EXHIBIT 10-5
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, dated as of May 31, 2006, made by the
undersigned ("Pledgor"), in favor of CAPITALSOURCE FINANCE LLC, a Delaware
limited liability company, not individually but in its capacity as "Agent" under
the Credit Agreement defined below (in such capacity the "Agent") pursuant to
the Credit Agreement (as defined below).
WITNESSETH:
WHEREAS, Pledgor is a "Borrower" under a certain Credit and Security
Agreement, dated as of May 31, 2006 (as at any time amended, modified or
supplemented, the "Credit Agreement"), by and among the "Lenders" identified as
such therein, CapitalSource Finance LLC, a Delaware limited liability company,
as the sole initial "Lender" or one of the "Lenders" and as "Agent" for all such
"Lenders," and Pledgor and Lexington Rubber Group, Inc. ("Issuer"; Pledgor and
Issuer, collectively, "Borrowers"), pursuant to which, subject to the terms and
conditions set forth therein, Lenders have agreed to make available to the
Borrowers certain credit facilities; and
WHEREAS, Pledgor is the record and beneficial owner of all of the
authorized, issued and outstanding shares of Equity Interests in Issuer, all as
more particularly described in Schedule I attached hereto (the "Pledged
Shares"); and
WHEREAS, as a condition precedent (among others) to the extension of
credit facilities to Borrowers under the Credit Agreement, Lenders are requiring
that Pledgor shall have executed and delivered in favor of Agent this Agreement
pledging to Agent, for the benefit of Lenders, all such Pledged Shares as
security for the payment of the "Secured Obligations" (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and to induce Agent
and Lenders to provide financial accommodations to Borrowers under the Credit
Agreement, Pledgor hereby agrees in favor of Agent as follows:
1. Definitions. In addition to the terms defined hereinabove, unless
otherwise defined herein, terms defined in the Credit Agreement are used herein
as therein defined. The following terms shall have (unless otherwise provided
elsewhere in this Agreement) the following respective meanings (such meanings
being equally applicable to both the singular and plural form of the terms
defined):
"Agreement" shall mean this Pledge Agreement, and all amendments,
modifications and supplements hereto.
"Bankruptcy Code" shall mean Xxxxx 00, Xxxxxx Xxxxxx Code, as amended
from time to time, and any successor statute thereto.
"Pledged Collateral" shall have the meaning assigned to such term in
Section 2 hereof.
"Secured Obligations" shall have the meaning assigned to such term in
Section 3 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"UCC" shall mean the Uniform Commercial Code of the State of New York.
2. Pledge. Pledgor hereby pledges, assigns, hypothecates, transfers
and grants to Agent, for the benefit of all Lender Parties, a security interest
in, all of the following (all of the following, herein, collectively, the
"Pledged Collateral"):
(a) the Pledged Shares, and the certificates representing the Pledged
Shares, and all dividends, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;
(b) all additional shares of capital stock of Issuer from time to time
acquired by Pledgor in any manner, including, without limitation, stock
dividends or distributions in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets, combination of
shares, stock split, spin-off or split-off (all of which shares shall constitute
additional Pledged Shares), and the certificates representing such additional
Pledged Shares and all dividends, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such additional Pledged Shares; and
(c) all options and rights, whether as an addition to, in substitution
of or in exchange for any such Pledged Shares, and all such dividends, cash,
instruments and other property or proceeds.
3. Security for Obligations. This Agreement secures, and the Pledged
Collateral is security for, the prompt payment in full when due, whether at
stated maturity, by acceleration or otherwise, and performance of all
"Obligations," as that term is defined in the Credit Agreement (herein,
collectively, the "Secured Obligations").
4. Delivery of Pledged Collateral. All certificates representing or
evidencing the Pledged Shares shall be delivered to and held by or on behalf of
Agent pursuant hereto and shall be accompanied by duly executed instruments of
transfer or assignment in blank. Pledgor hereby authorizes Issuer, upon demand
by Agent, to deliver any certificates, instruments or other distributions issued
in respect of the Pledged Collateral directly to Agent, in each case to be held
by Agent, subject to the terms hereof. Agent shall have the right, upon the
occurrence of an Event of Default and during its continuation, in its
discretion, and without notice to Pledgor (except as otherwise provided in the
Credit Agreement), to transfer to or to register in the name of Agent or any of
its nominees, any or all of the Pledged Shares. In addition, after an Event of
Default has occurred and during its continuation, Agent shall have the right to
exchange
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certificates or instruments representing or evidencing Pledged Shares for
certificates or instruments of smaller or larger denominations.
