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Exhibit 4.3
EXHIBIT C
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PLEDGE AND SECURITY AGREEMENT
DATED AS OF NOVEMBER 26, 1996
AMONG
THE PLEDGORS NAMED HEREIN
AND
BANK ONE, DAYTON, N.A.,
AS ADMINISTRATIVE AGENT
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EXECUTION COPY
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PLEDGE AND SECURITY AGREEMENT
DATED AS OF NOVEMBER 26, 1996
AMONG
THE PLEDGORS NAMED HEREIN
AND
BANK ONE, DAYTON, N.A.,
AS ADMINISTRATIVE AGENT
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TABLE OF CONTENTS
Article Section Page
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ARTICLE I DEFINITIONS.......................................................................................... 1
SECTION 1.01. Terms Defined in the Credit Agreement................................................... 1
SECTION 1.02. Definition of Certain Terms Used Herein................................................. 1
SECTION 1.03. UCC Definitions......................................................................... 3
SECTION 1.04. Rules of Interpretation................................................................. 3
ARTICLE II PLEDGE.............................................................................................. 3
SECTION 2.01. Grant and Pledge........................................................................ 3
SECTION 2.02. Delivery of the Collateral; Intercompany Obligations.................................... 3
SECTION 2.03. Registration in Nominee Name; Denominations............................................. 4
SECTION 2.04. Voting Rights; Dividends and Interest; Etc.............................................. 4
SECTION 2.05. Security Interests Absolute............................................................. 6
SECTION 2.06. Release of Collateral................................................................... 7
SECTION 2.07. Continuing Liability of the Pledgor..................................................... 7
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................................................... 8
SECTION 3.01. Credit Agreement........................................................................ 8
SECTION 3.02. Pledged Securities...................................................................... 8
SECTION 3.03. Validity, Perfection and Priority of Security Interests................................. 8
SECTION 3.04. Place of Business; Location of Collateral............................................... 9
SECTION 3.05. Effectiveness........................................................................... 9
ARTICLE IV COVENANTS........................................................................................... 9
SECTION 4.01. Perfection of Security Interests........................................................ 9
SECTION 4.02. Further Actions......................................................................... 10
SECTION 4.03. Change of Name, Identity or Structure................................................... 11
SECTION 4.04. Place of Business and Collateral........................................................ 11
SECTION 4.05. Maintenance of Records.................................................................. 11
SECTION 4.06. Compliance with Laws, Etc............................................................... 11
SECTION 4.07. Payment of Taxes, Etc................................................................... 11
SECTION 4.08. Limitation on Liens on Collateral....................................................... 11
SECTION 4.09. Limitations on Dispositions of Collateral............................................... 12
SECTION 4.10. Notices................................................................................. 12
SECTION 4.11. Change of Law........................................................................... 12
SECTION 4.12. Additional Interests.................................................................... 12
SECTION 4.13. Certain Liabilities..................................................................... 12
SECTION 4.14. Reimbursement Obligation................................................................ 12
SECTION 4.15. Further Approvals....................................................................... 13
ARTICLE V REMEDIES; RIGHTS UPON DEFAULT........................................................................ 13
SECTION 5.01. UCC Rights.............................................................................. 13
SECTION 5.02. Sale of Collateral...................................................................... 13
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SECTION 5.03. Additional Rights of the Administrative Agent........................................... 15
SECTION 5.04. Securities Act, Etc..................................................................... 16
SECTION 5.05. Remedies Not Exclusive.................................................................. 17
SECTION 5.06. Waiver and Estoppel..................................................................... 18
SECTION 5.07. Power of Attorney....................................................................... 18
ARTICLE VI MISCELLANEOUS....................................................................................... 20
SECTION 6.01. Notices................................................................................. 20
SECTION 6.02. Survival of Agreement................................................................... 20
SECTION 6.03. Counterparts; Effectiveness............................................................. 20
SECTION 6.04. Waivers; Amendment...................................................................... 21
SECTION 6.05. Supplemental Agreement.................................................................. 21
SECTION 6.06. Assignments............................................................................. 21
SECTION 6.07. Savings Clause.......................................................................... 21
SECTION 6.08. GOVERNING LAW........................................................................... 22
SECTION 6.09. Entire Agreement........................................................................ 22
SECTION 6.10. Headings................................................................................ 22
SECTION 6.11. Administrative Agent's Fees and Expenses; Indemnification............................... 22
SECTION 6.12. Submission to Jurisdiction.............................................................. 23
SECTION 6.13. Waiver of Jury Trial.................................................................... 23
SCHEDULES
Schedule 1 Chief Executive Office and Principal Place of Business; Locations of
Records of Receivables and General Intangibles
Schedule 2 Pledged Securities
Schedule 3 Intentionally Omitted
Schedule 4 Required Filings and Recordings
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PLEDGE AND SECURITY AGREEMENT dated as of November 26, 1996, among (i)
Xxxxxxx & Xxxxx, Inc., an Ohio corporation (the "BORROWER"), (ii) the Domestic
Subsidiaries listed on the signature pages hereof and such other Domestic
Subsidiaries as shall become parties hereto in accordance with Section 6.05
hereof (such listed Domestic Subsidiaries, together with the Borrower, being
referred to herein individually as a "PLEDGOR" or collectively as the
"PLEDGORS") and (iii) Bank One, Dayton, N.A., as Administrative Agent for the
Lenders (as defined herein).
Reference is made to the Credit Agreement dated as of November 26, 1996
(as amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among the Borrower, the financial institutions party thereto as
lenders (the "LENDERS"), Bank One, Dayton, N.A., as Administrative Agent (in
such capacity, the "ADMINISTRATIVE AGENT") and as Issuing Bank (in such
capacity, the "ISSUING BANK") and NationsBank, N.A., as Documentation and
Syndication Agent.
The Lenders have agreed to extend credit to the Borrower, and the
Issuing Bank has agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions set
forth in, the Credit Agreement. The obligations of the Lenders to extend credit
and of the Issuing Bank to issue Letters of Credit under the Credit Agreement
are conditioned on, among other things, the execution and delivery by the
Pledgors of a Pledge Agreement in the form hereof to secure all Secured
Obligations (defined below) of such Pledgor. As consideration therefor and in
order to induce the Lenders to make Loans and the Issuing Bank to issue Letters
of Credit, the Pledgors are willing to execute and deliver this Agreement.
Accordingly, the Pledgors and the Administrative Agent hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. TERMS DEFINED IN THE CREDIT AGREEMENT. Terms used herein
and not otherwise defined herein shall have the meanings set forth in the Credit
Agreement.
SECTION 1.02. DEFINITION OF CERTAIN TERMS USED HEREIN. As used herein,
the following terms shall have the following meanings:
"COLLATERAL" shall have the meaning assigned to such term in Section
2.01.
"GENERAL INTANGIBLES" of any Pledgor shall mean (a) all Capital Stock
of any Subsidiary now owned or hereafter acquired by such Pledgor; PROVIDED,
THAT, no shares of Capital Stock of any issuer organized in a jurisdiction
outside of the United States of America shall be included hereunder to the
extent that the aggregate amount of shares of Capital Stock of such issuer
pledged hereunder would exceed 65% of such issuer's issued and outstanding
Capital Stock for so long as the pledge of any greater percentage would have
adverse tax consequences for the Borrower and (b) all dividends, liquidating
dividends,
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distributions, options, rights to subscribe, cash, instruments and other
property and proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Capital Stock
referenced in clause (a) above (and all contract rights to receive any of the
foregoing) and (c) all rights of such Pledgor (including all choses in action
and causes of action) under all agreements that in any way relate to the Capital
Stock.
"PLEDGED DEBT" of any Pledgor shall mean (a) the Intercompany Notes
payable to such Pledgor and (b) all payments of principal or interest, cash,
instruments or other property from time to time received, receivable or
otherwise distributed, in respect of, in exchange for or upon the conversion of
the Intercompany Notes referred to in clause (a) above.
