PLEDGE AGREEMENT
This Pledge Agreement (the "AGREEMENT") is dated as of December 12, 1997,
by and among the parties executing this Agreement under the heading "Pledgors"
(such parties, along with any parties who execute and deliver to the Agent an
agreement in the form attached hereto as Schedule E, being hereinafter referred
to collectively as the "PLEDGORS" and individually as a "PLEDGOR"), each with
its mailing address as set forth on the signature page hereto and BANK OF
MONTREAL, a Canadian chartered bank acting through its Chicago Branch ("BOM"),
with its mailing address at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
acting as agent hereunder for the Secured Creditors hereinafter identified and
defined (BOM acting as such agent and any successor or successors to BOM acting
in such capacity being hereinafter referred to as the "AGENT");
PRELIMINARY
STATEMENTS
A. Platinum Entertainment, Inc., a Delaware corporation (the "COMPANY")
and Intersound, Inc. ("INTERSOUND"; the Company and Intersound collectively
referred to herein as the "BORROWERS" and individually as a "BORROWER"), Lexicon
Music, Inc., a Delaware corporation ("LEXICON"), ("CGI"), River North Records,
Inc., a Delaware corporation ("NORTH RECORDS"), Light Records, Inc., a Delaware
corporation ("LIGHT"), The Recording Experience, Inc., a Delaware corporation
("EXPERIENCE"), Peg Publishing, Inc. a Delaware corporation ("PEG"), JustMike
Music, Inc., a Delaware corporation ("JUSTMIKE"), Royce Publishing, Inc., a
Delaware corporation ("ROYCE") (Lexicon, CGI, North Records, Light Experience,
PEG, JustMike and Royce being hereinafter referred to collectively as the
"GUARANTORS" and individually as a "GUARANTOR"), BOM, individually and as agent,
and certain lenders have entered into a Credit Agreement dated as of even date
herewith (such Credit Agreement, as the same may be amended or modified from
time to time, including amendments and restatements thereof in its entirety,
being hereinafter referred to as the "CREDIT AGREEMENT"), pursuant to which BOM
and other lenders from time to time party to the Credit Agreement (BOM and the
other lenders which are now or from time to time hereafter become party to the
Credit Agreement, together with any affiliates of such lenders to which is owed
any Hedging Liability, being hereinafter referred to collectively as the
"LENDERS" and individually as a "LENDER") have agreed, subject to certain terms
and conditions, to extend credit and make certain other financial accommodations
available to the Borrowers identified therein.
B. Pursuant to the Credit Agreement, the Guarantors guarantee all of the
indebtedness, obligations, and liabilities of the Borrowers to the Agent and the
Lenders under the Credit Agreement.
C. The Borrowers, or any of them individually, may from time to time
enter into one or more interest rate exchange, cap, collar, floor or other
agreements with one or more of the Lenders party to the Credit Agreement or
their affiliates for the purpose of hedging or otherwise protecting the
Borrowers, or any of them individually, against changes in interest rates on the
Revolving Credit Loans and the Term Credit Loans (the liability of the
Borrowers, or any of them individually, in respect of such agreements with such
Lenders or their affiliates being hereinafter referred to as the "HEDGING
LIABILITY").
D. As a condition precedent to extending credit or otherwise making
financial accommodations available to the Borrowers under the Credit Agreement,
the Lenders have required, among other things, that each Pledgor grant to the
Agent for the benefit of the Lenders a lien on and security interest in certain
personal property of such Pledgor pursuant to this Agreement.
E. The Company owns, directly or indirectly, all or substantially all of
the equity interests in each Guarantor and the Company provides each Guarantor
with financial, management, administrative, and technical support which enables
such Guarantor to conduct its business in an orderly and efficient manner in the
ordinary course.
F. Each Guarantor will benefit, directly or indirectly, from credit and
other financial accommodations extended by the Lenders to the Borrowers.
Now, Therefore, for and in consideration of the execution and delivery by
the Lenders of the Credit Agreement, and other good and valuable consideration,
receipt whereof is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. TERMS DEFINED IN CREDIT AGREEMENT. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement. The term "Pledgor" and "Pledgors" as used herein
shall mean and include the Pledgors collectively and also each individually,
with all grants, representations, warranties and covenants of and by the
Pledgors, or any of them, herein contained to constitute joint and several
grants, representations, warranties and
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covenants of and by the Pledgors; PROVIDED, HOWEVER, that unless the context in
which the same is used shall otherwise require, any grant, representation,
warranty or covenant contained herein related to the Collateral shall be made by
each Pledgor only with respect to the Collateral owned by it or represented by
such Pledgor as owned by it.
SECTION 2. GRANT OF SECURITY INTEREST IN THE COLLATERAL. Each Pledgor
hereby grants to the Agent a security interest in, in each case for the ratable
benefit of the Lenders and the Hedging Creditors, and acknowledges and agrees
that the Agent has and shall continue to have for the ratable benefit of the
Lenders a continuing security interest in, any and all right, title and interest
of each Pledgor, whether now owned or existing or hereafter created, acquired or
arising, in and to the following (collectively, the "COLLATERAL"):
(a) STOCK COLLATERAL. (i) All shares of the capital stock of each of
the issuers listed and described on Schedule A attached hereto owned or
held by such Pledgor, whether now owned or hereafter acquired (those shares
delivered to and deposited with the Agent on the date hereof being listed
and described on Schedule A attached hereto), and all substitutions and
additions to such shares (herein, the "PLEDGED SECURITIES"), (ii) all
dividends, distributions and sums distributable or payable from, upon or in
respect of the Pledged Securities and (iii) all other rights and privileges
incident to the Pledged Securities (all of the foregoing being hereinafter
referred to collectively as the "STOCK COLLATERAL");
(b) PARTNERSHIP INTEREST COLLATERAL. (i) Each partnership identified
on Schedule B attached hereto and made a part hereof (such partnerships
being hereinafter referred to collectively as the "PARTNERSHIPS" and
individually as a "PARTNERSHIP") and (ii) any and all payments and
distributions of whatever kind or character, whether in cash or other
property, at any time made, owing or payable to such Pledgor in respect of
or on account of its present or hereafter acquired interests in the
Partnerships, whether due or to become due and whether representing
profits, distributions pursuant to complete or partial liquidation or
dissolution of any such Partnership, distributions representing the
complete or partial redemption of such Pledgor's interest in any such
Partnership or the complete or partial withdrawal of such Pledgor from any
such Partnership, repayment of capital contributions, payment of management
fees or commissions, or otherwise, and the right to receive, receipt for,
use and enjoy all such payments and distributions (all of the foregoing
being hereinafter collectively called the "PARTNERSHIP INTEREST
COLLATERAL"); and
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(c) PROCEEDS. All proceeds of the foregoing.
