Exhibit 10.65
-------------
BORROWER PLEDGE AGREEMENT
-------------------------
PLEDGE AGREEMENT (as amended, modified or supplemented from time to
time, this "Agreement"), dated as of January 8, 1997 made by COINMACH
CORPORATION (the "Pledgor"), to BANKERS TRUST COMPANY, as Collateral Agent
(together with any successor, the "Collateral Agent"), for the benefit of (x)
the Banks (as hereinafter defined), the Administrative Agent (as hereinafter
defined), the Syndication Agent (as hereinafter defined), the Documentation
Agent (as hereinafter defined) and the Collateral Agent under, and any other
lenders from time to time party to, the Credit Agreement hereinafter referred to
(such Banks, the Administrative Agent, the Syndication Agent, the Documentation
Agent, the Collateral Agent and such other lenders, if any, are hereinafter
called the "Bank Creditors") and (y) if one or more Banks or any Affiliate of a
Bank enters into one or more (i) interest rate protection agreements (including,
without limitation, interest rate swaps, caps, floors, collars and similar
agreements), (ii) foreign exchange contracts, currency swap agreements or other
similar agreements or arrangements designed to protect against the fluctuations
in currency values and/or (iii) other types of hedging agreements from time to
time (collectively, the "Interest Rate Protection or Other Hedging Agreements"),
with, or guaranteed by, the Pledgor, any such Bank or Banks or Affiliate or
Affiliates (even if the respective Bank subsequently ceases to be a Bank under
the Credit Agreement for any reason) so long as any such Bank or Affiliate
participates in the extension of such Interest Rate Protection or Other Hedging
Agreements, and their subsequent assigns, if any (collectively, the "Other
Creditors"; together with the Bank Creditors, the "Secured Creditors"). Except
as otherwise defined herein, terms used herein and defined in the Credit
Agreement shall be used herein as so defined.
R E C I T A L S :
---------------
1. Coinmach Laundry Corporation, the Pledgor, the lenders (the
"Banks") from time to time party thereto, Bankers Trust Company, as
Administrative Agent (together with any successor, the "Administrative Agent"),
First Union National Bank of North Carolina, as Syndication Agent (together with
any successor, the "Syndication Agent") and
1
Page 2
Xxxxxx Commercial Paper, Inc., as Documentation Agent (together with any
successor, the "Documentation Agent") have entered into a Credit Agreement,
dated as of the date hereof, providing for the making of Loans and the issuance
of, and participation in, Letters of Credit as contemplated therein (such
agreement, as amended, modified, extended, renewed, replaced, restated or
supplemented from time to time, and including any agreement extending the
maturity of, or restructuring all or any portion of the Indebtedness under such
agreement or any successor agreement, the "Credit Agreement");
2. The Pledgor may at any time and from time to time enter into, or
guarantee obligations of its Subsidiaries under, one or more Interest Rate
Protection or Other Hedging Agreements with one or more Other Creditors;
3. It is a condition to each of the above-described extensions of
credit that the Pledgor shall have executed and delivered this Agreement;
4. The Pledgor desires to enter into this Agreement in order to
satisfy the condition described in the preceding paragraph.
