EXHIBIT 10.3
EXECUTION COPY
PLEDGE AGREEMENT
PLEDGE AGREEMENT (as amended, modified, restated and/or supplemented
from time to time, this "AGREEMENT"), dated as of November 25, 2002, among each
of the undersigned pledgors (each, a "PLEDGOR" and, together with any other
entity that becomes a pledgor hereunder pursuant to Section 29 hereof, the
"PLEDGORS") and DEUTSCHE BANK TRUST COMPANY AMERICAS, as collateral agent
(together with any successor collateral agent, the "PLEDGEE"), for the benefit
of the Secured Creditors (as defined below). Except as otherwise defined herein,
all capitalized terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.
W I T N E S S E T H :
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WHEREAS, RBS Global, Inc. ("Holdings"), Rexnord Corporation (the
"Borrower"), the lenders party thereto from time to time (the "Lenders"),
Deutsche Bank Trust Company Americas, as administrative agent (together with any
successor administrative agent, the "Administrative Agent"), General Electric
Capital Corporation and Wachovia Bank, National Association, as Co-Documentation
Agents, and Deutsche Bank Securities Inc. and Credit Suisse First Boston, acting
through its Cayman Islands Branch, as Joint Lead Arrangers and Joint Book
Runners, have entered into a Credit Agreement, dated as of November 25, 2002 (as
amended, modified or supplemented from time to time, the "Credit Agreement"),
providing for the making of Loans to, and the issuance of, and participation in
Letters of Credit for the account of the Borrower, all as contemplated therein
(the Lenders, each Letter of Credit Issuer, and each Agent are herein called the
"Lender Creditors");
WHEREAS, the Borrower and one or more of its Subsidiaries may at any
time and from time to time enter into one or more Interest Rate Protection
Agreements (each such Interest Rate Protection Agreement, except to the extent
expressly stated therein that the liabilities and indebtedness thereunder are
not "Obligations" for the purposes of this Agreement, a "Covered Agreement" and,
collectively, the "Covered Agreements") with one or more Lenders or any
affiliate thereof (each such Lender or affiliate party to any such Covered
Agreement, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender or
affiliate's successors and assigns, if any, collectively, the "Other Creditors"
and, together with the Lender Creditors, the "Secured Creditors");
WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary
Guarantor and, after the creation of same, Intermediate Holdco, has jointly and
severally guaranteed to the Secured Creditors the payment when due of all
Guaranteed Obligations as described therein;
WHEREAS, it is a condition precedent to the making of Loans to the
Borrower and the issuance of, and participation in, Letters of Credit for the
account of the Borrower under the Credit Agreement and to the Other Creditors
entering into Covered Agreements that each Pledgor shall have executed and
delivered to the Pledgee this Agreement; and
WHEREAS, each Pledgor will obtain benefits from the incurrence of
Loans by the Borrower and the issuance of, and participation in, Letters of
Credit for the account of the
Borrower under the Credit Agreement and the entering into by the Borrower and
one or more of its Subsidiaries of Covered Agreements and, accordingly, desires
to execute this Agreement in order to satisfy the condition described in the
preceding paragraph and to induce the Lenders to make Loans to the Borrower and
issue, and/or participate in, Letters of Credit for the account of the Borrower
and the Other Creditors to enter into Covered Agreements with the Borrower
and/or one or more of its Subsidiaries;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Pledgor, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor hereby makes the following representations and
warranties to the Pledgee for the benefit of the Secured Creditors and hereby
covenants and agrees with the Pledgee for the benefit of the Secured Creditors
as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor
for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, principal, premium, interest
(including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor
or any Subsidiary thereof at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest is allowed
in any such proceeding), reimbursement obligations under Letters of Credit,
fees, costs and indemnities) of such Pledgor owing to the Lender Creditors,
whether now existing or hereafter incurred, in each case, under, arising
out of, or in connection with, the Credit Agreement and the other Credit
Documents to which such Pledgor is a party (including, in the case of each
Pledgor that is a Guarantor, all such obligations, liabilities and
indebtedness of such Pledgor under its Guaranty) and the due performance
and compliance by such Pledgor with all of the terms, conditions and
agreements contained in the Credit Agreement and in such other Credit
Documents (all such obligations, liabilities and indebtedness under this
clause (i), except to the extent consisting of obligations, liabilities or
indebtedness with respect to Covered Agreements, entitled to the benefits
of this Agreement being herein collectively called the "CREDIT DOCUMENT
OBLIGATIONS");
(ii) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, all interest that accrues
after the commencement of any case, proceeding or other action relating to
the bankruptcy, insolvency, reorganization or similar proceeding of any
Pledgor at the rate provided for in the respective documentation, whether
or not a claim for post-petition interest is allowed in any such
proceeding) owing by such Pledgor to the Other Creditors now existing or
hereafter incurred under, arising out of or in connection with any Covered
Agreement, whether such Covered Agreement is now in existence or
hereinafter arising (including, in the case of a Pledgor that is a
Guarantor, all obligations, liabilities and indebtedness of such Pledgor
under its Guaranty in respect of the Covered Agreements), and the due
performance and compliance by such Pledgor with all of the terms,
conditions and agreements contained in each such Covered
Agreement (all such obligations, liabilities and indebtedness under this
clause (ii) being herein collectively called the "OTHER OBLIGATIONS");
(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) in accordance with this Agreement,
or to preserve its security interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations or liabilities of such Pledgor
referred to in clauses (i) and (ii) above, after an Event of Default shall
have occurred and be continuing, the reasonable out-of-pocket expenses of
retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Pledgee of its rights hereunder, together with reasonable attorneys' fees
and court costs;
(v) all amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement under Section 11 of this Agreement; and
(vi) all amounts owing to any Agent or any of its affiliates
pursuant to any of the Credit Documents in its capacity as such;
all such obligations, liabilities, indebtedness, sums and expenses set forth in
clauses (i) through (vi) of this Section 1 being herein collectively called the
"OBLIGATIONS", it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITIONS. (a) Unless otherwise defined herein, all capitalized
terms used herein and defined in the Credit Agreement shall be used herein as
therein defined. Reference to singular terms shall include the plural and vice
versa.
(b) The following capitalized terms used herein shall have the
definitions specified below:
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the
recitals hereto.
"ADVERSE CLAIM" shall have the meaning given such term in Section
8-102(a)(1) of the UCC.
"AGREEMENT" shall have the meaning set forth in the first paragraph
hereof.
"BORROWER" shall have the meaning set forth in the recitals hereto.
"CERTIFICATED SECURITY" shall have the meaning given such term in
Section 8-102(a)(4) of the UCC.
"CHANGE OF LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement or (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement.
"CLEARING CORPORATION" shall have the meaning given such term in
Section 8-102(a)(5) of the UCC.
"COLLATERAL" shall have the meaning set forth in Section 3.1 hereof.
"COLLATERAL ACCOUNTS" shall mean any and all accounts established and
maintained by the Pledgee in the name of any Pledgor to which Collateral may be
credited.
"CREDIT AGREEMENT" shall have the meaning set forth in the recitals
hereto.
"CREDIT DOCUMENT OBLIGATIONS" shall have the meaning set forth in
Section 1(i) hereof.
"DOMESTIC CORPORATION" shall have the meaning set forth in the
definition of "Stock."
"EVENT OF DEFAULT" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event include, without
limitation, any payment default on any of the Obligations after the expiration
of any applicable grace period.
"EXEMPTED FOREIGN ENTITY" shall mean any Foreign Corporation and any
other entity organized under the laws of a jurisdiction other than the United
States or any State or Territory thereof that, in any such case, is treated as a
corporation or an association taxable as a corporation for U.S. Federal income
tax purposes.
"FINANCIAL ASSET" shall have the meaning given such term in Section
8-102(a)(9) of the UCC.
"FOREIGN CORPORATION" shall have the meaning set forth in the
definition of "Stock".
"HOLDINGS" shall have the meaning set forth in the recitals hereto.