All terms which are used in this Agreement which are defined in the Uniform
Commercial Code of the State of Illinois ("UCC") shall have the same meanings
herein as such terms are defined in the UCC, unless this Agreement shall
otherwise specifically provide.
SECTION 3. OBLIGATIONS HEREBY SECURED. (a) This Agreement is made and
given to secure, and shall secure, the payment and performance of (i) (x) any
and all indebtedness, obligations and liabilities of the Borrowers, or any of
them individually, to the Agent, the Lenders, or any of them individually,
evidenced by or otherwise arising out of or relating to the Credit Agreement or
any promissory note of the Borrowers, or any of them individually issued at any
time under the Credit Agreement (including all notes issued in extension or
renewal thereof or in substitution or replacement therefor), (y) any and all
Hedging Liability of the Borrowers, or any of them individually, to the Lenders
or any of them individually, and (z) any liability of the Guarantors, or any of
them individually, arising out of the Credit Agreement, as well as for any and
all other indebtedness, obligations and liabilities of the Debtors, or any of
them individually, to the Agent, the Lenders, or any of them individually,
evidenced by or otherwise arising out of or relating to this Agreement or any
other Loan Document, in each case, whether now existing or hereafter arising
(and whether arising before or after the filing of a petition in bankruptcy),
due or to become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, and (ii) any and all expenses and charges, legal or
otherwise, suffered or incurred by the Agent, the Lenders, or any of them
individually, in collecting or enforcing any of such indebtedness, obligations
or liabilities or in realizing on or protecting or preserving any security
therefor, including, without limitation, the lien and security interest granted
hereby (all of the foregoing being hereinafter referred to as the
"OBLIGATIONS"). Notwithstanding anything in this Agreement to the contrary, the
right of recovery against any Pledgor (other than the Borrowers to which this
limitation shall not apply) under this Agreement shall not exceed $1 less than
the amount which would render such Pledgor's obligations under this Agreement
void or voidable under applicable law, including fraudulent conveyance law.
(b) Notwithstanding anything herein to the contrary, the lien of this
Agreement on the Collateral shall be released as and to the extent required
by Section 8.18 of the Credit Agreement.
SECTION 4. COVENANTS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES. Each
Pledgor hereby covenants and agrees with, and represents and warrants to, the
Agent
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and the Lenders that:
(a) Each Pledgor is and shall be the sole and lawful legal, record
and beneficial owner of its Collateral. Each Pledgor's chief executive
office or place of business at the address listed under such Pledgor's name
on Schedule A and Schedule B hereto, as applicable. Each Pledgor agrees
that it will not change any location set forth on the applicable Schedule
hereto without the Agent's prior written consent. No Pledgor shall,
without the Agent's prior written consent, sell, assign, or otherwise
dispose of the Collateral or any interest therein. The Collateral, and
every part thereof, is and shall be free and clear of all security
interests, liens, rights, claims, attachments, levies and encumbrances of
every kind, nature and description and whether voluntary or involuntary,
except for the security interest of the Agent hereunder and for other Liens
which are expressly permitted by the Credit Agreement. Each Pledgor shall
warrant and defend the Collateral against any claims and demands of all
persons at any time claiming the same or any interest in the Collateral
adverse to the Agent and the Lenders.
(b) Each Pledgor agrees to execute and deliver to the Agent such
further agreements, assignments, instruments and documents and to do all
such other things as the Agent may deem necessary or appropriate to assure
the Agent its lien and security interest hereunder, including such
assignments, acknowledgments (including acknowledgments of assignment in
the form attached hereto as Schedule C) stock powers, financing statements,
instruments and documents as the Agent may from time to time require in
order to comply with the Uniform Commercial Code as enacted in the State of
Illinois and any successor statute(s) thereto (the "UCC"). Each Pledgor
hereby agrees that a carbon, photographic or other reproduction of this
Agreement or any such financing statement is sufficient for filing as a
financing statement by the Agent without notice thereof to such Pledgor
wherever the Agent in its discretion desires to file the same. In the
event for any reason the law of any jurisdiction other than Illinois
becomes or is applicable to the Collateral or any part thereof, or to any
of the Obligations, each Pledgor agrees to execute and deliver all such
agreements, assignments, instruments and documents and to do all such other
things as the Agent in its sole discretion deems necessary or appropriate
to preserve, protect and enforce the lien and security interest of the
Agent under the law of such other jurisdiction to at least the same extent
as such security interests would be protected under the UCC.
(c) If, as and when any Pledgor (x) delivers any securities for
pledge hereunder in addition to those listed on Schedule A hereto or
(y) pledges
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interests in any Partnership in addition to those listed on Schedule B
hereto, the Pledgors shall furnish to the Agent a duly completed and
executed amendment to such Schedule in substantially the form (with
appropriate insertions) of Schedule D hereto reflecting the securities
pledged hereunder after giving effect to such addition.
(d) None of the Collateral constitutes margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System).
(e) On failure of any Pledgor to perform any of the agreements and
covenants herein contained, the Agent may, at its option, perform the same
and in so doing may expend such sums as the Agent may deem advisable in the
performance thereof, including, without limitation, the payment of any
taxes, liens and encumbrances, expenditures made in defending against any
adverse claim, and all other expenditures which the Agent may be compelled
to make by operation of law or which Agent may make by agreement or
otherwise for the protection of the security hereof. All such sums and
amounts so expended shall be repayable by the Pledgors immediately without
notice or demand, shall constitute additional Obligations secured
hereunder and shall bear interest from the date said amounts are expended
at the rate per annum (computed on the basis of a 360-day year for the
actual number of days elapsed) determined by adding 3% to the Domestic Rate
(such rate per annum as so determined being hereinafter referred to as the
"DEFAULT RATE"). No such performance of any covenant or agreement by the
Agent on behalf of such Pledgor, and no such advancement or expenditure
therefor, shall relieve such Pledgor of any default under the terms of this
Agreement or in any way obligate the Agent or any Lender to take any
further or future action with respect thereto. The Agent, in making any
payment hereby authorized, may do so according to any xxxx, statement or
estimate procured from the appropriate public office or holder of the claim
to be discharged without inquiry into the accuracy of such xxxx, statement
or estimate, or into the validity of any tax assessment, sale, forfeiture,
tax lien or title or claim. The Agent, in performing any act hereunder,
shall be the sole judge of whether the relevant Pledgor is required to
perform the same under the terms of this Agreement. The Agent is hereby
authorized to charge any depository or other account of any Pledgor
maintained with the Agent for the amount of such sums and amounts so
expended.
SECTION 5. SPECIAL PROVISIONS RE: STOCK COLLATERAL.
(a) Each Pledgor has the right to vote the Pledged Securities and
there
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are no restrictions upon the voting rights associated with, or the transfer
of, any of the Pledged Securities, except as provided by federal and state
laws applicable to the sale of securities generally.
