Exhibit 10.2
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "PLEDGE AGREEMENT") is entered into as of
October 4, 2000 among UNITED STATES CAN COMPANY, a Delaware corporation (the
"BORROWER"), U.S. CAN CORPORATION, a Delaware corporation and each of the
Domestic Subsidiaries of the Borrower (individually a "DOMESTIC GUARANTOR" and
collectively the "DOMESTIC GUARANTORS"; together with the Borrower, individually
a "PLEDGOR" and collectively the "PLEDGORS") and BANK OF AMERICA, N.A., in its
capacity as collateral agent (in such capacity, the "COLLATERAL AGENT") for the
lenders from time to time party to the Credit Agreement described below (the
"LENDERS").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, modified, extended, renewed, restated or replaced from time
to time, the "CREDIT AGREEMENT") among the Borrower, the Foreign Subsidiary
Borrowers party thereto, the Domestic Guarantors, the Lenders, the Collateral
Agent in its capacity as Administrative Agent, Citicorp North America, Inc., as
Syndication Agent, and Bank One, NA (Main Office Chicago), as Documentation
Agent, the Lenders have agreed to make Loans and issue Letters of Credit upon
the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
issue their respective Letters of Credit under the Credit Agreement that the
Pledgors shall have executed and delivered this Pledge Agreement to the
Collateral Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Credit Agreement,
and the following terms which are defined in the Uniform Commercial Code (the
"UCC") in effect in the State of New York are used herein as so defined:
Control, Entitlement Order, Investment Company Security, Proceeds, Products,
Securities Account, Security Entitlement, Securities Intermediary and Security.
For purposes of this Pledge Agreement, (a) the term "Lender" shall include any
Affiliate of any Lender which has entered into a Hedging Agreement with any
Credit Party and (b) the term "First-Tier Foreign Subsidiary" shall mean any
direct Foreign Subsidiary of a Pledgor. Except as otherwise expressly provided,
all definitions shall be equally applicable to the singular and plural forms of
the terms defined.
2. PLEDGE AND GRANT OF SECURITY INTEREST. To secure the prompt payment
and performance in full when due, whether by lapse of time or otherwise, of the
Pledgor Obligations (as defined in Section 3 hereof), each Pledgor hereby
pledges and assigns to the Collateral Agent, for the benefit of the Lenders, and
grants to the Collateral Agent, for the benefit of the Lenders, a continuing
security interest in any and all right, title and interest of such Pledgor in
and to the following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the "PLEDGED COLLATERAL"):
(a) PLEDGED CAPITAL STOCK. 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding Capital Stock of
each Domestic Subsidiary and, subject to Section 3 hereof, each
First-Tier Foreign Subsidiary set forth on SCHEDULE 2(a) attached
hereto, together with the certificates (or other agreements or
instruments), if any, representing such Capital Stock and all options
and other rights, contractual or otherwise, with respect thereto
(collectively, together with the Capital Stock described in Sections
2(b) and 2(c) below, the "PLEDGED CAPITAL STOCK"), including, but not
limited to, the following:
(A) all shares, securities, membership interests or
other equity interests representing a dividend on any of the
Pledged Capital Stock, or representing a distribution or
return of capital upon or in respect of the Pledged Capital
Stock, or resulting from a stock split, revision,
reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the
holder of, or otherwise in respect of, the Pledged Capital
Stock; and
(B) without affecting the obligations of the Pledgors
under any provision prohibiting such action hereunder or under
the Credit Agreement, in the event of any consolidation or
merger involving the issuer of any Pledged Capital Stock and
in which such issuer is not the surviving entity, the Capital
Stock of the successor entity formed by or resulting from such
consolidation or merger.
(b) ADDITIONAL SHARES. 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding Capital Stock of
any Person which hereafter becomes a Domestic Subsidiary or a
First-Tier Foreign Subsidiary, together with the certificates (or other
agreements or instruments), if any, representing such Capital Stock.
(c) PROCEEDS. All Proceeds and Products of the foregoing,
however and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional Capital Stock to the Collateral Agent as collateral
security for the Pledgor Obligations. Upon delivery to the Collateral Agent,
such additional Capital Stock shall be deemed to be part of the Pledged
Collateral of such Pledgor and shall be subject to the terms of this Pledge
Agreement whether or not SCHEDULE 2(a) is amended to refer to such additional
Capital Stock.
