PLEDGE AGREEMENT dated as of September 30, 1997,
among HUNTSMAN PACKAGING CORPORATION, a Utah corporation
(the "Borrower"), each Subsidiary of the Borrower listed on
Schedule I hereto (each such Subsidiary individually a
"Subsidiary Pledgor" and collectively, the "Subsidiary
Pledgors"; the Borrower and the Subsidiary Pledgors are
referred to collectively herein as the "Pledgors") and THE
CHASE MANHATTAN BANK, a New York banking corporation
("Chase"), as collateral agent (in such capacity, the
"Collateral Agent") for the Secured parties (as defined in
the Credit Agreement referred to below).
Reference is made to (a) the Credit Agreement dated as of September
30, 1997 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among the Borrower, the lenders from time to time
party thereto (the "Lenders") and Chase, as administrative agent (in such
capacity, the "Administrative Agent") for the Lenders, and (b) the Guarantee
Agreement dated as of September 30, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Guarantee Agreement") among he
Subsidiary Pledgors and the Collateral Agent.
The Lenders have agreed to make Loans to the Borrower and the Issuing
Bank has agreed to issue Letters of Credit for the account of the Borrower,
pursuant to, and upon the terms and subject to the conditions specified in,
the Credit Agreement. The Subsidiary Guarantors have agreed to guarantee,
among other things, all the obligations of the Borrower under the Credit
Agreement. The obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit are conditioned upon, among other things, the
execution and delivery by the Pledgors of a Pledge Agreement in the form
hereof to secure (a) the due and punctual payment by the Borrower of (i) the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii)
each payment required
to be made by the Borrower under the Credit Agreement in respect of any Letter
of Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral and
(iii) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or
otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding), of the Loan Parties to be
Secured Parties under the Credit Agreement and the other Loan Documents, (b)
the due and punctual performance of all covenants, agreements, obligations and
liabilities of the Loan Parties under or pursuant to the Credit Agreement and
the other Loan Documents, (c) the due and punctual payment and performance of
all obligations of the Borrower, monetary or otherwise, under each Hedging
Agreement entered into with any counterparty that was a Lender (or an
Affiliate thereof) at the time such Hedging Agreement was entered into and (d)
the due and punctual payment of all monetary obligations of the Borrower (but
not in excess of $5,000,000 in the aggregate) under any domestic overdraft
facilities entered into by the Borrower including, but not limited to, the
Line of Credit Agreement and Automatic Borrowing Service Agreement entered
into with Mellon Bank, N.A. (all the monetary and other obligations referred
to in the preceding clauses (a) through (d) being referred to collectively as
the "Obligations"). Capitalized terms used herein and not defined herein shall
have meanings assigned to such terms in the Credit Agreement.
Accordingly, the Pledgors and the Collateral Agent, on behalf of
itself and each Secured Party (and each of their respective successors or
assigns), hereby agree as follows:
SECTION 1. Pledge. As security for the payment and performance, as
the case may be, in full of the Obligations, each Pledgor hereby transfers,
grants, bargains, sells, conveys, hypothecates, pledges, sets over and
delivers, and pursuant to the English charge over shares between Huntsman
Container Company International ("HCCI") and Chase, with respect to the shares
of Huntsman Container Limited ("HCCL"), and pursuant to the English charge
over shares between HCCI and Chase, with respect
2
to the shares of Huntsman Film Products U.K. Limited (together with the shares
of HCCL, the "English Pledged Stock"), pledges the English Pledged Stock, unto
the Collateral Agent, its successors and assigns, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest in all of the Pledgor's right, title and
interest in, to and under (a) the shares of capital stock owned by it and
listed on Schedule II hereto and any shares of capital stock of any Subsidiary
obtained in the future by the Pledgor and the certificates representing all
such shares (the "Pledged Stock"); (b)(i) the debt securities listed opposite
the name of the Pledgor on Schedule II hereto, (ii) any debt securities in the
future issued to the Pledgor and (iii) the promissory notes and any other
instruments evidencing such debt securities (the "Pledged Debt Securities");
(c) subject to Section 5, all payments of principal or interest, dividends,
cash, instruments and other property from time to time received, receivable or
otherwise distributed, in respect of, in exchange for or upon the conversion
of the securities referred to in clauses (a) and (b) above; (d) subject to
Section 5, all rights and privileges of the Pledgor with respect to the
securities and other property referred to in clauses (a), (b), (c) and (d)
above; and (e) all proceeds of any of the foregoing (the items referred to in
clauses (a) through (e) above being collectively referred to as the
"Collateral"). Notwithstanding any of the foregoing, the Pledged Stock shall
not include (i) more than 65% of the issued and outstanding shares of commons
stock of any Foreign Subsidiary that is not a Subsidiary Loan Party or (ii) to
the extent that applicable law requires that a Subsidiary of the Pledgor issue
directors' qualifying shares, such qualifying shares.