5. Representations and Warranties. To induce Lenders to enter into the
Credit Agreement, Pledgor makes the following representations and warranties to
Agent each and all of which shall survive the execution and delivery of this
Agreement until all Secured Obligations are indefeasibly satisfied in full and
there remain no outstanding commitments under the Loan Agreement:
(a) Sole Holder of Record. Pledgor is, and at the time of delivery of
any additional Pledged Shares to Agent pursuant to Section 4 hereof will be, the
sole holder of record and the sole beneficial owner of the Pledged Collateral
free and clear of any Lien except for Permitted Encumbrances.
(b) Authorized Shares. All of the Pledged Shares have been duly
authorized, are validly issued and are fully paid and non-assessable.
(c) No Restrictions on Transfer. There are no restrictions on transfer
of the Pledged Shares contained in any Organic Document of Issuer that have not
otherwise been enforceably and legally waived by the necessary parties.
(d) No Violation of Securities Regulations. None of the Pledged Shares
has been issued or transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to which such issuance
or transfer may be subject.
(e) Capital Stock of Issuer. On the date hereof, the authorized
capital stock of Issuer is as set forth on Schedule I hereto. As of the date
hereof, (i) no subscription, warrant, option or other right to purchase or
acquire any shares of any class of capital stock of Issuer is authorized and
outstanding, and (ii) there is no commitment by Issuer to issue any such shares,
warrants, options or other such rights or securities. The Pledged Shares
constitute all of the issued and outstanding shares of capital stock of Issuer.
(f) Valid Security Interest. The pledge, assignment and delivery of
the Pledged Collateral pursuant to this Agreement will create a valid security
interest in the Pledged Collateral and the proceeds thereof, securing the
payment of the Secured Obligations.
The foregoing representations and warranties shall be deemed to have
been made by Pledgor on the date of each borrowing by Borrowers under the Credit
Agreement on and as of such date of such borrowing as though made hereunder on
and as of such date.
6. Covenants. Pledgor covenants and agrees that until the Credit
Agreement has been terminated and the Secured Obligations have been paid in
full:
(a) Without the prior written consent of Agent, Pledgor will not sell,
assign, transfer, convey, or otherwise dispose of its rights in or to the
Pledged Collateral or any interest therein; nor will Pledgor create, incur or
permit to exist any Lien whatsoever with respect to any of the Pledged
Collateral or any unpaid dividends or other distributions or payments with
respect thereto or the proceeds thereof other than Permitted Encumbrances.
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(b) Pledgor will not, subsequent to the date of this Agreement,
without the prior written consent of Agent, cause or permit Issuer to issue or
grant any warrants, stock options of any nature or other instruments convertible
into shares of any class of capital stock or issue any additional shares of
capital stock or sell or transfer any treasury stock unless such warrants, stock
options, other instruments or shares are made part of the Pledged Collateral.
(c) Pledgor will, at its expense, promptly execute, acknowledge and
deliver all such instruments and take all such action as Agent may from time to
time reasonably request in order to ensure to Agent the benefits of the lien and
security interest in and to the Pledged Collateral intended to be created by
this Agreement, including, without limitation, delivering to Agent upon the
occurrence of an Event of Default, and during its continuation, irrevocable
proxies in respect of the Pledged Collateral in form satisfactory to Agent.
Until receipt thereof, after the occurrence of any Event of Default and during
its continuation, this Agreement shall constitute Pledgor's proxy to Agent or
its nominee to vote all shares of Pledged Collateral then registered in
Pledgor's name.
(d) Pledgor has and will defend the title to the Pledged Collateral
and the security interest of Agent therein against the claim of any Person other
than any holder of a Permitted Encumbrance, and will maintain and preserve such
security interest and until the date of termination of the Credit Agreement and
payment in full of the Secured Obligations.
