Exhibit 10.3
DOMESTIC PLEDGE AGREEMENT
DOMESTIC PLEDGE AGREEMENT dated as of January 4, 2006 (as it may be
amended, restated, supplemented or modified from time to time, this
"Agreement"), among the entities listed on the signature page hereof
(collectively referred to as the "Pledgors" and individually as a "Pledgor")
and GENERAL ELECTRIC CAPITAL CORPORATION, as Collateral Agent (in such
capacity, the "Collateral Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).
W I T N E S S E T H:
WHEREAS, Pliant Corporation (the "Parent Borrower"), the Domestic
Subsidiary Borrowers (as defined therein), the Lenders party thereto (the
"Lenders"), and General Electric Capital Corporation, as Administrative Agent
and Collateral Agent, are parties to that certain Senior Secured, Super
Priority, Priming Debtor-In-Possession Credit Agreement dated as of January 4,
2006 (as amended, restated, supplemented or otherwise modified from time to
time prior to the date hereof, the "Credit Agreement"); and
WHEREAS, the Lenders have agreed to make Loans to the Borrowers
and the Issuing Bank has agreed to issue Letters of Credit for the account of
the Parent Borrower, pursuant to, and upon the terms and subject to the
conditions specified in, the Credit Agreement; and
WHEREAS, pursuant to the Guarantee Agreement dated as of even date
herewith (as amended, restated supplemented or otherwise modified from time to
time, the "Guarantee Agreement"), certain of the Pledgors have agreed to
guarantee, among other things, all the obligations of the Borrowers under the
Credit Agreement; and
WHEREAS, the obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit are conditioned upon, among other
things, the execution and delivery by the Pledgors of a Pledge Agreement in
the form hereof to secure (a) the due and punctual payment by the Borrowers of
(i) the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii)
each payment required to be made by the Borrowers under the Credit Agreement
in respect of any Letter of Credit, when and as due, including payments in
respect of reimbursement of disbursements, interest thereon and obligations to
provide cash collateral and (iii) all other monetary obligations, including
fees, costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
each Loan Party to the Secured Parties under the Credit Agreement and the
other Loan Documents, (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of each Loan Party under or pursuant
to the Credit Agreement and the other Loan Documents, (c) the due and punctual
payment and performance of all obligations of the
Borrowers, monetary or otherwise, under each Swap Agreement that (i) is
effective on the Effective Date with a counterparty that is a Lender (or an
affiliate of a Lender) as of the Effective Date or (ii) is entered into after
the Effective Date with any counterparty that is a Lender (or an Affiliate
thereof) at the time such Swap Agreement is entered into and (d) the due and
punctual payment and performance of all monetary obligations of each Loan
Party in respect of overdrafts and related liabilities owed to any of the
Lenders (or any Affiliates thereof) arising from treasury, depositary and cash
management services or in connection with any automated clearinghouse
transfers of funds (all the monetary and other obligations referred to in the
preceding clauses (a) through (d) being referred to collectively as the
"Obligations").
ACCORDINGLY, each of the Pledgors and the Collateral Agent, on
behalf of itself and each Secured Party (and each of their respective
successors or assigns), hereby agrees that capitalized terms used herein and
not defined herein shall have meaning assigned to such terms in the Credit
Agreement and agrees as follows:
SECTION 1. Pledge. As security for the payment and performance, as
the case may be, in full of the Obligations, each Pledgor hereby transfers,
grants, bargains, sells, conveys, hypothecates, pledges, sets over and
delivers, unto the Collateral Agent, its successors and assigns, and hereby
grants to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, a security interest in all of the Pledgor's
right, title and interest in, to and under (a) the shares of capital stock and
other Equity Interests owned by it and listed on Schedule II hereto and any
Equity Interests obtained in the future by the Pledgor and the certificates
representing all such shares (the "Pledged Stock"); (b)(i) the debt securities
listed opposite the name of the Pledgor on Schedule II hereto, (ii) any debt
securities in the future issued to the Pledgor and (iii) the promissory notes
and any other instruments evidencing such debt securities (the "Pledged Debt
Securities"); (c) subject to Section 5, all payments of principal or interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed, in respect of, in exchange for or upon
the conversion of the securities referred to in clauses (a) and (b) above; (d)
subject to Section 5, all rights and privileges of the Pledgor with respect to
the securities and other property referred to in clauses (a), (b), (c) and (d)
above, including any interest of such Pledgor in the entries on the books of
the issuer of the Pledged Stock or any financial intermediary pertaining to
the Pledged Shares; and (e) all proceeds of any of the foregoing (the items
referred to in clauses (a) through (e) above being collectively referred to as
the "Collateral"). Notwithstanding any of the foregoing, the Pledged Stock
shall not include (i) more than 65% of the issued and outstanding shares of
common stock of any Foreign Subsidiary that is not a Loan Party or (ii) to the
extent that applicable law requires that a Subsidiary of the Pledgor issue
directors' or nominee's qualifying shares, such qualifying shares.
Upon delivery to the Collateral Agent, (a) any stock certificates,
notes or other securities now or hereafter included in the Collateral (the
"Pledged Securities") shall be accompanied by stock powers duly executed in
blank or other instruments of transfer satisfactory to the Collateral Agent
and by such other instruments and documents as the Collateral Agent may
reasonably request and (b) all other property comprising part of the
Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Pledgor and such other instruments or documents as
the Collateral Agent may reasonably request. Each delivery of Pledged
Securities shall be accompanied by a schedule describing the securities then
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being pledged hereunder, which schedule shall be attached hereto as Schedule
II and made a part hereof. Each schedule so delivered shall supplement any
prior schedules so delivered.
