Exhibit 99.03
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement"), dated as of October 1,
1995, by and between UNITED STATES FILTER CORPORATION, a Delaware
corporation (hereinafter called the "COMPANY"), and ANJOU INTERNATIONAL
COMPANY, a Delaware corporation (hereinafter called the "SECURED PARTY");
WITNESSETH THAT:
WHEREAS, the Company and the Secured Party are parties to that
certain Share Disposition Agreement dated as of the date hereof (the "Share
Disposition Agreement"); and
WHEREAS, the Company desires to secure its obligations to the
Secured Party under the Share Disposition Agreement by granting to the
Secured Party a first priority, perfected security interest in certificates
of deposit in the aggregate amount of $5 million issued by The First
National Bank of Boston, pursuant to the terms and subject to the
conditions of this Agreement; and
WHEREAS, the execution and delivery of this Agreement by the
Company is a condition precedent to the agreement by the Secured Party to
enter into the Share Disposition Agreement;
NOW, THEREFORE, in consideration of good and valuable
consideration, the receipt of which is hereby acknowledged by the Company,
and in order to induce the Secured Party to enter into the Share
Disposition Agreement, the parties hereto covenant and agree as follows:
1. CERTAIN DEFINITIONS. All capitalized words and terms not otherwise
defined herein that are defined in the Share Disposition Agreement are
herein used as therein defined. In addition to other words and terms
defined elsewhere in this Agreement, words and terms that are defined in
the UCC are used herein as defined in the UCC except where the context
otherwise requires, and the following words and terms shall have the
following meanings, respectively:
"AGREEMENT" means this Pledge Agreement, as it may from time to time
be amended, modified or supplemented.
"CERTIFICATES OF DEPOSIT" means the five certificates of deposit in
substantially the form attached hereto as Exhibit A issued by the First
National Bank of Boston in the aggregate amount of 5 million dollars and
any renewals, substitutions and replacements thereof.
"COLLATERAL" means (a) the Certificates of Deposit and any
Certificates of Deposit issued in renewal, substitution or replacement
thereof in substantially the form thereof (collectively, the "CD"), (b) all
rights and privileges pertaining to the CD, and (c) all proceeds from the
sale, transfer, exchange, redemption or other disposition of, or received,
receivable or otherwise distributed in respect of the CD; PROVIDED,
HOWEVER, that all interest payable on the CD shall not be "Collateral".
"COMPANY OBLIGATIONS" means the obligations of the Company to pay to
the Secured Party any deficiency referred to in Section 1.02 of the Share
Disposition Agreement in accordance with the terms and subject to the
conditions set forth in the Share Disposition Agreement.
"GOVERNMENTAL AUTHORITY" means any government, any governmental
entity, department, commission, board, agency or instrumentality, and any
court, tribunal, or judicial or arbitral body, whether federal, state,
local or foreign.
"EVENT OF DEFAULT" shall mean the failure by the Company to pay the
Company Obligations when due.
"LAW" means any applicable U.S. federal, state, municipal, local or
foreign statute, law, ordinance, rule, regulation or order of any
Governmental Authority or principle of common law.
"UCC" mean the Uniform Commercial Code (or any successor statue
thereto) as in effect in the State of New York.
2. GRANT OF SECURITY INTEREST. The Company hereby agrees that the
Secured Party shall have, and hereby grants to and creates in favor of the
Secured Party, a continuing first priority security interest in and to any
and all of the Collateral as security for the full and timely payment by
the Company of the Company Obligations and performance by the Company of
the Company Obligations.
3. RELEASE OF COLLATERAL. So long as no Event of Default has occurred
and is continuing, as and when the Secured Party sells USF Shares (any such
date, a "Sale Date"), if after giving effect to such sale the Release
Amount (as defined below) shall exceed the aggregate face amount of one or
more Certificates of Deposit then held by the Secured Party pursuant hereto
(as reasonably determined by the Secured Party), the Secured Party shall
promptly return to the Company such Certificate or Certificates of Deposit,
and such returned Certificate or Certificates shall be released from the
security interest hereunder; provided, that (i) the aggregate face amount
of such returned Certificates of Deposit shall not exceed the Release
Amount and (ii) after giving effect to such return the aggregate face
amount of Certificates of Deposit then held by the Secured Party shall not
be less than an amount equal to $5,000,000 minus the aggregate Release
Amounts through and including such Sale Date. For purposes of this
Section, "Release Amount" shall mean with respect to any Sale Date an
amount equal to (x) $5,000,000 times (y) a fraction, the numerator of which
shall equal the number of USF Shares that shall have been sold by the
Secured Party on the Sale Date and the denominator of which shall equal the
aggregate amount of all USF Shares owned by the Secured Party on the date
of this Agreement.
