1
EXHIBIT P
PLEDGE AGREEMENT
THIS PLEDGE dated July 24, 1998
BETWEEN:
J. R. SIMPLOT COMPANY
(the "Pledgor"),
- and -
CANADIAN IMPERIAL BANK OF COMMERCE.
Acting through its New York Agency
(the "Bank")
WHEREAS the Pledgor has or may have Liabilities owing to the Bank;
AND WHEREAS the Pledgor has agreed to enter into this Agreement in
order to provide the Bank with security for the Liabilities;
AND WHEREAS the Pledgor has agreed to pledge to the Bank as
security for the Liabilities 7,600,000 shares of common stock of Micron
Technology, Inc. ("Micron"), and the other collateral described in this
Agreement, which shares of common stock may be transferred by the Bank pursuant
to an effective registration statement filed by Micron pursuant to the
Securities Act of 1933, as amended (the "Securities Act").
AND WHEREAS the Bank is willing to compensate the Pledgor for the
use of certain assets;
NOW THEREFORE for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor and the Bank hereby
agree as follows:
2
1. DEFINITIONS
In this Agreement, capitalized terms not otherwise defined will
have the meanings set forth in the Loan Agreement, and the following terms will
have the meanings set out below, unless the context requires otherwise:
(a) "BUSINESS DAY" means any day except Saturday, Sunday or any statutory
holiday in New York, New York or Boise, Idaho;
(b) "COLLATERAL" has the meaning specified in Section 2;
(c) "EVENT OF DEFAULT" has the meaning given to it in the Loan Agreement;
(d) "LIABILITIES" means all present and future indebtedness, liabilities
and obligations of every kind, nature and description (whether direct or
indirect, joint or several, absolute or contingent, matured or unmatured) of the
Pledgor to the Bank under the Loan Agreement and the note issued pursuant
thereto and this Agreement;
(e) "LOAN AGREEMENT" means that certain Revolving Loan Agreement between
the Parties dated contemporaneously herewith, as such Revolving Loan Agreement
may be amended or restated from time to time;
(f) "MARKET VALUE" means, when used in reference to the Selected
Securities, the number of shares of the Selected Securities times the closing
sale price per share of the Selected Securities as reported on the primary
exchange on which such shares are listed on the Business Day prior to the date
of determination and when used in reference to other Collateral, the market
value thereof determined in a commercially reasonable matter by the Bank;
(g) "PARTY" means a party to this Agreement and any reference to a Party
includes its successors and permitted assigns; "PARTIES" means every Party;
(h) "SELECTED SECURITIES" means 7,600,000 shares of common stock, $.10
par value (U.S.$) of Micron Technology, Inc. (New York Stock Exchange ticker
symbol "MU") including any security entitlements thereto; and
(i) "UCC" means the Uniform Commercial Code as in effect in the State of
New York.
2. SECURITY INTEREST
As security for the prompt and complete payment when due of the
Liabilities, the Pledgor hereby pledges, assigns, conveys, grants and transfers
to the Bank a first and prior security interest in, and a general first lien
upon, all of the Pledgor's right, title and interest in and to the Selected
Securities and all securities entitlements in respect thereof, together with all
proceeds thereof and substitutions therefor, all cash, dividends, stock and
other moneys and property paid thereon, all rights to subscribe for securities
declared or granted in connection
2
3
therewith, and all other cash and noncash proceeds of the foregoing and in any
other cash, securities or property delivered to the Bank or its agent pursuant
to this Agreement (all of the foregoing, the "Collateral").
3. RESPECTING COLLATERAL
(a) Upon the execution hereof and thereafter from time to time as
required, the Pledgor shall deliver to the Bank, or to any person nominated by
the Bank as its agent for the purpose of holding the Collateral as security,
certificates representing all shares included in the Collateral, duly endorsed
for transfer in blank or, if directed by the Bank, to the Bank or the agent of
the Bank, or to such person as the Bank may determine upon enforcement of the
security hereby constituted or if such Collateral is a "security entitlement"
(as defined in the UCC), the Pledgor shall cause such Collateral to be
transferred, in accordance with instructions of the Bank, to a "securities
intermediary" (as also defined in the UCC) of the Bank which shall credit such
Collateral to a securities account of the Bank. The Bank is hereby authorized to
transfer any Collateral to any securities account of the Bank and, with respect
to any Collateral held in certificated form, to exchange certificates
representing or evidencing any Collateral for certificates of smaller or larger
denominations or to cause such securities to be registered in street name to be
held in an account with The Depositary Trust Company whereupon such securities
shall be held indirectly in the form of a security entitlement (as defined in
the UCC).