TO HAVE AND TO HOLD the Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, forever; subject, however, to the
terms, covenants and conditions hereinafter set forth.
SECTION 2. Delivery of the Collateral.
(a) Each Pledgor agrees promptly to deliver or cause to be
delivered to the Collateral Agent any and all Pledged Securities and any and
all certificates or other instruments or documents representing the Collateral
that have not been provided to the Pre-Petition Collateral Agent prior to the
date hereof.
(b) Each Pledgor will cause any Indebtedness for borrowed money
owed to the Pledgor by the Borrower or any Subsidiary (other than Pliant Film
Products GmbH) to be evidenced by a duly executed promissory note that is
pledged and delivered to the Collateral Agent pursuant to the terms hereof.
SECTION 3. Representations, Warranties and Covenants. Each Pledgor
hereby represents, warrants and covenants, as to itself and the Collateral
pledged by it hereunder, to and with the Collateral Agent that:
(a) the Pledged Stock represents that percentage as set forth on
Schedule II of the issued and outstanding shares of each class of the capital
stock of the issuer with respect thereto;
(b) except for the security interest granted hereunder and except
as permitted by the Credit Agreement, the Pledgor (i) is and will at all times
continue to be the direct owner, beneficially and of record, of the Pledged
Securities indicated on Schedule II, (ii) holds the same free and clear of all
Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on, the
Collateral, other than pursuant hereto and (iv) subject to Section 5, will
cause any and all Collateral, whether for value paid by the Pledgor or
otherwise, to be forthwith deposited with the Collateral Agent and pledged or
assigned hereunder;
(c) the Pledgor (i) has the power and authority to pledge the
Collateral in the manner hereby done or contemplated and (ii) will defend its
title or interest thereto or therein against any and all Liens (other than the
Lien created by this Agreement), however arising, of all Persons whomsoever;
(d) no consent which has not been obtained of any other Person
(including stockholders or creditors of any Pledgor) and no consent or
approval which has not been obtained of any Governmental Authority or any
securities exchange is necessary to the validity of the pledge effected
hereby;
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(e) by virtue of the execution and delivery by the Pledgors of
this Agreement, when the Pledged Securities, certificates or other documents
representing or evidencing the Collateral are delivered to the Collateral
Agent in accordance with this Agreement, the Collateral Agent will obtain a
valid and perfected first lien upon and security interest in such Pledged
Securities as security for the payment and performance of the Obligations;
(f) the pledge effected hereby is effective to vest in the
Collateral Agent, on behalf of the Secured Parties, the rights of the
Collateral Agent in the Collateral as set forth herein;
(g) all of the Pledged Stock has been duly authorized and validly
issued and is fully paid and nonassessable;
(h) all information set forth herein relating to the Pledged Stock
is accurate and complete in all material respects as of the date hereof; and
(i) the pledge of the Pledged Stock pursuant to this Agreement
does not violate Regulation U or X of the Federal Reserve Board or any
successor thereto as of the date hereof.
SECTION 4. Registration in Nominee Name; Denominations. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in
its sole and absolute discretion) to hold the Pledged Securities in its own
name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the
name of the Pledgors, endorsed or assigned in blank or in favor of the
Collateral Agent. Each Pledgor will promptly give to the Collateral Agent
copies of any notices or other communications received by it with respect to
Pledged Securities registered in the name of such Pledgor. The Collateral
Agent shall at all times have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement.
The applicable Pledgor shall, for each interest in any limited
liability company or limited partnership controlled by such Pledgor and
pledged hereunder that is represented by a certificate, in the organizational
documents of such limited liability company or limited partnership, cause the
issuer of such interests to elect to treat such interests as a "security"
within the meaning of Article 8 of the Uniform Commercial Code of its
jurisdiction of organization or formation, as applicable, by including in its
organizational documents language substantially similar to the following and,
accordingly, such interests shall be governed by Article 8 of the Uniform
Commercial Code:
"The Partnership/Company hereby irrevocably elects that all
membership interests in the Partnership/Company shall be
securities governed by Article 8 of the Uniform Commercial Code of
[jurisdiction of organization or formation, as applicable]. Each
certificate evidencing partnership/membership interests in the
Partnership/Company shall bear the following legend: "This
certificate evidences an interest in [name of Partnership/LLC] and
shall be a security for purposes of Article 8 of the Uniform
Commercial Code." No change to this provision shall be
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effective until all outstanding certificates have been surrendered
for cancelation and any new certificates thereafter issued shall
not bear the foregoing legend.
For each interest in any limited liability company or limited partnership
controlled by any Pledgor and pledged hereunder that is not represented by a
certificate, the applicable Pledgor agrees that it shall not, (a) at any time,
elect to treat any such interest as a "security" within the meaning of Article
8 of the Uniform Commercial Code of its jurisdiction of organization or
formation, as applicable, or (b) issue any certificate representing such
interest, unless (i) in the case of clause (a), such Pledgor provides prior
written notification to the Collateral Agent of such election and (ii) in the
case of clause (b), such Pledgor immediately complies with the requirements of
the second paragraph of this Section 4 with respect to such interest and
immediately pledges any such certificate to the Collateral Agent pursuant to
the terms hereof.
