Exhibit 10.20
EXHIBIT H-1
AMENDED AND RESTATED PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT (as amended, supplemented,
restated or otherwise modified from time to time, this "PLEDGE AGREEMENT"),
dated as of January 19, 1999, made by Key Components, LLC, a Delaware limited
liability company (the "PLEDGOR"), in favor of Societe Generale, as agent
(together with any successor(s) thereto in such capacity, the "AGENT") for each
of the Lender Parties and for each of the Noteholders (such capitalized terms
and all other capitalized terms not otherwise defined herein shall have the
meanings provided for in ARTICLE I).
W I T N E S S E T H:
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WHEREAS, pursuant to an Amended and Restated Credit and Guaranty Agreement,
dated as of January 19, 1999 (together with all amendments, supplements,
restatements and other modifications, if any, from time to time thereafter made
thereto, the "CREDIT AGREEMENT"), among the Pledgor, as Borrower, certain of its
Subsidiaries, as Guarantors (the "GUARANTORS"), the various financial
institutions as are, or may from time to time become, parties thereto
(collectively, the "LENDERS") and the Agent, the Lenders have extended
Commitments to make Credit Extensions to the Pledgor; and
WHEREAS, each Guarantor is a Subsidiary of the Pledgor;
WHEREAS, as a condition precedent to the making of the initial Credit
Extension under the Credit Agreement, the Pledgor is required to execute and
deliver this Pledge Agreement;
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, it is in the best interests of the Pledgor to execute this Pledge
Agreement inasmuch as the Pledgor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Pledgor by the
Lenders pursuant to the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders to make Credit
Extensions (including the initial Credit Extension) to the Pledgor pursuant to
the Credit Agreement, the Pledgor agrees, for the benefit of each Lender Party,
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"AGENT" is defined in the PREAMBLE.
"COLLATERAL" is defined in SECTION 2.1.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"DISTRIBUTIONS" means all stock dividends, liquidating dividends, shares of
stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers and
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Interests or other shares of
capital stock constituting Collateral, but shall not include Dividends.
"DIVIDENDS" means cash dividends and cash distributions with respect to any
Pledged Interests or other Pledged Property made in the ordinary course of
business or otherwise permitted under the Credit Agreement.
"LENDER" and "LENDERS" are defined in the FIRST RECITAL.
"LENDER PARTY" means, as the context may require, any Lender or the Agent
and each of its respective successors and permitted transferees and assigns.
"PLEDGE AGREEMENT" is defined in the PREAMBLE.
"PLEDGED INTEREST ISSUERS" means each Person identified in ATTACHMENT 1
hereto as the issuer of the Pledged Interests identified opposite the name of
such Person and each Person whose ownership, equity or other similar interests,
including shares of capital stock and general and limited partnership interests,
are required to be pledged hereunder and under the Credit Agreement from time to
time.
"PLEDGED INTERESTS" means all ownership, equity or other similar interests,
including shares of capital stock and general and limited partnership interests,
of any Pledged Interest Issuer which are delivered by the Pledgor to the Agent
as Pledged Property hereunder.
"PLEDGED PROPERTY" means all Pledged Interests, and all other instruments
and securities, in each case which are now being delivered by the Pledgor to the
Agent or may from time to time hereafter be delivered or be required to be
delivered by the Pledgor to the Agent for the purpose of pledge under this
Pledge Agreement or any other Loan Document, and all proceeds of any of the
foregoing.
"PLEDGOR" is defined in the PREAMBLE.
"SECURED OBLIGATIONS" is defined in SECTION 2.2.
"U.C.C." means the Uniform Commercial Code as in effect in the State of New
York.
SECTION 1.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. DEFINITIONS. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the U.C.C.
are used in this Pledge Agreement, including its preamble and recitals, with
such meanings.
