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EXHIBIT 14
SAILS PLEDGE AGREEMENT
dated as of
December 28, 2000
among
GSB INVESTMENTS CORP.,
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
and
CREDIT SUISSE FIRST BOSTON CORPORATION, as Agent
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TABLE OF CONTENTS
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PAGE
SECTION 1. The Security Interests............................................1
SECTION 2. Definitions.......................................................3
SECTION 3. Representations and Warranties of Pledgor.........................5
SECTION 4. Certain Covenants of Pledgor......................................7
SECTION 5. Administration of the Collateral and Valuation of the
Securities......................................................8
SECTION 6. Income and Voting Rights in Collateral...........................13
SECTION 7. Remedies upon Acceleration Events................................14
SECTION 8. Miscellaneous....................................................17
SECTION 9. Termination of Pledge Agreement..................................18
SECTION 10. Netting and Set-off..............................................18
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PLEDGE AGREEMENT
THIS AGREEMENT is made as of this 28th day of December, 2000 among GSB
INVESTMENTS CORP, a Delaware corporation ("PLEDGOR"), CREDIT SUISSE FIRST BOSTON
CORPORATION, as agent (in such capacity, the "AGENT") hereunder, and CREDIT
SUISSE FIRST BOSTON INTERNATIONAL ("SECURED PARTY").
WHEREAS, Pledgor owns shares of common stock, par value $1.00 per share, of
Golden State Bancorp Inc., a Delaware corporation (the "ISSUER"), or security
entitlements in respect thereof (the "COMMON STOCK");
WHEREAS, Pledgor, Mafco Holdings Inc., Secured Party and the Agent have
entered into an agreement entitled "Terms and Conditions for Private SAILS" (the
"TERM SHEET") dated as of December 19, 2000, pursuant to which Pledgor and
Secured Party have agreed to enter into certain transactions relating to the
Common Stock at the time and on the terms set forth therein;
WHEREAS, the Term Sheet provides that the transactions described therein
may be executed in one or more tranches (each, a "TRANCHE");
WHEREAS, the Term Sheet provides that the parties thereto will enter into
final documentation, consisting of a SAILS Mandatorily Exchangeable Securities
Contract and a SAILS Pledge Agreement, relating to each Tranche;
WHEREAS, it is a condition to the obligations of Secured Party under the
Securities Contract that Pledgor and Secured Party enter into this Agreement;
NOW, THEREFORE, in consideration of their mutual covenants contained herein
and to secure the performance by Pledgor of Pledgor's obligations under the
Securities Contract and the observance and performance of the covenants and
agreements contained herein and in the Securities Contract, 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 of Pledgor contained
herein and in the Securities Contract:
(a) Pledgor hereby assigns and pledges to Secured Party, and grants to
Secured Party, security interests in and to, and a lien upon and right of
set-off against,
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and transfers to Secured Party, as and by way of a security interest having
priority over all other security interests, with power of sale, all of Pledgor's
right, title and interest in and to (i) the Initial Pledged Items; (ii) all
additions to and substitutions for the Initial Pledged Items (including, without
limitation, any securities, instruments or other property delivered or pledged
pursuant to Section 4(a), 5(b) or 5(j)) (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 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 Initial Pledged Items or the
Additions and Substitutions (excluding Ordinary Cash Dividends but 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 or
Government Securities constituting Collateral (other than Ordinary Cash
Dividends), or into which any such Common Stock is converted in connection with
any Reorganization Event or otherwise, and any security entitlements in respect
of any of the foregoing, (B) any obligation of Secured Party to return any
rehypothecated Collateral pursuant to Section 5(i) and (C) any amounts paid or
assets delivered to Pledgor by Secured Party in respect of dividends paid or
distributions (other than Ordinary Cash Dividends) made on shares of Common
Stock constituting Collateral that have been rehypothecated in accordance with
Section 5(i)); (iv) the Collateral Account and all securities and other
financial assets (each as defined in Section 8-102 of the UCC), including the
Initial Pledged Items and the Additions and Substitutions, and other funds,
property or assets from time to time held therein or credited thereto; and (v)
all powers and rights now owned or hereafter acquired under or with respect to
the Initial Pledged Items or the Additions and Substitutions (such Initial
Pledged Items, Additions and Substitutions, proceeds, collections, powers,
rights, Collateral Account and assets held therein or credited thereto being
herein collectively called the "COLLATERAL"). Secured Party 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 Secured Party by this Agreement.