3. SECURITY FOR PLEDGOR OBLIGATIONS. The security interest created
hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the Credit Party Obligations owing from the
Borrower or any other Credit Party to any Lender or the Collateral Agent,
howsoever evidenced, created, incurred or acquired, whether primary, secondary,
direct, contingent, or joint and several, including, without limitation, all
obligations and liabilities incurred in connection with collecting and enforcing
the foregoing (collectively, the "PLEDGOR OBLIGATIONS"); PROVIDED, HOWEVER, (a)
in no event shall more than
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65% of the Capital Stock of any First Tier Foreign Subsidiary of any Pledgor
collaterally secure the Domestic Credit Party Obligations and (b) the
obligations under any Hedging Agreement owed to any Lender or any Affiliate of a
Lender shall constitute Pledgor Obligations only so long as the other Credit
Party Obligations remain outstanding and/or the Commitments are in effect.
4. DELIVERY OF THE PLEDGED COLLATERAL; PERFECTION OF SECURITY INTEREST.
Each Pledgor hereby agrees that:
(a) DELIVERY OF CERTIFICATES. Each Pledgor shall deliver to
the Collateral Agent (i) simultaneously with or prior to the execution
and delivery of this Pledge Agreement, all certificates representing
the Pledged Capital Stock of such Pledgor and (ii) promptly upon the
receipt thereof by or on behalf of a Pledgor, all other certificates
and instruments constituting Pledged Collateral of a Pledgor. Prior to
delivery to the Collateral Agent, all such certificates and instruments
constituting Pledged Collateral of a Pledgor shall be held in trust by
such Pledgor for the benefit of the Collateral Agent pursuant hereto.
All such certificates shall be delivered in suitable form for transfer
by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, substantially in the form provided in
EXHIBIT 4(a) attached hereto.
(b) ADDITIONAL SECURITIES. If such Pledgor shall receive by
virtue of its being, becoming or having been the owner of any Pledged
Collateral, any (i) certificate, including without limitation, any
certificate representing a dividend or distribution in connection with
any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares or membership or
equity interests, stock splits, spin-off or split-off, promissory notes
or other instrument; (ii) option or right, whether as an addition to,
substitution for, or an exchange for, any Pledged Collateral or
otherwise; (iii) dividends payable in securities; or (iv) distributions
of securities or other equity interests in connection with a partial or
total liquidation, dissolution or reduction of capital, capital surplus
or paid-in surplus, then, subject to the percentage limitations set
forth in Section 2(a) above, such Pledgor shall receive such
certificate, instrument, option, right or distribution in trust for the
benefit of the Collateral Agent, shall segregate it from such Pledgor's
other property and shall deliver it forthwith to the Collateral Agent
in the exact form received together with any necessary endorsement
and/or appropriate stock power duly executed in blank, substantially in
the form provided in EXHIBIT 4(a), to be held by the Collateral Agent
as Pledged Collateral and as further collateral security for the
Pledgor Obligations.
(c) FINANCING STATEMENTS. Each Pledgor shall execute and
deliver to the Collateral Agent such UCC or other applicable financing
statements as may be reasonably requested by the Collateral Agent in
order to perfect the security interest created hereby in the Pledged
Collateral of such Pledgor.
(d) PROVISIONS RELATING TO SECURITIES ENTITLEMENTS AND
SECURITIES ACCOUNTS. With respect to any Pledged Collateral consisting
of a Securities Entitlement or held in a Securities Account, (a) the
applicable Pledgor and the applicable Securities Intermediary shall
enter into an agreement with the Collateral Agent granting Control to
the Collateral
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Agent over such Pledged Collateral, such agreement to be in form and
substance satisfactory to the Collateral Agent and (b) the Collateral
Agent shall be entitled, upon the occurrence and during the continuance
of a Default or an Event of Default, to notify the applicable
Securities Intermediary that it should follow the Entitlement Orders of
the Collateral Agent and no longer follow the Entitlement Orders of the
applicable Pledgor. Upon receipt by a Pledgor of notice from a
Securities Intermediary of its intent to terminate the Securities
Account of such Pledgor held by such Securities Intermediary, prior to
the termination of such Securities Account the Pledged Collateral in
such Securities Account shall be (i) transferred to a new Securities
Account which is subject to a control agreement as provided above or
(ii) transferred to an account held by the Collateral Agent (in which
it will be held until a new Securities Account is established).
5. REPRESENTATIONS AND WARRANTIES. Each Pledgor hereby represents and
warrants to the Collateral Agent, for the benefit of the Lenders, that so long
as any of the Pledgor Obligations remain outstanding (other than any such
obligations which by the terms thereof are stated to survive termination of the
Credit Documents) or any Credit Document or Hedging Agreement between any Credit
Party and any Lender (to the extent the obligations of such Credit Party
thereunder constitute Credit Party Obligations) is in effect, and until all of
the Commitments shall have been terminated:
(a) AUTHORIZATION OF PLEDGED CAPITAL STOCK. The Pledged
Capital Stock is duly authorized and validly issued, is fully paid and,
with respect any Pledged Capital Stock consisting of stock of a
corporation, nonassessable and is not subject to the preemptive rights
of any Person. All other shares of Capital Stock constituting Pledged
Collateral will be duly authorized and validly issued, fully paid and,
with respect any Pledged Capital Stock consisting of stock of a
corporation, nonassessable and not subject to the preemptive rights of
any Person.
