Exhibit 10.17
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is made this 18th day
of December, 1998, by and among XXXXXXX AMERICAN CORPORATION (the "Borrower")
and the subsidiaries of the Company signatory hereto (each individually a
"Pledgor" and individually and collectively, "Pledgors") in favor of FIRST UNION
NATIONAL BANK, a national banking association ("Agent"), as agent for the
Lenders under the Credit Agreement described below (herein "Pledgee").
W I T N E S S E T H:
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WHEREAS, Borrower has entered into that certain Credit Agreement dated
of even date herewith (as amended from time to time, the "Credit Agreement")
with the lenders identified therein (together with such additional financial
institutions as may become lenders from time to time as therein provided,
"Lenders") and First Union as Agent for the Lenders ("Agent"); and
WHEREAS, it is a condition to the Credit Agreement that Pledgors have
executed this Pledge Agreement in favor of Pledgee for the benefit of the
Lenders.
NOW THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, Pledgors hereby agrees
with Pledgee as follows:
1. For the purposes of this Pledge Agreement:
(a) Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement.
(b) The term "Collateral" shall mean all shares of stock,
partnership interests, LLC interests, or other equity interests in any direct or
indirect Subsidiary of Borrower (as defined in the Credit Agreement) (the
"Securities") now or hereafter owned by any Pledgor, together with (i) all
rights to distributions and other rights under organizational documents, or
under any other agreements, with respect thereto, and all contract rights,
general intangibles and investment property associated with or representing such
Pledgor's rights and interests with respect thereto, and (ii) all additions to,
substitutions or exchanges for, proceeds of and distributions on, any of the
foregoing, and all associated secondary rights and secondary considerations of
any kind (subscription rights, bonus shares, etc.). A list of the Securities as
of the date hereof is set forth on Schedule A attached hereto.
(c) The term "Obligations" shall mean any and all obligations and
indebtedness of every kind and description of the Pledgors to the Lenders
pursuant to, under, or in connection with the Loan Documents, whether such debts
or obligations are primary or secondary, direct or indirect, absolute or
contingent, sole, joint or several, secured or unsecured, due or to become due,
contractual or tortious, arising by operation of law or
otherwise, or now or hereafter existing, whether incurred by any Pledgor as
principal, surety, endorser, guarantor, accommodation party or otherwise,
including, without limitation, principal, interest and fees, late fees and
expenses (including, attorneys' fees and costs and/or the allocated fees and
costs of Agent's in-house legal counsel to the extent required to be paid under
the Loan Documents), or that have been or may hereafter be contracted or
incurred, and any obligations of the Pledgors or any of them under interest rate
protection agreements, swaps, hedging contracts or similar arrangements with any
Lender (including, without limitation, any swap agreements as defined in 11
U.S.C. (S) 101). If a party ceases to be a Lender, any obligations under
interest rate protection agreements, swaps, hedging contracts or similar
arrangements (including, without limitation, any swap agreements as defined in
11 U.S.C. (S) 101) with such party prior to the date it ceased to be a Lender
shall continue to be Obligations secured by the pledge hereunder.
2. Pledgors hereby pledge, and xxxxx x xxxx as security with respect
to, the Collateral, to Pledgee as agent for the Lenders, as collateral security
for all of the Obligations.
3. Pledgors represent and warrant that:
(a) The chief place of business, chief executive offices and the
office(s) where their records are kept concerning accounts, contract rights and
other similar Collateral, are as set forth on Schedule B attached hereto, and as
set forth on Schedule B, each Pledgor either owns such premises free and clear
of any mortgage or other liens and encumbrances except as set forth on Schedule
B or it leases such premises from the record owner identified on Schedule B.
(b) Each Pledgor conducts business under and through its legal
name as set forth on the signature page hereto, and no other names except as set
forth on Schedule B attached hereto.
(c) Pledgors have good title to the Securities free and clear of
all liens and encumbrances except the security interest created hereby; and such
Securities constitute the percentage of the issued and outstanding shares of
each class of the capital stock or other equity interests of the subsidiaries of
Pledgors identified in Schedule A.
