")) of the Collateral and (ii) upon the occurrence and during the continuance of an Event of Default, all proceeds of the Collateral, including without limitation all Dividend Proceeds, and Pledgor shall take all such action as the Collateral Agent shall deem necessary or appropriate to give effect to such right. All such proceeds (other than Dividend Proceeds received prior to the occurrence of an Event of Default) and other payments and distributions that are received by Pledgor shall be received in trust for the benefit of the Collateral Agent and Secured Party and, if the Collateral Agent so directs (but only, in the case of Dividend Proceeds, upon the occurrence and during the continuance of an Event of Default), shall be segregated from other funds of Pledgor and shall, forthwith upon demand by the Collateral Agent (but only, in the case of Dividend Proceeds, during the continuance of an Event of Default), be paid over to the Collateral Agent as Collateral in the same form as received (with any necessary endorsement). After all Events of Default have been cured, the Collateral Agent's right to retain Dividend Proceeds under this Section 7(a) shall cease and the Collateral Agent shall pay over to Pledgor any such Collateral consisting of Dividend Proceeds retained by it during the continuance of any such Event of Default. (b) Notwithstanding Section 7(a), upon receipt of any Extraordinary Dividend, the Collateral Agent shall deliver (and Pledgor hereby irrevocably instructs the Collateral Agent to deliver in satisfaction of Pledgor's obligation to pay or deliver the cash and/or other property distributed in such Extraordinary Dividend to Secured Party pursuant to Section 6.01(a)(B) of the Stock Purchase Agreement) to Secured Party the cash and/or other property distributed in such Extraordinary Dividend. (c) Unless an Event of Default shall have occurred and be continuing, Pledgor shall have the right, from time to time, to vote and to give consents, ratifications and waivers with respect to the Collateral (other than any Collateral that has been rehypothecated by the Collateral Agent), and the Collateral Agent shall, upon receiving a written request from Pledgor accompanied by a certificate of an Authorized Officer of Pledgor stating that no Event of Default shall have occurred and be continuing, deliver to Pledgor or as specified in such request such proxies, powers of attorney, consents, ratifications and waivers in respect of any of the Collateral that is registered, or held through a securities intermediary, in the name of the Collateral Agent or its nominee as shall be specified in such request and shall be in form and substance satisfactory to the Collateral Agent. (d) If an Event of Default shall have occurred and be continuing, the Collateral Agent shall have the right, to the extent permitted by law, and Pledgor shall take all such action as may be necessary or appropriate to give effect to such right, to vote and to give consents, ratifications and waivers, and to take any other action with respect to any or all of the Collateral with the same force and effect as if the Collateral Agent were the absolute and sole owner thereof. SECTION 8. Remedies upon Events of Default. (a) If any Event of Default shall have occurred and be continuing, the Collateral Agent may exercise on behalf of Secured Party all the rights of a secured party under the Uniform Commercial Code (whether or not in effect in the jurisdiction where such rights are exercised) and, in addition, without being required to give any notice, except as herein provided or as may be required by mandatory provisions of law, shall: (i) deliver all Collateral consisting of shares of Common Stock that are Free Stock (but not in excess of the number thereof deliverable with respect to all Tranches that have been accelerated under the Stock Purchase Agreement at such time) to an affiliate of Secured Party designated by Secured Party on the date of each Acceleration Amount Notice for such Tranches relating to such Event of Default (the "Default Settlement Date") in satisfaction of Pledgor's obligations to deliver Free Stock for such Tranches under the Stock Purchase Agreement, whereupon such affiliate shall hold such shares of Common Stock absolutely and free from any claim or right of whatsoever kind, including any equity or right of redemption of Pledgor that may be waived or any other right or claim of Pledgor, and Pledgor, to the extent permitted by law, hereby specifically waives all rights of redemption, stay or appraisal that Pledgor has or may have under any law now existing or hereafter adopted; and (ii) if such delivery shall be insufficient to satisfy in full all of the obligations of Pledgor with respect to all Tranches that have been accelerated under the Stock Purchase Agreement or hereunder, sell all of the remaining Collateral, or such lesser portion thereof as may be necessary to generate proceeds sufficient to satisfy in full all of the obligations of Pledgor with respect to all Tranches that have been accelerated under the Stock Purchase Agreement or hereunder, at public or private sale or at any broker's board or on any securities exchange, for cash, upon credit or for future delivery, and at such price or prices as the Collateral Agent may deem satisfactory. Pledgor covenants and agrees that Pledgor will execute and deliver such documents and take such other action as the Collateral Agent