ARTICLE II
PLEDGE
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SECTION 2.1. GRANT OF SECURITY INTEREST. The Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to the Agent,
for its benefit and the ratable benefit of each of the Lender Parties, and
hereby grants to the Agent, for its benefit and the ratable benefit of the
Lender Parties, a continuing security interest in all of the Pledgor's right,
title and interest in, to and under the following property (the "COLLATERAL"):
(a) all Pledged Interests of each Pledged Interest Issuer identified
in ATTACHMENT 1 hereto, issued from time to time (the "STOCK COLLATERAL");
(b) all other Pledged Property, whether now or hereafter delivered to
the Agent in connection with this Agreement;
(c) all right, title and interest of such Pledgor, whether now
existing or hereafter arising or acquired, in, to and under any
partnership, joint venture or similar agreement which governs the rights
and obligations of the holders of ownership, equity or similar interests in
a Pledged Interest Issuer;
(d) all Dividends, Distributions, interest, and other payments and
rights with respect to any Pledged Property; and
(e) all proceeds of any of the foregoing.
SECTION 2.2. SECURITY FOR OBLIGATIONS. This Pledge Agreement secures the
payment in full of all amounts payable by the Pledgor and each other Obligor
under or in connection with the Credit Agreement, the Notes, each Rate
Protection Agreement with a Lender and each other Loan Document (including this
Pledge Agreement), whether for principal, interest, costs, fees, expenses,
indemnities or otherwise and whether now or hereafter existing (all of such
obligations being the "SECURED OBLIGATIONS").
SECTION 2.3. DELIVERY AND TRANSFER OF PLEDGED PROPERTY. All certificates
or instruments representing or evidencing any Collateral, including all Pledged
Interests, shall be delivered to and held by or on behalf of the Agent pursuant
hereto, shall be in suitable form for delivery, and shall be accompanied by all
necessary undated instruments of transfer or assignment, duly executed in blank
or, if any securities pledged pursuant to this Agreement are uncertificated
securities, confirmation and evidence satisfactory to the Agent that the
security interests in such uncertificated securities have been transferred to
and perfected by the Agent for the benefit of the Lenders in accordance with the
U.C.C.
SECTION 2.4. DIVIDENDS ON PLEDGED INTERESTS. In the event that any
Dividend is to be paid on any Pledged Interests, such Dividend may be paid
directly to the Pledgor. If any Default of the nature set forth in Section
8.1.9 of the Credit Agreement or Event of Default has occurred and is
continuing, then any such Dividend shall be paid directly to the Agent other
than as permitted by clauses (a) and (b) of Section 7.2.6 of the Credit
Agreement.
SECTION 2.5. CONTINUING SECURITY INTEREST; TRANSFER OF NOTE. This Pledge
Agreement shall create a continuing security interest in the Collateral and
shall
(a) remain in full force and effect until payment in full in cash of
all Secured Obligations and the expiration or termination of all
Commitments,
(b) be binding upon the Pledgor and its successors, transferees and
assigns, provided that the Pledgor shall not assign any of its rights or
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obligations under this Agreement without the consent of all the Lenders,
and
(c) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Agent and each other Lender Party.
Without limiting the foregoing CLAUSE (C), any Lender may, to the extent
permitted under the Credit Agreement, assign or otherwise transfer (in whole or
in part) any Note or Credit Extension held by it, to any other Person or entity,
and such other Person or entity shall thereupon become vested with all the
rights and benefits in respect thereof granted to such Lender under any Loan
Document (including this Pledge Agreement) or otherwise, subject, however, to
any contrary provisions in such assignment or transfer, and to the provisions of
Section 11.11 and Article X of the Credit Agreement. Upon the payment in full
in cash of all Secured Obligations and the expiration or termination of all
Commitments, the security interest granted herein shall terminate and all rights
to the Collateral shall revert to the Pledgor. Upon any such termination or
release, the Agent will, at the Pledgor's sole expense, deliver to the Pledgor,
without any representations, warranties or recourse of any kind whatsoever, (i)
in the case of such termination, all certificates and instruments representing
or evidencing all Pledged Interests, together with all other Collateral held by
the Agent hereunder, and (ii) in the case of any such release, all Collateral
held by the Agent for which the security interest granted hereunder is so
released, and in each case, execute and deliver to the Pledgor such documents as
the Pledgor shall reasonably request to evidence such termination or release.
