PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of April __, 1998, made by AMERICAN BUILDINGS
COMPANY, a Delaware corporation (the "Pledgor"), to CANADIAN IMPERIAL BANK OF
COMMERCE (the "Agent"), in connection with the Reimbursement Agreement, as
hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Industrial Development Authority of Mecklenburg County,
Virginia (the "Issuer") has issued its Industrial Development Revenue Bonds
(American Buildings Company Project) Series 1994 (the "Bonds") under that
Indenture of Trust dated as of December 1, 1994 (the "Indenture") between the
Issuer and NationsBank of Virginia, N.A. ("NationsBank"), as trustee
(NationsBank or any successor to NationsBank as trustee under the Indenture, the
"Trustee");
WHEREAS, the Indenture provides for the purchase of the Bonds under certain
circumstances as set forth in Sections 4.06 and 4.07 of the Indenture from the
holders thereof;
WHEREAS, the Agent has, at the request of and for the account of the
Pledgor, issued its irrevocable letter of credit (the "Letter of Credit") to
support payments on and purchases of the Bonds and to replace an existing letter
of credit issued by La Salle National Bank in connection with the issuance of
the Bonds;
WHEREAS, the obligations of the Pledgor to reimburse the Agent, as Agent,
are provided under and pursuant to the terms of a Credit Agreement, dated as of
December 4, 1997 (as amended, supplemented or otherwise modified from time to
time, the "Reimbursement Agreement"), among the Pledgor, as borrower, the
lenders from time to time parties thereto (the "Lenders") and Canadian Imperial
Bank of Commerce, as Administrative Agent. The proceeds of certain drawings
under the Letter of Credit may be used, inter alia, to pay the purchase price of
any Bonds tendered for purchase pursuant to the Indenture (to the extent moneys
drawn under the Letter of Credit are used to purchase any such Bonds, such Bonds
are hereinafter referred to as the "Bank Bonds"); and
WHEREAS, it is a condition precedent to the issuance of the Letter of
Credit that the Pledgor shall have executed and delivered this Pledge Agreement
to the Agent.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Agent to issue the Letter of Credit and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Pledgor hereby
agrees with the Agent as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in the
Indenture shall have such defined meanings when used herein.
2. Pledge. The Pledgor hereby (a) pledges, assigns, hypothecates, transfers
and delivers to the Agent, for its benefit and the benefit of the Lenders, all
its right, title and interest in and to the Bank Bonds, as the same may be from
time to time delivered to the Trustee, the Remarketing Agent, the Tender Agent
or the Company pursuant to the Indenture and (b) hereby grants to the Agent a
first lien on, and first security interest in, its right, title and interest in
and to the Bank Bonds, the interest thereon and all proceeds thereof, in each
case as collateral security for the
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prompt and complete payment when due of all amounts due with respect to the
obligations of the Pledgor with respect to the Letter of Credit (including,
without limitation, all reimbursement obligations, interest accruing thereon and
any other amounts owing thereunder or in connection therewith; all the foregoing
being hereinafter called the "Obligations").
3. Covenants. The Pledgor covenants and agrees with the Agent and the
Lenders (as defined in the Reimbursement Agreement) that, from and after the
date of this Pledge Agreement until this Pledge Agreement is terminated and the
security interests created hereby are released:
(a) If, while this Pledge Agreement is in effect, the Pledgor shall become
entitled to receive or shall receive any principal or interest payment with
respect to the Bank Bonds, the Pledgor agrees to accept the same as the Agent's
agent and to hold the same in trust on behalf of the Agent and to deliver the
same forthwith to the Agent. All sums of money so paid with respect to the Bank
Bonds which are received by the Pledgor and paid to the Agent shall be credited
against the obligations of the Pledgor to the Agent with respect to the Letter
of Credit.
(b) The Pledgor shall maintain any security interest created by this Pledge
Agreement as a first, perfected security interest and shall defense such
security interest against claims and demands of all Persons whomsoever. At any
time and from time to time, upon the written request of the Agent, and at the
sole expense of the Pledgor, the Pledgor will, or will cause the Trustee, the
Remarketing Agent or Tender Agent to (as the case may be), promptly and duly
execute and deliver such further instruments and documents and take such further
actions as the Agent may reasonably request for the purposes of obtaining or
preserving the full benefits of this Pledge Agreement and of the rights and
powers herein granted, including, without limitation, instructions to the
Depository Trust Company to register the Agent as the pledgee of any Bank Bonds
(which registration shall not be changed without the prior written consent of
the Agent). If any amount payable under or in connection with any Bank Bonds
shall be or become evidenced by any promissory note, other instrument or chattel
paper, such note, instrument or chattel paper shall be immediately delivered to
the Agent, duly endorsed in a manner reasonably satisfactory to the Agent, to be
held as collateral pursuant to this Pledge Agreement.
(c) The Borrower shall pay, and save the Agent and the Lenders harmless
from, any and all liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any Bank Bonds or in connection with
any of the transactions contemplated by this Pledge Agreement.
