PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of May 25, 2001 (as amended,
modified or supplemented from time to time, this "AGREEMENT"), made by each of
the undersigned pledgors (each a "PLEDGOR", and together with any entity that
becomes a party hereto pursuant to Section 19 hereof, the "PLEDGORS"), in favor
of BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as collateral agent,
for the benefit of the Secured Creditors (as defined below) (in such capacity
and together with any successor thereto, the "PLEDGEE"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.
W I T N E S S E T H:
WHEREAS, Xxxxxx Xxxxxxx LLC (the "COMPANY"), the Borrowing
Subsidiaries party thereto from time to time, the
Guarantors from time to time party thereto, various lenders from Lime to time
party thereto (the "BANKS"), ABN AMRO Bank N.V. and First Union National Bank,
as Documentation Agent and Syndication Agent, respectively (in such capacity,
the "DOCUMENTATION AGENT" and the "SYNDICATION AGENT", respectively), and Bank-
of America National Trust and Savings Association, as Administrative Agent (in
such capacity and together with any successor thereto, the "ADMINISTRATIVE
AGENT" and, together with the Pledgee, the Documentation Agent, the Syndication
Agent and the Banks and their respective successors and assigns, the "BANK
CREDITORS" have entered into a Second Amended and Restated Revolving Credit
Agreement, dated as of May 25, 2001, providing for the extensions of credit to
the Borrowers as contemplated therein (as used herein, the term "CREDIT
AGREEMENT" means the Credit Agreement described above in this paragraph, as the
same may be amended, modified, extended, renewed, replaced, restated,
supplemented or refinanced from time to time, and including any agreement
extending the maturity of, or refinancing or restructuring (including, but not
limited to, the inclusion of additional borrowers or guarantors thereunder or
any increase in the amount borrowed) all or any portion of, the indebtedness
under such agreement or any successor agreement, whether or not with the same
agent, trustee, representative, lenders or holders);
WHEREAS, pursuant to the terms of the Credit Agreement, the
Pledgors have either guaranteed or have agreed to be jointly and severally
liable to the Bank Creditors for the payment when due of all obligations and
liabilities of the Borrowers under or with respect to the Loan Documents;
WHEREAS, Xxxxxx Xxxxxxx Corporation on November 15, 1995
issued $200,000,000 in aggregate principal amount of its 6-3/4% Notes due
November 15, 2005 (the "6-3/4% NOTES") (with the holders from time to time of
such 6-3/4% Notes being herein called the "NOTEHOLDERS") pursuant to an
Indenture, dated as of November 15, 1995, by and between Xxxxxx Xxxxxxx
Corporation and Xxxxxx Trust and Savings Bank, as trustee (together with any
successor thereto, the "TRUSTEE") on behalf of the Noteholders (as amended,
modified or supplemented from time to time, the "INDENTURE");
WHEREAS, the Pledgors have issued guarantees of the payment
when due of all of the obligations and liabilities of Xxxxxx Xxxxxxx LLC (as
successor by merger to Xxxxxx Xxxxxxx Corporation) under or with respect to the
6-3/4% Notes and the Indenture (with any such guarantees, together with the
6-3/4% Notes and Indenture being herein collectively called the "NOTE
DOCUMENTS");
WHEREAS, it is a condition to the extensions of credit under
the Credit Agreement, and the Indenture requires, concurrently with the
execution and delivery of the Credit Agreement by the Borrowing Subsidiaries,
that each Pledgor shall have executed and delivered to the Pledgee this
Agreement;
WHEREAS, it is contemplated that the Pledged Instruments (as
defined below) will be pledged to secure the "CREDIT DOCUMENT OBLIGATIONS" and
the "NOTE OBLIGATIONS" and all other amounts comprising "Obligations" (as each
such term is hereinafter defined) on an equal and ratable basis, as contemplated
hereby, and that in connection therewith, the-Pledgee, as collateral agent
hereunder, shall act as the "Collateral Agent" for the benefit of the Bank
Creditors, the Noteholders and the other Secured Creditors; and
WHEREAS, each Pledgor desires to execute this Agreement to
satisfy the conditions described in the second preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following z' representations and warranties to the
Pledgee and hereby covenants and agrees with the Pledgee as follows:
SECTION 1. SECURITY FOR OBLIGATIONS; DEFINITIONS.