4. CERTIFICATE. Prior to or upon the execution and delivery of this
Agreement, the Company has delivered to the Secured Party in the State of
New York certificates representing the Certificates of Deposit for the
purpose of perfecting the Secured Party's security interest therein. So
long as no Event of Default shall have occurred, the Company shall have the
right to exercise all rights with respect to the Collateral. All interest
on the CD shall accrue for the benefit of and shall be paid directly to the
Company. If at any time or from time to time any certificate of deposit
included in the Collateral matures prior to the Termination Date, and
provided the Company Obligations shall not have been satisfied, then the
Company shall purchase additional certificates of deposit of equivalent
face amounts issued by The First National Bank of Boston and shall deliver
to the Secured Party on or before the date of such maturity certificates
representing such certificates of deposit, and such additional certificates
of deposit shall be included in and shall be part of the Collateral for all
purposes of this Agreement.
5. TITLE TO COLLATERAL. The Company represents and warrants to the
Secured Party that it has and will have at all times good and marketable
title to the Collateral, free and clear of all liens other than the lien
created hereby and will defend such title against the claims and demands of
all persons whomsoever. The Company covenants and agrees that it will take
any and all steps necessary or desirable to preserve its rights with
respect to the Collateral against any other party. The Company covenants
and agrees that it will not take any action that would result in an
alteration or impairment of the Collateral, the perfection or priority of
the security interest granted hereunder or of this Agreement.
6. TAXES AND CHARGES. The Company covenants to pay and discharge all
taxes, levies and other impositions levied on the Collateral (except to the
extent that such taxes, levies and other impositions shall not then be due
or shall be contested in good faith by appropriate proceedings diligently
conducted).
7. PRESERVATION AND PROTECTION OF SECURITY INTEREST. (a) The Company
will faithfully preserve and protect the Secured Party's security interest
in the Collateral and will from time to time at the reasonable request of
the Secured Party file or record, or cause to be filed or recorded, such
instruments, documents and notices, including, without limitation,
financing statements and continuation statements, that the Secured Party
believes are necessary to protect and preserve its first priority perfected
security interest in the Collateral.
(b) The Company hereby authorizes the Secured Party to file one or
more financing or continuation statements, and amendments thereto, relating
to all or any part of the Collateral without the signature of the Company
where permitted by law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by
law.
8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. The Company hereby
irrevocably appoints the Secured Party the Company's attorney-in-fact, with
full authority in the place and stead of the Company and in the name of the
Company or otherwise, from time to time in the Secured Party's discretion,
to take any action and to execute any instrument that the Secured Party may
deem necessary or advisable to protect the Collateral and the Secured
Party's first priority security interest therein, including, without
limitation:
(a) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Secured Party with respect to any of the Collateral.
9. SECURED PARTY MAY PERFORM. If the Company fails to perform any
agreement contained herein, the Secured Party may itself perform, or cause
performance of, such agreement.
10. THE SECURED PARTY'S DUTIES. The powers conferred on the Secured Party
hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the
safe custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Secured Party shall have no
duty as to any Collateral, as to ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not the Secured Party has or is
deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral.
11. REMEDIES. If any Event of Default shall have occurred and be
continuing:
(a) The Secured Party may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party upon
default under the Uniform Commercial Code in effect in the State of New
York at such time (the "N.Y. UNIFORM COMMERCIAL CODE") (whether or not the
N.Y. Uniform Commercial Code applies to the affected Collateral) and
without notice except as specified below sell the Collateral or any part
thereof in one or more parcels at public or private sale, at the Secured
Party's offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Secured Party may deem commercially
reasonable. The Company agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to the Company of the time and
place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Secured Party shall not
be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Secured Party may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(b) All cash proceeds received by the Secured Party in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the reasonable discretion of the Secured Party, be held
by the Secured Party as collateral for, and/or then or at any reasonable
time thereafter applied in accordance with the N.Y. Uniform Commercial
Code.
(c) The Secured Party may exercise any and all rights and remedies of
the Company in respect of the Collateral.
(d) All payments received by the Company in respect of the Collateral
shall be received in trust for the benefit of the Secured Party, shall be
segregated from other funds of the Company and shall be forthwith paid over
to the Secured Party in the same form as so received (with any necessary
indorsement).