Upon delivery to the Collateral Agent, (a) any stock certificates,
notes or other securities now or hereafter included in the Collateral (the
"Pledged Securities") shall be accompanied by stock powers duly executed in
blank or other instruments of transfer satisfactory to the Collateral Agent
and by such other instruments and documents as the Collateral Agent may
reasonably request and (b) all other property comprising part of the
Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Pledgor and such other instruments or documents as
the Collateral Agent
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may reasonably request. Each delivery of Pledged Securities shall be
accompanied by a schedule describing the securities then being pledged
hereunder, which schedule shall be attached hereto as Schedule II and made a
part hereof. Each schedule so delivered shall supplement any prior schedules
so delivered.
TO HAVE AND TO HOLD the Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.
SECTION 2. Delivery of the Collateral. (a) Each Pledgor agrees
promptly to deliver or cause to be delivered to the Collateral Agent any and
all Pledged Securities, and any and all certificates or other instruments or
documents representing the Collateral.
(b) Each Pledgor will cause any Indebtedness for borrowed money owed
to the Pledgor by the Borrower or any Subsidiary to be evidenced by a duly
executed promissory note that is pledged and delivered to the Collateral Agent
pursuant to the terms thereof.
SECTION 3. Representations, Warranties and Covenants. Each Pledgor
hereby represents, warrants and covenants, as to itself and the Collateral
pledged by it hereunder, to and with the Collateral Agent that:
(a) the Pledged Stock represents that percentage as set forth on
Schedule II of the issued and outstanding shares of each class of the capital
stock of the issuer with respect thereto;
(b) except for the security interest granted hereunder and except as
permitted by the Credit Agreement, the Pledgor (i) is and will at all times
continue to be the direct owner, beneficially and of record, of the Pledged
Securities indicated on Schedule II, (ii) holds the same free and clear of all
Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on, the
Collateral, other than pursuant hereto, and (iv)
4
subject to Section 5, will cause any and all Collateral, whether for value
paid by the Pledgor or otherwise, to be forthwith deposited with the
Collateral Agent and pledged or assigned hereunder;
(c) the Pledgor (i) has the power and authority to pledge the
Collateral in the manner hereby done or contemplated and (ii) will defend its
title or interest thereto or therein against any and all Liens (other than the
Lien created by this Agreement), however arising, of all Persons whomsoever;
(d) no consent which has not been obtained of any other Person
(including stockholders or creditors of any Pledgor) and no consent or
approval which has not been obtained of any Governmental Authority or any
securities exchange is necessary to the validity of the pledge effected
hereby;
(e) by virtue of the execution and delivery by the Pledgors of this
Agreement, when the Pledged Securities, certificates or other documents
representing or evidencing the Collateral are delivered to the Collateral
Agent in accordance with this Agreement, the Collateral Agent will obtain a
valid and perfected first lien upon and security interest in such Pledged
Securities as security for the payment and performance of the Obligations;
(f) the pledge effected hereby is effective to vest in the Collateral
Agent, on behalf of the Secured Parties, the rights of the Collateral Agent in
the Collateral as set forth herein;
(g) all of the Pledged Stock has been duly authorized and validly
issued and is fully paid and nonassessable;
(h) all information set forth herein relating to the Pledged Stock is
accurate and complete in all material respects as of the date hereof; and
(i) the pledge of the Pledged Stock pursuant to this Agreement does
not violate Regulation G, U or X of the Federal Reserve Board or any successor
thereto as of the date hereof.
5
SECTION 4. Registration in Nominee Name; Denominations. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in
its sole and absolute discretion) to hold the Pledged Securities in its own
name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the
name of the Pledgors, endorsed or assigned in blank or in favor of the
Collateral Agent. Each Pledgor will promptly give to the Collateral Agent
copies of any notices or other communications received by it with respect to
Pledged Securities registered in the name of such Pledgor. The Collateral
Agent shall at all times have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement.
SECTION 5. Voting Rights; Dividends and Interest, etc. (a) Unless and
until an Event of Default shall have occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner
of Pledged Securities or any part thereof for any purpose consistent
with the terms of this Agreement, the Credit Agreement and the other
Loan Documents; provided, however, that such Pledgor will not be
entitled to exercise any such right if the result thereof could
materially and adversely affect the rights inuring to a holder of the
Pledged Securities or the rights and remedies of any of the Secured
Parties under this Agreement or the Credit Agreement or any other
Loan Document or the ability of the Secured Parties to exercise the
same.