(b) TITLE. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal
and beneficial owner of such Pledged Collateral free and clear of any
Lien or "adverse claim" (within the meaning of Section 8-102 of the
UCC), other than Permitted Liens.
(c) EXERCISING OF RIGHTS. Neither the grant by the Obligors to
the Collateral Agent of the rights and remedies hereunder nor the
exercise by the Collateral Agent of its rights and remedies hereunder
in a lawful manner will violate any law or governmental regulation or
any material contractual restriction binding on or affecting a Pledgor
or any of its property; provided, however, that no representation or
warranty is made as to any authorization, approval or action by, or
notice of filing with, any Governmental Authority applicable to the
Collateral Agent or any Lender.
(d) PLEDGOR'S AUTHORITY. No authorization, approval or action
by, and no notice or filing with any Governmental Authority, the issuer
of any Pledged Capital Stock or any third party is required either (i)
for the pledge made by a Pledgor or for the granting of the security
interest by a Pledgor pursuant to this Pledge Agreement or (ii) for the
exercise by the Collateral Agent or the Lenders of their rights and
remedies hereunder (except as may be required by laws affecting the
offering and sale of securities).
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(e) SECURITY INTEREST/PRIORITY. This Pledge Agreement creates
a valid security interest in favor of the Collateral Agent, for the
benefit of the Lenders, in the Pledged Collateral. The taking of
possession by the Collateral Agent of the certificates, if any,
representing the Pledged Capital Stock and all other certificates and
instruments constituting Pledged Collateral will perfect and establish
the first priority of the Collateral Agent's security interest in the
Pledged Capital Stock and such certificates and instruments and, upon
the filing of UCC financing statements in the appropriate filing office
in the location of each Pledgor's chief executive office, the
Collateral Agent shall have a first priority perfected security
interest in all uncertificated Pledged Capital Stock consisting of
partnership or limited liability company interests that do not
constitute a Security pursuant to Section 8-103(c) of the UCC. With
respect to any Pledged Collateral consisting of a Securities
Entitlement or held in a Securities Account, upon execution and
delivery by the applicable Pledgor, the applicable Securities
Intermediary and the Collateral Agent of an agreement granting Control
to the Collateral Agent over such Pledged Collateral, the Collateral
Agent shall have a first priority perfected security interest in such
Pledged Collateral. Except as set forth in this Section, no action is
necessary to perfect or otherwise protect such security interest.
(f) NO OTHER CAPITAL STOCK. No Pledgor owns any Capital Stock
of any Domestic Subsidiary or First-Tier Foreign Subsidiary other than
as set forth on SCHEDULE 2(a) attached hereto.
(g) PARTNERSHIP AND LIMITED LIABILITY COMPANY INTERESTS.
Except as previously disclosed to the Collateral Agent pursuant to
Section 6(f), none of the Pledged Capital Stock consisting of
partnership or limited liability company interests (i) is dealt in or
traded on a securities exchange or in a securities market, (ii) by its
terms expressly provides that it is a Security governed by Article 8 of
the UCC, (iii) is an Investment Company Security, (iv) is held in a
Securities Account or (v) constitutes a "Security" or a "Financial
Asset" as such terms are defined in Article 8 of the UCC.
6. COVENANTS. Each Pledgor hereby covenants, that so long as any of the
Pledgor Obligations remain outstanding (other than any such obligations which by
the terms thereof are stated to survive termination of the Credit Documents) or
any Credit Document or Hedging Agreement between any Credit Party and any Lender
(to the extent the obligations of such Credit Party thereunder constitute Credit
Party Obligations) is in effect, and until all of the Commitments shall have
been terminated, such Pledgor shall:
(a) BOOKS AND RECORDS. Xxxx its books and records (and shall
cause the issuer of the Pledged Capital Stock of such Pledgor to xxxx
its books and records) to reflect the security interest granted to the
Collateral Agent, for the benefit of the Lenders, pursuant to this
Pledge Agreement.
(b) DEFENSE OF TITLE. Warrant and defend title to and
ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all other parties claiming an
interest therein, keep the Pledged Collateral free from all Liens,
except for Permitted Liens, and not sell, exchange, transfer, assign,
lease or
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otherwise dispose of Pledged Collateral of such Pledgor or any interest
therein, except as permitted under the Credit Agreement and the other
Credit Documents.