If any securities, whether certificated or uncertificated, or
other investment property now or hereafter acquired by any Pledgor are held by
such Pledgor or its nominee through a securities intermediary or commodity
intermediary, such Pledgor shall promptly notify the Collateral Agent thereof
and, at the Collateral Agent's request and option, pursuant to an agreement in
form and substance reasonably satisfactory to the Collateral Agent, either (i)
cause such securities intermediary or (as the case may be) commodity
intermediary to agree to comply with entitlement orders or other instructions
from the Collateral Agent to such securities intermediary as to such security
entitlements, or (as the case may be) to apply any value distributed on
account of any commodity contract as directed by the Collateral Agent to such
commodity intermediary, in each case without further consent of any Pledgor or
such nominee, or (ii) in the case of Financial Assets or other Investment
Property (each as defined in the NY UCC) held through a securities
intermediary, arrange for the Collateral Agent to become the entitlement
holder with respect to such investment property, with the Pledgor being
permitted, only with the consent of the Collateral Agent, to exercise rights
to withdraw or otherwise deal with such investment property. The Collateral
Agent agrees with each Pledgor that the Collateral Agent shall not give any
such entitlement orders or instructions or directions to any such issuer,
securities intermediary or commodity intermediary, and shall not withhold its
consent to the exercise of any withdrawal or dealing rights by any Pledgor,
unless an Event of Default has occurred and is continuing, or, after giving
effect to any such investment and withdrawal rights would occur. The
provisions of this paragraph shall not apply to any financial assets credited
to a securities account for which the Collateral Agent is the securities
intermediary.
SECTION 5. Voting Rights; Dividends and Interest, etc. (a) Unless
and until an Event of Default shall have occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of Pledged
Securities or any part thereof for any purpose consistent with the terms
of this Agreement, the Credit Agreement and the other Loan Documents;
provided, however, that such Pledgor will not be entitled to exercise
any such right if the result thereof could materially and adversely
affect the rights inuring to a holder of the Pledged Securities or the
rights and remedies of any of the Secured Parties under this Agreement
or the Credit Agreement or any other Loan Document or the ability of the
Secured Parties to exercise the same.
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(ii) The Collateral Agent shall execute and deliver to each
Pledgor, or cause to be executed and delivered to each Pledgor, all such
proxies, powers of attorney and other instruments as such Pledgor may
reasonably request for the purpose of enabling such Pledgor to exercise
the voting and/or consensual rights and powers it is entitled to
exercise pursuant to subparagraph (i) above and to receive the cash
dividends it is entitled to receive pursuant to subparagraph (iii)
below.
(iii) Each Pledgor shall be entitled to receive and retain any and
all cash dividends, interest and principal paid on the Pledged
Securities to the extent and only to the extent that such cash
dividends, interest and principal are permitted by, and otherwise paid
in accordance with, the terms and conditions of the Credit Agreement,
the other Loan Documents and applicable laws. All noncash dividends,
interest and principal, and all dividends, interest and principal paid
or payable in cash or otherwise in connection with a partial or total
liquidation or dissolution, return of capital, capital surplus or
paid-in surplus, and all other distributions (other than distributions
referred to in the preceding sentence) made on or in respect of the
Pledged Securities, whether paid or payable in cash or otherwise,
whether resulting from a subdivision, combination or reclassification of
the outstanding capital stock of the issuer of any Pledged Securities or
received in exchange for Pledged Securities or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a
party or otherwise, shall be and become part of the Collateral, and, if
received by any Pledgor, shall not be commingled by such Pledgor with
any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Collateral
Agent and shall be forthwith delivered to the Collateral Agent in the
same form as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Pledgor to dividends, interest or principal that
such Pledgor is authorized to receive pursuant to paragraph (a)(iii) above
shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and authority
to receive and retain such dividends, interest or principal. All dividends,
interest or principal received by the Pledgor contrary to the provisions of
this Section 5 shall be held in trust for the benefit of the Collateral Agent,
shall be segregated from other property or funds of such Pledgor and shall be
forthwith delivered to the Collateral Agent upon demand in the same form as so
received (with any necessary endorsement). Any and all money and other
property paid over to or received by the Collateral Agent pursuant to the
provisions of this paragraph (b) shall be retained by the Collateral Agent, in
an account to be established by the Collateral Agent upon receipt of such
money or other property and shall be applied in accordance with the provisions
of Section 7. After all Events of Default have been cured or waived, the
Collateral Agent shall, within five Business Days after all such Events of
Default have been cured or waived, repay to each Pledgor all cash dividends,
interest or principal (without interest), that such Pledgor would otherwise be
permitted to retain pursuant to the terms of paragraph (a)(iii) above and
which remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Pledgor to exercise the voting and consensual
rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of
this Section 5, and the obligations of the Collateral Agent
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under paragraph (a)(ii) of this Section 5, shall cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall have the
sole and exclusive right and authority to exercise such voting and consensual
rights and powers, provided that, unless otherwise directed by the Required
Lenders, the Collateral Agent shall have the right from time to time following
and during the continuance of an Event of Default to permit the Pledgors to
exercise such rights. After all Events of Default have been cured or waived,
such Pledgor will have the right to exercise the voting and consensual rights
and powers that it would otherwise be entitled to exercise pursuant to the
terms of paragraph (a)(i) above.