(a) This Agreement is made by each Pledgor in favor of the
Pledgee for the benefit of the Bank Creditors, the Noteholders and the Trustee
(collectively, together with the Pledgee, the "SECURED CREDITORS"), to secure on
an equal and ratable basis:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due (the
"BANKRUPTCY CODE" as used herein shall mean Title 11 of the United
States Code entitled "BANKRUPTCY" as now or hereafter in effect, or
any successor thereto) and liabilities (including, without
limitation, indemnities, fees and interest thereon) of such Pledgor
to the Bank Creditors, whether now existing or hereafter incurred
under, arising out of or in connection with the Credit Agreement and
all other Loan Documents to which it is at any time a party
(including, without limitation, all such obligations and liabilities
of such Pledgor under the Credit Agreement and under any guaranty by
it of the obligations under the Credit Agreement) and the due
performance and compliance by such Pledgor with the terms of each
such Loan Document (all such obligations and liabilities under this
clause (i) being herein collectively called the "CREDIT DOCUMENT
OBLIGATIONS");
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(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and
liabilities (including, without limitation, indemnities, fees and
interest thereon) of such Pledgor to the Noteholders and the Trustee,
whether now existing or hereafter incurred BANKRUPTCY at any time a
party (including, without limitation, all such obligations and
liabilities of such Pledgor under the Indenture or any guaranty by it
of the obligations under the Indenture) and the due performance and
compliance by such Pledgor with all of the terms, conditions and
agreements on its part contained in each such Note Document (all such
obligations and liabilities under this clause (ii) being herein
collectively called the "NOTE OBLIGATIONS");
(iii) any and all sums advanced by the Pledgee in order
to preserve the Collateral (as hereinafter defined) or preserve its
security interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities referred
to in clauses (i) through (iii) above, after an Event of Default
(such term, as used in this Agreement, shall mean (a) any "Event of
Default" at any time under, and as defined in, the Credit Agreement,
and (b) any payment default (after the expiration of any applicable
grace period) on any of the Obligations secured hereunder at such
time) shall have occurred and be continuing, the reasonable expenses
of retaking, holding, preparing for sale or otherwise disposing or
realizing on the Collateral, or of any exercise by the Pledgee of its
rights hereunder, together with reasonable attorneys' fees and court
costs; and
(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 9 of
this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (1)
through (v) of this Section 1, being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the type described above, whether outstanding on
the date of this Agreement or extended from time to time after the date of this
Agreement.
(b) As used herein, the term "Instruments" shall mean (i) a
promissory note dated February 10, 1999 of Xxxxxx Xxxxxxx Constructors, Inc.
("CONSTRUCTORS") in the amount of $10,000,000 payable to the order of Xxxxxx
Xxxxxxx USA Corporation; (ii) a promissory note dated February 10, 1999 of
Constructors in the amount of S10,000,000 payable to the order of Xxxxxx Xxxxxxx
Energy International, Inc., (iii) a promissory note dated February 10, 1999 of
Constructors in the amount of $10,000,000 payable to `the order of Xxxxxx
Xxxxxxx Energy Corporation, (iv) a promissory note dated May 25, 2001 of Xxxxxx
Xxxxxxx International Holdings, Inc. in the amount of S10,000,000 payable to the
order of Xxxxxx Xxxxxxx US Holdings, Inc., and (v) a promissory note dated May
25, 2001 of Xxxxxx Xxxxxxx US Holdings, Inc. in the amount of $10,000,000
payable to the order of Xxxxxx Xxxxxxx International Holdings, Inc.
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(c) All Instruments at any time pledged or required to be
pledged hereunder is hereinafter called the "Pledged Instruments," which
together with (i) all proceeds thereof, including any instruments, securities
and moneys received and at the time held by the Pledgee hereunder, and (ii) all
principal, interest, cash, rights, 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 Instruments are hereinafter called the
"Collateral".
SECTION 2. PLEDGE OF INSTRUMENTS.
To secure all Obligations of such Pledgor and for the
purposes set forth in Section 1 hereof, each Pledgor
hereby: (i) grants to the Pledgee a first priority security interest in all of
the Collateral owned by such Pledgor; (ii) pledges and deposits as security with
the Pledgee the Pledged Instruments owned by such Pledgor on the date hereof,
and delivers to the Pledgee such Pledged Instruments, duly endorsed in blank by
such Pled-or, or such other instruments of transfer as are reasonably acceptable
to the Pledgee; and (iii) assigns, transfers, hypothecates, mortgages, charges
and sets over to the Pledgee all of such Pledgor's right, title and interest in
and to such Pledged Instrument, to be held by the Pledgee, upon the terms and
conditions set forth in this Agreement.
SECTION 3. RIGHTS, ETC., WHILE NO EVENT OF DEFAULT.
Unless and until an Event of Default shall have occurred
and be continuing, each Pledgor shall be entitled to
exercise any and all rights pertaining to the Pledged Instruments; PROVIDED,
that no action shall be taken which would violate or be inconsistent with any of
the terms of this Agreement or any other Secured Debt Agreement (as hereinafter
defined). All such rights of such Pledgor shall cease in case an Event of
Default shall occur and be continuing, and Section 5 hereof shall become
applicable.
SECTION 4. INTEREST AND OTHER DISTRIBUTIONS.
Except as provided in Section 5 hereof, all payments in
respect of the Pledged Instruments shall be paid to the respective Pledgor.
SECTION 5. REMEDIES IN CASE OF EVENT OF DEFAULT.
In case an Event of Default shall have occurred and be
continuing, the Pledgee shall be entitled to exercise all of its rights, powers
and remedies (whether vested in it by this Agreement, by any other Loan
Document, or by any Note Document (with all of the Documents listed above being
herein collectively called the "SECURED DEBT AGREEMENTS") or by law) for the
protection and enforcement of its rights in respect of the Collateral, and the
Pledgee shall be entitled to exercise all the rights and remedies of a secured
party under the Uniform Commercial Code and also shall be entitled, without
limitation, to exercise the following rights, which each Pledgor hereby agrees
to be commercially reasonable:
(i) to receive all amounts payable in respect of the
Collateral otherwise payable to such Pledgor under Section 4 hereof;
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(ii) to instruct makers of the Pledged Instruments to make any
and all payments in respect of the Pledged Instruments directly to
the Pledgee;
(iii) to transfer all or any part of the Pledged Instruments
into the Pledgee's name or the name of its nominee or nominees;
(iv) to take any action in respect of the Collateral and
otherwise act with respect thereto as though it were the outright
owner thereof; and
(v) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention
to sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by each Pledgor),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Pledgee in its absolute discretion
may determine; PROVIDED, that at least 10 Business Days' notice of
the time and place of any such sale shall be given to such Pledgor.
