Contract
Exhibit
10.5
SECOND
AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT dated as of November 25,
2008, made by DREW INDUSTRIES INCORPORATED, a Delaware corporation (the
"Company"), KINRO, INC., an Ohio corporation ("Kinro"), XXXXXXX COMPONENTS,
INC., a Delaware corporation ("LCI") (LCI and Kinro, the "Borrowers"), and
XXXXXXX TIRE & AXLE, INC., a Delaware corporation ("LTA"), the Company,
together with the Borrowers and LTA, the "Stock Pledgors"), KINRO HOLDING,
INC.,
a New York corporation ("KHI"), XXXXXXX TIRE & AXLE HOLDING, INC., a New
York corporation and XXXXXXX HOLDING, INC., a New York corporation ("LCT")
("LTHI"; together with KHI and LCT, the "Partnership Pledgors") (each of the
Company, Kinro, Shoals, KHI and LTHI being referred to herein as a "Pledgor")
in
favor of JPMorgan Chase Bank, N.A. (f/k/a JPMorgan Chase Bank), as collateral
agent (in such capacity, the "Collateral Agent") for the Secured Parties (as
defined in the Credit Agreement referred to below).
Reference
is hereby made to the Second Amended and Restated Credit Agreement dated as
of
November 25, 2008 (as amended, supplemented, or modified from time to time,
the
"Credit Agreement") among the Borrowers, the financial institutions party
thereto as lenders (the "Lenders") and JPMorgan Chase Bank, N.A. (f/k/a JPMorgan
Chase Bank), as agent (in such capacity, the "Administrative Agent"). Terms
used
herein as defined terms and not otherwise defined herein shall have the meanings
given thereto in the Credit Agreement. Reference is further made to the Amended
and Restated Pledge and Security Agreement dated as of February 11, 2005 between
the Pledgors and the Collateral Agent (as thereafter amended and supplemented
from time to time, the "Amended and Restated Pledge Agreement"), which
instrument the parties agree is being amended and restated hereby.
The
Lenders have agreed to make Loans to the Borrowers upon the terms and subject
to
the conditions specified in the Credit Agreement. Each Pledgor other than the
Borrowers has guaranteed the Obligations of the Borrowers. The obligations
of
the Lenders to make Loans are conditioned on, among other things, the execution
and delivery by the Pledgors of an agreement in the form hereof.
NOW,
THEREFORE, the parties hereto hereby agree as follows:
ARTICLE
I
Section
1.01. Definitions. In
addition to the terms defined above, the following words and terms shall have
the respective meanings, and it is hereby agreed with respect thereto, as
follows:
"Agreement"
shall mean this Pledge and Security Agreement, as it shall be amended,
supplemented or otherwise modified from time to time.
"Obligations"
shall mean, collectively, (a) the due and punctual payment of (i) the principal
of, 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 repayment
or prepayment or otherwise, (ii) each payment required to be made by the
Borrowers under the Credit Agreement in respect of the 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), (x) of the Borrowers under the Credit Agreement,
(y) of the Guarantors under the Guarantee Agreements, (z) of the Borrowers
and
of the other Credit Parties under any other Loan Documents (including this
Agreement) to which the Borrowers or such other Credit Parties are or are to
be
parties, and (aa) of the Borrowers (or either of them) to any Lender as an
Interest Rate Protection Merchant under or in respect of any Interest Rate
Hedging Agreement now or hereafter in effect, and (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of the
Borrowers under or pursuant to the Credit Agreement and of the Borrowers and
of
the other Credit Parties under the other Loan Documents (including the Guarantee
Agreements and this Agreement) and or under any Interest Rate Hedging Agreement
now or hereafter in effect.
"Partner"
shall mean any partner or member in a Partnership.
"Partnership"
shall have the meaning given thereto in Schedule
II
hereto.
"Partnership
Documents" shall have the meaning given thereto in Schedule
II
hereto.
ARTICLE
II
Section
2.01. Pledge
and Grant of Security Interest.