SECTION 6. Remedies upon Default. Upon the occurrence and during
the continuance of an Event of Default, subject to applicable regulatory and
legal requirements and the terms of the Interim Order and the Final Order, the
Collateral Agent may sell the Collateral, or any part thereof, at public or
private sale or at any broker's board or on any securities exchange, for cash,
upon credit or for future delivery as the Collateral Agent shall deem
appropriate and pursuant to the Interim Order and the Final Order, the
automatic stay of Section 362 of the Bankruptcy Code or the Canadian Stay
Order shall be modified and vacated to permit Collateral Agent to exercise its
remedies under this Agreement and the Loan Documents, without further
application or motion to, or order from, the Bankruptcy Court or the Canadian
Court; provided, however, notwithstanding anything to the contrary contained
herein, Collateral Agent shall be permitted to exercise any remedy in the
nature of a liquidation of, or foreclosure on, any interest of any Pledgor in
the Collateral only upon three (3) Business Days' prior written notice to such
Pledgor and counsel approved by the Bankruptcy Court for the Committee. The
Collateral Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to
persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution
or sale thereof, and upon consummation of any such sale the Collateral Agent
shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. Each such purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on
the part of any Pledgor, and, to the extent permitted by applicable law, the
Pledgors hereby waive all rights of redemption, stay, valuation and appraisal
any Pledgor now has or may at any time in the future have under any rule of
law or statute now existing or hereafter enacted. Upon the occurrence and
during the continuance of an Event of Default and the exercise by Collateral
Agent of its rights and remedies under this Agreement and the other Loan
Documents, the Pledgors shall assist Collateral Agent in effecting a sale or
other disposition of the Collateral upon such terms as are designed to
maximize the proceeds obtainable from such sale or other disposition.
The Collateral Agent shall give a Pledgor 10 days' prior written
notice (which each Pledgor agrees is reasonable notice within the meaning of
Section 9-611 of the Uniform Commercial Code as in effect in the State of New
York or its equivalent in other jurisdictions) of the Collateral Agent's
intention to make any sale of such Pledgor's Collateral. Such notice, in the
case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker's board or on a securities exchange, shall
state the board or exchange at which such sale is to be made and the day on
which the Collateral, or portion thereof, will first be offered for sale at
such board or exchange. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the
Collateral Agent may fix and state in the notice of such sale. At any such
sale, the Collateral, or portion thereof, to be sold may be sold in one
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lot as an entirety or in separate parcels, as the Collateral Agent may (in its
sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do
so, regardless of the fact that notice of sale of such Collateral shall have
been given. The Collateral Agent may, without notice or publication, adjourn
any public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid in full by the purchaser or
purchasers thereof, but the Collateral Agent shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may be
sold again upon like notice. At any public (or, to the extent permitted by
applicable law, private) sale made pursuant to this Section 6, any Secured
Party may bid for or purchase, free from any right of redemption, stay or
appraisal on the part of any Pledgor (all said rights being also hereby waived
and released), the Collateral or any part thereof offered for sale and may
make payment on account thereof by using any claim then due and payable to it
from such Pledgor as a credit against the purchase price, and it may, upon
compliance with the terms of sale, hold, retain and dispose of such property
without further accountability to such Pledgor therefor. For purposes hereof,
(a) a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof, (b) the Collateral Agent shall be free to
carry out such sale pursuant to such agreement and (c) such Pledgor shall not
be entitled to the return of the Collateral or any portion thereof subject
thereto, notwithstanding the fact that after the Collateral Agent shall have
entered into such an agreement all Events of Default shall have been remedied
and the Obligations paid in full. As an alternative to exercising the power of
sale herein conferred upon it, the Collateral Agent may proceed by a suit or
suits at law or in equity to foreclose upon the Collateral and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court
or courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this Section
6 shall be deemed to conform to the commercially reasonable standards as
provided in Section 9-611 of the Uniform Commercial Code as in effect in the
State of New York or its equivalent in other jurisdictions.
SECTION 7. Application of Proceeds of Sale. The proceeds of any
sale of Collateral pursuant to Section 6, as well as any Collateral consisting
of cash, shall be applied by the Collateral Agent pursuant to Section 2.17(b)
of the Credit Agreement.
SECTION 8. Reimbursement of Collateral Agent.
(a) The Pledgors agree to pay upon demand to the Collateral Agent
the amount of any and all reasonable expenses, including the reasonable fees,
other charges and disbursements of its counsel and of any experts or agents,
that the Collateral Agent may incur in connection with (i) the administration
of this Agreement, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of the Collateral Agent hereunder
or (iv) the failure by such Pledgor to perform or observe any of the
provisions hereof.
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(b) Without limitation of its indemnification obligations under
the other Loan Documents, each Pledgor agrees to indemnify the Collateral
Agent and the Indemnitees (as defined in Section 10.03 of the Credit
Agreement) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, other charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or
as a result of (i) the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated hereby or thereby,
the performance by the parties hereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated thereby or (ii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is
a party thereto, provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses resulted from the gross negligence or wilful misconduct of
such Indemnitee.
(c) Any amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 8 shall remain operative and in full force and effect
regardless of the termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Obligations, the
invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document or any investigation made by or on behalf of the
Collateral Agent or any other Secured Party. All amounts due under this
Section 8 shall be payable on written demand therefor and shall bear interest
at the rate specified in Section 2.12(c) of the Credit Agreement.