(b) Unless otherwise specified herein and without limiting the rights
and obligations of the parties under Section 9, the Bank is hereby further
authorized, notwithstanding Section 9-207 of the UCC, to:
(i) sell, pledge, rehypothecate, assign, invest, use, commingle or
otherwise dispose of, or otherwise use in its business any
Collateral it holds, free from any claim or right of any nature
whatsoever of the Pledgor, including any equity or right of
redemption by the Pledgor; and/or
(ii) register any Collateral in the name of the Bank, its agent or a
nominee for either.
The Bank will be deemed to continue to hold all Collateral and, subject to
Section 4, to receive dividends, distributions and other money payments made
thereon, regardless of whether the Bank has exercised any rights with respect to
any Collateral pursuant to (i) or (ii) above.
4. DIVIDENDS
All cash dividends, distributions and other money payments in
respect of the Collateral shall be paid to or at the direction of the Bank, and
transferred by the Bank to the Pledgor, except that (i) to the extent that there
are unpaid Liabilities that are then due and owing by the Pledgor to the Bank,
the amounts necessary to satisfy such unpaid Liabilities will be retained by the
Bank and applied to any unpaid Liabilities; and (ii) to the extent that
following such transfer the Market Value of the Collateral would be less than
the Collateral Maintenance Requirement, the amount necessary to cause the Market
Value of the Collateral to equal or exceed the Collateral Maintenance
Requirement shall be retained by the Bank as additional
3
4
Collateral. Notwithstanding the foregoing, the Bank shall have no duty to
collect any distributions on the Collateral or enforce or preserve any rights
pertaining to the Collateral or in general to monitor the performance of any
Collateral.
5. VOTING
Until the enforcement or release of the security constituted hereby
in accordance with the terms hereof, all voting rights attaching to any Selected
Securities included in the Collateral shall be exercised (i) during the period,
if any, that the Selected Securities are registered in the name of the Pledgor,
the Bank or any agent or nominee of the Bank, by the Bank, and (ii) during any
period that the Selected Securities are registered in the name of any other
person, by such other registered holder, or by such person or persons to whom
such other registered holder shall have delivered a proxy (whether before or
after the date hereof) to exercise such voting rights. The Pledgor shall
deliver, or cause to be delivered, to the Bank such instruments of proxy or
power of attorney as shall be necessary or appropriate to permit the Bank to
exercise such voting rights. As used in this Section, "voting rights" includes
the right to attend and vote at any meeting, or to execute a written consent in
lieu thereof, and the right to assign a proxy, including the execution of
appropriate instruments of proxy and/or powers of attorney and the right to
exercise any option and any rights given to the holder of the Selected
Securities. Upon enforcement of the security constituted hereby in accordance
with the terms hereof, all voting rights attaching to the shares included in the
Collateral shall be exercised by the registered holder thereof for the time
being, or by such person or persons to whom such registered holder shall have
delivered a proxy to exercise such voting rights.
6. REGISTRATION AND DISCHARGE
(a) The Pledgor covenants and agrees that it will, at the Bank's
expense, upon thirty (30) days' prior written notice and in such manner and form
as the Bank may reasonably require, execute and deliver to the Bank for filing
and recordation any financing statement, specific assignment and take any other
action that may be necessary or desirable in order to create, preserve, perfect
or validate any security interests granted or to enable the Bank to exercise and
enforce its rights under this Agreement with respect to any of the Collateral.
(b) The Pledgor will not change its name or change the location of its
principal place of business unless it has provided the Bank with thirty (30)
days' prior written notice of such change.
(c) The Bank agrees to release the security interest created by this
Agreement at its expense forthwith after all the Liabilities have been satisfied
in full and the Loan Agreement shall have terminated and to return to the
Pledgor the Collateral which, in the case of the Selected Securities, may be in
the form of certificated securities or securities that have not been registered
under the Securities Act; provided that, immediately prior to such return, all
such securities that have not been registered under the Securities Act satisfy
the holding period requirements of Rule 144(d) of the Securities and Exchange
Commission.