(b) Immediately upon payment of the Purchase Price, Pledgor shall deliver
to the Custodian in pledge hereunder Eligible Collateral consisting of a number
of shares of Common Stock equal to the Base Amount as of the Closing Date (the
"INITIAL PLEDGED ITEMS"), in the manner provided in Section 5(c). Upon delivery
of the Purchase Price, Pledgor shall cause to be delivered to Secured Party any
documents as Secured Party may reasonably request to evidence that the Initial
Pledged Items have been delivered free and clear from any Lien or Transfer
Restrictions to which such Initial Pledged Items may have been subject prior to
the delivery of the Purchase Price.
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(c) In the event that the Issuer at any time issues 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, Pledgor shall
immediately pledge and deliver to Secured Party in accordance with Section 5(c)
all such shares or security entitlements in respect thereof as additional
Collateral hereunder.
(d) The Security Interests are granted as security only and shall not
subject 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 in or credited to the Collateral Account 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 Securities Contract. 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 Secured Party that such officer is authorized to act
hereunder on behalf of Pledgor.
"BORROW COSTS" has the meaning provided in Section 5(i).
"COLLATERAL" has the meaning provided in Section 1(a).
"COLLATERAL ACCOUNT" has the meaning provided in Section 5(c).
"COLLATERAL EVENT OF DEFAULT" means, the occurrence of either of the
following: (i) at any time, failure of the Collateral to include, as Eligible
Collateral, (A) at least the Maximum Deliverable Number of shares of Common
Stock or (B) if Pledgor shall have elected to substitute Government Securities
for Share Collateral in accordance with Section 5(j) , 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 (B), the
Calculation Agent shall promptly notify Pledgor
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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 (ii) at any time, failure 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 9-115 of
the UCC.
"CUSTODIAN" means The Bank of New York, or any other custodian appointed by
Secured Party and identified to Pledgor.
"DEFAULT SETTLEMENT DATE" 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 5(j), Government Securities; provided that Pledgor has good and
marketable title thereto, free of all Liens (other than the Security Interests)
and Transfer Restrictions and that Secured Party has a valid, first priority
perfected security interest therein, a first lien thereon and Control with
respect thereto.
"GOVERNMENT SECURITIES" means securities issued by the United States
Government.
"INITIAL PLEDGED ITEMS" has the meaning provided in Section 1(b).
"LOCATION" means, with respect to any party, the place such party is
"deemed located" within the meaning of Section 9-103(3)(d) of the UCC.
"MAXIMUM DELIVERABLE NUMBER" means, on any date, the Base Amount on such
date.
"PLEDGED ITEMS" means, as of any date, any and all securities and
instruments delivered by Pledgor to be held by or on behalf of Secured Party
under this Agreement as Collateral.
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"REHYPOTHECATE" has the meaning provided in Section 5(i).
"REHYPOTHECATION UNAVAILABILITY" has the meaning provided in Section 5(i).
"REIMBURSEMENT AMOUNT" has the meaning provided in Section 5(i).
"REIMBURSEMENT NOTICE DATE" has the meaning provided in Section 5(i).
"REIMBURSEMENT PAYMENT DATE" has the meaning provided in Section 5(i).
"REIMBURSEMENT PERIOD" means, with respect to any Rehypothecation
Unavailability, the period beginning on the date such Rehypothecation
Unavailability occurs and ending on the Reimbursement Payment Date immediately
following the date such Rehypothecation Unavailability terminates.
"SECURITIES CONTRACT" means the SAILS Mandatorily Exchangeable Securities
Contract dated as of the date hereof among Pledgor, Secured Party and the Agent,
as amended from time to time.
"SECURITY INTERESTS" means the security interests in the Collateral created
hereby.
"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 Secured Party that:
(a) Pledgor's holding period (calculated in accordance with Rule 144(d)
under the Securities Act) with respect to the Initial Pledged Items commenced on
or before May 23, 2000, and Pledgor (i) owns and, except with respect to
Collateral rehypothecated pursuant to Section 5(i), at all times prior to the
release of the Collateral pursuant to the terms of this Agreement, will own the
Collateral free and clear of any Liens (other than the Security Interests) or
Transfer Restrictions and (ii) is not and 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, Secured Party or
any securities intermediary through whom 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.
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(b) Other than financing statements or other similar or equivalent
documents or instruments with respect to the Security Interests, after delivery
of the Purchase Price, no financing statement, security agreement or similar or
equivalent document or instrument covering all or any part of the Collateral is
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.