(e) Pledgor will pay all taxes, assessments and charges levied,
assessed or imposed upon the Pledged Collateral before the same become
delinquent or become liens upon any of the Pledged Collateral except where the
same may be contested in good faith by appropriate proceedings and as to which
adequate reserves have been provided.
(f) Except as permitted by Section 7(a)(ii) hereof with respect to
certain cash dividends, Pledgor will cause any additional Pledged Collateral
issued to or received by it to be forthwith deposited and pledged with Agent, in
each case accompanied by instruments of assignment in conformity with Section 4
hereof.
7. Pledgor's Rights; Termination of Rights.
(a) As long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall have the right, from time to time, to vote and
give consents with respect to the Pledged Collateral or any part thereof for all
purposes not inconsistent with the provisions of this Agreement, the Credit
Agreement or any Other Document; provided, however, that no vote shall be cast,
no consent shall be given and no action shall be taken by Pledgor (without the
prior written consent of the Agent) that would violate any terms of this
Agreement or the Credit Agreement;
(ii) Pledgor shall be entitled, from time to time, to collect and
receive, for Pledgor's own use, all dividends paid in respect of the Pledged
Shares, to the extent then permitted to be paid under the Credit Agreement.
(b) Upon the occurrence of an Event of Default and during the
continuation thereof, all of Pledgor's rights to exercise voting and other
consensual rights pursuant to
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Section 7(a)(i) hereof and all of Pledgor's rights to receive any cash dividends
pursuant to Section 7(a)(ii) hereof shall cease and all such rights shall
thereupon become vested in Agent who shall have the sole and exclusive right to
exercise the voting and other consensual rights that Pledgor would otherwise be
authorized to exercise pursuant to Section 7(a)(i) hereof and to receive and
retain the dividends which Pledgor would otherwise be authorized to receive and
retain pursuant to Section 7(a)(ii) hereof; provided, however, that
notwithstanding anything contained in this Agreement to the contrary, no voting
or other consensual rights shall be vested in Agent, unless and until Agent
gives written notice to Pledgor that Agent intends to have such voting or other
consensual rights vest in itself. Upon the occurrence of an Event of Default and
during the continuation thereof, Pledgor shall pay over to Agent any cash
dividends received by Pledgor with respect to the Pledged Collateral and any and
all money and other property paid over to or otherwise received by Agent, shall
be retained by Agent as Pledged Collateral hereunder and shall be applied in
accordance with the provisions hereof.
8. Remedies. (a) Upon the occurrence of an Event of Default and during
its continuation, Agent may exercise all rights of a secured party under the
UCC. In addition, Agent is hereby authorized and empowered to (i) transfer and
register in its name or in the name of its nominee all or any part of the
Pledged Collateral, (ii) exercise the voting rights with respect to the Pledged
Collateral, (iii) exercise all corporate rights with respect to the Pledged
Collateral including, without limitation, all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any shares
of the Pledged Collateral as if it were the absolute owner thereof, including,
but without limitation, the right to exchange, at its discretion, any or all of
the Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other readjustment of Issuer, as issuer or holder thereof,
as applicable, or upon the exercise by Issuer of any right, privilege or option
pertaining to any of the Pledged Collateral, and, in connection therewith, to
deposit and deliver any and all of the Pledged Collateral with any committee,
depository, transfer agent, registrar or other designated agent upon such terms
and conditions as it may determine, all without liability except to account for
property actually received by it, (iv) collect and receive all cash dividends
and other distributions made upon the Pledged Collateral, (v) sell in one or
more sales after ten (10) days' notice of the time and place of any public sale
or of the time after which a private sale is to take place (which notice Pledgor
agrees is commercially reasonable), but without any prior notice or
advertisement, the whole or any part of the Pledged Collateral and (vi)
otherwise act with respect to the Pledged Collateral as though Agent was the
outright owner thereof. Any sale shall be made at a public or private sale at
Agent's place of business, or at any public building in the City of New York,
New York or at another location to be named in the notice of sale, either for
cash or upon credit or for future delivery at such price as Agent may deem fair,
and Agent may be the purchaser of the whole or any part of the Pledged
Collateral so sold and hold the same thereafter in its own right free from any
claim of Pledgor or any right of redemption, which Pledgor hereby waives to the
maximum extent permitted by applicable law. Each sale shall be made to the
highest bidder, but Agent reserves the right to reject any and all bids at such
sale that, in its discretion, it shall deem inadequate. Demands of performance,
except as otherwise herein specifically provided for, notices of sale,
advertisements and the presence of property at sale are hereby waived and any
sale hereunder may be conducted by an auctioneer or any officer or agent of
Agent.
