PLEDGE AND SECURITY AGREEMENT
between
XXXXXXXXX XXXXX CORPORATION,
as Pledgor and Debtor
and
THE BANK OF NEW YORK,
as trustee for the ratable benefit of the Holders
under that certain Indenture, dated as of July 2, 1997,
as Pledgee and Secured Party
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (together with any amendments,
modifications, waivers and supplements hereafter entered into, the "AGREEMENT"),
dated as of July 2, 1997 between Xxxxxxxxx Xxxxx Corporation, an Illinois
corporation (the "DEBTOR" or the "PLEDGOR"), and The Bank of New York, as
Trustee for the ratable benefit of the Holders (as hereinafter defined), under
the Indenture (as hereinafter defined) (the "TRUSTEE" or the "PLEDGEE").
W I T N E S S E T H:
WHEREAS, pursuant to the Indenture, the Pledgor shall issue and sell to
the Holders, $100,000,000 in aggregate principal amount of its 10 1/4% Senior
Secured Notes due 2004 (the "NOTES");
WHEREAS, the Pledgor is the legal and beneficial owner of the issued and
outstanding shares of capital stock of the companies (the "PLEDGED
SUBSIDIARIES"), if any, listed on SCHEDULE A hereto (as same may from time to
time be amended, modified, waived or supplemented, "SCHEDULE A") and the other
property interests and assets to be secured hereunder; and
WHEREAS, in order to secure the payment and performance in full of the
Obligations (as defined below), the parties hereto desire to set forth their
mutual understanding and certain agreements regarding the terms and conditions
of the pledge of and security interest in the Collateral (as defined below) made
by the Pledgor to the Pledgee;
NOW, THEREFORE, in consideration of the premises and other benefits to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. PLEDGE. As collateral security for the payment and
performance in full of all obligations of the Pledgor now or hereafter existing
or arising under, or in connection with, the Indenture, the Notes, the
Intellectual Property Security Agreement (as hereinafter defined), and this
Agreement, as each may be amended, modified, waived or supplemented from time to
time (collectively, the "OBLIGATIONS"), the Pledgor hereby pledges, assigns,
transfers, sets over and delivers unto the Pledgee, for the ratable benefit of
the Holders, and hereby grants to the Pledgee, for the ratable benefit of the
Holders, a continuing security interest in all of the right, title and interest
of such Pledgor in, to and under any and all of
the following described property, rights and interests, whether now owned or
hereafter acquired (collectively, the "COLLATERAL"):
(a) all of the issued and outstanding shares of capital stock of
the Pledged Subsidiaries owned by the Pledgor (the "PLEDGED SECURITIES") and
the certificate(s) representing such capital stock;
(b) all proceeds and products of the Pledged Securities and such
other additional property, including without limitation, dividends,
distributions, cash, instruments and other property or securities, now or
hereafter at any time or from time to time received or receivable or otherwise
distributed or distributable in respect of or in exchange for any or all of the
Pledged Securities and such other additional property;
(c) all Equipment, Fixtures, General Intangibles, and all
Insurance Policies, Contracts and Collateral Records to the extent relating to
any of the foregoing, in each case and from time to time located at either of
the addresses set forth on SCHEDULE B hereto.
TO HAVE AND TO HOLD the Collateral, together with all rights, titles, interests,
powers, privileges and preferences pertaining or incidental thereto, unto the
Pledgee, for the ratable benefit of the Holders, and their respective successors
and assigns, PROVIDED, however, that there is expressly excluded from the grant
of a security interest hereunder (i) all Receivables and (ii) all Inventory,
including all Inventory located at either such address, all Receivables
arising from the sale of such Inventory, and all Contracts, Accounts, Chattel
Paper, Collateral Records, Documents, General Intangibles, Instruments,
Receivables Records, Insurance Policies and money arising from or relating to
such Inventory or Receivables, or the sale thereof.
Section 2. DEFINED TERMS. As used herein, all capitalized terms
not otherwise defined shall have the meanings set forth in that certain
Indenture (as amended, modified, waived or supplemented from time to time, the
"INDENTURE"), dated as of July 2, 1997, between the Pledgor and the Pledgee.
The following terms shall have the following meanings:
"Account Debtor" shall mean the Person who is obligated on a
Receivable.
"Accounts" shall mean "accounts" as such term is defined in Section
9-106 of the UCC.
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"Agreement" has the meaning ascribed thereto in the introductory
paragraph hereof.
"Business Day" shall have the meaning set forth in the Indenture.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
Section 9-105(b) of the UCC.
"Collateral" shall have the meaning assigned to it in Section 1
hereof.
"Collateral Records" shall mean books, records, computer software,
computer printouts, customer lists, blueprints, technical specifications,
manuals, and similar items which relate to any Collateral other than such
items obtained under license or franchise agreements which prohibit
assignment or disclosure of such items.