12. MODIFICATIONS, AMENDMENTS OR WAIVERS. The Secured Party and the
Company may from time to time enter into written agreements amending,
supplementing or modifying any provision of this Agreement, and the Secured
Party may grant written waivers or consents to a departure from the due
performance of the obligations of the Company hereunder.
13. NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED. No delay
or failure of the Secured Party in exercising any right, power or remedy
hereunder shall affect or operate as a waiver thereof; nor shall any single
or partial exercise thereof or any abandonment or discontinuance of steps
to enforce such a right, power or remedy preclude any further exercise
thereof or of any other right, power or remedy. The rights and remedies of
the Secured Party hereunder are cumulative and not exclusive of any rights
or remedies which it might otherwise have. Any waiver, permit, consent or
approval of any kind or character on the part of the Secured Party of any
breach or default under this Agreement or any such waiver of any provision
or condition of this Agreement must be in writing and shall be effective
only to the extent in such writing specifically set forth.
14. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by cable, by telecopy, by telegram,
by telex or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or
at such other address for a party as shall be specified in a notice given
in accordance with this Section):
(a) if to the Secured Party:
Xxxxxxxxx X. Xxxxxx
Vice-President
Chief Financial Officer
Anjou International Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
(b) if to the Company:
United States Filter Corporation
00-000 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
and separately to the General Counsel
Telecopier: (000) 000-0000
15. SURVIVAL. All representations, warranties, covenants and agreements
of the Company contained herein or made in connection herewith shall
survive the execution and delivery of this Agreement and shall continue in
full force and effect so long as the Company Obligations are outstanding.
16. GOVERNING LAW; VENUE. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HERETO AND THERETO, SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK EXCLUDING (TO
THE GREATEST EXTENT PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE
THE APPLICATION OF LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK. THE COMPANY AGREES THAT ANY LEGAL SUIT, ACTION, OR PROCEEDING
ARISING OUT OF THIS AGREEMENT MAY BE INSTITUTED IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH JURISDICTION.
17. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Secured Party, the Company and their respective
successors and permitted assigns, except that the Company may not assign or
transfer its rights hereunder or any interest herein or delegate its duties
hereunder, and the Secured Party may assign its rights hereunder or any
interest herein or delegate its duties hereunder to any permitted assignee
of the Share Disposition Agreement and to no other person.
18. SEVERABILITY. If any term, provision, or restriction of this
Agreement is held to be invalid, void or unenforceable in any way in any
jurisdiction, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect in
such jurisdiction and shall in no way be affected, impaired or invalidated,
and such invalidity, voidness or unenforceability shall not affect the
validity and enforceability of such provision, covenant, or restriction in
any other jurisdiction.
19. PRIOR UNDERSTANDINGS. This Agreement supersedes all prior
understandings and agreements, whether written or oral, among the parties
hereto relating to the transactions provided for herein and therein.
20. CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing security interest in the Collateral and shall remain in full
force and effect until the earlier of payment in full in cash (or, if the
parties mutually agree, consideration other than cash) of the Company
Obligations and the termination of the Company Obligations pursuant to the
Share Disposition Agreement, be binding upon the Company, its successors
and assigns and inure, together with the rights and remedies of the
Secured Party hereunder, to the benefit of the Secured Party. Upon earlier
of the payment in full in cash (or, if the parties mutually agree,
consideration other than cash) of the Company Obligations and the
termination of the Company Obligations pursuant to the Share Disposition
Agreement, the pledge, assignment and security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the
Company. Upon any such termination, the Secured Party will return the
Collateral to the Company then in the Secured Party's possession, and the
Secured Party will execute and deliver to the Company such documents as the
Company shall reasonably request to evidence such termination.
21. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each
of which, when so executed and delivered, shall be an original, but all
such counterparts shall together constitute one and the same instrument.
22. CONSTRUCTION. Unless the context of this Agreement otherwise clearly
requires, references to the plural include the singular, the singular the
plural and the part the whole and "or" has the inclusive meaning. The
words "hereof", "herein", "hereunder" and similar terms in this Agreement
refer to this Agreement as a whole and not to any particular provision of
this Agreement. The section and other headings contained in this Agreement
are for reference purposes only and shall not control or affect the
construction of this Agreement or the interpretation thereof in any
respect. Section and subsection references are references to this
Agreement unless otherwise specified.
WITNESS the due execution of this Pledge Agreement as of the day
and year first above written.
UNITED STATES FILTER
CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
ANJOU INTERNATIONAL COMPANY
By: /s/ Xxxxxxx Xxxx
-----------------------
Name: Xxxxxxx Xxxx
Title: Chairman and Chief
Executive Officer