"INDEMNITEES" shall have the meaning set forth in Section 11 hereof.
"INSTRUMENT" shall have the meaning given such term in Section
9-102(a)(47) of the UCC.
"INVESTMENT PROPERTY" shall have the meaning given such term in
Section 9-102(a)(49) of the UCC.
"LENDER CREDITORS" shall have the meaning set forth in the recitals
hereto.
"LENDERS" shall have the meaning set forth in the recitals hereto.
"LIMITED LIABILITY COMPANY INTERESTS" shall mean the entire limited
liability company membership interest at any time directly owned by any Pledgor
in any limited liability company.
"NON-VOTING EQUITY INTERESTS" shall mean all Equity Interests of any
Person which are not Voting Equity Interests.
"NOTES" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, each Pledgor.
"NOTICED EVENT OF DEFAULT" shall mean (i) an Event of Default under
Section 9.01 or 9.05 of the Credit Agreement and (ii) any other Event of Default
in respect of which the Pledgee has given the Borrower notice that such Event of
Default constitutes a "Noticed Event of Default".
"OBLIGATIONS" shall have the meaning set forth in Section 1 hereof.
"OTHER CREDITORS" shall have the meaning set forth in the recitals
hereto.
"OTHER OBLIGATIONS" shall have the meaning set forth in Section 1(ii)
hereof.
"PARTNERSHIP INTEREST" shall mean the entire general partnership
interest or limited partnership interest at any time owned by any Pledgor in any
general partnership or limited partnership.
"PLEDGED NOTES" shall mean all Notes at any time pledged or required
to be pledged hereunder.
"PLEDGEE" shall have the meaning set forth in the first paragraph
hereof.
"PLEDGOR" shall have the meaning set forth in the first paragraph
hereof.
"PROCEEDS" shall have the meaning given such term in Section
9-102(a)(64) of the UCC.
"REQUIRED SECURED CREDITORS" shall have the meaning provided in the
Security Agreement.
"SECURED CREDITORS" shall have the meaning set forth in the recitals
hereto.
"SECURED DEBT AGREEMENTS" shall mean and include (x) this Agreement,
(y) the other Credit Documents and (z) the Covered Agreements entered into with
any Other Creditors.
"SECURITIES ACCOUNT" shall have the meaning given such term in Section
8-501(a) of the UCC.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, as
in effect from time to time.
"SECURITIES INTERMEDIARY" shall have the meaning given such term in
Section 8-102(14) of the UCC.
"SECURITY" and "SECURITIES" shall have the meaning given such term in
Section 8-102(a)(15) of the UCC and shall in any event also include all Stock
and all Notes.
"SECURITY ENTITLEMENT" shall have the meaning given such term in
Section 8-102(a)(17) of the UCC.
"STOCK" shall mean (x) with respect to corporations incorporated under
the laws of the United States or any State or territory thereof or the District
of Columbia (each, a "Domestic Corporation"), all of the issued and outstanding
shares of capital stock of any Domestic Corporation at any time directly owned
by any Pledgor and (y) with respect to corporations not Domestic Corporations
(each, a "Foreign Corporation"), all of the issued and outstanding shares of
capital stock of any Foreign Corporation at any time directly owned by any
Pledgor.
"TERMINATION DATE" shall have the meaning set forth in Section 20
hereof.
"UCC" shall mean the Uniform Commercial Code as in effect in the State
of New York from time to time; PROVIDED that all references herein to specific
Sections or subsections of the UCC are references to such Sections or
subsections, as the case may be, of the Uniform Commercial Code as in effect in
the State of New York on the date hereof.
"UNCERTIFICATED SECURITY" shall have the meaning given such term in
Section 8-102(a)(18) of the UCC.
"VOTING EQUITY INTERESTS" of any Person shall mean all classes of
Equity Interests of such Person entitled to vote.
3. PLEDGE OF SECURITIES, ETC.
3.1 PLEDGE. To secure the Obligations now or hereafter owed or to be
performed by such Pledgor, each Pledgor does hereby grant and pledge to the
Pledgee for the benefit of the Secured Creditors, and does hereby create a
continuing security interest (subject to those Liens permitted to exist with
respect to the Collateral pursuant to the terms of all Secured Debt Agreements
then in effect) in favor of the Pledgee for the benefit of the Secured Creditors
in, all of its right, title and interest in and to the following, whether now
existing or hereafter from time to time acquired (collectively, the
"COLLATERAL"):
(a) each of the Collateral Accounts (to the extent a security
interest therein is not created pursuant to the Security Agreement),
including any and all assets of whatever type or kind deposited by such
Pledgor in any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without limitation, all Financial
Assets, Investment Property, monies, checks, drafts, Instruments,
Securities or interests therein of any type or nature deposited or required
by the Credit Agreement or any other Secured Debt Agreement to be deposited
in such Collateral Account, and all investments and all certificates and
other Instruments (including depository receipts, if any) from time to time
representing or evidencing the same, and all dividends, interest,
distributions, cash and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of the foregoing;
(b) all Securities owned or held by such Pledgor from time to time
and all options and warrants owned by such Pledgor from time to time to
purchase Securities;
(c) all Limited Liability Company Interests owned by such Pledgor
from time to time and all of its right, title and interest in each limited
liability company to which each such Limited Liability Company Interest
relates, whether now existing or hereafter acquired, including, without
limitation, to the fullest extent permitted under the terms and provisions
of the documents and agreements governing such Limited Liability Company
Interests and applicable law:
(A) all its capital therein and its interest in all profits,
income, surpluses, losses and other distributions to which such
Pledgor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to such Pledgor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any, under any
limited liability company agreement or operating agreement, or at law
or otherwise in respect of such Limited Liability Company Interests;
(D) all present and future claims, if any, of such Pledgor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of such Pledgor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
such Pledgor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of such Pledgor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and
other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
thereof;
(d) all Partnership Interests owned by such Pledgor from time to
time and all of its right, title and interest in each partnership to which
each such Partnership Interest relates, whether now existing or hereafter
acquired, including, without limitation, to the fullest extent permitted
under the terms and provisions of the documents and agreements governing
such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all profits,
income, surpluses, losses, and other distributions to which such
Pledgor shall at any time be entitled in respect of such Partnership
Interests;
(B) all other payments due or to become due to such Pledgor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any, under any
partnership agreement or operating agreement, or at law or otherwise
in respect of such Partnership Interests;
(D) all present and future claims, if any, of such Pledgor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of such Pledgor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of such
Pledgor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of such Pledgor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(e) all Financial Assets and Investment Property owned by such
Pledgor from time to time;
(f) all Security Entitlements owned by such Pledgor from time to
time in any and all of the foregoing; and
(g) all Proceeds of any and all of the foregoing.
Notwithstanding anything to the contrary contained in this Agreement, (x) unless
there has been a Change of Law as a result of which the granting of the pledge
of more than 66-2/3% of the Voting Equity Interests of any Exempted Foreign
Entity will not give rise to adverse "deemed dividend" tax consequences to the
Borrower under Section 956 of the Code, no Pledgor shall be required to pledge
hereunder more than 65% of the Voting Equity Interests of any Exempted Foreign
Entity (and such Voting Equity Interests in excess of 65% shall not constitute
"Collateral,"), (y) each Pledgor shall be required to pledge hereunder 100% of
any Non-Voting Equity Interests at any time and from time to time acquired by
such Pledgor of any Exempted Foreign Entity and (z) the Collateral shall not
include Equity Interests in Joint Ventures that are not Subsidiaries of the
Borrower to the extent that the respective Pledgor is contractually prohibited
(after giving effect to any consents or waivers in respect of such prohibition)
from pledging such Equity Interests owned by it pursuant to the respective joint
venture agreement or similar agreement governing such Joint Venture.