(a) As
security for the payment and performance in full of its Obligations, each
Pledgor hereby transfers, grants, bargains, sells, conveys, hypothecates,
pledges, sets over and delivers unto the Collateral Agent and grants (and hereby
reconfirms such grant under the Original Security Agreement), to the Collateral
Agent for its benefit and for the ratable benefit of the Secured Parties, a
first priority security interest in (i) the shares of capital stock listed
below
the name of such Pledgor on Schedule
I
and any
shares of stock of any Subsidiary obtained in the future by such Pledgor and
the
certificates representing all such shares (the "Pledged Stock"), (ii) all of
such Pledgor's respective partnership and membership interests and related
rights described in Schedule
II
and any
partnership or membership interests or other equity interests in any Subsidiary
obtained in the future by such Pledgor (the "Pledged Interests"), (iii) all
other property that may be delivered to and held by the Collateral Agent
pursuant to the terms hereof, (iv) subject to Section 2.05, all payments of
dividends and distributions, including, without limitation, all cash,
instruments and other property (including, without limitation, any security
entitlements or investment property), from time to time received, receivable
or
otherwise paid or distributed, in respect of, or in exchange for or upon the
conversion of the securities and other property referred to in clauses (i),
(ii), or (iii) above, (v) subject to Section 2.05, all rights and privileges
of
such Pledgor with respect to the securities (including, without limitation,
any
securities entitlements) and other property referred to in clauses (i), (ii),
(iii) and (iv) above, (vi) any and all custodial accounts, securities accounts
or other safekeeping accounts in which any of the foregoing property (and any
property described in the following clauses (vii) and (viii)) may be deposited
or held in, and any security entitlements or other rights relating thereto,
(vii) any securities (as defined in the New York Uniform Commercial Code (the
“UCC”)) constituted by any of the foregoing, and (viii) all proceeds (as defined
in the UCC) of any of the foregoing (the items referred to in clauses (i)
through (vii) above being collectively referred to as the "Collateral"). The
Collateral Agent acknowledges that the security interest in the Collateral
granted herein ranks equally with and shall be pari passu with the security
interest in the Collateral granted to the Trustee pursuant to the pledge
agreement entered into pursuant to the Prudential Pledge and Security Agreement
and that the respective rights of the Collateral Agent and the Trustee with
respect to the Collateral shall be subject to the terms and conditions of the
Prudential Intercreditor Agreement.
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(b) Upon
delivery to the Collateral Agent, any stock certificates, notes or other
securities now or hereafter included in the Collateral (the "Pledged
Securities") shall be accompanied by undated 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 request.
Without limiting Section 2.02(b), (i) 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 request, and (ii) upon the grant of a security interest
in partnership or membership interests or other equity interests in any Person
now or hereafter included in the Collateral, there shall be executed and
delivered to the Collateral Agent such instruments of consent, waiver, and
recognition, from the issuer and other equity holders thereof (having provisions
comparable to the Consent, Waiver and Recognition Agreement in substantially
the
form of Exhibit
2.01
hereto)
and such other instruments and documents (including Uniform Commercial Code
financing statements duly executed in proper form for filing in such offices
as
the Collateral Agent shall require) as the Collateral Agent may request. Each
delivery of Pledged Securities and each such grant of a security interest shall
be accompanied by a schedule describing the securities, securities entitlements,
investment property and equity interests theretofore and then being pledged
hereunder, which schedule shall be attached hereto as Schedule
I
or
Schedule
II,
as
applicable, and made a part hereof (provided that the failure to deliver any
such schedule shall not impair the security interest hereunder of the Collateral
Agent in any Pledged Securities or Pledged Interests). Each schedule so
delivered (except to the extent in error) shall supersede any prior schedules
so
delivered.
Section
2.02. Deliveries.
(a) Each
Pledgor agrees promptly to (i) 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 Collateral, and any other
instruments referred to in Section 2.01(b)(i) endorsed to the Collateral Agent
or in blank by an effective endorsement, or (ii) cause the certificate to be
registered in the name of the Collateral Agent, upon original issue or
registration of transfer by the issuer thereof.
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(b) Upon
execution and delivery hereof there shall be delivered to the Collateral Agent
a
duly executed Consent, Waiver, and Recognition Agreement in substantially the
form of Exhibit
2.01
hereto
in respect of each Partnership (with any appropriate changes for the pledge
of a
membership interest in a limited liability company).
(c) With
respect to such of the Collateral as constitutes an uncertificated security,
(i)
the Pledgor agrees to cause the issuer to register the Collateral Agent as
the
registered owner thereof, upon original issue or registration of transfer or
(ii) the issuer agrees that it will comply with instructions with respect to
such uncertificated security originated by the Collateral Agent without further
consent of the registered owner.
(d) With
respect to such of the Collateral as constitutes a "security entitlement" as
defined in Article 8 of the UCC, the Pledgor agrees to cause the securities
intermediary to indicate by book entry that such security entitlement has been
credited to a securities account of the Collateral Agent.
(e) If
any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any note or other instrument (other than an instrument
which
constitutes chattel paper under the UCC), such note or other instrument shall
be
immediately pledged hereunder and a security interest therein hereby granted
to
Collateral Agent, and the same shall be duly endorsed without recourse or
warranty in a manner reasonably acceptable to Collateral Agent and be delivered
to Collateral Agent. If at any time Pledgor’s right or interest in any of the
Collateral becomes an interest in real property, Pledgor immediately shall
execute, acknowledge and deliver to Collateral Agent such further documents
as
the Collateral Agent reasonably deems necessary or advisable to create a first
priority perfected mortgage lien in favor of the Collateral Agent in such real
property interest.