(c) FURTHER ASSURANCES. Promptly execute and deliver at its
expense all further instruments and documents and take all further
action that may be necessary and desirable or that the Collateral Agent
may reasonably request in order to (i) perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor
(including, without limitation, the execution and filing of UCC
financing statements and any and all action necessary to satisfy the
Collateral Agent that the Collateral Agent has obtained a first
priority perfected security interest in all Pledged Capital Stock); and
(ii) enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder in respect of the Pledged Collateral of such
Pledgor, including, without limitation and if requested by the
Collateral Agent after the occurrence and during the continuance of an
Event of Default, delivering to the Collateral Agent irrevocable
proxies in respect of the Pledged Collateral of such Pledgor.
(d) AMENDMENTS. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any
restriction with respect to any of the Pledged Collateral of such
Pledgor other than pursuant hereto or as may be permitted under the
Credit Agreement.
(e) COMPLIANCE WITH SECURITIES LAWS. File all reports and
other information now or hereafter required to be filed by such Pledgor
with the United States Securities and Exchange Commission and any other
state, federal or foreign agency in connection with the ownership of
the Pledged Collateral of such Pledgor.
(f) ISSUANCE OR ACQUISITION OF CAPITAL STOCK. Not, without
providing 30 days prior written notice to the Collateral Agent and
without executing and delivering, or causing to be executed and
delivered, to the Collateral Agent such agreements, documents and
instruments as the Collateral Agent may require, issue or acquire any
Capital Stock consisting of an interest in a partnership or a limited
liability company that (i) is dealt in or traded on a securities
exchange or in a securities market, (ii) by its terms expressly
provides that it is a Security governed by Article 8 of the UCC, (iii)
is an Investment Company Security, (iv) is held in a Securities Account
or (v) constitutes a "Security" or a "Financial Asset" as such terms
are defined in Article 8 of the UCC.
7. PERFORMANCE OF OBLIGATIONS AND ADVANCES BY COLLATERAL AGENT. On
failure of any Pledgor to perform any of the covenants and agreements contained
herein, the Collateral Agent may, at its sole option and in its reasonable
discretion, perform or cause to be performed the same and in so doing may expend
such sums as the Collateral Agent may reasonably deem advisable in the
performance thereof, including, without limitation, the payment of any taxes, a
payment to obtain a release of a Lien or potential Lien, expenditures made in
defending against any adverse claim and all other expenditures which the
Collateral Agent may make for the protection of the security hereof or which may
be compelled to make by operation of law. All such sums and amounts so expended
shall be repayable by the Pledgors on a joint and several basis promptly upon
timely notice thereof and demand therefor, shall constitute additional Pledgor
Obligations and shall
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bear interest from the date said amounts are expended at the default rate
specified in Section 3.1 of the Credit Agreement for Revolving Loans that are
Base Rate Loans. No such performance of any covenant or agreement by the
Collateral Agent on behalf of any Pledgor, and no such advance or expenditure
therefor, shall relieve the Pledgors of any default under the terms of this
Pledge Agreement, the other Credit Documents or any Hedging Agreement between
any Credit Party. The Collateral Agent may make any payment hereby authorized in
accordance with any xxxx, statement or estimate procured from the appropriate
public office or holder of the claim to be discharged without inquiry into the
accuracy of such xxxx, statement or estimate or into the validity of any tax
assessment, sale, forfeiture, tax lien, title or claim except to the extent such
payment is being contested in good faith by a Pledgor in appropriate proceedings
and against which adequate reserves are being maintained in accordance with
GAAP.
8. EVENTS OF DEFAULT. The occurrence of an event which under the Credit
Agreement would constitute an Event of Default shall be an event of default
hereunder (an "EVENT OF DEFAULT").
9. REMEDIES.
(a) GENERAL REMEDIES. Upon the occurrence of an Event of
Default and during the continuation thereof, the Collateral Agent and
the Lenders shall have, in respect of the Pledged Collateral of any
Pledgor, in addition to the rights and remedies provided herein, in the
Credit Documents, in any Hedging Agreement between any Credit Party and
any Lender or by law, the rights and remedies of a secured party under
the UCC or any other applicable law.