(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 is and will 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 Pledgor or held through a securities
intermediary whose securities intermediary's 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 Pledgor or held through a
securities intermediary whose securities intermediary's 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
Secured Party to maintain 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) in the case of Collateral consisting of investment property
(as defined in Section 9-115 of the UCC), (A) the delivery of certificates
evidencing any such investment property consisting of certificated securities to
the Custodian in accordance with Section 5(c)(i), (B) the registration of any
such investment property consisting of uncertificated securities in the name of
the Custodian or its nominee in accordance with Section 5(c)(ii) or (C) the
crediting of any securities or other financial assets underlying any such
investment property consisting of security entitlements to a securities account
of the Custodian in accordance with Section 5(c)(iii) and, in each case, the
crediting of such securities or financial assets to the Collateral Account or
(ii) in the case of Collateral not consisting of investment property, the filing
of UCC-1 financing statements in the form of Exhibit B hereto in the appropriate
filing offices in each jurisdiction identified in Parts 4 and 5 of Exhibit C
hereto, Secured Party will have a valid and perfected security interest in such
Collateral, in respect of which Secured
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Party will have (in the case of Collateral consisting of investment property)
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, other than the filing of
UCC-1 financing statements in the form of Exhibit B hereto in the appropriate
filing offices in each jurisdiction identified in Parts 4 and 5 of Exhibit C
hereto.
(f) Pledgor has not performed and will not perform any acts that might
prevent Secured Party from enforcing any of the terms of this Agreement or that
might limit Secured Party in any such enforcement.
(g) The Location of Pledgor is the address set forth in Section 8(c), and
under the Uniform Commercial Code as in effect in such Location.
(h) Pledgor has delivered to Secured Party a perfection certificate
substantially in the form attached as Exhibit C hereto, completed and
supplemented with the schedules and attachments contemplated thereby to the
satisfaction of Secured Party, and signed by an Authorized Officer of Pledgor.
SECTION 4. Certain Covenants of Pledgor. Pledgor agrees that, so long as
any of Pledgor's obligations under the Securities Contract remain outstanding:
(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 5(b) and 5(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 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 9-115 of the UCC) or (iii) enable Secured Party
to exercise and enforce its rights hereunder with respect to such security
interest. To the extent permitted by applicable law, Pledgor hereby authorizes
Secured Party 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 Secured Party in its sole discretion may deem
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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 Secured Party, against the claims and demands of all
persons. Secured Party may elect, but without an obligation to do so, to
discharge any Lien of any third party on any of the Collateral.
(d) Pledgor shall not change (i) Pledgor's name, identity or corporate
structure in any manner or (ii) Pledgor's Location, unless in either case (a)
Pledgor shall have given Secured Party not less than 30 days' prior notice
thereof and (b) 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 9-115 of the UCC) or subject any Collateral to
any other Lien.
(e) Pledgor shall not (i) create or permit to exist any Lien (other than
the Security Interests) or any Transfer Restriction 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, Secured Party and any
securities intermediary through whom 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 5. Administration of the Collateral and Valuation of the
Securities. (a) Secured Party shall determine on each Business Day whether a
Collateral Event of Default shall have occurred.
(b) Pledgor may pledge additional Eligible Collateral hereunder at any
time. Concurrently with the delivery of any additional Eligible Collateral,
Pledgor shall deliver to Secured Party a certificate of an Authorized Officer of
Pledgor substantially in the form of Exhibit A 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 paragraphs
(a), (b), (c) and (d) of Section 3 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 5(c) and any other actions
necessary to create for the benefit of Secured Party a valid, first priority,
perfected security interest in, and a first lien upon, such additional Eligible
Collateral, as to which Secured Party will have Control.