deems necessary or advisable in order that any such sale may be made in compliance with law. Upon any such sale the Collateral Agent shall have the right to deliver, assign and transfer to the buyer thereof the Collateral so sold. Each buyer at any such sale shall hold the Collateral so sold absolutely and free from any claim or right of whatsoever kind, including any equity or right of redemption of Pledgor that may be waived or any other right or claim of Pledgor, and Pledgor, to the extent permitted by law, hereby specifically waives all rights of redemption, stay or appraisal that Pledgor has or may have under any law now existing or hereafter adopted. The notice (if any) of such sale required by Section 9-611 of the UCC shall (1) in case of a public sale, state the time and place fixed for such sale, (2) in case of sale at a broker's board or on a securities exchange, state the board or exchange at which such sale is to be made and the day on which the Collateral, or the portion thereof so being sold, will first be offered for sale at such board or exchange, and (3) in the case of a private sale, state the day after which such sale may be consummated. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix in the notice of such sale. At any such sale the Collateral may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may determine. The Collateral Agent shall not be obligated to make any such sale pursuant to any such notice. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned. In case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the selling price is paid by the buyer thereof, but the Collateral Agent shall not incur any liability in case of the failure of such buyer to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice. The Collateral Agent, instead of exercising the power of sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction. (b) Pledgor hereby irrevocably appoints the Collateral Agent Pledgor's true and lawful attorney, with full power of substitution, in the name of Pledgor, the Collateral Agent or Secured Party or otherwise, for the sole use and benefit of the Collateral Agent and Secured Party, but at the expense of Pledgor, to the extent permitted by law, to exercise, at any time and from time to time while an Event of Default has occurred and is continuing, all or any of the following powers with respect to all or any of the Collateral: (i) to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof, (ii) to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto, (iii) to sell, transfer, assign or otherwise deal in or with the same or the proceeds or avails thereof, as fully and effectually as if the Collateral Agent were the absolute owner thereof (including, without limitation, the giving of instructions and entitlement orders in respect thereof), and (iv) to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference thereto; provided that the Collateral Agent shall give Pledgor not less than one day's prior written notice of the time and place of any sale or other intended disposition of any of the Collateral, except any Collateral that threatens to decline speedily in value, including, without limitation, equity securities, or is of a type customarily sold on a recognized market. The Collateral Agent and Pledgor agree that such notice constitutes "reasonable authenticated notification" within the meaning of Section 9-611 of the UCC. (c) Upon any delivery or sale of all or any part of any Collateral made either under the power of delivery or sale given hereunder or under judgment or decree in any judicial proceedings for foreclosure or otherwise for the enforcement of this Agreement, the Collateral Agent is hereby irrevocably appointed the true and lawful attorney of Pledgor, in the name and stead of Pledgor, to make all necessary deeds, bills of sale, instruments of assignment, transfer or conveyance of the property, and all instructions and entitlement orders in respect of the property thus delivered or sold. For that purpose the Collateral Agent may execute all such documents, instruments, instructions and entitlement orders. This power of attorney shall be deemed coupled with an interest, and Pledgor hereby ratifies and confirms that which Pledgor's attorney acting under such power, or such attorney's successors or agents, shall lawfully do by virtue of this Agreement. If so requested by the Collateral Agent, by Secured Party or by any buyer of the Collateral or a portion thereof, Pledgor shall further ratify and confirm any such delivery or sale by executing and delivering to the Collateral Agent, to Secured Party or to such buyer or buyers at the expense of Pledgor all proper deeds, bills of sale, instruments of assignment, conveyance or transfer, releases, instructions and entitlement orders as may be designated in any such request. (d) In the case of an Event of Default, the Collateral Agent may proceed to realize upon the security interest in the Collateral against any one or more of the types of Collateral, at any time, as the Collateral Agent shall determine in its sole discretion subject to the foregoing provisions of this Section 8. The proceeds of any sale of, or other realization upon, or other receipt from, any of the Collateral shall be applied by the Collateral Agent in the following order of priorities: first, to the payment to the Collateral Agent of the expenses of such sale or other realization, including reasonable