Section
2.03. Representations;
Warranties; Covenants.
Each
Pledgor hereby represents, warrants and covenants, to and with the Collateral
Agent that:
(a) (i)
the
Pledged Stock has been delivered to the Collateral Agent in pledge hereunder,
and represents that percentage as set forth on Schedule
I
of the
issued and outstanding shares of each class of the capital stock of the issuer
with respect thereto; and (ii) a first priority security interest in the Pledged
Interests has been granted to the Collateral Agent hereunder, and the Pledged
Interests represent the interests in the Partnerships as set forth in
Schedule
II;
(b) each
Pledgor (i) is and will at all times continue to be the direct owner,
beneficially and of record, of the Collateral indicated on Schedule
I
or
Schedule
II
to be
owned by such Pledgor, (ii) holds the same free and clear of all Liens, except
for the security interest granted in the Collateral hereunder and except for
the
security interest which the Pledgor has concurrently herewith granted to the
Trustee for the holders of the Prudential Notes for the benefit thereof on
an
equal priority and pari passu
basis
with the security interest created hereunder for so long as the Prudential
Intercreditor Agreement is in effect, (iii) will make no assignment, pledge,
hypothecation or transfer of or create or suffer to exist any security interest
in or other Lien on, the Collateral, other than pursuant hereto, and (iv)
subject to Section 2.05, will cause any and all Collateral to be forthwith
deposited with the Collateral Agent and pledged or otherwise subject to the
security interest created hereunder;
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(c) each
Pledgor (i) has the power and authority to pledge or grant a security interest
in the Collateral in the manner hereby done or contemplated and (ii) will defend
its title or interest thereto or therein and the Lien of the Collateral Agent
for the ratable benefit of the Secured Parties against any and all other Liens,
however arising, of all Persons whomsoever.
(d) no
consent or approval (i) of any Governmental Authority or any securities exchange
or (ii) of any other Person except any such Person whose consent has been
obtained in writing and delivered to the Collateral Agent, was or is necessary
to the validity of the pledge or grant of a security interest effected
hereby;
(e) (i)
when
the Pledged Securities, certificates, instruments or other documents
representing or evidencing the Collateral are delivered to the Collateral Agent
in accordance with this Agreement, the Collateral Agent will have a valid and
perfected first Lien upon and security interest in such Pledged Securities
as
security for the payment and performance of the Obligations; and (ii) when
Uniform Commercial Code Financing Statements in the form of Exhibit
2.03
hereto
naming the appropriate Pledgor in accordance with Schedule
II
as
debtor and the Collateral Agent as secured party are filed in the respective
offices as set forth in Schedule 2.03 hereto, the Collateral Agent will have
a
valid and perfected first Lien upon and security interest in such Pledged
Interests as security for the payment and performance of the
Obligations;
(f) the
pledge and the grant of a security interest effected hereby are effective to
vest in the Collateral Agent, on behalf of itself and the Secured Parties,
the
rights of the Collateral Agent in the Collateral as set forth
herein.
Section
2.04. Registration
in Nominee Name, Denominations; Further Assurances.
(a) The
Collateral Agent, on behalf of itself and the Secured Parties, shall have the
right (in its sole and absolute discretion) to hold the Pledged Securities
and
Pledged Interests in its own name, the name of its nominee or the name of the
applicable Pledgor, 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 or Pledged Interests. 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 (and the surrender of any certificates to the issuer or any
agent
thereof for such purpose shall not constitute a release of the security interest
of the Collateral Agent in any such Pledged Securities represented thereby).
If
at any time the Pledged Interests are represented or evidenced by any
certificates, the same shall promptly be delivered to the Collateral Agent
in
pledge hereunder together with any instruments of transfer requested by the
Collateral Agent.
(b) Each
Pledgor agrees, at its expense, to execute, acknowledge, deliver and cause
to be
duly filed all such further instruments and documents and take all such actions
as the Collateral Agent may from time to time reasonably request to better
assure, preserve, protect and perfect the pledge and the security interest
and
the rights and remedies created hereby, including the payment of any fees and
taxes required in connection with the execution and delivery of this Agreement,
the pledge, and the granting of the security interest hereunder and the filing
of any financing statements or other documents in connection herewith.
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Section
2.05. Voting
Rights; Dividends.