(b) SALE OF PLEDGED COLLATERAL. Upon the occurrence of an
Event of Default and during the continuation thereof, without limiting
the generality of this Section and without notice, the Collateral Agent
may, in its sole discretion, sell or otherwise dispose of or realize
upon the Pledged Collateral, or any part thereof, in one or more
parcels, at public or private sale, at any exchange or broker's board
or elsewhere, at such price or prices and on such other terms as the
Collateral Agent may deem commercially reasonable, for cash, credit or
for future delivery or otherwise in accordance with applicable law. To
the extent permitted by law, any Lender may in such event bid for the
purchase of such securities. Each Pledgor agrees that, to the extent
notice of sale shall be required by law and has not been waived by such
Pledgor, any requirement of reasonable notice shall be met if notice,
specifying the place of any public sale or the time after which any
private sale is to be made, is personally served on or mailed postage
prepaid to such Pledgor in accordance with the notice provisions of
Section 11.1 of the Credit Agreement at least 10 days before the time
of such sale. The Collateral Agent shall not be obligated to make any
sale of Pledged Collateral of such Pledgor regardless of notice of sale
having been given. The Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(c) PRIVATE SALE. Upon the occurrence of an Event of Default
and during the continuation thereof, the Pledgors recognize that the
Collateral Agent may deem it impracticable to effect a public sale of
all or any part of the Pledged Collateral and that
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the Collateral Agent may, therefore, determine to make one or more
private sales of any such Pledged Collateral to a restricted group of
purchasers who will be obligated to agree, among other things, to
acquire such Pledged Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. Each Pledgor
acknowledges that any such private sale may be at prices and on terms
less favorable to the seller than the prices and other terms which
might have been obtained at a public sale and, notwithstanding the
foregoing, agrees that such private sale shall not be deemed to have
been made in a commercially unreasonable manner solely by reason of
such prices or terms and that the Collateral Agent shall have no
obligation to delay sale of any such Pledged Collateral for the period
of time necessary to permit the issuer of such Pledged Collateral to
register such Pledged Collateral for public sale under the Securities
Act of 1933. Each Pledgor further acknowledges and agrees that any
offer to sell such Pledged Collateral which has been (i) publicly
advertised on a bona fide basis in a newspaper or other publication of
general circulation in the financial community of New York, New York
(to the extent that such offer may be advertised without prior
registration under the Securities Act of 1933), or (ii) made privately
in the manner described above shall be deemed to involve a "public
sale" under the UCC, notwithstanding that such sale may not constitute
a "public offering" under the Securities Act of 1933, and the
Collateral Agent may, in such event, bid for the purchase of such
Pledged Collateral.
(d) RETENTION OF PLEDGED COLLATERAL. In addition to the rights
and remedies hereunder, upon the occurrence and during the continuance
of an Event of Default, the Collateral Agent may, after providing the
notices required by Section 9-505(2) of the UCC or otherwise complying
with the requirements of applicable law of the relevant jurisdiction,
retain all or any portion of the Pledged Collateral in satisfaction of
the Pledgor Obligations. Unless and until the Collateral Agent shall
have provided such notices, however, the Collateral Agent shall not be
deemed to have retained any Pledged Collateral in satisfaction of any
Pledgor Obligations for any reason.
(e) DEFICIENCY. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which
the Collateral Agent or the Lenders are legally entitled, the Pledgors
shall be jointly and severally liable for the deficiency, together with
interest thereon at the default rate specified in Section 3.1 of the
Credit Agreement for Revolving Loans that are Base Rate Loans and
together with the costs of collection and the reasonable fees of any
attorneys employed by the Collateral Agent to collect such deficiency.
Any surplus remaining after the full payment and satisfaction of the
Pledgor Obligations shall be returned to the Pledgors or to whomsoever
a court of competent jurisdiction shall determine to be entitled
thereto.
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10. RIGHTS OF THE COLLATERAL AGENT.
(a) POWER OF ATTORNEY. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the
Collateral Agent, on behalf of the Lenders, and each of its designees
or agents as attorney-in-fact of such Pledgor, irrevocably and with
power of substitution, with authority to take any or all of the
following actions upon the occurrence and during the continuance of an
Event of Default:
(i) to demand, collect, settle, compromise, adjust
and give discharges and releases concerning the Pledged
Collateral of such Pledgor, all as the Collateral Agent may
reasonably determine;
(ii) to commence and prosecute any actions at any
court for the purposes of collecting any of the Pledged
Collateral of such Pledgor and enforcing any other right in
respect thereof;
(iii) to defend, settle, adjust or compromise any
action, suit or proceeding brought and, in connection
therewith, give such discharge or release as the Collateral
Agent may deem reasonably appropriate;
(iv) to pay or discharge taxes, liens, security
interests, or other encumbrances levied or placed on or
threatened against the Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any payment
under any of the Pledged Collateral to make payment of any and