Each Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to
the Collateral, whether before or after sale hereunder, and all
rights, if any, of marshalling the Collateral and any other security
for the Obligations or otherwise. At any such sale, unless prohibited
by applicable law, the Pledgee on behalf of the Secured Creditors may
bid for and purchase all or any part of the Collateral so sold free
from any such right or equity of redemption. Each purchaser at any
such sale shall hold the property sold absolutely free from any claim
or right on the part of any Pledgor, and each Pledgor hereby waives
(to the extent permitted by 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. The Pledgee 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. Each Pledgor hereby waives any claims
against the Pledgee arising by reason of the fact that the price at
which any 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 the Pledgee accepts the first offer received and does not
offer such Collateral to more than one offer. If the proceeds of any
sale or other disposition of the Collateral are insufficient to pay
all the Obligations, the Pledgors shall be liable for the deficiency
and the fees of any attorneys employed by the Pledgee to collect such
deficiency. Neither the Pledgee nor any other Secured Creditor shall
be liable for failure to collect or realize upon any or all of the
Collateral or for any delay in so doing nor shall any of them be
under any obligation to take any action whatsoever with regard
thereto.
SECTION 6. REMEDIES, ETC., CUMULATIVE.
Each right, power and remedy of the Pledgee provided for in
this Agreement or in any other Secured Debt Agreement or now or hereafter
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existing at law or in equity or by statute shall be cumulative and concurrent
and shall be in addition to every other such right, power or remedy. `Me
exercise or beginning of the exercise by the Pledgee or any other Secured
Creditor of any one or more of the rights, powers or remedies provided for in
this Agreement or in any other Secured Debt Agreement or now or hereafter
existing at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Pledgee or any other Secured Creditor of
all such other rights, powers or remedies, and no failure or delay on the part
of the Pledgee or any other Secured Creditor to exercise any such right, power
or remedy shall operate as a waiver thereof. The Secured Creditors agree that
this Agreement may be enforced only by the Pledgee acting upon the instructions
of the Required Secured Creditors (as defined in Annex A hereto) and that no
other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Agreement or to realize upon the security to be granted hereby,
it being understood and agreed that such rights and remedies may be exercised by
the Pledgee for the benefit of the Secured Creditors upon the terms of this
Agreement.
SECTION 7. APPLICATION OF PROCEEDS.
(a) All moneys collected by the Pledgee upon any sale or other
disposition of the Collateral of each Pledgor, together with all other moneys
received by the Pledgee hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing to the
Pledgee of the type provided in clauses (iii), (iv) and (v) of the
definition of Obligations in Section 1 hereof;
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Obligations shall be paid to the Secured Creditors as
provided in Section 7(d) hereof, with each Secured Creditor receiving
an amount equal to its outstanding Obligations of such Pledgor or, if
the proceeds are insufficient to pay in full all such Obligations,
its Pro Rata Share (as hereinafter defined) of the amount remaining
to be distributed; and
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii),
inclusive, and following the termination of this Agreement pursuant
to Section 15 hereof, to the relevant Pledgor or to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement, "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's
Obligations and the denominator of which is the then outstanding amount of all
Obligations.
(c) If the Bank Creditors are to receive a distribution in
accordance with the procedures set forth above in this Section 7 on account of
undrawn amounts with respect to letters of credit issued under the Credit
Agreement, such amounts shall be paid to the Administrative Agent under the
Credit Agreement and held by it, for the equal and ratable benefit of the Bank
Creditors as such. If any amounts are held as cash security pursuant to the
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immediately preceding sentence, then upon the termination of all outstanding
letters of credit, and after the application of all such cash security to the
repayment of all Obligations owing to the Bank Creditors after giving effect to
the termination of all such letters of credit, if there remains any excess cash,
such excess cash shall be returned by the Administrative Agent to the Pledgee
for distribution in accordance with Section 7(a) hereof.
(d) Except as set forth in Section 7(c) hereof, all payments
required to be made hereunder shall be made (i) if to the Bank Creditors, to the
Administrative Agent under the Credit Agreement for the account of the Bank
Creditors, and (ii) if to any other Secured Creditors (other than the Pledgee),
to the Trustee or paying agent (each a "REPRESENTATIVE") for such Secured
Creditors or, in the absence of such a Representative, directly to the other
Secured Creditors.
(e) For purposes of applying payments received in accordance
with this Section 7, the Pledgee shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Representative for
any other Secured Creditors or, in the absence of such a Representative, upon
the respective Secured Creditors for a determination (which the Administrative
Agent, each Representative for any other Secured Creditors and the Secured
Creditors agree (or shall agree) to provide upon request of the Pledgee) of the
outstanding Primary Obligations and Secondary Obligations owed to the Secured
Creditors.
(f) It is understood and agreed that each Pledgor shall remain
liable to the extent of any deficiency between the amount of the proceeds of the
Collateral pledged by it hereunder and the aggregate amount of the Obligations
of such Pledgor.
SECTION 8. PURCHASERS OF COLLATERAL.