3.2 PROCEDURES. (a) To the extent that any Pledgor at any time or from
time to time owns, acquires or obtains any right, title or interest in any
Collateral, such Collateral shall automatically (and without the taking of any
action by such Pledgor) be pledged pursuant to Section 3.1 of this Agreement
and, in addition thereto, such Pledgor shall (to the extent provided below) take
the following actions as set forth below (as promptly as practicable and, in any
event, within 10 days after it obtains such Collateral) for the benefit of the
Pledgee and the other Secured Creditors:
(i) with respect to a Certificated Security (other than a
Certificated Security credited on the books of a Clearing Corporation or
Securities Intermediary), such Pledgor shall physically deliver such
Certificated Security to the Pledgee, endorsed to the Pledgee or endorsed
in blank, provided that no such Pledgor shall be required to deliver any
Certificated Securities held by it as a result of investment of such
Pledgor in Cash Equivalents, Foreign Cash Equivalents and Margin Stock made
in the ordinary course of business and in accordance with Section 8.06(a)
and(r) of the Credit Agreement;
(ii) with respect to an Uncertificated Security (other than an
Uncertificated Security credited on the books of a Clearing Corporation or
Securities Intermediary), such Pledgor shall cause (or in the case of any
such issuer that is not a Subsidiary of such Pledgor, use commercially
reasonable efforts to cause) the issuer of such Uncertificated Security to
duly authorize, execute, and deliver to the Pledgee, an agreement for the
benefit of the Pledgee and the other Secured Creditors substantially in the
form of Annex G hereto (appropriately completed to the reasonable
satisfaction of the Pledgee and with such modifications, if any, as shall
be reasonably satisfactory to the Pledgee) pursuant to which such issuer
agrees to comply, after the Pledgee has notified such issuer that an Event
of Default then exists, with any and all instructions originated by the
Pledgee without further consent by the registered owner and not to comply
with instructions regarding such Uncertificated Security (and any
Partnership Interests and Limited Liability
Company Interests issued by such issuer) originated by any other Person
other than a court of competent jurisdiction;
(iii) with respect to a Certificated Security, Uncertificated
Security, Partnership Interest or Limited Liability Company Interest
credited on the books of a Clearing Corporation or Securities Intermediary
(including a Federal Reserve Bank, Participants Trust Company or The
Depository Trust Company), such Pledgor shall promptly notify the Pledgee
thereof and shall promptly take (x) (i) all actions required to comply with
the applicable rules of such Clearing Corporation or Securities
Intermediary and (ii) use commercially reasonable efforts to perfect the
security interest of the Pledgee under applicable law (including, in any
event, under Sections 9-314(a), (b) and (c), 9-106 and 8-106(d) of the UCC)
and (y) such other actions as the Pledgee deems necessary or desirable to
effect the foregoing;
(iv) with respect to a Partnership Interest or a Limited Liability
Company Interest (other than a Partnership Interest or Limited Liability
Company Interest credited on the books of a Clearing Corporation or
Securities Intermediary), (1) if such Partnership Interest or Limited
Liability Company Interest is represented by a certificate and is a
Security for purposes of the UCC, the procedure set forth in Section
3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability
Company Interest is not represented by a certificate or is not a Security
for purposes of the UCC, the procedure set forth in Section 3.2(a)(ii)
hereof; and
(v) with respect to any Note evidencing Indebtedness in a principal
amount equal to or greater than $2,000,000, physical delivery of such Note
to the Pledgee, endorsed to the Pledgee or endorsed in blank.
(b) In addition to the actions required to be taken pursuant to
Section 3.2(a) hereof, each Pledgor shall take the following additional actions
with respect to the Collateral:
(i) with respect to all Collateral of such Pledgor whereby or with
respect to which the Pledgee may obtain "control" thereof within the
meaning of Section 8-106 of the UCC (or under any provision of the UCC as
same may be amended or supplemented from time to time, or under the laws of
any relevant State other than the State of New York), such Pledgor shall,
subject to the qualifications set forth in preceding clauses (a)(i), (ii),
(iii) and (v), take all actions as may be requested from time to time by
the Pledgee so that "control" of such Collateral is obtained and at all
times held by the Pledgee; and
(ii) each Pledgor shall from time to time cause appropriate
financing statements (on appropriate forms) under the Uniform Commercial
Code as in effect in the various relevant States, covering all Collateral
hereunder (with the form of such financing statements to be satisfactory to
the Pledgee), to be filed in the relevant filing offices so that at all
times the Pledgee's security interest in all Investment Property and other
Collateral which can be perfected by the filing of such financing
statements (in each case to the maximum extent perfection by filing may be
obtained under the laws of the relevant States, including, without
limitation, Section 9-312(a) of the UCC) is so perfected.
3.3 SUBSEQUENTLY ACQUIRED COLLATERAL. If any Pledgor shall acquire (by
purchase, stock dividend, distribution or otherwise) any additional Collateral
at any time or from time to time after the date hereof, (i) such Collateral
shall automatically (and without any further action being required to be taken)
be subject to the pledge and security interests created pursuant to Section 3.1
hereof and, furthermore, such Pledgor will thereafter take (or cause to be
taken) all action (as promptly as practicable and, in any event, within 10 days
after it obtains such Collateral) with respect to such Collateral in accordance
with the procedures set forth in Section 3.2 hereof, and will promptly
thereafter deliver to the Pledgee a certificate executed by an authorized
officer of such Pledgor describing such Collateral and certifying that the same
has been duly pledged in favor of the Pledgee (for the benefit of the Secured
Creditors) hereunder. Without limiting the foregoing, each Pledgor shall be
required to pledge hereunder the Equity Interests of any Exempted Foreign Entity
that are directly owned by such Pledgor at any time and from time to time after
the date hereof acquired by such Pledgor, PROVIDED that (x) except in the
circumstances and to the extent provided by the last paragraph of Section 3.1,
no Pledgor shall be required at any time to pledge hereunder more than 65% of
the total combined voting power of all classes of Voting Equity Interests of any
Exempted Foreign Entity and (y) each Pledgor shall be required to pledge
hereunder 100% of the Non-Voting Equity Interests of each Exempted Foreign
Entity at any time and from time to time acquired by such Pledgor.
3.4 TRANSFER TAXES. Each pledge of Collateral under Section 3.1 or
Section 3.3 hereof shall be accompanied by any transfer tax stamps required in
connection with the pledge of such Collateral.
3.5 CERTAIN REPRESENTATIONS AND WARRANTIES REGARDING THE COLLATERAL.
Each Pledgor represents and warrants that on the date hereof: (i) each direct
Subsidiary of such Pledgor, the direct ownership thereof and jurisdiction in
which such Subsidiary was organized, is listed in Annex A hereto; (ii) the Stock
(and any warrants or options to purchase Stock) held by such Pledgor consists of
the number and type of shares of the stock (or warrants or options to purchase
any stock) of the corporations as described in Annex B hereto; (iii) such Stock
referenced in clause (ii) of this paragraph constitutes that percentage of the
issued and outstanding capital stock of the issuing corporation as is set forth
in Annex B hereto; (iv) the Notes held by such Pledgor consist of the promissory
notes described in Annex C hereto where such Pledgor is listed as the lender;
(v) the Limited Liability Company Interests held by such Pledgor consist of the
number and type of interests of the Persons described in Annex D hereto; (vi)
each such Limited Liability Company Interest referenced in clause (v) of this
paragraph constitutes that percentage of the issued and outstanding Equity
Interest of the issuing Person as set forth in Annex D hereto; (vii) the
Partnership Interests held by such Pledgor consist of the number and type of
interests of the Persons described in Annex E hereto; (viii) each such
Partnership Interest referenced in clause (viii) of this paragraph constitutes
that percentage or portion of the entire partnership interest of the Partnership
as set forth in Annex E hereto; (ix) the exact address of each chief executive
office of such Pledgor is listed on Annex F hereto; (x) the Pledgor has complied
with the respective procedure set forth in Section 3.2(a) hereof with respect to
each item of Collateral described in Annexes C through F hereto; and (xi) on the
date hereof, such Pledgor owns no other Securities, Stock, Notes, Limited
Liability Company Interests or Partnership Interests (other than any such
Securities in the form of Cash Equivalents).