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(c) Any delivery of any securities or security entitlements (each as
defined in Section 8-102 of the UCC) as Collateral to Secured Party by Pledgor
shall be effected (i) in the case of Collateral consisting of certificated
securities registered in the name of Pledgor, by delivery of certificates
representing such securities to the Custodian, 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,
with signatures appropriately guaranteed, all in form and substance satisfactory
to Secured Party, and the crediting by the Custodian of such securities to a
securities account (as defined in Section 8-501 of the UCC) (the "COLLATERAL
ACCOUNT") of Secured Party maintained by the Custodian, (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 Custodian or its nominee, accompanied by any required transfer tax stamps,
the issuer's compliance with such instructions and the crediting by the
Custodian of such securities to the Collateral Account, (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 Custodian at
such securities intermediary or, at the option of Secured Party, at another
securities intermediary satisfactory to Secured Party and the crediting by the
Custodian of such securities to the Collateral Account or (iv) in any case, by
complying with such alternative delivery instructions as Secured Party shall
provide to Pledgor in writing. Upon delivery of any such Pledged Item under this
Agreement, Secured Party shall examine (or cause the Custodian to examine) such
Pledged Item and any certificates delivered pursuant to Section 5(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 Secured Party determines that a Collateral Event
of Default shall have occurred, Secured Party 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 Secured Party determines that no Acceleration
Event or failure by Pledgor to meet any of Pledgor's obligations under Sections
4 or 5 hereof has occurred and is continuing, Pledgor may obtain the release
from the Security Interests of any Collateral upon delivery to Secured Party 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 Maturity Date, unless (i) Pledgor shall have otherwise effected
the deliveries required by Section 2.03(b) of the Securities Contract or shall
have delivered
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the Cash Settlement Amount to Secured Party in lieu of shares of Common Stock in
accordance with Section 2.04 of the Securities Contract on the Maturity Date or
(ii) the Common Stock then held by or on behalf of Secured Party hereunder is
not Free Stock, Secured Party shall deliver or cause to be delivered to itself
from the Collateral Account in whole or partial, as the case may be,
satisfaction of Pledgor's obligations to deliver shares of Common Stock to
Secured Party on the Maturity Date pursuant to the Securities Contract, shares
of Common Stock then held by or on behalf of it hereunder representing the
number of shares of Common Stock required to be delivered under the Securities
Contract on the Maturity Date. Upon any such delivery, 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) Secured Party 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
Custodian, Secured Party or its nominee. Pledgor shall promptly give to Secured
Party 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 Secured Party
shall promptly give to Pledgor copies of any notices and communications received
by Secured Party with respect to Collateral that is registered, or held through
a securities intermediary, in the name of Custodian, Secured Party or its
nominee.
(h) Pledgor agrees that Pledgor shall forthwith upon demand pay to Secured
Party:
(i) the amount of any taxes that Secured Party or the Custodian 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 costs and expenses, including the fees
and disbursements of counsel and of any other experts, that Secured Party
or the Custodian 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 Secured Party of any of the rights
conferred upon it hereunder or (D) any Acceleration Event.
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
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annum equal to 5% plus the prime rate as published from time to time in The Wall
Street Journal, Eastern Edition.
(i) Without limiting the rights and obligations of the parties under this
Agreement, upon the consent of Pledgor (which consent need not be in writing),
Secured Party may, notwithstanding Section 9-207 of the UCC, sell, lend, pledge,
rehypothecate, assign, invest, use, commingle or otherwise dispose of, or
otherwise use in its business (collectively, "REHYPOTHECATE"), any Collateral,
free from any claim or right of any nature whatsoever of Pledgor, including any
equity or right of redemption by Pledgor; provided that Secured Party will
return any rehypothecated Collateral (with the same Collateral or identical
substitute Collateral) (A) upon five Business Days' notice from Pledgor or (B)
if not already returned, on the Maturity Date or on any Optional Termination
Date or any Reorganization Termination Date; provided further that in the case
of any Optional Termination Date on which the Securities Contract is terminated
in part pursuant to Section 3.01 of the Securities Contract, Secured Party will
be obligated to return only an amount of rehypothecated Collateral sufficient to
ensure that on such date, the Collateral Account will contain a number of shares
of Common Stock at least equal to the number of shares of Common Stock with
respect to which the Securities Contract is to be terminated pursuant to Section
3.01 of the Securities Contract; provided further that in the case of any
Reorganization Termination Date relating to any Reorganization Event in which
the consideration received by holders of Common Stock does not consist solely of
Non-Stock Consideration, Secured Party will be obligated to return only
Non-Stock Consideration in an amount and of the type that a holder of a number
of shares of Common Stock equal to the number of shares of Common Stock
rehypothecated by Secured Party immediately prior to such Reorganization