4. Release of Bank Bonds. Upon a remarketing of the Bank Bonds (or any
portion thereof) and receipt by the Agent of notice from the Tender Agent that
the Tender Agent has received the proceeds of such remarketing for the benefit
of the Agent in accordance with the provisions of Section 6.18 of the Indenture,
the Agent agrees to release from the lien of this Pledge Agreement and deliver
to the Remarketing Agent or the Pledgor, as appropriate under the Indenture,
such Bank Bonds (or such portion thereof) for resale in accordance with the
Indenture in an amount equal to the principal amount of such Bank Bonds together
with interest accrued from the date to which interest has been paid.
5. Rights of the Agent. The Agent shall not be liable for failure to
collect or realize upon the Obligations or any collateral security or guarantee
therefor, or any part thereof, or for any delay in so doing nor shall it be
under any obligation to take any action whatsoever with
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regard thereto. If an Event of Default (as defined in the Reimbursement
Agreement) has occurred and is continuing, the Agent may thereafter, without
notice, exercise all rights, privileges or options pertaining to any Bank Bonds
as if it were the absolute owner thereof, upon such terms and conditions as it
may determine, all without liability except to account for property actually
received by it, but the Agent shall have no duty to exercise any of the
aforesaid rights, privileges or options and shall not be responsible to the
Pledgor for any failure to do so or delay in so doing.
6. Remedies. In the event that the Obligations have been declared due and
payable pursuant to the Reimbursement Agreement, the Agent, without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
the Pledgor or any other person (all and each of which demands, advertisements
and/or notices are hereby expressly waived), may forthwith collect, receive,
appropriate and realize upon the Bank Bonds, or any portion thereof, and/or may
forthwith sell, assign, give option or options to purchase, contract to sell or
otherwise dispose of and deliver said Bank Bonds, or any portion thereof, in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or at any of the Agent's offices or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may in its sole
discretion deem best, for cash or on credit or for future delivery without
assumption of any credit risk, with the right to the Agent upon any such sale or
sales, public or private, to purchase the whole or any portion of said Bank
Bonds so sold, free of any right or equity of redemption in the Pledgor, which
right or equity is hereby expressly waived or released; provided, that it is
understood that any such sale of any Bank Bonds shall constitute a release
thereof for purposes of the Letter of Credit to the extent of such sale. The
Agent shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care, safekeeping,
sale, disposition or otherwise of any and all of the Bank Bonds or in
enforcement of the rights of the Agent hereunder, including reasonable
attorney's fees and legal expenses, to the payment, in whole or in part, of the
Obligations in such order as the Agent may elect, the Pledgor remaining liable
for any deficiency remaining unpaid after such application, and only after so
applying such net proceeds and after the payment by the Agent of any other
amount required to be paid by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Uniform Commercial Code of the State of
New York, need the Agent account for the surplus, if any, to the Pledgor. The
Pledgor agrees that the Agent need not give more than ten days' notice of the
time and place of any public sale or of the time after which a private sale or
other intended disposition is to take place and that such notice is reasonable
notification of such matters. No notification need be given to the Pledgor if it
has signed after default a statement renouncing or modifying any right to
notification of sale or other intended disposition. In addition to the rights
and remedies granted to it in this Pledge Agreement and in any other instrument
or agreement securing, evidencing or relating to any of the Obligations, the
Agent shall have all the rights and remedies of a secured party under the
Uniform Commercial Code of the State of New York. The Pledgor further agrees to
waive and agrees not to assert any rights or privileges which it may acquire
under Section 9-112 of the Uniform Commercial Code of the State of New York and
the Pledgor shall be liable for the deficiency if the proceeds of any sale or
other disposition of the Bank Bonds are insufficient to pay all amounts to which
the Agent is entitled, including, without limitation, the fees, costs and
expenses of any attorneys employed by the Agent to collect such deficiency.
7. Representations, Warranties and Covenants of the Pledgor. The Pledgor
represents and warrants that: (a) on the date of delivery to the Agent of any
Bank Bonds described herein, neither the Pledgor, nor, to the best of the
Pledgor's knowledge, the Issuer, the Remarketing Agent, the Tender Agent or the
Trustee will have any right, title or interest in and to the Bank Bonds (except
as provided in the Indenture); (b) it has, and on the date of delivery to the
Agent of any Bank
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Bonds will have, full power, authority and legal right to pledge all of its
right, title and interest in and to the Bank Bonds pursuant to this Pledge
Agreement; (c) this Pledge Agreement has been duly authorized, executed and
delivered by the Pledgor and constitutes a legal, valid and binding obligation
of the Pledgor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally or by equitable principles; (d) no consent
of any other party (including, without limitation, creditors of the Pledgor) and
no consent, license, permit, approval or authorization of, exemption by, notice
or report to, or registration, filing or declaration with, any governmental
authority, domestic or foreign, is required to be obtained by the Pledgor in
connection with the execution, delivery or performance of this Pledge Agreement;
(e) the execution, delivery and performance of this Pledge Agreement will not
violate any provision of any applicable law or regulation or of any order,
judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, or of any mortgage, indenture, lease, contract,
or other agreement, instrument or undertaking to which the Pledgor is a party or
which purports to be binding upon the Pledgor or upon its assets and will not
result in the creation or imposition of any lien, charge or encumbrance on or
security interest in any of the assets of the Pledgor except as contemplated by
this Pledge Agreement; and (f) the pledge, assignment and delivery of such Bank
Bonds pursuant to this Pledge Agreement will create a valid first lien on and a
perfected first priority security interest (subject only to the satisfaction of
the prerequisites for perfection) in all right, title or interest of the Pledgor
in or to such Bank Bonds, and the proceeds thereof, subject to no prior pledge,
lien, mortgage, hypothecation, security interest, charge, option or encumbrance
or to any agreement purporting to grant to any third party a security interest
in the property or assets of the Pledgor which would include the Bank Bonds. The
Pledgor covenants and agrees that it will defend the Agent's right, title and
security interest in and to the Bank Bonds and the proceeds thereof against the
claims and demands of any party whatsoever.