all monies due and to become due thereunder directly to the
Collateral Agent or as the Collateral Agent shall direct;
(vi) to receive payment of and receipt for any and
all monies, claims, and other amounts due and to become due at
any time in respect of or arising out of any Pledged
Collateral of such Pledgor;
(vii) to sign and endorse any drafts, assignments,
proxies, stock powers, verifications, notices and other
documents relating to the Pledged Collateral of such Pledgor;
(viii) to execute and deliver all assignments,
conveyances, statements, financing statements, renewal
financing statements, pledge agreements, affidavits, notices
and other agreements, instruments and documents that the
Collateral Agent may determine necessary in order to perfect
and maintain the security interests and liens granted in this
Pledge Agreement and in order to fully consummate all of the
transactions contemplated herein;
(ix) to exchange any of the Pledged Collateral of
such Pledgor or other property upon any merger, consolidation,
reorganization, recapitalization or other readjustment of the
issuer thereof and, in connection therewith, deposit any of
the Pledged Collateral of such Pledgor with any committee,
depository, transfer
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agent, registrar or other designated agency upon such terms as
the Collateral Agent may determine;
(x) to vote for a shareholder, partner or member
resolution, or to sign an instrument in writing, sanctioning
the transfer of any or all of the Pledged Capital Stock of
such Pledgor into the name of the Collateral Agent or one or
more of the Lenders or into the name of any transferee to whom
the Pledged Capital Stock of such Pledgor or any part thereof
may be sold pursuant to Section 9 hereof; and
(xi) to do and perform all such other acts and things
as the Collateral Agent may reasonably deem to be necessary,
proper or convenient in connection with the Pledged Collateral
of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Pledgor Obligations remain
outstanding (other than any such obligations which by the terms thereof
are stated to survive termination of the Credit Documents) or any
Credit Document or any Hedging Agreement between any Credit Party and
any Lender (to the extent the obligations of such Credit Party
thereunder constitute Credit Party Obligations) is in effect and (ii)
until all of the Commitments shall have been terminated. The Collateral
Agent shall be under no duty to exercise or withhold the exercise of
any of the rights, powers, privileges and options expressly or
implicitly granted to the Collateral Agent in this Pledge Agreement and
shall not be liable for any failure to do so or any delay in doing so.
The Collateral Agent shall not be liable for any act or omission or for
any error of judgment or any mistake of fact or law in its individual
capacity or its capacity as attorney-in-fact except acts or omissions
resulting from its gross negligence or willful misconduct. This power
of attorney is conferred on the Collateral Agent solely to protect,
preserve and realize upon its security interest in the Pledged
Collateral.
(b) ASSIGNMENT BY THE COLLATERAL AGENT. Subject to the terms
of the Credit Agreement, the Collateral Agent may from time to time
assign the Pledgor Obligations or any portion thereof and/or the
Pledged Collateral or any portion thereof, and the assignee shall be
entitled to all of the rights and remedies of the Collateral Agent
under this Pledge Agreement in relation thereto.
(c) THE COLLATERAL AGENT'S DUTY OF CARE. Other than the
exercise of reasonable care to ensure the safe custody of the Pledged
Collateral while being held by the Collateral Agent hereunder, the
Collateral Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that each of the
Pledgors shall be responsible for preservation of all rights in the
Pledged Collateral of such Pledgor, and the Collateral Agent shall be
relieved of all responsibility for such Pledged Collateral upon
surrendering it or tendering the surrender of it to such Pledgor. The
Collateral Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Pledged Collateral in its
possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own
property, which shall be no less than the treatment employed by a
reasonable and prudent
10
agent in the industry, it being understood that the Collateral Agent
shall not have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Pledged Collateral, whether or not the
Collateral Agent has or is deemed to have knowledge of such matters; or
(ii) taking any necessary steps to preserve rights against any parties
with respect to any Pledged Collateral.
(d) VOTING RIGHTS IN RESPECT OF THE PLEDGED COLLATERAL.
(i) So long as no Event of Default shall have
occurred and be continuing, to the extent permitted by law,
each Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral of such
Pledgor or any part thereof for any purpose not inconsistent
with the terms of this Pledge Agreement or the Credit
Agreement; and
(ii) Upon the occurrence and during the continuance
of an Event of Default, all rights of a Pledgor to exercise
the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to subsection (i)
of this Section shall cease and all such rights shall
thereupon become vested in the Collateral Agent which shall
then have the sole right to exercise such voting and other
consensual rights.
(e) DIVIDEND AND DISTRIBUTION RIGHTS IN RESPECT OF THE
PLEDGED COLLATERAL.
(i) So long as no Event of Default shall have
occurred and be continuing and subject to Section 4(b) hereof,
each Pledgor may receive and retain any and all dividends
(other than stock dividends and other dividends constituting
Pledged Collateral which are addressed hereinabove),
distributions or interest paid in respect of the Pledged
Collateral to the extent they are allowed under the Credit
Agreement.