(ii) The Collateral Agent shall execute and deliver to each
Pledgor, or cause to be executed and delivered to each Pledgor, all
such proxies, powers of attorney and other instruments as such
Pledgor to exercise the voting and/or consensual rights and powers it
is entitled to exercise pursuant to subparagraph (i) above and to
receive the cash dividends it is entitled to receive pursuant to
subparagraph (iii) below.
6
(iii) Each Pledgor shall be entitled to receive and retain
any and all cash dividends, interest and principal paid on the
Pledged Securities to the extent and only to the extent that such
cash dividends, interest and principal are permitted by, and
otherwise paid in accordance with, the terms and conditions of the
Credit Agreement, the other Loan Documents and applicable laws. All
noncash dividends, interest and principal, and all dividends,
interest and principal paid or payable in cash or otherwise in
connection with a partial or total liquidation or dissolution, return
of capital, capital surplus or paid-in surplus, and all other
distributions (other than distributions referred to in the preceding
sentence) made on or in respect of the Pledged Securities, whether
paid or payable in cash or otherwise, whether resulting from a
subdivision, combination or reclassification of the outstanding
capital stock of the issuer of any Pledged Securities or received in
exchange for Pledged Securities or any part thereof, or in redemption
thereof, of as a result of any merger, consolidation, acquisition or
other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Collateral, and, if
received by any Pledgor, shall not be commingled by such Pledgor with
any of its other funds or property but shall be held separate and
apart therefrom, shall be held in trust for the benefit of the
Collateral Agent and shall be forthwith delivered to the Collateral
Agent in the same form as so received (with any necessary
endorsement).
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Pledgor to dividends, interest or principal that
such Pledgor is authorized to receive pursuant to paragraph (a)(iii) above
shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and authority
to receive and retain such dividends, interest or principal. All dividends,
interest or principal received by the Pledgor contrary to the provisions of
this Section 5 shall be held in trust for the benefit of the Collateral Agent,
shall be segregated from other property or funds of such Pledgor and shall be
forthwith delivered to the Collater-
7
al Agent upon demand in the same form as so received (with any necessary
endorsement). Any and all money and other property paid over to or received by
the Collateral Agent pursuant to the provisions of this paragraph (b) shall be
retained by the Collateral Agent in an account to be established by the
Collateral Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of this Section 7. After all Events
of Default have been cured or waived, the Collateral Agent shall, within five
Business Days after all such Events of Default have been cured or waived,
repay to each Pledgor all cash dividends, interest or principal (without
interest), that such Pledgor would otherwise be permitted to retain pursuant
to the terms of paragraph (a)(iii) above and which remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Pledgor to exercise the voting and consensual
rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of
this Section 5, and the obligations of the Collateral Agent under paragraph
(a)(ii) of this Section 5, shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole and exclusive
right and authority to exercise such voting and consensual rights and powers,
provided that, unless otherwise directed by the Required Lenders, the
Collateral Agent shall have the right from time to time following and during
the continuance of an Event of Default to permit the Pledgors to exercise such
rights. After all Events of Default have been cured or waived, such Pledgor
will have the right to exercise the voting and consensual rights and powers
that it would otherwise be entitled to exercise pursuant to the terms of
paragraph (a)(i) above.
SECTION 6. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, subject to applicable regulatory and legal
requirements, the Collateral Agent may sell the Collateral, or any part
thereof, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict
the prospective bidders or purchasers to persons who will represent and agree
that they are
8
purchasing the Collateral for their own account for investment and not with a
view to the distribution or sale thereof, and upon consummation of any such
sale the Collateral Agent shall have the right to assign, transfer and deliver
to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely free from
any claim or right on the part of any Pledgor, and, to the extent permitted by
applicable law, the Pledgors hereby waive all rights of redemption, stay,
valuation and appraisal any Pledgor now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted.