Termination Date would have been entitled to receive in such Reorganization
Event. If at any time at which any shares of Common Stock constituting
Collateral have been rehypothecated pursuant to this Section 5(i) there shall
occur an event of a type that would, had Secured Party borrowed such shares of
Common Stock from Pledgor on terms customary for loans of equity securities (as
determined by the Calculation Agent), require either (i) an adjustment to the
number of shares of Common Stock or a change in the type of securities or other
property that Secured Party would be required to deliver to Pledgor to repay
such stock loan or (ii) a payment or delivery by Secured Party to Pledgor in
respect of dividends paid or distributions made on such shares of Common Stock,
then, in the case of clause (i), except as provided in the third proviso to the
immediately preceding sentence, such adjustment or change shall be applied to
the number of shares of Common Stock that Secured Party is required to return
upon notice from Pledgor in accordance with the first proviso to the immediately
preceding sentence and, in the case of clause (ii), Secured Party shall make
such payment or delivery to Pledgor, whereupon the amount so paid or the assets
so delivered shall become Collateral
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hereunder (except that to the extent any such payment is made in respect of an
Ordinary Cash Dividend, it shall be returned to Pledgor, it being understood
that Pledgor is entitled to Ordinary Cash Dividends pursuant to Section 6(a)
hereof). All determinations related to the immediately preceding sentence shall
be made by the Calculation Agent. Notwithstanding the foregoing, if Eligible
Collateral consisting of a number of shares of Common Stock equal to the Maximum
Deliverable Number is unavailable for rehypothecation by Secured Party at any
time ((1) as a result of Pledgor's withholding Pledgor's consent to
rehypothecation of such Collateral, (2) as a result of Pledgor's causing Secured
Party to return such Collateral pursuant to the first proviso to the first
sentence in this Section 5(i), (3) as a result of any Transfer Restrictions, (4)
as a result of Pledgor's substitution of Government Securities for Share
Collateral pursuant to Section 5(j) or (5) otherwise), (a "REHYPOTHECATION
UNAVAILABILITY"), Pledgor shall be obligated to reimburse Secured Party in the
manner set forth below for any costs ("BORROW COSTS") incurred by Secured Party
relating to Secured Party's borrowing of shares of Common Stock in connection
with hedging Secured Party's exposure to the Securities Contract during the
period such Rehypothecation Unavailability exists, the aggregate amount of any
such Borrow Costs to be determined by the Calculation Agent. Prior to the close
of business on the Business Day (the "REIMBURSEMENT NOTICE DATE") immediately
preceding the first Business Day of each month (each such Business Day, a
"REIMBURSEMENT PAYMENT Date") that begins during the Reimbursement Period for
such Rehypothecation Unavailability, the Calculation Agent shall deliver a
notice to Pledgor specifying the aggregate amount of Borrow Costs incurred (the
"REIMBURSEMENT AMOUNT") during the period beginning on the Reimbursement Payment
Date immediately preceding such Reimbursement Payment Date (or if there is no
preceding Reimbursement Payment Date, beginning on the date such Rehypothecation
Unavailability occurred) and ending on the Reimbursement Notice Date for such
Reimbursement Payment Date. On such Reimbursement Payment Date, Pledgor shall
make a cash payment to Secured Party, by wire transfer of immediately available
funds to an account designated by Secured Party, in an amount equal to the
aggregate amount of Borrow Costs specified in such notice. For purposes of
determining the occurrence of a Collateral Event of Default, the rehypothecation
of any Collateral pledged hereunder shall not affect the status of such
Collateral as Collateral or Eligible Collateral hereunder. This Section 5(i) is
intended to be an agreement that satisfies the requirements of Section 1058 of
the Internal Revenue Code of 1986, as amended, and the regulations (including
proposed regulations) promulgated thereunder, and Secured Party and Pledgor
agree to treat this Section 5(i) as such an agreement for all federal income tax
purposes.
(j) 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
12
<PAGE>
Collateral consisting of Common Stock then held in or credited to the Collateral
Account (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 6. Income and Voting Rights in Collateral. (a) Secured Party shall
have the right to receive and retain as Collateral hereunder all proceeds of the
Collateral (excluding Ordinary Cash Dividends but including, without limitation,
Extraordinary Cash Dividends or interest), and Pledgor shall take all such
action as Secured Party shall deem necessary or appropriate to give effect to
such right. All such proceeds that are received by Pledgor shall be received in
trust for the benefit of Secured Party and, if Secured Party so directs, shall
be segregated from other funds of Pledgor and shall, forthwith upon demand by
Secured Party, be delivered over to the Custodian on behalf of Secured Party as
Collateral in the same form as received (with any necessary endorsement).
(b) Unless an Acceleration Event 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 Collateral
that has been
13
<PAGE>
rehypothecated by Secured Party pursuant to Section 5(i)), and Secured Party
shall, upon receiving a written request from Pledgor accompanied by a
certificate of an Authorized Officer of Pledgor stating that no Acceleration
Event has occurred and is 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 Custodian, Secured Party or its
nominee as shall be specified in such request and shall be in form and substance
satisfactory to Secured Party.
(c) If an Acceleration Event shall have occurred and be continuing, Secured
Party 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 Secured Party were the absolute and sole owner thereof.
