EXHIBIT 11
PLEDGE AGREEMENT
Pledge Agreement (this "Pledge Agreement"), dated as of December 19,
2000, by and between Trefoil International III, SPRL, a Belgian corporation
(the "Pledgor"), and Apilanlehti International III Netherlands B.V., a
Netherlands corporation (the "Pledgee").
WHEREAS, the Pledgor owns 61,378,260 Ordinary Shares (the "Shares") of
Pacific Dunlop Limited, an Australian company (the "Company");
WHEREAS, the Pledgor has entered into a Revolving Credit Agreement
(the "Revolving Credit Agreement") with Pledgee, of even date herewith,
pursuant to which Pledgee has agreed to loan to Pledgor up to an aggregate
of AUD $150,000,000;
WHEREAS, in connection with the Revolving Credit Agreement, Pledgor
has executed a Promissory Note in favor of Pledgee, of even date herewith,
in the principal amount of up to AUD $150,000,000 (together with the
Revolving Credit Agreement, the "Loan Documents");
WHEREAS, the proceeds from any Loans evidenced by the Loan Documents
are being used in connection with Pledgor's financing of future
acquisitions of Shares and the refinancing of Pledgor's acquisitions of
Shares made prior to the date hereof (the "Acquisitions"); and
WHEREAS, the parties hereto have agreed that the Pledgor's prompt and
complete payment, observance and performance of all of its obligations
under the Loan Documents shall be secured by a security interest in the
Pledged Collateral (as defined in Section 2 hereof) pursuant to this Pledge
Agreement;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Pledgee to make the Loans evidenced by the Loan Documents, the
parties agree as follows:
Section 1. Definitions. Capitalized terms used in this Pledge
Agreement shall have (unless otherwise provided elsewhere in this Pledge
Agreement) the meanings set forth in the Loan Documents.
Section 2. Pledge. As collateral security for the prompt payment,
performance and observance by the Pledgor of all of its obligations under
the Loan Documents, Pledgor hereby assigns, transfers, pledges and grants
to the Pledgee a security interest in, the following (collectively, the
"Pledged Collateral"): (a) all Shares owned by Pledgor as of the date
hereof, and all Shares hereinafter acquired by Pledgor with proceeds from
any Loans (the "Pledged Interest"); (b) all distributions, cash,
instruments, investment property and other property from time to time
received, receivable or otherwise distributed in respect of, or in exchange
for, any or all of such Shares; (c) any Additional Pledged Collateral (as
defined in Section 7 hereof); (d) the property and interests in property
described in Section 4 hereof; and (e) all proceeds of any of the
foregoing.
Section 3. Security for Obligations. This Pledge Agreement shall
secure, and the Pledged Collateral and the Additional Pledged Collateral
shall be security for, the prompt payment in full when due, and performance
of, all obligations of the Pledgor under the Loan Documents, including the
costs of collection thereof, to the Pledgee or any assignee, indorsee or
transferee of the Pledgee (the "Secured Obligations").
Section 4. Pledged Collateral Adjustments. If, during the term of this
Pledge Agreement: (a) any distribution, reclassification, readjustment or
other change is declared or made in the capital structure of the Company;
or (b) any warrants or any other rights or options shall be issued in
connection with the Pledged Collateral, then all new, substituted and
additional shares, warrants, rights, options, investment properties or
other securities, issued by reason of any of the foregoing, shall
constitute Pledged Collateral hereunder.
Section 5. Representations and Warranties. The Pledgor represents and
warrants to the Pledgee that:
(a) As of the date hereof, the Pledgor beneficially owns the
Shares free and clear of any claims, liens and security interests of any
nature whatsoever, except for the lien created by this Pledge Agreement;
(b) The Pledgor has the right and requisite authority to pledge,
assign, transfer, deliver, deposit and set over the Pledged Collateral as
provided herein, free and clear of any claims, liens and security interests
of any nature whatsoever, except for the lien created by this Pledge
Agreement;
(c) The pledge, assignment and delivery of the Pledged Collateral
pursuant to this Pledge Agreement will create a valid security interest;
and
(d) This Pledge Agreement has been duly executed and delivered by
the Pledgor and constitutes a legal, valid and binding obligation of the
Pledgor enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization and other laws affecting creditors' rights generally and to
general equitable principles (whether considered in a proceeding in equity
or at law).