compensation to the Collateral Agent and its agents and counsel, and all expenses, liabilities and advances incurred or made by the Collateral Agent in connection therewith, including brokerage fees in connection with the sale by the Collateral Agent of any Collateral; second, to the payment to Secured Party of an amount equal to sum of the Market Values of the number of shares of Common Stock on the respective Acceleration Date for each Tranche that has been accelerated under the Stock Purchase Agreement equal, in the case of each such Tranche, to (i) the number of shares of Common Stock required to be delivered on the Default Settlement Date for such Tranche under Section 7.01 of the Stock Purchase Agreement without giving effect to the proviso in such Section 7.01 minus (ii) the number of shares of Common Stock delivered on the Default Settlement Date for such Tranche by the Collateral Agent to Secured Party as described in Section 8(a); and finally, if all of the obligations of Pledgor hereunder and for each Tranche under the Stock Purchase Agreement have been fully discharged or sufficient funds have been set aside by the Collateral Agent at the request of Pledgor for the discharge thereof, any remaining proceeds shall be released to Pledgor. (e) Pledgor recognizes that Secured Party may not choose to effect a public sale of all or a part of the Collateral by reason of certain prohibitions contained (x) in the Securities Act of 1933, as amended, as now or hereafter in effect, or (y) in applicable Blue Sky or other state securities laws, as now or hereafter in effect, and may resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such Collateral for their own account, for investment and not with a view to the distribution or resale thereof. Pledgor agrees that private sales so made may be at prices and other terms less favorable to the seller than if such Collateral were sold at public sales, and that Secured Party has no obligation to delay sale of any such Collateral for the period of time necessary to permit the issuer of such Collateral, even if such issuer would agree, to register such Collateral for public sale under such applicable securities laws. The Pledgor agrees that private sales made under the foregoing circumstances shall be deemed to have been made in a commercially reasonable manner. SECTION 9. The Collateral Agent. (a) Secured Party hereby irrevocably appoints and authorizes the Collateral Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Collateral Agent by the terms hereof, together with all such powers as are reasonably incidental thereto. (b) The obligations of the Collateral Agent hereunder are only those expressly set forth in this Agreement. (c) The Collateral Agent may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts. (d) Neither the Collateral Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or not taken by it in connection with this Agreement (1) with the consent or at the request of Secured Party or (2) in the absence of its own gross negligence or willful misconduct. The Collateral Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement or other writing (which may be a bank wire, telex or similar writing) believed by it to be genuine or to be signed by the proper party or parties. (e) Pledgor shall indemnify the Collateral Agent against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from the Collateral Agent's gross negligence or willful misconduct) that the Collateral Agent may suffer or incur in connection with this Agreement or any action taken or omitted by the Collateral Agent hereunder. (f) Beyond the exercise of reasonable care in the custody thereof, the Collateral Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent, bailee, clearing corporation or securities intermediary or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral if the Collateral is accorded treatment substantially equal to that which it accords its own property, and shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any agent, bailee, clearing corporation or securities intermediary selected by the Collateral Agent in good faith (or selected by an agent, bailee, clearing corporation or securities intermediary so selected by the Collateral Agent or by any agent, bailee, clearing corporation or securities intermediary selected in accordance with this parenthetical phrase). (g) Any corporation or association into which the Collateral Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its agency business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, shall, subject to the prior written consent of Secured Party, be and become a successor Collateral Agent hereunder and vested with all of the title to the Collateral and all of the powers, discretions, immunities, privileges and other matters as was its predecessor without, except as provided above, the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. SECTION 10. Miscellaneous. (a) Whenever any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party. All the covenants and agreements herein contained by or on behalf of Pledgor and the Collateral Agent 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 Secured Party and its successors and assigns. (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) Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Pledgor, the Collateral Agent and Secured Party or, in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any 