1
Exhibit 10.2
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered
into as of October 1, 1996 by Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxxx, the Xxxxxxxx
Xxxxxx Family Limited Partnership, the Xxxxxxx Xxxxxx Family Limited Partnership
and the Xxxxxxx Xxxxxx 1984 Children's Trust (individually, a "Pledgor";
collectively, the "Pledgors") in favor of Marine Midland Bank, a New York,
banking corporation ("Marine Midland"), having an office at 000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as collateral agent (the "Collateral Agent") for the
holders (the "Holders") of Shop Vac Corporation's 10 5/8% Senior Secured Notes
due 2003 (together with any notes issued in replacement thereof or in exchange
or substitution therefor, the "Notes"). Capitalized terms used and not defined
herein shall have the meanings given to such terms in the Indenture referred to
below.
W I T N E S S E T H:
WHEREAS, the Pledgors are the legal and beneficial owners of
all of the issued and outstanding shares of capital stock set forth on Schedule
I hereto (the "Pledged Shares") of Shop Vac Corporation, a New Jersey
corporation (the "Issuer");
WHEREAS, the Issuer and Marine Midland, as trustee, have
entered into that certain indenture dated as of October 1, 1996 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Indenture"), pursuant to which the Issuer issued $100 million in aggregate
principal amount of Notes;
WHEREAS, the Pledgors own 100% of the capital stock of Issuer,
and it is to the advantage of each Pledgor that the Holders purchase the Notes
from the Issuer;
WHEREAS, the terms of the Indenture require that the Pledgors
(i) pledge to the Collateral Agent for the ratable benefit of the Holders, and
grant to the Collateral Agent for the ratable benefit of the Holders a security
interest in, the Pledged Collateral (as defined herein) and (ii) execute and
deliver this Agreement in order to secure the payment and performance by the
Issuer of all of the Obligations of the Issuer under the Indenture and the Notes
(the "Obligations"); and
WHEREAS, notwithstanding anything herein to the contrary, this
Agreement provides solely for the pledge of certain Pledged Collateral by the
Pledgors as security for the Obligations, and under no circumstances shall the
Pledgors have any liabilities, with respect to the Indenture, the Notes or this
Agreement or any related agreements or transactions, monetary or otherwise,
other than to the extent of the Pledged Collateral.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and in order
to induce the Holders of Notes to purchase the Notes, the Pledgors hereby agree
with the Collateral Agent for its benefit and the ratable benefit of the Holders
as follows:
2
2
SECTION 1. Pledge. Each Pledgor hereby pledges to the
Collateral Agent for its benefit and for the ratable benefit of the Holders, and
grants to the Collateral Agent for the ratable benefit of the Holders, a
continuing first priority security interest in all of its right, title and
interest in the following collateral (the "Pledged Collateral"):
(a) the Pledged Shares and the certificates representing the
Pledged Shares, and all products and proceeds of any of the Pledged
Shares, including, without limitation, all dividends, cash, options,
warrants, rights, instruments, subscriptions and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Shares or any of the foregoing; and
(b) all additional equity interests in the Issuer from time to
time acquired by the Pledgors in any manner, and the certificates or
other instruments representing such additional equity interests (any
such additional equity interests and other items shall constitute part
of the Pledged Shares under and as defined in this Agreement), and all
products and proceeds of any of the foregoing, including, without
limitation, all dividends, cash, options, warrants, rights,
instruments, subscriptions, and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the foregoing.
Notwithstanding anything to the contrary in this Agreement,
the liability of the Pledgors (including without limitation any liability for
any costs or expenses arising hereunder) shall be limited to their respective
interests in the Pledged Collateral encumbered by this Pledge Agreement. This
Agreement does not confer upon the Collateral Agent any right to proceed against
the other assets of the Pledgors or against the Pledgors personally in order to
collect the Obligations secured by the Pledged Collateral pledged hereby, but
only to pursue the remedies provided hereby with respect to the Pledged
Collateral.
SECTION 2. Security for Obligations. This Agreement secures
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of all Obligations of the Issuer under
the Indenture and the Notes (including, without limitation, interest and any
other Obligations accruing after the date of any filing by the Issuer of any
petition in bankruptcy or the commencement of any bankruptcy, insolvency or
similar proceeding with respect to the Issuer).
SECTION 3. Delivery of Pledged Collateral. Each Pledgor hereby
agrees that all certificates or instruments representing or evidencing the
Pledged Collateral shall be immediately delivered to and held at all times by
the Collateral Agent pursuant hereto in the State of New York and shall be in
suitable form for transfer by delivery, or issued in the name of such Pledgor
and accompanied by instruments of transfer or assignment duly executed in blank
and undated, and in either case having attached thereto all requisite federal or
state stock transfer tax stamps, all in form and substance satisfactory to the
Collateral Agent.
SECTION 4. Representations and Warranties. Each Pledgor
represents and warrants that:
3
3
(a) Such Pledgor has the legal right to execute and deliver
and to grant the security interest in the Pledged Collateral pursuant
to this Agreement, and the execution, delivery and performance of this
Agreement do not contravene, or constitute a default under, any
provision of applicable law or regulation of such Pledgor or of any
agreement, judgment, injunction, order, decree or other instrument
binding upon such Pledgor, or result in the creation or imposition of
any Lien on any assets of such Pledgor, other than the Lien
contemplated hereby.
(b) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(c) The Pledged Shares constitute all of the issued and
outstanding capital stock of the Issuer and constitute all of the
shares of capital stock of the Issuer beneficially owned by such
Pledgor.
(d) Such Pledgor is the legal, record and beneficial owner of
the Pledged Collateral, free and clear of any Lien or claims of any
Person except for the security interest created by this Agreement.
(e) The Pledgor has full power and authority to enter into
this Agreement and has the right to vote, pledge and grant a security
interest in the Pledged Collateral as provided by this Agreement.
(f) This Agreement has been duly executed and delivered by
such Pledgor and constitutes a legal, valid and binding obligation of
such Pledgor, enforceable against such Pledgor in accordance with its
terms.
(g) Upon the delivery to the Collateral Agent of the Pledged
Collateral, the pledge of the Pledged Collateral pursuant to this
Agreement creates a valid and perfected first priority security
interest in the Pledged Collateral, securing the payment of the
Obligations for the benefit of the Collateral Agent and the Holders,
and enforceable as such against all creditors of such Pledgor and any
Persons purporting to purchase any of the Pledged Collateral from such
Pledgor.