"PLEDGED SECURITIES" of any Pledgor shall mean the Pledged Debt and the
Pledged Shares of such Pledgor.
"PLEDGED SHARES" of any Pledgor shall mean (a) the shares of Capital
Stock listed and described with respect to such Pledgor in SCHEDULE 2 hereto,
and the certificates representing such Capital Stock, (b) all additional shares
of Capital Stock of any issuer of the Pledged Shares from time to time acquired
by any Pledgor in any manner and all shares of Capital Stock of any Domestic
Subsidiary, any Foreign Subsidiary that is a Restricted Subsidiary, and other
person hereafter acquired by any Pledgor (which shares shall be considered to be
Pledged Shares under this Agreement), together in each case with the
certificates representing such additional shares, and (c) all dividends,
liquidating dividends, stock dividends, distributions, stock rights, options,
rights to subscribe, cash, instruments and other property and proceeds from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such listed shares referenced in clause (a) above or
such additional shares referenced in clause (b) above; PROVIDED, THAT, no shares
of Capital Stock of any issuer organized in a jurisdiction outside of the United
States of America shall be included hereunder to the extent that the aggregate
amount of shares of Capital Stock of such issuer pledged hereunder would exceed
65% of such issuer's issued and outstanding Capital Stock for so long as the
pledge of any greater percentage would have adverse tax consequences for the
Borrower.
"PROCEEDS" of any Pledgor shall mean all proceeds (as defined in the
UCC), including (a) whatever is received upon any collection, exchange, sale or
other disposition of any of the Collateral of such Pledgor and any property into
which any of the Collateral of such Pledgor is converted, whether cash or
non-cash, and (b) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral of such Pledgor.
"SECURED OBLIGATIONS" of any Pledgor shall mean (a) in the case of the
Borrower, all Obligations, (b) in the case of a Pledgor that is a Subsidiary,
all amounts now and hereafter payable by that Subsidiary as a Guarantor under
the Guarantee Agreement and (c) in the case of any Pledgor, all reasonable
expenses (including reasonable counsel fees and expenses) incurred in enforcing
any rights of the Administrative Agent and the other Secured Parties against
such Pledgor under this Agreement.
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"UCC" shall mean at any time the Uniform Commercial Code as the same
may from time to time be in effect in the State of Ohio; PROVIDED, THAT, if, by
reason of mandatory provisions of law, the validity or perfection of any
security interest granted herein is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than Ohio, then, as to the validity or
perfection of such security interest, "UCC" shall mean the Uniform Commercial
Code in effect in such other jurisdiction.
SECTION 1.03. UCC DEFINITIONS. The uncapitalized terms "contract
right", "instrument", "general intangible", "money" and "proceeds", as used in
Section 1.02 or elsewhere in this Agreement shall have the meanings ascribed
thereto in the UCC.
SECTION 1.04. RULES OF INTERPRETATION. The rules of interpretation
specified in Section 1.02 of the Credit Agreement shall be applicable to this
Agreement.
ARTICLE II
PLEDGE
SECTION 2.01. GRANT AND PLEDGE. As security for the punctual payment or
performance, as the case may be, of the Secured Obligations of such Pledgor,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing or due or to become due, in accordance
with the terms hereof, each Pledgor hereby bargains, sells, conveys, assigns,
sets over, mortgages, pledges, hypothecates and transfers to the Administrative
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties and hereby grants to the Administrative Agent, its successors and
assigns, for the benefit of the Secured Parties, a security interest in, all of
such Pledgor's right, title and interest in, to and under the following whether
now existing or hereafter acquired (all of which are herein sometimes
collectively referred to as the "COLLATERAL"):
(i) all Pledged Securities of such Pledgor;
(ii) all General Intangibles of such Pledgor; and
(iii) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing, whether existing on the date
hereof or hereafter arising.
TO HAVE AND TO HOLD the Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Administrative Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, forever; SUBJECT, HOWEVER, to the terms,
covenants and conditions hereinafter set forth.
SECTION 2.02. DELIVERY OF THE COLLATERAL; INTERCOMPANY OBLIGATIONS. (a)
Each Pledgor shall deliver original certificates and other instruments
evidencing all Pledged Securities of such Pledgor listed on SCHEDULE 2 hereto to
the Administrative Agent contemporaneously with its execution hereof, duly
endorsed in a manner satisfactory to the
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Administrative Agent. Upon delivery to the Administrative Agent, (i) the Pledged
Securities shall be accompanied by stock powers duly executed in blank or other
instruments of transfer satisfactory to the Administrative Agent and by such
other instruments and documents as the Administrative Agent may reasonably
request and (ii) all other property comprising part of the Collateral shall be
accompanied by proper instruments of assignment duly executed by each applicable
Pledgor and such other instruments or documents as the Administrative Agent may
reasonably request. Each delivery of Pledged Securities shall be accompanied by
a schedule describing the securities theretofore and then being pledged
hereunder, which schedule shall be attached hereto as SCHEDULE 2 and made a part
hereof. Each schedule so delivered as to any Pledgor shall supersede any prior
schedules so delivered as to such Pledgor.
(b) Each Pledgor agrees to promptly deliver or cause to be delivered to
the Administrative Agent from time to time after the execution hereof any and
all other Pledged Securities held by such Pledgor, and any and all other
certificates or other instruments or documents representing the Collateral.
(c) Each Pledgor will cause any obligations in respect of borrowed
money or similar advances owed to such Pledgor from any Subsidiary to be
evidenced by a duly executed Intercompany Note which is pledged and delivered to
the Administrative Agent pursuant to the terms hereof. Nothing herein shall be
construed as implying that any loan, advance or other investment by any Pledgor
is permitted under the Credit Agreement.
SECTION 2.03. REGISTRATION IN NOMINEE NAME; DENOMINATIONS. The
Administrative Agent shall have the right (in its sole and absolute discretion)
to hold the Pledged Securities in its own name as pledgee, the name of its
nominee or the name of the applicable Pledgor, endorsed or assigned in blank or
in favor of the Administrative Agent, PROVIDED, THAT it is understood that the
Administrative Agent shall not have the right to cause a reissuance of the
Pledged Securities in its own name or the name of its nominee until after the
occurrence of an Event of Default. Each Pledgor will promptly give to the
Administrative Agent copies of any notices or other communications received by
it with respect to Pledged Securities registered in its name. The Administrative
Agent shall at all times have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations (representing in the aggregate the same number of Pledged
Securities) for any purpose consistent with this Agreement.
SECTION 2.04. VOTING RIGHTS; DIVIDENDS AND INTEREST; ETC. (a) Unless
and until an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have notified any Pledgor that its rights under this
Section 2.04 are being suspended:
(i) Each Pledgor shall be entitled to exercise any and all
voting and/or other consensual rights and powers accruing to an owner
of Pledged Securities or any part thereof for any purpose consistent
with the terms of this Agreement, the Credit Agreement and the other
Loan Documents; PROVIDED, THAT, such action would not materially and
adversely affect the rights inuring to a holder of the Pledged
Securities or the rights and remedies of the Administrative Agent or
any of the Secured Parties under this Agreement or
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the Credit Agreement or any other Loan Document or the ability of the
Administrative Agent or any of the Secured Parties to exercise the
same.
(ii) The Administrative Agent shall execute and deliver to any
applicable Pledgor, or cause to be executed and delivered to such
Pledgor, all such proxies, powers of attorney and other instruments as
such Pledgor may reasonably request for the purpose of enabling it to
exercise the voting and/or consensual rights and powers which it is
entitled to exercise pursuant to subparagraph (i) above.