SECTION 9. Collateral Agent Appointed Attorney-in-Fact. Each
Pledgor hereby appoints the Collateral Agent the attorney-in-fact of such
Pledgor, upon the occurrence and during the continuance of a Default, for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Collateral Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the
foregoing, the Collateral Agent shall have the right, upon the occurrence and
during the continuance of an Event of Default, with full power of substitution
either in the Collateral Agent's name or in the name of such Pledgor, to ask
for, demand, xxx for, collect, receive and give acquittance for any and all
moneys due or to become due under and by virtue of any Collateral, to endorse
checks, drafts, orders and other instruments for the payment of money payable
to the Pledgor representing any interest or dividend or other distribution
payable in respect of the Collateral or any part thereof or on account thereof
and to give full discharge for the same, to settle, compromise, prosecute or
defend any action, claim or proceeding with respect thereto, and to sell,
assign, endorse, pledge, transfer and to make any agreement respecting, or
otherwise deal with, the same; provided, however, that nothing herein
contained shall be construed as requiring or obligating the Collateral Agent
to make any commitment or to make any inquiry as to the nature or sufficiency
of any payment received by the Collateral Agent, or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Collateral Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their
officers,
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directors, employees or agents shall be responsible to any Pledgor for any act
or failure to act hereunder, except for their own gross negligence or wilful
misconduct.
SECTION 10. Waivers; Amendment.
(a) No failure or delay of the Collateral Agent in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Collateral Agent hereunder and of the other Secured
Parties under the other Loan Documents are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provisions of this Agreement or consent to any departure by any Pledgor
therefrom shall in any event be effective unless the same shall be permitted
by paragraph (b) below, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice
or demand on any Pledgor in any case shall entitle such Pledgor to any other
or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into
between the Collateral Agent and the Pledgor or Pledgors with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 10.02 of the Credit Agreement.
SECTION 11. Securities Act, etc. In view of the position of the
Pledgors in relation to the Pledged Securities, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933,
as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "Federal Securities Laws") with
respect to any disposition of the Pledged Securities permitted hereunder. Each
Pledgor understands that compliance with the Federal Securities Laws might
very strictly limit the course of conduct of the Collateral Agent if the
Collateral Agent were to attempt to dispose of all or any part of the Pledged
Securities, and might also limit the extent to which or the manner in which
any subsequent transferee of any Pledged Securities could dispose of the same.
Similarly, there may be other legal restrictions or limitations affecting the
Collateral Agent in any attempt to dispose of all or part of the Pledged
Securities under applicable Blue Sky or other state securities laws or similar
laws analogous in purpose or effect. Each Pledgor recognizes that in light of
such restrictions and limitations the Collateral Agent may, with respect to
any sale of the Pledged Securities, limit the purchasers to those who will
agree, among other things, to acquire such Pledged Securities for their own
account, for investment, and not with a view to the distribution or resale
thereof. Each Pledgor acknowledges and agrees that in light of such
restrictions and limitations, the Collateral Agent, in its discretion, (a) may
proceed to make such a sale whether or not a registration statement for the
purpose of registering such Pledged Securities or part thereof shall have been
filed under the Federal Securities Laws and (b) may approach and negotiate
with a single potential purchaser to effect such sale. Each Pledgor
acknowledges and agrees that any such sale might result in prices and other
terms less favorable to the seller than if such sale were a public sale
without such restrictions. In the event of any such sale, the Collateral Agent
shall incur no responsibility or liability for selling all or any part of the
Pledged Securities at a price
10
that the Collateral Agent, in its discretion, may in good xxxxx xxxx
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 11 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.
SECTION 12. Registration, etc. Each Pledgor agrees that, upon the
occurrence and during the continuance of an Event of Default, if for any
reason the Collateral Agent desires to sell any of the Pledged Securities at a
public sale, it will, at any time and from time to time, upon the written
request of the Collateral Agent, use its best efforts to take or to cause the
issuer of such Pledged Securities to take such action and prepare, distribute
and/or file such documents, as are required or advisable in the reasonable
opinion of counsel for the Collateral Agent to permit the public sale of such
Pledged Securities. Each Pledgor further agrees to indemnify, defend and hold
harmless the Collateral Agent, each other Secured Party, any underwriter and
their respective officers, directors, affiliates and controlling persons from
and against all loss, liability, expenses, costs of counsel (including,
without limitation, reasonable fees and expenses to the Collateral Agent of
legal counsel), and claims (including the costs of investigation) that they
may incur insofar as such loss, liability, expense or claim arises out of or
is based upon any untrue statement of a material fact contained in any
prospectus (or any amendment or supplement thereto) or in any notification or
offering circular, or arises out of or is based upon any omission to state a
material fact required to be stated therein or necessary to make the
statements in any thereof not misleading, except insofar as the same may have
been caused by any untrue statement or omission based upon information
furnished to such Pledgor or the issuer of such Pledged Securities by the
Collateral Agent or any other Secured Party expressly for use therein. Each
Pledgor further agrees, upon such written request referred to above, to use
its best efforts to qualify, file or register, or cause the issuer of such
Pledged Securities to qualify, file or register, any of the Pledged Securities
under the Blue Sky or other securities laws of such states as may be requested
by the Collateral Agent and keep effective, or cause to be kept effective, all
such qualifications, filings or registrations. The Pledgors will bear all
costs and expenses of carrying out their obligations under this Section 12.
Each Pledgor acknowledges that there is no adequate remedy at law for failure
by it to comply with the provisions of this Section 12 and that such failure
would not be adequately compensable in damages, and therefore agrees that its
agreements contained in this Section 12 may be specifically enforced.