(h) Other than the consent dated as of September __, 1996
executed by all parties to the Shareholders' Agreement dated July 21,
1987 and amended August 1, 1991, among Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxxx,
The Xxxxxxxx Xxxxxx Family Partnership, The Xxxxxxx Xxxxxx Family
Partnership and the Xxxxxxx Xxxxxx 1984 Children's Trust, no consent of
any other Person and no consent, authorization, approval, or other
action by, and no notice to or filing with, any governmental authority
or regulatory body is required either (i) for the pledge by such
Pledgor of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by such Pledgor or
(ii) for the exercise by the Collateral Agent of the voting or other
rights provided for in this Agreement or the remedies in respect of the
Pledged Collateral pursuant to this Agreement (except as may be
required in connection with such disposition by laws affecting the
offering and sale of securities).
4
4
(i) No litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the best
knowledge of such Pledgor, threatened by or against such Pledgor or
against any of such Pledgor's properties or revenues with respect to
this Agreement or any of the transactions contemplated hereby.
(j) The pledge of the Pledged Collateral pursuant to this
Agreement is not prohibited by any applicable law or governmental
regulation, release, interpretation or opinion of the Board of
Governors of the Federal Reserve System or other regulatory agency
(including, without limitation, Regulations G, T, U and X of the Board
of Governors of the Federal Reserve System).
(k) All information set forth herein relating to the Pledged
Collateral is accurate and complete in all respects.
SECTION 5. Further Assurance. Each Pledgor will at all times
cause the security interests granted pursuant to this Agreement to constitute
valid perfected first priority security interests in the Pledged Collateral,
enforceable as such against all creditors of such Pledgor and (except as
otherwise specifically provided herein) any Persons purporting to purchase any
Pledged Collateral from such Pledgor. Each Pledgor will, promptly upon request
by the Collateral Agent, execute and deliver or cause to be executed and
delivered, or use its best efforts to procure, all stock powers, proxies, tax
stamps, assignments, instruments and other documents, all in form and substance
satisfactory to the Collateral Agent, deliver any instruments to the Collateral
Agent and take any other actions that are necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect, continue the perfection
of, or protect the first priority of the Collateral Agent's security interest
in, the Pledged Collateral, to protect the Pledged Collateral against the
rights, claims, or interests of third persons, to enable the Collateral Agent to
exercise or enforce its rights and remedies hereunder, or otherwise to effect
the purposes of this Agreement, including the filing of any financing or
continuation statements. Each Pledgor also hereby authorizes the Collateral
Agent to file any financing or continuation statements with respect to the
Pledged Collateral without the signature of such Pledgor to the extent permitted
by applicable law. The Pledgors will cause the Issuer to pay all costs incurred
in connection with any of the foregoing.
SECTION 6. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing with respect to which a Default Notice has been delivered to
the Collateral Agent in accordance with Section 12(e) hereof, the
Pledgors shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Shares or any part thereof
for any purpose not inconsistent with the terms of this Agreement or
the Indenture; provided, however, that the Pledgors shall not exercise
or shall refrain from exercising any such right if such action would
have a material adverse effect on the value of the Pledged Collateral
or any part thereof or be inconsistent with or violate any provisions
of this Agreement or the Indenture.
5
5
(b) So long as no Event of Default shall have occurred and be
continuing with respect to which a Default Notice has been delivered to
the Collateral Agent in accordance with Section 12(e) hereof, and
subject to the other terms and conditions of the Indenture, each
Pledgor shall be entitled to receive, and to utilize (subject to the
provisions of the Indenture) free and clear of the Lien of this
Agreement, all regular and ordinary cash dividends paid from time to
time in respect of the Pledged Collateral.
(c) Any and all (i) dividends and other distributions (other
than cash dividends permitted under Section 6(b) hereof) received,
receivable or otherwise distributed in respect of, or in exchange for,
any Pledged Collateral, (ii) dividends and other distributions paid or
payable in cash in respect of any Pledged Collateral in connection with
a partial or total liquidation or dissolution or in connection with a
reduction of capital, capital surplus or paid-in-surplus, and (iii)
cash paid, payable or otherwise distributed in redemption of, or in
exchange for, any Pledged Collateral, shall in each case be forthwith
delivered to the Collateral Agent to hold as Pledged Collateral and
shall, if received by any Pledgor, be received in trust for the benefit
of the Collateral Agent and the Holders, be segregated from the other
property and funds of such Pledgor and be forthwith delivered to the
Collateral Agent as Pledged Collateral in the same form as so received
(with any necessary endorsements).
(d) The Collateral Agent shall execute and deliver (or cause
to be executed and delivered) to the Pledgors all such proxies and
other instruments as the Pledgors may reasonably request for the
purpose of enabling the Pledgors to exercise the voting and other
rights that it is entitled to exercise pursuant to Sections 6(a) and
6(b) above.
(e) Upon the occurrence and during the continuance of an Event
of Default with respect to which a Default Notice has been delivered to
the Collateral Agent in accordance with Section 12(e) hereof, (i) all
rights of the Pledgors to exercise the voting and other consensual
rights that it would otherwise be entitled to exercise pursuant to
Section 6(a) shall cease, and all such rights shall thereupon become
vested in the Collateral Agent, which, to the extent permitted by law,
shall thereupon have the sole right to exercise such voting and other
consensual rights, and (ii) all dividends and other distributions
payable in respect of the Pledged Collateral shall be paid to the
Collateral Agent and each Pledgor's right to receive such cash payments
pursuant to Section 6(b) hereof shall immediately cease.
(f) Upon the occurrence and during the continuance of an Event
of Default with respect to which a Default Notice has been delivered to
the Collateral Agent in accordance with Section 12(e) hereof, each
Pledgor shall execute and deliver (or cause to be executed and
delivered) to the Collateral Agent all such proxies and other
instruments as the Collateral Agent may reasonably request for the
purpose of enabling the Collateral Agent to exercise the voting and
other rights that it is entitled to exercise pursuant to Section 6(e)
above.