Section 6. Covenants. The Pledgor covenants and agrees that until the
termination of this Pledge Agreement in accordance with Section 10 hereof:
(a) Except as otherwise set forth herein, without the prior
written consent of the Pledgee, it will not sell, assign, transfer, pledge
or otherwise encumber any of its rights in or to the Pledged Collateral or
Additional Pledged Collateral or xxxxx x xxxx therein (other than the lien
created by this Pledge Agreement). Pledgor shall have the right, however,
at any time and from time to time, to sell any and all Shares owned by it
provided that at least fifty percent (50%) of all proceeds after taxes from
any such sales shall be used to repay the debt owed by Pledgor under the
Loan Documents. In addition, at least fifty percent (50%) of all proceeds
after taxes from any distributions paid or payable in cash in respect of
the Pledged Collateral in connection with (1) a partial or total
liquidation or dissolution, (2) a reduction of capital, capital surplus or
paid-in-surplus, (3) a redemption of, or exchange for, any of the Pledged
Collateral, or (4) a sale of all or any material part of the Company's
assets shall be used to repay the debt owed by Pledgor under the Loan
Documents;
(b) The Pledgor will, at its expense, promptly execute,
acknowledge and deliver all such instruments and take all such action as
the Pledgee from time to time may reasonably request in order to ensure to
the Pledgee the benefits of the liens in and to the Pledged Collateral and
Additional Pledged Collateral intended to be created by this Pledge
Agreement; and
(c) The Pledgor has and will defend the title to the Pledged
Collateral and Additional Pledged Collateral and the liens of the Pledgee
thereon against the claim of any entity or person and will maintain and
preserve such liens until this Pledge Agreement is terminated and the
security interest created hereunder is released in accordance with Section
10 hereof.
Section 7. Pledgor's Rights. (a) As long as no event of default in the
prompt payment and performance of any of the Secured Obligations or the
breach by the Pledgor of any of the terms or provisions of this Pledge
Agreement (each, an "Event of Default") or event which but for the passage
of time or giving of notice would constitute an Event of Default shall have
occurred and be continuing the Pledgor shall be entitled, from time to
time, (i) subject to Section 6 of the Revolving Credit Agreement, to
collect and receive for its own use all ordinary cash distributions paid or
payable in cash in respect of the Pledged Collateral pursuant to its terms,
provided, however, that until actually paid all rights to such
distributions shall remain subject to the lien created by this Pledge
Agreement, and (ii) to vote and give consents with respect to the Pledged
Interest or any part thereof for all purposes not inconsistent with the
Loan Documents or this Pledge Agreement; and provided, however, that any
and all of the following (all of which items constituting collectively the
"Additional Pledged Collateral"): distributions and interest paid or
payable other than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in respect of, or in
exchange for, the Pledged Collateral shall be forthwith delivered to the
Pledgee to be held as Additional Pledged Collateral and shall, if received
by the Pledgor, be received in trust for the benefit of the Pledgee, be
segregated from the other property or funds of the Pledgor, and be
forthwith delivered to the Pledgee as Additional Pledged Collateral in the
same form as so received (with any endorsement, forms of assignment and
other documents of transfer as the Pledgee may request) and, provided,
however, that if an Event of Default shall have occurred and be continuing,
the Pledgor shall cooperate with the Pledgee (including the giving of
instructions to the Company) to cause all payments and distributions of
such Additional Pledged Collateral to be delivered directly to the Pledgee.
(b) The Pledgee hereby agrees to execute and deliver (or cause to
be executed and delivered) to the Pledgor all such instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the rights which it is entitled to exercise pursuant to the
provisions hereof, and to receive the distribution payments which it is
authorized to receive and retain pursuant to the provisions hereof.
Section 8. Defaults and Remedies.
