EXHIBIT 10.4
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of April 12, 1999 (as amended, restated,
modified and/or supplemented from time to time, this "AGREEMENT"), among each of
the undersigned (each, a "PLEDGOR" and, together with each other entity which
becomes a party hereto pursuant to Section 25, collectively, the "PLEDGORS") and
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, not in its individual capacity but
solely as Collateral Agent (the "PLEDGEE"), for the benefit of the Secured
Creditors (as defined below). Except as otherwise defined herein, terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
WHEREAS, Tenneco Packaging, Inc. ("TPI"), various financial
institutions from time to time party thereto (the "LENDERS"), X.X. Xxxxxx
Securities Inc. and BT Alex. Xxxxx Incorporated, as Co-Lead Arrangers (the
"CO-LEAD ARRANGERS"), Bankers Trust Company, as Syndication Agent (the
"SYNDICATION AGENT"), and Xxxxxx Guaranty Trust Company of New York, as
Administrative Agent (the "ADMINISTRATIVE AGENT", and together with the
Lenders, the Co-Lead Arrangers, the Syndication Agent, each Issuing Bank, the
Pledgee and the Collateral Agent, the "LENDER CREDITORS") have entered into
the Credit Agreement, providing for the making of Term Loans to TPI as
contemplated therein;
WHEREAS, TPI and Packaging Corporation of America ("PCA") have entered
into (i) the Contribution Agreement pursuant to which (x) TPI will contribute
the Containerboard Business to PCA and (y) PCA will acquire the Containerboard
Business and (ii) the Bank Credit Agreement Assignment and Assumption Agreement
pursuant to which (x) TPI will assign (without recourse, representation or
warranty) all of its rights, interests and obligations under the Credit
Agreement and the Notes to PCA and (y) PCA will assume all of the rights,
interests and obligations of TPI under the Credit Agreement and the Notes, all
as contemplated therein;
WHEREAS, upon the Contribution Effective Time, PCA will become the
"Borrower" for all purposes of the Credit Agreement, this Agreement and the
other Credit Documents;
WHEREAS, PCA may from time to time enter into one or more (i) interest
rate protection agreements (including, without limitation, interest rate swaps,
caps, floors, collars and similar agreements), (ii) foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values
and/or (iii) other types of hedging agreements from time to time (each such
agreement or arrangement with an Other Creditor (as hereinafter defined), an
"INTEREST RATE PROTECTION AGREEMENT OR OTHER HEDGING AGREEMENT"), with Xxxxxx
Guaranty Trust Company of New York in its individual capacity ("XXXXXX
GUARANTY"), any Lender or a
syndicate of financial institutions organized by Xxxxxx Guaranty or any such
Lender, or an affiliate of
Xxxxxx Guaranty or any such Lender (Xxxxxx Guaranty, any such
Lender or Lenders or affiliate or affiliates of Xxxxxx Guaranty or such
Lender or Lenders (even if Xxxxxx Guaranty or any such Lender ceases to be a
Lender under the Credit Agreement for any reason) and any such institution
that participates in such Interest Rate Protection Agreements or Other
Hedging Agreements, and in each case their subsequent successors and assigns,
collectively, the "OTHER CREDITORS", and together with the Lender Creditors,
the "SECURED CREDITORS");
WHEREAS, pursuant to a Subsidiaries Guaranty, dated as of April 12,
1999 (as amended, restated, modified and/or supplemented from time to time,
the "SUBSIDIARIES GUARANTY"), each Pledgor (other than PCA) has, on and after
the Contribution Effective Time, jointly and severally guaranteed to the
Secured Creditors the payment when due of all obligations and liabilities of
PCA under or with respect to the Credit Documents and each Interest Rate
Protection Agreement and Other Hedging Agreement;
WHEREAS, it is a condition precedent to the making of Loans to TPI
and PCA and the issuance of, and participation in, Letters of Credit for the
account of PCA under the Credit Agreement and to the Other Creditors entering
into Interest Rate Protection Agreements and Other Hedging Agreements that
each Pledgor shall have executed and delivered to the Pledgee this Agreement;
and
WHEREAS, each Pledgor will obtain benefits from the incurrence
and/or assumption of Loans by PCA and the issuance of Letters of Credit for
the account of PCA under the Credit Agreement and PCA's entering into
Interest Rate Protection Agreements or Other Hedging Agreements and,
accordingly, desires to execute this Agreement in order to satisfy the
conditions precedent described in the preceding paragraph and to induce the
Lenders to make Loans to TPI and PCA and to issue, and participate in,
Letters of Credit for the account of PCA, and to induce the Other Creditors
to enter into Interest Rate Protection Agreements and Other Hedging
Agreements with PCA;
NOW, THEREFORE, in consideration of the benefits accruing to each
Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the
Pledgee and hereby covenants and agrees with the Pledgee 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 the stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, indemnities, Fees and interest
thereon) of such Pledgor owing to the Lender Creditors, whether now
existing or hereafter incurred 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 a Pledgor other than the Borrower,
all such
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obligations, liabilities and indebtedness under the Subsidiaries