(b) If, at the original time or times appointed for the sale of all or
any part of the Pledged Collateral, the highest bid, if there be but one sale,
shall be inadequate to discharge
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in full all the Secured Obligations, or if the Pledged Collateral is offered for
sale in lots, if at any of such sales, the highest bid for the lot offered for
sale would indicate to Agent, in its reasonable discretion, the unlikelihood of
the proceeds of the sales of all of the Pledged Collateral being sufficient to
discharge all the Secured Obligations, Agent may, on one or more occasions and
in its reasonable discretion, postpone any of said sales by public announcement
at the time of sale or the time of previous postponement of sale, and no other
notice of such postponement or postponements of sale need be given, any other
notice being hereby waived; provided, however, that any sale or sales made after
such postponement shall be after ten (10) days' notice to Pledgor.
(c) If, at any time Agent shall determine to exercise its rights to
sell all or any part of the Pledged Collateral hereunder, such Pledged
Collateral or the part thereof to be sold shall not, for any reason whatsoever,
be effectively registered under the Securities Act, Agent may, in its reasonable
discretion (subject only to applicable requirements of law), sell such Pledged
Collateral or part thereof by private sale in such manner and under such
circumstances as Agent may deem necessary or advisable, and shall not be
required to effect such registration or to cause the same to be effected.
(d) Pledgor recognizes that Agent may be unable to effect a public
sale of any or all the Pledged Collateral and may be compelled to resort to one
or more private sales thereof. Pledgor also acknowledges that any such private
sale may result in prices and other terms less favorable to the seller than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. Agent shall be under no obligation to delay a sale of any of
the Pledged Collateral for the period of time necessary to permit Pledgor to
cause such securities to be registered for public sale under the Act, or under
applicable state securities laws, even if Pledgor would agree to do so.
(e) Pledgor agrees that after the occurrence of an Event of Default
and during its continuation, Pledgor will not at any time plead, claim or take
the benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay the
enforcement of this Agreement, or the absolute sale of the whole or any part of
the Pledged Collateral or the possession thereof by any purchaser at any sale
hereunder, and Pledgor waives the benefit of all such laws to the extent it
lawfully may do so. Pledgor agrees that it will not interfere with any right,
power and remedy of Agent provided for in this Agreement or now or hereafter
existing at law or in equity or by statute or otherwise, or any exercise by
Agent of any one or more of such rights, powers, or remedies. No failure or
delay on the part of Agent to exercise any such right, power or remedy and no
notice or demand which may be given to or made upon Pledgor by Agent with
respect to any such remedies shall operate as a waiver thereof, or limit or
impair Agent's or any Lender's right to take any action or to exercise any power
or remedy hereunder, without notice or demand, or prejudice its rights as
against Pledgor in any respect. Pledgor waives all claims, damages and demands
against Agent arising out of the repossession, retention or sale of the Pledged
Collateral except such as result from Agent's gross negligence or willful
misconduct.
(f) Pledgor further agrees that a breach of any of the covenants
contained in this Section 8 will cause irreparable injury to Agent, that Agent
has no adequate remedy at law in
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respect of such breach and, as a consequence, agrees that each and every
covenant contained in this Section 8 shall be specifically enforceable against
Pledgor, and Pledgor hereby waives and agrees not to assert any defenses against
an action for specific performance of such covenants except for a defense that
the Secured Obligations are not then due and payable in accordance with the
agreements and instruments governing and evidencing such obligations.