A G R E E M E N T :
------------------
NOW, THEREFORE, in consideration of the above-described extensions of
credit to be made to the Pledgor and other benefits accruing to the Pledgor, the
receipt and sufficiency of which are hereby acknowledged, the Pledgor hereby
makes the following representations and warranties as of the date hereof to the
Collateral Agent for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
Section 1. SECURITY FOR OBLIGATIONS. This Agreement is made by the
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise in accordance with the terms of the
Credit Agreement) of (x) the principal of and interest on the Notes issued,
and Loans made, under the Credit Agreement, and all reimbursement
obligations and Unpaid Drawings with respect to the Letters of Credit under
the Credit Agreement and
Page 3
(y) all other obligations and indebtedness (including, without limitation,
indemnities, Fees and interest thereon) of the Pledgor to the Bank
Creditors now existing or hereafter incurred under, arising out of, or in
connection with the Credit Agreement and the other Credit Documents and the
due performance and compliance by the Pledgor with all of the terms,
conditions and agreements contained in the Credit Agreement and the other
Credit Documents (all such principal, interest, obligations and liabilities
described in this clause (i) collectively, the "Credit Agreement
Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise in accordance with the terms of the
Credit Agreement) of all obligations and liabilities owing by the Pledgor
to the Other Creditors under, or with respect to, any Interest Rate
Protection or Other Hedging Agreement, whether such Interest Rate
Protection or Other Hedging Agreement is now in existence or hereafter
arising in connection with the Credit Documents, and the due performance
and compliance by the Pledgor with all of the terms, conditions and
agreements contained therein (all such obligations and liabilities
described in this clause (ii) collectively, the "Other Obligations");
(iii) any and all sums advanced and not repaid by the Collateral
Agent in order to preserve the Collateral (as hereinafter defined) or
preserve its security interest in the Collateral in accordance with the
terms hereof and the other Credit Documents; and
(iv) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities of the Pledgor referred to
in clauses (i) and (ii), after an Event of Default (as such term is defined
in the Security Agreement) shall have occurred and be continuing and the
Collateral Agent has given notice under Article X of the Credit Agreement,
the commercially reasonable expenses of retaking, holding, preparing for
sale or lease, selling or otherwise disposing of or realizing on the
Collateral, or of any exercise by the Collateral Agent of its rights
hereunder, together with reasonable attorneys' fees and court costs in
accordance with the terms hereof and the other Credit Documents;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (iv) of this Section 1
Page 4
collectively, the "Obligations," it being acknowledged and agreed that the
"Obligations" shall include extensions of credit of the types described above,
whether outstanding on the date of this Agreement or extended from time to time
after the date of this Agreement.
Section 2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used
herein, (i) the term "Stock" shall mean (x) with respect to corporations
incorporated under the laws of the United States or any State or territory
thereof (each a "Domestic Corporation"), all of the issued and outstanding
shares of capital stock at any time owned by the Pledgor of any Domestic
Corporation and (y) with respect to corporations not Domestic Corporations (each
a "Foreign Corporation"), all of the issued and outstanding shares of capital
stock at any time owned by the Pledgor of any Foreign Corporation, provided
--------
that, except as provided in the last sentence of this Section 2, the Pledgor
shall not be required to pledge hereunder more than 65% of the total combined
voting power of all classes of capital stock of any Foreign Corporation entitled
to vote and (ii) the term "Notes" shall mean (x) all promissory notes at any
time issued to the Pledgor by any of its Subsidiaries or Affiliates and (y)
except as provided in the last sentence of this Section 2, the Pledgor shall not
be required to pledge hereunder any promissory notes issued to the Pledgor by
any Subsidiary of the Pledgor which is a Foreign Corporation. If and to the
extent that the Collateral Agent receives or holds stock certificates
representing more than 65% of the total combined voting power of all classes of
capital stock of any Foreign Corporation entitled to vote, the Collateral Agent
agrees to act as bailee and custodian for the benefit of the Pledgor with
respect to any portion of such capital stock representing more than 65% of the
total combined voting power of all classes of capital stock of any Foreign
Corporation entitled to vote except as otherwise provided in the last sentence
of this Section 2. As used herein, the term "Securities" shall mean all of the
Stock and Notes. The Pledgor represents and warrants, as to the stock of
corporations and promissory notes owned by the Pledgor, that on the date hereof
(a) the Stock consists of the number and type of shares of the stock of the
corporations as described in Part I of Schedule A hereto; (b) such Stock
----------
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as is set forth in Part I of Schedule A hereto; (c) the
----------
Notes consist of the promissory notes described in Part II of Schedule A hereto;
----------
and (d) the Pledgor is the holder of record and sole beneficial owner of the
Stock and the Notes and there exist no options or preemption rights in
Page 5
respect of any of the Stock. If following a change in the relevant sections of
the Code or the regulations, rules, rulings, notices or other official
pronouncements issued or promulgated thereunder which would permit a pledge (x)
of 66 2/3% or more (or would be adjusted to permit a pledge of less than 66
2/3%) of the total combined voting power of all classes of capital stock of any
Foreign Corporation entitled to vote and (y) of any promissory note issued by
any Subsidiary of the Pledgor which is a Foreign Corporation without causing the
undistributed earnings of such Foreign Corporation as determined for Federal
income taxes to be treated as a deemed dividend to the Pledgor for Federal
income tax purposes, then the 65% limitation set forth in clause (i)(y) and the
limitation in the proviso of clause (ii) in each case of this Section 2 shall no
longer be applicable (or shall be adjusted as appropriate) and the Pledgor shall
duly pledge and deliver to the Collateral Agent such of the Securities not
theretofore required to be pledged hereunder or the Collateral Agent shall
return such Securities, as applicable.