Guaranty) and the due performance and compliance by such Pledgor with all
of the terms, conditions and agreements contained in the Credit Agreement
and such other Credit Documents (all such obligations, liabilities and
indebtedness under this clause (i), except to the extent guaranteeing
obligations of the Borrower under Interest Rate Protection Agreements or
Other Hedging Agreements, 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, indemnities, fees and interest
thereon) of such Pledgor owing to the Other Creditors, now existing or
hereafter incurred under, arising out of or in connection with any Interest
Rate Protection Agreement or Other Hedging Agreement, whether such
Interest Rate Protection Agreement or Other Hedging Agreement is now in
existence or hereinafter arising, and the due performance and compliance
with the terms, conditions and agreements of each such Interest Rate
Protection Agreement and Other Hedging Agreement by such Pledgor,
including, in the case of Pledgors other than the Borrower, all
obligations, liabilities and indebtedness under the Subsidiaries Guaranty,
in each case, in respect of the Interest Rate Protection Agreements and
Other Hedging Agreements, and the due performance and compliance by such
Pledgor with all of the terms, conditions and agreements contained in each
such Interest Rate Protection Agreement and Other Hedging 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) and/or preserve its security
interest therein;
(iv) in the event of any proceeding for the collection of the
Obligations (as defined below) or the enforcement of this Agreement, after
an Event of Default (such term, as used in this Agreement, shall mean and
include any Event of Default under, and as defined in, the Credit Agreement
and any payment default under any Interest Rate Protection Agreement or
Other Hedging Agreement and shall in any event include, without limitation,
any payment default (after the expiration of any applicable grace period)
on any of the Obligations (as defined below)) shall have occurred and be
continuing, the reasonable 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; and
(v) all amounts paid by any Indemnitee to which such Indemnitee
has the right to reimbursement under Section 11 of this Agreement.
all such obligations, liabilities, indebtedness, sums and expenses set forth in
clauses (i) through (v) of this Section 1 being collectively called the
"OBLIGATIONS", it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above,
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whether outstanding on the date of this Agreement or extended from time to
time after the date of this Agreement.
2. DEFINITIONS; ANNEXES. (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 given such term 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.
"BANK CREDIT AGREEMENT ASSIGNMENT AND ASSUMPTION AGREEMENT" shall have
the meaning provided in the Credit Agreement.
"BORROWER" shall mean (i) at any time prior to the Contribution
Effective Time, TPI and (ii) thereafter, PCA.
"CERTIFICATED SECURITY" shall have the meaning given such term in
Section 8-102(a)(4) of the UCC.
"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.
"CONTAINERBOARD BUSINESS" shall have the meaning provided in the
Credit Agreement.
"CONTRIBUTION AGREEMENT" shall have the meaning provided in the Credit
Agreement.
"CONTRIBUTION EFFECTIVE TIME" shall have the meaning provided in the
Credit Agreement.
"CREDIT AGREEMENT" shall mean the Credit Agreement , dated as of April
12, 1999, among the Borrower, the Lenders, the Co-Lead Arrangers, the
Syndication Agent and the Administrative Agent, providing for the making of
Loans to the Borrower and, after the
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Contribution Effective Time, the issuance of, and participation in, Letters
of Credit for the account of the Borrower as contemplated therein, as the
same may be amended, restated, modified, extended, renewed, replaced,
supplemented, restructured and/or refinanced from time to time, and including
any agreement extending the maturity of, refinancing or restructuring
(including, but not limited to, the inclusion of additional borrowers
thereunder that are Subsidiaries of the Borrower and whose obligations are
guaranteed by the Borrower and/or the Subsidiary Guarantors thereunder or any
increase in the amount borrowed) all, or any portion of, the Indebtedness
under such agreement or any successor agreements; PROVIDED, that with respect
to any agreement providing for the refinancing of Indebtedness under the
Credit Agreement, such agreement shall only be treated as, or as part of, the
Credit Agreement hereunder if (i) either (A) all obligations under the Credit
Agreement being refinanced shall be paid in full at the time of such
refinancing, and all commitments under the refinanced Credit Agreement shall
have terminated in accordance with their terms or (B) the Required Lenders
shall have consented in writing to the refinancing Indebtedness being
treated, along with their Indebtedness, as Indebtedness pursuant to the
Credit Agreement, (ii) the refinancing Indebtedness shall be permitted to be
incurred under the Credit Agreement being refinanced (if such Credit
Agreement is to remain outstanding) and (iii) a notice to the effect that the
refinancing Indebtedness shall be treated as issued under the Credit
Agreement shall be delivered by the Borrower to the Pledgee).
"CREDIT DOCUMENT OBLIGATIONS" shall have the meaning set forth in
Section 1 hereof.