Upon any sale of the Collateral by the Pledgee hereunder
(whether by virtue of the power of sale herein granted, pursuant to judicial
process or otherwise), the receipt of the Pledgee or the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers of the Collateral
so sold, and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Pledgee or such
officer or be answerable in any way for the misapplication or nonapplication
thereof.
SECTION 9. INDEMNITY.
Each Pledgor jointly and severally agrees (i) to indemnify and
hold harmless the Pledgee in such capacity and each Representative of a Secured
Creditor in its capacity as such from and against any and all claims, demands,
losses, judgments and liabilities of whatsoever kind or nature, and (ii) to
reimburse the Pledgee in such capacity and each Representative of a Secured
Creditor in its capacity as such for all reasonable costs and expenses,
including reasonable attorneys' fees, in each case to the extent growing out of
or resulting from the exercise by the Pledgee of any right or remedy granted to
it hereunder except, with respect to clauses (i) and (ii) above, to the extent
arising from the Pledgee's or such other Secured Creditor's gross negligence or
willful misconduct. In no event shall the Pledgee be liable, in the absence of
gross negligence or willful misconduct on its part, for any matter or thing in
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connection with this Agreement other than to account for moneys actually
received by it in accordance with the terms hereof. If and to the extent that
the obligations of the Pledgors under this Section 9 are unenforceable for any
reason, each Pledgor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law.
SECTION 10. FURTHER ASSURANCES; POWER OF ATTORNEY.
(a) Each Pledgor agrees that it will join with the Pledgee in
executing and, at such Pledgor's own expense, file and refile under the
applicable Uniform Commercial Code or such other law such financing statements,
continuation statements and other documents in such offices as the Pledgee may
reasonably deem necessary or appropriate and wherever required or permitted by
law in order to perfect and preserve the Pledgee's security interest in the
Collateral and hereby authorizes the Pledgee to file financing statements and
amendments thereto relative to all or any part of the Collateral without the
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably deem necessary or advisable to carry into effect the purposes of this
Agreement or to further assure and confirm unto the Pledgee its rights, powers
and remedies hereunder.
(b) Each Pledgor hereby appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, to act from time to time after the
occurrence and during the continuance of an Event of Default in the Pledgee's
reasonable discretion to take any action and to execute any instrument which the
Pledgee may deem necessary or advisable to accomplish the purposes of this
Section 10.
SECTION 11. THE PLEDGEE AS AGENT.
The Pledgee will hold in accordance with this Agreement all
items of the Collateral at any time received under this Agreement. It is
expressly understood and agreed that the obligations of the Pledgee as holder of
the Collateral and interests therein and with respect to the disposition
thereof, and otherwise under this Agreement, are only those expressly set forth
in this Agreement. The Pledgee shall act hereunder on the terms and conditions
set forth herein and in Annex A hereto, the terms of which shall be deemed
incorporated herein by reference as fully as if same were set forth herein in
their entirety.
SECTION 12. TRANSFER BY PLEDGORS.
No Pledgor will sell or otherwise dispose of, grant any option
with respect to, or mortgage, pledge or otherwise encumber any of the Collateral
or any interest therein (except in accordance with the terms of this Agreement
and as permitted by the terms of the Secured Debt Agreements).
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SECTION 13. REPRESENTATION S, WARRANTIES AND COVENANTS OF
PLEDGORS.
(a) Each Pledgor represents, warrants and covenants that:
(i) it is the legal, record and beneficial owner of, and
has good title to, all Pledged Instruments purported to be owned by
such Pledgor, subject to no Lien, except the Liens created by this
Agreement;
(ii) it has full power, authority and legal right to pledge
all the Pledged Instruments;
(iii) this Agreement has been duly authorized, executed and
delivered by such Pledgor and constitutes the legal, valid and
binding obligation of such Pledgor enforceable in accordance with its
terms, except to the extent that the enforceability hereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally and by equitable principles (regardless of whether
enforcement is sought in equity or at law);
(iv) no consent of any other party (including, without
limitation, any stock-holder or creditor of such Pledgor or any of
its Subsidiaries) and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority is required to
be obtained by such Pledgor in connection with the execution,
delivery or performance of this Agreement, or in connection with the
exercise of its rights and remedies pursuant to this Agreement, in
each case except those which have been obtained or made or as may be
required by laws affecting the offer and sale of securities generally
in connection with the exercise by the Pledgee of certain of its
remedies hereunder;
(v) the execution, delivery and performance of this
Agreement by such Pledgor does not violate any provision of any
applicable law or regulation or of any order, judgment, writ, award
or decree of any court, arbitrator or governmental authority,
domestic or foreign, or of the certificate of incorporation or
by-laws (or analogous organizational documents) of such Pledgor or of
any securities issued by such Pledgor or any of its Subsidiaries, or
of any mortgage, indenture, lease, deed of trust, credit agreement or
loan agreement, or any other material agreement, contract or
instrument to which such Pledgor or any of its Subsidiaries is a
party or which purports to be binding upon such Pledgor or any of its
Subsidiaries or upon any of their respective assets and will not
result in the creation or imposition (or the obligation to create or
impose) of any lien or encumbrance on any of the assets of such
Pledgor or any of its Subsidiaries except as contemplated by this
Agreement;
(vi) all Pledged Instruments have been duly and validly
issued; and
(vii) the pledge, assignment and delivery (which delivery
has been made) to the Pledgee of the Pledged Instruments creates a
valid and perfected first priority security interest in such Pledged
Instruments, subject to no prior lien or encumbrance or to any
agreement purporting to grant to any third party (except the Secured
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Creditors) a lien or encumbrance on the property or assets of such
Pledgor which would include the Instruments.