Section 3. PLEDGE OF SECURITIES, ETC.
Section 3.1. Pledge. To secure the Obligations and for the purposes
------
set forth in Section 1, the Pledgor (i) hereby grants to the Collateral Agent a
security interest in all of the Collateral (as hereinafter defined), (ii) hereby
pledges and deposits with the Collateral Agent the Securities owned by the
Pledgor on the date hereof, and delivers to the Collateral Agent certificates
therefor, duly endorsed in blank in the case of promissory notes and accompanied
by undated stock powers duly executed in blank by the Pledgor (and accompanied
by any transfer tax stamps required in connection with the pledge of such
Securities) in the case of capital stock, or such other instruments of transfer
as are reasonably acceptable to the Collateral Agent and (iii) hereby
collaterally assigns, transfers, hypothecates and sets over to the Collateral
Agent all of the Pledgor's right, title and interest in and to such Securities
(and in and to the certificates or instruments evidencing such Securities), to
be held by the Collateral Agent as collateral security for the Obligations, upon
the terms and conditions set forth in this Agreement.
Section 3.2. Subsequently Acquired Securities. If the Pledgor shall
--------------------------------
acquire (by purchase, stock dividend or otherwise) any additional Securities at
any time or from time to time after the date hereof, the Pledgor will promptly
thereafter pledge and deposit such Securities (or
Page 6
certificates or instruments representing Securities) as security with the
Collateral Agent and deliver to the Collateral Agent certificates or instruments
therefor, duly endorsed in blank in the case of promissory notes, and
accompanied by undated stock powers duly executed in blank by the Pledgor (and
accompanied by any transfer tax stamps required in connection with the pledge of
such Securities) in the case of capital stock, or such other instruments of
transfer as are reasonably acceptable to the Collateral Agent, and will promptly
thereafter deliver to the Collateral Agent a certificate executed by a principal
executive officer of the Pledgor describing such Securities and certifying that
the same has been duly pledged with the Collateral Agent hereunder. Subject to
the last sentence of Section 2, the Pledgor shall not be required at any time to
pledge hereunder any promissory notes issued to the Pledgor by a Subsidiary
which is a Foreign Corporation or more than 65% of the total combined voting
power of all classes of capital stock of any Foreign Corporation entitled to
vote.
Section 3.3. Uncertificated Securities. Notwithstanding anything to
-------------------------
the contrary contained in Sections 3.1 and 3.2, if any Securities (whether now
owned or hereafter acquired) are uncertificated securities, the Pledgor shall
promptly notify the Collateral Agent thereof, and shall promptly take all
actions reasonably 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 if applicable). The Pledgor further
agrees to take such actions as the Collateral Agent deems reasonably 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 reasonably satisfactory to the Collateral Agent with respect
to any such pledge of uncertificated Securities promptly upon the reasonable
request of the Collateral Agent.
Section 3.4. Definitions of Pledged Stock; Pledged Notes; Pledged
----------------------------------------------------
Securities and Collateral. All Stock at any time pledged or required to be
-------------------------
pledged hereunder is hereinafter called the "Pledged Stock;" all Notes at any
time pledged or required to be pledged hereunder are hereinafter called the
"Pledged Notes;" all Pledged Stock and Pledged Notes together are called the
"Pledged Securities;" and the Pledged Securities, together with all proceeds
thereof, including any securities and moneys received and at any time held by
the Collateral Agent hereunder, are hereinafter called the "Collateral."
Page 7
Section 4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The
Collateral Agent shall have the right to appoint one or more sub-agents, at the
cost and expense of the Collateral Agent, for the purpose of retaining physical
possession of the Pledged Securities, which may be held (in the reasonable
discretion of the Collateral Agent) in the name of the Pledgor, endorsed or
assigned in blank or in favor of the Collateral Agent or any nominee or nominees
of the Collateral Agent or a sub-agent appointed by the Collateral Agent.
