EXHIBIT 4.29
EXHIBIT VIII
[FORM OF CEA STOCK PLEDGE AGREEMENT]
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "AGREEMENT") is dated as of March
__, 2004 and entered into by and between COVANTA ENERGY AMERICAS, INC., a
Delaware corporation (the "PLEDGOR"), and BANK OF AMERICA, N.A., in its capacity
as collateral agent for and representative of the Secured Parties (as defined in
the Intercreditor Agreement referred to below) (the "COLLATERAL AGENT"). All
capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed thereto in the Intercreditor Agreement.
PRELIMINARY STATEMENTS
A. As of the date hereof, Pledgor is the legal and beneficial
owner of the shares of Capital Stock issued by Covanta Power International
Holdings, Inc. ("COMPANY") listed on Schedule I hereto.
B. Pursuant to the Credit Agreement dated as of March ___,
2004 (said Credit Agreement or any credit agreement entered into by Revolver
Borrowers (as defined below) to refinance, replace, renew or extend, in whole or
in part, said Credit Agreement and the indebtedness thereunder to the extent
permitted pursuant to the Term Loan Agreement (as defined below), as said Credit
Agreement or any replacement to said Credit Agreement may be amended, restated,
supplemented or otherwise modified from time to time, being the "REVOLVER CREDIT
AGREEMENT"), by and among Company as a borrower, the Subsidiaries of Company
party thereto from time to time as additional borrowers (collectively, Company
and such Subsidiaries being the "REVOLVER BORROWERS" and each a "REVOLVER
BORROWER"), the financial institutions from time to time party thereto as
lenders (the "REVOLVER LENDERS"), and Deutsche Bank AG, New York Branch, as
administrative agent for the Revolver Lenders (in such capacity, the "REVOLVER
AGENT"), the Revolver Lenders have made certain commitments (each, a "REVOLVER
COMMITMENT"), subject to the terms and conditions set forth in the Revolver
Credit Agreement, to extend certain revolving credit facilities to Revolver
Borrowers.
C. Pursuant to the Credit Agreement dated as of March ___,
2004 (said Credit Agreement or any credit agreement entered into by Term Loan
Borrowers to refinance, replace, renew or extend, in whole or in part, said
Credit Agreement and the indebtedness thereunder to the extent permitted
pursuant to the Revolver Credit Agreement, as said Credit Agreement or any
replacement to said Credit Agreement may be amended, restated, supplemented or
otherwise modified from time to time, being the "TERM LOAN AGREEMENT," and
collectively with the Revolver Credit Agreement, the "CREDIT AGREEMENTS"), by
and among Company as a borrower, the Subsidiaries of Company party thereto from
time
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to time as additional borrowers (collectively, Company and such Subsidiaries
being the "TERM LOAN BORROWERS" and each a "TERM LOAN BORROWER," and
collectively with the Revolver Borrowers, the "BORROWERS"), the financial
institutions from time to time party thereto as lenders (the "TERM LOAN
LENDERS") and Bank of America, N.A., as administrative agent for the Term Loan
Lenders (in such capacity, the "TERM LOAN AGENT"), and Deutsche Bank Securities,
Inc., as documentation agent for the Term Loan Lenders (in such capacity, the
"TERM LOAN DOCUMENTATION AGENT," and collectively with the Term Loan Agent, the
Term Loan Lenders, the Revolver Agent and the Revolver Lenders, the "BENEFITED
PARTIES"), the Term Loan Lenders have made certain commitments (each, a "TERM
LOAN COMMITMENT," and together with the Revolver Commitments, collectively, the
"COMMITMENTS"), subject to the terms and conditions set forth in the Term Loan
Agreement, to extend certain term loan facilities to the Term Loan Borrowers.
D. In accordance with the terms of the Credit Agreements,
Borrowers are required to maintain the Cash Management System with Bank of
America (in such capacity, the "CASH MANAGEMENT BANK"), and it is desired that
the Cash Management Obligations be secured hereunder.
E. The Revolver Borrowers, the Term Loan Borrowers, Pledgor,
the Revolver Agent, the Revolver Lenders, the Term Loan Agents, the Term Loan
Lenders, the Cash Management Bank and Collateral Agent have entered into that
certain Intercreditor Agreement dated as of March ___, 2004 (as it may hereafter
be amended, restated, supplemented or otherwise modified from time to time, the
"INTERCREDITOR AGREEMENT"), pursuant to which the Revolver Agent, the Revolver
Lenders, the Term Loan Agents, the Term Loan Lenders and the Cash Management
Bank have appointed Collateral Agent, and Collateral Agent has agreed to act, as
collateral agent for the Revolver Agent, the Revolver Lenders, the Term Loan
Agents, the Term Loan Lenders and the Cash Management Bank hereunder.
F. It is a condition precedent to (i) the extension of credit
by the Revolver Lenders under the Revolver Credit Agreement and (ii) the
extension of credit by the Term Loan Lenders under the Term Loan Agreement that
the Pledgor shall have granted the security interest and undertaken the
obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Revolver Lenders to make extensions of credit from time to time
under the Revolver Credit Agreement, the Term Loan Lenders to continue their
extensions of credit under the Term Loan Agreement, the Cash Management Bank to
provide cash management services to the Borrowers and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Pledgor hereby agrees with Collateral Agent as follows:
SECTION 1. PLEDGE OF SECURITY. Pledgor hereby pledges and
collaterally assigns to Collateral Agent, and hereby grants to Collateral Agent
a security interest in, all of Pledgor's right, title and interest in and to the
following (the "PLEDGED COLLATERAL"):
(a) all Capital Stock in Company now or hereafter owned by
Pledgor, whether such Capital Stock is classified as investment property or
general intangibles under
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the Uniform Commercial Code as in effect in the State of New York ("UCC"),
including all securities convertible into, and rights, warrants, options and
other rights to purchase or otherwise acquire, any Capital Stock in Company, and
including those owned on the date hereof and described in Schedule I for
Pledgor, the certificates or other instruments representing any of the foregoing
and any interest of Pledgor in the entries on the books of any securities
intermediary pertaining thereto (the "PLEDGED EQUITY"), and all distributions,
dividends, and other property received, receivable or otherwise distributed in
respect of or in exchange therefor;
(b) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that at any
time evidence any of the Pledged Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon;
(c) to the extent not covered by clauses (a) and (b) above,
all proceeds of any or all of the foregoing Pledged Collateral. For purposes of
this Agreement, the term "PROCEEDS" includes whatever is receivable or received
when Pledged Collateral or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes,
without limitation, proceeds of any indemnity or guaranty payable to Pledgor or
Collateral Agent from time to time with respect to any of the Pledged
Collateral.