(d) The Securities are validly issued, fully paid and
nonassessable and are not subject to any charter, bylaw, statutory, contractual
or other restrictions governing their issuance, transfer, ownership or control
except as indicated on the stock certificates for the Securities.
(e) Pledgors have delivered to Pledgee all certificates or other
similar instruments or documents representing or evidencing the Securities,
together with corresponding assignment or transfer powers duly executed in blank
by Pledgors, and this Pledge Agreement and such powers have been duly and
validly executed and are binding and enforceable against Pledgor in accordance
with their terms except as such enforceability may be affected by bankruptcy
laws and other laws of general application relating to creditors'
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enforceable against Pledgor in accordance with their terms except as such
enforceability may be affected by bankruptcy laws of general application
relating to creditors' rights; and the pledge of the Securities in accordance
with the terms hereof creates a valid and perfected first priority security
interest in the Securities securing payment of the Obligations.
(f) No authorization, approval, or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required
either (i) for the pledge by Pledgors of the Securities pursuant to this Pledge
Agreement or for the execution, delivery or performance of this Pledge Agreement
by Pledgor or (ii) for the exercise by Pledgee of the voting or other rights
provided for in this Pledge Agreement or the remedies in respect of the
Collateral pursuant to this Pledge Agreement (except as may be required in
connection with such disposition by laws affecting the offering and sale of
securities generally or the perfection of liens and security interests in
proceeds).
4. Anything herein to the contrary notwithstanding, (a) Pledgors
shall remain liable under any contracts and agreements included in the
Collateral to perform all of their respective duties and obligations thereunder
to the same extent as if this Agreement had not been executed, (b) the exercise
by Pledgee of any of its rights hereunder shall not release Pledgees from any of
their duties or obligations under any contracts and agreements included in the
Collateral, and (c) Pledgee shall not have any obligation or liability under any
contracts and agreements included in the Collateral by reason of this Agreement,
nor shall Pledgee be obligated to perform any of the obligations or duties of
Pledgors thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
5. Pledgors will promptly notify and provide Pledgee with a complete
description of the opening of any new places of business which would be required
to be disclosed pursuant to Paragraph 3(a) above (excluding sales offices at
which no books and records are maintained other than books and records that are
duplicates of books and records maintained at other locations of which Agent has
notice hereunder), the conduct of business under any names or through any
entities other than those set forth above, the relocation of any of the
Collateral, and the acquisition of any new Collateral. Pledgors will furnish to
Pledgee from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Pledgee may reasonably request upon reasonable notice, all in
reasonable detail.
6. At any time and from time to time, upon the request of Pledgee,
Pledgors will, at their own expense:
(a) defend the Collateral against the claims and demands of all
persons.
(b) deliver and pledge to Pledgee, endorsed or accompanied by
instruments of assignment or transfer satisfactory to Pledgee, any instruments
and documents covered hereby which Pledgee may specify.
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(c) give, execute, deliver and file or record in the proper
governmental offices, any instrument, paper or document, including but not
limited to one or more financing statements under the Uniform Commercial Code,
satisfactory to Pledgee, or take any action, which Pledgee reasonably may deem
necessary or desirable in order to create, preserve, perfect, continue, modify,
terminate or otherwise affect any security interest granted pursuant hereto, or
to enable Pledgee to exercise or enforce any of its rights hereunder.
(d) keep, and stamp or otherwise xxxx, any of its documents and
instruments and its individual books and records relating to any of the
Collateral in such manner as Pledgee reasonably may require.
(e) pay, or reimburse Pledgee in the amount of, all reasonable
expenses (including reasonable fees and expenses of attorneys, experts and
Pledgees) incurred in any way in connection with the exercise, defense or
assertion of any rights or interests of Pledgee hereunder, the enforcement of
any provisions hereof, or the management, preservation, use, operation,
maintenance, collection, possession, disposition or enforcement of any of the
Collateral (all such expenses to be Obligations hereunder).