"Contracts" shall mean written contracts, agreements, leases and
arrangements in which the Debtor has an interest or to which Debtor is a
party as any of the same may from time to time be amended, supplemented or
otherwise modified.
"Default" shall have the meaning set forth in the Indenture.
"Documents" shall mean "documents" as such term is defined in Section
9-105(f) of the UCC.
"Equipment" shall mean "equipment" as such term is defined in Section
9-109(2) of the UCC, including, without limitation, machinery,
manufacturing equipment, data processing equipment, computers, office
equipment, furniture, appliances, tools, and other similar property.
"Event of Default" shall have the meaning set forth in the Indenture.
"Financing Documents" shall mean the Indenture, the Notes, the
Intellectual Property Security Agreement and this Agreement.
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"Fixtures" shall mean "fixtures" as such term is defined in Section
9-313 of the UCC.
"General Intangibles" shall mean "general intangibles" as such term is
defined in Section 9-106 of the UCC, including, without limitation, rights
to the payment of money (other than Accounts and Receivables), trademarks,
copyrights, patents, and contracts, licenses and franchises (except in the
case of licenses and franchises in respect of which the Assignor is the
licensee or franchisee if the agreement in respect of such license or
franchise prohibits by its terms any assignment or grant of a security
interest, limited and general partnership interests and joint venture
interests, federal income tax refunds (subject to the terms of the Tax
Sharing Agreement (as defined in the Indenture)), trade names, to the
extent classified as a "general intangible" under any applicable law),
distributions on certificated securities (as defined in Section
8-102(1)(a) of the UCC) and uncertificated securities (as defined in
Section 8-102(1)(b) of the UCC), computer programs and other computer
software, inventions, designs, trade secrets, goodwill, proprietary rights,
customer lists, supplier contracts, sale orders, correspondence,
advertising materials, payments due in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any property,
reversionary interests in pension and profit-sharing plans and
reversionary, beneficial and residual interests in trusts, credits with and
other claims against any Person, together with any collateral for any of
the foregoing and the rights under any security agreement granting a
security interest in such collateral.
"Instruments" shall mean "instruments" as such term is defined in
Section 9-105(1)(i) of the UCC.
"Insurance Policies" shall mean any and all insurance policies from
time to time maintained by the Debtor (other than third-party liability
policies), to the extent covering the Collateral..
"Intellectual Property Security Agreement" shall mean that certain
Intellectual Property Security Agreement, dated as of the date hereof, between
the Debtor, as assignor, and the Trustee as assignee, for the ratable benefit of
the Holders, as same may from time to time be amended, modified, waived or
supplemented.
"Inventory" shall mean "inventory" as such term is defined in Section
9-109(4) of the UCC, including without limitation, all goods (whether such
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goods are in the possession of the Debtor or of a bailee or other Person
for sale, lease, storage, transit, processing, use or otherwise and whether
consisting of whole goods, spare parts, components, supplies, materials or
consigned or returned or repossessed goods), including without limitation,
all such goods which are held for sale or lease or are to be furnished (or
which have been furnished) under any contract of service or which are raw
materials, work in progress or finished goods..
"Lien" shall have the meaning set forth in the Indenture.
"Material Adverse Effect" shall mean a material adverse effect upon
(i) the business, operations, properties, assets, or condition (financial
or otherwise) of the Debtor (after giving effect to the transactions
contemplated by this Security Agreement and the other Financing Documents),
or (ii) the ability of the Debtor to perform (to the extent that it is
liable thereon) or of the Trustee to enforce, any of the Obligations.
"Permitted Liens" shall have the meaning given to it in the Indenture.
"Person" shall mean and include any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or agency, department or instrumentality
thereof.
"Pledged Securities" shall have the meaning specified in Section 1(a).
"Pledged Subsidiaries" shall have the meaning specified in the second
Whereas clause.
"Possessory Collateral" shall mean, collectively, certificates
representing the Pledged Securities, and all such Instruments, Documents,
Chattel Paper and other tangible property of the Debtor which is subject to
the grant of the security interest therein contained perfection of which
may be obtained by the Pledgee's taking possession thereof.
"Proceeds" shall mean "proceeds" as such term is defined in Section
9-306(1) of the UCC.
"Receivables" shall mean all rights to payment for Inventory sold,
whether or not earned by performance and all rights in respect of the
Account Debtor, including without limitation, all such rights in which the
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Debtor has any right, title or interest by reason of the purchase thereof
by the Account Debtor, and including, without limitation, all such rights
constituting or evidenced by any Account, Chattel Paper, Instrument,
General Intangible, note, contract, invoice, purchase order, draft,
acceptance, book debt, intercompany account, security agreement, or other
evidence of indebtedness or security, and assigned, hypothecated or held
to secure any of the foregoing and the rights under any security agreement
granting a security interest in such Inventory or Receivables, and all
goods, the sale of which gave rise to any of the foregoing, including,
without limitation, all rights in any returned or repossessed goods and
unpaid seller's rights.