9. Application of Proceeds. Any cash held by Agent as Pledged
Collateral and all cash proceeds received by Agent in respect of any sale of,
liquidation of, or other realization upon all or any part of the Pledged
Collateral shall be applied or distributed by Agent first, to the payment of all
costs, expenses and charges of Agent, or the reimbursement of Agent for the
prior payment of such costs, expenses and charges incurred in connection with
the care and safekeeping of any of the Pledged Collateral (including, without
limitation, the expenses of any sale or other proceeding, the expenses of any
taking, reasonable attorneys' fees and expenses, court costs, any other expenses
incurred or expenditures or advances made by Agent in the protection,
enforcement or exercise of its rights, powers or remedies hereunder) with
interest on any such reimbursement at the rate prescribed in the Credit
Agreement as the Default Rate from the date of payment; second, to the payment
of all other Secured Obligations (in whatever order Agent elects); third, to
such Persons as required by applicable law including, without limitation,
Section 9-504(1)(c) of the Uniform Commercial Code and then, to the extent of
any surplus thereafter remaining, to Pledgor or as a court of competent
jurisdiction may direct. In the event that the proceeds of any collection,
recovery, receipt, appropriation, realization or sale are insufficient to
satisfy the Obligations, Pledgor shall be liable for the deficiency together
with interest thereon at the rate prescribed in the Credit Agreement as the
Default Rate plus the reasonable fees of any attorneys employed by Agent to
collect such deficiency. Agent, in its sole and absolute discretion, with or
without notice to Pledgor, may deposit any proceeds of any collection, recovery,
receipt, appropriation or sale of the Pledged Collateral in an interest bearing
cash collateral deposit account to be maintained as security for the
Obligations.
10. Information. Pledgor will promptly give or cause to be given to
Agent written notice of any material notices or other material documents
received by it with respect to the Pledged Collateral.
11. Power of Attorney. Effective upon the occurrence of an Event of
Default during its continuation, Pledgor appoints Agent as Pledgor's attorney,
with power to endorse Pledgor's name on any checks, notes, acceptances, money
orders, drafts or other forms of payment or security representing a portion of
the Pledged Collateral that may come into Agent's possession and to do all
things necessary to carry out this Agreement. Pledgor ratifies and approves all
such acts of such attorney. Agent, as attorney hereunder, will not be liable for
any acts or omissions, nor for any errors of judgment or mistakes of fact or
law, except for such acts, omissions or errors in judgment determined by a court
of competent jurisdiction in a final proceeding to have resulted primarily from
Agent's gross negligence or willful misconduct. This power, coupled with an
interest, is irrevocable until the payment in full of the Secured Obligations
and termination of the Credit Agreement.
12. Waiver. No delay on Agent's part in exercising any power of sale,
lien, option or other right hereunder, and no notice or demand which may be
given to or made upon Pledgor by Agent with respect to any power of sale, lien,
option or other right hereunder, shall
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constitute a waiver thereof, or limit or impair Agent's right to take any action
or to exercise any power of sale, lien, option, or any other right hereunder,
without notice or demand, or prejudice Agent's or any Lender's rights as against
Pledgor in any respect.
13. Assignment. Agent may assign, endorse or transfer any instrument
evidencing all or any part of the Secured Obligations to any Person, to the
extent provided in the Credit Agreement and such permitted holder of such
instrument shall be entitled to the benefits of this Agreement.
14. Termination. Promptly following the payment in full of the Secured
Obligations and the irrevocable termination of the Credit Agreement, Agent shall
deliver to Pledgor the Pledged Collateral pledged by Pledgor at the time subject
to this Agreement and all instruments of assignment executed in connection
therewith, free and clear of the security interest therein created hereby, and,
except as otherwise provided herein, all of Pledgor's obligations hereunder
shall terminate at such time.
15. Lien Absolute. All rights of Agent hereunder, and all obligations
of Pledgor hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit Agreement,
this Agreement, any Other Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, the Agreement, any Other Document or any other agreement or
instrument governing or evidencing any Secured Obligations;
(c) any exchange, release or non-perfection of any other Collateral,
other than the Pledged Collateral or any release or amendment or waiver of or
consent to departure from the terms of, any guaranty, for all of any of the
Secured Obligations; or
(d) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Pledgor.