"DOMESTIC CORPORATION" shall have the meaning set forth in the
definition of "Stock."
"EVENT OF DEFAULT" shall have the meaning set forth in Section 1
hereof.
"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."
"INDEMNITEES" shall have the meaning set forth in Section 11 hereof.
"INSTRUMENT" shall have the meaning given such term in
Section 9-105(1)(i) of the UCC.
"INTEREST RATE PROTECTION AGREEMENT" shall have the meaning given such
term in the recitals hereto.
"INVESTMENT PROPERTY" shall have the meaning given such term in
Section 9-115(f) of the UCC.
"LENDER CREDITORS" shall have the meaning given such term in the
recitals hereto.
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"LENDERS" shall have the meaning given such term in the recitals
hereto.
"LIMITED LIABILITY COMPANY ASSETS" shall mean all assets, whether
tangible or intangible and whether real, personal or mixed (including, without
limitation, all limited liability company capital and interest in other limited
liability companies), at any time owned or represented by any Limited Liability
Company Interest.
"LIMITED LIABILITY COMPANY INTERESTS" shall mean the entire limited
liability company membership interest at any time owned by any Pledgor in any
limited liability company.
"NON-VOTING STOCK" shall mean all capital stock which is not Voting
Stock.
"NOTES" shall mean (x) all intercompany notes at any time issued to
each Pledgor and (y) all other promissory notes from time to time issued to, or
held by, each Pledgor.
"OBLIGATIONS" shall have the meaning set forth in Section 1 hereof.
"OTHER HEDGING AGREEMENT" shall have the meaning set forth in the
recitals hereto.
"OTHER CREDITORS" shall have the meaning set forth in the recitals
hereto.
"OTHER OBLIGATIONS" shall have the meaning set forth in Section 1
hereof.
"PARTNERSHIP ASSETS" shall mean all assets, whether tangible or
intangible and whether real, personal or mixed (including, without limitation,
all partnership capital and interest in other partnerships), at any time owned
or represented by any Partnership Interest.
"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.
"PCA" shall have the meaning provided in the recitals hereto.
"PLEDGED NOTES" shall have the meaning set forth in Section 3.5
hereof.
"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 9-306(l)
of the UCC.
"REQUIRED LENDERS" shall have the meaning given such term in the
Credit Agreement.
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"SECURED CREDITORS" shall have the meaning set forth in the recitals
hereto.
"SECURED DEBT AGREEMENTS" shall have the meaning set forth in
Section 5 hereof.
"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.
"SECURITY" and "SECURITIES" shall have the meaning given such term in
Section 8-102(a)(15) of the UCC and shall in any event include all Stock and
Notes (to the extent same constitute "Securities" under Section 8-102(a)(15)).
"SECURITY ENTITLEMENT" shall have the meaning given such term in
Section 8-102(a)(17) of the UCC.
"SPECIFIED DEFAULT" shall have the meaning provided such term in
Section 5.
"STOCK" shall mean (x) with respect to corporations incorporated
under the laws of the United States or any State or territory thereof (each,
a "DOMESTIC CORPORATION"), all of the issued and outstanding shares of
capital stock of any corporation at any time owned by any Pledgor of any
Domestic Corporation (other than American Cellulose Corporation so long as
same is not a direct or indirect Subsidiary of 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 at
any time owned by any Pledgor of any Foreign Corporation.
"SYNDICATION AGENT" shall have the meaning given such term in the
recitals hereto.
"TERMINATION DATE" shall have the meaning set forth in Section 19
hereof.
"TPI" shall have the meaning provided in the recitals hereto.
"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 STOCK" shall mean all classes of capital stock of any Foreign
Corporation entitled to vote.
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3. PLEDGE OF SECURITY INTEREST, ETC.