(g) All payments of dividends and other distributions that are
received by any Pledgor contrary to the provisions of this Section 6
shall be received in trust for the
6
6
benefit of the Collateral Agent and the Holders, shall be segregated
from the other property or funds of such Pledgor and shall be forthwith
delivered to the Collateral Agent as Pledged Collateral in the same
form as so received (with any necessary endorsements).
SECTION 7. Covenants. Each Pledgor hereby covenants and agrees
with the Collateral Agent and the Holders, that from and after the date of this
Agreement and until the Obligations have been paid in full, as follows:
(a) Each Pledgor agrees that such Pledgor will not (i) sell,
assign, transfer, convey or otherwise dispose of, or grant any option or warrant
with respect to, any interest in any of the Pledged Collateral without the prior
written consent of the Collateral Agent at the direction of the Trustee, (ii)
create or permit to exist any Lien upon or with respect to any of the Pledged
Collateral, except for the security interest granted under this Agreement, and
at all times will be the sole beneficial owner of the Pledged Collateral, (iii)
enter into any agreement or understanding that purports to or that may restrict
or inhibit the Collateral Agent's rights or remedies hereunder, including,
without limitation, the Collateral Agent's right to sell or otherwise dispose of
the Pledged Collateral, or (iv) take any action, or permit the taking of any
action by the Issuer, with respect to the Pledged Collateral, the taking of
which would result in a violation of the Indenture or this Agreement.
(b) Each Pledgor agrees that immediately upon becoming the
beneficial owner of other equity interests of the Issuer (including as a result
of any permitted merger or consolidation of the Issuer with or into another
entity) it will pledge and deliver to the Collateral Agent for its benefit and
the ratable benefit of the Holders and grant to the Collateral Agent for its
benefit and the ratable benefit of the Holders a continuing first priority
security interest in such other equity interests (as well as instruments of
transfer or assignment duly executed in blank and undated and any necessary
stock transfer tax stamps, all in form and substance satisfactory to the
Collateral Agent). Each Pledgor further agrees to deliver to the Collateral
Agent a certificate executed by such Pledgor describing such additional equity
interests and certifying that the same have been duly pledged and delivered to
the Collateral Agent hereunder.
SECTION 8. Power of Attorney. In addition to all of the powers
granted to the Collateral Agent pursuant to Section 10.06 of the Indenture, each
Pledgor hereby appoints and constitutes the Collateral Agent as such Pledgor's
attorney-in-fact to exercise all of the following powers upon and at any time
after the occurrence of an Event of Default with respect to which a Default
Notice has been delivered to the Collateral Agent in accordance with Section
12(e) hereof: (i) collection of proceeds of any Pledged Collateral; (ii)
conveyance of any item of Pledged Collateral to any purchaser thereof; (iii)
giving of any notices or recording of any Liens under Section 5 hereof; (iv)
making of any payments or taking any acts under Section 9 hereof and (v) paying
or discharging taxes or Liens levied or placed upon or threatened against the
Pledged Collateral, the legality or validity thereof and the amounts necessary
to discharge the same to be determined by the Collateral Agent in its sole
discretion. The Collateral Agent's authority hereunder shall include, without
limitation, the authority to execute and give receipt for any certificate of
ownership or any document, transfer title to any item of Pledged Collateral,
sign any Pledgor's name on all financing
7
7
statements or any other documents deemed necessary or appropriate to preserve,
protect or perfect the security interest in the Pledged Collateral and to file
the same, prepare, file and sign any Pledgor's name on any notice of Lien, and
prepare, file and sign any Pledgor's name on a proof of claim in bankruptcy or
similar document against any customer of the Pledgors, and to take any other
actions arising from or incident to the powers granted to the Collateral Agent
in this Agreement. This power of attorney is coupled with an interest and is
irrevocable by the Pledgors.
SECTION 9. Collateral Agent May Perform. If any Pledgor fails
to perform any agreement contained herein, the Collateral Agent may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
the Collateral Agent incurred in connection therewith shall be payable by the
Issuer pursuant to Section 14 hereof.
SECTION 10. No Assumption of Duties; Reasonable Care. The
rights and powers granted to the Collateral Agent hereunder are being granted in
order to preserve and protect the security interest of the Collateral Agent and
the Holders in and to the Pledged Collateral granted hereby and shall not be
interpreted to, and shall not, impose any duties on the Collateral Agent in
connection therewith. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which the Collateral Agent accords its own property, it being understood
that the Collateral Agent shall not have any responsibility for (i) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative 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.
SECTION 11. Subsequent Changes Affecting Collateral. Each
Pledgor represents to the Collateral Agent and each Holder that such Pledgor has
made its own arrangements for keeping informed of changes or potential changes
affecting the Pledged Collateral (including, but not limited to, rights to
convert, rights to subscribe, payment of dividends, payments of interest and/or
principal, reorganization or other exchanges, tender offers and voting rights),
and such Pledgor agrees that the Collateral Agent and the Holders shall have no
responsibility or liability for informing such Pledgor of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto. Each Pledgor covenants that it will not, without the prior
written consent of the Collateral Agent as directed in writing by the Trustee,
vote to enable, or take any other action to permit, the Issuer to issue any
capital stock or other securities or to sell or otherwise dispose of, or grant
any option with respect to, any of the Pledged Collateral or create or permit to
exist any Lien upon or with respect to any of the Pledged Collateral, except for
the security interests granted under this Agreement. Each Pledgor will defend
the right, title and interest of the Collateral Agent and the Holders in and to
the Pledged Collateral against the claims and demands of all Persons.
SECTION 12. Remedies Upon Default.
8
8
(a) If any Event of Default under the Indenture shall
have occurred and be continuing with respect to which a Default Notice
has been delivered to the Collateral Agent in accordance with Section
12(e) hereof, the Collateral Agent shall have, in addition to all other
rights given by law or by this Agreement, all of the rights and
remedies with respect to the Pledged Collateral of a secured party
under the Uniform Commercial Code (the "UCC") as in effect in the State
of New York at that time. The Collateral Agent may, subject to the
provision of Section 12(e) below, without notice and at its option,
transfer or register, and each Pledgor shall register or cause to be
registered upon request therefor by the Collateral Agent, the Pledged
Collateral or any part thereof on the books of the Issuer into the name
of the Collateral Agent or the Collateral Agent's nominee(s), with or
without any indication that such Pledged Collateral is subject to the
security interest hereunder. In addition, with respect to any Pledged
Collateral that shall then be in or shall thereafter come into the
possession or custody of the Collateral Agent, the Collateral Agent
may, subject to the provisions of Section 12(e) below, sell or cause
the same to be sold at any broker's board or at public or private sale,
in one or more sales or lots, at such price or prices as the Collateral
Agent may deem best, for cash or on credit or for future delivery,
without assumption of any credit risk. The purchaser of any or all
Pledged Collateral so sold shall thereafter hold the same absolutely,
free from any claim, encumbrance or right of any kind whatsoever.