(b) The certificates for all shares of the Pledged Securities shall
be delivered by the relevant Pledgor to the Agent duly endorsed in blank
for transfer or accompanied by an appropriate assignment or assignments or
an appropriate undated stock power or powers, in every case sufficient to
transfer title thereto. The Agent may at any time after the occurrence of
an Event of Default cause to be transferred into its name or into the name
of its nominee or nominees any and all of the Pledged Securities. The
Agent shall at all times have the right to exchange the certificates
representing the Pledged Securities for certificates of smaller or larger
denominations.
(c) The Pledged Securities have been validly issued and are fully
paid and non-assessable. There are no outstanding commitments or other
obligations of the issuers of any of the Pledged Securities to issue, and
no options, warrants or other rights of any individual or entity to
acquire, any share of any class or series of capital stock of such issuers
except for the Purchaser Warrants, the Affiliate Warrants and the Harnick
Warrant. The Pledged Securities listed and described on Schedule A
attached hereto constitute the percentage of the issued and outstanding
capital stock of each series and class of the issuers thereof as set forth
thereon owned by the relevant Pledgor. Each Pledgor further agrees that in
the event any such issuer shall issue any additional capital stock of any
series or class (whether or not entitled to vote) to such Pledgor or
otherwise on account of its ownership interest therein, each Pledgor will
forthwith pledge and deposit hereunder, or cause to be pledged and
deposited hereunder, all such additional shares of such capital stock.
SECTION 6. SPECIAL PROVISIONS RE: PARTNERSHIP INTEREST COLLATERAL.
(a) Each Pledgor further warrants to and agrees with the Agent and
the Lenders as follows:
(i) that said Partnerships are valid and existing entities of
the type listed on Schedule B and are duly organized and existing
under applicable law;
(ii) that the Partnership Interest Collateral listed and
described on Schedule B attached hereto constitutes the percentage of
the equity
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interest in each Partnership set forth thereon owned by the relevant
Pledgor;
(iii) that the copies of the partnership agreements (each such
agreement being hereinafter referred to as "ORGANIZATIONAL AGREEMENT")
for the Partnerships heretofore delivered to the Agent are true and
correct copies thereof and have not been amended or modified in any
respect, except for such amendments or modifications as are attached
to the copies thereof delivered to the Agent; and
(iv) that the Partnerships have no loans outstanding to the
Pledgors, and no Pledgor will borrow money from the Partnerships.
(b) Except as expressly permitted by Sections 8.18 and 8.24 of the
Credit Agreement, the Pledgors shall not, without the prior written consent
of the Agent, consent to any amendment or modification to any of the
Organizational Agreements which would in any manner adversely affect or
impair the Partnership Interest Collateral or reduce or dilute the rights
of the Pledgor with respect to any of the Partnerships, any of such done
without such prior written consent to be null and void. The Pledgors shall
promptly send to the Agent copies of all notices and communications with
respect to each Partnership alleging the existence of a default by an
Pledgor in the performance of any of its obligations under any
Organizational Agreement. Each Pledgor agrees that it will promptly notify
the Agent of any litigation which might adversely affect such Pledgor or a
Partnership or any of their respective properties and of any material
adverse change in the operations, business properties, assets or
conditions, financial or otherwise, of any Pledgor or any Partnership.
Each Pledgor shall promptly perform all of its obligations under each
Organizational Agreement. In the event any Pledgor fails to pay or perform
any obligation arising under any Organizational Agreement or otherwise
related to any Partnership, the Agent may, but need not, pay or perform
such obligation at the expense and for the account of the Pledgors and all
funds expended for such purposes shall constitute Obligations secured
hereby which the Pledgors promise to pay to the Agent together with
interest thereon at the Default Rate.
SECTION 7. VOTING RIGHTS AND DIVIDENDS. Unless and until an Event of
Default hereunder has occurred and thereafter until notified by the Agent
pursuant to Section 9(b) hereof:
(a) Each Pledgor shall be entitled to exercise all voting and/or
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consensual powers pertaining to the Collateral of such Pledgor, or any part
thereof, for all purposes not inconsistent with the terms of this Agreement
or any other document evidencing or otherwise relating to any of the
Obligations.
(b) Each Pledgor shall be entitled to receive and retain all
dividends and distributions in respect of the Collateral which are paid in
cash of whatsoever nature; PROVIDED, HOWEVER, that such dividends and
distributions representing:
(i) stock or liquidating dividends or a distribution or return
of capital upon or in respect of the Pledged Securities or any part
thereof or resulting from a split-up, revision or reclassification of
the Pledged Securities or any part thereof or received in addition to,
in substitution of or in exchange for the Pledged Securities or any
part thereof as a result of a merger, consolidation or otherwise, or
(ii) distributions in complete or partial liquidation of any
Partnership or the interest of such Pledgor therein,
in each case, shall be paid, delivered or transferred, as appropriate,
directly to the Agent immediately upon the receipt thereof by such Pledgor
and shall, in the case of cash, be applied by the Agent to the satisfaction
of Obligations in accordance with the provisions of Section 10 hereof,
whether or not the same may then be due or otherwise adequately secured and
shall, in the case of all other property, together with any cash received
by the Agent and not applied as aforesaid, be held by the Agent pursuant
hereto as part of the Pledged Securities as additional Pledged Securities
pledged under and subject to the terms of this Agreement; or
(c) In order to permit each Pledgor to exercise such voting and/or
consensual powers which it is entitled to exercise under subsection (a)
above and to receive such distributions which such Pledgor is entitled to
receive and retain under subsection (b) above, the Agent will, if
necessary, upon the written request of such Pledgor, from time to time
execute and deliver to such Pledgor appropriate proxies and dividend
orders.