3.1 PLEDGE. To secure the Obligations now or hereafter owed or to
be performed by such Pledgor, each Pledgor does hereby grant, pledge and
assign 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 the 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 PCA Security Agreement),
including any and all assets of whatever type or kind deposited by such
Pledgor in such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without limitation, all Financial
Assets, Investment Property, moneys, 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 of such Pledgor from time to time;
(c) all Limited Liability Company Interests of such Pledgor from
time to time, excluding those in a limited liability company that is not a
Wholly-Owned Subsidiary of the Borrower to the extent (and only to the
extent) such Limited Liability Company Interests may not be pledged
hereunder without violating the terms of the operating agreement or other
organizational documents of such limited liability company, and all of its
right, title and interest in each limited liability company to which each
such interest relates, whether now existing or hereafter acquired,
including, without limitation:
(A) all its capital therein and its interest in all
profits, losses, Limited Liability Company Assets 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;
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(D) all present and future claims, if any, of such Pledgor
against any such limited liability company for moneys 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
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 or for any Limited Liability Company Asset,
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 (with all of the foregoing rights only to be exercisable
upon the occurrence and during the continuation of an Event of
Default); 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 of such Pledgor from time to time,
excluding those in a partnership that is not a Wholly-Owned Subsidiary of
the Borrower to the extent (and only to the extent) such Partnership
Interests may not be pledged hereunder without violating the terms of the
partnership agreement or other organizational documents of such
partnership, and all of its right, title and interest in each partnership
to which each such interest relates, whether now existing or hereafter
acquired, including, without limitation:
(A) all its capital therein and its interest in all
profits, losses, Partnership Assets 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
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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 moneys 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 any 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 or for any Partnership Asset, 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 (with all of the
foregoing rights only to be exercisable upon the occurrence and during
the continuation of an Event of Default); 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 Security Entitlements of such Pledgor from time to time in
any and all of the foregoing;
(f) all Financial Assets and Investment Property of such Pledgor
from time to time; and
(g) all Proceeds of any and all of the foregoing;
PROVIDED that (x) except to the extent provided by Section 8.14 of the Credit
Agreement, no Pledgor shall be required at any time to pledge hereunder more
than 65% of the Voting Stock of any Foreign Corporation and (y) each Pledgor
shall be required to pledge hereunder 100% of any Non-Voting Stock at any time
and from time to time acquired by such Pledgor of any Foreign Corporation.
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 the respective Pledgor) be pledged
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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
Secured Creditors:
(i) with respect to a Certificated Security (other than a
Certificated Security credited on the books of a Clearing Corporation), the
respective Pledgor shall physically deliver such Certificated Security to
the Pledgee, endorsed to the Pledgee or endorsed in blank;
(ii) with respect to an Uncertificated Security (other than an
Uncertificated Security credited on the books of a Clearing Corporation),
the respective Pledgor shall cause the issuer of such Uncertificated
Security to duly authorize and 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
satisfaction of the Pledgee and with such modifications, if any, as shall
be satisfactory to the Pledgee) pursuant to which such issuer agrees to
comply 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; it being
understood that the Pledgee will not so originate any instructions to any
such issuer unless an Event of Default has occurred and is continuing;
(iii) with respect to a Certificated Security, Uncertificated
Security, Partnership Interest or Limited Liability Company Interest
credited on the books of a Clearing Corporation (including a Federal
Reserve Bank, Participants Trust Company or The Depository Trust Company),
the respective Pledgor shall promptly notify the Pledgee thereof and shall
promptly take all actions (x) required (i) to comply with the applicable
rules of such Clearing Corporation and (ii) to perfect the security
interest of the Pledgee under applicable law (including, in any event,
under Sections 9-115 (4)(a) and (b), 9-115 (1)(e) and 8-106(d) of the UCC)
and (y) 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
Interest credited on the books of a Clearing Corporation), (1) if such
Partnership Interest or Limited Liability Company Interest is represented
by a certificate, the procedure set forth in Section 3.2(a)(i), and (2) if
such Partnership Interest or Limited Liability Company Interest is not
represented by a certificate, the procedure set forth in Section
3.2(a)(ii);
(v) with respect to any Note, physical delivery of such Note to
the Pledgee, endorsed to the Pledgee or endorsed in blank; and
(vi) after an Event of Default has occurred and is continuing, with
respect to cash, to the extent not otherwise provided in the Security
Agreement, (i) establishment by
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the Pledgee of a cash account in the name of such Pledgor over which the
Pledgee shall have exclusive and absolute control and dominion (and no
withdrawals or transfers may be made therefrom by any Person except with
the prior written consent of the Pledgee) and (ii) deposit of such cash
in such cash account.
(b) In addition to the actions required to be taken pursuant to
proceeding Section 3.2(a), each Pledgor shall take the following additional
actions with respect to the Securities and Collateral (as defined below):
(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), the respective
Pledgor shall 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 Form UCC-1 or other appropriate form) under the Uniform
Commercial Code as in effect in the various relevant States, on form
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 has a security interest in
all Investment Property and other Collateral which is 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 9-115(4)(b) of the UCC).
3.3 SUBSEQUENTLY ACQUIRED COLLATERAL. If any Pledgor shall acquire
(by purchase, stock dividend or otherwise) any additional Collateral at any time
or from time to time after the date hereof, 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 and, furthermore,
such Pledgor will within 10 days thereafter take (or cause to be taken) all
action with respect to such Collateral (except to the extent such Collateral
consists of Cash Equivalents) in accordance with the procedures set forth in
Section 3.2, and will promptly thereafter deliver to the Pledgee (i) a
certificate executed by a principal executive 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 and (ii)
supplements to Annexes A through F hereto as are necessary to cause such annexes
to be complete and accurate at such time. Without limiting the foregoing, each
Pledgor shall be required to pledge hereunder any shares of stock at any time
and from time to time after the date hereof acquired by such Pledgor of any
Foreign Corporation, PROVIDED that (x) except to the extent provided by Section
8.14 of the Credit Agreement, no Pledgor shall be required at any time to pledge
hereunder more than 65% of the Voting Stock of any Foreign Corporation and (y)
each Pledgor shall be required to pledge hereunder 100% of any Non-Voting Stock
at any time and from time to time acquired by such Pledgor of any Foreign
Corporation.