(a) Unless
and until an Event of Default shall have occurred and be
continuing;
(i) The
Pledgors shall be entitled to exercise any and all voting and/or other
consensual rights and powers accruing to them as owners of Pledged Securities
and Pledged Interests for any purpose consistent with the terms of this
Agreement, the Credit Agreement and the other Loan Documents; provided, however,
that such action would not adversely affect the rights inuring to a holder
of
the Pledged Securities and Pledged Interests or the rights and remedies of
any
of the Secured Parties under this Agreement or any other Loan Document or the
ability of the Secured Parties to exercise the same.
(ii) Each
Pledgor shall be entitled to receive and retain any and all cash dividends
and
distributions paid on the Pledged Securities and cash distributions in respect
of the Pledged Interests to the extent and only to the extent that such cash
dividends and cash distributions are permitted by, and otherwise paid in
accordance with, the terms and conditions of the Credit Agreement, the
Prudential Intercreditor Agreement, the other Loan Documents and applicable
laws. All noncash dividends and distributions, and all dividends and
distributions (whether 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 payments, dividends, and distributions made on or in
respect of the Pledged Securities or Pledged Interests, 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 any amendment of any Partnership Document or the admission or
withdrawal of any Partner, or received in exchange for Pledged Securities or
Pledged Interests 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 or Partnership may be a party or otherwise, shall (except as
otherwise provided in the preceding sentence) be and become part of the
Collateral, and, if received by a 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)(any such cash to be applied in
accordance with Section 2.07).
(b) Upon
the
occurrence and during the continuation of an Event of Default, all rights of
the
Pledgors to exercise the voting and consensual rights and powers they are
entitled to exercise pursuant to paragraph (a)(i) of this Section 2.05, 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.
(c) Upon
the
occurrence and during the continuation of an Event of Default, all rights of
each Pledgor to dividends and other distributions that such Pledgor is
authorized to receive pursuant to the first sentence of paragraph (a)(ii) 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 and other distributions. All dividends and other
distributions received by any Pledgor contrary to the provisions of this Section
2.05 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) and shall be applied in accordance with the
provisions of Section 2.07.
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Section
2.06. Possession,
Sale of Collateral, Etc.
(a) Upon
the
occurrence and during the continuation of an Event of Default, the Collateral
Agent may sell or cause to be sold, whenever it shall decide, in one or more
sales or parcels, at such prices as it may deem best, and for cash, on credit
or
for future delivery, without assumption of any credit risk, all or any portion
of the Collateral, at any broker's board or at public or private sale, without
demand of performance or notice of intention to sell or of time or place of
sale
(except ten (10) days' written notice to the Pledgor thereof of the time and
place of such sale or other intended disposition of the Collateral, except
any
Collateral which is perishable or threatens to decline speedily in value or
is
of a type customarily sold on a recognized market, which notice each Pledgor
hereby agrees to be commercially reasonable and shall constitute “reasonably
authenticated notification of disposition” within the meaning of Section
9-611(b) of the UCC), and such other notices as may be required by applicable
statute and cannot be waived), and any Person may be the purchaser of all or
any
portion of the Collateral so sold and thereafter hold the same absolutely,
free
from any claim or right of whatever kind, including any equity of redemption,
of
any Pledgor, any such demand, notice, claim, right or equity being hereby
expressly waived and released. 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. At any sale or sales made pursuant
to
this Agreement, any Secured Party may bid for or purchase, free from any claim
or right of whatever kind, including any equity of redemption of any Pledgor,
any such demand, notice, claim, right or equity being hereby expressly waived
and released, all or any portion of the Collateral offered for sale, and may
make any payment on account thereof by using any claim for money then due and
payable to such Secured Party by any Pledgor as a credit against the purchase
price. At any such sale, the Collateral, or portion thereof, to be sold may
be
sold in one 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. 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) no Pledgor shall be entitled to the return of the Collateral
or any portion thereof subject thereof, 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. Neither the
Collateral Agent nor the Secured Parties shall in any such sale make any
representations or warranties with respect to the Collateral or any part
thereof, and shall not be chargeable with any of the obligations or liabilities
of any Pledgor. 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 shall be deemed
to
conform to the commercially reasonable standards as provided in Section 9-610(b)
of the UCC as in effect in the State of New York or its equivalent in other
jurisdictions.