SECTION 8. POWER OF ATTORNEY. Each Pledgor hereby appoints the Agent,
and each of its nominees, officers, agents, attorneys, and any other person whom
the Agent may designate, as such Pledgor's attorney-in-fact, with full power and
authority to ask, demand, collect, receive, receipt for, xxx for, compound and
give acquittance for any and all sums or properties which may be or become due,
payable or distributable in
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respect of the Collateral or any part thereof, with full power to settle, adjust
or compromise any claim thereunder or therefor as fully as such Pledgor could
itself do, to endorse or sign the Pledgor's name on any assignments, stock
powers, or other instruments of transfer and on any checks, notes, acceptances,
money orders, drafts, and any other forms of payment or security that may come
into the Agent's possession and on all documents of satisfaction, discharge or
receipt required or requested in connection therewith, and, in its discretion,
to file any claim or take any other action or proceeding, either in its own name
or in the name of such Pledgor, or otherwise, which the Agent may deem necessary
or appropriate to collect or otherwise realize upon all or any part of the
Collateral, or effect a transfer thereof, or which may be necessary or
appropriate to protect and preserve the right, title and interest of the Agent
in and to such Collateral and the security intended to be afforded hereby. Each
Pledgor hereby ratifies and approves all acts of any such attorney and agrees
that neither the Agent nor any such attorney will be liable for any such acts or
omissions nor for any error of judgment or mistake of fact or law other than
such person's gross negligence or willful misconduct. The Agent may file one or
more financing statements disclosing its security interest in all or any part of
the Collateral without any Pledgor's signature appearing thereon, and each
Pledgor also hereby grants the Agent a power of attorney to execute any such
financing statements, and any amendments or supplements thereto, on behalf of
such Pledgor without notice thereof to such Pledgor. The foregoing powers of
attorney, being coupled with an interest, are irrevocable until the Obligations
have been fully satisfied and any commitment of the Lenders to extend credit
constituting Obligations to the Borrowers, or any of them individually has
terminated; PROVIDED, HOWEVER, that the Agent agrees, as a personal covenant to
the relevant Pledgor, not to exercise the powers of attorney set forth in this
Section unless an Event of Default exists.
SECTION 9. DEFAULTS AND REMEDIES. (a) The occurrence of any event or
the existence of any condition which is specified as an "Event of Default" under
the Credit Agreement shall constitute an "EVENT OF DEFAULT" hereunder.
(b) Upon the occurrence of any Event of Default, all rights of the
Pledgors to receive and retain the distributions which they are entitled to
receive and retain pursuant to Section 7(b) hereof shall, at the option of
the Agent cease and thereupon become vested in the Agent which, in addition
to all other rights provided herein or by law, shall then be entitled solely
and exclusively to receive and retain the distributions which the Pledgors
would otherwise have been authorized to retain pursuant to Section 7(b)
hereof and all rights of the Pledgors to exercise the voting and/or
consensual powers which they are entitled to exercise pursuant to Section
7(a) hereof shall, at the option of the Agent, cease and thereupon become
vested in the Agent
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which, in addition to all other rights provided herein or by law, shall then
be entitled solely and exclusively to exercise all voting and other
consensual powers pertaining to the Collateral and to exercise any and all
rights of conversion, exchange or subscription and any other rights,
privileges or options pertaining thereto as if the Agent were the absolute
owner thereof including, without limitation, the right to exchange, at its
discretion, the Collateral or any part thereof upon the merger,
consolidation, reorganization, recapitalization or other readjustment of the
respective issuer thereof or upon the exercise by or on behalf of any such
issuer or the Agent of any right, privilege or option pertaining to the
Collateral or any part thereof and, in connection therewith, to deposit and
deliver the Collateral or any part thereof with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Agent may determine. In the event the Agent in good faith
believes any of the Collateral constitutes restricted securities within the
meaning of any applicable securities law, any disposition thereof in
compliance with such laws shall not render the disposition commercially
unreasonable.
(c) Upon the occurrence of any Event of Default, the Agent shall
have, in addition to all other rights provided herein or by law, the rights
and remedies of a secured party under the UCC (regardless of whether the UCC
is the law of the jurisdiction where the rights or remedies are asserted and
regardless of whether the UCC applies to the affected Collateral), and
further the Agent may, without demand and without advertisement, notice,
hearing or process of law, all of which each Pledgor hereby waives to the
extent permitted by law, at any time or times, sell and deliver any or all of
the Collateral held by or for it at public or private sale, at any securities
exchange or broker's board or at any of the Agent's offices or elsewhere, for
cash, upon credit or otherwise, at such prices and upon such terms as the
Agent deems advisable, in its sole discretion. In the exercise of any such
remedies, the Agent may sell the Collateral as a unit even though the sales
price thereof may be in excess of the amount remaining unpaid on the
Obligations. Also, if less than all the Collateral is sold, the Agent shall
have no duty to marshal or apportion the part of the Collateral so sold as
between the Pledgors, or any of them, but may sell and deliver any or all of
the Collateral without regard to which of the Pledgors are the owners
thereof. In addition to all other sums due the Agent or any Lender
hereunder, each Pledgor shall pay the Agent and the Lenders all costs and
expenses incurred by the Agent and such Lenders, including reasonable
attorneys' fees and court costs, in obtaining, liquidating or enforcing
payment of Collateral or the Obligations or in the prosecution or defense of
any action or proceeding by or against the Agent, such Lenders or any Pledgor
concerning any matter arising out of or connected with this Agreement or the
Collateral or the Obligations including, without limitation, any of the
foregoing arising in, arising under or related to a case under the United
States Bankruptcy Code (or any successor
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statute). Any requirement of reasonable notice shall be met if such notice is
personally served on or mailed, postage prepaid, to the Pledgors in accordance
with Section 14(b) hereof at least ten days before the time of sale or other
event giving rise to the requirement of such notice; PROVIDED, HOWEVER, no
notification need be given to a Pledgor if such Pledgor has signed, after an
Event of Default has occurred, a statement renouncing any right to notification
of sale or other intended disposition. The Agent shall not be obligated to make
any sale or other disposition of the Collateral regardless of notice having been
given. The Agent or any Lender may be the purchaser at any sale or other
disposition of the Collateral or any part thereof. Each Pledgor hereby waives
all of its rights of redemption from any sale or other disposition of the
Collateral or any part thereof. The Agent may postpone or cause the
postponement of the sale of all or any portion of the Collateral by announcement
at the time and place of such sale, and such sale may, without further notice,
be made at the time and place to which the sale was postponed or the Agent may
further postpone such sale by announcement made at such time and place.
Each Pledgor agrees that if any part of the Collateral is sold at any
public or private sale, the Agent may elect to sell only to a buyer who will
give further assurances, satisfactory in form and substance to the Agent,
respecting compliance with the requirements of the Federal Securities Act of
1933, as amended, and a sale subject to such condition shall be deemed
commercially reasonable.
Each Pledgor further agrees that in any sale of any part of the
Collateral, 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,
without limitation, compliance with such procedures as may restrict the
number of prospective bidders and purchasers and/or further restrict such
prospective bidders or 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 each 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 be liable or accountable to any Pledgor for any discount allowed by
reason of the fact that such collateral is sold in compliance with any such
limitation or restriction.
(d) In the event the Agent shall sell any part of the Partnership
Interest Collateral at a foreclosure sale, each Pledgor hereby grants the
purchaser of such portion of the Partnership Interest Collateral to the
fullest extent of its capacity, the
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ability (but not the obligation) to become a partner in the relevant
Partnership (subject to the approval of the general partner of the relevant
Partnership, in the exercise of its sole discretion), in the place and stead
of such Pledgor. To exercise such right, the purchaser shall give written
notice to the relevant Partnership of its election to become a partner in
such Partnership. Following such election and giving of consent by all
necessary partners of the relevant Partnership as to the purchaser becoming a
partner, the purchaser shall have the right and powers and be subject to the
liabilities of a partner under the relevant Organizational Agreement and the
partnership act governing the Partnership.