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3.4 TRANSFER TAXES. Each pledge of Collateral under Section 3.1 or
Section 3.3 shall be accompanied by any transfer tax stamps required in
connection with the pledge of such Collateral.
3.5 DEFINITION OF PLEDGED NOTES. All Notes at any time pledged or
required to be pledged hereunder are hereinafter called the "PLEDGED NOTES".
3.6 CERTAIN REPRESENTATIONS AND WARRANTIES REGARDING THE COLLATERAL.
Each Pledgor represents and warrants that on the date hereof (i) each Subsidiary
of such Pledgor, and the direct ownership thereof, is listed in Annex A hereto;
(ii) the Stock held by such Pledgor consists of the number and type of shares of
the stock of the corporations as described in Annex B hereto; (iii) such Stock
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 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 constitutes that percentage or portion of the entire
partnership interest of the Partnership as set forth in Annex E hereto; (ix) the
Pledgor has complied with the respective procedure set forth in Section 3.2(a)
with respect to each item of Collateral described in Annexes A through E hereto;
and (x) such Pledgor owns no other Securities, Limited Liability Company
Interests or Partnership Interests.
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 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 an Event of Default or a Default
under Section 10.01 or 10.05 of the Credit Agreement (each such Default, a
"SPECIFIED DEFAULT"), each Pledgor shall be entitled to exercise all voting
rights attaching to any and all Collateral owned by it, and to give consents,
waivers or ratifications in respect thereof, PROVIDED that no vote shall be
cast or any consent, waiver or ratification given or any action taken which
would violate, result in breach of any covenant contained in, or be
inconsistent with, any of the terms of this Agreement, the Credit Agreement,
any other Credit Document or any Interest Rate Protection Agreement or Other
Hedging Agreement (collectively, the "SECURED DEBT AGREEMENTS"), or which
would have the effect of materially impairing the value of the Collateral or
any material part thereof or the position or interests of the Pledgee or any
other Secured Creditor therein. All such rights of a Pledgor to vote and to
give consents, waivers and ratifications shall cease in case an Event of
Default or a Specified Default shall occur and be continuing and Section 7
hereof shall become applicable.
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6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an Event
of Default or a Specified Default shall have occurred and be continuing, all
cash dividends, cash distributions, cash Proceeds and other cash amounts payable
in respect of the Collateral shall be paid to (and may be retained by) the
respective Pledgor. Subject to Section 3.2 hereof, the Pledgee shall be
entitled to receive directly, and to retain as part of the Collateral:
(i) all other or additional stock, notes, 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) paid or distributed by way of dividend or otherwise in
respect of the Collateral;
(ii) all other or additional stock, notes, limited liability
company interests, partnership interests, instruments or other securities
or property (including, but not limited to, cash) 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, 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
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. All dividends, distributions or
other payments which are received by the respective Pledgor contrary to the
provisions of this Section 6 or Section 7 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 OR A SPECIFIED
DEFAULT. In the event an Event of Default or a Specified Default shall have
occurred and be continuing, the Pledgee shall be entitled to exercise all of the
rights, powers and remedies (whether vested in it by this Agreement or by any
other Secured Debt Agreement or by law) for the protection and enforcement of
its rights in respect of the Collateral, including, without limitation, all the
rights and remedies of a secured party upon default under the Uniform Commercial
Code of the State of New York, and the Pledgee shall be entitled, without
limitation, to exercise any or all of 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 to such Pledgor;
(ii) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
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(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 (including, without limitation, to make any demand for
payment thereon);
(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 (subject to
any applicable operating agreement, partnership agreement or other
organizational document in the case of any Collateral constituting a
Partnership Interest or a Limited Liability Company Interest) (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 or from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by each Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of credit
risk, and for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine; PROVIDED that at least 10 days' notice
of the time and place of any such sale shall be given to such Pledgor. The
Pledgee shall not be obligated to make such sale of Collateral regardless
of whether any such notice of sale has theretofore been given. Each
purchaser at any such sale shall hold the property so sold absolutely free
from any claim or right on the part of each Pledgor, and 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, all rights, if any, of marshalling the Collateral and
any other security for the Obligations or otherwise, and all rights, if
any, of stay and/or appraisal which it now has or may at any time in the
future have under rule of law or statute now existing or hereafter enacted.