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Collateral, which may be held (in the discretion of
the Pledgee) in the name of the relevant Pledgor, endorsed or assigned in blank
or, after a Noticed Event of Default, in favor of the Pledgee or any nominee or
nominees of the Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there
shall have occurred and be continuing a Noticed Event of Default, each Pledgor
shall be entitled to exercise any and all voting and other consensual rights
pertaining to the Collateral owned by it, and to give consents, waivers or
ratifications in respect thereof; PROVIDED that, in each case, no vote shall be
cast or any consent, waiver or ratification given or any action taken or omitted
to be taken which would violate or result in a breach of any covenant contained
in any Secured Debt Agreement, or which could reasonably be expected to have the
effect of materially impairing the value of the Collateral or any part thereof
or the position or interests of the Pledgee or any other Secured Creditor in the
Collateral, unless expressly permitted by the terms of the Secured Debt
Agreements. All such rights of each Pledgor to vote and to give consents,
waivers and ratifications shall cease in case a Noticed Event of Default has
occurred and is continuing, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall
have occurred and be continuing a Noticed Event of Default, all cash dividends,
cash distributions, cash Proceeds and other cash amounts payable in respect of
the Collateral shall be paid to the respective Pledgor, PROVIDED, that all cash
dividends payable in respect of the Pledged Stock which are determined by the
Pledgee to represent in whole or in part an extraordinary, liquidating or other
distribution in return of capital shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution in return of
capital, to the Pledgee and retained by it as part of the Collateral (although
the respective Pledgor shall be permitted to retain cash proceeds received by it
in connection with sales or other transfers of Pledged Stock permitted under
Section 8.02 of the Credit Agreement so long as such proceeds are not otherwise
required to be applied to repay Loans pursuant to Section 4.02(A)(c) of the
Credit Agreement). The Pledgee shall be entitled to receive directly, and to
retain as part of the Collateral:
(i) all other or additional stock, notes, certificates, limited
liability company interests, partnership interests, instruments or other
securities or property (including, but not limited to, cash dividends other
than as set forth above);
(ii) all other or additional stock, notes, certificates, limited
liability company interests, partnership interests, instruments or other
securities or property (including, but not limited to, cash (although such
cash may be paid directly to the respective Pledgor so long as no Event of
Default then exists) paid or distributed in respect of the Collateral by
way of stock-split, spin-off, split-up, reclassification, combination of
shares or similar rearrangement; and
(iii) all other or additional stock, notes, certificates, limited
liability company interests, partnership interests, instruments or other
securities or property (including, but not limited to, cash) which may be
paid in respect of the Collateral by reason of any
consolidation, merger, exchange of stock, conveyance of assets, liquidation
or similar corporate or other reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive the proceeds of the Collateral in any form in
accordance with Section 3 of this Agreement. Furthermore, the foregoing
provisions of this Section 6 shall not restrict the respective Pledgor's right
to receive dividends made pursuant to Sections 8.09(i), (ii), (iv), (v) and
(viii) (to the extent related to amounts that may be paid pursuant to Section
8.10(vi) of the Credit Agreement) of the Credit Agreement, provided that such
dividends are made in accordance with the applicable terms and conditions set
forth on the Credit Agreement. All dividends, distributions or other payments
which are received by any Pledgor contrary to the provisions of this Section 6
or Section 7 hereof shall be received in trust for the benefit of the Pledgee,
shall be segregated from other property or funds of such Pledgor and shall be
forthwith paid over to the Pledgee as Collateral in the same form as so received
(with any necessary endorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. If there shall have
occurred and be continuing a Noticed Event of Default, then and in every such
case, the Pledgee shall be entitled to exercise all of the rights, powers and
remedies (whether vested in it by this Agreement, any other Secured Debt
Agreement or by law) for the protection and enforcement of its rights in respect
of the Collateral, and the Pledgee shall be entitled to exercise all the rights
and remedies of a secured party under the UCC as in effect in any relevant
jurisdiction and also shall be entitled, without limitation, to exercise the
following rights, which each Pledgor hereby agrees to be commercially
reasonable:
(i) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 hereof to the respective Pledgor;
(ii) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect upon
any Pledged Note in accordance with its terms (including, without
limitation, to make any demand for payment thereon in accordance with its
terms);
(iv) to vote all or any part of the Collateral (whether or not
transferred into the name of the Pledgee) and give all consents, waivers
and ratifications in respect of the Collateral and otherwise act with
respect thereto as though it were the outright owner thereof (each Pledgor
hereby irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of such Pledgor, with full power of substitution to do
so);
(v) at any time and from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or, notice of intention to sell or of the time
or place of sale or adjournment thereof or to redeem or otherwise purchase
or dispose (all of which are hereby waived by each Pledgor to the fullest
extent
permitted by law), for cash, on credit or for other property, for immediate
or future delivery without any assumption of credit risk, and for such
price or prices and on such terms as the Pledgee in its absolute discretion
may determine, PROVIDED at least 10 days' written notice of the time and
place of any such sale shall be given to the respective Pledgor. The
Pledgee shall not be obligated to make any such sale of Collateral
regardless of whether any such notice of sale has theretofore been given.
Each Pledgor hereby waives and releases to the fullest extent permitted by
law any right or equity of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of
marshalling the Collateral and any other security or the Obligations or
otherwise. At any such sale, unless prohibited by applicable law, the
Pledgee on behalf of the Secured Creditors may bid for and purchase all or
any part of the Collateral so sold free from any such right or equity of
redemption. Neither the Pledgee nor any other Secured Creditor shall be
liable for failure to collect or realize upon any or all of the Collateral
or for any delay in so doing nor shall any of them be under any obligation
to take any action whatsoever with regard thereto; and
(vi) to set off any and all Collateral against any and all
Obligations, and to withdraw any and all cash or other Collateral from any
and all Collateral Accounts and to apply such cash and other Collateral to
the payment of any and all Obligations.
8. REMEDIES, CUMULATIVE, ETC. Each and every right, power and remedy
of the Pledgee provided for in this Agreement or in any other Secured Debt
Agreement, or now or hereafter existing at law or in equity or by statute shall
be cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee or any
other Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or any other Secured Debt Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any other Secured Creditor to exercise any such
right, power or remedy shall operate as a waiver thereof. No notice to or demand
on any Pledgor in any case shall entitle it to any other or further notice or
demand in similar or other circumstances or constitute a waiver of any of the
rights of the Pledgee or any other Secured Creditor to any other or further
action in any circumstances without notice or demand. The Secured Creditors
agree that this Agreement may be enforced only by the action of the Pledgee, in
each case, acting upon the instructions of the Required Secured Creditors, and
that no other Secured Creditor shall have any right individually to seek to
enforce or to enforce this Agreement or to realize upon the security to be
granted hereby, it being understood and agreed that such rights and remedies may
be exercised by the Pledgee for the benefit of the Secured Creditors upon the
terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All monies collected by the Pledgee
upon any sale or other disposition of the Collateral pursuant to the terms of
this Agreement, together with all other monies received by the Pledgee
hereunder, shall be applied in the manner provided in the Security Agreement.