Each Pledgor covenants and agrees that it will defend the
Pledgee's right, title and security interest in and to the Collateral and the
proceeds thereof against the claims and demands of all persons whomsoever; and
such Pledgor covenants and agrees that it will have like title to and right to
pledge any other property at any time hereafter pledged to the Pledgee as
Collateral hereunder and will likewise defend the right thereto and security
interest therein of the Pledgee and the other Secured Creditors.
(b) The Pledgors hereby agree that the rights created by the
subordinated provisions of the guarantees executed by the Pledgors; related to
the Note Documents and the subordination provisions of the Credit Agreement
which each provide for the subordination of the indebtedness of the Borrowers
owing to any Pledgor to the Obligations of the Borrowers owing to the Secured
Creditors shall be on a parity basis for the equal and ratable benefit of the
Secured Creditors.
SECTION 14. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC.
The obligations of each Pledgor under this Agreement shall be
absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation: (i) any renewal, extension, amendment or modification of or
addition or supplement to or deletion from any Secured Debt Agreement or any
other instrument or agreement referred to therein, or any assignment or transfer
of any thereof; (ii) any waiver, consent, extension, indulgence or other action
or inaction under or in respect of any such agreement or instrument or this
Agreement; (iii) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the Pledgee
or its assignee; (iv) any limitation on any party's liability or obligations
under any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof; (v)
any limitation on any other Pledgor's liability or obligations under this
Agreement or under any other Secured Debt Agreement or any invalidity or
unenforceability, in whole or in part, of this Agreement or any other Secured
Debt Agreement or any ten-n thereof; or (vi) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to such Pledgor or any Subsidiary of such Pledgor, or any
action taken with respect to this Agreement by any trustee or receiver, or by
any court, in any such proceeding, whether or not such Pledgor shall have notice
or knowledge of any of the foregoing.
SECTION 15. TERMINATION, RELEASE.
(a) After the Termination Date (as defined below), this
Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 9 hereof shall survive any such
termination) and the Pledgee, at the request and expense of the respective
Pledgor, will promptly execute and deliver to such Pledgor a proper instrument
or instruments acknowledging the satisfaction and termination of this Agreement,
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and will duly assign, transfer and deliver to such Pledgor (without recourse and
without any representation or warranty) such of the Collateral as may be in the
possession of the Pledgee and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement. As used in this Agreement,
"Termination Date" shall mean the earliest of (i) the date upon which the Total
Revolving Credit Commitment has been terminated, no Note under the Credit
Agreement is outstanding and all other Credit Document Obligations (excluding
normal continuing indemnity obligations which survive in accordance with their
terms, so long as no amounts are then due and payable in respect thereof) have
been indefeasibly paid in full, (ii) the date upon which the Credit Documents
are amended to release all Collateral subject to this Agreement and (iii) the
date on which the Indenture no longer requires equal and ratable security or the
6-3/4% Notes have been paid in full.
(b) In the event that any part of the Collateral is sold
(other than to any Credit Party) in connection with a sale permitted by the
Secured Debt Agreement or is otherwise released at the direction of the Required
Secured Creditors, the Pledgee, at the request and expense of such Pledgor will
promptly execute and deliver to such Pledgor a proper instrument or instruments
acknowledging such release, and will duly assign, transfer and deliver to such
Pledgor (without recourse and without any representation or warranty) such of
the Collateral as is then being (or has been) so sold, distributed or released
and as may be in possession of the Pledgee and has not theretofore been released
pursuant to this Agreement.
(c) At any time that a Pledgor desires that Collateral be
released as provided in the foregoing Section 15(a) or (b), it shall deliver to
the Pledgee a certificate signed by an authorized Officer of such Pledgor
stating that the release of the respective Collateral is permitted pursuant to
Section 15(a) or (b), and the Pledgee shall be entitled (but not required) to
conclusively rely thereon.
SECTION 16. NOTICES, ETC.
Except as otherwise specified herein, all notices, requests,
demands or other communications to or upon the respective parties hereto shall
be deemed to have been given or made when delivered to the party to which such
notice, request, demand or other communication is required or permitted to be
given or made under this Agreement, addressed as follows:
(a) if to any Pledgor, at:
Xxxxxxxxxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Vice President and Treasurer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(b) if to the Pledgee, at:
Bank of America National Trust and Savings
Association
0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
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(c) if to any Bank Creditor (other than the Pledgee), (x) to
the Administrative Agent, at the address of the Administrative Agent specified
in the Credit Agreement or (y) at such address as such Bank Creditor shall have
specified in the Credit Agreement;
(d) if to any other Secured Creditor, (x) to the
Representative for such Secured Creditor or (y) if there is no such
Representative, at such address as such Secured Creditor shall have specified in
writing to each Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
SECTION 17. WAIVER; AMENDMENT.
None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner whatsoever unless in writing
duly signed by each Pledgor directly affected thereby (it being understood that
additional Pledgors may be added as parties hereto from time to time in
accordance with Section 19 hereof and Pledgors may be released as parties hereto
in accordance with Sections 15 and 18 hereof and that no consent of any other
Pledgor or of the Secured Creditors shall be required in connection therewith)
and the Pledgee (with the written consent of the Required Lenders (or all the
Lenders if required by Section 10.03 of the Credit Agreement); PROVIDED, that
the Company certifies that any such change, waiver, modification or variance is
otherwise permitted by the terms of the respective Secured Debt Agreements or,
if not so permitted, that the requisite consents therefor have been obtained.