The security interest granted hereby is subject to the terms
of the Intercreditor Agreement (including, without limitation, the provisions
regarding lien priority).
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures,
and the Pledged Collateral assigned by Pledgor is collateral security for, the
Secured Obligations.
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Collateral Agent pursuant hereto and shall be in
suitable form for transfer by delivery or, as applicable, shall be accompanied
by Pledgor's endorsement, where necessary, or duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Collateral Agent. Upon the occurrence and during the continuation of an Event of
Default, Collateral Agent shall have the right, with notice to Pledgor, to
transfer to or to register in the name of Collateral Agent or any of its
nominees any or all of the Pledged Collateral, subject to the revocable rights
specified in Section 7(a). In addition, Collateral Agent shall have the right at
any time to exchange certificates or instruments representing or evidencing
Pledged Equity for certificates or instruments of smaller or larger
denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor represents
and warrants as follows:
(a) Organization and Powers. Pledgor is duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite power and authority to own and operate its properties, to
carry on its business as now conducted and
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proposed to be conducted and to enter into this Agreement and carry out the
transactions contemplated hereby.
(b) Good Standing. Pledgor is qualified to do business and in
good standing wherever necessary to carry on its present business and
operations, except in jurisdictions in which the failure to be so qualified or
in good standing has not had and will not have a material adverse effect on the
business, operations, properties, assets or condition (financial or otherwise)
of Pledgor and its subsidiaries, taken as a whole.
(c) Authorization. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action by
Pledgor.
(d) No Conflict. The execution, delivery and performance by
Pledgor of this Agreement will not (i) violate the Certificate of Incorporation
or Bylaws of Pledgor, (ii) violate any provision of law applicable to Pledgor,
or any order, judgment or decree of any court or other agency of government
binding on Pledgor, (iii) be in conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Pledgor, (iv) result in or require the creation or
imposition of any Lien upon any of its properties or assets other than the Lien
created by this Agreement, or (v) require the approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of Pledgor.
(e) Binding Obligation. This Agreement is the legally valid
and binding obligation of Pledgor, enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating to
or limiting creditors' rights generally.
(f) Due Authorization, etc. of Pledged Equity. All of the
Pledged Equity described on Schedule I has been duly authorized and validly
issued and is fully paid and non-assessable.
(g) Description of Pledged Equity. The Pledged Equity
constitutes all of the issued and outstanding Capital Stock in Company and there
are no outstanding warrants, options or other rights to purchase, or other
agreements outstanding with respect to, or property that is now or hereafter
convertible into, or that requires the issuance or sale of, any Capital Stock of
Company.
(h) Ownership of Pledged Collateral. Pledgor is the legal,
record and beneficial owner of the Pledged Collateral and its interests in the
Pledged Collateral are free and clear of any Lien except for Permitted
Encumbrances.
(i) Governmental Authorizations. No authorization, approval or
other action by, and no notice to or filing with, any Government Authority or
regulatory body is required for either (i) the pledge by Pledgor of the Pledged
Collateral pursuant to this Agreement and the grant by Pledgor of the security
interests granted hereby, (ii) the execution, delivery or performance of this
Agreement by Pledgor, or (iii) the exercise by Collateral Agent of the voting or
other rights, or the remedies in respect of the Pledged Collateral, provided for
in this Agreement (except as may be required in connection with a
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disposition of Pledged Collateral by laws affecting the offering and sale of
securities generally).
(j) Perfection. The security interest in the Pledged
Collateral granted to Collateral Agent in Section 2 hereof constitutes a valid
security interest, to the extent the UCC is applicable thereto, securing the
payment of the applicable Secured Obligations. Upon (i) the filing of UCC
financing statements naming Pledgor as "debtor", naming Collateral Agent as
"secured party" and describing the Pledged Collateral in the filing offices
listed on Schedule II and (ii) in the case of Pledged Collateral consisting of
certificated securities, in addition to filing such financing statements,
delivery of the certificates representing such certificated securities to
Collateral Agent, duly endorsed or accompanied by duly executed instruments of
assignment or transfer in blank, the security interest in the Pledged Collateral
referred to in the immediately preceding sentence will constitute a perfected
security interest therein, to the extent the UCC is applicable thereto, prior to
all other Liens, securing the payment of the Secured Obligations, and all
filings and other actions in the United States necessary to perfect and protect
such security interest have been duly made or taken.
(k) Office Locations; Type and Jurisdiction of Organization.
The chief executive office of Pledgor is as of the date hereof, located at the
location set forth on Schedule III annexed hereto; as of the date hereof,
Pledgor's name as it appears in official filings in its jurisdiction of
incorporation, jurisdiction of incorporation and corporation number provided by
the applicable Government Authority of its jurisdiction of incorporation are set
forth on Schedule III annexed hereto.
(l) Names. Pledgor (or predecessor by merger or otherwise of
Pledgor) has not, within the five year period preceding the date hereof, had a
different name from the name of Pledgor listed on the signature pages hereof,
except the names set forth on Schedule III annexed hereto.
(m) Margin Regulations. The pledge of the Pledged Collateral
pursuant to this Agreement does not violate Regulations T, U or X of the Board
of Governors of the Federal Reserve System.
(n) Other Information. All information heretofore, supplied to
Collateral Agent pursuant to the Revolver Credit Agreement or the Term Loan
Agreement by or on behalf of Pledgor with respect to the Pledged Collateral is
accurate and complete in all material respects.