SECTION 13. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the grant of a security interest in the Collateral
and all obligations of each Pledgor hereunder, shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of
the Credit Agreement, any other Loan Document, any agreement with respect to
any of the Obligations or any other agreement or instrument relating to any of
the foregoing, (b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Credit Agreement, any other
Loan Document or any other agreement or instrument relating to any of the
foregoing, (c) any exchange, release or nonperfection of any other collateral,
or any release or amendment or waiver of or consent to or departure from any
guaranty, for all or any of the Obligations or (d) any other circumstance that
might otherwise constitute a defense available
11
to, or a discharge of, any Pledgor in respect of the Obligations or in respect
of this Agreement (other than the indefeasible payment in full of all the
Obligations).
SECTION 14. Termination or Release.
(a) This Agreement and the pledge of Pledged Securities shall
continue in effect (notwithstanding the fact that from time to time there may
be no Obligations outstanding) until (i) the Credit Agreement has terminated
pursuant to its express terms and (ii) all of the Obligations (other than
contingent obligations for which no claims has been made) have been
indefeasibly paid and performed in full (or with respect to any outstanding
Letters of Credit, a cash deposit has been delivered to the Administrative
Agent as required by the Credit Agreement) and no commitments of the Agents or
the Lenders which would give rise to any Obligations are outstanding. Upon
payment in full in cash of the outstanding Obligations and the expiration or
termination of the Commitments, the security interest granted hereby shall
terminate and all right to the Collateral shall revert to the Pledgors or any
other Person entitled thereto. Upon such termination, the Administrative Agent
will authorize the filing of appropriate UCC termination statements to
terminate such security interests and shall, at the expense of the Pledgors,
execute and deliver to such Pledgor such documents as such Pledgor shall
reasonably request to evidence the termination of such security interests or
the release of such Collateral, as applicable.
(b) A Pledgor shall automatically be released from its obligations
hereunder and the pledge of the Collateral of such Pledgor shall be
automatically released in the event that all capital stock of such Pledgor
shall be sold, transferred or otherwise disposed of to a Person that is not an
Affiliate of the Parent Borrower in accordance with the terms of the Credit
Agreement; provided that the Required Lenders shall have consented to such
sale, transfer or other disposition (to the extent required by the Credit
Agreement) and the terms of such consent did not provide otherwise.
(c) Upon any sale or other transfer by any Pledgor of any
Collateral that is permitted under the Credit Agreement, provided that the
Required Lenders shall have consented to such transaction (to the extent
required by the Credit agreement) and the terms of such consent did not
provide otherwise, or upon the effectiveness of any written consent to the
release of the security interest granted hereby in any Collateral pursuant to
Section 10.02 of the Credit Agreement, the security interest in such
Collateral shall be automatically released.
(d) In connection with any termination or release pursuant to
paragraph (a), (b) or (c) above, the Collateral Agent shall execute and
deliver to the Pledgors, at the Pledgors' expense, all UCC termination
statements and similar documents which the Pledgor shall reasonably request to
evidence such termination or release. Any execution and delivery of
termination statements or release documents pursuant to this Section 14 shall
be without recourse to or warranty by the Collateral Agent.
SECTION 15. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 10.01 of the Credit
Agreement. All communications and notices hereunder to any Subsidiary Pledgor
shall be given to it at the address for notices set forth on Schedule I.
12
SECTION 16. Further Assurances. Each Pledgor agrees to do such
further acts and things, and to execute and deliver such additional
conveyances, assignments, agreements and instruments, as the Collateral Agent
may at any time reasonably request in connection with the administration and
enforcement of this Agreement or with respect to the Collateral or any part
thereof or in order better to assure and confirm unto the Collateral Agent its
rights and remedies hereunder.
SECTION 17. Binding Effect; Several Agreement; Assignments.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of any Pledgor that
are contained in this Agreement shall bind and inure to the benefit of its
successors and assigns. This Agreement shall become effective as to any
Pledgor when a counterpart hereof executed on behalf of such Pledgor shall
have been delivered to the Collateral Agent and a counterpart hereof shall
have been executed on behalf of the Collateral Agent, and thereafter shall be
binding upon such Pledgor and the Collateral Agent and their respective
successors and assigns, and shall inure to the benefit of such Pledgor, the
Collateral Agent and the other Secured Parties, and their respective
successors and assigns, except that no Pledgor shall have the right to assign
its rights hereunder or any interest herein or in the Collateral (and any such
attempted assignment shall be void), except as expressly contemplated by this
Agreement or the other Loan Documents. If all of the capital stock of a
Pledgor is sold, transferred or otherwise disposed of to a Person that is not
an Affiliate of the Borrower pursuant to a transaction permitted by Section
6.06 of the Credit Agreement, such Pledgor shall be released from its
obligations under this Agreement without further action. This Agreement shall
be construed as a separate agreement with respect to each Pledgor and may be
amended, modified, supplemented, waived or released with respect to any
Pledgor without the approval of any other Pledgor and without affecting the
obligations of any other Pledgor hereunder.
SECTION 18. Survival of Agreement; Severability.