"Receivables Records" shall mean (a) all original copies of all
documents, instruments or other writings evidencing the Receivables, (b)
all books, correspondence, credit or other files, records, ledger sheets or
cards, invoices, and other papers relating to Receivables, including
without limitation all tapes, cards, computer tapes, computer discs,
computer runs, record keeping systems and other papers and documents
relating to the Receivables, whether in the possession or under the control
of the Debtor or any computer bureau or agent from time to time acting for
the Debtor or otherwise, (c) all evidences of the filing of financing
statements and the registration of other instruments in connection
therewith and amendments, supplements or other modifications thereto,
notices to other creditors or secured parties, and certificates,
acknowledgements, or other writings, including without limitation lien
search reports, from filing or other registration officers, (d) all credit
information, reports and memoranda relating thereto, and (e) all other
written or non-written forms of information related in any way to the
foregoing or any Receivable.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York, or Illinois, as applicable.
Section 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PLEDGOR. The Pledgor hereby represents and warrants (as of the date of
execution hereof as to the Collateral existing on such date and as of the date
of acquisition as to the Collateral acquired subsequently), covenants and agrees
that:
(a) The Pledgor is the legal and beneficial owner of the
Collateral, holds the Collateral free and clear of all Liens, except for the
Lien and security interest granted hereunder and Permitted Liens, and has not
made and will not make or permit any other pledge, assignment, mortgage,
hypothecation or
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transfer of the Collateral except for Permitted Liens. The Pledged Securities
are not subject to any put, call, option or other right in favor of any other
Person whatsoever.
(b) The Pledged Securities, if any, have (i) been duly
authorized and validly issued and are fully paid and non-assessable and
constitute such percentage of all of the issued and outstanding shares of
capital stock of the Pledged Subsidiaries as set forth on SCHEDULE A hereto.
(c) Upon the execution and delivery of this Agreement, the
delivery of the Possessory Collateral to the Pledgee, the filing of the
financing statements in the jurisdictions set forth in Schedule B hereto, and
the filing of the Intellectual Property Security Agreement with the U.S. Patent
and Trademark Office and the U.S. Copyright Office, to the extent required by
applicable law, the Pledgee, for the ratable benefit of the Holders, will have a
valid, perfected, first priority security interest until all of the Obligations
have been indefeasibly paid and performed in full in the Collateral, securing
the indefeasible payment and performance in full of the Obligations.
(d) The Pledgor has the requisite corporate authority to pledge
and grant a security interest in the Collateral pursuant to this Agreement and
will defend its title thereto against the claims of all persons whomsoever, and
shall maintain and preserve the Lien and security interest granted hereunder
with respect to the Collateral until all of the Obligations have been
indefeasibly paid and performed in full, as long as this Agreement remains in
full force and effect.
(e) Neither the execution, delivery or performance of this
Agreement, nor the transactions herein contemplated will (i) violate any
provision of the charter or bylaws of the Debtor or any of the Pledged
Subsidiaries, (ii) violate or cause a breach under the terms of any agreement,
indenture, mortgage, deed of trust, equipment lease, instrument or other
document to which the Pledgor or any Pledged Subsidiary is a party, (iii)
violate any law, order, rule or regulation or (iv) result in, or require the
creation or imposition of, any Lien (other than the Lien and security interest
contemplated hereby) upon or with respect to any of the property now owned or
hereafter acquired by the Debtor or any of its Pledged Subsidiaries, which
violations or conflicts would, singly or in the aggregate, have a Material
Adverse Effect.
(f) The Pledged Securities constitute the issued and outstanding
shares of capital stock of the Pledged Subsidiaries owned by the Debtor
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and there are no outstanding options, warrants or other rights to subscribe for
or purchase any property described in Section 1(a) or any notes, bonds,
debentures or other evidences of indebtedness that (i) are at any time
convertible into capital stock of any of the Pledged Subsidiaries or (ii) have,
or at any time could by their terms have, voting rights with respect to any
matters affecting the Debtor or any of the Pledged Subsidiaries.
(g) No consent or approval which has not been obtained prior to
the date hereof of any Person and no authorization, approval or other action
(other than delivery of the Possessory Collateral to the Trustee, the filing of
UCC-1 financing statements in the jurisdictions listed on SCHEDULE B hereto and
the filing of the Intellectual Property Security Agreement with the U.S. Patent
and Trademark Office, and the U.S. Copyright Office, to the extent required by
applicable law) by, and no notice to or filing with any Person was or is
necessary as a condition to the validity of the pledge and security interest
granted hereby, and such pledge and security interest is effective to vest in
the Pledgee the rights of the Pledgee in the Collateral as set forth herein.
(h) The Pledgor shall deliver to the Pledgee concurrently with
the execution of this Agreement or, to the extent acquired subsequent to the
date of execution hereof, immediately upon such Pledgor's acquisition thereof:
all certificates and instruments representing the Pledged Securities and each
other item of Possessory Collateral. Any and all Pledged Securities delivered
to the Pledgee shall be accompanied by undated, duly executed stock powers in
blank and by such other instruments of transfer or documents as the Pledgee may
request. The Pledgee shall hold the certificates representing the Pledged
Securities delivered to it in custody.