Notwithstanding anything to the contrary contained above, it is understood and
agreed that the Required Lenders may agree to modifications to this Agreement
for the purpose, among other things, of securing additional extensions of credit
(including, without limitation, pursuant to the Credit Agreement or any
refinancing or extension thereof), with such changes not being subject to the
proviso to the immediately preceding sentence. Furthermore, the proviso to the
second preceding sentence shall not apply to any release of Collateral effected
in accordance with the requirements of Section 18 of this Agreement, or any
other release of Collateral or termination of this Agreement so long as the
certifies that such actions will not violate the terms of any Secured Debt
Agreement then in effect.
SECTION 18. RELEASE.
In the event any Pledgor is released from either its guaranty
obligation or its joint and several obligation under the Credit Agreement, such
Pledgor shall be released from this Agreement and this Agreement shall, as to
such Pledgor only, have no further force or effect.
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SECTION 19. ADDITIONAL PLEDGORS.
Pursuant to Section 5.15 of the Credit Agreement, certain
Subsidiaries of the Company may after the date hereof be required to enter into
this Agreement as a Pledgor. Upon execution and delivery, after the date hereof,
by the Pledgee and such Subsidiary of an instrument in the form of Exhibit A-2,
such Subsidiary shall become a Pledgor hereunder with the same force and effect
as if originally named as a Pledgor hereunder. Each Subsidiary which is required
to become a party to this Agreement shall so execute and deliver a copy of
Exhibit A-2 to the Pledgee and, at such time, shall execute a Pledge and
Security Agreement Supplement in the form of Exhibit A-1 to this Agreement with
respect to all Collateral of such Pledgor required to be pledged hereunder,
which Supplement shall be completed in accordance with Exhibit A-1. The
execution and delivery of any such instrument shall not require the consent of
any other Pledgor hereunder. Upon the execution and delivery by the Pledgee and
such Subsidiary of an instrument in the form of Exhibit A-2 as provided above,
it is understood and agreed that the pledge and security interests hereunder
shall apply to all Collateral of such additional Pledgor as provided in Section
2 hereof regardless of an failure of an additional Pledgor to deliver, or any
inaccurate information stated in, the Pledge and Security Agreement Supplement.
SECTION 20. RECOURSE.
This Agreement is made with full recourse to the Pledgors and
pursuant to and upon all representations, warranties, covenants and agreements
on the part of the Pledgors contained herein and otherwise in writing in
connection herewith.
SECTION 21. PLEDGEE NOT BOUND.
(a) The Pledgee shall not be obligated to perform or discharge
any obligation of any Pledgor as a result of the collateral assignment hereby
effected.
(b) The acceptance by the Pledgee of this Agreement, with all
the rights, powers, privileges and authority so created, shall not at any time
or in any event obligate the Pledgee to appear in or defend any action or
proceeding relating to the Collateral to which it is not a party, or to take any
action hereunder or thereunder, or to expend any money or incur any expenses or
perform or discharge any obligation, duty or liability under the Collateral.
SECTION 22. CONTINUING PLEDGORS.
The rights and obligations of each Pledgor (other than the
respective released Pledgor in the case of following clause (y)) hereunder shall
remain in full force and effect notwithstanding (x) the addition of any new
Pledgor as a party to this Agreement as contemplated by Section 19 hereof or
otherwise and/or (y) the release of any Pledgor under this Agreement as
contemplated by Section 18 hereof or otherwise.
SECTION 23. NO FRAUDULENT CONVEYANCE.
Each Pledgor hereby confirms that it is its intention that
this Agreement not constitute a fraudulent transfer or conveyance for purposes
of any bankruptcy, insolvency or similar law, the Uniform Fraudulent Conveyance
Act or any similar Federal, state or foreign law. To effectuate the foregoing
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intention, each Pledgor hereby irrevocably agrees that its obligations and
liabilities hereunder shall be limited to the maximum amount as will, after
giving effect to such maximum amount and all other (contingent or otherwise)
liabilities of such Pledgor that are relevant under such laws, result in the
obligations and liabilities of such Pledgor hereunder in respect of such maximum
amount not constituting a fraudulent transfer or conveyance.
SECTION 24. MISCELLANEOUS.
This Agreement shall be binding upon the successors and
assigns of each Pledgor and shall inure to the benefit of and be enforceable by
the Pledgee and its successors and assigns; provided that no Pledgor may assign
any of its rights or obligations hereunder without the prior written consent of
the Pledgee (with the consent of the Required Lenders and, if required by
Section 10.03 of the Credit Agreement, all Lenders). This Agreement shall be
construed and enforced in accordance with and governed by the law of the State
of New York (without regard to principles of conflict of laws). The headings in
this Agreement are for purposes of reference only and shall not limit or define
the meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one instrument.
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IN WITNESS WHEREOF, each Pledgor has caused this Agreement to
be duly executed and delivered by its duly authorized officer on the date first
above written.
XXXXXX XXXXXXX USA CORPORATION
By: /S/ XXXXXX X. XXXXXXXX
----------------------
Title: Treasurer
XXXXXX XXXXXXX ENERGY INTERNATIONAL, INC.