4
5
7. APPLICATION OF PROCEEDS
Any income or dividends or other proceeds realized by the Bank on or
in respect of the Collateral in connection with the exercise of any rights or
remedies of the Bank shall be applied in the following order:
(i) to the payment of the expenses of realization and
enforcement;
(ii) to the satisfaction of Liabilities (other than such
Liabilities satisfied in clause (i) above), in the order
determined by the Bank in its sole discretion; and
(iii) the balance, if any, shall be returned to the Pledgor.
8. ENFORCEMENT
(a) The Bank shall be entitled to enforce the security interest granted
herein upon the occurrence of an Event of Default.
(b) In connection with the enforcement of the security interest granted
herein constituted hereby, the Bank may:
(i) subject to the limitations of this Agreement and the Loan
Agreement, exercise all the rights and remedies of a secured
party under the UCC (whether or not the UCC applies to the
Collateral) and all other applicable law;
(ii) subject to applicable law, complete the blanks in any transfer
in blank or power of attorney in respect of any shares
included in the Collateral with such names and in such manner
as the Bank may determine, and the Bank may seal and deliver
the same after such blanks have been filled in;
(iii) subject to applicable law, realize upon the Collateral, or any
of it, by directing the relevant corporation to register the
shares included in the Collateral in the name of the Bank (or
its agent as aforesaid) to enable it to enforce the security
hereof;
(iv) subject to applicable law, exercise all rights of ownership of
and all other rights attaching to the Collateral, or any of
it, as if the Bank were the absolute owner thereof; and
(v) sell, transfer, assign, grant an option or options to purchase
or otherwise dispose of or deal in all or any part of the
Collateral in one or more parcels at public or private sale or
sales, at any exchange, broker's board or at any of the Bank's
offices or elsewhere, upon such terms as shall be
5
6
commercially reasonable, subject to applicable law (including
without limitation compliance by the Bank with applicable
securities laws).
(c) The Bank may exercise any of its rights and remedies in respect of
the Collateral independently or in combination and at any time and from time to
time once the Bank is entitled to enforce the security constituted hereby
pursuant to Section 9(a) hereof. The exercise of any particular right or remedy
in respect of the Collateral shall not preclude the further exercise of that or
any other right or remedy available pursuant to this Agreement or the Loan
Agreement.
9. PLEDGOR A TRUSTEE
Any income, dividends, distributions and accretions upon, to or of
the Collateral received by the Pledgor at any time after the enforcement of the
security constituted hereby shall be received by the Pledgor as trustee for the
Bank and shall be forthwith paid over to the Bank to be dealt with on the terms
hereof.
10. REPRESENTATIONS AND WARRANTIES AND COVENANT
The Pledgor represents and warrants to the Bank, and acknowledges
that the Bank is relying on such representations and warranties, that as of the
date hereof the Pledgor is the beneficial and registered owner of the shares
constituting the Collateral, free and clear of all encumbrances apart from the
charge, pledge and security interest created in this Agreement.
11. RESTRICTIONS
In addition to the covenants set out elsewhere in this Agreement,
the Pledgor covenants and agrees with the Bank that, except as expressly
permitted or contemplated by this Agreement or as permitted by the prior written
consent of the Bank, it will not
(i) No Sale: sell, exchange, release, abandon, transfer or otherwise
dispose of the Collateral or the legal or beneficial ownership
thereof; or
(ii) No Further Encumbrances: grant, create or permit to exist any
mortgage, pledge, lien, hypothecation, security interest or other
encumbrance or charge (whether fixed, floating or otherwise) with
respect to the Collateral except in favor of the Bank.