(i) The Pledgee shall at all times have full and free access
during normal business hours to all of the books, correspondence and records of
the Pledgor relating to the Collateral and the Pledgee and its representatives
may examine the same, make abstracts therefrom and make photocopies thereof, and
each Pledgor agrees to render to the Pledgee and its representatives, at such
Pledgor's cost and expense, such clerical and other assistance as may be
reasonably requested by any of them with regard thereto.
(j) The Debtor shall not permit the Pledged Subsidiaries to
issue any securities other than the Pledged Securities.
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(k) If, while this Agreement is in effect, any stock dividend,
stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the capital
structure, including the creation of any subscription or other rights relating
to the Pledged Securities, is declared or made by the Pledged Subsidiaries, all
substituted and additional securities or interests issued with respect to the
Collateral and evidenced by certificates shall be endorsed in blank by the
Pledgor promptly upon receipt thereof or otherwise appropriately transferred to
the Pledgee in negotiable form, and all certificates or instruments evidencing
such securities shall be delivered to the Pledgee to be held under the terms of
this Agreement in the same manner as, and as a part of, the Collateral. All
Pledged Securities shall be evidenced by one or more certificates. Any
securities that may be issued upon exercise of any subscription or other rights
relating to the Pledged Securities shall be endorsed in blank and delivered to
the Pledgee with any necessary stock or other powers.
(l) The Pledgor shall pay and discharge all taxes, assessments
and governmental charges or levies against any Collateral prior to delinquency
thereof and shall keep all Collateral free of all unpaid charges whatsoever.
(m) The Pledgor shall promptly notify the Pledgee (i) of any
material adverse changes in any fact or circumstance represented or warranted by
such Pledgor with respect to any portion of the Collateral (other than a de
minimis portion of the Collateral), (ii) of any actual or imminent material
impairment of any portion of the Collateral (other than a de minimis portion of
the Collateral) and (iii) of any claim, action or proceeding materially
adversely affecting title to all or any portion of the Collateral (other than a
de minimis portion of the Collateral).
(n) The chief executive office and principal place of business
of the Debtor is located at 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxxx
00000. The Debtor shall not change its name or the name under which it does
business or relocate its principal place of business or chief executive office
unless the Debtor gives 30 days' prior written notice to the Pledgee, which
notice shall specify such new name and/or address.
(o) The Debtor shall pledge to the Trustee, for the ratable
benefit of the Holders, all of the capital stock of each company that becomes a
Subsidiary (as defined in the Indenture) after the date hereof, and in
furtherance thereof, will execute and deliver an amendment to this Agreement, or
a new pledge and security agreement, in substantially the form of this
agreement,with such changes therein as the Trustee shall request, and such other
documents, instruments,
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agreements, certificates and financing statements as may be necessary or
desirable in the discretion of the Trustee.
Section 4. RELEASE OF COLLATERAL. The Collateral shall not be
released from the Lien and security interest created hereunder and no property
shall be substituted for any of the Collateral except in accordance with the
provisions of the Indenture or Section 17 hereof. None of the tangible
Collateral shall be moved from the respective locations set forth in Schedule B
hereto where such Collateral is located on the date hereof if such move could
affect the attachment, validity or perfection of the Pledgee's security interest
therein, unless the Pledgor shall have given the Pledgee at least 30 days' prior
notice in writing, and Pledgor shall have taken all actions required or
reasonably requested by the Pledgee to preserve or protect its security interest
therein. The Pledgee shall return the physical certificates and related stock
powers and other Possessory Collateral in its possession only when expressly
required by this Agreement or the Indenture.
Section 5. VOTING RIGHTS, DIVIDENDS, ETC.
(a) Unless and until an Event of Default shall have occurred and
be continuing:
(i) The Pledgor shall be entitled to exercise any and all voting
or consensual rights and powers, including subscription rights, accruing to
an owner of the Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement or any of the other Financing
Documents; and
(ii) except as otherwise provided in this Agreement, the Pledgor
shall be entitled to retain and use any and all dividends, distributions or
other payments paid on or with respect to the Pledged Securities that are
permitted by the Indenture (other than securities, which shall constitute
additional Collateral subject to this Agreement).
(b) Upon the occurrence and during the continuance of an Event
of Default, all rights of the Pledgor to exercise the voting or consensual
rights and powers which the Pledgor would otherwise be entitled to exercise
pursuant to Section 5(a)(i) shall automatically cease, and all such rights shall
thereupon become vested in the Pledgee, and the Pledgee for the ratable benefit
of the Holders, shall then have the sole and exclusive right and authority to
exercise, in its sole discretion, all such voting and consensual rights and
powers.