(b) It is understood and agreed that each Pledgor shall remain
jointly and severally liable with respect to its Obligations to the extent of
any deficiency between the
amount of the proceeds of the Collateral pledged by it hereunder and the
aggregate amount of such Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making such sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to
indemnify, reimburse and hold harmless the Pledgee and each other Secured
Creditor and their respective successors, assigns, employees, agents and
affiliates (individually an "INDEMNITEE", and collectively, the "INDEMNITEES")
from and against any and all obligations, damages, injuries, penalties, claims,
demands, losses, judgments and liabilities (including, without limitation,
liabilities for penalties) of whatsoever kind or nature incurred by any
Indemnitee as a result of, or in any way relating to, or arising out of, or by
reason of, any investigation, litigation or other proceeding (whether or not any
Indemnitee is party thereto and whether or not such investigation, litigation or
other proceeding is between or among any Indemnitee, any Pledgor or any third
Person or otherwise) related to the entering into and/or performance of this
Agreement or any other Secured Debt Agreement, and (ii) to reimburse each
Indemnitee for all reasonable, documented, costs, expenses and disbursements in
each case arising out of or resulting the exercise by any Indemnitee of any
right or remedy granted to it hereunder or under any other Secured Debt
Agreement (including, without limitation, reasonable attorneys' fees and
expenses, PROVIDED THAT, except in the case of a bankruptcy of any Assignor, no
more than one counsel for the Indemnitees may be used in any one jurisdiction)
(but excluding any obligations, damages, injuries, penalties, claims, demands,
losses, judgments and liabilities (including, without limitation, liabilities
for penalties) or expenses of whatsoever kind or nature to the extent incurred
or arising by reason of gross negligence or willful misconduct of such
Indemnitee or an affiliate thereof (as determined by a court of competent
jurisdiction in a final and non-appealable decision)). In no event shall the
Pledgee hereunder be liable, in the absence of gross negligence or willful
misconduct on its part (as determined by a court of competent jurisdiction in a
final and non-appealable decision), for any matter or thing in connection with
this Agreement other than to account for monies or other property actually
received by it in accordance with the terms hereof. If and to the extent that
the obligations of any Pledgor under this Section 11 are unenforceable for any
reason, such Pledgor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law. The indemnity obligations of each Pledgor contained in this
Section 11 shall continue in full force and effect notwithstanding the full
payment of all the Notes issued under the Credit Agreement, the termination of
all Covered Agreements and Letters of Credit, and the payment of all other
Obligations and notwithstanding the discharge thereof.
12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a)
Nothing herein shall be construed to make the Pledgee or any other Secured
Creditor liable as a member of any limited liability company or as a partner of
any partnership and neither the Pledgee nor any other Secured Creditor by virtue
of this Agreement or otherwise
(except as referred to in the following sentence) shall have any of the duties,
obligations or liabilities of a member of any limited liability company or as a
partner in any partnership. The parties hereto expressly agree that, unless the
Pledgee shall become the absolute owner of Collateral consisting of a Limited
Liability Company Interest or a Partnership Interest pursuant hereto, this
Agreement shall not be construed as creating a partnership or joint venture
among the Pledgee, any other Secured Creditor, any Pledgor and/or any other
Person.
(b) Except as provided in the last sentence of paragraph (a) of
this Section 12, the Pledgee, by accepting this Agreement, did not intend to
become a member of any limited liability company or a partner of any partnership
or otherwise be deemed to be a co-venturer with respect to any Pledgor, any
limited liability company, partnership and/or any other Person either before or
after an Event of Default shall have occurred. The Pledgee shall have only those
powers set forth herein and the Secured Creditors shall assume none of the
duties, obligations or liabilities of a member of any limited liability company
or as a partner of any partnership or any Pledgor except as provided in the last
sentence of paragraph (a) of this Section 12.
(c) The Pledgee and the other Secured Creditors shall not be
obligated to perform or discharge any obligation of any Pledgor as a result of
the pledge hereby effected.
(d) The acceptance by the Pledgee of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate the Pledgee or any other Secured Creditor to appear in or
defend any action or proceeding relating to the Collateral to which it is not a
party, or to take any action hereunder or thereunder, or to expend any money or
incur any expenses or perform or discharge any obligation, duty or liability
under the Collateral.
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees
that it will join with the Pledgee in executing and, at such Pledgor's own
expense, file and refile under the UCC or other applicable law such financing
statements, continuation statements and other documents, in form reasonably
acceptable to the Pledgee, in such offices as the Pledgee (acting on its own or
on the instructions of the Required Secured Creditors) may reasonably deem
necessary or appropriate and wherever required or permitted by law in order to
perfect and preserve the Pledgee's security interest in the Collateral hereunder
and hereby authorizes the Pledgee to file financing statements and amendments
thereto relative to all or any part of the Collateral (including, without
limitation, (x) financing statements which list the Collateral specifically
and/or "all assets" as collateral and (y) "in lieu of" financing statements)
without the signature of such Pledgor where permitted by law, and agrees to do
such further acts and things and to execute and deliver to the Pledgee such
additional agreements and instruments as the Pledgee may reasonably require or
deem advisable to carry into effect the purposes of this Agreement or to further
assure and confirm unto the Pledgee its rights, powers and remedies hereunder or
thereunder.
(b) Each Pledgor hereby constitutes and appoints the Pledgee its
true and lawful attorney-in-fact, irrevocably, with full authority in the place
and stead of such Pledgor and in the name of such Pledgor or otherwise, from
time to time after the occurrence and during the continuance of an Event of
Default, in the Pledgee's reasonable discretion, to act, require, demand,
receive and give acquittance for any and all monies and claims for monies due or
to
become due to such Pledgor under or arising out of the Collateral, to endorse
any checks or other instruments or orders in connection therewith and to file
any claims or take any action or institute any proceedings and to execute any
instrument which the Pledgee may reasonably deem necessary or advisable to
accomplish the purposes of this Agreement, which appointment as attorney is
coupled with an interest.
14. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood, acknowledged and agreed by
each Secured Creditor that by accepting the benefits of this Agreement each such
Secured Creditor acknowledges and agrees that the obligations of the Pledgee as
holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement and in Section 11 of the Credit Agreement.
The Pledgee shall act hereunder on the terms and conditions set forth herein and
in Section 11 of the Credit Agreement.
15. TRANSFER BY THE PLEDGORS. Except as permitted (i) prior to the
date all Credit Document Obligations have been paid in full and all Commitments
under the Credit Agreement have been terminated, pursuant to the Credit
Agreement and the other Credit Documents, and (ii) thereafter, pursuant to the
other Secured Debt Agreements, no Pledgor will sell or otherwise dispose of,
grant any option with respect to, or mortgage, pledge or otherwise encumber any
of the Collateral or any interest therein.
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a)
Each Pledgor represents, warrants and covenants that:
(i) it is the legal, beneficial and record owner of, and has good
and marketable title to, all of its Collateral consisting of one or more
Securities, Partnership Interests and Limited Liability Company Interests
and that it has sufficient interest in all of its Collateral in which a
security interest is purported to be created hereunder for such security
interest to attach (subject, in each case, to no pledge, lien, mortgage,
hypothecation, security interest, charge, option, Adverse Claim or other
encumbrance whatsoever, except the liens and security interests created by
this Agreement or permitted under the Secured Debt Agreements);
(ii) it has full power, authority and legal right to pledge all the
Collateral pledged by it pursuant to this Agreement;
(iii) this Agreement has been duly authorized, executed and delivered
by such Pledgor and constitutes a legal, valid and binding obligation of
such Pledgor enforceable against such Pledgor in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general equitable
principles (regardless of whether enforcement is sought in equity or at
law);
(iv) except to the extent already obtained or made, no consent of
any other party (including, without limitation, any stockholder, partner,
member or creditor of such
Pledgor or any of its Subsidiaries) is required to be obtained by such
Pledgor in connection with (a) the execution, delivery or performance of
this Agreement by such Pledgor, (b) the validity or enforceability of this
Agreement against such Pledgor, (c) the perfection or enforceability of the
Pledgee's security interest in such Pledgor's Collateral or (d) except for
compliance with or as may be required by applicable securities laws, the
exercise by the Pledgee of any of its rights or remedies provided herein;
(v) all of such Pledgor's Collateral (consisting of Securities,
Limited Liability Company Interests and Partnership Interests) has been
duly and validly issued, is fully paid and non-assessable and is subject to
no options to purchase or similar rights;
(vi) the pledge, collateral assignment and delivery to the Pledgee
of such Pledgor's Collateral consisting of Certificated Securities and
Pledged Notes pursuant to -this Agreement creates a valid and perfected
first priority security interest in such Certificated Securities and
Pledged Notes, and the proceeds thereof, subject to no prior Lien or
encumbrance or to any agreement purporting to grant to any third party a
Lien or encumbrance on the property or assets of such Pledgor which would
include the Securities (other than the liens and security interests
permitted under the Secured Debt Agreements then in effect) and the Pledgee
is entitled to all the rights, priorities and benefits afforded by the UCC
or other relevant law as enacted in any relevant jurisdiction to perfect
security interests in respect of such Collateral; and
(vii) "control" (as defined in Section 8-106 of the UCC) has been
obtained by the Pledgee over all of such Pledgor's Collateral consisting of
Securities (including, without limitation, Notes evidencing Indebtedness in
a principal amount equal to or greater than $2,000,000 which are Securities
but excluding (x) Securities in the form of Cash Equivalents, Foreign Cash
Equivalents and Margin Stock held by such Pledgor as a result of
investments by such Pledgor in Cash Equivalents, Foreign Cash Equivalents
and Margin Stock made in the ordinary course of business and in accordance
with Section 8.06(a) and (r) of the Credit Agreement any (y) each Note
evidencing Indebtedness of less than $2,000,000) with respect to which such
"control" may be obtained pursuant to Section 8-106 of the UCC, except to
the extent that the obligation of the applicable Pledgor to provide the
Pledgee with "control" of such Collateral has not yet arisen under this
Agreement; PROVIDED that in the case of the Pledgee obtaining "control"
over Collateral consisting of a Security Entitlement, such Pledgor shall
have taken all steps in its control so that the Pledgee obtains "control"
over such Security Entitlement.