Unless any of the Pledged Collateral threatens to decline speedily in
value or is or becomes of a type sold on a recognized market, the
Collateral Agent will give each Pledgor reasonable notice of the time
and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any sale of
the Pledged Collateral conducted in conformity with reasonable
commercial practices of banks, insurance companies, commercial finance
companies, or other financial institutions disposing of property
similar to the Pledged Collateral shall be deemed to be commercially
reasonable. Any requirements of reasonable notice shall be met if such
notice is mailed to the Pledgors as provided below in Section 18.1, at
least ten days before the time of the sale or disposition. Any other
requirement of notice, demand or advertisement for sale is, to the
extent permitted by law, waived. The Collateral Agent or any Holder of
Notes may, in its own name or in the name of a designee or nominee, buy
any of the Pledged Collateral at any public sale and, if permitted by
applicable law, at any private sale. All expenses (including court
costs and reasonable attorneys' fees and disbursements) of, or incident
to, the enforcement of any of the provisions hereof shall be
recoverable from the proceeds of the sale or other disposition of the
Pledged Collateral.
(b) If, subject to the provisions of Section 12(e)
below, the Collateral Agent shall determine to exercise its right to
sell any or all of the Pledged Shares pursuant to Section 12(a) above,
and if in the opinion of counsel for the Collateral Agent it is
necessary, or if in the opinion of the Collateral Agent it is
advisable, to have the Pledged Shares or that portion thereof to be
sold, registered under the provisions of the Securities Act of 1933, as
amended (the "Securities Act"), the Pledgors will cause the Issuer to
(i) execute and deliver, and cause its directors and officers to
execute and deliver, all at the Issuers' expense, all such instruments
and documents, and to do or cause to be done all such other acts and
things as may be
9
9
necessary or, in the opinion of the Collateral Agent, advisable to
register such Pledged Shares under the provisions of the Securities
Act, (ii) cause the registration statement relating thereto to become
effective and to remain effective for a period of 180 days from the
date of the first public offering of such Pledged Shares, or that
portion thereof to be sold and (iii) make all amendments thereto and/or
to the related prospectus that, in the opinion of the Collateral Agent,
are necessary or advisable, all in conformity with the requirements of
the Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto. Each Pledgor agrees to cause
the Issuer to comply with the provisions of the securities or "Blue
Sky" laws of any jurisdiction that the Collateral Agent shall designate
for the sale of the Pledged Shares and to make available to the
Issuers' security holders, as soon as practicable, an earnings
statement (which need not be audited) that will satisfy the provisions
of Section 11(a) of the Securities Act. Each Pledgor will cause the
Issuer to furnish to the Collateral Agent such number of copies as the
Collateral Agent may reasonably request of each preliminary and final
prospectus, to notify the Collateral Agent promptly of the happening of
any event as a result of which any then effective prospectus includes
an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of then existing circumstances, and
to cause the Collateral Agent to be furnished with such number of
copies as the Collateral Agent may request of such supplement to or
amendment of such prospectus. Each Pledgor will cause the Issuer, to
the maximum extent permitted by law, to indemnify, defend and hold
harmless the Collateral Agent and the Holders from and against all
losses, liabilities, expenses or claims (including reasonable legal
expenses and the reasonable costs of investigation) that the Collateral
Agent or any Holder may incur under the Securities Act or otherwise,
insofar as such losses, liabilities, expenses or claims arise out of or
are based upon any alleged untrue statement of a material fact
contained in such registration statement (or any amendment thereto) or
in any preliminary or final prospectus (or any amendment or supplement
thereto), or arise out of or are based upon any alleged omission to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, except to the extent that
any such losses, liabilities, expenses or claims arise solely out of or
are based upon any such alleged untrue statement made or such alleged
omission to state a material fact included or excluded on the written
direction of the Collateral Agent. Each Pledgor will cause the Issuer
to bear all costs and expenses of carrying out its obligations
hereunder.
(c) In view of the fact that federal and state
securities laws may impose certain restrictions on the method by which
a sale of the Pledged Collateral may be effected after an Event of
Default, each Pledgor agrees that upon the occurrence or existence of
any Event of Default, the Collateral Agent may, from time to time,
attempt to sell all or any part of the Pledged Collateral by means of a
private placement, restricting the prospective purchasers to those who
will represent and agree that they are purchasing for investment only
and not for distribution. In so doing, the Collateral Agent may solicit
offers to buy the Pledged Collateral, or any part of it, for cash, from
a limited number of investors who might be interested in purchasing the
Pledged Collateral. Each Pledgor acknowledges and agrees that any such
private sale
10
10
may result in prices and terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially
reasonable manner. The Collateral Agent shall be under no obligation to
delay a sale of any of the Pledged Collateral for the period of time
necessary to permit the Issuer to register such securities for public
sale under the Securities Act, or under applicable state securities
laws, even if the Issuer agrees to do so.
(d) Each Pledgor further agrees to use its best
efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of the
Pledged Collateral pursuant to this Section 12 valid and binding and in
compliance with any and all other applicable requirements of law. Each
Pledgor further agrees that a breach of any of the covenants contained
in this Section 12 will cause irreparable injury to the Collateral
Agent and the Holders, that the Collateral Agent and the Holders have
no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 12
shall be specifically enforceable against such Pledgor, and such
Pledgor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense
that no Default or Event of Default has occurred under the Indenture.