Section 5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
there shall have occurred and be continuing an Event of Default and the
Collateral Agent has given written notice to the Pledgor in accordance with
Article X of the Credit Agreement, the Pledgor shall be entitled to vote any and
all Pledged Securities owned by it, and to give consents, waivers or
ratifications in respect thereof, provided that no vote shall be cast or any
--------
consent, waiver or ratification given or any action taken which would violate,
result in breach of any covenant contained in this Agreement, the Credit
Agreement or any other Credit Document or which is not permitted under any of
the Credit Documents and could reasonably be expected to have the effect of
materially impairing the value of the Collateral or any material part thereof or
the position or interests of the Collateral Agent or any Secured Creditor. All
such rights of the Pledgor to vote and to give consents, waivers and
ratifications shall cease in case an Event of Default has occurred and is
continuing and the Collateral Agent has given written notice to the Pledgor in
accordance with Article X of the Credit Agreement, and Section 7 hereof shall
become applicable.
Section 6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there
shall have occurred and be continuing an Event of Default and the Collateral
Agent has given written notice to the Pledgor in accordance with Article X of
the Credit Agreement, all cash dividends and distributions payable in respect of
the Pledged Stock and all payments in respect of the Pledged Notes shall be paid
to the Pledgor. The Collateral Agent shall be entitled to receive directly, and
to retain as part of the Collateral:
(a) all other or additional stock or securities (other than cash) paid
or distributed by way of dividend or otherwise, as the case may be, in
respect of the Pledged Stock;
Page 8
(b) all other or additional stock or other securities paid (other than
cash) or distributed in respect of the Pledged Stock by way of stock-split,
spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and
(c) all other or additional stock or other securities or property
(excluding cash) which may be paid in respect of the Collateral by reason
of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Collateral Agent's right to receive proceeds of the Collateral in any form in
accordance with Section 3 of this Agreement. All dividends, distributions or
other payments which are received by the Pledgor contrary to the provisions of
this Section 6 and Section 7 shall be received in trust for the benefit of the
Collateral Agent, shall be segregated from other property or funds of the
Pledgor and shall be forthwith paid or delivered over to the Collateral Agent as
Collateral in the same form as so received (with any necessary endorsement).
Section 7. REMEDIES IN CASE OF EVENTS OF DEFAULT. If there shall
have occurred and be continuing an Event of Default and the Collateral Agent has
given written notice to the Pledgor in accordance with Article X of the Credit
Agreement, then and in every such case, the Collateral Agent shall be entitled
to exercise all of the rights, powers and remedies (whether vested in it by this
Agreement, any other Credit Document, any Interest Rate Protection or Other
Hedging Agreement or by law) for the protection and enforcement of its rights in
respect of the Collateral, and the Collateral Agent shall be entitled to
exercise all the rights and remedies of a secured party under the Uniform
Commercial Code and also shall be entitled, without limitation, to exercise the
following rights, which the Collateral Agent agrees to exercise in a
commercially reasonable manner:
(a) to receive all amounts payable in respect of
the Collateral otherwise payable under Section 6 to the Pledgor;
(b) to transfer all or any part of the Collateral
into the Collateral Agent's name or the name of its nominee or nominees;
Page 9
(c) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect upon
any Pledged Note at such times and under the conditions set forth therein;
(d) to vote all or any part of the Pledged Stock (whether or not
transferred into the name of the Collateral Agent) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise act
with respect thereto in a commercially reasonable manner as though it were
the outright owner thereof (the Pledgor hereby irrevocably constituting and
appointing the Collateral Agent the proxy and attorney-in-fact of the
Collateral Agent, with full power of substitution to do so upon the
occurrence and during the continuance of an Event of Default provided the
Collateral Agent has delivered written notice to the Pledgor in accordance
with Article X of the Credit Agreement); and
(e) to sell, assign and deliver, or grant options to purchase, all or
any part of the Collateral, or any interest therein, at any public or
private sale, without demand of performance, advertisement or notice of
intention to sell or of the time or place of sale or adjournment thereof or
to redeem or otherwise (all of which are hereby waived by the Pledgor), for
cash, on credit or for other property, for immediate or future delivery
without any assumption of credit risk, and for such price or prices and on
such terms as the Collateral Agent may determine in a commercially
reasonable manner, provided that at least 10 days' written notice of the
--------
time and place of any such sale shall be given to the Pledgor. The
Collateral Agent shall not be obligated to make any such sale of Collateral
regardless of whether any such notice of sale has theretofore been given.
The Pledgor hereby waives and releases to the fullest extent permitted by
law any right or equity of redemption with respect to the Collateral,
whether before or after sale hereunder other than the Pledgor's right to
receive any excess proceeds or Collateral remaining after payment in full
of the Obligations, and all rights, if any, of marshalling the Collateral
and any other security for the Obligations or otherwise. At any such sale,
unless prohibited by applicable law, the Collateral Agent on behalf of the
Secured Creditors may bid for and purchase all or any part of the
Collateral so sold free from any such right or equity of redemption.