At any such sale, unless prohibited by applicable law, the Pledgee on
behalf of all Secured Creditors (or certain of them) may bid for and
purchase (by bidding in Obligations or otherwise) 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, ETC., CUMULATIVE. Each right, power and remedy of
the Pledgee provided for in this Agreement or 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
15
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. Unless otherwise required by the Credit Documents, no
notice to or demand on any Pledgor in any case shall entitle such Pledgor to
any other or further notice or demand in similar 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 demand
or notice. The Secured Creditors agree that this Agreement may be enforced
only by the action of the Pledgee, acting upon the instructions of the
Required Lenders (or, after the date on which all Credit Document Obligations
have been paid in full, the holders of at least a majority of the outstanding
Other Obligations) 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 or the holders of at
least a majority of the outstanding Other Obligations, as the case may be,
for the benefit of the Secured Creditors upon the terms of this Agreement and
the other Credit Documents.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied to the payment of the Obligations in the manner
provided in Section 7.4 of the Security Agreement.
(b) It is understood and agreed that each Pledgor shall remain liable
to the extent of any deficiency between the amount of proceeds of the Collateral
pledged by it hereunder and the aggregate amount of its 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 of the purchase money paid as consideration pursuant to
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 and hold harmless the Pledgee, each other Secured Creditor and their
respective successors, assigns, employees, agents and servants (individually an
"INDEMNITEE", and collectively, the "INDEMNITEES") from and against any and all
claims, demands, losses, judgments and liabilities (including liabilities for
penalties) of whatsoever kind or nature, and (ii) to reimburse each Indemnitee
for all reasonable costs and expenses, including reasonable attorneys' fees, in
each case arising out of or resulting from this Agreement or the exercise by any
Indemnitee of any right or remedy granted to it hereunder or under any other
Secured Debt Agreement (but
16
excluding any claims, demands, losses, judgments and liabilities (including
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). In no event shall any Indemnitee hereunder
be liable, in the absence of gross negligence or willful misconduct on its
part, 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, each 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 Interest Rate
Protection and Other Hedging Agreements and Letters of Credit, and the
payment of all other Obligations and notwithstanding the discharge thereof.
12. 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 Uniform Commercial Code such financing
statements, continuation statements and other documents in such offices as
the Pledgee (acting on its own or on the instructions of the Required
Lenders) 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 without the signature of such Pledgor where permitted by
law, and agrees to do such further acts and things and to execute and deliver
to the Pledgee such additional conveyances, assignments, agreements and
instruments as the Pledgee may reasonably 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 appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor
and in the name of such Pledgor or otherwise, from time to time after the
occurrence and during the continuance of an Event of Default, in the
Pledgee's discretion to take any action and to execute any instrument which
the Pledgee may deem necessary or advisable to accomplish the purposes of
this Agreement.
13. 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 and agreed that the
obligations of the Pledgee as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement. The Pledgee shall act
hereunder on the terms and conditions set forth herein and in Section 12 of the
Credit Agreement.
14. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of
17
the Collateral or any interest therein (except in accordance with the terms
of this Agreement and the other Secured Debt Agreements).
15. 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 Collateral consisting of one or more
Securities and that it has sufficient interest in all 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 Credit Agreement);
(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 generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at
law) and principles of good faith and fair dealing;
(iv) except to the extent already obtained or made, no consent of
any other party (including, without limitation, any stockholder, member,
partner or creditor of such Pledgor or any of its Subsidiaries) and no
consent, license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required to be obtained by such Pledgor in
connection with (a) the execution, delivery or performance of this
Agreement, (b) the validity or enforceability of this Agreement (except as
set forth in clause (iii) above), (c) the perfection or enforceability of
the Pledgee's security interest in the Collateral, (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 or
(e) except for compliance with or as may required by any applicable
partnership agreement, limited liability company agreement or other
organizational document relating to any partnership or limited liability
company that is not a Wholly-Owned Subsidiary of the Borrower, the exercise
by the Pledgee of any of is rights or remedies provided herein with respect
to the Partnership Interest or Limited Liability Company Interest relating
to such partnership or limited liability company;
(v) the execution, delivery and performance of this 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, applicable to such Pledgor, or
of the certificate of incorporation, operating agreement,
18
limited liability company agreement or by-laws of such Pledgor or of any
securities issued by such Pledgor or any of its Subsidiaries, or of any
mortgage, deed of trust, indenture, lease, loan agreement, credit
agreement or other contract, agreement or instrument or undertaking to
which such Pledgor or any of its Subsidiaries is a party or which
purports to be binding upon such Pledgor or any of its Subsidiaries or
upon any of their respective assets and will not result in the creation
or imposition of (or the obligation to create or impose) any lien or
encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries except as contemplated by this Agreement (other than the
Liens created by the Collateral Documents);
(vi) all of the Collateral (consisting of Securities, Limited
Liability Company Interests or 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, PROVIDED that Collateral consisting
of Limited Liability Company Interests or Partnership Interest, may require
further payments and/or assessments in respect thereof in accordance with
the partnership agreements, limited liability company agreements or other
organizational documents relating thereto or applicable laws;
(vii) each of the Pledged Notes constitutes, or when executed by the
obligor thereof will constitute, the legal, valid and binding obligation of
such obligor, enforceable 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
generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law) and
principles of good faith and fair dealing;
(viii) the pledge, collateral assignment and delivery to the Pledgee
of the Collateral consisting of certificated securities (together with
instruments of transfer therefor), pursuant to this Agreement creates a
valid and perfected first priority security interest in such Securities,
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 Permitted Liens) 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
(ix) "control" (as defined in Section 8-106 of the UCC) has been
obtained by the Pledgee over all Collateral consisting of Securities
(including Notes which are Securities) with respect to which such "control"
may be obtained pursuant to Section 8-106 of the UCC, 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 the Securities and the
proceeds thereof against the claims and
19
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 as Collateral hereunder 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.