(iii) Each Pledgor shall be entitled to receive and retain any
and all dividends, interest and principal paid in cash on the Pledged
Securities pledged by it to the extent and only to the extent that such
cash dividends, interest and principal are permitted by, and otherwise
paid in accordance with, the terms and conditions of the Credit
Agreement, the other Loan Documents and applicable laws. Other than (A)
pursuant to the first sentence of this paragraph (a)(iii) or (B)
pursuant to a distribution or transfer of any of the assets of a
Subsidiary to any Pledgor in a transaction permitted under the Credit
Agreement, all noncash dividends, interest and principal, and all
dividends, interest and principal paid or payable in cash or otherwise
in connection with a partial or total liquidation or dissolution,
return of capital, capital surplus or paid-in surplus, and all other
distributions made on or in respect of Pledged Securities of such
Pledgor, whether paid or payable in cash or otherwise, whether
resulting from a subdivision, combination or reclassification of the
outstanding Capital Stock of the issuer of any Pledged Securities or
received in exchange for Pledged Securities or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a
party or otherwise, shall be and become part of the Collateral, and, if
received by such Pledgor, shall not be commingled by such Pledgor with
any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Administrative
Agent and shall be forthwith delivered to the Administrative Agent in
the same form as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of
Default, after the Administrative Agent shall have notified any Pledgor of the
suspension of its rights under paragraph (a)(iii) above, then all rights of such
Pledgor to dividends, interest and principal payments which such Pledgor is
authorized to receive pursuant to paragraph (a)(iii) above shall cease, and all
such rights shall thereupon become vested in the Administrative Agent, which
shall have the sole and exclusive right and authority to receive and retain such
dividend, interest and principal payments. All dividends, interest and principal
which are received by any Pledgor contrary to the provisions of this Section
2.04 shall be received in trust for the benefit of the Administrative Agent,
shall be segregated from other property or funds of such Pledgor and shall be
forthwith delivered to the Administrative Agent in the same form as so received
(with any necessary endorsement). Any and all money and other property paid over
to or received by the Administrative Agent pursuant to the provisions of
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this paragraph (b) shall be retained by the Administrative Agent in an account
to be established by the Administrative Agent upon receipt of such money or
other property and shall be applied in accordance with the provisions of Section
5.02(c).
(c) Upon the occurrence and during the continuance of an Event of
Default, after the Administrative Agent shall have notified any Pledgor of the
suspension of its rights under paragraph (a)(i) above, then all rights of such
Pledgor to exercise the voting and consensual rights and powers which such
Pledgor is entitled to exercise pursuant to paragraph (a)(i) of this Section
2.04, and the obligations of the Administrative Agent under paragraph (a)(ii) of
this Section 2.04, shall cease, and all such rights shall thereupon become
vested in the Administrative Agent, which shall have the sole and exclusive
right and authority to exercise such voting and consensual rights and powers.
(d) Any notice given by the Administrative Agent to any Pledgor
suspending its rights under paragraph (a) above (i) may be given by telephone if
promptly confirmed in writing and (ii) may suspend the rights of such Pledgor
under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such
rights (as specified by the Administrative Agent in its sole and absolute
discretion) and without waiving or otherwise affecting the Administrative
Agent's rights to give additional notices from time to time suspending other
rights so long as an Event of Default has occurred and is continuing.
SECTION 2.05. SECURITY INTERESTS ABSOLUTE. All rights of the
Administrative Agent and the Secured Parties hereunder, and all obligations of
each Pledgor hereunder, shall be absolute and unconditional and, without
limiting the generality of the foregoing and to the fullest extend permitted
under applicable law, shall not be released, discharged or otherwise affected
by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any Secured Obligation, any Note, or any other
document evidencing or securing such Secured Obligation, by operation
of law or otherwise;
(b) any modification or amendment or supplement to the Credit
Agreement, any Note, or any other document evidencing or securing any
Secured Obligation;
(c) any release, non-perfection or invalidity of any direct or
indirect security for any Secured Obligation;
(d) any change in the existence, structure or ownership of the
Borrower, such Pledgor or any other Pledgor, or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the
Borrower, such Pledgor or any other Pledgor or its assets or any
resulting disallowance, release or discharge of all or any portion of
the Secured Obligations;
(e) the existence of any claim, set-off or other right which
the Pledgor may have at any time against the Borrower, such Pledgor,
any other Pledgor, the
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Administrative Agent, any Secured Party or any other corporation or
person, whether in connection herewith or any unrelated transactions;
(f) any invalidity or unenforceability for any reason of any
Secured Obligation relating to or against the Borrower, such Pledgor or
any other Pledgor, or any provision of applicable law or regulation
purporting to prohibit the payment by the Borrower, such Pledgor or any
other Pledgor of the Secured Obligations;
(g) any failure by the Administrative Agent or any Secured
Party (i) to file or enforce a claim against the Borrower or any other
Pledgor or its estate (in a bankruptcy or other proceeding), (ii) to
give notice of the existence, creation or incurrence by the Borrower or
any other Pledgor of any new or additional indebtedness or obligation
under or with respect to the Secured Obligations, (iii) to commence any
action against the Borrower or any other Pledgor, (iv) to disclose to
such Pledgor any facts which the Administrative Agent or any Secured
Party may now or hereafter know with regard to the Borrower or any
other Pledgor or (v) to proceed with due diligence in the collection,
protection or realization upon any collateral securing the Secured
Obligations; or
(h) any other act or omission to act or delay of any kind by
the Borrower, any other Pledgor, the Administrative Agent, any other
Secured Party or any other person or any other circumstance whatsoever
which might, but for the provisions of this clause, constitute a legal
or equitable discharge of such Pledgor's obligations hereunder.
SECTION 2.06. RELEASE OF COLLATERAL. Upon (a) the indefeasible payment
in full in cash of all of the Secured Obligations, (b) the termination of the
Commitments, (c) the cancellation or expiration of all Letters of Credit and the
reimbursement in full of all Letter of Credit Disbursements and (d) the
satisfaction by each Pledgor of all terms and conditions hereof, of the Credit
Agreement, the Notes, the Collateral Documents and of all other documents or
agreements governing the Secured Obligations applicable to such Pledgor, the
Administrative Agent will (as soon as reasonably practicable after receipt of
notice from such Pledgor requesting the same, but at the expense of such
Pledgor) execute and send to such Pledgor, (a) for each filing made under
Section 4.01 or 4.02 to perfect the security interests granted to the
Administrative Agent and the Secured Parties hereunder, a termination statement
prepared by such Pledgor to the effect that the Administrative Agent and the
other Secured Parties no longer claim a security interest under such filing and
(b) all documents and instruments previously pledged to the Administrative Agent
hereunder.
SECTION 2.07. CONTINUING LIABILITY OF THE PLEDGOR. Anything herein to
the contrary notwithstanding, each Pledgor shall remain liable to observe and
perform all the terms and conditions to be observed and performed by it under
any contract, agreement, warranty or other obligation with respect to the
Collateral, and shall do nothing to impair the security interests herein
granted. Neither the Administrative Agent nor any Secured Party shall have any
obligation or liability under any such contract, agreement, warranty or
obligation by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any Secured Party of any payment relating to any
Collateral, nor shall the
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Administrative Agent or any Secured Party be required to perform or fulfill any
of the obligations of any Pledgor with respect to any of the Collateral, to make
any inquiry as to the nature or sufficiency of any payment received by it or the
sufficiency of the performance of any party's obligations with respect to any
Collateral. Furthermore, neither the Administrative Agent nor any Secured Party
shall be required to file any claim or demand to collect any amount due or to
enforce the performance of any party's obligations with respect to the
Collateral.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Pledgor represents, warrants and covenants to and with the
Administrative Agent and each of the Secured Parties that:
SECTION 3.01. CREDIT AGREEMENT. All representations and warranties
contained in the Credit Agreement that relate to such Pledgor are true and
correct. Such Pledgor agrees to comply with each of the covenants contained in
the Credit Agreement that imposes or purports to impose restrictions or
obligations on such Pledgor. Such Pledgor acknowledges that any default in the
due observance or performance by such Pledgor of any covenant, condition or
agreement contained herein may constitute an Event of Default as provided in
Article VII of the Credit Agreement. There are no conditions precedent to the
effectiveness of this Agreement that have not been satisfied or waived.