The Collateral agent shall give a Pledgor 10 days' prior written
notice (which each Pledgor agrees is reasonable notice within the meaning of
Section 9-504(3) of the Uniform Commercial Code as in effect in the State of
New York or its equivalent in other jurisdictions) of the Collateral Agent's
intention to make any sale of such Pledgor's Collateral. Such notice, in the
case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker's board or on a securities exchange, shall
state the board or exchange at which such sale is to be made and the day on
which the Collateral, or portion thereof, will first be offered for sale at
such board or exchange. 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 and state in the notice of such sale. At any such
sale, the Collateral, or portion thereof, to be sold may be sold in one lot as
an entirely or in separate parcels, as the Collateral Agent may (in its sole
and absolute discretion) determine. The Collateral Agent shall not be
obligated to xxxx any sale of any Collateral if it shall determine not to do
so, regardless of the fact that notice of sale of such Collateral shall have
been given. 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
any announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid in full by the purchaser or
purchasers
9
thereof, but the Collateral Agent shall not incur any liability in case any
such purchaser or purchasers shall fail to take up and pay for the Collateral
so sold and, in case of any such failure, such Collateral may be sold again
upon like notice. At any public (or, to the extent permitted by applicable
law, private) sale made pursuant to this Section 6, any Secured Party may bid
for or purchase, free from any right of redemption, stay or appraisal on the
part of any Pledgor (all said rights being also hereby waived and released),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to it from such
Pledgor as a credit against the purchase price, and it may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to such Pledgor therefor. For purposes hereof, (a) a
written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof, (b) the Collateral Agent shall be free to carry out
such sale pursuant to such agreement and (c) such Pledgor shall not be
entitled to the return of the Collateral or any portion thereof subject
thereto, notwithstanding the fact that after the Collateral Agent shall have
entered into such an agreement all Events of Default shall have been remedied
and the Obligations paid in full. As an alternative to exercising the power of
sale herein conferred upon it, the Collateral Agent may proceed by a suit or
suits at law or in or in equity to foreclose upon the Collateral and to sell
the Collateral or any portion thereof pursuant to a judgment or decree of a
court or courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this Section
6 shall be deemed to conform to the commercially reasonable standards as
provided in Section 9-504(3) of the Uniform Commercial Code as in effect in
the State of New York or its equivalent in other jurisdictions.
SECTION 7. Application of Proceeds of Sale. The proceeds of any sale
of Collateral pursuant to Section 6, as well as any Collateral consisting of
cash, shall be applied by the Collateral Agent as follows:
FIRST, to the payment of all costs and expenses incurred by
the Collateral Agent or the Administrative Agent in connection with
such sale or otherwise in connection with this Agreement, any other
Loan
10
Document or any of the Obligations, including all court costs and the
reasonable fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Collateral Agent hereunder or
under any other Loan Document on behalf of any Pledgor and any other
costs or expenses incurred in connection with the exercise of any
right or remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the Obligations (the
amounts so applied to be distributed among the Secured Parties pro
rata in accordance with the amounts of the Obligations owed to them
on the date of any such distribution); and
THIRD, to the Pledgors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statue or under a judicial proceeding),
the receipt of the purchase money by the Collateral Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see the application of any part of the purchase money paid over
to the Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
SECTION 8. Reimbursement of Collateral Agent. (a) The Pledgors agree
to pay upon demand to the Collateral Agent the amount of any and all
reasonable expenses, including the reasonable fees, other charges and
disbursements of its counsel and of any experts or agents, that the Collateral
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Collateral Agent hereunder or (iv) the failure by
such Pledgor to perform or observe any of the provisions hereof.
11
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each Pledgor agrees to indemnify the Collateral Agent
and the Indemnitees (as defined in Section 9.03 of the Credit Agreement)
against , and hold each Indemnitee harmless from any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees,
other charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i)
the execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations thereunder or the consummation
of the Transactions and the other transactions contemplated thereby or (ii)
any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto, provided that
such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses resulted
from the gross negligence or wilful misconduct of such Indemnitee.
(c) Any amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 8 shall remain operative and in full force and effect
regardless of the termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Obligations, the
invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document or any investigation made by or on behalf of the
Collateral Agent or any other Secured Party. All amounts due under this
Section 8 shall be payable on written demand therefor and shall bear interest
at the rate specified in Section 2.13 of the Credit Agreement.