(e) The Collateral Agent shall not commence or
otherwise take any action or proceeding pursuant to this Section 12 or
to realize upon any or all of the Collateral unless and until the
Trustee, on behalf of the Holders of at least 25% in aggregate
principal amount of the then outstanding Notes, shall have notified the
Collateral Agent in writing of the occurrence of an Event of Default
with respect to the Notes (a "Default Notice") and shall have directed
the Collateral Agent in writing to commence to enforce this Agreement
and/or to realize upon any or all of the Collateral. Upon receipt by
the Collateral Agent of any such notice and direction, the Collateral
Agent shall (i) promptly send copies thereof to all Holders and (ii)
seek to enforce this Agreement and to realize upon the Collateral.
After any such notice and direction has been given, the holders of more
than 50% of the sum of the then outstanding Obligations pursuant to the
Indenture and the Notes (collectively, the "Majority Holders"), shall
have the right to give written directions to the Collateral Agent as to
the time, place and manner of the taking of such actions, and the
Collateral Agent shall be required to seek to follow such directions;
provided that, at the time of delivery of such notice, the Majority
Holders shall provide the Collateral Agent with a written calculation
establishing their status as the Majority Holders; provided, further,
that the Collateral Agent, prior to acting on such notice, shall
request, and may rely upon, a statement from the Trustee confirming the
amounts outstanding under the Indenture; provided, further, that in the
absence of such notice and direction, 45 days after receipt of the
Default Notice, the Collateral Agent shall have the right to take such
actions as it deems necessary, advisable or appropriate; provided,
further, that each Holder of Notes agrees, by its acceptance of any
Note or Notes, as the case may be, that if at any time of determination
such Holder of Notes is a Majority Holder, such Holder of Notes shall
exercise its rights pursuant to this sentence in good faith for the
benefit of all of the Holders; and provided further that
11
11
the Majority Holders may give written directions to the Collateral
Agent to cease or materially curtail its efforts seeking to enforce
this Agreement or to cease or materially curtail its efforts seeking to
realize upon any or all of the Collateral. Upon the receipt by the
Collateral Agent of any such direction to so cease, the Collateral
Agent shall be required to seek to do so, subject to the rights of the
Trustee on behalf of the Holders to give another written notice and
direction of the type referred to above.
SECTION 13. Irrevocable Authorization and Instruction to the
Issuer. Each Pledgor hereby authorizes and instructs the Issuer to comply with
any instruction received by the Issuer from the Collateral Agent that (i) states
that an Event of Default has occurred and (ii) is otherwise in accordance with
the terms of this Agreement, without any other or further instructions from such
Pledgor, and such Pledgor agrees that the Issuer shall be fully protected in so
complying.
SECTION 14. Fees and Expenses. Each Pledgor will cause the
Issuer, upon demand, to pay to the Collateral Agent the amount of any and all
reasonable fees and expenses (including, without limitation, the reasonable fees
and disbursements of its counsel, of any investment banking firm, accountants,
business broker or other selling agent and of any other such experts and agents
retained by the Collateral Agent, including the allocated costs of inside
counsel) that the Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent and the Holders hereunder or (iv) the failure by any Pledgor to
perform or observe any of the provisions hereof.
SECTION 15. Interest Absolute. All rights of the Collateral
Agent and the Holders and the security interests created hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or
any other agreement or instrument relating thereto;
(b) 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
Indenture;
(c) any exchange, surrender, release or non-perfection of any
other collateral, or any release or amendment or waiver of or consent
to departure from any guarantee, for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Pledgor in respect of the
Obligations or of this Agreement.
SECTION 16. Application of Proceeds. Upon the occurrence and
during the continuance of an Event of Default with respect to which a Default
Notice has been delivered to the Collateral Agent in accordance with Section
12(e) hereof, the proceeds of any sale of,
12
12
or other realization upon, all or any part of the Pledged Collateral and any
cash held by the Collateral Agent shall be applied by the Collateral Agent in
the following order of priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and counsel
for the Collateral Agent, and all expenses, liabilities and advances
incurred or made by the Collateral Agent in connection therewith, and
any other unreimbursed fees and expenses for which the Collateral Agent
is to be reimbursed pursuant to Section 14 hereof;
second, to the ratable payment (based on the principal amount
of Notes deemed by the Indenture to be outstanding at the time of
distribution) of accrued but unpaid interest on such outstanding Notes;
third, to the ratable payment (based on the principal amount
of Notes deemed by the Indenture to be outstanding at the time of
distribution) of unpaid principal of such outstanding Notes;
fourth, to the ratable payment (based on the principal amount
of Notes deemed by the Indenture to be outstanding at the time of
distribution) of all other Obligations, until all Obligations shall
have been paid in full; and
finally, to payment to the Pledgors or their successors, heirs
or assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
SECTION 17. Uncertificated Securities. Notwithstanding
anything to the contrary contained herein, if any Pledged Shares (whether now
owned or hereafter acquired) are uncertificated Pledged Shares, the Pledgors
shall promptly notify the Collateral Agent, and shall promptly take all actions
required to perfect the security interest of the Collateral Agent under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York Uniform Commercial Code). Each Pledgor further agrees to take such
actions as the Collateral Agent deems necessary or desirable to effect the
foregoing and to permit the Collateral Agent to exercise any of its rights and
remedies hereunder, and agrees to provide an Opinion of Counsel satisfactory to
the Pledgee with respect to any such pledge of uncertificated Pledged Shares
promptly upon request of the Collateral Agent.
SECTION 18. Miscellaneous Provisions.
18.1 Notices. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner as set forth on Schedule II hereto.
18.2 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by any Pledgor to the Collateral Agent to release any
Collateral, such Pledgor shall deliver to the Collateral Agent an Officer's
Certificate and/or an Opinion of Counsel in accordance with the requirements of
Sections 10.03, 10.04 and 10.05 of the Indenture.
13
13
18.3 No Adverse Interpretation of Other Agreements. This
Agreement may not be used to interpret another pledge, security or debt
agreement of any Pledgor, the Issuer or any subsidiary thereof. No such pledge,
security or debt agreement may be used to interpret this Agreement.
18.4 Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
18.5 Limited Recourse Obligation. Notwithstanding anything
herein to the contrary, this Agreement provides solely for the pledge of certain
Pledged Collateral by the Pledgors as security for the Obligations, and under no
circumstances shall the Pledgors have any liabilities, with respect to the
Indenture, the Notes or this Agreement or any related agreements or
transactions, monetary or otherwise, other than to the extent of the Pledged
Collateral. In addition, no director, officer, employee, stockholder or
affiliate, as such, of the Issuer shall have any liability for any obligations
of any Pledgor under this Agreement or for any claim based on, in respect of or
by reason of such obligations or their creation. Each Holder of Notes, by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Notes.