(b) Each Pledgor covenants and agrees that it will defend the
Pledgee's right, title and security interest in and to such Pledgor's Collateral
and the proceeds thereof against the claims and demands of all persons
whomsoever; and each Pledgor covenants and agrees that it will have like title
to and right to pledge any other property at any time hereafter pledged to the
Pledgee by such Pledgor as Collateral hereunder (subject in the case of
Collateral consisting of Equity Interests in a Joint Venture that is not a
Subsidiary of such Pledgor, to restrictions on the transfer of such Equity
Interests that may appear in the organizational documents for such Joint
Venture), and will likewise defend the right thereto and security interest
therein of the Pledgee and the other Secured Creditors.
(c) Each Pledgor covenants and agrees that it will take no action
which would violate any of the terms of any Secured Debt Agreement.
17. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever (other than termination of this Agreement pursuant to
Section 19 hereof), including, without limitation:
(i) any renewal, extension, amendment or modification of, or
addition or supplement to or deletion from any Secured Debt Agreement
(other than this Agreement in accordance with its terms), or any other
instrument or agreement referred to therein, or any assignment or transfer
of any thereof;
(ii) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument including,
without limitation, this Agreement (other than a waiver, consent or
extension with respect to this Agreement in accordance with its terms);
(iii) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the
Pledgee or its assignee;
(iv) any limitation on any party's liability or obligations under
any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof;
or
(v) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
any Pledgor or any Subsidiary of any Pledgor, or any action taken with
respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not such Pledgor shall have notice or
knowledge of any of the foregoing.
18. SALE OF COLLATERAL WITHOUT REGISTRATION. If at any time when the
Pledgee shall determine to exercise its right to sell all or any part of the
Collateral consisting of Securities, Limited Liability Company Interests or
Partnership Interests pursuant to Section 7 hereof, and such Collateral or the
part thereof to be sold shall not, for any reason whatsoever, be effectively
registered under the Securities Act, as then in effect, the Pledgee may, in its
sole and absolute discretion, sell such Collateral or part thereof by private
sale in such manner and under such circumstances as the Pledgee may deem
necessary or advisable in order that such sale may legally be effected without
such registration. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion (i) may proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering such Collateral or part thereof shall have been filed under such
Securities Act, (ii) may approach and negotiate with a single possible purchaser
to effect such sale, and (iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Collateral
or part thereof. In the event of any such sale, the Pledgee shall incur no
responsibility
or liability for selling all or any part of the Collateral at a price which the
Pledgee, in its sole and absolute discretion, may in good xxxxx xxxx reasonable
under the circumstances, notwithstanding the possibility that a substantially
higher price might be realized if the sale were deferred until the registration
as aforesaid.
19. TERMINATION; RELEASE. (a) On the Termination Date (as defined
below), this Agreement shall terminate (provided that all indemnities set forth
herein including, without limitation, in Section 11 hereof shall survive any
such termination) and the Pledgee, at the request and expense of such Pledgor,
will execute and deliver to such Pledgor a proper instrument or instruments
(including UCC termination statements) acknowledging the satisfaction and
termination of this Agreement (including, without limitation, UCC termination
statements and instruments of satisfaction, discharge and/or reconveyance), and
will duly release from the security interest created hereby and assign, transfer
and deliver to such Pledgor (without recourse and without any representation or
warranty) such of the Collateral as may be in the possession of the Pledgee and
as has not theretofore been sold or otherwise applied or released pursuant to
this Agreement, together with any moneys at the time held by the Pledgee or any
of its sub-agents hereunder and, with respect to any Collateral consisting of an
Uncertificated Security, a Partnership Interest or a Limited Liability Company
Interest (other than an Uncertificated Security, Partnership Interest or Limited
Liability Company Interest credited on the books of a Clearing Corporation or
Securities Intermediary), a termination of the agreement relating thereto
executed and delivered by the issuer of such Uncertificated Security pursuant to
Section 3.2(a)(ii) or by the respective partnership or limited liability company
pursuant to Section 3.2(a)(iv)(2). As used in this Agreement, "TERMINATION DATE"
shall mean the date upon which the Commitments under the Credit Agreement have
been terminated and all Covered Agreements have been terminated, no Letter of
Credit or Note (as defined in the Credit Agreement) is outstanding (and all
Loans have been paid in full), all Letters of Credit have been terminated, and
all other Obligations (other than indemnities described herein and described in
Section 12.01 of the Credit Agreement, and any other indemnities set forth in
any other Credit Documents, in each case which are not then due and payable)
then due and payable have been paid in full.
(b) In the event that any part of the Collateral is sold or
otherwise disposed of (to a Person other than a Credit Party) (x) at any time
prior to the time at which all Credit Document Obligations have been paid in
full and all Commitments and Letters of Credit under the Credit Agreement have
been terminated, in connection with a sale or disposition permitted by Section
8.02 of the Credit Agreement or is otherwise released at the direction of the
Required Lenders (or all the Lenders if required by Section 12.12 of the Credit
Agreement) or (y) at any time thereafter, to the extent permitted by the other
Secured Debt Agreements, and in the case of clauses (x) and (y), the proceeds of
such sale or disposition (or from such release) are applied in accordance with
the terms of the Credit Agreement or such other Secured Debt Agreement, as the
case may be, to the extent required to be so applied, the Pledgee, at the
request and expense of such Pledgor, will duly release from the security
interest created hereby (and will execute and deliver such documentation,
including termination or partial release statements and the like in connection
therewith) and assign, transfer and deliver to such Pledgor (without recourse
and without any representation or warranty) such of the Collateral as is then
being (or has been) so sold or released and as may be in the possession of the
Pledgee (or, in the case of Collateral held
by any sub-agent designated pursuant to Section 4 hereto, such sub-agent) and
has not theretofore been released pursuant to this Agreement.
(c) At any time that any Pledgor desires that Collateral be
released as provided in the foregoing Section 19(a) or (b), it shall deliver to
the Pledgee (and the relevant sub-agent, if any, designated pursuant to Section
4 hereof) a certificate signed by an authorized officer of such Pledgor stating
that the release of the respective Collateral is permitted pursuant to Section
19(a) or (b) hereof.
(d) The Pledgee shall have no liability whatsoever to any other
Secured Creditor as the result of any release of Collateral by it in accordance
with (or which the Collateral Agent in the absence of gross negligence and
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision) believes to be in accordance with) this
Section 19.