(e) Upon the occurrence and during the continuation of any Event of
Default, in addition to all other rights provided herein or by law, the Agent
shall have the right to cause all or any part of the Partnership Interest
Collateral of any of the Pledgors in any one or more of the Partnerships to
be redeemed and to cause a withdrawal, in whole or in part, of any Pledgor
from any Partnership or any of its Partnership Interest Collateral therein.
(f) The powers conferred upon the Agent hereunder are solely to
protect its interest in the Collateral and shall not impose on it any duties
to exercise such powers. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equivalent
to that which the Agent accords its own property, consisting of similar types
securities, it being understood, however, that the Agent shall have no
responsibility for (i) ascertaining or taking any action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relating
to any Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters, (ii) taking any necessary steps to preserve rights
against any parties with respect to any Collateral, or (iii) initiating any
action to protect the Collateral or any part thereof against the possibility
of a decline in market value. This Agreement constitutes an assignment of
rights only and not an assignment of any duties or obligations of the
Pledgors in any way related to the Collateral, and the Agent shall have no
duty or obligation to discharge any such duty or obligation. By its
acceptance hereof, the Agent does not undertake to perform or discharge and
shall not be responsible or liable for the performance or discharge of any
such duties or responsibilities and shall not in any event become a
"SUBSTITUTED LIMITED PARTNER" or words of like import (as defined in the
relevant Organizational Agreement) in the relevant Partnership. Neither the
Agent or any Lender, nor any party acting as attorney for the Agent or any
Lender, shall be liable hereunder for any acts or omissions or for any error
of judgment or mistake of fact or law other than such person's gross
negligence or willful misconduct.
-13-
(g) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Pledgor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not
operate as a waiver; and no waiver shall be effective unless it is in
writing, signed by the party against whom such waiver is sought to be
enforced and then only to the extent specifically stated. The rights and
remedies of the Agent and the Lenders under this Agreement shall be
cumulative and not exclusive of any other right or remedy which the Agent or
the Lenders may have. For purposes of this Agreement, an Event of Default
shall be construed as continuing after its occurrence until the same is
waived in writing by the Lenders or the Required Lenders, as the case may be,
in accordance with the Credit Agreement.
SECTION 10. APPLICATION OF PROCEEDS. The proceeds and avails of the
Collateral at any time received by the Agent during the existence of any
Event of Default shall, when received by the Agent in cash or its equivalent,
be applied by the Agent in reduction of, or as collateral security for, the
Obligations in accordance with the terms of the Credit Agreement. The
Pledgors shall remain liable to the Agent and the Lenders for any deficiency.
Any surplus remaining after the full payment and satisfaction of the
Obligations shall be returned to the Pledgors, or to whomsoever the Agent
reasonably determines is lawfully entitled thereto.
SECTION 11. CONTINUING AGREEMENT. This Agreement shall be a
continuing agreement in every respect and shall remain in full force and
effect until all of the Obligations, both for principal and interest, have
been fully paid and satisfied and any commitment to extend constituting
Obligations to the Borrowers, or any of them individually shall have
terminated. Upon such termination of this Agreement, the Agent shall, upon
the request of the Pledgors, execute and deliver to such Pledgors a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of
this Agreement, and will duly assign, transfer and deliver to such Pledgors,
against receipt and without recourse to the Agent, such of the Collateral as
may be in the possession of the Agent and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement or the Credit
Agreement.
SECTION 12. PRIMARY SECURITY; OBLIGATIONS ABSOLUTE. The lien and
security herein created and provided for stand as direct and primary security
for the Obligations. No application of any sums received by the Agent in
respect of the Collateral or any disposition thereof to the reduction of the
Obligations or any portion thereof shall in any manner entitle any Pledgor to
any right, title or interest in or to the Obligations or any collateral
security therefor, whether by subrogation or otherwise, unless and until all
-14-
Obligations have been fully paid and satisfied and any commitments to extend
credit constituting Obligations to the Borrowers, or any of them individually
shall have terminated. Each Pledgor acknowledges and agrees that the lien
and security hereby created and provided for are absolute and unconditional
and shall not in any manner be affected or impaired by any acts or omissions
whatsoever of the Agent, any Lender or any other holder of any of the
Obligations, and without limiting the generality of the foregoing, the lien
and security hereof shall not be impaired by any acceptance by the Agent, any
Lender or any other holder of any of the Obligations of any other security
for or guarantors upon any Obligations or by any failure, neglect or omission
on the part of the Agent, any Lender or any other holder of any of the
Obligations to realize upon or protect any of the Obligations or any
collateral security therefor. The lien and security hereof shall not in any
manner be impaired or affected by (and the Agent and the Lenders, without
notice to anyone, are hereby authorized to make from time to time) any sale,
pledge, surrender, compromise, settlement, release, renewal, extension,
indulgence, alteration, substitution, exchange, change in, modification or
disposition of any of the Obligations, or of any collateral security
therefor, or of any guaranty thereof, or of any instrument or agreement
setting forth the terms and conditions pertaining to any of the foregoing.
The Lenders may at their discretion at any time grant credit to the
Borrowers, or any of them individually without notice to any Pledgor in such
amounts and on such terms as the Lenders may elect without in any manner
impairing the lien and security hereby created and provided for. In order to
realize hereon and to exercise the rights granted the Agent hereunder and
under applicable law as against any Pledgor or any portion of the Collateral
in which any such Pledgor has rights, there shall be no obligation on the
part of the Agent, any Lender or any other holder of any of the Obligations
at any time to first resort for payment to the Borrowers, or any of them
individually or any other Pledgor or any other Person, its property or estate
or to any guaranty of the Obligations or any portion thereof or to resort to
any other collateral security, property, liens or any other rights or
remedies whatsoever, and the Agent shall have the right to enforce this
Agreement as against any Pledgor or any portion of the Collateral in which
any such Pledgor has rights, irrespective of whether or not other proceedings
or steps are pending seeking resort to or realization upon or from any of the
foregoing.
SECTION 13. THE AGENT. In acting under or by virtue of this
Agreement, Agent shall be entitled to all the rights, authority, privileges
and immunities provided in Section 10 of the Credit Agreement, all of which
provisions of said Section 10 are incorporated by reference herein with the
same force and effect as if set forth herein in their entirety. The Agent
hereby disclaims any representation or warranty to the Lenders or any other
holders of the Obligations concerning the perfection of the liens and
security interests granted hereunder or in the value of the Collateral.