SECTION 7. Remedies upon Acceleration Events. (a) On or after any
Acceleration Date, Secured Party may exercise 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 or cause to be delivered to itself from
the Collateral Account all Collateral consisting of shares of Common Stock (but
not in excess of the number thereof deliverable under the Securities Contract at
such time) on the date of the Acceleration Amount Notice relating to such
Acceleration Date (the "DEFAULT SETTLEMENT DATE") in satisfaction of Pledgor's
obligations to deliver Common Stock under the Securities Contract, whereupon
Secured Party shall hold such shares of Common Stock absolutely 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 under the Securities
Contract 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 under the Securities Contract 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 Secured Party may deem satisfactory. Pledgor covenants and
agrees that Pledgor will execute and deliver such documents and take such other
action as Secured Party deems necessary or advisable in order that any such sale
may be made in compliance with law. Upon any such sale, Secured Party shall have
the right to deliver,
14
<PAGE>
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 9-504 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 Secured Party 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 Secured Party may determine. Secured Party shall not be
obligated to make any such sale pursuant to any such notice. Secured Party 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 Secured Party until the selling price is paid by the buyer thereof,
but Secured Party 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. Secured Party,
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 Secured Party Pledgor's true and
lawful attorney, with full power of substitution, in the name of Pledgor,
Secured Party or otherwise, for the sole use and benefit of 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 Acceleration Event 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;
15
<PAGE>
(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 Secured
Party 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 Secured Party 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. Secured Party and Pledgor agree
that such notice constitutes "reasonable notification" within the meaning of
Section 9-504(3) 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, Secured Party 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 Secured Party
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 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 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 Acceleration Event, Secured Party 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 Secured Party shall determine in its
sole discretion subject to the foregoing provisions of this Section 7. The
proceeds of any sale of, or other realization upon, or other receipt from, any
of the Collateral shall be applied by Secured Party in the following order of
priorities:
16
<PAGE>
first, to the payment to Secured Party or the Custodian of the expenses
of such sale or other realization, including reasonable compensation to the
Custodian and the agents and counsel of the Custodian and Secured Party,
and all expenses, liabilities and advances incurred or made by Secured
Party or the Custodian in connection therewith, including brokerage fees in
connection with the sale by Secured Party of any Collateral;
second, to the payment to Secured Party of an amount equal to the
aggregate market value (as determined by the Calculation Agent) as of the
Default Settlement Date of a number of shares of Common Stock equal to (i)
the number of shares of Common Stock that would be required to be delivered
under Section 8.01 of the Securities Contract on the Default Settlement
Date without giving effect to the proviso therein minus (ii) the number of
shares of Common Stock delivered to Secured Party on the Default Settlement
Date as described in Section 7(a);
finally, if all of the obligations of Pledgor hereunder and under the
Securities Contract have been fully discharged or sufficient funds have
been set aside by Secured Party, at the request of Pledgor for the
discharge thereof, any remaining proceeds shall be released to Pledgor.
SECTION 8. Miscellaneous. (a) This Agreement is not intended and shall not
be construed to create any rights in any person other than Pledgor, Secured
Party 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 Pledgor and Secured Party shall bind, and inure to
the benefit of, their respective successors and assigns whether so expressed or
not. The rights and duties under this Agreement may not be assigned or
transferred by any party hereto without the prior written consent of the other
parties hereto; provided that (i) Secured Party may assign or transfer any of
its rights or duties hereunder with the prior written consent of Pledgor (which
consent shall not be unreasonably withheld) and (ii) Agent may assign or
transfer any of its rights or duties hereunder without the prior written consent
of the other parties hereto to any affiliate of Credit Suisse First Boston, so
long as such affiliate is a broker-dealer registered with the Securities and
Exchange Commission.
(b) 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 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 either
party in exercising any right,
17
<PAGE>
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.
(c) 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, New York 10021, Telecopy No. (212) 572-5965,
Attention: Chief Financial Officer; notices to Secured Party shall be directed
to it in care of Credit Suisse First Boston Corporation, Eleven Madison Avenue,
New York, New York 10010, Telecopy No. (212) 325-8175, Attention: Ricardo
Harewood.
(d) 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, Secured Party shall, in addition to any rights
under the laws of the State of New York, have all of the rights to which a
secured party is entitled under the laws of such other jurisdiction) and each
party hereto submits to the jurisdiction of the Courts of the State of New York
and waives, to the fullest extent permitted by law, any objection that it may
now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or in connection with this Agreement in any such court
or that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. The parties hereto hereby agree that the
Custodian'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. 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.
(E) 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.
(f) 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.
(g) The rights and obligations of the Agent shall be as set forth in
Section 9.08 of the Securities Contract.
18
<PAGE>
SECTION 9. 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 under the Securities
Contract 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 Secured Party, all at the request and expense of Pledgor.