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(c) Unless and until an Event of Default shall have occurred and
be continuing, the Pledgor shall have the right and authority to receive and
retain as Collateral all dividends, distributions and other payments paid on or
with respect to the Pledged Securities. Upon the occurrence and during the
continuance of an Event of Default, the Pledgee shall have the sole and
exclusive right and authority to receive and retain as Collateral all dividends,
distributions and other payments paid on or with respect to the Pledged
Securities. Any and all money and other property paid over to or received by
the Pledgee pursuant to this Section 5(c) shall be retained by the Pledgee as
additional Collateral hereunder and shall be administered and applied in
accordance with the provisions of this Agreement. All dividends and interest
payments that are received by the Pledgor contrary to the provisions of this
Section 5(c) shall be received in trust for the benefit of the Pledgee, shall be
segregated from other funds of the Pledgor, and shall be forthwith paid over to
the Pledgee as Collateral in the same form as so received (with any necessary
endorsement).
Section 6. DEFAULT; REMEDIES.
(a) EXERCISE OF REMEDIES UNDER THE AGREEMENT. If an Event of
Default shall have occurred and be continuing, the Pledgee may, and within 3
Business Days of instructions from the Holders of a majority in principal amount
of the Notes outstanding, shall, commence the taking of such actions (or refrain
from taking actions) toward collection or enforcement of this Agreement and the
Collateral (or any portion thereof), including without limitation action toward
foreclosure upon any Collateral. If any Event of Default that was the basis for
the commencement of such action shall have been cured or waived, and, in the
case where there has been an acceleration, rescission of such acceleration shall
have occurred, any direction to the Pledgee to take any action shall be deemed
rescinded upon notification by the Holders of a majority in outstanding
principal amount of the Notes with respect to such Event of Default.
(b) REMEDIES GENERALLY. If an Event of Default shall have
occurred and be continuing, then the Pledgee may:
(i) exercise any or all of its rights and remedies hereunder and
under any other instrument or agreement securing, evidencing or relating to
the Obligations or under applicable laws (including all of the rights and
remedies of a secured creditor under the UCC);
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(ii) retain possession of the Collateral; or
(iii) sell, assign, transfer, or dispose of, in whole or in
part, the Collateral at public or private sale or sales, at any exchange,
brokers board or any of Pledgee's offices or elsewhere, for cash, credit or
other property, for immediate or future delivery, and, to the extent
permitted by applicable law, for such price or prices and on such other
terms as the Pledgee may deem commercially reasonable. Upon consummation
of any such sale, the Pledgee shall have the right to assign, transfer,
endorse and deliver to the purchaser or purchasers thereof the Collateral
so sold. Each such purchaser at any such sale shall hold such property
sold free from any claim or right on the part of the Pledgor, and the
Pledgor hereby waives (to the fullest extent permitted by law) all rights
of redemption, stay or appraisal that such Pledgor now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. The Pledgee shall give the Pledgor five (5) Business
Days' written notice (which the Pledgor agrees shall be deemed to be
reasonable notification within the meaning of the applicable provisions of
the UCC) of the Pledgee's intention to make any such public or private
sale. Any such sale shall be held at such time or times and at such place
or places as the Pledgee may fix. At any such sale, the Collateral or any
portion thereof, to be sold, may be sold as an entirety or in separate
portions, as the Pledgee may, in its sole discretion, determine. The
Pledgee shall not be obligated to make any sale of the Collateral if it
shall determine not to do so, regardless of the fact that notice of such
sale may have been given. The Pledgee 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 the sale of all or any part of the
Collateral is made on credit for future delivery, the Collateral so sold
may be retained by the Pledgee until the sale price is paid by the
purchaser or purchasers thereof, but the Pledgee 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. As an alternative to
exercising the power of sale herein conferred upon it, the Pledgee may
proceed by suit or suits at law or in equity to exercise its
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remedies regarding the Collateral and sell the Collateral or any portion
thereof pursuant to judgment or decree of a court or courts having
competent jurisdiction. If the Pledgee shall be required by law to dispose
of the Collateral within a period of time that does not permit the giving
of notice to the Pledgor as herein provided, the Pledgee need give the
Pledgor only such notice of disposition as shall be reasonably practicable
in view of such law.
(c) REMEDIES; OBTAINING THE COLLATERAL UPON DEFAULT. The
Pledgor agrees that if any Event of Default shall have occurred and be
continuing, then, in every such case and in addition to the rights and remedies
available to a secured party under any applicable provision of the UCC or any
other applicable law, the Pledgee may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof from the Pledgor or, to
the extent permitted by applicable law, any other Person who then has
possession of any part thereof, with or without notice or process of law,
and for that purpose may, to the extent permitted by law, enter upon
Pledgor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of Pledgor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation constituting Collateral to make any payment
or render any performance required by the terms of such agreement,
instrument or obligation directly to the Pledgee or its designees; and
(iii) take possession of the Collateral or any part thereof by
directing the Pledgor to deliver the same to the Pledgee at any place or
places designated by the Pledgee which is reasonably convenient to the
parties, in which event the Pledgor shall, at its own expense, forthwith
cause the same to be so delivered, it being understood that the Pledgor's
obligation so to deliver the Collateral is of the essence of this Agreement
and that, accordingly, upon application to a court of equity having
jurisdiction, the Pledgee shall be entitled to a decree requiring specific
performance by the Pledgor of such obligation.