Neither the Collateral Agent nor any Secured Creditor shall be liable for
failure to collect (except in such cases
Page 10
where the Collateral Agent bids for and purchases all or part of the
Collateral) or realize upon any or all of the Collateral or for any delay
in so doing nor shall any of them be under any obligation to take any
action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and
remedy of the Collateral Agent provided for in this Agreement, the other Credit
Documents, or the Interest Rate Protection or Other Hedging Agreements, or now
or hereafter existing at law or in equity or by statute, shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by the Collateral Agent or any Secured
Creditor of any one or more of the rights, powers or remedies provided for in
this Agreement, the other Credit Documents or the Interest Rate Protection or
Other Hedging Agreements or now or hereafter existing at law or in equity or by
statute shall not preclude the simultaneous or later exercise by the Collateral
Agent or any Secured Creditor of all such other rights, powers or remedies, and
no failure or delay on the part of the Collateral Agent or any Secured Creditor
to exercise any such right, power or remedy shall operate as a waiver thereof
except as required by applicable law. Unless otherwise required by the Credit
Documents, no notice to or demand on the Pledgor in any case shall entitle it to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Collateral Agent or any Secured
Creditor to any other or further action in any circumstances without notice or
demand.
Section 9. APPLICATION OF PROCEEDS. All moneys collected by the
Collateral Agent upon any sale or other disposition of the Collateral, together
with all other moneys received by the Collateral Agent hereunder, shall be
applied to the payment of the Obligations in the manner provided by Section 7.4
of the Security Agreement.
Section 10. PURCHASERS OF COLLATERAL. Upon any sale of the
Collateral by the Collateral Agent hereunder (whether by virtue of the power of
sale herein granted, pursuant to judicial process or otherwise), the receipt of
the Collateral Agent or the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold, and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Collateral Agent or such
Page 11
officer or be answerable in any way for the misapplication or nonapplication
thereof.
Section 11. INDEMNITY. The Pledgor agrees to indemnify and hold
harmless the Collateral Agent and each Secured Creditor and their respective
successors, assigns, employees, agents and servants (each an "Indemnitee,";
collectively, the "Indemnitees") from and against any and all claims, demands,
losses, judgments and liabilities (including liabilities for penalties) of
whatsoever kind or nature, and to reimburse each Indemnitee for all costs and
expenses, including reasonable attorneys' fees, growing out of or resulting from
this Agreement or the exercise by any Indemnitee of any right or remedy granted
to it hereunder or under the other Credit Documents or the Interest Rate
Protection and Other Hedging Agreements (but excluding any claims, demands,
losses, judgments and liabilities or expenses to the extent finally judicially
determined to have been incurred by reason of gross negligence or willful
misconduct of such Indemnitee). If and to the extent that the obligations of
the Pledgor under this Section 11 are unenforceable for any reason, the Pledgor
hereby agrees to make the maximum contribution to the payment and satisfaction
of such obligations which is permissible under applicable law.
Section 12. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) The Pledgor
agrees that it will join with the Collateral Agent in executing and, at its own
expense, file and refile under the Uniform Commercial Code or other applicable
law such financing statements, continuation statements and other documents in
such offices as the Collateral Agent may deem reasonably necessary and wherever
required by law in order to perfect and preserve the Collateral Agent's security
interest in the Collateral and hereby authorizes the Collateral Agent to file
financing statements and amendments thereto relative to all or any part of the
Collateral without the signature of the Pledgor where permitted by law, and
agrees to do such further acts and things and to execute and deliver to the
Collateral Agent such additional conveyances, assignments, agreements and
instruments as the Collateral Agent may reasonably require or deem necessary to
carry into effect the purposes of this Agreement or to further assure and
confirm unto the Collateral Agent its rights, powers and remedies hereunder.
(b) The Pledgor hereby appoints the Collateral Agent the Pledgor's
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the
Page 12
Pledgor or otherwise, from time to time after the occurrence and during the
continuance of an Event of Default and provided that the Collateral Agent shall
have delivered notice to the Pledgor in accordance with Article X of the Credit
Agreement, in the Collateral Agent's reasonable discretion to take any action
and to execute any instrument which the Collateral Agent may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement.