7. Pledgors agree not to:
(i) sell or otherwise dispose of, or grant any option
(collectively, "Transfer") with respect to, any of the Collateral, provided
however, that nothing herein shall prohibit a merger of a wholly-owned
Subsidiary into any of the Companies as permitted pursuant to Paragraph 6.8(iii)
of the Credit Agreement; or
(ii) create or permit to exist any lien, security interest,
or other charge or encumbrance upon or with respect to any of the Collateral,
except the security interest under this Pledge Agreement. Pledgors agree that
all additional shares of stock or other equity interests of any direct or
indirect Subsidiary of Borrower (as defined in the Credit Agreement) acquired by
any Pledgor after the date hereof shall automatically and without any further
action of Pledgors be pledged hereunder and constitute a part of the Collateral
hereunder, and in connection therewith, Pledgors agree to immediately deliver to
Pledgee any certificates or other instruments or documents representing or
evidencing the Securities and a supplement to Schedule A attached hereto
describing such additional Collateral.
8. Prior to the full payment and performance of the Obligations,
Pledgee shall be entitled to receive, as additional Collateral, any and all
additional shares of stock or any other property of any kind distributable on or
by reason of the Securities pledged hereunder, whether in the form of or by way
of stock dividends, warrants, partial liquidation, conversion, prepayments or
redemptions (in whole or in part), liquidation, or otherwise, other than cash
dividends. If any of such property, other than such cash dividends, shall come
into the possession or control of Pledgors, Pledgors shall hold or control and
forthwith transfer and deliver the same to Pledgee subject to the provisions
hereof.
9. So long as no default has occurred under any of the Obligations
or Loan Documents and Pledgors are in full compliance with the terms hereof:
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(a) Pledgors shall be entitled to receive and retain any normal,
regularly declared cash dividends paid on the Securities pledged hereunder.
(b) Pledgors may exercise all voting rights, if any, pertaining
to the Securities for any purpose not inconsistent with the terms hereof or of
the Obligations or Loan Documents. In the event the Securities have been
transferred into the name of Pledgee or a nominee or nominees of Pledgee prior
to default, Pledgee or its nominee will execute and deliver upon request of
Pledgors an appropriate proxy in order to permit Pledgors to vote, if
applicable, the same.
10. Pledgors shall take all actions (and execute and deliver from
time to time all instruments and documents) reasonably necessary or appropriate
or reasonably requested by Pledgee, to continue the validity, enforceability and
perfected status of the pledge of Securities hereunder.
11. Pledgee shall be under no obligation to take any actions and
shall have no liability (except for gross negligence or willful misconduct) with
respect to the preservation or protection of the pledged Securities or any
underlying interests represented thereby as against any prior or other parties.
In the event Pledgors request that Pledgee take or omit to take action(s) with
respect to the Collateral, Pledgee may refuse so to do with impunity if Pledgors
do not, upon request of Pledgee, post sufficient, creditworthy indemnities with
Pledgee which, in Pledgee's sole discretion, are sufficient to hold it harmless
from any possible liability of any kind in connection therewith.
12. Pledgors agree that Pledgee, at any time and without affecting
its rights in the pledged Securities and without notice to Pledgors, may grant
any extensions, releases or other modifications of any kind respecting the Loan
Documents, Obligations and any collateral security therefor and Pledgors, except
as otherwise provided herein or in the Loan Documents, waive all notices of any
kind in connection with the Obligations, the Loan Documents and any changes
therein or defaults or enforcement proceedings thereunder, whether against
Pledgors or any other party. Pledgors hereby waive any rights it has at equity
or in law to require Pledgee to apply any rights of marshaling or other
equitable doctrines in the circumstances.
13. After the occurrence and during the continuance of an Event of
Default under the Credit Agreement:
(a) Pledgee may transfer or cause to be transferred any of the
pledged Securities into its own or a nominee's or nominees' name or name(s).
(b) Pledgee shall be entitled to receive and apply in payment of
the Obligations any cash dividends, interest or other payment on the pledged
Securities.
(c) Pledgee shall be entitled to exercise in Pledgee's discretion
all voting rights, if any, pertaining thereto and in connection therewith and at
the written request
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of Pledgee, Pledgors shall execute any appropriate dividend, payment or
brokerage orders or proxies.