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(d) PREVENTING IMPAIRMENT OF THE COLLATERAL. Regardless of
whether or not there shall have occurred any Default or Event of Default, the
Pledgee may institute and maintain, or cause in the name of the Pledgor or the
Pledgee to be instituted and maintained, such suits and proceedings as the
Pledgee may be advised by counsel shall be necessary or expedient to prevent any
impairment of the Lien or security interest in, or perfection of, the Collateral
in contravention of the terms of this Agreement. The Pledgor agrees not to
knowingly take or permit to be taken any action that would impair the Collateral
or any of Pledgee's rights in the Collateral.
Section 7. PLEDGEE APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
constitutes and appoints Pledgee its attorney-in-fact for the purpose of
carrying out the provisions of this Agreement and taking any action and
executing any instrument, including without limitation any financing statement
or continuation statement, that the Pledgee deems necessary or advisable to
maintain the validity, perfection, priority and enforcement of the Lien and
security interest intended to be created hereunder or to accomplish the other
purposes hereof, which appointment is irrevocable and coupled with an interest;
PROVIDED, that nothing herein contained shall be construed as requiring or
obligating the Pledgee to take any such action with respect to the Collateral or
any part thereof or any property covered thereby, and no action taken or omitted
shall give rise to any defense, counterclaim or right of action against the
Pledgee unless Pledgee's actions are taken or omitted to be taken with gross
negligence or bad faith or constitute willful misconduct.
Section 8. PURCHASE OF COLLATERAL BY PLEDGEE. At any public sale
of the Collateral, whether pursuant to power of sale or otherwise hereunder, the
Pledgee or any Holder may, to the extent permitted by applicable law, bid for
and purchase, free from any right of redemption, stay or appraisal (all such
rights being hereby waived and released by the Pledgor to the extent permitted
by law), the Collateral or any part thereof or an interest therein and, upon
compliance with the terms of such sale, may hold, retain, exploit, resell or
otherwise dispose of such property without further accountability to the Pledgor
for the proceeds of such sale (except in the event that there is a surplus of
such proceeds in excess of the Obligations, in which case, the Pledgee shall
account to the Pledgor for such surplus). The Pledgor will execute and deliver
or cause to be executed and delivered such instruments, endorsements,
assignments, waivers, certificates and other documents and take such further
action as the Pledgee shall request in connection with any such sale.
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Section 9. DISPOSITION OF PROCEEDS. The proceeds of any sale of
the whole or any part of the Collateral, together with any other monies held by
the Pledgee under the provisions of this Agreement, shall be applied by the
Pledgee in accordance with the terms of Section 6.10 of the Indenture.
Section 10. WAIVER OF CLAIMS. Except as otherwise provided
in this Agreement, THE PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE PLEDGEE'S
TAKING POSSESSION OF, OR THE PLEDGEE'S DISPOSITION OF, ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND
HEARINGS FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT
PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE
UNITED STATES OR OF ANY STATE, and, to the full extent permitted by
applicable law, the Pledgor hereby further waives:
(a) all damages occasioned by such taking of possession or
disposition except any damages which are the direct result of the Pledgee's
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction; and
(b) all rights of redemption, appraisement, valuation, stay,
marshalling of assets, extension or moratorium, now or hereafter existing at law
or in equity, respecting the enforcement of this Agreement or the sale or other
disposition of the Collateral or any portion thereof.
Any sale of, or the exercise of any option to purchase, or any other
realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, at law or in equity, of the Pledgor therein and
thereto, and shall be a perpetual bar both at law and in equity against the
Pledgor and against any and all persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, through and
under the Pledgor. The Pledgor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
satisfy the Obligations in full.
Section 11. REMEDIES CUMULATIVE; NO WAIVER. Each right, power and
remedy of the Pledgee provided for herein, in any other agreement pursuant to
which a Lien is created in favor of the Pledgee or now or hereafter existing at
law or in equity shall be cumulative and concurrent and shall be in addition to
every
15
other such right, power or remedy of the Pledgee. No failure on the part of the
Pledgee to exercise, and no delay in exercising, any such right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. No notice to or demand on
the Pledgor hereunder shall, of itself, entitle the Pledgor to any other or
further notice or demand in the same, similar or other circumstances.