-15-
SECTION 14. MISCELLANEOUS. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and
security interest in the Collateral and shall be binding upon each Pledgor,
its successors and assigns, and shall inure, together with the rights and
remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders, and their successors and assigns; PROVIDED, HOWEVER, that no
Pledgor may assign its rights or delegate its duties hereunder without the
Agent's prior written consent. Without limiting the generality of the
foregoing, and subject to the provisions of the Credit Agreement, any Lender
may assign or otherwise transfer any indebtedness held by it secured by this
Agreement to any other person, and such other person shall thereupon become
vested with all the benefits in respect thereof granted to such Lender herein
or otherwise.
(b) All communications provided for herein shall be in writing, except
as otherwise specifically provided for hereinabove, and shall be deemed to
have been given or made, if to any Pledgor when given to any Borrower in
accordance with Section 13.8 of the Credit Agreement, or if to the Agent or
any Lender, when given to such party in accordance with Section 13.8 of the
Credit Agreement.
(c) No Lender shall have the right to institute any suit, action or
proceeding in equity or at law for the foreclosure or other realization upon
any Collateral subject to this Agreement or for the execution of any trust or
power hereof or for the appointment of a receiver, or for the enforcement of
any other remedy under or upon this Agreement; it being understood and
intended that no one or more of the Lenders shall have any right in any
manner whatsoever to affect, disturb or prejudice the lien and security
interest of this Agreement by its or their action or to enforce any right
hereunder, and that all proceedings at law or in equity shall be instituted,
had and maintained by the Agent in the manner herein provided for the benefit
of the Lenders.
(d) In the event that any provision hereof shall be deemed to be
invalid by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Agreement shall be construed
as not containing such provision, but only as to such locations where such
law or interpretation is operative, and the invalidity of such provision
shall not affect the validity of any remaining provision hereof, and any and
all other provisions hereof which are otherwise lawful and valid shall remain
in full force and effect. Without limiting the generality of the foregoing,
in the event that this Agreement shall be deemed to be invalid or otherwise
unenforceable with respect to any Pledgor, such invalidity or
unenforceability shall not affect the validity of this Agreement with respect
to the other Pledgors.
(e) This Agreement shall be deemed to have been made in the State of
-16-
Illinois and shall be governed by, and construed in accordance with, the laws of
the State of Illinois. All terms which are used in this Agreement which are
defined in the UCC shall have the same meanings herein as said terms do in the
UCC unless this Agreement shall otherwise specifically provide. The headings in
this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning of any provision hereof.
(f) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same instrument. Each
Pledgor acknowledges that this Agreement is and shall be effective upon its
execution and delivery by such Pledgor to the Agent, and it shall not be
necessary for the Agent to execute this Agreement or any other acceptance
hereof or otherwise to signify or express its acceptance hereof.
(g) In the event the Agent and the Lenders shall at any time in their
discretion permit a substitution of Pledgors hereunder or a party shall wish
to become a Pledgor hereunder, such substituted or additional Pledgor shall,
upon executing an agreement in the form attached hereto as Schedule E, become
a party hereto and be bound by all the terms and conditions hereof to the
same extent as though such Pledgor had originally executed this Agreement
and, in the case of a substitution, in lieu of the Pledgor being replaced.
No such substitution shall be effective absent the written consent of Agent
and the Lenders nor shall it in any manner affect the obligations of the
other Pledgors hereunder.
(h) The Agent and the Pledgors agree that all disputes among them
arising out of, connected with, related to, or incidental to the relationship
established among them in connection with this Agreement, and whether arising
in contract, tort, equity, or otherwise, shall be resolved only by state or
federal courts located in Xxxx County, Illinois, but each of the Agent and
the Pledgors acknowledge that any appeals from those courts may have to be
heard by a court located outside of Xxxx County, Illinois. Each of the
Pledgors waives in all disputes any objection that such Pledgor may have to
the location of the court considering the dispute or any objection that such
Pledgor may have that any other party has not been joined in such proceeding.
Each of the Pledgors agrees that the Agent shall have the right to proceed
against each and any of the Pledgors or their Collateral in a court in any
location to enable the Agent to realize on the Collateral, or to enforce a
judgment or other court order entered in favor of the Agent, whether or not
proceeding separately against any Pledgor and its property or jointly against
the Borrower and any one or more of the Pledgors and their property. Each of
the Pledgors waives any objection that it may have to the location of the
court
-17-
in which the agent has commenced a proceeding described in this paragraph.
[Signature Pages to Follow]
-18-
In Witness Whereof, each Pledgor has caused this Agreement to be duly
executed and delivered as of the date first above written.
PLEDGORS:
PLATINUM ENTERTAINMENT, INC.
By /s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Its: President
Acknowledged and agreed to as of the date first above written.
Bank of Montreal, as Agent as
aforesaid for the Lenders
By /s/ Xxxxxxx Xxxxx
--------------------------
Its: Director
-19-
SCHEDULE A TO PLEDGE AGREEMENT
THE PLEDGED SECURITIES
Name and Percentage
Location of Name of Jurisdiction of No. of Certificate of Issuer's
Pledgor Issuer Incorporation Shares Class No. Stock
Platinum Entertainment, Inc. Lexicon Music, INC. Delaware 3,000 Common 1 100%
0000 Xxxxxxxxxxx Xx.
Xxxxx 0000, Xxxxxxx Xxxxx, Intersound, Inc. Delaware 450 Common 6 100%
IL 60515
CGI Records, Inc. Delaware 3,000 Common 1 100%
River North Records, Delaware 3,000 Common 4 100%
Inc.
Light Records, Inc. Delaware 3,000 Common 1 100%
The Recording Delaware 3,000 Common 1 100%
Experience, Inc.
Peg Publishing, Inc. Delaware 3,000 Common 1 100%
-20-
Justmike Music, Inc. Delaware 3,000 Common 1 100%
Royce Publishing, Inc. Delaware 3,000 Common 1 100%
-21-
SCHEDULE B TO PLEDGE AGREEMENT
PARTNERSHIP INTERESTS
Relevant Pledgor and Location Name of Type of Jurisdiction Percent of
Partnership Organization of Organization Ownership
Platinum Entertainment, Inc. House of Blues Music Joint Venture California 50%
0000 Xxxxxxxxxxx Xx. Company
Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
-22-
SCHEDULE C TO PLEDGE AGREEMENT
ACKNOWLEDGMENT OF COLLATERAL ASSIGNMENT
December 12, 1997
_________________________________
_________________________________
_________________________________
_________________________________
Attention:_______________________
Ladies and Gentlemen:
Platinum Entertainment, Inc. and ___________________ (each a "PLEDGOR" and
collectively the "PLEDGORS") executed a Pledge Agreement dated as of
December 12, 1997 (the "SECURITY AGREEMENT") in favor of Bank of Montreal (the
"AGENT"), a copy of which you have received. Pursuant to the Security
Agreement, each Pledgor whose signature appears below (each a "RELEVANT PLEDGOR"
and collectively the "RELEVANT PLEDGORS") assigned its partnership interests in
___________________ (the "PARTNERSHIP") as collateral security for, among other
things, indebtedness and obligations of Platinum Entertainment, Inc. (the
"COMPANY") and Intersound, Inc. ("INTERSOUND"; the Company and Intersound
collectively referred to herein as the "BORROWERS" and individually as a
"BORROWER") now or from time to time owing pursuant to that certain Credit
Agreement dated as of December 12, 1997 (such Credit Agreement as the same may
be amended, modified or restated from time to time being hereinafter referred to
as the "CREDIT AGREEMENT") among the Borrowers, certain affiliates of the
Company, the Agent and various other lenders party thereto.