SECTION 2.6. SECURITY INTEREST ABSOLUTE. All rights of the Agent and the
security interests granted to the Agent hereunder, and all obligations of the
Pledgor hereunder, shall, to the fullest extent permitted by applicable law, be
absolute and unconditional, irrespective of
(a) any lack of validity or enforceability of the Credit Agreement,
any Note, any Rate Protection Agreement with a Lender or any other Loan
Document,
(b) the failure of any Lender Party or any holder of any Note
(i) to assert any claim or demand or to enforce any right or
remedy against the Pledgor, any other Obligor or any other Person
under the provisions of the Credit Agreement, any Note, any Rate
Protection Agreement with a Lender, any other Loan Document or
otherwise, or
(ii) to exercise any right or remedy against any other guarantor
of, or collateral securing, any Secured Obligation of the Pledgor or
any other Obligor,
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
extension, compromise or renewal of any Obligation of the Pledgor or any
other Obligor,
(d) any reduction, limitation, impairment or termination of any
Secured Obligation of the Pledgor or any other Obligor for any reason
(other than the repayment in full of all Secured Obligations), including
any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to (and the Pledgor hereby waives any right to or
claim of) any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or
occurrence affecting, any Secured Obligation of the Pledgor, any other
Obligor or otherwise,
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(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Credit Agreement,
any Note, any Rate Protection Agreement or any other Loan Document,
(f) any addition, exchange, release, surrender or non-perfection of
any collateral (including the Collateral), or any amendment to or waiver or
release of or addition to or consent to departure from any guaranty, for
any of the Secured Obligations, or
(g) any other circumstances which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Pledgor, any other
Obligor, any surety or any guarantor.
SECTION 2.7. POSTPONEMENT OF SUBROGATION, ETC. The Pledgor will not
exercise any rights which it may acquire by way of rights of subrogation under
this Pledge Agreement or otherwise, until the prior payment, in full and in
cash, of all Secured Obligations. Any amount paid to the Pledgor on account of
any such subrogation rights prior to the payment in full of all Secured
Obligations shall be held in trust for the benefit of the Lender Parties and
each holder of a Note and shall immediately be paid to the Agent and credited
and applied against the Secured Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement; PROVIDED, HOWEVER, that if
(a) the Pledgor has made payment to the Lender Parties and each
holder of a Note of all or any part of the Secured Obligations, and
(b) all Secured Obligations have been paid in full and all
Commitments have been permanently terminated,
each Lender Party and each holder of a Note agrees that, at the Pledgor's
request, the Agent, on behalf of the Lender Parties and the holders of the
Notes, will execute and deliver to the Pledgor appropriate documents (without
recourse and without representation or warranty) necessary to evidence the
transfer by subrogation to the Pledgor of an interest in the Secured Obligations
resulting from such payment by the Pledgor. In furtherance of the foregoing,
for so long as any Secured Obligations or Commitments remain outstanding, the
Pledgor shall refrain from taking any action or commencing any proceeding
against the Guarantors (or their respective successors or assigns, whether in
connection with a bankruptcy proceeding or otherwise) to recover any amounts in
respect of proceeds of any Collateral received by any Lender Party or any holder
of a Note.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. WARRANTIES, ETC. The Pledgor represents and warrants unto
each Lender Party, as at the date of each pledge and delivery hereunder
(including each pledge and delivery of Pledged Interests) by the Pledgor to the
Agent of any Collateral, as set forth in this Article.
SECTION 3.1.1. INCORPORATION OF CREDIT AGREEMENT REPRESENTATIONS AND
WARRANTIES. The representations and warranties contained in Article VI of the
Credit Agreement are hereby confirmed and restated, insofar as the
representations and warranties contained therein by their terms are applicable
to the Pledgor or its properties or assets, each such representation and
warranty (insofar as applicable as aforesaid), together with all related
definitions and ancillary provisions, being hereby incorporated into this Pledge
Agreement by reference as though specifically set forth in this Section.