20. NOTICES, ETC. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or
courier service and all such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, cable company
or overnight courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Pledgee or any Pledgor shall not be
effective until received by the Pledgee or such Pledgor, as the case may be. All
notices and other communications shall be in writing and addressed as follows:
(a) if to any Pledgor:
c/o Rexnord Corporation
0000 Xxxx Xxxxxxxxxx Xxxxxx
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000;
(b) if to the Pledgee, at:
Deutsche Bank Trust Company Americas
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000;
(c) if to any Lender Creditor, either (x) to the Administrative
Agent, at the address of the Administrative Agent specified in the Credit
Agreement, or (y) at such address as such Lender Creditor shall have specified
in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Pledgors and the Pledgee;
or at such other address or addressed to such other individual as shall have
been furnished in writing by any Person described above to the party required to
give notice hereunder.
21. WAIVER; AMENDMENT. Except as provided in Sections 29 and 31
hereof, none of the terms and conditions of this Agreement may be changed,
waived, modified or varied in any manner whatsoever except in accordance with
the requirements specified in the Security Agreement.
22. SUCCESSORS AND ASSIGNS. This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full force and
effect, subject to release and/or termination as set forth in Section 19, (ii)
be binding upon each Pledgor, its successors and assigns; PROVIDED, HOWEVER,
that no Pledgor shall assign any of its rights or obligations hereunder without
the prior written consent of the Pledgee (with the prior written consent of the
Required Secured Creditors), and (iii) inure, together with the rights and
remedies of the Pledgee hereunder, to the benefit of the Pledgee, the other
Secured Creditors and their respective successors and permitted transferees and
assigns. All agreements, statements, representations and warranties made by each
Pledgor herein or in any certificate or other instrument delivered by such
Pledgor or on its behalf under this Agreement shall be considered to have been
relied upon by the Secured Creditors and shall survive the execution and
delivery of this Agreement and the other Secured Debt Agreements regardless of
any investigation made by the Secured Creditors or on their behalf.
23. HEADINGS DESCRIPTIVE. The headings of the several Sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
24. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN
EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH PLEDGOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH PLEDGOR HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH
PLEDGOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE
AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH
PLEDGOR. EACH PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
ANY SUCH PLEDGOR AT ITS ADDRESS FOR NOTICES AS
PROVIDED IN SECTION 20 ABOVE UNLESS ANOTHER ADDRESS IS PROVIDED TO THE
COLLATERAL AGENT IN WRITING IN ACCORDANCE WITH SECTION 20, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH PLEDGOR HEREBY IRREVOCABLY
WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES
AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER
OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY
INVALID OR INEFFECTIVE IF IN CONFORMITY WITH THE FOREGOING. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE PLEDGEE UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR,
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PLEDGOR IN ANY OTHER JURISDICTION.
(b) EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
25. PLEDGOR'S DUTIES. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Pledgor shall remain liable
to perform all of the obligations, if any, assumed by it with respect to the
Collateral and the Pledgee shall not have any obligations or liabilities with
respect to any Collateral by reason of or arising out of this Agreement, except
for the safekeeping of Collateral actually in Pledgor's possession, nor shall
the Pledgee be required or obligated in any manner to perform or fulfill any of
the obligations of any Pledgor under or with respect to any Collateral, in each
case unless the Pledgee shall become the absolute owner of such Collateral as a
result of the exercise of its remedies hereunder pursuant to Section 7 of this
Agreement.
26. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with each Pledgor and the
Pledgee.
27. SEVERABILITY. Any provision of this 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.
28. RECOURSE. This Agreement is made with full recourse to each
Pledgor and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of such Pledgor contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
29. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of Holdings that is required to become a party to this Agreement
after the date hereof pursuant to the requirements of the Credit Agreement or
any other Credit Document, shall become a Pledgor hereunder by (x) executing a
counterpart hereof, or of a Joinder Agreement in the form of Exhibit L to the
Credit Agreement, and delivering same to the Pledgee and (y) delivering
supplements to Annexes A through F, hereto as are necessary to cause such
annexes to be complete and accurate with respect to such additional Pledgor on
such date. In addition, such additional Pledgor shall take actions as specified
in this Agreement as would have been taken by such Pledgor had it been an
original party to this Agreement, in each case with all documents required above
to be delivered to the Pledgee and with all documents and actions required above
to be taken to the reasonable satisfaction of the Pledgee.
30. LIMITED OBLIGATIONS. It is the desire and intent of each Pledgor
and the Secured Creditors that this Agreement shall be enforced against each
Pledgor to the fullest extent permissible under the laws applied in each
jurisdiction in which enforcement is sought. Notwithstanding anything to the
contrary contained herein, in furtherance of the foregoing, it is noted that the
obligations of each Pledgor constituting a Subsidiary Guarantor have been
limited as provided in the Subsidiaries Guaranty.
31. RELEASE OF PLEDGORS. If at any time all of the Equity Interests of
any Pledgor owned by the Borrower or any of its Subsidiaries are sold (to a
Person other than a Credit Party) in a transaction permitted pursuant to the
Credit Agreement (and which does not violate the terms of any other Secured Debt
Agreement then in effect), then, such Pledgor shall be released as a Pledgor
pursuant to this Agreement without any further action hereunder (it being
understood that the sale of all of the Equity Interests in any Person that owns,
directly or indirectly, all of the Equity Interests in any Pledgor shall be
deemed to be a sale of all of the Equity Interests in such Pledgor for purposes
of this Section), and the Pledgee is authorized and directed to execute and
deliver, at the expense of the Pledgors, such instruments of release as are
reasonably satisfactory to the applicable Pledgor and the Pledgee. At any time
that the Borrower desires that a Pledgor be released from this Agreement as
provided in this Section 31, the Borrower shall deliver to the Pledgee a
certificate signed by an Authorized Officer of the Borrower stating that the
release of such Pledgor is permitted pursuant to this Section 31. The Pledgee
shall have no liability whatsoever to any other Secured Creditor as a result of
the release of any Pledgor by it in accordance with, or which it believes to be
in accordance with, this Section 31.
* * * *
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
RBS GLOBAL, INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
REXNORD CORPORATION,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
RBS NORTH AMERICA, INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
RBS ACQUISITION CORPORATION,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
RAC - I, INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
RBS CHINA HOLDINGS, L.L.C.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
REXNORD NORTH AMERICA
HOLDINGS, INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
ADDAX, INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
BETZDORF CHAIN COMPANY, INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
CLARKSON INDUSTRIES, INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
PT COMPONENTS, INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
PRAGER INCORPORATED,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
REXNORD GERMANY - I INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
REXNORD INTERNATIONAL INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
REXNORD, LTD.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
REXNORD PUERTO RICO INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
XXXXXXX XXXX LICENSCO INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
X.X. XXXX INC.,
as a Pledgor
By: /s/
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
Accepted and Agreed to:
DEUTSCHE BANK TRUST COMPANY
AMERICAS,
as Collateral Agent and Pledgee
By: /s/
-----------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
ANNEX A
to
PLEDGE AGREEMENT
SCHEDULE OF SUBSIDIARIES
Jurisdiction of
Entity Ownership Organization
------ --------- ---------------
ANNEX B
to
PLEDGE AGREEMENT
SCHEDULE OF STOCK
1. RBS GLOBAL, INC.
Sub-clause of
Name of Section 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No.(1) Owned(2) Agreement
----------- ------- --------- ----------- ---------- --------------
2. [ADDITIONAL PLEDGOR(S)]
Sub-clause of
Name of Section 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
----------- ------- --------- ----------- ---------- --------------
----------
(1) Specify if uncertificated.
(2) Specify for each Foreign Subsidiary the percentage owned of (x) Voting
Equity Interests and (y) Non-Voting Equity Interests.