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(b) Each
Pledgor hereby agrees that it will indemnify and hold the Collateral Agent
and
the Secured Parties, and their respective officers, directors, employees,
agents, and representatives harmless (except for their own willful misconduct
or
gross negligence) from and against any and all claims with respect to the
Collateral asserted both before and after the taking of actual possession or
control of the Collateral by the Collateral Agent pursuant to this Agreement,
or
arising out of any act or omission of any party other than the Collateral Agent
prior to such taking of actual possession or control by the Collateral Agent,
or
arising out of any act or omission of such Pledgor, or any agents thereof,
before or after the commencement of such actual possession or control by the
Collateral Agent. In any action hereunder the Collateral Agent shall be entitled
to the appointment, without notice, of a receiver to take possession of all
or
any portion of the Collateral and to exercise such powers as the court shall
confer upon such receiver. Notwithstanding the foregoing, upon the occurrence
of
an Event of Default, and during the continuation of such Event of Default,
the
Collateral Agent shall be entitled to apply, without prior notice to any
Pledgor, any cash or cash items constituting Collateral in the possession of
the
Collateral Agent to payment of the Obligations.
Section
2.07. Application
of Proceeds.
(a) Each
Pledgor hereby agrees that it shall upon the occurrence and during the
continuation of an Event of Default, (i) immediately turn over to the
Collateral Agent any instruments (with appropriate endorsements) or other items
constituting Collateral not then in the possession of the Collateral Agent,
the
possession of which is required for the perfection of the Collateral Agent's
security interest for its benefit and the ratable benefit of the Secured
Parties, all of which shall be held in trust for the benefit of the Collateral
Agent for its benefit and the ratable benefit of the Secured Parties and not
commingled prior to its coming into the Collateral Agent's possession, and
(ii) take all steps necessary to cause all sums, monies, royalties, fees,
commissions, charges, payments, advances, income, profits, and other amounts
constituting Proceeds of any Collateral to be deposited directly in an account
of the Pledgor (or any of them) with the Collateral Agent and to cause such
sums
to be applied to the satisfaction of the Obligations.
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(b) Subject
to the terms of the Prudential Intercreditor Agreement, all proceeds from any
collection or sale of the Collateral pursuant hereto, all Collateral consisting
of cash, and all deposits in accounts of any Pledgor with the Collateral Agent
or any Secured Party shall be applied (i) first, to the payment of the fees
and
expenses of the Collateral Agent incurred pursuant to, and any other Obligations
payable to the Collateral Agent under, this Agreement or any other Loan
Document, including costs and expenses of collection or sale, reimbursement
of
any advances, and any other costs or expenses in connection with the exercise
of
any rights or remedies hereunder or thereunder (including, without limitation,
reasonable fees and disbursements of counsel), (ii) second, to the payment
in
full of the Obligations owed to the Lenders and the Issuing Bank in respect
of
the Loans, LC Disbursements and any Interest Rate Hedging Agreements, pro rata
as among the Lenders (including, but not limited to, any of them as an Interest
Rate Protection Merchant) in accordance with the amounts of such Obligations
owed to them, and (iii) third, to the payment of the Obligations (other than
those referred to above) pro rata as among the Secured Parties in accordance
with the amounts of such Obligations owed to them. Any amounts remaining after
such applications shall be remitted to the Pledgors or as a court of competent
jurisdiction may otherwise direct. The Collateral Agent shall have absolute
discretion as to the time of application of any such proceeds, cash, or balances
in accordance with this Agreement.
Section
2.08. Power
of Attorney.
(a) Each
Pledgor does hereby irrevocably make, constitute and appoint the Collateral
Agent or any officer or designee thereof its true and lawful attorney-in-fact
with full power in the name of the Collateral Agent, and of such Pledgor, with
power of substitution, to, upon the occurrence and during the continuation
of an
Event of Default, receive, open and dispose of all mail addressed to such
Pledgor, to endorse any note, check, draft, money order, or other evidence
of
payment relating to the Collateral that may come into the possession of the
Collateral Agent, with full power and right to cause the mail of such Pledgor
to
be transferred to the Collateral Agent's own offices or otherwise; to
communicate with any issuer of Pledged Securities or any Partnership; to
commence or prosecute any suits, actions or proceedings to collect or otherwise
realize upon any Collateral or enforce any rights in respect thereof; to settle,
compromise, adjust or defend any claims in respect of any Collateral; to notify
any issuer of Pledged Securities or any Partnership, or otherwise require them
to make payment directly to the Collateral Agent; to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with
all
or any of the Collateral, and to do any and all other acts necessary or proper
to carry out the intent of this Agreement and each other Loan Document and
the
grant, confirmation and continuation of the security interests hereunder and
thereunder. Such power of attorney is coupled with an interest and is
irrevocable, and shall survive the bankruptcy, insolvency or dissolution of
any
or all of the Pledgors. Nothing herein contained shall be construed as requiring
or obligating the Collateral Agent or any Secured Party to make any commitment
or to make any inquiry as to the nature or sufficiency of any payment received
by the Collateral Agent or any other Secured Party, 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 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,
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 willful
misconduct. The provisions of this Section shall in no event relieve any Pledgor
of any of its obligations hereunder or under the other Loan Documents with
respect to the Collateral or any part thereof or impose any obligation on the
Collateral Agent to proceed in any particular manner with respect to the
Collateral or any part thereof, or in any way limit the exercise by any Secured
Party of any other or further right that it may have on the date of this
Agreement or hereafter, whether hereunder, under any other Loan Document, by
law
or otherwise. Any sale of Collateral pursuant to the provisions of this Section
shall be deemed to conform to the commercially reasonable standards as provided
in Section 9-610(b) of the UCC or its equivalent in other
jurisdictions.