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SECTION 3.1.2. OWNERSHIP, NO LIENS, ETC. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) the Collateral, free and clear of all Liens,
except any lien or security interest granted pursuant hereto in favor of the
Agent and any other Liens permitted under the Credit Agreement.
SECTION 3.1.3. VALID SECURITY INTEREST. The delivery or transfer of the
Stock Collateral to the Agent pursuant to SECTION 2.3 is effective to create a
valid, perfected, first priority security interest in the Stock Collateral and
all proceeds thereof, securing the Secured Obligations.
SECTION 3.1.4. AS TO PLEDGED INTERESTS. In the case of any Pledged
Interests constituting the Collateral, all of such Pledged Interests are duly
authorized and validly issued, fully paid, and non-assessable, and constitute
all of the issued and outstanding shares of capital stock and other ownership
interests of each Pledged Interest Issuer. The Pledgor has no Subsidiaries
other than the Pledged Interest Issuers.
SECTION 3.1.5. AUTHORIZATION, APPROVAL, ETC. No authorization, approval,
or other action by, and no notice to or filing with, any governmental authority,
regulatory body or any other Person is required (other than U.C.C. filings)
either
(a) for the pledge by the Pledgor of any Collateral pursuant to this
Pledge Agreement or for the execution, delivery, and performance of this
Pledge Agreement by the Pledgor, or
(b) for the exercise by the Agent of the voting or other rights
provided for in this Pledge Agreement, or, except with respect to the
Pledged Interests, as may be required in connection with a disposition of
such Pledged Interests by laws affecting the offering and sale of
securities generally, the remedies in respect of the Collateral pursuant to
this Pledge Agreement.
SECTION 3.1.6. COMPLIANCE WITH CONTRACTS, LAWS, ETC. The Pledgor is in
compliance with the requirements of all applicable laws (including, without
limitation, the provisions of the Fair Labor Standards Act), contracts to which
it is a party, rules, regulations and orders of every governmental authority,
the non-compliance with which might reasonably be expected to materially
adversely affect the condition (financial or otherwise), operations, business,
assets or liabilities of the Pledgor and its Subsidiaries (taken as a whole) or
the value of the Collateral or the worth of the Collateral as collateral
security.
ARTICLE IV
COVENANTS
SECTION 4.1. PROTECT COLLATERAL; FURTHER ASSURANCES, ETC. The Pledgor
will not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of the Agent hereunder), except for a Permitted
Disposition thereof. In the event of a Permitted Disposition of Collateral
hereunder which is effected in compliance with the terms of the Credit
Agreement, the Agent shall release its lien and security interest in respect of
the Collateral so disposed of upon request therefor made by the Pledgor. The
Pledgor will warrant and defend the right and title herein granted unto the
Agent in and to the Collateral (and all right, title, and interest represented
by the Collateral) against the claims and demands of all Persons whomsoever.
The Pledgor agrees that at any time, and from time to time, at the expense of
the Pledgor, the Pledgor will promptly execute and deliver all further
instruments, and take all further action, that may be necessary or desirable, or
that the
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Agent may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. The Pledgor will not permit any Pledged Interest Issuer to issue
any capital stock or other ownership interests unless the same is immediately
delivered in pledge to the Agent hereunder.
SECTION 4.2. STOCK POWERS, ETC. The Pledgor agrees that all Pledged
Interests (and all other shares of capital stock, partnership interests and
other ownership interests constituting Collateral) delivered by the Pledgor
pursuant to this Pledge Agreement will be accompanied by duly executed undated
blank stock powers, or other equivalent instruments of transfer acceptable to
the Agent. The Pledgor will, from time to time upon the request of the Agent,
promptly deliver to the Agent such stock powers, instruments, and similar
documents, satisfactory in form and substance to the Agent, with respect to the
Collateral as the Agent may reasonably request and will, from time to time upon
the request of the Agent after the occurrence and during the continuation of any
Event of Default, promptly transfer any Pledged Interests or other shares of
common stock or other ownership interests constituting Collateral into the name
of any nominee designated by the Agent.