(d) Pledgors shall take any action necessary or required or
reasonably requested by Pledgee, in order to allow Pledgee fully to enforce the
pledge of the Securities hereunder and realize thereon to the fullest possible
extent, including but not limited to the filing of any claims with any court,
liquidator or trustee, custodian, receiver or other like person or party.
(e) Pledgee shall have all the rights and remedies granted or
available to it hereunder, under any statute or the common law, or under any of
the Loan Documents, including the right to sell the pledged Securities or any
portion thereof at one or more public or private sales upon ten (10) days'
written notice and to bid thereat or purchase any part or all thereof in its own
or a nominee's or nominees' names, free and clear of any equity of redemption;
and to apply the net proceeds of the sale, after deduction for any expenses of
sale, including the payment of all Pledgee's reasonable attorneys' fees in
connection with the Obligations and the sale, to the payment of the Obligations
in any manner or order which Pledgee in its sole discretion may elect, without
further notice to or consent of Pledgors and without regard to any equitable
principles of marshaling or other like equitable doctrines.
(f) Pledgee may increase, in its sole discretion, but shall not
be required to do so, the Obligations by making reasonable additional advances
or incurring reasonable expenses for the account of Pledgors deemed appropriate
or desirable by Pledgee in order to protect, enhance, preserve or otherwise
further the sale or disposition of the Collateral or any other property it holds
as security for the Obligations.
14. Pledgors recognize that Pledgee may be unable to effect a sale to
the public of all or part of the Securities by reason of certain prohibitions or
restrictions in applicable securities laws and regulations (herein collectively
called the "Securities Laws"), or the provisions of other laws, regulations or
rulings, but may be compelled to resort to one or more sales to a restricted
group of purchasers who will be required to agree to acquire the Securities for
their own account, for investment and not with a view to the further
distribution or resale thereof without restriction. Pledgors agree that any
sale(s) so made may be at prices and on other terms less favorable to Pledgors
than if the Securities were sold to the public, and that Pledgee has no
obligation to delay sale of the Securities for period(s) of time necessary to
permit the issuer thereof to register the Securities for sale to the public
under any of the Securities Laws. Pledgors agree that negotiated sales whether
for cash or credit made under the foregoing circumstances shall not be deemed
for that reason not to have been made in a commercially reasonable manner.
Pledgors shall cooperate with Pledgee to satisfy any requirements under the
Securities Laws applicable to the sale or transfer of the Securities by Pledgee.
In connection with any sale or disposition of the Collateral, Pledgee
is authorized to comply with any limitation or restriction as it may be advised
by its counsel is
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necessary or desirable in order to avoid any violation of applicable law or to
obtain any required approval of the purchasers) by any governmental regulatory
body or officer and it is agreed that such compliance shall not result in such
sale being considered not to have been made in a commercially reasonable manner
nor shall Pledgee be liable or accountable by reason of the fact that the
proceeds obtained at such sale(s) are less than might otherwise have been
obtained at public sale.
Pledgee may elect to obtain the advice of any independent nationally-
known investment banking firm, which is a member firm of the New York Stock
Exchange, with respect to the method and manner of sale or other disposition of
any of the Collateral, the best price reasonably obtainable therefor, the
consideration of cash and/or credit terms, or any other details concerning such
sale or disposition. Pledgee, in its sole discretion, may elect to sell on such
credit terms which it deems reasonable.
15. The powers conferred on Pledgee hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its possession
and the accounting for monies actually received by it hereunder, Pledgee shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve any right of or against other parties pertaining to any Collateral.
Pledgors agree jointly and severally to indemnify Pledgee and each Secured Party
from and against any and all claims, losses and liabilities growing out of or
resulting from this Agreement (including, without limitation, enforcement of
this Agreement) or Pledgee's or any Lender's interest in the Collateral, except
claims, losses or liabilities resulting from such party's gross negligence or
wilful misconduct.
16. The parties agree that this Pledge Agreement shall be governed as
to its validity, interpretation and effect by the internal laws of the
Commonwealth of Pennsylvania without regard to the conflict of laws rules
thereof; and any terms used herein which are defined in the Uniform Commercial
Code as enacted in Pennsylvania shall have the meanings therein set forth.