9
(b) Without
limiting the preceding paragraph, each Pledgor does hereby further irrevocably
make, constitute and appoint the Collateral Agent or any officer or designee
thereof its true and lawful attorney-in-fact with full power in the name of
the
Collateral Agent, and of such Pledgor, with power of substitution, (i) to
enforce all of such Pledgor's rights under and pursuant to all agreements with
respect to the Collateral, all for the sole benefit of the Collateral Agent
and
the Secured Parties, (ii) to enter into and perform such agreements as may
be reasonably necessary in order to carry out the terms, covenants and
conditions of this Agreement that are required to be observed or performed
by
such Pledgor, (iii) to execute such other and further mortgages, pledges
and assignments of the Collateral and filings or recordations in respect thereof
as the Collateral Agent may require for the purpose of protecting, maintaining
or enforcing the security interest of the Collateral Agent hereunder for the
ratable benefit of itself and the Secured Parties, (iv) to act as
authorized in the following Section hereof, and (v) to do any and all other
things reasonably necessary or proper to carry out the intention of this
Agreement and the grant, confirmation, continuation and perfection of the
security interests hereunder. Such power of attorney is coupled with an interest
and is irrevocable, and shall survive the insolvency, bankruptcy, or dissolution
of any or all of the Pledgors.
Section
2.09. Financing
Statements, Direct Payments, Confirmation .
Each
Pledgor hereby authorizes the Collateral Agent to file Uniform Commercial Code
financing statements (and any other filings) required in connection with the
perfection or preservation of the security interest hereunder in respect of
all
or any part of the Collateral, and amendments thereto and continuations thereof
with regard to such Collateral, without such Pledgor's signature, or, in the
alternative, to execute such items on behalf of such Pledgor pursuant to the
powers of attorney granted in the preceding Section. Each Pledgor further
authorizes the Collateral Agent to confirm with any issuer of Pledged Securities
or any Partnership the amounts payable to such Pledgor with regard to the
Collateral. Each Pledgor hereby further authorizes the Collateral Agent upon
the
occurrence and during the continuation of an Event of Default to notify any
issuer of Pledged Securities or any Partnership that all sums payable to such
Pledgor relating to the Collateral shall be paid directly to the Collateral
Agent.
Section
2.10. Termination.
The
security interest granted hereunder shall terminate when all the Obligations
have been fully, finally and indefeasibly paid and performed, the Revolving
Credit Exposure of each Lender shall be zero, the LC Exposure shall be zero
and
the Revolving Credit Commitment of each Lender shall have terminated. Thereupon,
the Collateral Agent will, subject to the terms of the Prudential Intercreditor
Agreement, return to the Pledgors the Pledged Securities and execute and
deliver, at each Pledgor's expense, UCC termination statements reasonably
requested by such Pledgor evidencing the release of the security interest
hereunder, all without recourse to or warranty by the Collateral
Agent.
10
Section
2.11. Remedies
Not Exclusive.
The
remedies conferred upon or reserved to the Collateral Agent and the other
Secured Parties in this Article and elsewhere in this Agreement are intended
to
be in addition to, and not in limitation of any other remedy available to the
Collateral Agent and the other Secured Parties.
Section
2.12. Securities
Laws, etc.
In view
of the position of the Pledgors in relation to the Pledged Securities and
Pledged Interests, or because of other current or future circumstances, issues
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 statue as from time to time in effect being called the
"Federal Securities Laws") with respect to any disposition of the Pledged
Securities or Pledged Interests permitted hereunder, the Pledgors understand
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 or Pledged
Interests, and might also limit the extent to which or the manner in which
any
subsequent transferee of any Pledged Securities or Pledged Interests 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 or Pledged Interests under applicable Blue Sky
or
other state securities laws or similar laws analogous in purpose or effect.