18.6 Headings. The headings of the Articles and Sections of
this Agreement have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms or provisions hereof.
18.7 Counterpart Originals. This Agreement may be signed in
two or more counterparts. Each signed copy shall be an original, but all of them
together represent one and the same agreement. Each counterpart may be executed
and delivered by telecopy, if such delivery is promptly followed by the original
manually signed copy sent by overnight courier.
18.8 Benefits of Agreement. Nothing in this Agreement, express
or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
18.9 Amendments, Waivers and Consents. Any amendment or waiver
of any provision of this Agreement and any consent to any departure by any
Pledgor from any provision of this Agreement shall be effective only if made or
given in compliance with all of the terms and provisions of the Indenture
necessary for amendments or waivers of, or consents to any departure by any
Pledgor from any provision of the Indenture and neither the Collateral Agent nor
any Holder shall be deemed, by any act, delay, indulgence, omission or
otherwise, to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default or in any breach of any of the terms and
conditions hereof. Failure of the Collateral Agent or any Holder to exercise, or
delay in exercising, any right, power or privilege hereunder shall not operate
as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further
14
14
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Collateral Agent or any Holder of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy that the
Collateral Agent or such Holder would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by law.
18.10 Interpretation of Agreement. Time is of the essence in
each provision of this Agreement of which time is an element. All terms not
defined herein or in the Indenture shall have the meaning set forth in the
applicable UCC, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with the Indenture and is not
dealt with herein with more specificity, the Indenture shall control with
respect to the subject matter of such term or provision. Acceptance of or
acquiescence in a course of performance rendered under this Agreement shall not
be relevant to determine the meaning of this Agreement even though the accepting
or acquiescing party had knowledge of the nature of the performance and
opportunity for objection.
18.11 Continuing Security Interest; Transfer of Notes. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) remain in full force and effect until the payment in full of all
the Obligations and all the fees and expenses owing to the Collateral Agent,
(ii) be binding upon each Pledgor, their successors, heirs and assigns, and
(iii) inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Collateral Agent, the Holders and their
respective successors, transferees and assigns.
18.12 Reinstatement. This Agreement shall continue to be
effective or be reinstated if at any time any amount received by the Collateral
Agent or any Holder in respect of the Obligations is rescinded or must otherwise
be restored or returned by the Collateral Agent or any Holder upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the Issuer
or upon the appointment of any receiver, intervenor, conservator, trustee or
similar official for the Issuer or any substantial part of its assets, or
otherwise, all as though such payments had not been made.
18.13 Survival of Provisions. All representations, warranties
and covenants of each Pledgor and the Issuer, as the case may be, contained
herein shall survive the execution and delivery of this Agreement (including the
Issuer's obligations under Section 14 hereof), and shall terminate only upon the
full and final payment and performance by the Issuer of the Obligations.
18.14 Waivers. Each Pledgor waives presentment and demand for
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which such
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
15
15
18.15 Authority of the Collateral Agent.
(a) The Collateral Agent shall have and be entitled to
exercise all powers hereunder that are specifically granted to the Collateral
Agent by the terms hereof, together with such powers as are reasonably incident
thereto. The Collateral Agent may perform any of its duties hereunder or in
connection with the Pledged Collateral by or through agents or employees and
shall be entitled to retain counsel and to act in reliance upon the advice of
counsel concerning all such matters. Neither the Collateral Agent nor any
director, officer, employee, attorney or agent of the Collateral Agent shall be
responsible for the validity, effectiveness or sufficiency hereof or of any
document or security furnished pursuant hereto. The Collateral Agent and its
directors, officers, employees, attorneys and agents shall be entitled to rely
on any communication, instrument or document believed by it or them to be
genuine and correct and to have been signed or sent by the proper person or
persons. The Pledgors agree to cause the Issuer to indemnify and hold harmless
the Collateral Agent, each Holder and any other Person from and against any and
all costs, expenses (including the reasonable fees and disbursements of counsel,
accountants, experts or such other professionals as the Collateral Agent deems
necessary, advisable or appropriate (including the allocated costs of inside
counsel)), claims and liabilities incurred by the Collateral Agent, each Holder
or such Person hereunder, unless such claim or liability shall be due to willful
misconduct or gross negligence on the part of the Collateral Agent, such Holder
or such Person. To the maximum extent permitted by applicable law, each Pledgor
waives all claims, damages, and demands against the Collateral Agent arising out
of the repossession, retention, or sale of the Collateral pursuant to the
written instruction of the Trustee, except such which may arise out of the gross
negligence or willful misconduct of the Collateral Agent. Until the Collateral
Agent is able to effect a sale, lease, or other disposition of the Collateral,
the Collateral Agent shall have the right to use or operate the Collateral, or
any part thereof, to the extent that it deems appropriate for the purpose of
preserving the Collateral or its value or for any other purpose deemed
appropriate by the Collateral Agent. The Collateral Agent shall have no
obligation to maintain or preserve the rights of the Pledgors as against third
parties with respect to the Collateral while the Collateral is in the possession
of the Collateral Agent. The Collateral Agent shall use reasonable care with
respect to the Collateral in its possession or under its control. The Collateral
Agent shall not have any other duty as to the Collateral in its possession or
control or in the possession or control of any agent or nominee of the
Collateral Agent, or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto. Upon request of
the Pledgors, the Collateral Agent shall account for any monies received by the
Collateral Agent in respect of any foreclosure on or disposition of the
Collateral.
(b) Each Pledgor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect to
any action taken by the Collateral Agent or the exercise or non-exercise by the
Collateral Agent of any option, right, request, judgment or other right or
remedy provided for herein or resulting or arising out of this Agreement shall,
as among the Collateral Agent and the Holders of Notes, be governed by this
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Collateral Agent and the Pledgors,
the Collateral Agent shall be conclusively presumed to be acting as agent for
the Holders with full and valid
16
16
authority so to act or refrain from acting, and the Pledgors shall not be
obligated or entitled to make any inquiry respecting such authority.