ANNEX C
to
PLEDGE AGREEMENT
SCHEDULE OF NOTES
1. RBS GLOBAL, INC.
Sub-clause of
Section 3.2(a)
Amount Maturity Date Obligor of Pledge Agreement
------ ------------- ------- -------------------
2. [ADDITIONAL PLEDGOR(S)]
Sub-clause of
Section 3.2(a)
Amount Maturity Date Obligor of Pledge Agreement
------ ------------- ------- -------------------
ANNEX D
to
PLEDGE AGREEMENT
SCHEDULE OF LIMITED LIABILITY COMPANY INTERESTS
1. RBS GLOBAL, INC.
Name of Sub-clause of
Issuing Limited Type of Percentage Section 3.2(a)
Liability Company Interest Owned of Pledge Agreement
------------------ -------- ---------- -------------------
2. [ADDITIONAL PLEDGOR(S)]
Name of Sub-clause of
Issuing Limited Type of Percentage Section 3.2(a)
Liability Company Interest Owned of Pledge Agreement
------------------ -------- ---------- -------------------
ANNEX E
to
PLEDGE AGREEMENT
SCHEDULE OF PARTNERSHIP INTERESTS
1. RBS GLOBAL, INC.
Sub-clause of
Name of Type of Percentage Section 3.2(a)
Issuing Partnership Interest Owned of Pledge Agreement
------------------- -------- ---------- -------------------
2. [ADDITIONAL PLEDGOR(S)]
Sub-clause of
Name of Type of Percentage Section 3.2(a)
Issuing Partnership Interest Owned of Pledge Agreement
------------------- -------- ---------- -------------------
ANNEX F
to
PLEDGE AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
Name of Pledgor Address(es) of Chief Executive Office
--------------- -------------------------------------
ANNEX G
to
PLEDGE AGREEMENT
FORM OF AGREEMENT REGARDING UNCERTIFICATED SECURITIES, LIMITED LIABILITY
COMPANY INTERESTS AND PARTNERSHIP INTERESTS
AGREEMENT (as amended, modified, restated and/or supplemented from
time to time, this "AGREEMENT"), dated as of [_______ __, 200_], among the
undersigned pledgor (the "PLEDGOR"), [____________], not in its individual
capacity but solely as Collateral Agent (the "PLEDGEE"), and [__________], as
the issuer of the Uncertificated Securities, Limited Liability Company Interests
and/or Partnership Interests (each as defined below) (the "ISSUER").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Pledgor, certain of its affiliates and the Pledgee have
entered into a Pledge Agreement, dated as of [_______ __, 200_] (as amended,
modified, restated and/or supplemented from time to time, the "PLEDGE
AGREEMENT"), under which, among other things, in order to secure the payment of
the Obligations (as defined in the Pledge Agreement), the Pledgor has or will
pledge to the Pledgee for the benefit of the Secured Creditors (as defined in
the Pledge Agreement), and grant a security interest in favor of the Pledgee for
the benefit of the Secured Creditors in, all of the right, title and interest of
the Pledgor in and to [any and all] [65% of all outstanding](1) ["uncertificated
securities" (as defined in Section 8-102(a)(18) of the Uniform Commercial Code,
as adopted in the State of
New York) ("UNCERTIFICATED SECURITIES")] [Partnership
Interests (as defined in the Pledge Agreement)] [Limited Liability Company
Interests (as defined in the Pledge Agreement)], from time to time issued by the
Issuer and owned by the Pledgor, whether now existing or hereafter from time to
time acquired by the Pledgor (with all of such [Uncertificated Securities]
[Partnership Interests] [Limited Liability Company Interests] being herein
collectively called the "ISSUER PLEDGED INTERESTS"); and
WHEREAS, the Pledgor desires the Issuer to enter into this Agreement
in order to perfect the security interest of the Pledgee under the Pledge
Agreement in the Issuer Pledged Interests, to vest in the Pledgee control of the
Issuer Pledged Interests and to provide for the rights of the parties under this
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. The Pledgor hereby irrevocably authorizes and directs the
Issuer, and the Issuer hereby agrees, following receipt by the Issuer of a
notice from the Pledgee stating that an Event of Default exists and that the
Pledgee is exercising exclusive control of the Issuer Pledged
----------
(1) Use appropriate bracketed language in the case of Issuer Pledged Interests
of an Exempted Foreign Entity (as per the last paragraph of Section 3.1 of
the Pledge Agreement).
Interests, to comply with any and all instructions and orders originated by the
Pledgee (and its successors and assigns) regarding any and all of the Issuer
Pledged Interests without the further consent by the registered owner (including
the Pledgor), and not to comply with any instructions or orders regarding any or
all of the Issuer Pledged Interests originated by any person or entity other
than the Pledgee (and its successors and assigns) or a court of competent
jurisdiction.
2. The Issuer hereby certifies that (i) no notice of any security
interest, lien or other encumbrance or claim affecting the Issuer Pledged
Interests (other than the security interest of the Pledgee) has been received by
it, and (ii) the security interest of the Pledgee in the Issuer Pledged
Interests has been registered in the books and records of the Issuer.
3. The Issuer hereby represents and warrants that (i) the pledge
by the Pledgor of, and the granting by the Pledgor of a security interest in,
the Issuer Pledged Interests to the Pledgee, for the benefit of the Secured
Creditors, does not violate the charter, by-laws, partnership agreement,
membership agreement or any other agreement governing the Issuer or the Issuer
Pledged Interests, and (ii) the Issuer Pledged Interests consisting of capital
stock of a corporation are fully paid and nonassessable.
4. All notices, statements of accounts, reports, prospectuses,
financial statements and other communications to be sent to the Pledgor by the
Issuer in respect of the Issuer will also be sent to the Pledgee at the
following address:
[__________________]
[__________________]
Attention: [______________]
Telephone No.: [______________]
Telecopier No.: [______________]
5. Following its receipt of a notice from the Pledgee stating that
an Event of Default exists and until the Pledgee shall have delivered written
notice to the Issuer that all of the Obligations have been paid in full and this
Agreement is terminated, the Issuer will send any and all redemptions,
distributions, interest or other payments in respect of the Issuer Pledged
Interests from the Issuer for the account of the Pledgee only by wire transfers
to such account as the Pledgee shall instruct.
6. Except as expressly provided otherwise in Sections 4 and 5, all
notices, instructions, orders and communications hereunder shall be sent or
delivered by mail, telegraph, telex, telecopy, cable or overnight courier
service and all such notices and communications shall, when mailed, telexed,
telecopied, cabled or sent by overnight courier, be effective when received. All
notices and other communications shall be in writing and addressed as follows:
(ii)
(a) if to the Pledgor, at:
________________________
________________________
________________________
________________________
Attention: ________
Telephone No.:
Telecopier No.:
(b) if to the Pledgee, at the address given in Section 4 hereof;
(c) if to the Issuer, at:
________________________________
________________________________
________________________________
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. As used in this
Section 6, "BUSINESS DAY" means any day other than a Saturday, Sunday, or other
day in which banks in
New York are authorized to remain closed.
7. This Agreement shall be binding upon the successors and
permitted assigns of the Pledgor and the Issuer and shall inure to the benefit
of and be enforceable by the Pledgee and its successors and assigns. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which shall constitute one instrument. In the event that
any provision of this Agreement shall prove to be invalid or unenforceable, such
provision shall be deemed to be severable from the other provisions of this
Agreement which shall remain binding on all parties hereto. None of the terms
and conditions of this Agreement may be changed, waived, modified or varied in
any manner whatsoever except in writing signed by the Pledgee, the Issuer and
the Pledgor.
8. This Agreement shall be governed by and construed in accordance
with the laws of the State of
New York, without regard to its principles of
conflict of laws.
(iii)
IN WITNESS WHEREOF, the Pledgor, the Pledgee and the Issuer have
caused this Agreement to be executed by their duly elected officers duly
authorized as of the date first above written.
[_____________________________],
as Pledgor
By_____________________________
Name:
Title:
[_____________________________],
not in its individual capacity but solely as
Collateral Agent and Pledgee
By____________________________________
Name:
Title:
[_____________________________],
as the Issuer
By____________________________________
Name:
Title:
(iv)