SECTION 5. COVENANTS. Pledgor shall:
(a) not, except as expressly permitted by the Credit Documents
with respect to actions taken or omitted to be taken by Pledgor or Company or
its Subsidiaries, (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral, (ii) create or suffer to exist any Lien upon or with respect to any
of the Pledged Collateral, except for Permitted Encumbrances, or (iii) permit
any issuer of Pledged Equity to merge or consolidate;
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(b) (i) cause Company not to issue any Capital Stock in
addition to or in substitution for the Pledged Equity issued by Company, except
to Pledgor and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional Capital Stock of Company;
(c) at its expense (i) perform and comply in all material
respects with all terms and provisions of any agreement related to the Pledged
Collateral required to be performed or complied with by it, (ii) maintain all
such agreements in full force and effect, and (iii) enforce all such agreements
in accordance with their terms;
(d) give Collateral Agent at least 30 days' prior written
notice of any (i) change in Pledgor's name, identity or corporate structure and
(ii) reincorporation, reorganization or other action that results in a change of
the jurisdiction or organization of Pledgor;
(e) promptly deliver to Collateral Agent all written notices
received by it with respect to the Pledged Collateral; and
(f) if any Pledged Collateral is not a security pursuant to
Section 8-103 of the UCC, not take any action that, under such Section, converts
such Pledged Collateral into a security without causing the issuer thereof to
issue to it certificates or instruments evidencing such Pledged Collateral,
which it shall promptly deliver to Collateral Agent as provided in this Section
5.
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary, or that
Collateral Agent may reasonably request, in order to perfect and protect the
security interest granted or purported to be granted hereby or to enable
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral. Without limiting the generality of the
foregoing, Pledgor will: (i) execute (if necessary) and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as Collateral Agent may reasonably request, in
order to perfect and preserve the security interest granted or purported to be
granted hereby and (ii) at Collateral Agent's reasonable request, appear in and
defend any action or proceeding that may affect Pledgor's title to or Collateral
Agent's security interest in all or any material part of the Pledged Collateral.
Pledgor hereby authorizes Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Pledged Collateral.
(b) Pledgor further agrees that it will, upon obtaining any
additional Capital Stock in Company, promptly (and in any event within five
Business Days) deliver to Collateral Agent a Pledge Amendment, duly executed by
Pledgor, in substantially the form of Schedule IV annexed hereto (a "PLEDGE
AMENDMENT"), together with supplements to the Schedules annexed hereto, as
applicable, to cause such Schedules to be complete and accurate at such time, in
respect of the additional Pledged Equity to be pledged pursuant to this
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Agreement; provided that the failure of Pledgor to execute a Pledge Amendment
with respect to any additional Pledged Equity shall not impair the security
interest of Collateral Agent therein or otherwise adversely affect the rights
and remedies of Collateral Agent hereunder with respect thereto. Upon each such
acquisition, the representations and warranties contained in Section 4 hereof
shall be deemed to have been made by Pledgor as to the Pledged Collateral
described in such Pledge Amendment.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of this
Agreement or the Credit Documents; provided, however, that Pledgor
shall not exercise or refrain from exercising any such right if
Collateral Agent shall have notified Pledgor that, in Collateral
Agent's judgment, such action would have a material adverse effect on
the value of the Pledged Collateral or any part thereof; and
(ii) Pledgor shall be entitled to receive and retain, and to utilize
free and clear of the lien of this Agreement, any and all dividends,
other distributions and interest paid in respect of the Pledged
Collateral; provided, however, that any and all
(A) dividends, other distributions and interest paid
or payable other than in cash in respect of, and instruments
and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged
Collateral,
(B) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in connection with
a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or
paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for any
Pledged Collateral,
in each case shall be, and shall forthwith be delivered to Collateral
Agent to hold as, Pledged Collateral and shall, if received by Pledgor,
be received in trust for the benefit of Collateral Agent, be segregated
from the other property or funds of Pledgor and be forthwith delivered
to Collateral Agent as Pledged Collateral in the same form as so
received (with all necessary endorsements).
Notwithstanding the foregoing, the parties hereto acknowledge
that the Credit Agreements contain restrictions on the payment of dividends and
distributions on the Pledged Collateral, none of which restrictions are waived
or otherwise prejudiced hereby.
(b) Upon the occurrence and during the continuation of an
Event of Default:
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(i) upon written notice from Collateral Agent to Pledgor, all rights of
Pledgor to exercise the voting and other consensual rights that it
would otherwise be entitled to exercise pursuant to Section 7(a)(i)
shall cease, and all such rights shall thereupon become vested in
Collateral Agent who shall thereupon have the sole right to exercise
such voting and other consensual rights;
(ii) except as otherwise provided in the Credit Documents, upon written
notice from Collateral Agent to Pledgor all rights of Pledgor to
receive the dividends, other distributions and interest payments that
it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(ii) shall cease, and all such rights shall thereupon
become vested in Collateral Agent who shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends, other
distributions and interest payments; and
(iii) all dividends, principal, interest payments and other
distributions that are received by Pledgor contrary to the provisions
of paragraph (ii) of this Section 7(b) shall be received in trust for
the benefit of Collateral Agent, shall be segregated from other funds
of Pledgor and shall forthwith be paid over to Collateral Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsements).
(c) IRREVOCABLE PROXY. In order to permit Collateral Agent to
exercise the voting and other consensual rights that it may be entitled to
exercise pursuant to Section 7(b)(i) and to receive all dividends and other
distributions which it may be entitled to receive under Section 7(a)(ii) or
Section 7(b)(ii), (i) Pledgor shall promptly execute and deliver (or cause to be
executed and delivered) to Collateral Agent all such proxies, dividend payment
orders and other instruments as Collateral Agent may from time to time
reasonably request and (ii) without limiting the effect of the immediately
preceding clause (i), Pledgor hereby grants to Collateral Agent an IRREVOCABLE
PROXY to vote the Pledged Equity and to exercise all other rights, powers,
privileges and remedies to which a holder of the Pledged Equity would be
entitled (including, without limitation, giving or withholding written consents
of holders of the Pledge Equity, calling special meetings of holders of the
Pledged Equity and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Equity on the record books of the issuer thereof) by any other
Person (including the issuer of the Pledged Equity or any officer or agent
thereof), only upon the occurrence and during the continuance of an Event of
Default and which proxy shall only terminate upon the payment in full of all
Secured Obligations (other than contingent indemnification Secured Obligations
with respect to claims which have not yet arisen).