By: /S/ XXXXXX X. XXXXXX
--------------------
Title: Treasurer
XXXXXX XXXXXXX ENERGY CORPORATION
By: /S/ XXXXXX X XXXXXXXX
---------------------
Title: Treasurer
XXXXXX XXXXXXX US HOLDINGS, INC.
By: /S/ XXXXXX X. XXXXXX
--------------------
Title: Treasurer
XXXXXX XXXXXXX INTERNATIONAL HOLDINGS, INC.
By: /S/ XXXXXX X. XXXXXX
--------------------
Title: Treasurer
ACCEPTED AND AGREED TO:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Collateral Agent and Pledgee
By: /S/ XXXXXX X. XXXXXXXX
----------------------
Title: Managing Director
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ANNEX A
TO
PLEDGE AND SECURITY AGREEMENT
THE PLEDGEE
1. APPOINTMENT. The Secured Creditors, by their acceptance of the
benefits of the Pledge Agreement to which this Annex A is attached (the "Pledge
Agreement") hereby irrevocably designate Bank of America National Trust and
Savings Association (and any successor Pledgee) to act as specified herein and
therein. Unless otherwise defined herein, all capitalized terms used herein (x)
and defined in the Pledge Agreement, are used herein as therein defined and (y)
not defined in the Pledge Agreement, are used herein as defined in the Credit
Agreement referenced in the Pledge Agreement. Each Secured Creditor hereby
irrevocably authorizes, and each holder of any Obligation by the acceptance of
such Obligation and by the acceptance of the benefits of the Pledge Agreement
shall be deemed irrevocably to authorize, the Pledgee to take such action on its
behalf under the provisions of the Pledge Agreement and any instruments and
agreements referred to therein and to exercise such powers and to perform such
duties thereunder as are specifically delegated to or required of the Pledge
Agreement by the terms thereof and such other powers as are reasonably
incidental thereto. The Pledgee may perform any of its duties hereunder or
thereunder by or through its authorized agents, sub-agents or employees.
2. NATURE OF DITTIES. (a) The Pledgee shall have no duties or
responsibilities except those expressly set forth herein or in the Pledge
Agreement. The duties of the Pledgee shall be mechanical and administrative in
nature; the Pledgee shall not have by reason of the Pledge Agreement or any
other Secured Debt Agreement a fiduciary relationship in respect of any Secured
Creditor; and nothing in the Pledge Agreement or any other Secured Debt
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Pledgee any obligations in respect of the Pledge Agreement
except as expressly set forth herein and therein.
(b) The Pledgee shall not be responsible for insuring the Collateral
or for the payment of taxes, charges or assessments or discharging of Liens upon
the Collateral or otherwise as to the maintenance of the Collateral.
(c) The Pledgee shall not be required to ascertain or inquire as to
the performance by any Pledgor of any of the covenants or agreements contained
in the Pledge Agreement or any other Secured Debt Agreement.
(d) The Pledgee shall be under no obligation or duty to take any
action under, or with respect to, the Pledge Agreement if taking such action (i)
would subject the Pledgee to a tax in any jurisdiction where it is not then
subject to a tax or (ii) would require the Pledgee to qualify to do business, or
obtain any license, in any jurisdiction where it is not then so qualified or
licensed or (iii) would subject the Pledgee to in personam jurisdiction in any
locations where it is not then so subject.
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(e) Notwithstanding any other provision of this Annex A, neither the
Pledgee nor any of its officers, directors, employees, affiliates or agents
shall, in its individual capacity, be personally liable for any action taken or
omitted to be taken by it in accordance with, or pursuant to this Annex A or the
Pledge Agreement except for its own gross negligence or willful misconduct.
3. LACK OF RELIANCE ON THE PLEDGEE. Independently and without
reliance upon the Pledgee, each Secured Creditor, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of each Pledgor and its
Subsidiaries in connection with the making and the continuance of the
Obligations and the taking or not taking of any action in connection therewith,
and (ii) its own appraisal of the creditworthiness of each Pledgor and its
Subsidiaries, and the Pledgee shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Secured Creditor with any
credit or other information with respect thereto, whether coming into its
possession before the extension of any Obligations or the purchase of any notes
or at any time or times thereafter. The Pledgee shall not be responsible in any
manner whatsoever to any Secured Creditor for the correctness of any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of the Pledge Agreement or the security
interests granted hereunder or the financial condition of any Pledgor or any
Subsidiary of any Pledgor or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
the Pledge Agreement, or the financial condition of any Pledgor-or or any
Subsidiary of any Pledgor, or the existence or possible existence of any default
or Event of Default. The Pledgee makes no representations as to the value or
condition of the Collateral or any part thereof, or as to the title of any
Pledgor thereto or as to the security afforded by the Pledge Agreement.
4. CERTAIN RIGHTS OF THE PLEDGEE. (a) No Secured Creditor shall have
the right to cause the Pledgee to take any action with respect to the
Collateral, with only the Required Secured Creditors having the right to direct
the Pledgee to take any such action. If the Pledgee shall request instructions
from the Required Secured Creditors, with respect to any act or action
(including failure to act) in connection with the Pledge Agreement, the Pledgee
shall be entitled to refrain from such act or taking such action unless and
until it shall have received instructions from the Required Secured Creditors
and to the extent requested, appropriate indemnification in respect of actions
to be taken, and the Pledgee shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Secured Creditor shall have
any right of action whatsoever against the Pledgee as a result of the Pledgee
acting or refraining from acting hereunder in accordance with the instructions
of the Required Secured Creditors. As used herein, the term "Required Secured
Creditors" shall mean the holders of at least a majority of the then outstanding
Credit Document Obligations.