18.16 Resignation or Removal of the Collateral Agent. Until
such time as the Obligations shall have been paid in full, the Collateral Agent
may at any time, by giving written notice to the Pledgors and the Trustee,
resign and be discharged of the responsibilities hereby created, such
resignation to become effective upon (i) the appointment of a successor
Collateral Agent and (ii) the acceptance of such appointment by such successor
Collateral Agent. As promptly as practicable after the giving of any such
notice, the Majority Holders shall appoint a successor Collateral Agent, which
successor Collateral Agent shall be reasonably acceptable to the Pledgors. If no
successor Collateral Agent shall be appointed and shall have accepted such
appointment within 60 days after the Collateral Agent gives the aforesaid notice
of resignation, the Collateral Agent may apply to any court of competent
jurisdiction to appoint a successor Collateral Agent to act until such time, if
any, as a successor shall have been appointed as provided in this Section 18.16.
Any successor so appointed by such court shall immediately and without further
act be superseded by any successor Collateral Agent appointed by the Majority
Holders as provided in this Section 18.16. Simultaneously with its replacement
as Collateral Agent hereunder, the Collateral Agent so replaced shall deliver to
its successor all documents, instruments, certificates and other items of
whatever kind (including, without limitation, the certificates and instruments
evidencing the Pledged Collateral and all instruments of transfer or assignment)
held by it pursuant to the terms hereof. The Collateral Agent that has resigned
shall be entitled to fees, costs and expenses to the extent incurred or arising,
or relating to events occurring, before its resignation or removal.
18.17 Termination of Agreement.
Subject to the provisions of Section 18.12 hereof, this
Agreement shall terminate upon full and final payment and performance of the
Obligations (and upon receipt by the Collateral Agent of the Pledgors' written
certification that all such Obligations have been satisfied) and payment in full
of all fees and expenses owing by the Issuer to the Collateral Agent. At such
time, the Collateral Agent shall, at the request of the Pledgors, reassign and
redeliver to the Pledgors all of the Pledged Collateral hereunder that has not
been sold, disposed of, retained or applied by the Collateral Agent in
accordance with the terms hereof. Such reassignment and redelivery shall be
without warranty by or recourse to the Collateral Agent, except as to the
absence of any prior assignments by the Collateral Agent of its interest in the
Pledged Collateral, and shall be at the expense of the Pledgors.
18.18 Final Expression. This Agreement, together with any
other agreement executed in connection herewith, is intended by the parties as a
final expression of their Agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
18.19 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER
OF JURY TRIAL; WAIVER OF DAMAGES.
17
17
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER
THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE
PLEDGORS, THE COLLATERAL AGENT, AND THE HOLDERS IN CONNECTION WITH THIS
AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF
LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH
(vi) BELOW, THE PLEDGORS, THE COLLATERAL AGENT AND THE HOLDERS AGREE THAT ALL
DISPUTES BETWEEN OR AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE
PLEDGORS, THE COLLATERAL AGENT AND THE HOLDERS ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW
YORK. EACH PLEDGOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(iii) EACH PLEDGOR AGREES THAT THE COLLATERAL AGENT SHALL, IN
ITS OWN NAME OR IN THE NAME AND ON BEHALF OF ANY HOLDER, HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST SUCH PLEDGOR OR SUCH
PLEDGOR'S PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH
TO ENABLE THE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL AGENT. EACH
PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY THE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE COLLATERAL AGENT. EACH
PLEDGOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE COLLATERAL AGENT HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS.
(iv) EACH PLEDGOR, THE COLLATERAL AGENT AND THE HOLDERS WAIVE
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
18
18
AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(v) EACH PLEDGOR HEREBY IRREVOCABLY DESIGNATES THE REGISTERED
AGENT OF THE PLEDGOR AS THE DESIGNEE, APPOINTEE AND AGENT OF THE PLEDGOR TO
RECEIVE, FOR AND ON BEHALF OF SUCH PLEDGOR, SERVICE OF PROCESS IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT. IT IS UNDERSTOOD THAT
NOTICE AND A COPY OF SUCH PROCESS SERVED ON SUCH AGENT, WILL BE FORWARDED
PROMPTLY TO SUCH PLEDGOR, BUT THE FAILURE OF EACH PLEDGOR TO RECEIVE SUCH NOTICE
AND COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. EACH PLEDGOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS 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 SUCH PLEDGOR AT ITS
ADDRESS SET FORTH ON SCHEDULE II HERETO, SUCH SERVICE TO BECOME EFFECTIVE FIVE
(5) BUSINESS DAYS AFTER SUCH MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL
AGENT OR ANY SECURED CREDITOR TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE PLEDGORS
IN ANY OTHER JURISDICTION.
(vii) EACH PLEDGOR HEREBY AGREES THAT NEITHER THE COLLATERAL
AGENT NOR ANY HOLDER SHALL HAVE ANY LIABILITY TO SUCH PLEDGOR (WHETHER SOUNDING
IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY SUCH PLEDGOR IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS
CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY ACT,
OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY
A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE COLLATERAL
AGENT OR SUCH SECURED CREDITOR, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE
RESULT OF ACTS OR OMISSIONS ON THE PART OF THE COLLATERAL AGENT OR SUCH SECURED
CREDITOR, AS THE CASE MAY BE, CONSTITUTING GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
(viii) EACH PLEDGOR WAIVES ALL RIGHTS OF NOTICE AND HEARING OF
ANY KIND PRIOR TO THE EXERCISE BY THE COLLATERAL AGENT OR ANY HOLDER OF ITS
RIGHTS DURING THE CONTINUANCE OF A DEFAULT OR AN EVENT OF DEFAULT TO REPOSSESS
THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE
COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. EACH PLEDGOR WAIVES THE
POSTING OF ANY BOND OTHERWISE REQUIRED OF THE COLLATERAL AGENT OR ANY SECURED
CREDITOR IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN
POSSESSION OF, REPLEVY, ATTACH OR LEVY UPON COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS, TO ENFORCE ANY
19
19
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL AGENT OR ANY
SECURED CREDITOR, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING
ORDER OR PRELIMINARY OR PERMANENT INJUNCTION THIS AGREEMENT OR ANY OTHER
AGREEMENT OR DOCUMENT AMONG THE PLEDGORS, THE COLLATERAL AGENT AND THE HOLDERS.