SECTION 8. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.
Pledgor hereby irrevocably appoints Collateral Agent as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor, Collateral Agent or otherwise, from time to time in
Collateral Agent's discretion to take any action and to execute any instrument
that Collateral Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including without limitation:
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(a) upon the occurrence and during the continuance of an Event
of Default, to ask, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Pledged Collateral;
(b) upon the occurrence and during the continuance of an Event
of Default, to receive, endorse and collect any instruments made payable to
Pledgor representing any dividend, principal or interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same;
(c) upon the occurrence and during the continuance of an Event
of Default, to file any claims or take any action or institute any proceedings
that Collateral Agent may deem necessary or desirable for the collection of any
of the Pledged Collateral or otherwise to enforce the rights of Collateral Agent
with respect to any of the Pledged Collateral;
(d) with notice to the Pledgor, to pay or discharge taxes or
Liens (other than Liens permitted under this Agreement or the Credit Documents)
levied or placed upon or threatened against the Pledged Collateral, the legality
or validity thereof and the amounts necessary to discharge the same to be
determined by Collateral Agent in its sole discretion, any such payments made by
Collateral Agent to become obligations of Pledgor to Collateral Agent, due and
payable immediately without demand; and
(e) upon the occurrence and during the continuance of an Event
of Default, generally to sell, transfer, pledge, make any agreement with respect
to or otherwise deal with any of the Pledged Collateral as fully and completely
as though Collateral Agent were the absolute owner thereof for all purposes, and
to do, at Collateral Agent's option and Pledgor's expense, at any time or from
time to time, all acts and things that Collateral Agent deems necessary to
protect, preserve or realize upon the Pledged Collateral and Collateral Agent's
security interest therein in order to effect the intent of this Agreement, all
as fully and effectively as Pledgor might do.
SECTION 9. COLLATERAL AGENT MAY PERFORM; NO ASSUMPTION.
(a) If Pledgor fails to perform any agreement contained
herein, Collateral Agent may itself perform, or cause performance of, such
agreement, and the expenses of Collateral Agent incurred in connection therewith
shall be payable by Pledgor under Section 13(b).
(b) Anything contained herein to the contrary notwithstanding,
(i) Pledgor shall remain liable under any agreements included in or related to
the Pledged Collateral, to the extent set forth therein, to perform all of its
duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (ii) the exercise by Collateral Agent of any of its rights
hereunder shall not release Pledgor from any of its duties or obligations under
any such agreements, and (iii) Collateral Agent shall not have any obligation or
liability under any such agreements by reason of this Agreement, nor shall
Collateral Agent be obligated to perform any of the obligations or duties of
Pledgor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
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SECTION 10. STANDARD OF CARE. The powers conferred on
Collateral Agent hereunder are solely to protect its interest in the Pledged
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the exercise of reasonable care in the custody of any Pledged
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Collateral Agent shall have no duty as to any Pledged Collateral,
it being understood that Collateral Agent shall have no responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Collateral, whether
or not Collateral Agent has or is deemed to have knowledge of such matters, (b)
taking any necessary steps (other than steps taken in accordance with the
standard of care set forth above to maintain possession of the Pledged
Collateral) to preserve rights against any prior parties or any other rights
pertaining to any Pledged Collateral, (c) taking any necessary steps to collect
or realize upon the Secured Obligations or any guarantee therefor, or any part
thereof, or any of the Pledged Collateral, or (d) initiating any action to
protect the Pledged Collateral against the possibility of a decline in market
value. Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which Collateral
Agent accords its own property consisting of negotiable securities.
SECTION 11. REMEDIES.
(a) Subject to the terms of the Intercreditor Agreement, if
any Event of Default shall have occurred and be continuing, Collateral Agent may
exercise in respect of the Pledged Collateral, in addition to all 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 UCC (whether or not the UCC
applies to the affected Pledged Collateral), and Collateral Agent may also in
its sole discretion, without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange or broker's board or at any of Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Collateral Agent may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of the Pledged Collateral. Collateral Agent or any Benefited Party
(subject to the terms of the Intercreditor Agreement) may be the purchaser of
any or all of the Pledged Collateral at any such sale, and Collateral Agent, as
agent for and representative of Lenders (but not any Benefited Party in its
individual capacity unless Requisite Obligees shall otherwise agree in writing),
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Pledged Collateral sold at
any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Pledged Collateral payable by
Collateral Agent at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Pledgor,
and Pledgor hereby waives (to the extent permitted by applicable law) all rights
of redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to 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. Collateral Agent shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given.
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Collateral 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.
Pledgor hereby waives (to the extent permitted by applicable law) any claims
against Collateral Agent arising by reason of the fact that the price at which
any Pledged Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if Collateral
Agent accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree.
(b) Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as from time to time amended (the
"SECURITIES ACT"), and applicable state securities laws, Collateral Agent may be
compelled, with respect to any sale of all or any part of the Pledged Collateral
conducted without prior registration or qualification of such Pledged Collateral
under the Securities Act and/or such state securities laws, to limit purchasers
to those who will agree, among other things, to acquire the Pledged Collateral
for their own account, for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges that any such private placement may be at
prices and on terms less favorable than those obtainable through a sale without
such restrictions (including, without limitation, an offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding such
circumstances and the registration rights granted to Collateral Agent by Pledgor
pursuant to Section 11(d), Pledgor agrees that any such private placement shall
not be deemed, in and of itself, to be commercially unreasonable and that
Collateral Agent shall have no obligation to delay the sale of any Pledged
Collateral for the period of time necessary to permit the issuer thereof to
register it for a form of sale requiring registration under the Securities Act
or under applicable state securities laws, even if such issuer would, or should,
agree to so register it.