SECTION 10. Netting and Set-off. (a) If on any date, cash would otherwise
be payable or shares of Common Stock or other property would otherwise be
deliverable (including, for the avoidance of doubt, the replacement, as required
by Section 5(i), of shares of Common Stock that have been rehypothecated
pursuant to such Section) pursuant to the Securities Contract or this Agreement
by Secured Party to Pledgor and by Pledgor to Secured Party and the type of
property required to be paid or delivered by each such party on such date is the
same, then, on such date, each such party's obligation to make such payment or
delivery will be automatically satisfied and discharged and, if the aggregate
amount that would otherwise have been payable or deliverable by one such party
exceeds the aggregate amount that would otherwise have been payable or
deliverable by the other such party, replaced by an obligation upon the party by
whom the larger aggregate amount would have been payable or deliverable to pay
or deliver to the other party the excess of the larger aggregate amount over the
smaller aggregate amount.
(b) In addition to and without limiting any rights of set-off that Secured
Party may have as a matter of law, pursuant to contract or otherwise, upon the
occurrence of a Reorganization Termination Date to which clause (B) of Section
7.02 of the Securities Contract applies or an Acceleration Date, Secured Party
shall have the right to terminate, liquidate and otherwise close out the
transactions contemplated by the Securities Contract and this Agreement pursuant
to the terms of the Securities Contract and this Agreement, and to set off any
obligation it may have to (i) release from the Security Interests or return to
Pledgor any Collateral pursuant to Section 5(e) or Section 9 or (ii) return any
rehypothecated Collateral pursuant to Section 5(i), against any right Secured
Party or any of its affiliates may have against Pledgor, including without
limitation any right to receive a payment or delivery pursuant to Section
2.03(b), Section 2.04, Section 2.05, Section 3.01, Section 7.02, Section 7.04 or
Section 8.01 of the Securities Contract or any other provision of the Securities
Contract. In the case of a set-off of any obligation to return or replace assets
against any right to receive assets of the same type, such obligation and right
shall be set off in kind. In the case of a set-off of any obligation to return
or replace assets against any right to receive assets of any other type, the
value of each of such obligation and such right shall be determined by the
Calculation Agent and the result of such set-off shall be that the net obligor
shall pay or deliver to the other party an amount of cash or assets, at
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<PAGE>
the net obligor's option, with a value (determined, in the case of a delivery of
assets, by the Calculation Agent) equal to that of the net obligation. In
determining the value of any obligation to release or deliver Common Stock or
right to receive Common Stock, the value at any time of such obligation or right
shall be determined by reference to the market value of the Common Stock at such
time. If an obligation or right is unascertained at the time of any such
set-off, the Calculation Agent may in good faith estimate the amount or value of
such obligation or right, in which case set-off will be effected in respect of
that estimate, and the relevant party shall account to the other party at the
time such obligation or right is ascertained.
20
<PAGE>
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
SECURED PARTY:
CREDIT SUISSE FIRST BOSTON
INTERNATIONAL
By: /s/ Edward Curtin
--------------------------------
Name: Edward Curtin
Title: Director-Legal and Compliance
Department
By: /s/ Susan Girard
--------------------------------
Name: Susan Girard
Title: Director-Legal and Compliance
Department
<PAGE>
AGENT:
CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ Timothy D. Bock
----------------------------------
Name: Timothy D. Bock
Title: Managing Director
<PAGE>
EXHIBIT A
Certificate for Additional Collateral
The undersigned, an Authorized Officer of GSB Investments Corp.
("PLEDGOR"), hereby certifies, pursuant to Section 5(b) of the SAILS Pledge
Agreement dated as of December 28, 2000 among Pledgor, Credit Suisse First
Boston Corporation, as Agent, and Credit Suisse First Boston International (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 5(c) of the Pledge Agreement, the following securities (or security
entitlements in respect thereof) to Secured Party to be held by Secured
Party as additional Collateral (the "ADDITIONAL COLLATERAL"):
2. Pledgor hereby represents and warrants to Secured Party that the
Additional Collateral is Eligible Collateral and that the representations
and warranties contained in paragraphs (a), (b), (c) and (d) of Section 3
of the Pledge Agreement are true and correct with respect to the Additional
Collateral on and as of the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this ___
day of __________, ____.