SECTION 9. Collateral Agent Appointed attorney-in- Fact. Each Pledgor
hereby appoints the Collateral Agent the attorney-in-fact of such Pledgor for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem
necessary or advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, the Collateral Agent shall have the
12
right, upon the occurrence and during the continuance of an Event of Default,
with full power of substitution either in the Collateral Agent's name or in
the name of such Pledgor, to ask for, demand, xxx for, collect, receive and
give acquittance for any and all moneys due or to become due under and by
virtue of any Collateral, to endorse checks, drafts, orders and other
instruments for the payment of money payable to the Pledgor representing any
interest or dividend or any distribution payable in respect of the Collateral
or any part thereof or on account thereof and to give full discharge for the
same, to settle, compromise, prosecute or defend any action, claim or
proceeding with respect thereto, and to sell, assign, endorse, pledge,
transfer and to make any agreement respecting, or otherwise deal with, the
same; provided, however, that nothing herein contained shall be construed as
requiring or obligating the Collateral Agent to make any commitment or to make
any inquiry as to the nature or sufficiency of any payment received by the
Collateral Agent, or to present or file any claim or notice, or to take any
action with respect to the Collateral or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby. The
Collateral Agent and the other Secured Parties shall be accountable only for
amounts actually received as a result of the exercise of the powers granted to
them herein, and neither they nor their officers, directors, employees or
agents shall be responsible to any Pledgor for any act or failure to act
hereunder, except for their own gross negligence or wilful misconduct.
SECTION 10. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Collateral Agreement
hereunder and of the other Secured Parties under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provisions of this Agreement or consent to
any departure by any Pledgor therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific
13
instance and for the purpose for which given. No notice or demand on any
Pledgor in any case shall entitle such Pledgor to another or further notice or
demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into
between the Collateral Agent and the Pledgor or Pledgors with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.02 of the Credit Agreement.
SECTION 11. Securities Act, etc. In view of the position of the
Pledgors in relation to the Pledged Securities, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933,
as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "Federal Securities Laws") with
respect to any disposition of the Pledged Securities permitted hereunder. Each
Pledgor understands that compliance with the Federal Securities Laws might
very strictly limit the course of conduct of the Collateral Agent if the
Collateral Agent were to attempt to dispose of all of any part of the Pledged
Securities, and might also limit the extent to which or the manner in which
any subsequent transferee of any Pledged Securities could dispose of the same.
Similarly, there may be other legal restrictions or limitations affecting the
Collateral Agent in any attempt to dispose of all or part of the Pledged
Securities under applicable Blue Sky or other state securities laws or similar
laws analogous in purpose or effect. Each Pledgor recognizes that in light of
such restrictions and limitations the Collateral Agent may, with respect to
any sale of the Pledged Securities, limit the purchasers to those who will
agree, among other things, to acquire such Pledged Securities for their own
account, for investment, and not with a view to the distribution or resale
thereof. Each Pledgor acknowledges and agrees that in light of such
restrictions and limitations, the Collateral Agent, in its discretion, (a) may
proceed to make such a sale whether or not a registration statement for the
purpose of registering such Pledged Securities or part thereof shall have been
filed under the Federal Securities Laws and (b) may approach
14
and negotiate with a single potential purchaser to effect such sale. Each
Pledgor acknowledges and agrees that any such sale might result in prices and
other terms less favorable to the seller than if such sale were a public sale
with without such restrictions. In the event of any such sale, the Collateral
Agent shall incur no responsibility or liability for selling all or any part
of the Pledged Securities at a price that the Collateral Agent, in its
discretion, may in good xxxxx xxxx reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid
or if more than a single purchaser were approached. The provisions of this
Section 11 will apply notwithstanding the existence of a public or private
market upon which the quotations or sales prices may exceed substantially the
price at which the Collateral Agent sells.
SECTION 12. Registration, etc. Each Pledgor agrees that, upon the
occurrence and during the continuance of an Event of Default hereunder, if for
any reason the Collateral Agent desires to sell any of the Pledged Securities
of the Borrower at a public sale, it will, at any time and from time to time,
upon the written request of the Collateral Agent, use its best efforts to take
or to cause the issuer of such Pledged Securities to take such action and
prepare, distribute and/or file such documents, as are required or advisable
in the reasonable opinion of counsel for the Collateral Agent to permit the
public sale of such Pledged Securities. Each Pledgor further agrees to
indemnify, defend and hold harmless the Collateral Agent, each other Secured
Party, any underwriter and their respective officers, directors, affiliates
and controlling persons from and against all loss, liability, expenses, costs
of counsel (including, without limitation, reasonable fees and expenses to the
Collateral Agent of legal counsel), and claims (including the costs of
investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any untrue statement or a material fact
contained in any prospectus (or any amendment or supplement thereto) or in any
notification or offering circular, or arises out of or is based upon any
omission to state a material fact required to be stated therein or necessary
to make the statements in any thereof not misleading, except insofar as the
same may have been
15
caused by any untrue statement or omission based upon information furnished to
such Pledgor or the issuer of such Pledged Securities by the Collateral Agent
or any other Secured Party expressly for use therein. Each Pledgor further
agrees, upon such written request referred to above, to use its best efforts
to qualify, file or register, or cause the issuer of such Pledged Securities
to qualify, file or register, any of the Pledged Securities under the Blue Sky
or other securities laws of such states as may be requested by the Collateral
Agent and keep effective, or cause to be kept effective, all such
qualifications, filings or registrations. The Pledgors will bear all costs and
expenses of carrying out their obligations under this Section 12. Each Pledgor
acknowledges that there is no adequate remedy at law for failure by it to
comply with the provisions of this Section 12 and that such failure would not
be adequately compensable in damages, and therefore agrees that its agreements
contained in this Section 12 may be speficically enforced.