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. (d) All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard forms of telecommunication. Notices to Pledgor shall be directed to Pledgor at 35 East 62nd Street, New York, NY, 10021, Telecopy No. 212-572- 5965, Attention: Chief Financial Officer; notices to the Collateral Agent or Secured Party shall be directed to it at JPMorgan Chase Bank, 277 Park Avenue - 11th Floor, New York, NY 10172, Attention: EDG Corporate Marketing (Ross Gray), Telephone: (212) 622-5730, Telecopy: (212) 622-0105, with a copy to JPMorgan Chase Bank, 500 Stanton Christiana Road, Newark, DE 19713-2107, Attention: Collateral Ops, 3 OPS 2, Telephone: (302) 634-3158, Telecopy: (302) 634-3208. (e) This Agreement shall in all respects be construed in accordance with and governed by the laws of the State of New York (without reference to choice of law doctrine); provided that as to Pledged Items located in any jurisdiction other than the State of New York, the Collateral Agent on behalf of Secured Party shall have, in addition to any rights under the laws of the State of New York, all of the rights to which a secured party is entitled under the laws of such other jurisdiction. The parties hereto hereby agree that the Collateral Agent's jurisdiction, within the meaning of Section 8-110(e) of the UCC, insofar as it acts as a securities intermediary hereunder or in respect hereof, is the State of New York. (f) Each party hereby irrevocably and unconditionally submits to the non-exclusive jurisdiction of the Federal and state courts located in the Borough of Manhattan in the City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. (g) Each party hereby irrevocably and unconditionally waives any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby. (h) This Agreement may be executed, acknowledged and delivered in any number of counterparts, and all such counterparts taken together shall be deemed to constitute one and the same agreement. SECTION 11. Set-off. The parties hereto acknowledge and agree that each of them may elect to set-off any or all of its obligations to the other party under any agreement between the parties against any or all of its rights to obtain performance from such other party under any other agreement between such parties. SECTION 12. Termination of Pledge Agreement. This Agreement and the rights hereby granted by Pledgor in the Collateral shall cease, terminate and be void upon fulfillment of all of the obligations of Pledgor for each Tranche under the Stock Purchase Agreement and hereunder. Any Collateral remaining at the time of such termination shall be fully released and discharged from the Security Interests and delivered to Pledgor by the Collateral Agent, all at the request and expense of Pledgor. SECTION 13. Assignment. Neither Secured Party nor Pledgor may assign its rights or delegate its obligations under this Agreement, except with the prior written consent of the other parties hereto, and any purported assignment or delegation without such prior written consent shall be void and of no effect; provided that, notwithstanding any other provision of this Agreement or the Stock Purchase Agreement to the contrary requiring Secured Party to purchase, sell, receive or deliver any shares of Common Stock or other securities to or from Pledgor, Secured Party may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities or otherwise to perform Secured Party's obligations in respect of the transactions contemplated hereunder and under the Stock Purchase Agreement and any such designee may assume such obligations, and Secured Party shall be discharged of its obligations to Pledgor to the extent of any such performance. IN WITNESS WHEREOF, the parties have signed this Agreement as of the date and year first above written. PLEDGOR: GSB INVESTMENTS CORP. By: /s/ Todd J. Slotkin ----------------------------------- Name: Todd J. Slotkin Title: Executive Vice President and Chief Financial Officer COLLATERAL AGENT: JPMORGAN CHASE BANK, as Collateral Agent By: /s/ Demetrios G. Xistris -------------------------------- Name: Demetrios G. Xistris Title: Vice President and Assistant General Counsel SECURED PARTY: JPMORGAN CHASE BANK By: /s/ Demetrios G. Xistris -------------------------------- Name: Demetrios G. Xistris Title: Vice President and Assistant General Counsel Exhibit A (a) The execution and delivery of this Agreement and the Stock Purchase 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. Exhibit B CERTIFICATE FOR ADDITIONAL COLLATERAL The undersigned, an officer of GSB Investments Corp. ("Pledgor"), hereby certifies, pursuant to Section 6(b) of the Pledge Agreement, dated as of November 14, 2001, among Pledgor, JPMorgan Chase Bank, as Collateral Agent, and JPMorgan Chase Bank, as Secured Party (the "Pledge Agreement"; terms defined in the Pledge Agreement being used herein as defined therein), that: 1. Pledgor is delivering, or causing to be delivered in accordance with Section 6(c) of the Pledge Agreement, the following securities (or security entitlements in respect thereof) to the Collateral Agent to be held by the Collateral Agent as additional Collateral (the "Additional Collateral"): 2. Pledgor hereby represents and warrants to the Collateral Agent that the Additional Collateral is Eligible Collateral and that the representations and warranties contained in Sections 3(a), 3(b), 3(c) and 3(d) of the Pledge Agreement are true and correct with respect to the Additional Collateral on and as of the date hereof. This Certificate may be relied upon by Secured Party as fully and to the same extent as if this Certificate had been specifically addressed to Secured Party. IN WITNESS WHEREOF, the undersigned has executed this Certificate this [___] day of [__________, ___]. By: -------------------------------- Name: Title: Exhibit C List of Locations pursuant to Section 3(g): Delaware