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(a) Upon any Event of Default by the Pledgor, the Pledgee, in
addition to all rights of the Pledgee created under the Loan Documents,
shall have and may exercise with respect to the Pledged Collateral and the
New York Uniform Commercial Code, or otherwise at law or in equity
including, without limiting the generality of the foregoing, (i) the right
to take the Pledged Collateral and Additional Pledged Collateral (or
portion thereof) for its own account as provided in clause (b) of this
Section 8 and (ii) the right to sell or assign the Pledged Collateral and
the Additional Pledged Collateral, or any part thereof, at public or
private sale in New York or elsewhere as Pledgee may determine in good
faith to be commercially reasonable and at such prices as Pledgee may deem
best and commercially reasonable. The parties agree that written notice
mailed to the Pledgor not less than ten days prior to any public sale of
the Pledged Collateral or any Additional Pledged Collateral or ten days
prior to the date after which any private sale or other disposition of such
Pledge Collateral or Additional Pledged Collateral will be made shall
constitute reasonable notice (all other notices, demands or advertisements
of any kind being hereby expressly waived), but notice given in any other
reasonable manner or at any other reasonable time shall be sufficient. At
any such sale, Pledgee shall have the right to purchase the Pledged
Collateral, or any part thereof.
To the extent Pledgee is restricted from making sales of Pledged
Collateral and Additional Pledged Collateral without registration under the
Securities Act of 1933, as amended (the "Securities Act"), the following
shall govern:
(i) at any such sale, Pledgee, at is discretion, may
restrict the potential bidders or purchasers to institutional investors,
and/or other persons who shall represent and warrant that they are
acquiring the Pledged Collateral or Additional Pledged Collateral (to the
extent such Additional Pledged Collateral constitutes securities) for their
own account, for investment only and not with a view toward the resale or
distribution thereof and which will make such further representations and
warranties as Pledgee may, in its discretion, deem necessary or desirable
to assure Pledgee that such prospective bidders or purchasers are, with
respect to applicable federal and state securities laws and rules, suitable
bidders and purchasers of such Pledged Collateral or Additional Pledged
Collateral;
(ii) the Pledgee may additionally decide to sell the Pledged
Collateral or Additional Pledged Collateral in one or more private sales or
in such other manner and subject to such restrictions and conditions as
Pledgee, in its discretion, shall deem necessary in order for such sale to
be exempt from the registration requirement of the Securities Act, and
applicable state securities laws;
(iii) Pledgor consents to any sales made in the manner
above-described and agree that sales made as above-described shall be
deemed to have been made in a commercially reasonable manner and Pledgor
further agrees that the Pledgee shall have no obligation to delay sale of
any of the Pledged Collateral or Additional Pledged Collateral for the
period of time necessary to permit the offering and sale of such Collateral
to be registered for public sale under the Securities Act, and applicable
state securities laws, and no representation is made that any such
registration is possible or will be made.
(b) Upon any Event of Default by the Pledgor, the Pledgee shall
have the right, in lieu of selling Pledged Collateral and Additional
Pledged Collateral as provided in clause (a) of this Section 8, to take for
its own account a portion of the Pledged Collateral and Additional Pledged
Collateral with an Appraised Value (as hereinafter defined) equal to the
amount of the Secured Obligations as to which the Pledgor shall be in
default (the "Foreclosed Collateral") upon 10 days prior written notice
(which notice shall state the Appraised Value ascribed thereto). In such
event, Pledgee shall thereafter have all right, title and interest in and
to such Foreclosed Collateral free of any liens, claims or encumbrances and
the Pledgor's interest therein shall terminate, as if such Foreclosed
Collateral had been sold to a third party in accordance with the procedures
contemplated by clause (a) of this Section 8. "Appraised Value" shall mean
the fair market value of such Pledged Collateral and Additional Pledged
Collateral on the day prior to the date of the notice provided for herein
as determined by a nationally recognized independent investment banking
firm selected by the Pledgee.