Section 13. THE PLEDGEE AS AGENT. The Collateral Agent will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed by the parties
hereto and each Secured Creditor, by accepting the benefits of this Agreement,
each such person acknowledges and agrees that the obligations of the Collateral
Agent as holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. The Collateral Agent shall act hereunder
on the terms and conditions set forth herein and in Section 12 of the Credit
Agreement.
Section 14. TRANSFER BY THE PLEDGOR. The Pledgor will not sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except as may
be permitted in accordance with the terms of the Credit Agreement).
Section 15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR.
The Pledgor represents and warrants that as of the date hereof (a) it is, or at
the time when pledged hereunder will be, the legal, record and beneficial owner
of, and has (or will have) good title to, all Securities pledged hereunder,
subject to no Lien (except the Lien created by this Agreement); (b) it has full
corporate power, authority and legal right to pledge all the Securities pursuant
to this Agreement; (c) this Agreement has been duly authorized, executed and
delivered by the Pledgor and constitutes a legal, valid and binding obligation
of the Pledgor enforceable in accordance with its terms, except to the extent
that the enforceability hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law); (d) except to the extent already obtained or
made, no consent of any other party (including, without limitation, any
stockholder or
Page 13
creditor of the Pledgor or any of its Subsidiaries) and no consent, license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is required
to be obtained by the Pledgor in connection with (i) the execution, delivery or
performance of this Agreement, (ii) the validity or enforceability of this
Agreement, (iii) the perfection or enforceability of the Collateral Agent's
security interest in the Collateral or (iv) except for compliance with or as may
be required by applicable securities laws, the exercise by the Collateral Agent
of any of its rights or remedies provided herein; (e) the execution, delivery
and performance of this Agreement will not violate any provision of any
applicable law or regulation or of any order, judgment, writ, award or decree of
any court, arbitrator or governmental authority, domestic or foreign, applicable
to the Pledgor, or of the Certificate of Incorporation or By-Laws of the Pledgor
or of any securities issued by the Pledgor or any of its Subsidiaries, or of any
material mortgage, indenture, lease, loan agreement, credit agreement or other
contract, agreement or instrument or undertaking to which the Pledgor or any of
its Subsidiaries is a party or which purports to be binding upon the Pledgor or
any of its Subsidiaries or upon any of their respective material assets and will
not result in the creation or imposition of (or the obligation to create or
impose) any lien or encumbrance on any of the assets of the Pledgor or any of
its Subsidiaries except as contemplated by this Agreement; (f) all the shares of
the Stock have been duly and validly issued, are fully paid and non-assessable
and are subject to no options to purchase or similar rights; (g) each of the
Pledged Notes to the extent executed by Holdings or any of its Subsidiaries
constitutes, or when executed by the obligor thereof will constitute, the legal,
valid and binding obligation of such obligor, enforceable in accordance with its
terms, except to the extent that the enforceability thereof may by limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law); and (h) the
pledge, collateral assignment and delivery to the Collateral Agent of the
Securities (other than uncertificated securities) pursuant to this Agreement
creates a valid and perfected first priority Lien in the Securities, and the
proceeds thereof, subject to no other Lien or to any agreement purporting to
grant to any third party a Lien on the property or assets of the Pledgor which
would include the Securities. The Pledgor covenants and agrees that it will
take commercially reasonable steps to defend the Collateral
Page 14
Agent's right, title and security interest in and to the Securities and the
proceeds thereof against the claims and demands of all persons whomsoever; and
the Pledgor covenants and agrees that it will have like title to and right to
pledge any other property at any time hereafter pledged to the Collateral Agent
as Collateral hereunder and will likewise take commercially reasonable steps to
defend the right thereto and security interest therein of the Collateral Agent
and the Secured Creditors.
Section 16. PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC. The obligations of
the Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from the Credit Documents, the Interest Rate Protection or Other Hedging
Agreements or any other instrument or agreement referred to therein, or any
assignment or transfer of any thereof; (b) any waiver, consent, extension,
indulgence or other action or inaction under or in respect of any such agreement
or instrument including, without limitation, this Agreement; (c) any furnishing
of any additional security to the Collateral Agent or its assignee or any
acceptance thereof or any release of any security by the Collateral Agent or its
assignee; (d) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; or (e) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to the Pledgor or any Subsidiary
of the Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not the
Pledgor shall have notice or knowledge of any of the foregoing.