SECTION 13. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the grant of a security interest in the Collateral and all
obligations of each Pledgor hereunder, shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document, any agreement with respect to any of the
Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Credit Agreement, any other
Loan Document or any other agreement or instrument relating to any of the
foregoing, (c) any exchange, release or nonperfection of any other collateral,
or any release or amendment or waiver of or consent to or departure from any
guaranty, for all or any of the Obligations of (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Pledgor in respect of the Obligations or in respect of this Agreement (other
than the indefeasible payment in full of all the Obligations).
SECTION 14. Termination or Release. (a) This Agreement and the
security interests granted hereby shall terminate when all the Obligations
have been indefeasibly
16
paid in full and the Lenders have no further commitment to lend under the
Credit Agreement, the LC Exposure has been reduced to zero and the Issuing
Bank has no further obligation to issue Letters of Credit under the Credit
Agreement.
(b) Upon any sale or other transfer by any Pledgor of any Collateral
that is permitted under the Credit Agreement to any Person that is not an
Affiliate of the Borrower, or, upon the effectiveness of any written consent
to the release of the security interest granted hereby in any Collateral
pursuant to Section 9.02(b) of the Credit Agreement, the security interest in
such Collateral shall be automatically released.
(c) In connection with any termination or release pursuant to
paragraph (a) or (b), the Collateral Agent shall execute and deliver to any
Pledgor, at such Pledgor's expense, all documents that such Pledgor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 14 shall be without recourse to
or warranty by the Collateral Agent.
SECTION 15. Notices. All communications and notices hereunder shall
be in writing and given as provided in Section 9.01 of the Credit Agreement.
All communications and notices hereunder to any Subsidiary Pledgor shall be
given to it at the address for notices set forth on Schedule I.
SECTION 16. Further Assurances. Each Pledgor agrees to do such
further acts and things, and to execute and deliver such additional
conveyances, assignments, agreements and instruments, as the Collateral Agent
may at any time reasonably request in connection with the administration and
enforcement of this Agreement or with respect to the Collateral or any part
thereof or in order better to assure and confirm unto the Collateral Agent its
rights and remedies hereunder.
SECTION 17. Binding Effect; Several Agreement; Assignments. Whenever
in this Agreement any of the parties hereto is referred to, such reference
shall be deemed to include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Pledgor that are
contained in this
17
Agreement shall bind and inure to the benefit of its successors and assigns.
This Agreement shall become effective as to any Pledgor when a counterpart
hereof executed on behalf of such Pledgor shall have been delivered to the
Collateral Agent and a counterpart hereof shall have been executed on behalf
of the Collateral Agent, and thereafter shall be binding upon such Pledgor and
the Collateral Agent and their respective successors and assigns, and shall
inure to the benefit of such Pledgor, the Collateral Agent and the other
Secured Parties, and their respective successors and assigns, except that no
Pledgor shall have the right to assign its rights hereunder or any interest
herein or in the Collateral (and any such attempted assignment shall be void),
except as expressly contemplated by this Agreement or the other Loan
Documents. If all of the captial stock of a Pledgor is sold, transferred or
otherwise disposed of to a Person that is not an Affiliate of the Borrower
pursuant to a transaction permitted by Section 6.06 of the Credit Agreement,
such Pledgor shall be released from its obligations under this Agreement
without further action. This Agreement shall be construed as a separate
agreement with respect to each Pledgor and may be amended, modified,
supplemented, waived or released with respect to any Pledgor without the
approval of any other Pledgor and without affecting the obligations of any
other Pledgor hereunder.
SECTION 18. Survival of Agreement; Severability. (a) All covenants,
agreements, representations and warranties made by each Pledgor herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered
to have been relied upon by the Collateral Agent and the other Secured Parties
and shall survive the making by the Lenders of the Loans and the issuance of
the Letters of Credit by the Issuing Bank, regardless of any investigation
made by the Secured Parties or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any
Loan or any other fee or amount payable under this Agreement or any other Loan
Document is outstanding and unpaid or the LC Exposure does not equal zero and
as long as the Commitments have not been terminated.