(c) If Collateral Agent determines to exercise its right to
sell any or all of the Pledged Collateral, upon written request, Pledgor shall
and shall cause each issuer of any Pledged Equity to be sold hereunder from time
to time to furnish to Collateral Agent all such information as Collateral Agent
may request in order to determine the amount of Pledged Collateral that may be
sold by Collateral Agent in exempt transactions under the Securities Act and the
rules and regulations of the Securities and Exchange Commission thereunder, as
the same are from time to time in effect.
(d) If Collateral Agent shall determine to exercise its right
to sell all or any of the Pledged Collateral, Pledgor agrees that, upon request
of Collateral Agent (which request may be made by Collateral Agent in its sole
discretion), Pledgor will, at its own expense:
(i) execute and deliver, and use best efforts to cause each
issuer of the Pledged Collateral contemplated to be sold and the
directors and officers thereof to execute and deliver, all such
instruments and documents, and do or cause to be done all such other
acts and things, as may be necessary or, in the opinion of Collateral
Agent, advisable to register such Pledged Collateral under the
provisions of the Securities Act and to cause the registration
statement relating thereto to become effective and to remain effective
for such period as prospectuses are required by law
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VIII-11
to be furnished, and to make all amendments and supplements thereto and
to the related prospectus which, in the opinion of Collateral Agent,
are necessary or advisable, all in conformity with the requirements of
the Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto;
(ii) use its best efforts to qualify the Pledged Collateral
under all applicable state securities or "Blue Sky" laws and to obtain
all necessary governmental approvals for the sale of the Pledged
Collateral, as requested by Collateral Agent;
(iii) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement which will
satisfy the provisions of Section 11(a) of the Securities Act;
(iv) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Pledged Collateral or any
part thereof valid and binding and in compliance with applicable law;
and
(v) bear all costs and expenses, including reasonable
attorneys' fees, of carrying out its obligations under this Section
11(d).
Pledgor further agrees that a breach of any of the covenants
contained in Section 11 will cause irreparable injury to Collateral Agent, that
Collateral Agent has no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in Sections 11 shall be
specifically enforceable against Pledgor, and Pledgor hereby waives and agrees
(to the extent permitted by applicable law) not to assert any defenses against
an action for specific performance of such covenants except for a defense that
no default has occurred giving rise to the Secured Obligations becoming due and
payable prior to their stated maturities. Nothing in this Section 11(d) shall in
any way alter the rights of Collateral Agent hereunder.
SECTION 12. APPLICATION OF PROCEEDS. To the extent any sale
of, collection from, or other realization upon all or any part of the Pledged
Collateral is expressly permitted by the Credit Documents, Pledgor shall pay to
Collateral Agent any Net Asset Sale Proceeds received by Pledgor or any of its
Subsidiaries in respect of such sale, collection or other realization (to the
extent required by the Credit Documents). Except as expressly provided elsewhere
in this Agreement, all proceeds received by Collateral Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Pledged Collateral (whether pursuant to the preceding sentence or otherwise)
shall be applied in accordance with the Intercreditor Agreement.
SECTION 13. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Collateral Agent and each
Benefited Party from and against any and all claims, losses and liabilities in
any way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from Collateral Agent's or such Benefited Party's gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
CEA Stock Pledge Agreement
VIII-12
(b) Pledgor agrees to pay to Collateral Agent upon demand the
amount of any and all costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Collateral Agent may
incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of Collateral Agent hereunder, or (iv) the
failure by Pledgor to perform or observe any of the provisions hereof.
(c) Anything contained in this Agreement to the contrary
notwithstanding, the obligations of Pledgor set forth in this Section 13 are
included herein solely for the purpose of including such obligations within the
Secured Obligations, and such obligations shall in all respects be limited by
the provisions of Section 27; accordingly, nothing in this Section 13 shall be
construed in a manner which shall obligate Pledgor to make any payment, or
provide any security, to Collateral Agent with respect to such obligations apart
from the grant of the security interest in the Pledged Collateral as set forth
in Section 1 hereof.
(d) In the event of any registered offering described in
Section 11(d), Pledgor agrees to indemnify and hold harmless Collateral Agent
and each of Collateral Agent's directors, officers, employees and agents from
and against any loss, fee, cost, expense, damage, liability or claim, joint or
several, to which Collateral Agent or such other persons may become subject or
for which any of them may be liable, under the Securities Act or otherwise,
insofar as such losses, fees, costs, expenses, damages, liabilities or claims
(or any litigation commenced or threatened in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus, registration statement, prospectus
or other such document published or filed in connection with such registered
offering, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will promptly reimburse Collateral Agent and such other persons for any
legal or other expenses reasonably incurred by Collateral Agent and such other
persons in connection with any litigation, of any nature whatsoever, commenced
or threatened in respect thereof (including without limitation any and all fees,
costs and expenses whatsoever reasonably incurred by Collateral Agent and such
other persons and counsel for Collateral Agent and such other persons in
investigating, preparing for, defending against or providing evidence, producing
documents or taking any other action in respect of, any such commenced or
threatened litigation or any claims asserted). This indemnity shall be in
addition to any liability which Pledgor may otherwise have and shall extend upon
the same terms and conditions to each person, if any, that controls Collateral
Agent or such persons within the meaning of the Securities Act.
(e) The obligations of Pledgor in this Section 13 shall (i)
survive the termination of this Agreement and the discharge of Pledgor's other
obligations under this Agreement, the Revolver Credit Agreement and the Term
Loan Agreement (subject to the terms of the Intercreditor Agreement).
SECTION 14. CONTINUING SECURITY INTERESTS; TRANSFER OF LOANS.