8. No Disposition, etc. Without the prior written consent of the Agent
(which consent may only be given if such Bank Bonds have previously been
released from the lien of this Pledge Agreement pursuant to Section 4 hereof),
the Pledgor agrees that it will not sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Bank Bonds, nor
will it create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, charge, option or any other encumbrance with
respect to any of the Bank Bonds, or any interest therein, or any proceeds
thereof, except for the lien and security interest provided for by this Pledge
Agreement and sale of the Bank Bonds pursuant to the Indenture.
9. Agent's Appointment as Attorney-in-Fact. (a) The Pledgor hereby
irrevocably constitutes and appoints the Agent and any officer or agent of the
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 the Pledgor
and in the name of the Pledgor or in the Agent's own name, from time to time in
the Agent's discretion, for the purpose of carrying out the terms of this Pledge
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 Pledge Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer.
(b) The Pledgor hereby ratifies all that said attorneys shall lawfully do
or cause to be done pursuant to the power of attorney granted in Section 9(a)
hereof. All powers, authorizations and agencies contained in this Pledge
Agreement are coupled with an interest and are irrevocable until this Pledge
Agreement is terminated and the security interests created hereby are released.
10. Duty of Agent. The Agent's sole duty with respect to the custody,
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safekeeping and physical preservation of the Bank Bonds in its possession, under
Section 9- 207 of the Code or otherwise, shall be to deal with it in the same
manner as the Agent deals with similar securities and property for its own
account, except that the Agent shall have no obligation to invest any funds it
may receive in respect of the Bank Bonds. Neither the Agent, any Lender nor any
of their respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Bank Bonds or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Bank Bonds upon the request of the Pledgor or any other Person or to take
any other action whatsoever with regard to the Bank Bonds or any part thereof.
11. Authority of Agent. The Pledgor acknowledges that the rights and
responsibilities of the Agent under this Pledge Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
right or remedy provided for herein or resulting or arising out of this Pledge
Agreement shall, as between the Agent and the Lenders, be governed by the
Reimbursement Agreement and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Agent and the Pledgor,
the Agent shall be conclusively presumed to be acting as agent for the Lenders
with full and valid authority so to act or refrain from acting, and the Pledgor
shall not be under any obligation, or entitlement, to make any inquiry
respecting such authority.
12. Further Assurances. The Pledgor agrees that at any time and from time
to time upon the written request of the Agent, the Pledgor will execute and
deliver such further documents and do such further acts and things as the Agent
may reasonably request in order to effect the purposes of this Pledge Agreement.
13. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. No Waiver; Remedies Cumulative. The Agent shall not by any act, delay,
omission or otherwise be deemed to have waived any of its rights or remedies
hereunder and no waiver shall be valid unless in writing, signed by the Agent,
and then only to the extent therein set forth. A waiver by the Agent of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Agent would otherwise have on any future occasion.
No failure to exercise nor any delay in exercising on the part of the Agent, any
right, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights or remedies provided by the operative documents (including without
limitation, this Pledge Agreement, the Letter of Credit, the Reimbursement
Agreement and the other Loan Documents (as defined in the Reimbursement
Agreement)) or by law.
15. Waivers, Amendments; Applicable Law. None of the terms or provisions of
this Pledge Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by the Agent and the Pledgor. This Pledge
Agreement and all obligations of the Pledgor hereunder shall be binding upon the
successors and assigns of the Pledgor, and shall, together with the rights and
remedies of the Agent hereunder, inure to the benefit of the Agent and its
successors and assigns. This Pledge Agreement shall be governed by, and be
construed and interpreted in accordance with, the laws of the State of New York.
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IN WITNESS WHEREOF, the Pledgor has caused this Pledge Agreement to be duly
executed and delivered under seal on the day and year first above written.
AMERICAN BUILDINGS COMPANY
By: /s/________________________________
Name: _____________________________
Title: ____________________________
Accepted by:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent under the Credit Agreement
By: CIBC XXXXXXXXXXX CORP., as Agent
By: /s/____________________________
Name: _______________________________
Title: _______________________________