18
(b) In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision
in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 20. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute a single contract, and shall
become effective as provided in Section 17. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 21. Rules of Interpretation. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement. Section headings used herein are for convenience of reference only,
are not part of this Agreement and are not to affect the construction of, or
to be taken into consideration in interpreting this Agreement.
SECTION 22. Jurisdiction; Consent to Service of Process. (a) Each
Pledgor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the Untied States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally
19
agrees that, to the extent permitted by applicable law, all claims in respect
of any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgement in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
shall affect any right that the Collateral Agent or any other Secured Party
may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against any Pledgor or its properties in
the courts of any jurisdiction.
(b) Each Pledgor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action of proceeding in
any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 15. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION.
SECTION 24. Additional Pledgors. Pursuant to Section 5.12 of the
Credit Agreement, each Subsidiary
20
Loan Party that was not in existence or not a Subsidiary Loan Party on the
date of the Credit Agreement is required to enter in this Agreement as a
Subsidiary Pledgor upon becoming a Subsidiary Loan Party. Upon execution and
delivery by the Collateral Agent and a Subsidiary of an instrument in the form
of Annex 1, such Subsidiary shall become a Subsidiary Pledgor hereunder with
the same force and effect as if originally named as a Subsidiary Pledgor
herein. The execution and delivery of such instrument shall not require the
consent of any Pledgor hereunder. The rights and obligations of each Pledgor
hereunder shall remain in full force and effect notwithstanding the addition
of any new Subsidiary Pledgor as a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
HUNTSMAN PACKAGING CORPORATION,
by ____________________________
Name:
Title:
THE SUBSIDIARY PLEDGORS LISTED
ON SCHEDULE I HERETO
by ____________________________
Name:
Title: Authorized Officer
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by ___________________________
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
21
(Pledge Agreement)
SCHEDULE I
Subsidiary Pledgors
1. Huntsman Deerfield Films Corporation
2. Huntsman United Films Corporation
3. Huntsman Preparatory Inc.
4. Huntsman Container Corporation International
5. Huntsman Packaging Georgia, Inc.
6. Huntsman Film Products of Mexico, Inc.
7. Huntsman Bulk Packaging Corporation
22
(Pledge Agreement)
SCHEDULE 11
Capital Stock & Debt Securities
Stock Ownership
Name Authorized Shares Issued Pledged Ownership
of Common Stock Shares Shares
--------------------------------------- --------------- ------ ------ ---------------------------------
Huntsman Deefiled Films Corporation 200,000 Class A 100 100 100% Huntsman Packaging Corporation
Huntsman United Film Corportion 500,000 10,880 10,880 100% Huntsman Packaging Corporation
Huntsman Preparatory Inc. 50,000 1,000 1,000 100% Huntsman Packaging Corporation
Huntsman Container Corporation International 50,000 1,000 1,000 100% Huntsman Packaging Corporation
Huntsman Packaging Georgia, Inc. 1,000 1,000 1,000 100% Huntsman Packaging Corporation
Huntsman Film Products of Mexico, Inc. 50,000 1,000 1,000 100% Huntsman Packaging Corporation
Huntsman Bulk Packaging Corporation 1,000,000 1,000 1,000 100% Huntsman Packaging Corporation
Huntsman Film Prodcuts of Canada Ltd 100 100 65 100% Huntsman Packaging Corporation
Huntsman Film Products of GmbH DM 50,000 DM 32,500 DM 32,500 100% Huntsman Packaging Corporation
DM 17,500 100% Huntsman Packaging Corporation
Huntsman Film Products UK Ltd. 100 100 65 100% Huntsman Container Corporation
International
Huntsman Container Company Ltd. 6,000,000 4,162,879 2,705,871 99% Huntsman Container Corportion
International
Huntsman Container Company France FF 250,000 2,500 99% Huntsman Container Corporation
International
Debt Securities
1. Intercompany Notes, between Huntsman Packaging Corporation, as lender and
Huntsman Deerfield Films Corporation, Huntsman United Films Corporation,
Huntsman Preparatory Inc., Huntsman Container Corporation International,
Huntsman Packaging Georgia, Inc., Huntsman Film Products of Mexico, Inc.,
Huntsman Bulk Packaging Corporation, Huntsman Film Products of Canada Ltd.,
Huntsman Film Products GmbH, Huntsman Film Products UK Ltd., Huntsman
Container Company Ltd. and Huntsman Container Company France, as borrowers.