16. CHIEF EXECUTIVE OFFICE; RECORDS. The chief executive office
of each Pledgor is located at the address specified in Annex F hereto. Each
Pledgor will not move its chief executive office except to such new location as
such Pledgor may establish in accordance with the last sentence of this Section
16. The originals of all documents in the possession of such Pledgor evidencing
all Collateral, including but not limited to all Limited Liability Company
Interests and Partnership Interests, and the only original books of account and
records of such Pledgor relating thereto are, and will continue to be, kept at
such chief executive office at the location specified in Annex F hereto, or at
such new locations as such Pledgor may establish in accordance with the last
sentence of this Section 16. All Limited Liability Company Interests and
Partnership Interests are, and will continue to be, maintained at, and
controlled and directed (including, without limitation, for general accounting
purposes) from, such chief executive office location specified in Annex F
hereto, or such new locations as the respective Pledgor may establish in
accordance with the last sentence of this Section 16. No Pledgor shall
establish a new location for such offices until (i) it shall have given to the
Collateral Agent not less than 30 days' prior written notice of its intention so
to do, clearly describing such new location and providing such other information
in connection therewith as the Collateral Agent may reasonably request and (ii)
with respect to such new location, it shall have taken all action, satisfactory
to the Collateral Agent, to maintain the security interest of the Collateral
Agent in the Collateral intended to be granted hereby at all times fully
perfected and in full force and effect. Promptly after establishing a new
location for such offices in accordance with the immediately preceding sentence,
the respective Pledgor shall deliver to the Pledgee a supplement to Annex F
hereto so as to cause such Annex F hereto to be complete and accurate.
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 or this
Agreement (other than a waiver, consent or extension with respect to this
Agreement in accordance with its terms);
20
(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, and such Collateral or the part
thereof to be sold shall not, for any reason whatsoever, be effectively
registered under the Securities Act of 1933, 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 the
respective Pledgor, will execute and deliver to such Pledgor a proper instrument
or instruments 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 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 (other than an Uncertificated Security credited on the
books of a Clearing
21
Corporation), a Partnership Interest or a Limited Liability Company Interest,
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). As used in this Agreement, "TERMINATION DATE" shall mean the
date upon which the Total Commitments and all Interest Rate Protection
Agreements and Other Hedging Agreements have been terminated, no Letter of
Credit or Note is outstanding (and all Loans have been paid in full), all
Letters of Credit have been terminated, and all other Obligations then due
and payable have been paid in full (other than any indemnity, not then due
and payable, which by its terms shall survive such termination and payment).
(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 9.02
of the Credit Agreement or is otherwise released at the direction of the
Required Lenders (or all the Lenders if required by Section 13.12 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 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 possession of the Pledgee 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 a certificate signed by a principal executive officer of such Pledgor
stating that the release of the respective Collateral is permitted pursuant to
Section 19(a) or (b). If reasonably requested by the Pledgee (although the
Pledgee shall have no obligation to make any such request), the relevant Pledgor
shall furnish appropriate legal opinions (from counsel reasonably acceptable to
the Pledgee) to the effect set forth in the immediately preceding sentence. The
Pledgee shall have no liability whatsoever to any Secured Creditor as the result
of any release of Collateral by it as permitted by this Section 19.
20. NOTICES, ETC. All notices and other communications hereunder
shall be in writing and shall be delivered or mailed by first class mail,
postage prepaid, addressed:
(i) if to any Pledgor, at:
Packaging Corporation of America
0000 Xxxx Xxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
22
Tel: (000) 000-0000
Fax: (000) 000-0000
(ii) if to the Pledgee, at:
Xxxxxx Guaranty Trust Company of New York
c/o X.X. Xxxxxx Services, Inc.
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx
Attention: Xxxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
(iii) if to any Lender (other than the Pledgee), at such address as
such Lender shall have specified in the Credit Agreement;
(iv) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Borrower and the Pledgee;
or at such address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
21. THE PLEDGEE. (a)The Pledgee will hold, directly or indirectly
in accordance with this Agreement, all items of the Collateral at any time
received by it under this Agreement. It is expressly understood and agreed that
the obligations of the Pledgee with respect to the Collateral, interests therein
and the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in the UCC and this Agreement.