Section 12. FURTHER ASSURANCES. The Pledgor agrees that it shall,
at its own expense, (a) promptly file or record such notices, financing
statements, continuation statements or other documents and take all further
action as the Pledgee may reasonably request to perfect, maintain and protect
the perfection of the security interests of the Pledgee hereunder or to enable
the Pledgee to exercise and enforce their respective rights and remedies
hereunder with respect to the Collateral, such instruments to be in form and
substance reasonably satisfactory to the Pledgee and (b) perform such further
acts and things and execute and deliver to the Pledgee such additional
conveyances, assignments, endorsements, agreements and instruments as the
Pledgee may at any time reasonably request in connection with the administration
and enforcement of this Agreement or relative to the Collateral or any part
thereof or in order to assure and confirm unto the Pledgee its rights, powers
and remedies hereunder.
Section 13. INDEMNIFICATION AND EXPENSES.
(a) The Pledgor agrees to indemnify the Pledgee and each Holder
from and against any and all claims, losses and liabilities growing out of or
resulting from an Event of Default (including, without limitation, enforcement
of this Agreement), except claims, losses or liabilities resulting from
Pledgee's or any such Holder's gross negligence, or willful misconduct, as
determined by a final judgment of a court of competent jurisdiction.
(b) The Pledgor will pay upon demand to the Pledgee the amount
of any and all reasonable out-of-pocket expenses, including the reasonable fees
and charges of its counsel and of any experts and agents, that the Pledgee may
incur in connection with (i) the negotiation, execution and enforcement of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from or other realization upon, any of the Collateral, or (iii) the
exercise or enforcement of any of the rights of the Pledgee hereunder.
Section 14. REGISTRATION RIGHTS, ETC.
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(a) If, upon or at any time after the occurrence of an Event of
Default, the Pledgee reasonably determines that the registration of any of the
Pledged Securities, or other compliance with, the Securities Act or any similar
Federal or state law is required with respect to the Pledged Securities, the
Pledgor will use its best efforts to cause such registration or compliance to be
effectively made, at no expense to the Pledgee, and to continue any such
registration effective for such time as may be reasonably necessary in the
opinion of the Pledgee. Pledgor will reimburse the Pledgee upon demand for any
expenses incurred by the Pledgee (including reasonable attorneys' fees) incurred
in connection therewith, which obligation to pay such expenses shall be secured
hereunder.
(b) If Pledgor is unable to effect a public sale of any or all
of the Pledged Securities or if the Pledgee determines that it is desirable to
sell the Pledged Securities in one or more private sales, the Pledgee may limit
such sales to a restricted group of purchasers who will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to distribution or resale. Pledgor acknowledges
and agrees that any such private sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Pledgee shall
be under no obligation to delay a sale of any of the Pledged Securities for the
period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act or under applicable
state securities laws, even if such issuer would agree to do so.
(c) Pledgor further agrees to do, or use all reasonable efforts
to cause to be done, all other acts as may be necessary to make such sale or
sales of all or any part of the Collateral valid and binding and comply with any
and all applicable laws, rules and regulations and orders and decrees of any and
all courts having jurisdiction over such sales, all at such Pledgor's expense.
Pledgor further agrees that a breach of any of the covenants contained in this
Agreement will cause irreparable injury to the Pledgee, as secured parties, for
which the Pledgee would have no adequate remedy at law in respect of such breach
and, as a consequence, agrees that each and every covenant contained in this
Section 14 shall be specifically enforceable against Pledgor and, to the fullest
extent permitted by applicable law, Pledgor waives and agrees not to assert as a
defense against an action for specific performance of such covenants that (i)
Pledgor's failure to perform such covenants will not cause irreparable injury to
the Pledgee (ii) the Pledgee have an adequate remedy at law in respect of such
breach.
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Section 15. PLEDGOR'S OBLIGATIONS ABSOLUTE. The liability of
Pledgor under this Agreement shall remain in full force and effect without
regard to, and, unless otherwise expressly provided in any other Financing
Document, shall not be released, suspended, discharged, terminated or otherwise
affected by: (a) any change in the time, place or manner of payment of all or
any of the Obligations, or in any other term of any of the Financing Documents,
waiver, indulgence, renewal, extension, amendment or modification of or
addition, consent or supplement to or deletion from or any other action or
inaction under or in respect of the Financing Documents or any assignment or
transfer thereof; (b) any lack of validity or enforceability, in whole or in
part, of any of the Financing Documents; (c) any furnishing of any additional
security for the Obligations or any acceptance thereof or any release or
non-perfection of any security interest in property; (d) any limitation on any
party's liability or obligations under any of the Financing Documents; (e) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to the Pledgor, any Pledged
Subsidiary or any other Person, or any action taken with respect to this
Agreement by any trustee or receiver, or by any court, in any such proceeding,
whether or not the Pledgor shall have notice or knowledge of any of the
foregoing; or (f) any exchange, release, amendment or waiver of, or consent to
departure from any other agreement pursuant to which a Lien is created in favor
of the Pledgee.
Section 16. WAIVER. To the extent permitted by applicable law, and
except as otherwise expressly provided for herein, Pledgor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
the Obligations and any requirement that the Pledgee protect, secure, perfect or
insure any security interest or any property subject thereto or exhaust any
right or take any action against the Pledgor or any other Person; PROVIDED,
HOWEVER, that the Pledgee shall in any event take such care in the handling of
any Possessory Collateral in its possession as it takes with respect to its own
property of a similar nature in its possession.