SECTION 4.3. CONTINUOUS PLEDGE. Subject to SECTION 2.4, the Pledgor will,
at all times, keep pledged to the Agent pursuant hereto all Pledged Interests
and all other shares of capital stock constituting Collateral, all Dividends
(other than Dividends actually paid in cash in accordance with the terms of the
Credit Agreement) and Distributions with respect thereto, and all other
Collateral and other securities, instruments, proceeds, and rights from time to
time received by or distributable to the Pledgor in respect of any Collateral.
SECTION 4.4. VOTING RIGHTS; DIVIDENDS, ETC. The Pledgor agrees:
(a) after any Default of the nature set forth in Section 8.1.9 of the
Credit Agreement or Event of Default shall have occurred and be continuing,
promptly upon receipt thereof by the Pledgor and without any request
therefor by the Agent, to deliver (properly endorsed where required hereby
or requested by the Agent) to the Agent all Dividends, all Distributions,
all interest, all principal, all other cash payments, and all proceeds of
the Collateral (in each case other than as permitted by clauses (a) and (b)
of Section 7.2.6 of the Credit Agreement), all of which shall be held by
the Agent as additional Collateral for use in accordance with SECTION 6.4;
and
(b) after any Event of Default shall have occurred and be continuing
and the Agent has notified the Pledgor of the Agent's intention to exercise
its voting power under this SECTION 4.4(B)
(i) the Agent may exercise (to the exclusion of the Pledgor) the
voting power and all other incidental rights of ownership with respect
to any Pledged Interests or other shares of capital stock or other
ownership interests constituting Collateral and the Pledgor hereby
grants the Agent an irrevocable proxy, exercisable under such
circumstances, to vote the Pledged Interests and such other
Collateral; and
(ii) promptly to deliver to the Agent such additional proxies and
other documents as may be reasonably necessary to allow the Agent to
exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Pledgor but which the
Pledgor is then obligated to deliver to the Agent, shall, until delivery to the
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Agent, be held by the Pledgor separate and apart from its other property in
trust for the Agent for the benefit of the Lenders. The Agent agrees that
unless an Event of Default shall have occurred and be continuing and the Agent
shall have given the notice referred to in SECTION 4.4(B), the Pledgor shall
have the exclusive voting power with respect to any shares of capital stock or
other ownership interests (including any of the Pledged Interests) constituting
Collateral and the Agent shall, upon the written request of the Pledgor,
promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by the Pledgor which are necessary to allow the Pledgor to
exercise voting power with respect to any such share of capital stock or other
ownership interests (including any of the Pledged Interests) constituting
Collateral; PROVIDED, HOWEVER, that no vote shall be cast, or consent, waiver,
or ratification given, or action taken by the Pledgor that would materially
impair any Collateral or be materially inconsistent with or violate any
provision of the Credit Agreement or any other Loan Document (including this
Pledge Agreement).
ARTICLE V
THE AGENT
SECTION 5.1. AGENT APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, to take any action
and to execute any instrument which the Agent may deem necessary or advisable to
accomplish the purposes of this Pledge Agreement, including without limitation:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with CLAUSE (A) above; and
(c) to file any claims or take any action or institute any proceedings
which the Agent may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. AGENT MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by the Pledgor pursuant to SECTION 6.4.
SECTION 5.3. AGENT HAS NO DUTY. The powers conferred on the Agent
hereunder are solely to protect its interest (on behalf of the Lender Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Property, whether or not the Agent has or is deemed to have knowledge of
such matters, or
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(b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. REASONABLE CARE. The Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; PROVIDED, HOWEVER, the Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral if it
takes such action for that purpose as the Pledgor reasonably requests in writing
at times other than upon the occurrence and during the continuance of any Event
of Default, but failure of the Agent to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. CERTAIN REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in addition
to other rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party on default under the
U.C.C. (whether or not the U.C.C. applies to the affected Collateral) and
also may, without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any
of the Agent's offices or elsewhere, for cash, on credit or for future
delivery (without assumption of any credit risk), and upon such other terms
as the Agent may deem commercially reasonable in accordance with applicable
laws. The Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten days' prior notice to the Pledgor of the time
and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it
was so adjourned.