The
Pledgors recognize that in light of the foregoing restrictions and limitations
the Collateral Agent may, with respect to any sale of the Pledged Securities
or
Pledged Interests, limit the purchasers to those who will agree, among other
things, to acquire such Pledged Securities or Pledged Interests for their own
account, for investment, and not with a view to the distribution or resale
thereof. The Pledgors acknowledge and agree that in light of the foregoing
restrictions and limitations, the Collateral Agent, in its sole and absolute
discretion, (a) may proceed to make such a sale whether or not a registration
statement for the purpose of registering such Pledged Securities or Pledged
Interests or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser
(including without limitation, any Partner) to effect such sale. The Pledgors
acknowledge and agree 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 or Pledged Interests at a price that the Collateral Agent, in its
sole and absolute 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 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.
11
Section
2.13. No
Assumption of Liability.
The
pledge and security interest hereunder is granted as security only and shall
not
subject the Collateral Agent or any other Secured Party to, or in any way alter
or modify, any obligation or liability of any Pledgor with respect to or arising
out of any of the Collateral. Each Pledgor shall remain liable to, at its own
cost and expense, duly and punctually observe and perform all the conditions
and
obligations to be observed and performed by it under each contract, agreement
or
instrument relating to the Collateral, including, without limitation, the
Partnership Documents, all in accordance with the terms and conditions thereof,
and each Pledgor agrees to indemnify and hold harmless the Collateral Agent
and
the other Secured Parties from and against any and all liability for such
performance.
ARTICLE
III
MISCELLANEOUS
Section
3.01. No
Discharge.
All
rights of the Collateral Agent hereunder, the security interest granted
hereunder, and the obligations of each Pledgor under this Agreement shall be
absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, discharged or in any way diminished by
(i)
any lack of validity or enforceability of the Credit Agreement, any other Loan
Document (including this Agreement and each Guarantee Agreement), any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (ii) 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 the foregoing, (iii) any exchange, release or nonperfection of any other
collateral, or any release or amendment or waiver of or consent to or departure
from any guarantee, for all or any of the Obligations, (iv) any exercise or
nonexercise by the Collateral Agent or any Secured Party of any right, remedy,
power or privilege under or in respect of this Agreement, any other Loan
Document or applicable law, including, without limitation, any failure by the
Collateral Agent or any Secured Party to setoff or release in whole or in part
any balance of any deposit account or credit on its books in favor of any Credit
Party or any waiver, consent, extension, indulgence or other action or inaction
in respect of any thereof, or (v) any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of any Credit Party or would otherwise, but for this
specific provision to the contrary, operate as a discharge of or exonerate
any
Pledgor as a matter of law.
Section
3.02. Amendment;
Waiver.
No
amendment or waiver of any provision of this Agreement, nor consent to any
departure by any Pledgor therefrom, shall in any event be effective unless
the
same shall be in writing and signed by the Collateral Agent with the written
consent of the Required Lenders. Any such waiver, consent or approval shall
be
effective only in the specific instance and for the purpose for which given.
No
notice to or demand on any Pledgor in any case shall entitle any Pledgor to
any
other or further notice or demand in the same, similar or other circumstances.
No waiver by any Secured Party of any breach or default of or by any Pledgor
under this Agreement shall be deemed a waiver of any other previous breach
or
default or any thereafter occurring.
12
Section
3.03. Survival;
Severability.
(a) All
covenants, agreements, representations and warranties made by the Pledgors
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 execution and delivery to the Lenders of any Notes evidencing such Loans,
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 Revolving Commitments have
not
been terminated.
(b) Any
provision of this Agreement that is illegal, invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such illegality, invalidity or unenforceability without invalidating the
remaining provisions hereof or affecting the legality, validity or
enforceability of such provisions in any other jurisdiction. The parties hereto
agree to negotiate in good faith to replace any illegal, invalid or
unenforceable provision of this Agreement with a legal, valid and enforceable
provision that, to the extent possible, will preserve the economic bargain
of
this Agreement, or to otherwise amend this Agreement to achieve such
result.
Section
3.04. Successors
and Assigns.
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,
or
the Collateral Agent that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns. No Pledgor may assign
or transfer any of its rights or obligations hereunder or any interest herein
or
in the Collateral except as expressly contemplated by this Agreement or the
other Loan Documents (and any such attempted assignment shall be
void).
Section
3.05. GOVERNING
LAW.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE
STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAWS OF SUCH STATE
THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN
SUCH
STATE.
Section
3.06. Headings.
The
Article and Section headings in this Agreement are for convenience only and
shall not affect the construction hereof.
Section
3.07. Notices.
Notices, consents and other communications provided for herein shall (except
as
otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement. Communications and notices to any Pledgor
shall be given to it at its address set forth in Schedule
3.07
hereto
or to such other address as shall have been designated by notice duly given
hereunder.
13
Section
3.08. Reimbursement
of the Collateral Agent.