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VIII-13
(a) This Agreement shall create a continuing security interest
in the Pledged Collateral and shall (i) remain in full force and effect until
the payment in full of all Secured Obligations (other than contingent
indemnification Secured Obligations with respect to claims which have not yet
arisen), and the cancellation or termination of all commitments to extend credit
under the Credit Documents (collectively, the "COMMITMENTS"), (ii) be binding
upon Pledgor, its successors and assigns, and (iii) inure, together with the
rights and remedies of Collateral Agent hereunder, to the benefit of Collateral
Agent and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (iii), but subject to the relevant assignment
provisions set forth in each of the Credit Documents and the Intercreditor
Agreement, (A) the Revolver Agent or any Revolver Lender may assign or otherwise
transfer its rights under the Revolver Credit Agreement to any other Person, and
in each case such other Person shall thereupon become vested with all the
benefits in respect thereof granted to the Revolver Agent or such Revolver
Lender, as applicable, herein or otherwise (subject to the terms of the
Intercreditor Agreement) and (B) any Term Loan Agent and any Term Loan Lender
may assign or otherwise transfer its rights under the Term Loan Agreement to any
other Person, and in each case such other Person shall thereupon become vested
with all the benefits in respect thereof granted to such Term Loan Agent or such
Term Loan Lender, as applicable, herein or otherwise (subject to the terms of
the Intercreditor Agreement).
(b) Upon the payment in full of all Secured Obligations (other
than contingent indemnification Secured Obligations with respect to claims which
have not yet arisen), and the cancellation or termination of the Commitments,
the security interest granted hereby shall terminate and all rights to the
Pledged Collateral shall revert to Pledgor. Upon any such termination Collateral
Agent will, at Pledgor's expense, execute and deliver to Pledgor such documents
as Pledgor shall reasonably request to evidence such termination. In addition,
upon the proposed sale, transfer or other disposition of any Pledged Collateral
by Pledgor in accordance with the relevant provisions of each Credit Document
for which Pledgor desires to obtain a security interest release from Collateral
Agent, Pledgor shall deliver an Officer's Certificate (x) stating that the
Pledged Collateral subject to such disposition is being sold, transferred or
otherwise disposed of in compliance with the terms of the Credit Documents and
(y) specifying the Pledged Collateral being sold, transferred or otherwise
disposed of in the proposed transaction. Upon the receipt of such Officer's
Certificate and so long as (i) no Event of Default has occurred and is
continuing or would result from the proposed disposition of the Pledged
Collateral, (ii) such disposition is expressly permitted by the Credit
Documents, and (iii) the proceeds from such disposition are applied in
accordance with the Credit Documents and, with respect to proceeds received by
Pledgor, in accordance with this Agreement, Collateral Agent shall, at Pledgor's
expense, so long as Collateral Agent believes in good faith that the Officer's
Certificate delivered by Pledgor with respect to such sale is true, correct and
complete, execute and deliver such releases of its security interest in such
Pledged Collateral which is to be so sold, transferred or disposed of, as may be
reasonably requested by Pledgor.
SECTION 15. COLLATERAL AGENT AS AGENT.
(a) Pursuant to the Intercreditor Agreement, Collateral Agent
has been appointed to act as Collateral Agent hereunder by the Benefited
Parties. Collateral Agent
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VIII-14
shall be obligated, and shall have the right hereunder, to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action (including without limitation the release or
substitution of Pledged Collateral), solely in accordance with this Agreement,
the Intercreditor Agreement and the other Credit Documents; provided that
Collateral Agent shall exercise, or refrain from exercising, any remedies
provided for in Section 11 in accordance with the instructions of Requisite
Obligees.
(b) Collateral Agent shall at all times be the same Person
that is Collateral Agent under the Intercreditor Agreement. Written notice of
resignation by Collateral Agent pursuant to subsections 6.1(h) or (i) of the
Intercreditor Agreement shall also constitute notice of resignation as
Collateral Agent under this Agreement; removal of Collateral Agent pursuant to
subsections 6.1(h) or (i) of the Intercreditor Agreement shall also constitute
removal as Collateral Agent under this Agreement; and appointment of a successor
Collateral Agent pursuant to subsections 6.1(h) or (i) of the Intercreditor
Agreement shall also constitute appointment of a successor Collateral Agent
under this Agreement. Upon the acceptance of any appointment as Collateral Agent
under subsections 6.1(h) or (i) of the Intercreditor Agreement by a successor
Collateral Agent, that successor Collateral Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
or removed Collateral Agent under this Agreement, and the retiring or removed
Collateral Agent under this Agreement shall promptly (i) transfer to such
successor Collateral Agent all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Collateral Agent under this Agreement, and (ii) execute and deliver to such
successor Collateral Agent such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Collateral Agent of the security interest created
hereunder, whereupon such retiring or removed Collateral Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Collateral Agent's resignation or removal hereunder as
Collateral Agent, the provisions of this Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Agreement while it
was Collateral Agent hereunder.
SECTION 16. [INTENTIONALLY OMITTED]
SECTION 17. AMENDMENTS; ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by Pledgor therefrom, shall in any event be effective unless the same
shall be in writing and signed by Collateral Agent and, in the case of any such
amendment or modification, by Pledgor. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 18. NOTICES. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, or sent by telefacsimile
or United States mail or courier service or electronic mail and shall be deemed
to have been given (a) when delivered in person or by courier service, (b) upon
receipt of telefacsimile in complete and legible form, or (c) three
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VIII-15
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Collateral Agent shall not be
effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or such other address as shall be designated by such Person in a written
notice delivered to such other party hereto.
Notices and other communications hereunder may be delivered or
furnished by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by Collateral Agent. Collateral Agent
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.
SECTION 19. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Collateral Agent in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 20. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 21. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 22. GOVERNING LAW; TERMS. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW, EXCEPT TO THE EXTENT THAT THE UCC
PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein or in the Credit Documents, terms used in Articles 8 and 9 of the
UCC are used herein as therein defined. The rules of construction set forth in
subsection 1.3 of each Credit Agreement shall be applicable to this Agreement
mutatis mutandis.