We ask you, by accepting this letter below on behalf of the Partnership and
as its general partner, to confirm the following:
1. Each Relevant Pledgor is a partner in the Partnership.
2. You consent to the collateral assignment of each Relevant
Pledgor's interest in the Partnership to the Agent, notwithstanding
anything to the contrary contained in the Partnership Agreement. This
letter will serve to evidence the consent to this collateral assignment
from the Partnership and its general partner.
-23-
3. All parties required by the terms of the Partnership Agreement to
approve the collateral assignment made by the Security Agreement have done
so, and the interest of the Agent by virtue of that assignment has been
reflected on the books and records of the Partnership.
4. The Partnership has been formed under the ______________
Partnership Agreement dated as of ________________, 19___ (the "PARTNERSHIP
AGREEMENT"), and the Partnership Agreement has not subsequently been
modified or amended and continues in full force and effect. The
Partnership Agreement shall not be amended without the consent of the
Agent. The Agent agrees with the Partnership that the Agent will not
unreasonably withhold its consent to modifications or amendments to the
Partnership's Partnership Agreement which do not adversely affect the
interests of the Agent or any of the Lenders identified and defined in the
Pledge Agreement.
5. All payments and distributions due and to become due to any
Relevant Pledgor pursuant to the Partnership Agreement shall continue to be
paid directly to such Relevant Pledgor, unless and until the Agent notifies
the Partnership in writing to do otherwise. If the Agent so notifies the
Partnership, the Partnership will immediately cease making such payments
and distributions to the Relevant Pledgors and will as soon as possible,
but in any event within five days after receiving such notice, remit all
such payments and distributions directly to the Agent at 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
6. By virtue of the Security Agreement, the Agent has the right at
its option to exercise each Relevant Pledgor's right (if any) to withdraw
all or any part of such Relevant Pledgor's interest in the Partnership by
so notifying the Partnership in writing no less than ten days prior to the
proposed withdrawal date. All payments or distributions due or to become
due under the Partnership Agreement to the Relevant Pledgors as a result of
such withdrawal shall be remitted directly to the Agent as stated above.
If given at all, the notice provided pursuant to this paragraph may (but
need not) be given concurrently with any notice provided pursuant to the
immediately preceding paragraph.
7. Each Relevant Pledgor agrees that any such payment to the Agent
shall be a good receipt and acquittance as against it -- that is to say,
the Partnership should make the payment directly to the Agent and in so
doing, the Partnership discharges any liability to such Relevant Pledgor
for that payment.
8. The Relevant Pledgors have no currently outstanding loans from
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the Partnership and the Partnership shall not extend any loans to any
Relevant Pledgor.
9. The terms of the Security Agreement prohibit any Relevant Pledgor
from making any transfer of its interest in the Partnership without the
Agent's prior written consent. You agree not to honor any transfer of any
Relevant Pledgor's interest without such consent.
The agreements in this letter shall be modified only in a writing signed by
the Agent, each Pledgor and the Partnership. We acknowledge that the
Partnership shall be entitled to assume that the Security Agreement continues in
full force and effect unless and until the Partnership receives actual written
notice of a termination of same from the Agent .
Very truly yours,
BANK OF MONTREAL, as Agent
By
Its
-25-
Accepted and Agreed.
[PLATINUM ENTERTAINMENT, INC.]
By
Name: Xxxxxx Xxxxxx
Its: President
The undersigned, both as the general partner of the Partnership and on
behalf of the Partnership, join in this letter to evidence their acknowledgment
and agreement to the same.
[PARTNERSHIP]
By
Its
[GENERAL PARTNER OF PARTNERSHIP]
By
Its
-26-
SCHEDULE D TO PLEDGE AGREEMENT
AMENDMENT TO PLEDGE AGREEMENT
Reference is hereby made to that certain Pledge Agreement dated as of
December 12, 1997 (as the same may be amended, the "PLEDGE AGREEMENT"), from
the Pledgors which are signatories thereto to Bank of Montreal, as Agent.
Capitalized terms not otherwise defined herein shall have the meaning set
forth in the Pledge Agreement.
Subsequent to the Pledgors' delivery of the Pledge Agreement, certain
shares of stock or partnership interests have been added as Collateral under
the Pledge Agreement. As a result of such addition, Schedule A of the Pledge
Agreement does not accurately describe the shares of capital stock and/or
Schedule B does not accurately describe the partnership interests, currently
held by the Agent as collateral under the Pledge Agreement.
The Pledgors now desire to amend Schedule A and/or Schedule B to the
Pledge Agreement to reflect such addition, and this instrument shall
constitute an agreement between the Pledgors and the Agent amending the
Pledge Agreement in the respects, but only in the respects, hereinafter set
forth:
1. If an Annex A is attached hereto, Schedule A of the Pledge
Agreement shall be and hereby is amended and as so amended shall be
restated in its entirety to read as Annex A attached hereto.
2. If an Annex B is attached hereto, Schedule B of the Pledge
Agreement shall be and hereby is amended and as so amended shall be
restated in its entirety to read as Annex B attached hereto.
3. As collateral security for the Obligations, each Pledgor hereby
grants to the Agent a continuing security interest in, and acknowledges and
agrees that the Agent has and shall continue to have a continuing security
interest in, all the shares of capital stock of each issuer listed and
described on Annex A attached hereto (if attached) and all of the
partnership interests listed and described on Annex B attached hereto (if
attached) and all the other properties, rights, interests and privileges
comprising the Collateral (as such term is defined in the Pledge Agreement
after giving effect to this Amendment), to the same extent and with the
same force and effect as if (i) the shares of stock described on Annex A
had originally been included on Schedule A to the Pledge Agreement and
(ii) the partnership interests described on Annex B had been
-27-
originally included on Schedule B to the Pledge Agreement. The foregoing
granting clause is in addition to and supplemental of and not in
substitution for the granting clause contained in the Pledge Agreement.
Neither the Pledgors nor the Agent intend by this Amendment to in any way
impair or otherwise affect the lien of the Pledge Agreement on such of
the Collateral which was subject to the Pledge Agreement prior to giving
effect to this Amendment.