SECTION 3.02. PLEDGED SECURITIES. All Pledged Securities have been duly
authorized and validly issued by the issuers thereof and are fully paid and
nonassessable. Each Pledgor owns good and valid title to all the outstanding
Pledged Securities listed on SCHEDULE 2 hereto with respect to such Pledgor,
free and clear of all Liens, other than the Liens of the Collateral Documents,
of every kind, whether absolute, matured, contingent or otherwise. None of the
Pledged Securities is subject to options to purchase, rights of first refusal or
similar rights of any person. No Pledgor is nor will become a party to or
otherwise bound by any agreement, shareholders agreement, partnership agreement,
operating agreement, charter or by-law provision or contractual restriction
other than this Agreement, which restricts, prohibits, impairs or delays in any
manner the rights of any present or future holder of any of the Pledged
Securities with respect thereto, the pledge of Collateral hereunder or the sale
or disposition of Collateral pursuant hereto after the occurrence of an Event of
Default or the exercise by the Administrative Agent of its rights and remedies
hereunder. The Pledged Securities constitute and will at all times constitute
100% of the Capital Stock of each Subsidiary of the Pledgor (except for smaller
percentages set forth on Schedule 3.08 of the Credit Agreement or as may be
otherwise expressly permitted by the Credit Agreement); PROVIDED, THAT, with
respect to any Foreign Subsidiary that is a Restricted Subsidiary, the Pledged
Securities shall constitute 65% of the Capital Stock of such Foreign Subsidiary
to the extent, and for so long as, the pledge of any greater percentage would
have adverse tax consequences for such Pledgor. Each Pledgor (i) has the power
and authority to pledge the Collateral pledged by it hereunder in the manner
hereby done or contemplated and (ii) will defend its title or interest thereto
or therein against any
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and all Liens (other than the Lien of this Agreement), however arising, of all
persons whomsoever. No consent or approval of any Governmental Authority or any
securities exchange was or is necessary to the validity of the pledges effected
hereby.
SECTION 3.03. VALIDITY, PERFECTION AND PRIORITY OF SECURITY INTERESTS.
(a) By complying with Section 4.01 and by delivering all certificates or
instruments, if any, representing or evidencing the Collateral to the
Administrative Agent, each Pledgor will have created a valid and duly perfected
security interest in favor of the Administrative Agent for the benefit of the
Secured Parties as security for the due and punctual payment and performance of
all Secured Obligations of such Pledgor in all Collateral and identifiable
Proceeds of such Collateral, as to which a security interest may be perfected by
(i) filing UCC financing statements and (ii) possession, which security interest
would be prior to the claims of the trustee in bankruptcy under Section 544(a)
of Title 11 of the United States Bankruptcy Code. Continuing compliance by each
Pledgor with the provisions of Section 4.02 will also (i) create and duly
perfect valid security interests in all Collateral acquired by any Pledgor or
otherwise coming into existence after the date hereof and in all identifiable
Proceeds of such Collateral as security for the due and punctual payment of all
Secured Obligations of each Pledgor and (ii) cause such security interests in
all Collateral and in all Proceeds which are (A) identifiable cash Proceeds of
Collateral covered by financing statements required to be filed hereunder and
(B) identifiable Proceeds in which a security interest may be perfected by such
filing under the UCC, to be duly perfected under the UCC, in each case prior to
the claims of a trustee in bankruptcy under the United States Bankruptcy Code.
(b) The security interests of the Administrative Agent and the other
Secured Parties in the Collateral rank first in priority. Other than financing
statements or other similar documents perfecting the security interests of the
Administrative Agent, no financing statements or similar documents covering all
or any part of the Collateral are on file or of record in any government office
in any jurisdiction in which such filing or recording would be effective to
perfect a security interest in such Collateral, nor is any of the Collateral in
the possession of any person (other than such Pledgor) asserting any claim
thereto or security interest therein.
SECTION 3.04. PLACE OF BUSINESS; LOCATION OF COLLATERAL. SCHEDULE 1
correctly sets forth (a) each Pledgor's chief executive office and principal
place of business and (b) the offices of each Pledgor where records concerning
the General Intangibles are kept.
SECTION 3.05. EFFECTIVENESS. The pledge and grant effected hereby is
effective to vest in the Administrative Agent, on behalf of the Secured Parties,
the rights of the Administrative Agent in the Collateral as set forth herein.
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ARTICLE IV
COVENANTS
Each Pledgor covenants and agrees with the Administrative Agent that
until all the Secured Obligations have been indefeasibly paid in full in cash,
the Commitments have been terminated, all Letters of Credit have been cancelled
or have expired and all Letter of Credit Disbursements have been reimbursed in
full and all terms and conditions hereof, the Credit Agreement, the Loan
Documents and all other documents or agreements governing the Secured
Obligations have been satisfied, each Pledgor will comply with the following:
SECTION 4.01. PERFECTION OF SECURITY INTERESTS. Such Pledgor will, at
its own expense, cause all filings and recordings and other actions specified on
SCHEDULE 4 with respect to such Pledgor to have been completed and filed on or
prior to the Closing Date.
SECTION 4.02. FURTHER ACTIONS. (a) At all times after the Closing Date,
such Pledgor will, at its own expense, comply with the following:
(i) as to all General Intangibles and Pledged Securities of
such Pledgor, it will cause UCC financing statements and continuation
statements to be filed and to be on file in all applicable
jurisdictions as required to perfect the security interests granted to
the Administrative Agent and the Secured Parties hereunder, to the
extent that applicable law permits perfection of a security interest by
filing under the UCC;
(ii) as to all Proceeds of such Pledgor, it will cause all UCC
financing statements and continuation statements filed in accordance
with clause (i) above to include a statement or a checked box
indicating that Proceeds of all items of Collateral described therein
are covered; and
(iii) as to any Capital Stock hereafter acquired by such
Pledgor, such Pledgor will immediately pledge and deliver the
corresponding certificates as contemplated by the Agreement (i.e., 100%
of all Capital Stock of an issuer organized under the laws of the
United States and 65% of the Capital Stock of an issuer organized in a
jurisdiction outside the United States for so long as the pledge of any
greater percentage would have adverse tax consequences to the
Borrower), or other instruments, if applicable, to the Administrative
Agent for the benefit of the Secured Parties as part of the Pledged
Securities duly endorsed in a manner satisfactory to the Administrative
Agent or accompanied by instruments of transfer satisfactory to the
Administrative Agent.
(b) Such Pledgor will, from time to time and at its own expense,
execute, deliver, file or record such financing statements pursuant to the UCC
and such other statements, assignments, instruments, documents, agreements or
other papers and take any other action that may be necessary or desirable, or
that the Administrative Agent may reasonably request, in order to create,
preserve, perfect, confirm or validate the security interests, to enable the
Administrative Agent and the Secured Parties to obtain the full benefits of this
Agreement or
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to enable the Administrative Agent to exercise and enforce any of its rights,
powers and remedies hereunder, including, without limitation, its right to take
possession of the Collateral.
(c) To the fullest extent permitted by law, such Pledgor authorizes the
Administrative Agent (i) to sign and file financing and continuation statements
and amendments thereto with respect to the Collateral without its signature
thereon and (ii) to the extent permissible by applicable law, file this
Agreement in any UCC filing jurisdiction as a financing statement with respect
to the Collateral. In furtherance of the foregoing, such Pledgor hereby
irrevocably constitutes and appoints the Administrative Agent, with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Pledgor and in the name of
such Pledgor, or in its own name, from time to time in the Administrative
Agent's reasonable discretion, to execute, deliver, file or record financing
statements pursuant to the UCC as may be necessary or desirable in order to
create, preserve, perfect, confirm or validate the security interests.