22. WAIVER; AMENDMENT. Except as contemplated in Section 25
hereof, none of the terms and conditions of this Agreement may be changed,
waived, discharged or terminated in any manner whatsoever unless such change,
waiver, discharge or termination is in writing duly signed by each Pledgor
directly and adversely affected thereby and the Collateral Agent (with the
consent of (x) the Required Lenders (or, to the extent required by Section 13.12
of the Credit Agreement, all of the Lenders) at all time prior to the time in
which all Credit Document Obligations (other than those arising from indemnities
for which no request has been made) have been paid in full and all Commitments
and Letters of Credit under the Credit Agreement had been terminated or (y) the
holders of at least a majority of the outstanding Other Obligations at all times
after the time on which all Credit Document Obligations (other than those
arising from indemnities for which no request has been made) have been paid in
full and all Commitments and Letters of Credit under the Credit Agreement had
been terminated, PROVIDED, HOWEVER, that no such change, waiver, modification or
variance shall be made to Section 11 hereof or this Section 22 without the
consent of each Secured Creditor adversely affected thereby, PROVIDED FURTHER
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class (as defined below) of Secured Creditors (and not all
Secured Creditors in a like or similar manner) shall require the written consent
of the Requisite Creditors (as defined below) of such Class of Secured
Creditors. For the purpose of this Agreement, the
23
term "CLASS" shall mean each class of Secured Creditors, I.E., whether (x)
the Lender Creditors as holders of the Credit Document Obligations or (y)
the Other Creditors as holders of the Other Obligations. For the purpose of
this Agreement, the term "REQUISITE CREDITORS" of any Class shall mean each
of (x) with respect to each of the Credit Document Obligations, the Required
Lenders and (y) with respect to the Other Obligations, the holders of more
than 50% of all obligations outstanding from time to time under the Interest
Rate Protection Agreements and Other Hedging Agreements.
23. MISCELLANEOUS. 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 Lenders or to the extent required by Section 13.12 of the Credit
Agreement, all of the Lenders), and (iii) inure, together with the rights and
remedies of the Pledgee hereunder, to the benefit of the Pledgee, the other
Secured Parties and their respective successors, transferees and assigns. THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK. The headings of the several sections
and subsections in this Agreement are for purposes of reference only and shall
not limit or define the meaning hereof. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together 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.
24. WAIVER OF JURY TRIAL. Each Pledgor hereby irrevocably waives
all right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this Agreement or the transactions contemplated hereby.
25. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become a Pledgor hereunder by executing a counterpart hereof and
delivering the same to the Pledgee.
26. RECOURSE. This Agreement is made with full recourse to the
Pledgors and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of the Pledgors contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
27. LIMITED OBLIGATIONS. It is the desire and intent of each
Pledgor and the Secured Parties that this Agreement shall be enforced against
each Pledgor to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is sought.
Notwithstanding anything to the contrary contained herein, in furtherance
24
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.
28. 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 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 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 Partnership Interest pursuant hereto, this
Agreement shall not be construed as creating a partnership or joint venture
among the Pledgee, any other Secured Creditor and/or any Pledgor.
(b) Except as provided in the last sentence of paragraph (a) of
this Section 28, the Pledgee, by accepting this Agreement, did not intend to
become a member of any limited liability company or partnership or otherwise be
deemed to be a co-venturer with respect to any Pledgor or any limited liability
company or partnership 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 partnership or any Pledgor except
as provided in the last sentence of paragraph (a) of this Section 28.
(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.
29. EFFECTIVENESS. This Agreement shall become effective when (i)
the Contribution Effective Time shall have occurred and (ii) the Pledgee, PCA
and each Subsidiary of PCA whose name appears on the signature pages hereto
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Administrative Agent at its Notice Office or the
offices of its counsel.
[Remainder of page intentionally left blank]
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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.
PACKAGING CORPORATION OF AMERICA,
as a Pledgor
By /s/ Xxxx X. Xxxxxx
---------------------------------
Title: Chairman of the Board and
Chief Executive Officer
DAHLONEGA PACKAGING CORPORATION,
as a Pledgor
By /s/ Xxxx X. Xxxxxx
---------------------------------
Title: Chief Executive Officer
XXXXX CONTAINER CORPORATION,
as a Pledgor
By /s/ Xxxx X. Xxxxxx
---------------------------------
Title: Chief Executive Officer
PCA HYDRO, INC., as a Pledgor
By /s/ Xxxx X. Xxxxxx
---------------------------------
Title: Chief Executive Officer
PCA TOMAHAWK CORPORATION,
as a Pledgor
By /s/ Xxxx X. Xxxxxx
---------------------------------
Title: Chief Executive Officer
PCA VALDOSTA CORPORATION,
as a Pledgor
By /s/ Xxxx X. Xxxxxx
---------------------------------
Title: Chief Executive Officer
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as Pledgee
By /s/ Unn Xxxxxxx
---------------------------------
Title: Vice President