4. Each Pledgor hereby repeats and reaffirms all of its covenants,
agreements, representations and warranties contained in the Pledge
Agreement, each and all of which shall be applicable to all of the
properties, rights, interests and privileges subject to the lien of the
Pledge Agreement after giving effect to this Amendment. Each Pledgor
hereby certifies that no Event of Default or event which, with notice or
lapse of time or both, would constitute an Event of Default exists under
the Pledge Agreement after giving effect to this Amendment.
5. No reference to this Amendment need be made in any note,
instrument or other document at any time referring to the Pledge
Agreement, any reference in any of such to the Pledge Agreement to be
deemed to reference to the Pledge Agreement as modified hereby. All
references in the Pledge Agreement to the term "Pledged Securities" shall
be deemed a reference to such term as defined in the Pledge Agreement
after giving effect to this Amendment.
6. Except as specifically modified hereby, all the terms and
conditions of the Pledge Agreement shall stand and remain unchanged and
in full force and effect. This Amendment shall be effective upon the
Pledgors' execution and delivery thereof to the Agent, no acceptance by
the Agent being required.
Pledgor(s):
[NAME OF RELEVANT PLEDGOR}
By
Its
[NAME OF RELEVANT PLEDGOR}
By
Its
-28-
Acknowledged and agreed to as of the date first above written.
BANK OF MONTREAL, as Agent
By
Its
-29-
ANNEX A
TO AMENDMENT TO PLEDGE AGREEMENT
THE PLEDGED SECURITIES
Percentage
Name and Name of Jurisdiction of No. of Certificate of Issuer's
Location of Issuer Incorporation Shares Class No. Stock
Pledgor
-30-
ANNEX B
TO AMENDMENT TO PLEDGE AGREEMENT
PARTNERSHIP INTERESTS
Name of Type of Jurisdiction Percent of
Partnership Organization of Organization Relevant Pledgor Ownership
-31-
SCHEDULE E TO PLEDGE AGREEMENT
ASSUMPTION AND SUPPLEMENTAL PLEDGE AGREEMENT
THIS AGREEMENT dated as of this 12th day of December, 1997 from [NEW
PLEDGOR], a __________ corporation (the "NEW PLEDGOR"), to Bank of Montreal
("BOM"), as agent for the Lenders (defined in the Pledge Agreement hereinafter
identified and defined) (BOM acting as such agent and any successor or
successors to Bank of Montreal in such capacity being hereinafter referred to as
the "AGENT");
WITNESSETH THAT:
WHEREAS, certain Pledgors have executed and delivered to the Agent that
certain Pledge Agreement dated as of December 12, 1997 (such Pledge Agreement,
as the same may from time to time be modified or amended, including supplements
thereto which add additional parties as Pledgors thereunder, being hereinafter
referred to as the "PLEDGE AGREEMENT") pursuant to which such parties (the
"EXISTING PLEDGORS") have granted to the Agent for the benefit of the Lenders a
lien on and security interest in such Existing Pledgors' Collateral (as such
term is defined in the Pledge Agreement) to secure the Obligations (as such term
is defined in the Pledge Agreement);
WHEREAS, each Pledgor will benefit, directly and indirectly, from credit
and other financial accommodations extended by the Lenders to the Borrowers.
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances made
or to be made, or credit accommodations given or to be given, to the Borrowers
by the Lenders from time to time, the New Pledgor hereby agrees as follows:
1. The New Pledgor acknowledges and agrees that it shall become a
"Pledgor" party to the Pledge Agreement effective upon the date the New
Pledgor's execution of this Agreement and the delivery of this Agreement to the
Agent, and that upon such execution and delivery, all references in the Pledge
Agreement to the terms "Pledgor" or "Pledgors" shall be deemed to include the
New Pledgor. Without limiting the generality of the foregoing, the New Pledgor
hereby repeats and reaffirms all grants (including the grant of a lien and
security interest), covenants, agreements, representations and warranties
contained in the Pledge Agreement as amended hereby, each and all of which are
and shall remain applicable to the Collateral from time to time owned by the New
Pledgor or in which the New Pledgor from time to time has any rights. Without
limiting the foregoing, in order to secure payment of the Obligations, whether
now existing or hereafter arising, the New Pledgor does hereby
-32-
grant to the Agent for the benefit of the Lenders, and hereby agrees that the
Agent has and shall continue to have for the benefit of the Lenders a continuing
security interest in, among other things, all of the New Pledgor's Collateral
(as such term is defined in the Pledge Agreement) described in Section 2 of the
Pledge Agreement, each and all of such granting clauses being incorporated
herein by reference with the same force and effect as if set forth in their
entirety except that all references in such clauses to the Existing Pledgor or
any of them shall be deemed to include references to the New Pledgor. Nothing
contained herein shall in any manner impair the priority of the liens and
security interests heretofore granted in favor of the Agent under the Pledge
Agreement.
2. The following information shall be added to Schedules A and/or B to
the Pledge Agreement, as applicable:
SCHEDULE A
THE PLEDGED SECURITIES
Percentage
Name and Name of Jurisdiction of No. of Certificate of Issuer's
Location of Issuer Incorporation Shares Class No. stock
Pledgor
OR
SCHEDULE B
PARTNERSHIP INTERESTS
Name of Type of Jurisdiction Percent of
Partnership Organization of Organization Relevant Pledgor Ownership
3. The New Pledgor hereby acknowledges and agrees that the Obligations
are secured by all of the Collateral according to, and otherwise on and subject
to, the terms and conditions of the Pledge Agreement to the same extent and with
the same force and effect as if the New Pledgor had originally been one of the
Existing Pledgors
-33-
under the Pledge Agreement and had originally executed the same as such an
Existing Pledgor.
4. All capitalized terms used in this Agreement without definition shall
have the same meaning herein as such terms have in the Pledge Agreement, except
that any reference to the term "Pledgor" or "Pledgors" and any provision of the
Pledge Agreement providing meaning to such term shall be deemed a reference to
the Existing Pledgors and the New Pledgor. Except as specifically modified
hereby, all of the terms and conditions of the Pledge Agreement shall stand and
remain unchanged and in full force and effect.
5. The New Pledgor agrees to execute and deliver such further instruments
and documents and do such further acts and things as the Agent may reasonably
deem necessary or proper to carry out more effectively the purposes of this
Agreement.
6. No reference to this Agreement need be made in the Pledge Agreement or
in any other document or instrument making reference to the Pledge Agreement,
any reference to the Pledge Agreement in any of such to be deemed a reference to
the Pledge Agreement as modified hereby.
7. This Agreement shall be governed by and construed in accordance with
the State of Illinois (without regard to principles of conflicts of law).
[NEW PLEDGOR]
By
-----------------------,
(Print or Type Name) (Title)
-34-