SECTION 4.03. CHANGE OF NAME, IDENTITY OR STRUCTURE. Such Pledgor will
not change its name, identity or corporate structure in any manner and will not
conduct its business under any trade, assumed or fictitious name unless
expressly permitted by the Credit Agreement and unless it shall have given the
Administrative Agent at least 30 days' prior written notice thereof and shall
have taken all action (or made arrangements to take such action substantially
simultaneously with such change if it is impossible to take such action in
advance) necessary or reasonably requested by the Administrative Agent to amend
any financing statement or continuation statement relating to the security
interests granted hereby in order to preserve such security interests and to
effectuate or maintain the priority thereof against all persons.
SECTION 4.04. PLACE OF BUSINESS AND COLLATERAL. Such Pledgor will not
change the location of its chief executive office unless, prior to such change,
it notifies the Administrative Agent of such change, makes all UCC filings
required by Section 4.02 and takes all other action necessary or that the
Administrative Agent may reasonably request to preserve, perfect, confirm and
protect the security interests granted hereby.
SECTION 4.05. MAINTENANCE OF RECORDS. Pledgor will keep and maintain at
its own cost and expense complete books and records relating to the Collateral
of such Pledgor which are reasonably satisfactory to the Administrative Agent,
including a record of all payments received and all credits granted with respect
to the Collateral of such Pledgor and all of its other dealings with such
Collateral. Such Pledgor will provide the Administrative Agent with reasonable
access to or copies of such records promptly upon Administrative Agent's request
therefor.
SECTION 4.06. COMPLIANCE WITH LAWS, ETC. Such Pledgor will comply, in
all material respects, with all acts, rules, regulations, orders, decrees and
directions of any Governmental Authority applicable to the Collateral or any
part thereof or to the operation of such Pledgor's business; PROVIDED, THAT,
such Pledgor may contest any act, regulation, order, decree or direction in any
reasonable manner which shall not in the reasonable judgment of
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the Administrative Agent adversely affect the Administrative Agent's rights or
the first priority of its security interest in the Collateral.
SECTION 4.07. PAYMENT OF TAXES, ETC. Such Pledgor will pay promptly
when due all taxes, assessments and other governmental charges or levies imposed
upon the Collateral of such Pledgor or in respect of its income or profits
therefrom, and all claims of any kind; PROVIDED, THAT, no such tax, assessment,
charge or claim need be paid or reimbursed if the validity thereof is being
contested in good faith by appropriate proceedings promptly initiated and
diligently conducted and if such reserves or other appropriate provision, if
any, as shall be required by GAAP shall have been made therefor and be adequate
in the good faith judgment of such Pledgor.
SECTION 4.08. LIMITATION ON LIENS ON COLLATERAL. Such Pledgor will not
create, permit or suffer to exist, but will defend the Collateral of such
Pledgor and such Pledgor's rights with respect thereto against and take such
other action as is necessary to remove, any security interest, encumbrance,
claim or other Lien in respect of the Collateral of such Pledgor other than the
security interests created hereunder.
SECTION 4.09. LIMITATIONS ON DISPOSITIONS OF COLLATERAL. Such Pledgor
will not directly or indirectly (through the sale of stock, merger or otherwise)
sell, transfer, lease or otherwise dispose of any of the Collateral of such
Pledgor, or attempt, offer or contract to do so, except in each case as
expressly permitted under the Credit Agreement. The inclusion of Proceeds of the
Collateral under the security interest granted hereby shall not be deemed a
consent by the Administrative Agent to any sale or disposition of any
Collateral.
SECTION 4.10. NOTICES. Such Pledgor will advise the Administrative
Agent promptly and in reasonable detail, (a) of any security interest,
encumbrance or claim made or other Lien asserted against any of the Collateral
of such Pledgor, (b) of any material change in the composition of the Collateral
of such Pledgor, and (c) of the occurrence of any other event which would have a
material effect on the aggregate value of the Collateral of such Pledgor, or on
the security interests granted to the Administrative Agent in this Agreement.
SECTION 4.11. CHANGE OF LAW. Such Pledgor shall:
(a) promptly notify the Administrative Agent in writing of any
change in law known to it which (i) adversely affects or will adversely
affect the validity, perfection or priority of the security interests
granted hereby, (ii) requires or will require a change in the
procedures to be followed in order to maintain and protect such
validity, perfection and priority or (iii) could result in the
Administrative Agent not having a perfected security interest in any of
the Collateral of such Pledgor;
(b) furnish the Administrative Agent with an opinion of
outside legal counsel reasonably satisfactory to the Administrative
Agent setting forth the procedures to be followed in order (i) to avoid
(or to minimize if avoidance is impossible) such adverse effect, (ii)
to maintain and protect such
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validity, perfection and priority or (iii) to assure that the
Administrative Agent has perfected security interests in all of the
Collateral of such Pledgor; and
(c) follow the procedures set forth in such opinion of
counsel.
SECTION 4.12. ADDITIONAL INTERESTS. No later than 30 days prior to
acquiring any Capital Stock of any Subsidiary, such Pledgor shall provide notice
to the Administrative Agent of such acquisition and complete any filings
required under Section 4.02 with respect to such acquisition.
SECTION 4.13. CERTAIN LIABILITIES. By taking a security interest in the
Collateral pursuant to this Agreement, the Administrative Agent and the other
Secured Parties do not assume, accept or become liable with respect to any
debts, liabilities or obligations of any issuer of any Collateral.
SECTION 4.14. REIMBURSEMENT OBLIGATION. Should any Pledgor fail to
comply with the provisions of this Agreement or any other agreement relating to
the Collateral of such Pledgor such that the value of any Collateral or the
validity, perfection, rank or value of any security interest granted to the
Administrative Agent hereunder or thereunder is thereby diminished or
potentially diminished in any material respect or put at risk in any material
respect (as reasonably determined by the Administrative Agent), the
Administrative Agent on behalf of such Pledgor may, but shall not be required
to, effect such compliance on behalf of such Pledgor, and such Pledgor shall
reimburse the Administrative Agent for the costs thereof on demand, and interest
shall accrue on any such unpaid reimbursement obligation from the date the
relevant costs are incurred until reimbursement thereof in full at the default
rate provided in Section 2.07 of the Credit Agreement.
SECTION 4.15. FURTHER APPROVALS. In connection with the exercise by the
Administrative Agent on behalf of the Secured Parties of its rights hereunder,
it may be necessary to obtain the prior consent or approval of Governmental
Authorities and other persons to a transfer or assignment of Collateral. Each
Pledgor hereby agrees, during the continuance of an Event of Default, to
execute, deliver and file, and hereby appoints (to the extent permitted under
applicable law) the Administrative Agent on behalf of the Secured Parties as its
attorney, during the continuance of an Event of Default, to execute, deliver and
file on each Pledgor's behalf and in each Pledgor's name, all applications,
certificates, filings, instruments and other documents (including any
application for an assignment or transfer of control or ownership) that may be
necessary or appropriate, in the Administrative Agent's opinion, to obtain such
consents, waivers or approvals. Each Pledgor further agrees to use its best
efforts to obtain the foregoing consents, waivers and approvals, including
receipt of consents, waivers and approvals under applicable agreements, prior to
a Default or Event of Default. Each Pledgor acknowledges that there is no
adequate remedy at law for failure by it to comply with the provisions of this
Section 4.16 and that such failure would not be adequately compensable in
damages, and therefore agrees that this Section 4.16 may be specifically
enforced.
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ARTICLE V
REMEDIES; RIGHTS UPON DEFAULT
SECTION 5.01. UCC RIGHTS. If any Event of Default shall have occurred,
the Administrative Agent may, in addition to all other rights and remedies
granted to it in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, exercise all rights
and remedies of a secured party under the UCC and all other rights available to
the Administrative Agent at law or in equity.