(b) The Agent may
(i) transfer all or any part of the Collateral into the name of
the Agent or its nominee, with or without disclosing that such
Collateral is subject to the lien and security interest hereunder,
(ii) notify the parties obligated on any of the Collateral to
make payment to the Agent of any amount due or to become due
thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any party
with respect thereto,
(iv) endorse any checks, drafts, or other writings in the
Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
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(vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
SECTION 6.2. SECURITIES LAWS. The Pledgor agrees that in any sale of any
of the Collateral whenever an Event of Default shall have occurred and be
continuing, the Agent is hereby authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law (including
compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that such prospective bidders and purchaser have
certain qualifications, and restrict such prospective bidders and purchasers to
persons who will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or resale of such
Collateral), or in order to obtain any required approval of the sale or of the
purchaser by any governmental regulatory authority or official, and the Pledgor
further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Agent or any other Lender Party be liable or accountable to the
Pledgor for any discount allowed by reason of the fact that such Collateral is
sold in compliance with any such limitation or restriction.
SECTION 6.3. APPLICATION OF PROCEEDS. All cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization upon, all
or any part of the Collateral may, in the discretion of the Agent, be held, to
the extent permitted under applicable law, by the Agent as additional collateral
security for, or then or at any time thereafter be applied (after payment of any
amounts payable to the Agent pursuant to Section 11.3 of the Credit Agreement
and SECTION 6.4 below) in whole or in part by the Agent against, all or any part
of the Secured Obligations in the following order:
(a) FIRST, to payment of the expenses of such sale or other
realization including reasonable compensation to the Agent and its agents
and counsel, and all expenses, liabilities and advances incurred or made by
the Agent in connection therewith, and any other unreimbursed expenses for
which the Agent is to be reimbursed pursuant to Section 11.3 of the Credit
Agreement or SECTION 6.4 hereof and unpaid fees owing to the Agent under
the Credit Agreement;
(b) SECOND, to the ratable payment of accrued but unpaid interest on
the Loans;
(c) THIRD, to the ratable payment of unpaid principal of the Loans
under the Credit Agreement;
(d) FOURTH, to the ratable payment of all other amounts payable by
the Obligors under the Credit Agreement; and
(e) FIFTH, to the ratable payment of all other Secured Obligations
owing under any Loan Document, until all Secured Obligations shall have
been paid in full.
The Agent may make distributions hereunder in cash or in kind or, on a ratable
basis, in any combination thereof. Any surplus of such cash or cash proceeds
held by the Agent and remaining after payment in full of all the Secured
Obligations, and the termination of all Commitments, shall be paid over to the
Pledgor or to whomsoever may be lawfully entitled to receive such surplus.
SECTION 6.4. INDEMNITY AND EXPENSES. The Pledgor hereby indemnifies and
holds harmless the Agent and the other Lender Parties from and against any and
all claims, losses, and liabilities arising out of or resulting from this Pledge
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Agreement (including enforcement of this Pledge Agreement), except claims,
losses, or liabilities resulting from the Agent's gross negligence or wilful
misconduct. Upon demand, the Pledgor will pay to the Agent the amount of any
and all reasonable expenses, including the reasonable fees and disbursements of
its counsel and of any experts and agents, which the Agent or, in the case of
clause (c) below, any other Lender Party may incur in connection with:
(a) the administration of this Pledge Agreement, the Credit Agreement
and each other Loan Document;
(b) the custody, preservation, use, or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral;
(c) the exercise or enforcement of any of the rights of the Agent
hereunder; or
(d) the failure by the Pledgor to perform or observe any of the
provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. LOAN DOCUMENT. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 7.2. AMENDMENTS, ETC. No amendment to or waiver of any provision
of this Pledge Agreement nor consent to any departure by the Pledgor herefrom
shall in any event be effective unless the same shall be in writing and signed
by the Agent (acting with the requisite consent of the Lenders as provided in
the Credit Agreement), and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it is given.