(b) Notwithstanding anything to the contrary contained herein, the
Pledgee is authorized, but not obligated, (i) to take any action reasonably
required to perfect or continue the perfection of the liens on the Collateral
for the benefit of the Secured Creditors and (ii) when instructions from the
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Required Secured Creditors have been requested by the Pledgee but have not yet
been received, to take any action which the Pledgee, in good faith, believes to
be reasonably required to promote and protect the interests of the Secured
Creditors in the Collateral; PROVIDED that once instructions have been received,
the actions of the Pledgee shall be governed thereby and the Pledgee shall not
take any further action which would be contrary thereto.
(c) Notwithstanding anything to the contrary contained herein or in
the Pledge Agreement, the Pledgee shall not be required to take any action that
exposes or, in the good faith Judgment of the Pledgee may expose, the Pledgee or
its officers, directors, agents or employees to personal liability, unless the
Pledgee shall be adequately indemnified as provided herein, or that is, or in
the good faith judgment of the Pledgee may be, contrary to the Pledge Agreement,
any Secured Debt Agreement or applicable law.
5. RELIANCE. The Pledgee shall be entitled to rely, and shall be
fully protected in relying, upon, any note, writing, resolution, notice,
statement, certificate, telex, teletype or telescopes message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
the proper Person or entity, and, with respect to all legal matters pertaining
hereto or to the Pledge Agreement and its duties thereunder and hereunder, upon
advice of counsel selected by it.
6. INDEMNIFICATION. TO THE EXTENT THE PLEDGEE IS NOT REIMBURSED AND
INDEMNIFIED BY THE PLEDGORS UNDER THE PLEDGE Agreement, the Bank Creditors will
reimburse and indemnify the Pledgee, in proportion to their respective
outstanding principal amounts of Obligations, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Pledgee in performing its duties
hereunder, or in any way relating, to or arising out of its actions as Pledgee
in respect of the Pledge Agreement except for those resulting solely from the
Pledgee's own gross negligence or willful misconduct. The indemnities set forth
in this Section 6 shall survive the repayment of all Obligations, with the
respective indemnification at such time to be based upon the outstanding
principal amounts (determined as described above) of Obligations at the time of
the respective occurrence upon which the claim against the Pledgee is based or,
if same is not reasonably determinable, based upon the outstanding principal
amounts (determined as described above) of Obligations as in effect immediately
prior to the termination of the Pledge Agreement. The indemnities set forth in
this Section 6 are in addition to any indemnities provided by the Banks to the
Pledgee pursuant to the Credit Agreement.
7. THE PLEDGEE IN ITS INDIVIDUAL CAPACITY. With respect to its
obligations as a lender under the Credit Agreement and any other Loan Documents
to which the Pledgee is a party, and to act as agent under one or more of such
Loan Documents, the Pledgee shall have the rights and powers specified therein
and herein for a "Lender", or the "Administrative Agent", as the case may be,
and may exercise the same rights and powers as though it were not performing the
duties specified herein; and the terms "Banks" "Required Lenders," "holders of
Notes," or any similar terms shall, unless the context clearly otherwise
indicates, include the Pledgee in its individual capacity. The Pledgee and its
affiliates may accept deposits from, lend money to, and generally engage in any
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kind of banking, investment banking, trust or other business with any Pledgor or
any Affiliate or Subsidiary of any Pledgor as if it were not performing the
duties specified herein or in the other Loan Documents, and may accept fees and
other consideration from the Pledgors for services in connection with the Credit
Agreement, the other Loan Documents and otherwise without having to account for
the same to the Secured Creditors.
8. HOLDERS. The Pledgee may deem and treat the payee of any note as
the owner thereof for all purposes hereof unless and until written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have been
filed with the Pledgee. Any request, authority or consent of any person or
entity who, at the time of making such request or giving such authority or
consent, is the holder of any note, shall be final and conclusive and binding on
any subsequent holder, transferee, assignee or endorsee, as the case may be, of
such note or of any note or notes issued in exchange therefor.
9. RESIGNATION BY THE PLEDGEE. (a) The Pledgee may resign from the
performance of all of its functions and duties hereunder and under the Pledge
Agreement at any time by giving 15 Business Days' prior or written notice to the
Company, the Banks and Representatives for the other Secured Creditors or, if
there is no such Representative, directly to such Secured Creditors. Such
resignation shall take effect upon the appointment of a successor Pledgee
pursuant to clause (b) or (c) below.
(b) If a successor Pledgee shall not have been appointed within said
15 Business Day period by the Required Secured Creditors, the Pledgee, with the
consent of the , which consent shall not be unreasonably withheld or delayed,
shall then appoint a successor Pledgee who shall serve as Pledgee hereunder or
thereunder until such time, if any, as the Required Secured Creditors appoint a
successor Pledgee as provided above.
(c) If no successor Pledgee has been appointed pursuant to clause (b)
above by the 20th Business Day after the date of such notice of resignation was
given by the Pledgee, as a result of a failure b the to consent to the
appointment of such a successor Pledgee, the Required Secured Creditors shall
then appoint a successor Pledgee who shall serve as Pledgee hereunder or
thereunder until such time, if any, as the Required Secured Creditors appoint a
successor Pledgee as provided above.
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