(c) Any cash held by or on behalf of the Pledgee as Pledged
Collateral and Additional Pledged Collateral and all cash proceeds received
by or on behalf of the Pledgee in respect of any sale of, liquidation of,
or other realization upon or all or any part of the Pledged Collateral and
Additional Pledged Collateral shall be applied by the Pledgee as follows:
(i) First, to the payment of the costs and expenses of such
sale or of enforcing Pledgee's rights under this Pledge Agreement or the
Loan Documents, including reasonable expenses of the Pledgee's counsel, and
all other of the expenses, liabilities and advances made or incurred by the
Pledgee in connection therewith; and
(ii) Next, to the payment of the Secured Obligations, all in
accordance with the terms and provisions of the Loan Documents; and
(iii) Finally, after payment in full of all of the Secured
Obligations, to the Pledgor, or its successors or assigns, or to whomsoever
may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such proceeds.
Section 9. Waiver. No delay on the part of the Pledgee in exercising
any power of sale, lien, option or other right hereunder, and no notice or
demand which may be given to or made upon the Pledgor by the Pledgee with
respect to any power of sale, lien, option or other right hereunder, shall
constitute a waiver thereof, or limit or impair the Pledgee's right to take
any action or to exercise any power of sale, lien, option, or any other
right hereunder, or prejudice the Pledgee's rights as against the Pledgor
in any respect.
Section 10. Termination. This Pledge Agreement shall remain in full
force and effect until the Secured Obligations have been fully and
indefeasibly paid and satisfied and no Event of Default shall have occurred
and be continuing. Upon the termination of this Pledge Agreement as
provided above (other than as a result of the sale of the Pledged
Collateral), the Pledgee will release the security interest created
hereunder.
Section 11. Miscellaneous. This Pledge Agreement shall be binding upon
the Pledgor and its successors and assigns, and shall inure to the benefit
of, and be enforceable by, the Pledgee and its successors and assigns, and
none of the terms or provisions of this Pledge Agreement may be waived,
altered, modified or amended except in writing duly signed by the Pledgee
and the Pledgor.
Section 12. Severability. If for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing
or future law, such invalidity shall not impair the operation of or affect
those portions of this Pledge Agreement which are valid.
Section 13. Notices. All notices, requests, demands and other
communications which are required or may be given under this Pledge
Agreement shall be given in writing and shall be deemed sufficiently given
when delivered by hand or by conformed facsimile transmission on the second
business day after a writing is consigned (freight prepaid) to a commercial
overnight courier, and on the fifth business day after a writing is
deposited in the mail, postage and other charges prepaid, addressed as
follows:
To the Pledgor:
Trefoil International III, SPRL
Xxxxxx xx Xxxxxxxxxxx 00
0000 Xxxxxxxx, Xxxxxxx
Attention: Xxxxxxx X. Xxxxxx
To the Pledgee:
Apilanlehti International III Netherlands B.V.
c/o Equity Trust Co. NV
Officia I, Xx Xxxxxxxxx 0
0000 XX Xxxxxxxxx
The Netherlands
Attention: Xxxxxxx X. Gold
or to such other address as either party may, from time to time, designate
by notice in writing to the other party.
Section 14. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, which shall, collectively and separately,
constitute one agreement.
Section 15. Assignment. Pledgee shall have the full power, right and
authority to assign its interests under the Loan Documents with or without
the consent of Pledgor hereunder and upon such assignment such transferee
shall have rights and benefits of the Pledgee under this Pledge Agreement.
Section 16. Further Assurances. The Pledgor agrees that it will
cooperate with the Pledgee and will execute and deliver, or cause to be
executed and delivered, all such other powers, proxies, instruments and
documents, and will take all such other action, including, without
limitation, the filing of financing statements, as the Pledgee may
reasonably request from time to time in order to carry out the provisions
and purposes of this Pledge Agreement.
Section 17. Governing Law. This Pledge Agreement shall be governed by
and construed in accordance with the internal laws of the State of New
York, without regard to rules or principles respecting conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the date first written above.
TREFOIL INTERNATIONAL III, SPRL
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director
APILANLEHTI INTERNATIONAL III
NETHERLANDS B.V.
By: /s/ Xxxxxxx X. Gold
-----------------------------------
Name: Xxxxxxx X. Gold
Title: Director