SECTION 7.3. PROTECTION OF COLLATERAL. The Agent may from time to time,
at its option and at the expense of the Pledgor, perform any act which the
Pledgor agrees hereunder to perform and which the Pledgor shall fail to perform
after being requested in writing so to perform (it being understood that no such
request need be given after the occurrence and during the continuance of any
Event of Default) and the Agent may from time to time take any other action
which the Agent reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of its security interest therein for the
benefit of the Lender Parties.
SECTION 7.4. ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing or by facsimile transmission and, if
to the Pledgor, at the address of the Pledgor provided for in the Credit
Agreement and, if to the Agent, at its address set forth in the Credit
Agreement, or as to either party at such other address as shall be designated by
such party in a written notice to each other party complying as to delivery with
the terms of this Section. All such notices and other communications, if mailed
and properly addressed with postage prepaid, shall be deemed given three
Business Days after posting; any notice sent by prepaid overnight express mail
shall be deemed delivered on the next following Business Day; and any notice
transmitted by facsimile shall be deemed given upon receipt of electronic
confirmation of transmission by the sender thereof.
SECTION 7.5. SECTION CAPTIONS. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
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SECTION 7.6. SEVERABILITY. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
SECTION 7.7. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS PLEDGE AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK. THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE
ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
SECTION 7.8. FORUM SELECTION AND CONSENT TO JURISDICTION. TO THE FULLEST
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS PLEDGE AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
ANY LENDER PARTY MAY BE BROUGHT AND MAINTAINED IN ANY UNITED STATES FEDERAL OR
NEW YORK STATE COURTS SITTING IN THE CITY OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE PLEDGOR HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURTS SITTING IN THE CITY OF NEW YORK FOR THE PURPOSE
OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE PLEDGOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
THE PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT THE PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION
OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, TO THE FULLEST EXTENT
PERMITTED UNDER APPLICABLE LAW, THE PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE AGREEMENT.
SECTION 7.9. WAIVER OF JURY TRIAL, ETC. EACH LENDER PARTY AND THE PLEDGOR
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS PLEDGE AGREEMENT OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE
PLEDGOR. THE PLEDGOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENT ENTERING INTO THIS PLEDGE AGREEMENT. IN NO
EVENT SHALL ANY LENDER PARTY BE LIABLE FOR ANY CONSEQUENTIAL DAMAGES WHICH MAY
BE ALLEGED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered by their respective authorized officers thereunto
duly authorized as of the day and year first above written.
KEY COMPONENTS, LLC
By:
--------------------------------
Title:
SOCIETE GENERALE,
as Agent
By:
--------------------------------
Title:
X-00
XXXXXXXXXX 0
Xxxxxxx Xxxxxxxxx:
------------------
Common Stock
--------------------------------------
Pledged Authorized Outstanding % of Shares
Interest Issuer Shares Shares Pledged
------------------------------------- ---------- ----------- ------------
X.X. Xxxxxxx Manufacturing, Co., Inc. [ ] [ ] 100%
------------------------------------- ---------- ----------- ------------
Xxxxxx Lock, Inc. [ ] [ ] 100%
------------------------------------- ---------- ----------- ------------
Key Components Finance Corp. [ ] [ ] 100%
------------------------------------- ---------- ----------- ------------
ESP Lock Products, Inc. [ ] [ ] 100%
------------------------------------- ---------- ----------- ------------
Valley Forge Corporation [ ] [ ] 100%
------------------------------------- ---------- ----------- ------------
KCI Acquisition Corp. [ ] [ ] 100%
------------------------------------- ---------- ----------- ------------