(ii) Upon the occurrence and during the
continuance of an Event of Default:
(A) all rights of a Pledgor to receive the
dividends, distributions and interest payments which
it would otherwise be authorized to receive and
retain pursuant to subsection (i) of this Section
shall cease and all such rights shall thereupon be
vested in the Collateral Agent which shall then have
the sole right to receive and hold as Pledged
Collateral such dividends, distributions and interest
payments; and
(B) all dividends, distributions and
interest payments which are received by a Pledgor
contrary to the provisions of subsection (A) of this
Section shall be received in trust for the benefit of
the Collateral Agent, shall be segregated from other
property or funds of such Pledgor, and shall be
forthwith paid over to the Collateral Agent as
Pledged Collateral in the
11
exact form received, to be held by the Collateral
Agent as Pledged Collateral and as further collateral
security for the Pledgor Obligations.
(f) RELEASE OF PLEDGED COLLATERAL. The Collateral Agent may
release any of the Pledged Collateral from this Pledge Agreement or may
substitute any of the Pledged Collateral for other Pledged Collateral
in connection with a transaction permitted by the Credit Agreement
without altering, varying or diminishing in any way the force, effect,
lien, pledge or security interest of this Pledge Agreement as to any
Pledged Collateral not expressly released or substituted, and this
Pledge Agreement shall continue as a first priority lien on all Pledged
Collateral not expressly released or substituted.
11. APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Collateral Agent or any of the Lenders in cash or its equivalent, will be
applied in reduction of the Pledgor Obligations in the order set forth in
Section 9.3 of the Credit Agreement, and each Pledgor irrevocably waives the
right to direct the application of such payments and proceeds.
12. COSTS OF COUNSEL. At all times hereafter, whether or not an Event
of Default exists, the Pledgors agree to promptly pay upon demand any and all
reasonable costs and expenses of the Collateral Agent or the Lenders, (a) as
required under Section 11.5 of the Credit Agreement and (b) as necessary to
protect the Collateral or to exercise any rights or remedies under this Pledge
Agreement or with respect to any Collateral. All of the foregoing costs and
expenses shall constitute Pledgor Obligations hereunder.
13. CONTINUING AGREEMENT.
(a) This Pledge Agreement shall be a continuing agreement in
every respect and shall remain in full force and effect so long as any
of the Pledgor Obligations remain outstanding (other than any such
obligations which by the terms thereof are stated to survive
termination of the Credit Documents) or any Credit Document or any
Hedging Agreement between any Credit Party and any Lender (to the
extent the obligations of such Credit Party thereunder constitute
Credit Party Obligations) is in effect, and until all of the
Commitments thereunder shall have terminated. Upon such payment and
termination, the Collateral Agent and the Lenders shall, upon the
request and at the expense of the Pledgors, forthwith release all of
their Liens and security interests hereunder and shall execute and
deliver all UCC termination statements and/or other documents
reasonably requested by the Pledgors evidencing such termination.
Notwithstanding the foregoing, all releases and indemnities provided
hereunder shall survive termination of this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment,
in whole or in part, of any of the Pledgor Obligations is rescinded or
must otherwise be restored or returned by the Collateral Agent or any
Lender as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had
not been made; provided that in the event payment of all or any part of
the Pledgor Obligations is rescinded or must be restored or returned,
all reasonable costs and expenses (including without
12
limitation any reasonable legal fees and disbursements) incurred by the
Collateral Agent or any Lender in defending and enforcing such
reinstatement shall be deemed to be included as a part of the Pledgor
Obligations.
14. AMENDMENTS; WAIVERS; MODIFICATIONS. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.6 of the Credit Agreement.
15. SUCCESSORS IN INTEREST. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns and shall inure, together with the rights
and remedies of the Collateral Agent and the Lenders hereunder, to the benefit
of the Collateral Agent and the Lenders and their successors and permitted
assigns; PROVIDED, HOWEVER, that none of the Pledgors may assign its rights or
delegate its duties hereunder without the prior written consent of each Lender
or the Required Lenders, as required by the Credit Agreement. To the fullest
extent permitted by law, each Pledgor hereby releases the Collateral Agent and
each Lender, and its successors and assigns, from any liability for any act or
omission relating to this Pledge Agreement or the Collateral, except for any
liability arising from the gross negligence or willful misconduct of the
Collateral Agent, or such Lender, or its officers, employees or agents.
16. NOTICES. All notices required or permitted to be given under this
Pledge Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
17. COUNTERPARTS; TELECOPY. This Pledge Agreement may be executed in
any number of counterparts, each of which where so executed and delivered shall
be an original, but all of which shall constitute one and the same instrument.
It shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart. Delivery of an executed counterpart
by facsimile shall be as effective as an original executed counterpart and shall
be deemed a representation that an original executed counterpart will be
delivered.
18. HEADINGS. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning,
construction or interpretation of any provision of this Pledge Agreement.
19. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any
legal action or proceeding with respect to this Pledge Agreement may be
brought in the courts of the State of New York, or of the United States
for the Southern District of New York, and, by execution and delivery
of this Pledge Agreement, each Pledgor hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally,
the jurisdiction of such courts. Each Pledgor further irrevocably
consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it
13
at the address for notices pursuant to Section 11.1 of the Credit
Agreement, such service to become effective 30 days after such mailing.
Nothing herein shall affect the right of the Collateral Agent to serve
process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Pledgor in any other
jurisdiction.
(b) Each Pledgor hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Pledge Agreement brought in the courts referred to in subsection
(a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
20. WAIVER OF JURY TRIAL; WAIVER OF CONSEQUENTIAL DAMAGES. EACH OF THE
PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS PLEDGE AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY. Each Pledgor agrees not to assert any claim against the
Agents, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys or agents, on any theory of liability,
for special, indirect, consequential or punitive damages arising out of or
otherwise relating to any of the transactions contemplated herein.
21. SEVERABILITY. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
22. ENTIRETY. This Pledge Agreement together with the other Credit
Documents represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.
23. SURVIVAL. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement, the
other Credit Documents and the Hedging Agreements between any Credit Party and
any Lender (to the extent the obligations of such Credit Party thereunder
constitute Credit Party Obligations), the delivery of the Notes, the making of
the Loans and the issuance of the Letters of Credit.
24. OTHER SECURITY. To the extent that any of the Pledgor Obligations
are now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Collateral Agent and the Lenders shall have the right to proceed against
such other property, guarantee or endorsement upon the occurrence of any Event
of Default, and the Collateral Agent and the Lenders have the right, in their
sole discretion, to determine which rights, security, liens, security interests
or remedies the Collateral Agent and the
14
Lenders shall at any time pursue, relinquish, subordinate, modify or take
with respect thereto, without in any way modifying or affecting any of them
or any of the Collateral Agent's and the Lenders' rights or the Pledgor
Obligations under this Pledge Agreement, under any other of the Credit
Documents or under any Hedging Agreement between any Credit Party and any
Lender.
25. RIGHTS OF REQUIRED LENDERS. To the fullest extent permitted by law,
all rights of the Collateral Agent hereunder, if not exercised by the Collateral
Agent, may be exercised by the Required Lenders.
15
Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
PLEDGORS:
UNITED STATES CAN COMPANY,
a Delaware corporation
By: _________________________________________________
Name: _______________________________________________
Title: ______________________________________________
U.S. CAN CORPORATION,
a Delaware corporation
By: _________________________________________________
Name: _______________________________________________
Title: ______________________________________________
USC MAY VERPACKUNGEN HOLDING, INC.,
a Delaware corporation
By: _________________________________________________
Name: _______________________________________________
Title: ______________________________________________
Accepted and agreed to as of the date first above written.
BANK OF AMERICA, N.A.,
as Collateral Agent
By: _________________________________________________
Name: _______________________________________________
Title: ______________________________________________
SCHEDULE 2(a)
to
Pledge Agreement
dated as of October 4, 2000 in favor of
Bank of America, N.A.,
as Collateral Agent
PLEDGED CAPITAL STOCK
---------------------
PLEDGOR: U.S. CAN CORPORATION
Name of Number of Certificate Percentage Percentage
Domestic Subsidiary Shares Number Ownership Pledged
------------------- ------ ------ --------- -------
United States Can Company 1000 7 100% 100%
PLEDGOR: UNITED STATES CAN COMPANY
Name of Number of Certificate Percentage Percentage
Domestic Subsidiary Shares Number Ownership Pledged
------------------- ------ ------ --------- -------
USC May Verpackungen Holding Inc. 100 1 100% 100%
Name of Number of Certificate Percentage Percentage
Foreign Subsidiary Shares Number Ownership Pledged
------------------- ------ ------ --------- -------
U.S.C. Europe N.V. 3900 2 100% 100% (subject to
2100 3 limitations in
1 4 Section 3)
1 5
PLEDGOR: USC MAY VERPACKUNGEN HOLDING INC.
Name of Number of Certificate Percentage Percentage
Domestic Subsidiary Shares Number Ownership Pledged
------------------- ------ ------ --------- -------
May Xxxxxxxxxxxx XxxX & Xx., XX X/X X/X 100% 100% (subject to
limitations in
Section 3)
EXHIBIT 4(a)
to
Pledge Agreement
dated as of October 4, 2000 in favor of
Bank of America, N.A.,
as Collateral Agent
Irrevocable Stock Power
-----------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
to
the following shares of capital stock of _____________________, a ____________
corporation:
No. of Shares Certificate No.
------------- ---------------
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
_______________,
a ______________ corporation
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