12. NOTICES
(a) Any notice, certificate, consent, determination or other
communication required or permitted to be given or made under this Agreement
will be in writing and will be effectively given and made if (i) delivered
personally, (ii) delivered by prepaid courier service or certified or registered
mail, return receipt requested, or (iii) sent prepaid by fax or other similar
means of electronic communication, in each case to the applicable address set
out below:
6
7
(1) if to the Bank, to:
Xx. Xxxxxx Xxxx
Executive Director
Canadian Imperial Bank of Commerce
000 Xxxxxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to:
Xx. Xxxxxxxxx Xxxxx
Executive Director, Financial Products
Canadian Imperial Bank of Commerce
000 Xxxxxxxxx Xxxxxx
0xx xxxxx
Xxx Xxxx, X.X. 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
(2) if to the Pledgor, to:
J.R. Simplot Company
000 Xxxx Xxxxxx - Xxx. 0000
Xxxxx, Xxxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
Attn: Treasurer
and
Xxxxxx Xxxxxx, Esq.
J.R. Simplot Company
000 Xxxx Xxxxxx - Xxx. 0000
Xxxxx, Xxxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to:
7
8
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
(b) Any such communication so given or made will be deemed to have been
given or made and to have been received on the day of delivery if delivered, or
on the day of faxing or sending by other means of recorded electronic
communication, provided that such day in either event is a Business Day and the
communication is so delivered, faxed or sent prior to 4:30 p.m. on such day. If
so delivered, faxed or sent on or after 4:30 p.m. on such day, such
communication will be deemed to have been given and made and to have been
received on the next following Business Day. Any such communication sent by mail
will be deemed to have been given and made and to have been received on the
fifth Business Day following the mailing thereof; provided however that no such
communication will be mailed during any actual or apprehended disruption of
postal services. Any such communication given or made in any other manner will
be deemed to have been given or made and to have been received only upon actual
receipt.
(c) Any Party may from time to time change its address under this
Section by notice to the other Party given in the manner provided by this
Section.
13. COVENANT OF THE BANK
The Bank shall hold the Collateral in accordance with the terms of
this Agreement.
14. FURTHER ASSURANCES
The Pledgor shall from time to time forthwith on the Bank's
request, do make and execute all such documents, acts, matters and things as may
be required by the Bank with respect to this Agreement or any part hereof or as
may be required by the Bank to give effect to these presents. Once the Bank is
entitled to enforce the security interest constituted hereby pursuant to Section
9(a) hereof, an officer of the Bank may, without further approval or
authorization of the Pledgor, be constituted and appointed by the Pledgor the
true and lawful attorney of the Pledgor irrevocable with full power of
substitution to do, make and execute all such statements, assignments,
documents, acts, matters or things with the right to use the name of the Pledgor
whenever and wherever it may be deemed necessary or expedient for the purposes
of enforcing this Agreement or protecting the security created hereby.
8
9
15. GENERAL
(a) The Bank may grant extensions of time and other indulgences, take
and give up security, accept compositions and otherwise deal with the Pledgor
and with other persons without prejudice to the rights of the Bank hereunder and
without limitation to the debts, liabilities and obligations secured or to the
security constituted hereby.
(b) The security constituted hereby is taken in addition to and not in
substitution for and is independent of any other security taken by or granted to
the Bank by the Pledgor or any other person.
(c) The Bank may expend funds in connection with the protection of or
enforcement of the security constituted hereby (including without limitation
reasonable fees and disbursements of counsel. All such funds shall be added to
and form part of the Liabilities, and in case of the enforcement of the security
constituted hereby shall be deducted from and limited to the proceeds of any
such enforcement, and may be applied in the discretion of the Bank to such part
or parts of the Liabilities as to the Bank seems best.
(d) Any provision in this Agreement which is prohibited or unenforceable
shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof.
(e) No waiver of any of the provisions of this Agreement shall be
effective unless given in writing by the party against which the same is to be
asserted.
(f) Headings have been inserted in this Agreement for reference only,
and shall not define, limit or enlarge the construction or interpretation
hereof.
(g) This Agreement and the rights of the parties hereunder shall be
governed by and construed and interpreted in accordance with the laws of State
of New York, without reference to conflict of law provisions (other than Section
5-1401 of the New York General Obligations Law).
9
10
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement
as of the day and year first above written.
J.R. SIMPLOT COMPANY
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Sr. Vice-President
CANADIAN IMPERIAL BANK OF
COMMERCE,
Acting through its New York Agency
By: /s/ XXXXXX XXXX
---------------------------------------
Name: Xxxxxx Xxxx
Title: Executive Director
10