(a) All covenants, agreements, representations and warranties made
by each Pledgor herein and in the certificates or other instruments prepared
or delivered in connection with or pursuant to this Agreement or any other
Loan Document shall be considered to have been relied upon by the Collateral
Agent and the other Secured Parties and shall survive the making by the
Lenders of the Loans and the issuance of the Letters of Credit by the Issuing
Bank, regardless of any investigation made by the Secured Parties or on their
behalf, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any other fee or amount payable
under this Agreement or any other Loan Document is outstanding and unpaid or
the LC Exposure does not equal zero and as long as the Commitments have not
been terminated.
(b) In the event any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby (it
being understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision
in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal
13
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 19. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 20. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute a single contract, and shall
become effective as provided in Section 17. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile transmission or
other electronic transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 21. Rules of Interpretation. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement. Section headings used herein are for convenience of reference only,
are not part of this Agreement and are not to affect the construction of, or
to be taken into consideration in interpreting, this Agreement.
SECTION 22. Jurisdiction; Consent to Service of Process.
(a) Each Pledgor hereby irrevocably and unconditionally submits,
for itself and its property, to the exclusive jurisdiction of the Bankruptcy
Court, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that, to the extent permitted by
applicable law, all claims in respect of any such action or proceeding may be
heard and determined in such the Bankruptcy Court; provided, however that the
Collateral Agent and the Pledgors acknowledge that any appeals from the
Bankruptcy Court may have to be heard by a court other than the Bankruptcy
Court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent or
any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against any Pledgor or
its properties in the courts of any jurisdiction.
(b) Each Pledgor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in the Bankruptcy Court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 15. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
14
SECTION 23. Waiver Of Jury Trial. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION.
SECTION 24. Additional Pledgors. Pursuant to Section 5.12 of the
Credit Agreement, each Loan Party (other than a Foreign Subsidiary) that was
not in existence or not a Loan Party on the date of the Credit Agreement is
required to enter in this Agreement as a Subsidiary Pledgor upon becoming a
Loan Party. Upon execution and delivery by the Collateral Agent and a
Subsidiary of an instrument in the form of Annex 1, such Subsidiary shall
become a Subsidiary Pledgor hereunder with the same force and effect as if
originally named as a Subsidiary Pledgor herein. The execution and delivery of
such instrument shall not require the consent of any Pledgor hereunder.
The rights and obligations of each Pledgor hereunder shall remain in full
force and effect notwithstanding the addition of any new Subsidiary Pledgor as
a party to this Agreement.
SECTION 25. Intentionally Omitted
SECTION 26. Nova Scotia Unlimited Liability Companies.
Notwithstanding anything else contained in this Agreement or any other
document or agreement among all or some of the parties hereto, Uniplast
Holdings Inc. is the sole registered and beneficial owner of all Collateral
which is comprised of shares of Uniplast Industries Co. or any other Person
whose securities are the subject hereof and which is an unlimited liability
company (a "ULC") and will remain so until such time as such shares are
effectively transferred into the name of the Collateral Agent, any other
Secured Party or any other Person on the books and records of such ULC.
Accordingly Uniplast Holdings Inc. shall be entitled to receive and retain for
its own account any dividend on or other distribution, if any, in respect of
such Collateral (except insofar as Uniplast Holdings Inc. has granted a
security interest therein) and shall have the right to vote such Collateral
and to control the direction, management and policies of Uniplast Industries
Co. to the same extent as Uniplast Holdings Inc. would if such Collateral were
not pledged to the Collateral Agent (for its own benefit and for the benefit
of the Secured Parties) pursuant hereto. Nothing in this Agreement or any
other document or agreement among all or some of the parties hereto is
intended to, and nothing in this Agreement or any other document or agreement
among all or some of the parties hereto shall, constitute the Collateral
Agent, any Secured Party or any Person other than Uniplast Holdings Inc. a
member of a ULC for the purposes of the Companies Act (Nova Scotia) until such
time as notice is given to Uniplast Holdings Inc. and further steps are taken
thereunder so as to register the Collateral Agent , any Secured Party or any
other Person as holder of shares of the ULC. To the extent any provision
hereof would have the effect
15
of constituting the Collateral Agent or any Secured Party as a member of any
ULC prior to such time, such provision shall be severed herefrom and
ineffective with respect to Collateral which are shares of a ULC without
otherwise invalidating or rendering unenforceable this Agreement or
invalidating or rendering unenforceable such provision insofar as it relates
to Collateral which are not shares of a ULC.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
PLEDGORS: PLIANT CORPORATION
By:______________________________________
Name:
Title:
PLIANT SOLUTIONS CORPORATION
By:______________________________________
Name:
Title:
PLIANT CORPORATION INTERNATIONAL
By:______________________________________
Name:
Title:
PLIANT FILM PRODUCTS OF MEXICO, INC.
By:______________________________________
Name:
Title:
PLIANT PACKAGING OF CANADA, LLC
By:______________________________________
Name:
Title:
DOMESTIC PLEDGE AGREEMENT
UNIPLAST HOLDINGS INC.
By:______________________________________
Name:
Title:
UNIPLAST U.S., INC.
By:______________________________________
Name:
Title:
PLIANT INVESTMENT, INC.