16. Release. Pledgor consents and agrees that Agent may at any time,
or from time to time, in its discretion (a) renew, extend or change the time of
payment, and/or the manner, place or terms of payment of all or any part of the
Secured Obligations and (b) exchange, release and/or surrender all or any of the
Pledged Collateral, or any part thereof, by whomsoever deposited, which is now
or may hereafter be held by Agent in connection with all or any of the Secured
Obligations; all in such manner and upon such terms as Agent may deem proper,
and without notice to or further assent from Pledgor, it being hereby agreed
that Pledgor shall be and remain bound upon this Agreement, irrespective of the
existence, value or condition of any of the Pledged Collateral, and
notwithstanding any such change, exchange, settlement, compromise, surrender,
release, renewal or extension, and notwithstanding also that the Secured
Obligations may, at any time exceed the aggregate principal amount thereof set
forth in the Credit Agreement, or any other agreement governing any Secured
Obligations. Pledgor hereby waives notice of acceptance of this Agreement, and
also presentment, demand, protest and notice
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of dishonor of any and all of the Secured Obligations, and promptness in
commencing suit against any party hereto or liable hereon, and in giving any
notice to or of making any claim or demand hereunder upon Pledgor, except for
such notices as are provided for in the Credit Agreement. No act or omission of
any kind on Agent's or any Lender's part shall in any event affect or impair
this Agreement.
17. Agent's Right to Take Action. In the event that Pledgor fails or
refuses to perform any of its obligations set forth herein, including, without
limitation its obligation pursuant to Section 6(e) hereof to pay taxes,
assessments and other charges levied, assessed or imposed on the Pledged
Collateral, or otherwise fails or refuses to pay any amount necessary for the
preservation and protection of the Pledged Collateral, Agent shall have the
right, without obligation, to do all things it deems reasonably necessary or
advisable to discharge the same (including, without limitation, to pay any such
taxes, assessments, charges or other sums, together with interest and penalties
thereon) and any sums paid by Agent or the cost thereof, including, without
limitation, attorneys' fees, shall be reimbursed by Pledgor to Agent on demand
and, until so reimbursed, shall bear interest at the rate prescribed in the
Credit Agreement as the Default Rate.
18. Payments. Agent shall have the continuing and exclusive right to
apply or reverse and reapply any and all payments to any portion of the Secured
Obligations. This Agreement shall remain in full force and effect and continue
to be effective should any petition be filed by or against Pledgor for
liquidation or reorganization, should Pledgor become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of Pledgor's assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by Agent whether as a "voidable preference", "fraudulent
conveyance" or otherwise all as though such payment or performance had not been
made. In the event that any payment or any part thereof, is rescinded, reduced,
restored, or returned, the Secured Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or
returned.
19. Miscellaneous.
(a) No Liability to Agent. The recitals of fact herein shall be taken
as statements of Pledgor for which Agent assumes no responsibility. Agent makes
no representation to anyone as to the value of the Pledged Collateral or any
part thereof or as to the validity or adequacy of the security afforded or
intended to be afforded thereby or as to the validity of this Agreement. Agent
shall be protected in relying upon any notice, consent, request or other paper
or document believed by it to be genuine and correct and to have been signed by
a proper person. The permissive rights of Agent hereunder shall not be construed
as duties of Agent. Agent shall be under no obligation to take any action toward
the enforcement of this Agreement or rights or remedies in respect of any of the
Pledged Collateral. Agent nor any of its respective officers, directors,
employees, agents or counsel shall be liable for any action lawfully taken or
omitted to be taken by it or them hereunder or in connection herewith, except
for its or their own gross negligence or willful misconduct.
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(b) Amendments. This Agreement may not be modified, amended, or the
terms waived except in a writing signed by Pledgor and the Agent.
(c) Successors and Assigns. All of the rights, privileges, remedies
and options given to Agent hereunder shall inure to the benefit of their
successors and assigns; and all the terms, conditions, promises, covenants,
provisions and warranties of this Agreement shall inure to the benefit of and
shall bind the representatives, successors and assigns of Agent and Pledgor, as
permitted by the Credit Agreement. Pledgor may not assign this Agreement to any
Person.
(d) Interpretation. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. In case any security
interest or other right of Agent shall be held to be invalid, illegal or
unenforceable, such invalidity, illegality or unenforceability shall not affect
any other security interest or other right, privilege or power granted under
this Agreement.