Section 17. TERMINATION. Upon indefeasible payment and performance
in full and satisfaction of all of the Obligations, this Agreement shall
terminate and the Pledgee shall assign and redeliver to the Pledgor all of the
Collateral hereunder that has not been sold, disposed of, retained or applied by
the Pledgee in accordance with the terms hereof. Such reassignment and
redelivery shall be without warranty by or recourse to the Pledgee, and shall be
at the expense of the Pledgor. At such time, this Agreement shall no longer
constitute a Lien upon or a grant of any security interest in any of the
Collateral, and the Pledgee shall, at the Pledgor's expense deliver to the
Pledgor written acknowledgment thereof and of
18
cancellation of this Agreement in a form reasonably requested by the Pledgor;
PROVIDED, HOWEVER, that this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Obligations is rescinded or must otherwise be returned upon the insolvency,
bankruptcy or reorganization of the Pledgor or the Pledged Subsidiaries or any
other Person, all as though such payment had not been made.
Section 18. NOTICES. Any notices or other communications required
or permitted hereunder shall be made as provided in Section 11.2 of the
Indenture.
Section 19. BINDING AGREEMENT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the Pledgee, the Pledgor and their
respective successors and permitted assigns. Neither this Agreement nor any
interest herein or in the Collateral, or any part thereof, may be assigned by
Pledgor without the prior written consent of the Pledgee, except as expressly
permitted herein. The Pledgee shall have the right to assign this Agreement
only in accordance with the provisions of the Indenture, and any such permitted
assignee shall have all rights and powers and obligations of the Pledgee
hereunder.
Section 20. GOVERNING LAW. This Agreement shall be construed in
accordance with, and be governed by, the laws of the State of New York.
Section 21. AMENDMENTS. This Agreement may not be amended or
modified except in writing signed by the Pledgor and Pledgee.
Section 22. SEVERABILITY. In the event that any provision
contained in this Agreement shall for any reason be held to be illegal or
invalid under the laws of any jurisdiction, such illegality or invalidity shall
in no way impair the effectiveness of any other provision hereof, or of such
provision under the laws of any other jurisdiction; PROVIDED, that in the
construction and enforcement of such provision under the laws of the
jurisdiction in which such holding of illegality or invalidity exists, and to
the extent only of such illegality or invalidity, this Agreement shall be
construed and enforced as though such illegal or invalid provision had not been
contained herein.
Section 23. HEADINGS. Section headings used herein are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Agreement.
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Section 24. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, and all of which shall together constitute but one and the same
instrument. A complete set of counterparts shall be lodged with Pledgor and
Pledgee.
Section 25. COOPERATION OF PLEDGED SUBSIDIARIES. The Pledgor shall
cause the Pledged Subsidiaries to take all actions necessary to facilitate the
Pledgor's compliance with the terms hereof.
Section 26. ACTIONS BY PLEDGEE. Whenever any provision of this
Agreement requires action, or waiver by or the consent of, the Pledgee, the
Trustee shall only be required to take or refrain from taking such action or
grant or withhold any waiver or consent when 25% in outstanding principal
amount of the Notes shall have instructed the Trustee in writing. References to
actions which may be taken by the Pledgee in its discretion or sole discretion
shall likewise be required when 25% in outstanding principal amount of the Notes
shall have instructed the Trustee in writing.
[signature pages follow]
20
IN WITNESS WHEREOF, each of the parties hereto has caused this Pledge
and Security Agreement to be duly executed and delivered as of the date first
above written.
XXXXXXXXX XXXXX CORPORATION,
as debtor and pledgor
By: /s/ Xxx X Xxxxxxxx
-----------------------------------------
Name: Xxx X. Xxxxxxx
---------------------------------------
Title: President and Chief Operating Officer
--------------------------------------
THE BANK OF NEW YORK, for
the ratable benefit of the Holders,
as secured party and pledgee
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxx
---------------------------------------
Title: Assistant Treasurer
--------------------------------------
SCHEDULE A
PLEDGED SECURITIES OWNED BY XXXXXXXXX XXXXX CORPORATION
Percentage
Stock Number of
Stock Class of Certificate Par of Outstanding
Issuer Stock Number Value Shares Shares
-------- --------- ----------- ----- ------- -----------
NONE
====================================================================
SCHEDULE B
Xxxxxxxxx Xxxxx Corporation
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Xxxxxxxxx Xxxxx Corporation
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Xxxxxxxxx Xxxxx Corporation
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Xxxxxxxxx Xxxxx Corporation
0000-0000 Xxxx Xxx Xxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Xxxxxxxxx Xxxxx Corporation
0000 Xxxxxxxxxx Xxxx
Xxx 000
Xxxxxxxx, XX 00000