CEA Stock Pledge Agreement
VIII-16
SECTION 23. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX
XXXX. BY EXECUTING AND DELIVERING THIS AGREEMENT, PLEDGOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO PLEDGOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 18; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER PLEDGOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; (V) AGREES THAT COLLATERAL AGENT RETAINS THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES THAT
THE PROVISIONS OF THIS SECTION 23 RELATING TO JURISDICTION AND VENUE SHALL BE
BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 24. WAIVER OF JURY TRIAL. PLEDGOR AND COLLATERAL AGENT
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Pledgor and Collateral
Agent acknowledge that this waiver is a material inducement for Pledgor and
Collateral Agent to enter into a business relationship, that Pledgor and
Collateral Agent have already relied on this waiver in entering into this
Agreement and that each will continue to rely on this waiver in their related
future dealings. Pledgor and Collateral Agent further warrant and represent that
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 24 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
CEA Stock Pledge Agreement
VIII-17
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
SECTION 25. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile transmission
shall be effective as delivery of a manually executed counterpart thereof.
SECTION 26. SURETYSHIP WAIVERS BY PLEDGOR, ETC.
(a) Pledgor agrees that its obligations hereunder are
irrevocable, absolute, independent and unconditional and shall not be affected
by any circumstance which constitutes a legal or equitable discharge of a
guarantor or surety other than payment in full of all Secured Obligations (other
than contingent indemnification Secured Obligations with respect to claims which
have not yet arisen). In furtherance of the foregoing and without limiting the
generality thereof, Pledgor agrees as follows: (i) Collateral Agent or any
Benefited Party may from time to time, without notice or demand and without
affecting the validity or enforceability of this Agreement or giving rise to any
limitation, impairment or discharge of Pledgor's liability hereunder, (A) renew,
extend, accelerate or otherwise change the time, place, manner or terms of
payment of the Secured Obligations, (B) settle, compromise, release or
discharge, or accept or refuse any offer of performance with respect to, or
substitutions for, the Secured Obligations or any agreement relating thereto
and/or subordinate the payment of the same to the payment of any other
obligations, (C) request and accept guaranties of the Secured Obligations and
take and hold other security for the payment of the Secured Obligations, (D)
release, exchange, compromise, subordinate or modify, with or without
consideration, any other security for payment of the Secured Obligations, any
guaranties of the Secured Obligations, or any other obligation of any Person
with respect to the Secured Obligations, (E) enforce and apply any other
security now or hereafter held by or for the benefit of Collateral Agent or any
Benefited Party in respect of the Secured Obligations and direct the order or
manner of sale thereof, or exercise any other right or remedy that Collateral
Agent or any Benefited Party, or any of them, may have against any such
security, as Collateral Agent in its discretion may determine consistent with
the Credit Documents and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable,
and (F) exercise any other rights available to Collateral Agent or any Benefited
Party under the Credit Documents at law or in equity; and (ii) this Agreement
and the obligations of Pledgor hereunder shall be valid and enforceable and
shall not be subject to any limitation, impairment or discharge for any reason
(other than payment in full of the Secured Obligations (other than contingent
indemnification Secured Obligations with respect to claims which have not yet
arisen)), including without limitation the occurrence of any of the following,
whether or not Pledgor shall have had notice or knowledge of any of them: (A)
any failure to assert or enforce or agreement not to assert or enforce, or the
stay or enjoining, by order of court, by operation of law or otherwise, of the
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VIII-18
exercise or enforcement of, any claim or demand or any right, power or remedy
with respect to the Secured Obligations or any agreement relating thereto, or
with respect to any guaranty of or other security for the payment of the Secured
Obligations, (B) any waiver, amendment or modification of, or any consent to
departure from, any of the terms or provisions of the Credit Documents, or any
agreement or instrument executed pursuant thereto, or of any guaranty or other
security for the Secured Obligations, (C) the Secured Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect, (D) the application of payments received from any
source to the payment of indebtedness other than the Secured Obligations, even
though Collateral Agent or Benefited Parties, or any of them, might have elected
to apply such payment to any part or all of the Secured Obligations, (E) any
failure to perfect or continue perfection of a security interest in any other
collateral which secures any of the Secured Obligations, (F) any defenses,
set-offs or counterclaims which any Borrower may allege or assert against
Collateral Agent or any Benefited Party in respect of the Secured Obligations,
including but not limited to failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury, and (G) any other act or thing or omission, or delay to do any other act
or thing, which may or might in any manner or to any extent vary the risk of
Pledgor as an obligor in respect of the Secured Obligations.
(b) Pledgor hereby waives, for the benefit of Benefited
Parties and Collateral Agent: (i) any right to require Collateral Agent or
Benefited Parties as a condition of payment or performance by Pledgor, to (A)
proceed against any Borrower, any guarantor of the Secured Obligations or any
other Person, (B) proceed against or exhaust any other security held from any
Borrower, any guarantor of the Secured Obligations or any other Person, (C)
proceed against or have resort to any balance of any deposit account or credit
on the books of Collateral Agent, any Benefited Party in favor of any Borrower
or any other Person, or (D) pursue any other remedy in the power of Collateral
Agent or any Benefited Party whatsoever; (ii) any defense arising by reason of
the incapacity, lack of authority or any disability or other defense of any
Borrower including, without limitation, any defense based on or arising out of
the lack of validity or the unenforceability of the Secured Obligations or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of any Borrower from any cause other than payment in full of all
Secured Obligations; (iii) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal; (iv) any
defense based upon Collateral Agent's or any Benefited Party's errors or
omissions in the administration of the Secured Obligations, except behavior
which amounts to gross negligence or willful misconduct; (v) (A) any principles
or provisions of law, statutory or otherwise, which are or might be in conflict
with the terms of this Agreement and any legal or equitable discharge of
Pledgor's obligations hereunder, (B) the benefit of any statute of limitations
affecting Pledgor's liability hereunder or the enforcement hereof, (C) any
rights to set-offs, recoupments and counterclaims, and (D) promptness, diligence
and any requirement that Collateral Agent or any Benefited Party protect,
secure, perfect or insure any other security interest or lien or any property
subject thereto; (vi) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction, notices of
default under the Credit Documents or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Secured
Obligations or any agreement related thereto, notices of any extension of credit
to any Borrower and
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notices of any of the matters referred to in Section 26(a) and any right to
consent to any thereof; and (vii) to the fullest extent permitted by law, any
defenses or benefits that may be derived from or afforded by law which limit the
liability of or exonerate guarantors or sureties, or which may conflict with the
terms of this Agreement.