23
Annex 1 to the
Pledge Agreement
SUPPLEMENT NO. dated as of , to the PLEDGE
AGREEMENT dated as of September 30, 1997, among HUNTSMAN
PACKAGING CORPORATION, a Utah corporation (the "Borrower"),
and each subsidiary of the Borrower listed on Schedule I
hereto (each such subsidiary individually a "Subsidiary
Pledgor") and collectively, the "Subsidiary Pledgors"; the
Borrower and the Subsidiary Pledgors are referred to
collectively herein as the "Pledgors") and THE CHASE
MANHATTAN BANK, a New York banking corporation ("Chase"), as
collateral agent (in such capacity, the "Collateral Agent")
for the Secured Parties (as defined in the Credit Agreement
referred to below)
A. Reference is made to (a) the Credit Agreement dated as of
September 30, 1997 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the lenders from time to
time party thereto (the "Lenders") and Chase, as administrative agent (in such
capacity, the "Administrative Agent") for the Lenders and (b) the Guarantee
Agreement dated as of September 30, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Guarantee Agreement") among the
Subsidiary Pledgors and the Collateral Agent.
B. Capitalized terms used herein and not other wise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
C. The Pledgors have entered into the Pledge Agreement in order to
induce the Lenders to make Loans and the Issuing Bank to issue Letters of
Credit. Pursuant to Section 5.12 of the Credit Agreement, each Subsidiary Loan
Party that was not in existence or not a Subsidiary Loan Party on the date of
the Credit Agreement is
24
required to enter into the Pledge Agreement as a Subsidiary Pledgor upon
becoming a Subsidiary Loan Party. Section 24 of the Pledge Agreement provides
that such Subsidiaries may become Subsidiary Pledgors under the Pledge
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary (the "New Pledgor") is executing this
Supplement in accordance with the requirements of the Credit Agreement to
become a Subsidiary Pledgor under the Pledge Agreement in order to induce the
Lenders to make additional Loans and the Issuing Bank to issue additional
Letters of Credit and as consideration for Loans previously made and Letters
of Credit previously issued.
Accordingly, the Collateral Agent and the New Pledgor agree as
follows:
SECTION 1. In accordance with Section 24 of the Pledge Agreement, the
New Pledgor by its signature below becomes a Pledgor under the Pledge
Agreement with the same force and effect as if originally named therein as a
Pledgor and the New Pledgor hereby agrees (a) to all the terms and provisions
of the Pledge Agreement applicable to it as a Pledgor thereunder and (b)
represents and warrants that the representations and warranties made by it as
a Pledgor thereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Pledgor, as security for the payment and
performance in full of the Obligations (as defined in the Pledge Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors and assigns,
a security interest in and lien on all of the New Pledgor's right, title and
interest in and to the Collateral (as defined in the Pledge Agreement) of the
New Pledgor. Each reference to a "Subsidiary Pledgor" or a "Pledgor" in the
Pledge Agreement shall be deemed to include the New Pledgor. The Pledge
Agreement is hereby incorporated herein by reference.
SECTION 2. The New Pledgor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
25
SECTION 3. This Supplement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Collateral Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of the New Pledgor and the Collateral
Agent. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. The New Pledgor hereby represents and warrants that set
forth on Schedule I attached hereto is a true and correct schedule of all its
Pledged Securities.
SECTION 5. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any
respect, neither party hereto shall be required to comply with such provision
for so long as such provision is held to be invalid, illegal or unenforceable,
but the validity, legality and enforceability of the remaining provisions
contained herein and in the Pledge Agreement shall not in any way be affected
or impaired. The parties hereto shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 15 of the Pledge Agreement. All
communications and notices hereunder to the New Pledgor shall be given to it
at the address set forth under its signature hereto.
26
SECTION 9. The New Pledgor agrees to reimburse the Collateral Agent
for its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Pledgor and the Collateral Agent have
duly executed this Supplement to the Pledge Agreement as of the day and year
first above written.
[Name of New Pledgor],
by______________________
Name:
Title:
Address:
THE CHASE MANHATTAN BANK,
as Collateral Agent,
by______________________
Name:
Title:
Address:
27
Schedule I to
Supplement No.
to the Pledge Agreement
Pledged Securities of the New Pledgor
CAPITAL STOCK
Number of
Number of Registered Class of Percent
Issuer Certificates Owner Shares of Shares
------ ------------ ----- ------ ---------
DEBT SECURITIES
Principal Date of Maturity
Issuer Amount Note Date
------ ------ ---- ----
28