(a) The
Pledgors jointly and severally agree to pay upon demand to the Collateral Agent
the amount of any and all reasonable and documented expenses, including the
reasonable and documented fees and expenses of its counsel and of any experts
or
agents, that the Collateral Agent may incur in connection with (i) the
administration of this Agreement and the other Loan Documents, (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 any Pledgor to perform
or
observe any of the provisions hereof. If the Pledgors shall fail to do any
act
or thing that they have covenanted to do hereunder or any representation or
warranty of the Pledgors hereunder shall be breached, the Collateral Agent
may
(but shall not be obligated to) do the same or cause it to be done or remedy
any
such breach and there shall be added to the Obligations the cost or expense
incurred by the Collateral Agent in so doing.
(b) Without
limitation of their indemnification obligations under the other Loan Documents,
the Pledgors jointly and severally agree to indemnify the Collateral Agent
and
the Secured Parties and their respective officers, directors, employees, agents,
attorneys, and representatives ("Indemnitees") against, and hold each of them
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees and expenses, incurred by or
asserted against any of them arising out of, in any way connected with, or
as a
result of, the execution, delivery or performance of this Agreement or any
claim, litigation, investigation or proceeding relating hereto or to the
Collateral, 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 have resulted from
the
gross negligence or willful 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
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 shall be payable on written demand
therefor and shall bear interest at the default rate (as provided in the Credit
Agreement).
Section
3.09. Counterparts;
Additional Pledgors.
(a) This
Agreement may be executed in separate counterparts (a facsimile of any executed
counterpart having the same effect as manual delivery thereof), each of which
shall constitute an original, but all of which, when taken together, shall
constitute but one Agreement.
(b) Upon
execution and delivery after the date hereof by the Collateral Agent and a
Subsidiary of the Company of an instrument in the form of Exhibit
3.09(b)
hereto,
such Subsidiary shall become a Pledgor hereunder with the same force and effect
as if originally named as a 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, or the failure to add, any new Pledgor as
a
party hereto, in each case whether or not required under the Credit
Agreement.
14
Section
3.10. Entire
Agreement; Jurisdiction; Consent to Service of Process.
(a) Except
as
expressly herein provided, this Agreement and the other Loan Documents
constitute the entire agreement among the parties relating to the subject matter
hereof. Any previous agreement among the parties with respect to the
transactions contemplated hereunder is superseded by this Agreement and the
other Loan Documents. Except as expressly provided herein or in the other Loan
Documents, nothing in this Agreement or in any other Loan Document, expressed
or
implied, is intended to confer upon any party, other than the parties hereto,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement or such other Loan Documents.
(b) Each
Pledgor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State
of
New York sitting in New York County and of the United States District Court
of
the Southern District of New York, and any appellate court from any thereof,
in
any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any
such action or proceeding may be heard and determined in such New York State
or,
to the extent permitted by law, in such Federal 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 against any Pledgor
or
its properties in the courts of any jurisdiction.
(c) Each
Pledgor hereby irrevocably and unconditionally waives, to the fullest extent
it
may legally and effectively do so, any objection which 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 in any court referred to in the preceding paragraph.
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.
(d) Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 3.07. Nothing in this Agreement will affect
the
right of any party to this Agreement to serve process in any other manner
permitted by law.
Section
3.11. WAIVER
OF JURY TRIAL, WAIVER OF SPECIAL DAMAGES.
EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
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.
15
EACH
OF
THE PLEDGORS WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
EITHER OF THEM MAY HAVE TO CLAIM OR RECOVER FROM THE ADMINISTRATIVE AGENT,
THE
COLLATERAL AGENT, ANY LENDER OR ISSUING BANK IN ANY LEGAL ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY ANY SPECIAL, EXEMPLARY, PUNITIVE
OR
CONSEQUENTIAL DAMAGES.
16
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers or representatives as of
the
day and year first above written.
|
JPMORGAN
CHASE BANK, N.A.
|
DREW
INDUSTRIES INCORPORATED
|
|||
|
as
Collateral Agent
|
||||
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By:
|
By:
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|||
|
Name
Title
|
Name:
Title:
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|||
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KINRO,
INC.
|
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By:
|
|
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Name:
|
|
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Title:
|
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XXXXXXX
TIRE & AXLE, INC.
|
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By:
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Name:
|
|
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Title:
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KINRO
HOLDING, INC.
|
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By:
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Name:
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Title:
|
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XXXXXXX
TIRE & AXLE HOLDING, INC.
|
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By:
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Name:
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Title:
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17
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XXXXXXX
COMPONENTS, INC.
|
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By:
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| Name: | |
| Title: | |
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XXXXXXX
HOLDING, INC.
|
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By:
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Name:
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Title:
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18