SECTION 5.02. SALE OF COLLATERAL. (a) Each Pledgor expressly agrees
that if an Event of Default shall occur and be continuing, the Administrative
Agent, without demand of performance or other demand or notice of any kind
(except the notice specified below of the time and place of any public or
private sale) to such Pledgor or any other person (all of which demands and/or
notices are hereby waived by such Pledgor), may forthwith collect, receive,
appropriate and realize upon the Collateral and/or forthwith sell, lease,
assign, give an option or options to purchase or otherwise dispose of and
deliver the Collateral (or contract to do so) or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at any
office of the Administrative Agent or elsewhere in such manner as is
commercially reasonable and as the Administrative Agent may deem best, for cash
or on credit or for future delivery without assumption of any credit risk. The
Administrative Agent or any Secured Party shall have the right upon any such
public sale and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Collateral so sold. Each Pledgor further
agrees, at the Administrative Agent's request, to assemble the Collateral, and
to make it available to the Administrative Agent at places which the
Administrative Agent may reasonably select. To the extent permitted by
applicable law, each purchaser or purchasers at any such sale shall hold any
Collateral purchased absolutely free from any claim or right of any Pledgor and,
to the extent permitted by applicable law, each such Pledgor waives all claims,
damages and demands against the Administrative Agent arising out of the
foreclosure, repossession, retention or sale of the Collateral except to the
extent that a court of competent jurisdiction shall have determined by final
nonappealable judgment that any action taken by the Administrative Agent or any
Secured Party with respect to such foreclosure, repossession, retention or sale
constitutes gross negligence or willful misconduct.
(b) Unless the Collateral threatens to decline speedily in value or is
of a type customarily sold in a recognized market, the Administrative Agent
shall give such Pledgor ten (10) days' written notice of its intention to make
any such public or private sale or sale at a broker's board or on a securities
exchange. Such notice shall (i) in the case of a public sale, state the time and
place fixed for such sale, (ii) in the case of a sale at a broker's board or on
a securities exchange, state the board or exchange at which such sale is to be
made and the day on which the Collateral, or any portion thereof being sold,
will first be offered for sale and (iii) in the case of a private sale, state
the day after which such sale may be consummated. The Administrative Agent shall
not be required or obligated to make any such sale pursuant to any such notice.
The Administrative Agent may adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which
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the same may be so adjourned. In the case of any sale of all or any part of the
Collateral for credit or for future delivery, the Collateral so sold may be
retained by the Administrative Agent until the selling price is paid by the
purchaser thereof, but the Administrative Agent shall not incur any liability in
case of failure of such purchaser to pay for the Collateral so sold and, in the
case of such failure, such Collateral may again be sold upon like notice. At any
public sale made pursuant to this Section any Secured Party may bid for or
purchase, free (to the extent permitted by law) from any right of redemption,
stay, valuation or appraisal on the part of any Pledgor (all rights being also
hereby waived and released to the extent permitted by law), the Collateral or
any part thereof offered for sale and may make payment on account thereof by
using any claim then due and payable to it from any Pledgor as a credit against
the purchase price, and the Administrative Agent may, upon compliance with the
terms of sale, hold, retain and dispose of such property without further
accountability to any Pledgor therefor to the fullest extent permitted under
applicable law. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Administrative Agent shall be free to carry out such sale pursuant to such
agreement, and, to the fullest extent permitted under applicable law, no Pledgor
shall be entitled to the return of the Collateral or any portion thereof subject
thereto, notwithstanding the fact that after the Administrative Agent shall have
entered into such an agreement all Events of Default shall have been remedied
and the Secured Obligations paid in full.
(c) The proceeds of any sale of Collateral pursuant to this Section
5.02 shall be applied by the Administrative Agent as follows:
FIRST, to the payment of all reasonable costs and expenses
incurred by the Administrative Agent (in its capacity as such hereunder
or under any other Loan Document) in connection with such sale or
otherwise in connection with this Agreement or any of the Secured
Obligations, including all reasonable court costs and the reasonable
fees and expenses of its agents and legal counsel, the repayment of all
advances made by the Administrative Agent hereunder or under any other
Loan Document on behalf of any Pledgor and any other reasonable costs
or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the Secured Obligations (the
amounts so applied to be distributed among the Secured Parties pro rata
in accordance with the amounts of the Secured Obligations owed to them
on the date of any such distribution); and
THIRD, to the Pledgors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Administrative Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Administrative Agent
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the Administrative Agent or of the officer making
the sale shall be a sufficient discharge to the purchaser or purchasers of the
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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
Administrative Agent or such officer or be answerable in any way for the
misapplication thereof.
SECTION 5.03. ADDITIONAL RIGHTS OF THE ADMINISTRATIVE AGENT. Upon the
occurrence and during the continuance of an Event of Default:
(a) The Administrative Agent shall have the right and power to
institute and maintain such suits and proceedings as it may deem appropriate to
protect and enforce the rights vested in it by this Agreement and may proceed by
suit or suits at law or in equity to enforce such rights and to foreclose upon
and sell the Collateral or any part thereof pursuant to the judgment or decree
of a court of competent jurisdiction.
(b) The Administrative Agent shall, to the extent permitted by law and
without regard to the solvency or insolvency at the time of any person then
liable for the payment of any of the Secured Obligations or the then value of
the Collateral, and without requiring any bond from any party to such
proceedings, be entitled to the appointment of a special receiver or receivers
(who may be the Administrative Agent or any other Secured Party) for the
Collateral or any part thereof and for the rents, issues, tolls, profits,
royalties, revenues and other income therefrom, which receiver shall have such
powers as the court making such appointment shall confer, and to the entry of an
order directing that the rents, issues, tolls, profits, royalties, revenues and
other income of the property constituting the whole or any part of the
Collateral be segregated, sequestered and impounded for the benefit of the
Administrative Agent and the other Secured Parties, and each Pledgor irrevocably
consents to the appointment of such receiver or receivers and to the entry of
such order.
SECTION 5.04. SECURITIES ACT, ETC. (a) In view of the position of the
Pledgors in relation to the Pledged Securities, or because of other present or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "FEDERAL SECURITIES LAWS"), with respect to any
disposition of the Pledged Securities permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Administrative Agent if the Administrative
Agent were to attempt to dispose of all or any part of the Pledged Securities,
and might also limit the extent to which or the manner in which any subsequent
transferee of any such Pledged Securities could dispose of the same. Similarly,
there may be other legal restrictions or limitations affecting the
Administrative Agent and the other Secured Parties in any attempt to dispose of
all or part of the Pledged Securities under applicable blue sky or other state
securities laws or similar laws analogous in purpose or effect. Each Pledgor
recognizes that in light of the foregoing restrictions and limitations the
Administrative Agent may, with respect to any sale of Pledged Securities, limit
the purchasers to those who will agree, among other things, to acquire Pledged
Securities for their own account, for investment, and not with a view to the
distribution or resale thereof.
Accordingly, each Pledgor expressly agrees that the Administrative
Agent is authorized, in connection with any sale of the Pledged Securities, if
it deems it advisable so
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to do, (i) to restrict the prospective bidders on or purchasers of any of the
Pledged Securities to a limited number of sophisticated investors who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of such
Pledged Securities, (ii) to cause to be placed on certificates for any or all of
the Pledged Securities or on any other securities pledged hereunder a legend to
the effect that such security has not been registered under the Federal
Securities Laws and may not be disposed of in violation of the provision of the
Federal Securities Laws and (iii) to impose such other limitations or conditions
in connection with any such sale as the Administrative Agent deems necessary or
advisable in order to comply with the Federal Securities Laws or any other law.
Each Pledgor covenants and agrees that it will execute and deliver such
documents and take such other action as the Administrative Agent deems necessary
or advisable in order to comply with the Federal Securities Laws or any other
law. Each Pledgor acknowledges and agrees that such limitations may result in
prices and other terms less favorable to the seller than if such limitations
were not imposed, and, notwithstanding such limitations, agrees that any such
sale shall be deemed to have been made in a commercially reasonable manner, it
being the agreement of each Pledgor, the Administrative Agent and the other
Secured Parties that the provisions of this Section 5.04 will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Administrative Agent sells the Pledged Securities. The Administrative Agent
shall be under no obligation to delay a sale of any Pledged Securities for a
period of time necessary to permit the issuer of any securities contained
therein to register such securities under the Federal Securities Laws, or under
applicable state securities laws, even if the issuer would agree to do so.