Section 17. REGISTRATION, ETC. (a) If there shall have occurred and
be continuing an Event of Default and acceleration of the Notes then, and in
every such case, upon receipt by the Pledgor from the Collateral Agent of a
written request or requests that the Pledgor cause any registration,
qualification or compliance under any Federal or any state securities law or
laws to be effected with respect to all or any part of the Pledged Stock, the
Pledgor as soon as practicable and at its expense will use its commercially
reasonable efforts to cause such registration to be declared
Page 15
effective (and be kept effective) and will use its commercially reasonable
efforts to cause such qualification and compliance to be declared effective (and
be kept effective) as may be so requested and as would permit or facilitate the
sale and distribution of such Pledged Stock, including, without limitation,
registration under the Securities Act of 1933, as then in effect (or any similar
statute then in effect), appropriate qualifications under applicable blue sky or
other state securities laws and appropriate compliance with any other government
requirements, provided that the Collateral Agent shall furnish to the Pledgor
--------
such information regarding the Collateral Agent as the Pledgor may request in
writing and as shall be required in connection with any such registration,
qualification or compliance. Any such registration shall be effected in
accordance with customary underwriting practices and in compliance with
applicable law. The Pledgor will cause the Collateral Agent to be kept advised
in writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Collateral
Agent such number of prospectuses, offering circulars or other documents
incident thereto as the Collateral Agent from time to time may reasonably
request, and will indemnify the Collateral Agent and all others participating in
the distribution of such Pledged Stock against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same may have been caused by an
untrue statement or omission based upon information furnished in writing to the
Pledgor by the Collateral Agent expressly for use therein.
(b) If at any time when the Collateral Agent shall determine to
exercise its right to sell all or any part of the Pledged Securities pursuant to
Section 7, and such Pledged Securities or the part thereof to be sold shall not,
for any reason whatsoever, be effectively registered under the Securities Act of
1933, as then in effect, the Collateral Agent may, in its sole and absolute
discretion, sell such Pledged Securities or part thereof by private sale in such
manner and under such circumstances as the Collateral Agent may deem reasonably
necessary or advisable in order that such sale may legally be effected without
such registration. Without limiting the generality of the foregoing, in any
such
Page 16
event the Collateral Agent, in its commercially reasonable discretion (i) may
proceed to make such private sale notwithstanding that a registration statement
for the purpose of registering such Pledged Securities or part thereof shall
have been filed under such Securities Act, (ii) may approach and negotiate with
a single possible purchaser to effect such sale, and (iii) may restrict such
sale to a purchaser who will represent and agree that such purchaser is
purchasing for its own account, for investment, and not with a view to the
distribution or sale of such Pledged Securities or part thereof. In the event
of any such sale, the Collateral Agent shall incur no responsibility or
liability for selling all or any part of the Pledged Securities at a price which
the Collateral Agent, in its commercially reasonable discretion, in good xxxxx
xxxxx reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until
after registration as aforesaid.
Section 18. TERMINATION; RELEASE. (a) After the Termination Date
(as defined below), this Agreement and the security interest created hereby
shall terminate, and the Collateral Agent, at the request and expense of the
Pledgor, will execute and deliver to the Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this Agreement,
and will duly assign, transfer and deliver to the Pledgor (without recourse and
without any representation or warranty other than a representation that the
Collateral Agent has not granted any lien on or security interest in the
Collateral) such of the Collateral as may be in the possession of the Collateral
Agent or any of its sub-agents and has not theretofore been sold or otherwise
applied or released pursuant to this Agreement, together with any moneys at the
time held by the Collateral Agent or any of its sub-agents hereunder. As used
in this Agreement, "Termination Date" shall mean the date upon which the
Commitments and all Interest Rate Protection or Other Hedging Agreements have
been terminated, no Note under the Credit Agreement is outstanding (and all
Loans have been repaid in full), all Letters of Credit have been terminated and
all Obligations then owing have been paid in full.
(b) Notwithstanding anything to the contrary contained above, upon the
presentment of satisfactory evidence to the Collateral Agent in its sole
discretion that all obligations evidenced by any Pledged Note have been repaid
in full, and that any payments received by the Pledgor were permitted to be
received by the Pledgor pursuant to Section 6 hereof, the Collateral Agent
shall, upon the request and at
Page 17
the expense of the Pledgor, duly assign, transfer and deliver to the Pledgor
(without recourse and without any representation or warranty other than a
representation that the Collateral Agent has not granted any lien on or security
interest in such Pledged Note) such Pledged Note if same is then in the
possession of the Collateral Agent or any of its sub-agents and has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement.