17. This Pledge Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
18. If Pledgee shall waive any rights or remedies arising hereunder
or under any applicable law, such waiver shall not be deemed to be a waiver upon
the later occurrence or recurrence of any of said events. No delay by Pledgee
in the exercise of any right or remedy shall under any circumstances constitute
or be deemed to be a waiver, express or implied, of the same and no course of
dealing between the parties hereto shall constitute a waiver of Pledgee's rights
or remedies.
19. Pledgor hereby irrevocably appoints Pledgee, effective upon the
occurrence and during the continuation of an Event of Default under the Credit
Agreement, as
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its attorney-in-fact to execute, deliver and record, if appropriate, from time
to time any instruments or documents in connection with the Collateral, in
Pledgors or Pledgee's names.
20. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
PLEDGE AGREEMENT OR THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS
OF AGENT OR LENDERS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR AGENT'S
ENTERING INTO THIS PLEDGE AGREEMENT ON BEHALF OF THE LENDERS.
21. EACH PLEDGOR ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF
COUNSEL IN THE REVIEW AND EXECUTION OF THIS PLEDGE AGREEMENT AND, SPECIFICALLY,
PARAGRAPH 20 HEREOF, AND FURTHER ACKNOWLEDGES THAT THE MEANING AND EFFECT OF THE
FOREGOING WAIVER OF JURY TRIAL HAVE BEEN FULLY EXPLAINED TO SUCH PLEDGOR BY SUCH
COUNSEL.
22. This Pledge Agreement represents the entire understanding of the
parties with respect to the subject matter and no modification or change herein
shall be effective unless contained in a writing signed by the parties hereto.
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IN WITNESS WHEREOF, the undersigned have executed this Pledge
Agreement under seal as of the day and year first above written.
Attest: XXXXXXX AMERICAN CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxxx
---------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: President
Attest: XXXXXXX ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxx
--------------------------- -------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxx
Title: Secretary Title: Treasurer
Attest: XXXXXX-AMERICAN COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxxx X. Xxxxxxxx
Title: Secretary Title: President
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SCHEDULE A
Pledged Securities
------------------
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Percent of
Description of Outstanding
Company Securities Certificate No. No. of Shares Equity
----------------- ------------------- --------------- ------------- -------------
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Xxxxxxx (1) 42 955.6 shares 100%
American Xxxxxx-American
Corporation Company, Inc.
common stock,
par value $1.00
per share
------------------- -------------- -------------- -----------
(2) Xxxxxxx C-54 1,721,974 100%
Enterprises, Inc. shares
common stock,
par value $0.01
per share
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Xxxxxx-American Xxxxxx-American 1 100 shares 100%
Company, Inc. Company of
Florida, Inc.
common stock,
par value $1.00
per share
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Xxxxxxx Xxxxxxx 8 61,000 shares 100%
Enterprises, Laboratories,
Inc. Inc. voting
common stock,
par value $0.01
per share
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SCHEDULE B
Disclosures -- Executive Offices
--------------------------------
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Company Executive Office Location Mortgage Status
--------------------------- ------------------------- ------------------------------
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Xxxxxxx American 000 Xxxxxxxx Xxxxxx See Indenture of Mortgage
Corporation Canton, Massachusetts of Xxxxxxx Enterprises, Inc.
02021 below (MAC will guarantee
this Indenture)
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Xxxxxxx Enterprises, Inc. 000 Xxxxxxxx Xxxxxx Xxxxxxxxx of Mortgage, Deed
Canton, Massachusetts of Trust, Security
02021 Agreement, Fixture Filing,
Financing Statement and
Assignment of Rents and
Leases, dated as of February
13, 1998 between Xxxxxxx
Enterprises, Inc. and
Corporate Real Estate
Capital, LLC
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Xxxxxx-American Company, 7315 Pineville-Xxxxxxxx Deed of Trust and Security
Inc. Road Agreement, dated as of
Charlotte, North November 2, 1992, and the
Carolina First Amendment to Deed of
28226 Trust, dated November 30,
1998 between Xxxxxx-
American Company, Inc.
and Rexham Industries Corp.
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