(b) If the Administrative Agent shall determine to exercise its right
to sell all or any of the Pledged Securities and if in the opinion of counsel
for the Administrative Agent it is necessary, or if in the opinion of the
Administrative Agent it is advisable, to have the securities included in the
Pledged Securities or the portion thereof to be sold registered under the
provisions of the Federal Securities Laws, each Pledgor agrees, at its own
expense, (i) to execute and deliver, and to use its best efforts to cause its
directors and officers to execute and deliver, all such instruments and
documents, and to do or cause to be done all other such acts and things, as may
be necessary or, in the opinion of the Administrative Agent, advisable to
register such securities under the provisions of the Federal Securities Laws and
to cause the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to be
furnished, and to make or cause to be made all amendments and supplements
thereto and to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Federal Securities Laws and the rules and regulations of the
Securities and Exchange Commission thereunder, (ii) to prepare, and to make
available to its security holders as soon as practicable, an earnings statement
(which need not be audited) covering the period of at least 12 months beginning
with the first month after the effective date of any such registration
statement, which earning statement will satisfy the provisions of Section 11(a)
of the Federal Securities Laws, (iii) to use its best efforts to qualify such
securities under state blue sky or securities laws and to obtain the approval of
any governmental authorities for the sale of such securities as requested by the
Administrative Agent and (iv) at the request of the Administrative Agent, to
indemnify and hold harmless the Administrative Agent, any other Secured Party
and any underwriters (and any person controlling any of the
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foregoing) from and against any loss, liability, claim, damage and expense (and
reasonable counsel fees incurred in connection therewith) under the Federal
Securities Laws or otherwise insofar as such loss, liability, claim, damage or
expense arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in such registration statement or
prospectus or in any preliminary prospectus or any amendment or supplement
thereto, or arises out of or is based upon any omission or alleged omission to
state therein a material fact required to be stated or necessary to make the
statements therein not misleading, such indemnification to remain operative
regardless of any investigation made by or on behalf of the Administrative
Agent, any other Secured Party or any underwriters (or any person controlling
any of the foregoing); PROVIDED, THAT, such Pledgor shall not be liable in any
case to the extent that any such loss, liability, claim, damage or expense
arises out of or is based on an untrue statement or alleged untrue statement or
an omission or an alleged omission made in reliance upon and in conformity with
written information furnished to such person by the Administrative Agent or any
underwriter expressly for use in such registration statement or prospectus.
SECTION 5.05. REMEDIES NOT EXCLUSIVE. (a) No remedy conferred upon or
reserved to the Administrative Agent in this Agreement is intended to be
exclusive of any other remedy or remedies, but every such remedy shall be
cumulative and shall be in addition to every other remedy conferred herein or
now or hereafter existing at law, in equity or by statute.
(b) If the Administrative Agent shall have proceeded to enforce any
right, remedy or power under this Agreement and the proceeding for the
enforcement thereof shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Administrative Agent, each Pledgor
and the Administrative Agent shall, subject to any determination in such
proceeding, severally and respectively be restored to their former positions and
rights under this Agreement, and thereafter all rights, remedies and powers of
the Administrative Agent shall continue as though no such proceedings had been
taken.
(c) All rights of action under this Agreement may be enforced by the
Administrative Agent without the possession of any instrument evidencing any
Secured Obligation or the production thereof at any trial or other proceeding
relative thereto, and any suit or proceeding instituted by the Administrative
Agent shall be brought in its name and any judgment shall be held as part of the
Collateral.
SECTION 5.06. WAIVER AND ESTOPPEL. (a) Each Pledgor, to the extent it
may lawfully do so, agrees that it will not at any time in any manner whatsoever
claim or take the benefit or advantage of any appraisement, valuation, stay,
extension, moratorium, turnover or redemption law, or any law now or hereafter
in force permitting it to direct the order in which the Collateral shall be sold
which may delay, prevent or otherwise affect the performance or enforcement of
this Agreement and each Pledgor hereby waives the benefits or advantage of all
such laws, and covenants that it will not hinder, delay or impede the execution
of any power granted to the Administrative Agent in this Agreement but will
permit the execution of every such power as though no such law were in force;
PROVIDED, THAT, nothing contained in this Section 5.06 shall be construed as a
waiver of any rights of any Pledgor under any applicable Federal bankruptcy law.
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(b) Each Pledgor, to the extent it may lawfully do so, on behalf of
itself and all who may claim through or under it, including any and all
subsequent creditors, vendees, assignees and lienors, waives and releases all
rights to demand or to have any marshalling of the Collateral upon any sale,
whether made under any power of sale granted herein or pursuant to judicial
proceedings or upon any foreclosure or any enforcement of this Agreement and
consents and agrees that all of the Collateral may at any such sale be offered
and sold as an entirety.
(c) Each Pledgor, to the extent it may lawfully do so, waives
presentment, demand, protest and any notice of any kind (except notices
explicitly required hereunder or under the Credit Agreement) in connection with
this Agreement and any action taken by the Administrative Agent with respect to
the Collateral.
SECTION 5.07. POWER OF ATTORNEY. Each Pledgor hereby irrevocably
constitutes and appoints the Administrative Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Pledgor and in the name of
such Pledgor or in its own name, from time to time in the Administrative Agent's
discretion for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement and, without limiting the generality of the foregoing, hereby
gives the Administrative Agent the power and right, on behalf of such Pledgor,
without notice to or assent by such Pledgor to do the following:
(a) upon the occurrence and during the continuance of any
Event of Default, to pay or discharge taxes, liens, security interests
or other encumbrances levied or placed on or threatened against the
Collateral; and
(b) upon the occurrence and during the continuance of any
Event of Default and otherwise to the extent provided in this
Agreement, (i) to direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due and to come
due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (ii) to receive payment of and
receipt for any and all moneys, claims and other amounts due and to
become due at any time in respect of or arising out of any Collateral;
(iii) to commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any thereof and to enforce any other right in respect of
any Collateral; (iv) to defend any suit, action or proceeding brought
against such Pledgor with respect to any Collateral; (v) to settle,
compromise and adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or releases as
the Administrative Agent may deem appropriate; and (vi) generally to
sell, transfer, pledge, make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes,
and to do, at the option of the Administrative Agent and such Pledgor's
expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Administrative Agent's security
interest therein, in order
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to effect the intent of this Agreement, all as fully and effectively as
such Pledgor might do.
Each Pledgor hereby ratifies all that such attorneys shall lawfully do
or cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
Except as provided by law or the UCC or its equivalent, nothing herein
contained shall be construed as requiring or obligating the Administrative Agent
to make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by the Administrative Agent, or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby, and the Administrative Agent shall not be liable
hereunder for any action taken by the Administrative Agent or omitted to be
taken with respect to the Collateral or any part thereof (other than any action
or inaction that a court of competent jurisdiction shall have determined by
final and nonappealable judgment to constitute gross negligence or willful
misconduct). It is understood and agreed that the appointment of the
Administrative Agent as the agent of each Pledgor for the purposes set forth
above in this Section 5.07 is coupled with an interest and is irrevocable. The
provisions of this Section 5.07 shall in no event relieve such Pledgor of any of
its obligations hereunder with respect to the Collateral or any part thereof or
impose any obligation on the Administrative Agent to proceed in any particular
manner with respect to the Collateral or any part thereof, or in any way limit
the exercise by the Administrative Agent of any other or further right which it
may have on the date of this Agreement or hereafter, whether hereunder or by law
or otherwise.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. NOTICES. Unless otherwise specified herein, all notices,
requests or other communications to any party hereunder shall be in writing,
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy and shall be given to such party at its
address or telecopy number set forth, in the case of the Administrative Agent,
in Section 9.01 of the Credit Agreement and, in the case of each Pledgor, on the
signature pages hereof or at any other address or telecopy number which such
party shall have specified for the purpose of communications hereunder by notice
to the other parties hereunder. All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt if delivered by hand or
overnight courier service or sent by telecopy or on the date three Business Days
after dispatch by certified or registered mail if mailed, in each case
delivered, sent or mailed (properly addressed) to such party as provided in this
Section 6.01 or in accordance with the latest unrevoked direction from such
party given in accordance with this Section 6.01.