(e) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applied to contracts to be
performed wholly within the State of New York.
(f) Injunctive Relief. Pledgor recognizes that, in the event that
Pledgor fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to Agent; therefore, Pledgor agrees that Agent, if Agent so requests,
shall be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages, to the extent permitted by
applicable law.
(g) Notices. Any notice or request hereunder shall be given to Pledgor
or to Agent in the manner prescribed therefor in the Credit Agreement.
(h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same instrument.
(i) Recapture. Anything in this Agreement to the contrary
notwithstanding, if Agent receives any payment or payments on account of the
Secured Obligations, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver, or any other party under
the United States Bankruptcy Code, as amended, or any other federal or state
bankruptcy, reorganization, moratorium or insolvency law relating to or
affecting the enforcement of creditors' rights generally, common law or
equitable doctrine, then to the extent of any sum not finally retained by Agent,
Pledgor 's obligations to Agent shall be reinstated and this Agreement shall
remain in full force and effect (or be reinstated) until payment shall have been
made to Agent, which payment shall be due on demand.
10
(j) Section Headings. Any section headings used herein are solely for
the convenience of the parties and shall be without legal effect.
(k) Time of Essence. Time is of the essence in all matters pertaining
to the payment or performance by Pledgor of its obligations hereunder.
20. Survival of Rights, Duties, Etc. No termination or cancellation
(regardless of cause or procedure) of the Credit Agreement, except with the
written agreement or consent of the Agent, shall in any way affect or impair the
powers, obligations, duties, rights and liabilities of the parties hereto in any
way with respect to (i) any transaction or event occurring prior to such
termination or cancellation, (ii) the Pledged Collateral, or (iii) any of
Pledgor's undertakings, agreements, covenants, warranties and representations
contained in this Agreement and all such undertakings, agreements, covenants,
warranties and representations shall survive such termination or cancellation
until all of the Secured Obligations of every nature whatsoever shall have been
fully paid and satisfied.
21. Intercreditor Matters. The Agent for itself and on behalf of the
Lenders, acknowledges that, in connection with the Loan and Security Agreement
dated as of even date herewith, among the Borrowers, the lenders a party thereto
("Term Loan Lenders"), and CSE Mortgage LLC, as Agent (the "Term Loan Agent")
for the Term Loan Lenders, the Pledgor is entering into a Pledge Agreement of
even date herewith in favor of the Term Loan Agent pursuant to, among other
things, the Pledgor has also granted a security interest in the Pledged
Collateral to the Term Loan Agent for the benefit of the Term Loan Lenders.
Accordingly, the Agent and the Term Loan Agent are entering into the
Intercreditor Agreement which sets forth the Agent's and the Term Loan Agent's
respective rights and obligations with respect to the Pledged Collateral.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Pledgor has executed this Agreement or caused this
Agreement to be executed by its officers thereunto duly authorized as of the
date first above written.
"PLEDGOR"
LEXINGTON PRECISION CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
The foregoing is hereby accepted and agreed to as of the date first above
written.
CAPITALSOURCE FINANCE LLC, as Agent
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director Business
Credit Group
12
SCHEDULE I
PLEDGED SHARES
NUMBER OF STOCK CERTIFICATE PERCENTAGE
PLACE OF CLASS OF SHARES ISSUED NUMBERS OF OF NUMBER OF
ISSUER ORGANIZATION CAPITAL STOCK AND OUTSTANDING PLEDGED SHARES SHARES PLEDGED SHARES PLEDGED
------ ------------ ------------- --------------- ----------------- -------------- --------------
Lexington Rubber Group, Inc. Delaware Common 1 1 100% 1
STOCK ASSIGNMENT
(SEPARATE FROM CERTIFICATE)
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and convey
unto _____________________________________________ all right, title and interest
of the undersigned in and to one (1) share of the common stock of Lexington
Rubber Group, Inc., a Delaware corporation, standing in the name of the
undersigned on the books of said corporation, and represented by Certificate No.
1 to which this stock assignment is appended, with full power of substitution in
the premises as attorney-in-fact for the undersigned.
Dated: May 31, 2006
LEXINGTON PRECISION CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