(c) Until the Secured Obligations shall have been paid in full
and the Commitments shall have terminated, Pledgor shall withhold exercise of
(i) any claim, right or remedy, direct or indirect, that Pledgor now has or may
hereafter have against any Borrower or any assets of any Borrower in connection
with this Agreement or the performance by Pledgor of its obligations hereunder,
in each case whether such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise and including without
limitation (A) any right of subrogation, reimbursement or indemnification that
Pledgor now has or may hereafter have against any Borrower, (B) any right to
enforce, or to participate in, any claim, right or remedy that Collateral Agent
or any Benefited Party now has or may hereafter have against any Borrower, and
(C) any benefit of, and any right to participate in, any other collateral or
security now or hereafter held by Collateral Agent or any Benefited Party, and
(ii) any right of contribution Pledgor now has or may hereafter have against any
guarantor of any of the Secured Obligations. Pledgor further agrees that, to the
extent the agreement to withhold exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification Pledgor may have against
any Borrower or against any other collateral or security, and any rights of
contribution Pledgor may have against any such guarantor, shall be junior and
subordinate to any rights Collateral Agent or Benefited Parties may have against
such Borrower, to all right, title and interest Collateral Agent or Benefited
Parties may have in any such other collateral or security, and to any right
Collateral Agent or Benefited Parties may have against any such guarantor.
(d) Benefited Parties and Collateral Agent shall have no
obligation to disclose or discuss with Pledgor their respective assessments, or
Pledgor's assessment, of the financial condition of Borrowers. Pledgor has
adequate means to obtain information from Borrowers on a continuing basis
concerning the financial condition of Borrowers and their ability to perform
their obligations under the Credit Documents and Pledgor assumes the
responsibility for being and keeping informed of the financial condition of
Borrowers and of all circumstances bearing upon the risk of nonpayment of the
Secured Obligations. Pledgor hereby waives and relinquishes any duty on the part
of Collateral Agent or any Benefited Party to disclose any matter, fact or thing
relating to the business, operations or condition of Borrowers now known or
hereafter known by Collateral Agent or any Benefited Party.
SECTION 27. LIMITED RECOURSE. Notwithstanding anything to the
contrary in this Agreement, no recourse shall be had, whether by levy or
execution, or under any law, or by the enforcement of any assessment or penalty
or otherwise, for the payment of any of the Secured Obligations, against Pledgor
individually or personally, any successor or Affiliate of Pledgor, or any of the
assets of the aforesaid persons, it being expressly understood that the sole
remedies available to Collateral Agent and the Secured Parties pursuant to this
Agreement with respect to the Secured Obligations shall be against the Pledged
Collateral; provided that nothing in this Section 27 shall (i) constitute a
waiver, release or discharge of
CEA Stock Pledge Agreement
VIII-20
any of the Secured Obligations, but the same shall continue until fully paid,
discharged, observed or performed, or (ii) in any way limit or restrict any
right of Collateral Agent or the Secured Parties to foreclose the Liens and the
security interest granted pursuant to this Agreement or otherwise realize upon
any of the Pledged Collateral.
[Remainder of page intentionally left blank.]
CEA Stock Pledge Agreement
VIII-21
IN WITNESS WHEREOF, Pledgor and Collateral Agent have caused
this Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
COVANTA ENERGY AMERICAS, INC.,
as Pledgor
By: __________________________
Name: _______________________
Title: ________________________
Notice Address for Pledgor:
CEA Stock Pledge Agreement
S-1
BANK OF AMERICA, N.A.,
as Collateral Agent
By: __________________________
Name: _______________________
Title: ________________________
Notice Address for Collateral Agent:
Bank of America, N.A., as Collateral Agent
555 So. Flower Street, 17th Floor
CA9-706-17-54
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx, Vice President
Voice: (000) 000-0000
Fax: (000) 000-0000
email: xxxxx.xxxxx@xxxxxxxxxxxxx.xxx
SCHEDULE I
Attached to and forming a part of the Pledge Agreement dated
as of March __, 2004 between Covanta Energy Americas, Inc., as Pledgor, and Bank
of America, N.A., as Collateral Agent.
Part A
AMOUNT OF
CLASS EQUITY PERCENTAGE
ISSUER OF EQUITY INTEREST CERTIFICATE NOS. INTERESTS PLEDGED
CEA Stock Pledge Agreement
SCHEDULE-I-1
SCHEDULE II
PLEDGE AGREEMENT
FILING OFFICE
Pledgor Filing Office
CEA Stock Pledge Agreement
SCHEDULE II-1
SCHEDULE III
OFFICE, TYPE AND JURISDICTION OF ORGANIZATION
NAME OF TYPE OF JURISDICTION OF
PLEDGOR ORGANIZATION ORGANIZATION ORGANIZATION NUMBER
NAMES OF PLEDGOR USED IN PAST FIVE YEARS
CEA Stock Pledge Agreement
SCHEDULE III-1
SCHEDULE IV
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, ____, is delivered
pursuant to Section 6(b) of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge Agreement dated March __, 2004, between Covanta Energy Americas, Inc., as
Pledgor, and Bank of America, N.A., as Collateral Agent (the "PLEDGE AGREEMENT,"
capitalized terms defined therein being used herein as therein defined), and
that the Capital Stock listed on this Pledge Amendment shall be deemed to be
part of the Pledged Equity and shall become part of the Pledged Collateral and
shall secure all Secured Obligations.
COVANTA ENERGY AMERICAS, INC.,
as Pledgor
By: ___________________________
Title:
Class of Amount of Percentage
Equity Certificate Equity Ownership Percentage
Issuer Interests Nos. Interests Interest Pledged