(c) In the event that any part of the Collateral is sold in connection
with a sale permitted by Section 9.02 of the Credit Agreement or otherwise
released at the direction of the Required Banks (or all Banks if required by
Section 13.12 of the Credit Agreement) and the proceeds of such sale or sales or
from such release are applied in accordance with the provisions of Section 4.02
of the Credit Agreement, to the extent required to be so applied, the Collateral
Agent, at the request and expense of the Pledgor, will duly assign, transfer and
deliver to the Pledgor (without recourse and without any representation or
warranty) such of the Collateral as is then being (or has been) so sold or
released and as may be in the possession of the Collateral Agent or any of its
sub-agents and has not theretofore been released pursuant to this Agreement.
(d) At any time that the Pledgor desires that Collateral be released
as provided in the foregoing sub-section (a), (b) or (c), it shall deliver to
the Collateral Agent a certificate signed by its chief financial officer stating
that the release of the respective Collateral is permitted pursuant to such
subsection (a), (b) or (c).
(e) The Collateral Agent shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it in accordance
with this Section 18.
Section 19. NOTICES ETC. All such notices and communications
hereunder shall be telecopied or delivered by messenger or overnight courier
service and all such notices and communications shall, when mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, be effective when
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier and when mailed shall be effective
three Business Days following deposit in the mail with proper postage, except
that notices and communications to the Collateral Agent shall not be effective
until received by the
Page 18
Collateral Agent. All notices and other communications shall be in writing and
addressed as follows:
(a) if to the Pledgor, at:
Coinmach Corporation
00 Xxxxxx Xxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
with a copy to:
Xxxxxxxx Kill & Olick, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
(b) if to the Collateral Agent, at:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Prior
(c) if to any Bank Creditor, either (x) to the Administrative Agent,
at the address of the Administrative Agent specified in the Credit
Agreement or (y) at such address as such Bank Creditor shall have specified
in the Credit Agreement;
(d) if to any Other Creditor at such address as such Other Creditor
shall have specified in writing to the Pledgor and the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to and received by the party required to give notice hereunder.
Section 20. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by the Pledgor and the Collateral Agent
(with the written consent of the Required Banks or, to the extent required by
Section 13.12 of the Credit Agreement, with the consent of each of the Banks);
provided, however, that any change, waiver, modification or variance affecting
-------- -------
the rights and benefits of a single Class (as defined below) of Secured
Creditors (and not all Secured Creditors in a like or similar manner) shall
require the written consent of the Requisite Creditors (as defined below) of
such affected Class. For the purpose of this Agreement, the term
Page 19
"Class" shall mean each class of Secured Creditors, i.e., whether (y) the Bank
---
Creditors as holders of the Credit Agreement Obligations or (z) the Other
Creditors as the holders of the Other Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of (x)
with respect to the Credit Agreement Obligations, the Required Banks and (y)
with respect to the Other Obligations, the holders of 51% of all obligations
outstanding from time to time under the Interest Rate Protection Agreements or
Other Hedging Agreements.
Section 21. MISCELLANEOUS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. The headings
in this Agreement are for purposes of reference only and shall not limit or
define the meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one instrument. In the event that any provision of this Agreement
shall prove to be invalid or unenforceable, such provision shall be deemed to be
severable from the other provisions of this Agreement which shall remain binding
on all parties hereto.
Section 22. RECOURSE. This Agreement is made with full recourse to
the Pledgor and pursuant to and upon all the representations, warranties,
covenants and agreements on the part of the Pledgor contained herein, in the
other Credit Documents, in the Interest Rate Protection or Other Hedging
Agreements and otherwise in writing in connection herewith or therewith.
Page 20
IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
COINMACH CORPORATION,
as Pledgor
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
BANKERS TRUST COMPANY, as
Collateral Agent
By /s/ Xxxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President
Page 21
SCHEDULE A
Part I. Pledged Stock
-------------
Percentage of
Outstanding Shares
Name of Issuing Corporation Type of Shares Number of Shares of Capital Stock
----------------------------- -------------- ---------------- ------------------
Grand Wash & Dry Common Stock, 10 100%
Launderette, Inc. no par value
Super Laundry Equipment Common Stock, 10 100%
Corp. par value
$.01 per Share
Part II. Pledged Notes
-------------
NONE