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SECTION 6.02. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by each Pledgor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Administrative Agent and the other Secured Parties and shall survive the making
by the Lenders of the Loans, the issuance by the Issuing Bank of Letters of
Credit and the execution and delivery to the Lenders of the Notes evidencing
such Loans, regardless of any investigation made by the Lenders or on their
behalf, and shall continue in full force and effect until the Secured
Obligations have been indefeasibly paid in full in cash, the Commitments have
been terminated, all Letters of Credit have been cancelled or have expired, all
Letter of Credit Disbursements have been reimbursed in full and all terms and
conditions hereof, the Credit Agreement, the Loan Documents and all other
documents or agreements governing the Secured Obligations have been satisfied.
SECTION 6.03. COUNTERPARTS; EFFECTIVENESS. (a) This Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which, when taken together, shall constitute but one
instrument.
(b) This Agreement shall become effective as to each Pledgor when a
counterpart hereof executed on behalf of such Pledgor shall have been delivered
to the Administrative Agent and a counterpart hereof shall have been executed on
behalf of the Administrative Agent, and thereafter shall be binding upon such
Pledgor and the Administrative Agent and their respective successors and
assigns, subject to the terms of Section 6.06 hereof, and shall inure to the
benefit of such Pledgor, the Administrative Agent and the other Secured Parties
and their respective successors and assigns, subject to the terms of Section
6.06 hereof.
SECTION 6.04. WAIVERS; AMENDMENT. (a) To the fullest extent permitted
under applicable law, no failure or delay of the Administrative Agent in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent hereunder
and of the Administrative Agent and the Lenders under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies which they would
otherwise have. No waiver of any provisions of this Agreement or any other Loan
Document or consent to any departure by any Pledgor therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on any Pledgor in any case
shall entitle such Pledgor to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Pledgor with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.08 of the Credit Agreement.
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SECTION 6.05. SUPPLEMENTAL AGREEMENT. Upon execution and delivery by
the Administrative Agent and a Subsidiary of a Supplemental Agreement
substantially in the form of Exhibit I to the Credit Agreement, such Subsidiary
shall become a Pledgor hereunder with the same force and effect as if originally
named as a Pledgor herein. The execution and delivery of any such instrument
shall not require the consent of any other Pledgor hereunder. The rights and
obligations of each Pledgor hereunder shall remain in full force and effect
notwithstanding the addition of any new Pledgor as a party to this Agreement.
SECTION 6.06. ASSIGNMENTS. Upon the assignment by any Lender of all or
any portion of its rights and obligations under the Credit Agreement (including
all or any portion of its Commitment and the Loans owing to it) to any other
person, such other person shall thereupon become vested with all the benefits in
respect thereof granted to such transferor or assignor herein or otherwise. No
Pledgor shall be permitted to assign, transfer or delegate any of its rights or
obligations under this Agreement (and any such purported assignment, transfer or
delegation without such consent shall be void).
SECTION 6.07. SAVINGS CLAUSE. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, no party hereto shall be required to comply with
such provision for so long as such provision is held to be invalid, illegal or
unenforceable, and the validity, legality and enforceability of the remaining
provisions contained herein, and of such invalid, illegal or unenforceable
provision with respect to any other party, shall not in any way be affected or
impaired. The parties shall endeavor in good-faith negotiations to replace any
invalid, illegal or unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 6.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF OHIO.
SECTION 6.09. ENTIRE AGREEMENT. This Agreement, the other Loan
Documents and the Fee Letter constitute the entire contract between the parties
relative to the subject matter hereof. Any previous agreement among the parties
with respect to the subject matter hereof is superseded by this Agreement, the
other Loan Documents and the Fee Letter. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto and
the Secured Parties, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
SECTION 6.10. HEADINGS. Article and Section headings used herein are
for convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 6.11. ADMINISTRATIVE AGENT'S FEES AND EXPENSES;
INDEMNIFICATION. (a) Each Pledgor agrees to pay upon demand to the
Administrative Agent the amount of any and all reasonable expenses, including
the reasonable fees and expenses of its counsel and of any experts or agents,
which the Administrative Agent may incur in connection with (i) the
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administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from or other realization upon any of the Collateral of such
Pledgor, (iii) the exercise, enforcement or protection of any of the rights of
the Administrative Agent hereunder or (iv) the failure of such Pledgor to
perform or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each Pledgor agrees, to the fullest extent permitted under
applicable law, to indemnify the Administrative Agent and the other Indemnified
Parties against, and hold each of them harmless from, any and all losses,
claims, damages, liabilities and related expenses, including reasonable counsel
fees and expenses, incurred by or asserted against any of them arising out of,
in any way connected with, or as a result of, the execution, delivery or
performance of this Agreement or any claim, litigation, investigation or
proceeding relating hereto or to the Collateral, whether or not any Indemnified
Party is a party thereto; PROVIDED, THAT, such indemnity shall not, as to any
Indemnified Party, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnified Party.
(c) Any such amounts payable as provided hereunder shall be additional
obligations secured hereby. The provisions of this Section shall remain
operative and in full force and effect regardless of the termination of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent or any Lender. All amounts due
under this Section shall be payable on written demand therefor.
SECTION 6.12. SUBMISSION TO JURISDICTION. (a) Each Pledgor hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any Ohio State court or Federal court of the United
States of America sitting in Dayton, Ohio and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
Ohio State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent or any Secured Party may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against such Pledgor or its properties in the courts of
any jurisdiction.
(b) Each Pledgor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
Ohio State court or Federal court of the United States of America sitting in
Dayton, Ohio. Each of the parties hereto hereby
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irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 6.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first written above.
BANK ONE, DAYTON, N.A.,
as Administrative Agent
By:____________________________
Name:
Title:
XXXXXXX & XXXXX, INC.
By:____________________________
Name:
Title:
Address:
Telecopy:
PFAUDLER, INC.
By:____________________________
Name:
Title:
Address:
Telecopy:
CHEMINEER, INC.
By:____________________________
Name:
Title:
Address:
Telecopy:
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EDLON, INC.
By:____________________________
Name:
Title:
Address:
Telecopy:
GLASTEEL PARTS AND SERVICES, INC.
By:____________________________
Name:
Title:
Address:
Telecopy:
E.C. MOTORS, INC.
By:____________________________
Name:
Title:
Address:
Telecopy:
R&M ENVIRONMENTAL STRATEGIES, INC.
By:____________________________
Name:
Title:
Address:
Telecopy:
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Schedule 1
----------
CHIEF EXECUTIVE OFFICE AND PRINCIPAL PLACE OF BUSINESS
------------------------------------------------------
Name Mailing Address County State
---- --------------- ------ -----
LOCATIONS OF RECORDS OF RECEIVABLES AND GENERAL INTANGIBLES
-----------------------------------------------------------
Name Mailing Address County State
---- --------------- ------ -----
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Schedule 2
----------
PLEDGED SECURITIES
------------------
Part I: List of Pledged Shares:
-----------------------
Class Stock Par Number
Pledgor Stock Issuer Of Stock Certificate Nos. Value of Shares
------- ------------ -------- ---------------- ----- ---------
Part II: List of Pledged Debt:
---------------------
Pledgor Debt Issuer Date of Issuance Outstanding Balance
------- ----------- ---------------- -------------------
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Schedule 3
----------
TRADE NAMES, DIVISION NAMES, ETC.
---------------------------------
Pledgor Trade Names, Division Names, Etc.
------- ---------------------------------
34
Schedule 4
----------
REQUIRED FILINGS AND RECORDINGS
-------------------------------
Pledgor UCC Filings & Locations Other Filings
------- ----------------------- -------------