Section 18.20 Acknowledgments. Each Pledgor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement;
(b) neither the Collateral Agent nor any Holder has any
fiduciary relationship to the Pledgors, and the relationship between the
Collateral Agent and the Holders, on the one hand, and the Pledgors, on
the other hand, is solely that of a secured party and a creditor; and
(c) no joint venture exists among the Holders or among the
Pledgors and the Holders.
20
20
IN WITNESS WHEREOF, the Pledgors and the Collateral Agent have each
caused this Agreement to be duly executed and delivered as of the date first
above written.
XXXXXXXX XXXXXX
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------
Name:
Title:
XXXXXXX XXXXXX
By:
----------------------------------
Name:
Title:
XXXXXXXX XXXXXX FAMILY LIMITED
PARTNERSHIP
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------
Name:
Title:
XXXXXXX XXXXXX FAMILY LIMITED
PARTNERSHIP
By:
----------------------------------
Name:
Title:
21
IN WITNESS WHEREOF, the Pledgors and the Collateral Agent have each
caused this Agreement to be duly executed and delivered as of the date first
above written.
XXXXXXXX XXXXXX
--------------------------------(SEAL)
XXXXXXX XXXXXX
/s/ Xxxxxxx Xxxxxx
---------------------------------(SEAL)
XXXXXXXX XXXXXX FAMILY LIMITED
PARTNERSHIP
By: Xxxxxxxx Xxxxxx, Inc.
Managing General Partner
By:
------------------------------
Name: Xxxxxxxx Xxxxxx
Title: President
XXXXXXX XXXXXX FAMILY LIMITED
PARTNERSHIP
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing General Partner
XXXXXXX XXXXXX 1984 CHILDREN'S TRUST
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: Trustee
22
21
XXXXXXX XXXXXX 1984 CHILDREN'S
TRUST
By:
----------------------------------
Name:
Title:
MARINE MIDLAND BANK, as Collateral Agent:
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
Accepted and acknowledged as of
the date first above written:
MARINE MIDLAND BANK
as Trustee under the Indenture
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
23
SCHEDULE I
PLEDGED SHARES:
Certificate Owner Number of % of Outstanding Issue Date
No. ----- Shares ---------------- ----------
--- ------
A1 Xxxxxxxx Xxxxxx 2,053 0.313% 12/29/92
A2 Xxxxxxx Xxxxxx 2,053 0.313% 12/29/92
A13 Xxxxxxx Xxxxxx, Trustee, Xxxxxxx Xxxxxx 1984 207.5 0.032% 11/18/93
Children's Trust
A15 Xxxxxxxx Xxxxxx Family Limited Partnership 383.75 0.058% 11/18/93
A16 Xxxxxxxx Xxxxxx Family Limited Partnership 383.75 0.058% 11/18/93
A17 Xxxxxxxx Xxxxxx Family Limited Partnership 111 0.017% 11/18/93
A18 Xxxxxxxx Xxxxxx Family Limited Partnership 111 0.017% 11/18/93
A19 Xxxxxxxx Xxxxxx Family Limited Partnership 207.5 0.032% 11/18/93
A20 Xxxxxxx Xxxxxx Family Limited Partnership 383.75 0.058% 11/30/93
A21 Xxxxxxx Xxxxxx Family Limited Partnership 383.75 0.058% 11/30/93
A22 Xxxxxxx Xxxxxx Family Limited Partnership 74 0.011% 11/30/93
A23 Xxxxxxx Xxxxxx Family Limited Partnership 74 0.011% 11/30/93
A24 Xxxxxxx Xxxxxx Family Limited Partnership 74 0.011% 11/30/93
---------------------------------------------------------------------------------------------------------------
--------
B13 Xxxxxxx Xxxxxx, Trustee, Xxxxxxx Xxxxxx 1984 20,750 3.161% 12/29/92
Children's Trust
B30 Xxxxxxxx Xxxxxx Family Limited Partnership 3,263 0.497% 11/18/93
B31 Xxxxxxxx Xxxxxx Family Limited Partnership 197,031 30.012% 11/18/93
B32 Xxxxxxxx Xxxxxx Family Limited Partnership 38,375 5.845% 11/18/93
B33 Xxxxxxxx Xxxxxx Family Limited Partnership 38,375 5.845% 11/18/93
B34 Xxxxxxxx Xxxxxx Family Limited Partnership 13,603 2.072% 11/18/93
B35 Xxxxxxxx Xxxxxx Family Limited Partnership 13,603 2.072% 11/18/93
B36 Xxxxxxxx Xxxxxx Family Limited Partnership 20,750 3.151% 11/18/93
B37 Xxxxxxx Xxxxxx Family Limited Partnership 38,375 5.845% 11/30/93
B38 Xxxxxxx Xxxxxx Family Limited Partnership 197,869 30.140% 11/30/93
B39 Xxxxxxx Xxxxxx Family Limited Partnership 38,375 5.845% 11/30/93
B40 Xxxxxxx Xxxxxx Family Limited Partnership 7,718 1.176% 11/30/93
B41 Xxxxxxx Xxxxxx Family Limited Partnership 7,718 1.176% 11/30/93
B42 Xxxxxxx Xxxxxx Family Limited Partnership 14,195 2.162% 11/30/93
24
SCHEDULE II
Xxxxxxxx Xxxxxx
00 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxxx Xxxxxx
00 Xxxxxxxx Xxxxx
Xxxxxx XX0 0XX
Xxxxxxx
Xxxxxxx Xxxxxx, Trustee
Xxxxxxx Xxxxxx 1984 Children's Trust
00 Xxxxxxxx Xxxxx
Xxxxxx XX0 0XX
Xxxxxxx
Xxxxxxxx Xxxxxx Family Limited Partnership
Xxxxxxxx Xxxxxx, Inc., General Partner
Xxxxxxxx Xxxxxx, President
00 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxxx Xxxxxx Family Limited Partnership
Xxxxxxx Xxxxxx, General Partner
00 Xxxxxxxx Xxxxx
Xxxxxx XX0 0XX
Xxxxxxx
Collateral Agent
Marine Midland Bank
Corporate Trust Services
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