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 ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ============================== ============================== ============================== ============================= 1(a).......................1a - ---- 1(b)......................001 - ---- 1(c)......................002 - ---- 1(e)......................016 - ---- 3(a)......................003 - ---- 3(b)......................004 - ---- 3(c)......................005 - ---- 3(d)......................006 - ---- 3(g)......................018 - ---- 4(e)............liens.pledges - ---- 5.........................007 - - 5(a)......................008 - ---- 6.......................sec.6 - - 6(a).......................6a - ---- 6(b).......................6b - ---- 6(c).......................6c - ---- 6(c)(i)...................009 - ------- 6(c)(ii)..................010 - -------- 6(c)(iii).................011 - --------- 6(d).......................6d - ---- 6(e).......................6e - ---- 6(f).......................6f - ---- 6(g).......................6g - ---- 6(h).......................6h - ---- 6(h)(i).............amt.taxes - ------- 6(h)(ii).............out.pock - -------- 7.......................sec.7 - - 7(a)......................012 - ---- 8.........................013 - - 8(a)......................014 - ---- 9.........................015 - - 10(a).....................017 - ----- 12..............term.pldg.agt - --
EX-99 5 prepricing.txt EXHIBIT 29 - PREPRICING ACKNOWLEDGMENT EXHIBIT 29 PRE-PRICING ACKNOWLEDGMENT -- TRANCHE No. 1 November __, 2001 This Pre-pricing Acknowledgment is a Pre-pricing Acknowledgment within the meaning of Section 2.02(b) of the Stock Purchase Agreement dated as of November __, 2001 (the "Stock Purchase Agreement") between GSB Investments Corp. ("Seller") and JPMorgan Chase Bank ("Buyer"), by J.P. Morgan Securities Inc., as its agent. This Pre-pricing Acknowledgment relates to Tranche No. 1. Capitalized terms used herein have the meanings set forth in the Stock Purchase Agreement. The parties hereto hereby acknowledge and agree as follows with respect to Tranche No. 1: (i) the Designation of Tranche: Tranche No. 1. (ii) the "Advance Rate," as set forth in Section 2.02(d) of the Stock Purchase Agreement, shall be equal to ___%. (iii) the "Downside Rate," as set forth in Section 2.02(d) of the Stock Purchase Agreement, shall be equal to 100%. (iv) the "Hedging Amount," as set forth in Section of the Stock Purchase Agreement, shall be equal to $0.15. (v) the "Maturity Date," as set forth in Section 2.02(d) of the Stock Purchase Agreement, shall be the date twenty-three months from the last day of the Hedging Period for Tranche 1. (vi) the "Maximum Base Amount," as set forth in Section 2.02(d) of the Stock Purchase Agreement, shall be equal to 1,000,000 shares. (vii) the "Upside Rate," as set forth in Section 2.02(d) of the Stock Purchase Agreement, shall be equal to 140%. This Pre-pricing Acknowledgment shall be governed by the laws of New York and may be executed in any number of counterparts, and all such counterparts taken together shall be deemed to constitute one and the same agreement. IN WITNESS WHEREOF, the parties have signed this Pre-pricing Acknowledgment as of the date and year first above written. SELLER: GSB INVESTMENTS CORP. By: /s/ Todd J. Slotkin ------------------------------------- Name: Todd J. Slotkin Title: Executive Vice President and Chief Financial Officer BUYER: JPMORGAN CHASE BANK, by J.P. MORGAN SECURITIES INC., as its Agent By: /s/ Neeraj Hora ------------------------------------- Name: Neeraj Hora Title: Vice President EX-99 6 pricing.txt EXHIBIT 30 - PRICING LETTER EXHIBIT 30 PRICING SCHEDULE -- TRANCHE No. 1 JPMorgan Chase Bank 277 Park Avenue New York, New York 10172 11/16/2001 GSB Investments Corp. 35 East 62nd Street New York, NY, 10021 Attention: Chief Financial Officer Dear Sir: This Pricing Schedule is a Pricing Schedule within the meaning of Section 2.02(c) of the Stock Purchase Agreement dated as of November 14, 2001 (the "Stock Purchase Agreement") between GSB Investments Corp. ("Seller") and JPMorgan Chase Bank ("Buyer"), by J.P. Morgan Securities Inc., as its agent. Capitalized terms used herein have the meanings set forth in the Stock Purchase Agreement. This Pricing Schedule relates to Tranche No. 1. For all purposes under the Stock Purchase Agreement, the Terms of Tranche with respect to Tranche No. 1 shall be as follows: 1. Designation of Tranche: Tranche No. 1. 2. Purchase Price: $20,274,030. 3. Payment Date: 11/21/01. 4. Initial Share Price: $25.23. 5. Initial Short Position: 638,800 6. Hedged Value: $25.23 7. Upside Limit: $35.32 8. Maturity Date: 11/16/03 9. Base Amount: 1,000,000 10. The Last Day of Hedging Period: 11/16/2001 Very truly yours, JPMORGAN CHASE BANK, by J.P. MORGAN SECURITIES INC., as its Agent By: /s/ Neeraj Hora ---------------------------------------------- Name: Neeraj Hora Title: Vice President -----END PRIVACY-ENHANCED MESSAGE-----