By:______________________________________
Name:
Title:
ALLIANT COMPANY LLC
By:______________________________________
Name:
Title:
COLLATERAL AGENT: GENERAL ELECTRIC CAPITAL
CORPORATION
By:______________________________________
Name:
Title:
DOMESTIC PLEDGE AGREEMENT
Schedule I to the
Domestic Pledge Agreement
SUBSIDIARY PLEDGORS
-------------------
Schedule II to the
Domestic Pledge Agreement
CAPITAL STOCK
-------------
--------------------------------------------------------------------------------
Number
and
Class of
Issuer Number of Registered Owner Shares Percentage
Certificate of Shares
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DEBT SECURITIES
---------------
--------------------------------------------------------------------------------
Intercompany Note Date
----------------- ----
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Annex 1 to the
Pledge Agreement
SUPPLEMENT NO. ___ dated as of __________, 20___, to the DOMESTIC
PLEDGE AGREEMENT (as amended, restated, supplemented or otherwise modified
from time to time, the "Domestic Pledge Agreement") dated as of January 4,
2006, among each of the parties listed on the signature pages thereto and
those additional entities that thereafter become parties thereto (each a
"Pledgor" and collectively, the "Pledgors") and GENERAL ELECTRIC CAPITAL
CORPORATION, as Collateral Agent (in such capacity, the "Collateral Agent")
for the Secured Parties (as defined in the Credit Agreement referred to below)
A. Reference is made to (a) the Senior Secured, Super Priority,
Priming Debtor-In-Possession Credit Agreement dated as of January 4, 2006 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Parent Borrower, the Domestic Subsidiary Borrowers, the
Lenders party thereto (the "Lenders"), and General Electric Capital
Corporation, as Administrative Agent and Collateral Agent and (b) the
Guarantee Agreement dated as of January 4, 2006 (as amended, supplemented or
otherwise modified from time to time, the "Guarantee Agreement"), among the
certain of the Pledgors and the Administrative Agent.
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
C. The Pledgors have entered into the Domestic Pledge Agreement in
order to induce the Lenders to make Loans and the Issuing Bank to issue
Letters of Credit. Pursuant to Section 5.12 of the Credit Agreement, each Loan
Party (other than a Foreign Subsidiary) that was not in existence or not a
Loan Party on the date of the Credit Agreement is required to enter into the
Domestic Pledge Agreement as a Subsidiary Pledgor upon becoming a Loan Party.
Section 24 of the Domestic Pledge Agreement provides that such Subsidiaries
may become Subsidiary Pledgors under the Domestic Pledge Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Pledgor") is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a
Subsidiary Pledgor under the Domestic Pledge Agreement in order to induce the
Lenders to make additional Loans and the Issuing Bank to issue additional
Letters of Credit and as consideration for Loans previously made and Letters
of Credit previously issued.
Accordingly, the Collateral Agent and the New Pledgor agree as
follows:
SECTION 1. In accordance with Section 24 of the Pledge Agreement,
the New Pledgor by its signature below becomes a Pledgor under the Domestic
Pledge Agreement with the same force and effect as if originally named therein
as a Pledgor and the New Pledgor hereby agrees (a) to all the terms and
provisions of the Domestic Pledge Agreement applicable to it as a Pledgor
thereunder and (b) represents and warrants that the representations and
warranties made by it as a Pledgor thereunder are true and correct on and as
of the date hereof. In furtherance of the foregoing, the New Pledgor, as
security for the payment and performance in full of the Obligations (as
defined in the Domestic Pledge Agreement), does hereby create and grant to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, their successors and assigns, a security interest in and lien on all
of the New Pledgor's right, title and interest in and to the Collateral (as
defined in the Domestic Pledge Agreement) of the New Pledgor. Each reference
to a "Subsidiary Pledgor" or a "Pledgor" in the Domestic Pledge Agreement
shall be deemed to include the New Pledgor. The Domestic Pledge Agreement is
hereby incorporated herein by reference.
SECTION 2. The New Pledgor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts, each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Supplement shall become effective
when the Collateral Agent shall have received counterparts of this Supplement
that, when taken together, bear the signatures of the New Pledgor and the
Collateral Agent. Delivery of an executed signature page to this Supplement by
facsimile transmission or other electronic transmission shall be effective as
delivery of a manually signed counterpart of this Supplement.
SECTION 4. The New Pledgor hereby represents and warrants that set
forth on Schedule I attached hereto is a true and correct schedule of all its
Pledged Securities.
SECTION 5. Except as expressly supplemented hereby, the Domestic
Pledge Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any
respect, neither party hereto shall be required to comply with such provision
for so long as such provision is held to be invalid, illegal or unenforceable,
but the validity, legality and enforceability of the remaining provisions
contained herein and in the Domestic Pledge Agreement shall not in any way be
affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 15 of the Domestic Pledge Agreement.
All communications and notices hereunder to the New Pledgor shall be given to
it at the address set forth under its signature hereto.
SECTION 9. The New Pledgor agrees to reimburse the Collateral
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Collateral Agent.
2
3
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
Annex 1 to the
Pledge Agreement
IN WITNESS WHEREOF, the New Pledgor and the Collateral Agent have
duly executed this Supplement to the Domestic Pledge Agreement as of the day
and year first above written.
[NAME OF NEW PLEDGOR],
By:___________________________________________
Name:
Title:
Address:
GENERAL ELECTRIC CAPITAL CORPORATION, AS
COLLATERAL AGENT,
By:___________________________________________
Name:
Title:
Schedule I to
Supplement No __.
to the Domestic Pledge Agreement
Pledged Securities of the New Pledgor
-------------------------------------
CAPITAL STOCK
Issuer Number of Registered Number and Percentage
------ Certificate Owner Class of of Shares
----------- ----- Shares ---------
------
DEBT SECURITIES
Issuer Principal Date of Maturity
------ Amount Note Date
------ ---- ----