By:
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT B
Form of UCC-1 Financing Statement
ANNEX A TO FINANCING STATEMENT NAMING
GSB INVESTMENTS CORP., AS DEBTOR, AND CREDIT SUISSE
FIRST BOSTON INTERNATIONAL, AS SECURED PARTY
This financing statement covers the right, title and interest of GSB
Investments Corp. ("DEBTOR") in and to the following, whether owned at the time
that the Initial Pledged Items were delivered to the Custodian or thereafter
acquired (all of which is hereinafter collectively referred to as the
"COLLATERAL"):
(i) the Initial Pledged Items;
(ii) all additions to and substitutions for the Initial Pledged Items (the
"ADDITIONS AND Substitutions");
(iii) all income, proceeds and collections received or to be received, or
derived or to be derived, at the time that the Initial Pledged Items were
delivered to the Custodian or at any time thereafter (whether before or after
the commencement of any proceeding under applicable bankruptcy, insolvency or
similar law, by or against Debtor, with respect to Debtor) from or in connection
with the Initial Pledged Items or the Additions and Substitutions (excluding
Ordinary Cash Dividends but 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 (other than Ordinary
Cash Dividends), or into which any such Common Stock is converted in connection
with any Reorganization Event or otherwise, and any security entitlements in
respect of any of the foregoing, (B) any obligation of Secured Party to return
any rehypothecated Collateral and (C) any amounts paid or assets delivered to
Debtor by Secured Party in respect of dividends paid or distributions (other
than Ordinary Cash Dividends) made on shares of Common Stock constituting
Collateral that have been rehypothecated);
(iv) the Collateral Account and all securities and other financial assets
(each as defined in Section 8-102 of the UCC), including the Initial Pledged
Items and the Additions and Substitutions, and other funds, property or other
assets from time to time held therein or credited thereto; and
<PAGE>
(v) all powers and rights owned at the time that the Initial Pledged Items
were delivered to the Custodian or thereafter acquired under or with respect to
the Initial Pledged Items or the Additions and Substitutions.
As used in this Annex A, the following capitalized terms have the meanings
specified below (such meanings being equally applicable to both the singular and
plural forms of the terms defined):
"COLLATERAL ACCOUNT" means a securities account (as defined in Section
8-501(a) of the UCC) established in the name of Secured Party at the offices of
the Custodian in which or to which certain of the Collateral is to be deposited
or credited.
"COMMON STOCK" means shares of Common Stock, par value $1.00 per share, of
the Issuer, or security entitlements in respect thereof.
"CUSTODIAN" means The Bank of New York, or any other custodian appointed by
Secured Party and identified to Debtor.
"INITIAL PLEDGED ITEMS" means 1,304,800 shares of Common Stock.
"ISSUER" means Golden State Bancorp., a Delaware corporation.
"REORGANIZATION EVENT" means (i) any consolidation or merger of the Issuer
with or into another entity (other than a merger or consolidation in which the
Issuer is the continuing corporation and in which the Common Stock outstanding
immediately prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Issuer or another corporation), (ii) any
sale, transfer, lease or conveyance of the property of the Issuer as an entirety
or substantially as an entirety, (iii) any statutory exchange of securities of
the Issuer with another corporation (other than in connection with a merger or
acquisition) or (iv) any liquidation, dissolution or winding up of the Issuer.
"SECURED PARTY" means Credit Suisse First Boston International.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York.
<PAGE>
EXHIBIT C
Perfection Certificate
The undersigned, GSB Investments Corp. ("PLEDGOR"), acting through an
Authorized Officer, hereby certifies, pursuant to Section 3(h) of the SAILS
Pledge Agreement (the "PLEDGE AGREEMENT") dated as of December 28, 2000 among
Pledgor, Credit Suisse First Boston Corporation, as Agent, and Credit Suisse
First Boston International (terms defined therein being used herein as defined
in the Pledge Agreement), that:
1. Jurisdiction of Organization. Pledgor is a corporation organized under
the laws of the State of Delaware.
2. Name. The exact corporate name of Pledgor as it appears in its
certificate of incorporation is:
GBS Investments Corp.
3. Prior Name. (a) Set forth below is each other corporate name that
Pledgor has had since its incorporation, together with the date of the relevant
change:
N/A
(b) Pledgor has not changed its corporate structure in any way within the
past five years.(2)
4. Current Location. The chief executive office of Pledgor is located at
the following address:
--------
(2) Changes in corporate structure include mergers and consolidations, as
well as any change in the Pledgor's form of organization. If any such change has
occurred, include in Schedule I the information required by Parts 1 -- 5 of this
certificate as to each constituent party to any merger or consolidation and any
other predecessor organization.
<PAGE>
MAILING ADDRESS COUNTY STATE
--------------------------------------------------------------------------------
35 East 62nd Street New York New York
New York, New York 10021
5. Prior Locations. (a) Set forth below is the information required by Part
4 above with respect to each other chief executive office maintained by Pledgor
at any time during the past five years:
MAILING ADDRESS COUNTY STATE
--------------------------------------------------------------------------------
N/A
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Certificate this 28
day of December, 2000.
GSB INVESTMENTS CORP.
By:
--------------------------------
Name:
Title:
