PLEDGE AGREEMENT
This Pledge Agreement (the "AGREEMENT") is dated as of January 31, 1997, by
and among the parties executing this Agreement under the heading "Pledgors"
(such parties, along with any parties who execute and deliver to the Agent an
agreement in the form attached hereto as Schedule E, being hereinafter referred
to collectively as the "PLEDGORS" and individually as a "PLEDGOR"), each with
its mailing address as set forth on the signature page hereto and BANK OF
MONTREAL, a Canadian chartered bank acting through its Chicago Branch ("BOM"),
with its mailing address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
acting as agent hereunder for the Secured Creditors hereinafter identified and
defined (BOM acting as such agent and any successor or successors to BOM acting
in such capacity being hereinafter referred to as the "AGENT");
PRELIMINARY STATEMENTS
A. Platinum Entertainment, Inc., a Delaware corporation (the "BORROWER"),
Lexicon Music, Inc., a Delaware corporation, River North Studios, Inc., a
Delaware corporation, CGI Records, Inc., a Delaware corporation, River North
Records, Inc., a Delaware corporation, Light Records, Inc., a Delaware
corporation, The Recording Experience, Inc., a Delaware corporation, Peg
Publishing, Inc. a Delaware corporation, JustMike Music, Inc., a Delaware
corporation, Royce Publishing, Inc., a Delaware corporation (collectively, the
"GUARANTORS" and individually, a "GUARANTOR"), BOM, individually and as agent,
and certain lenders have entered into a Credit Agreement dated as of even date
herewith (such Credit Agreement, as the same may be amended or modified from
time to time, including amendments and restatements thereof in its entirety,
being hereinafter referred to as the "CREDIT AGREEMENT"), pursuant to which BOM
and other lenders from time to time party to the Credit Agreement (BOM and the
other lenders which are now or from time to time hereafter become party to the
Credit Agreement, together with any affiliates of such lenders to which is owed
any Hedging Liability, being hereinafter referred to collectively as the "BANKS"
and individually as a "BANK") have agreed, subject to certain terms and
conditions, to extend credit and make certain other financial accommodations
available to the Borrower identified therein.
B. Pursuant to the Credit Agreement, the Guarantors guarantee all of the
indebtedness, obligations, and liabilities of the Borrower to the Agent and the
Banks under the Credit Agreement.
C. The Borrower may from time to time enter into one or more interest
rate exchange, cap, collar, floor or other agreements with one or more of the
Banks party to the Credit Agreement or their affiliates for the purpose of
hedging or otherwise protecting the Borrower against changes in interest rates
on the Revolving Credit Loans and the Term Credit Loans (the liability of the
Borrower in respect of such agreements with such Banks or their affiliates being
hereinafter referred to as the "HEDGING LIABILITY").
D. As a condition precedent to extending credit or otherwise making
financial accommodations available to the Borrower under the Credit Agreement,
the Banks have required, among other things, that each Pledgor grant to the
Agent for the benefit of the Banks a lien on and security interest in certain
personal property of such Pledgor pursuant to this Agreement.
E. The Borrower owns, directly or indirectly, all or substantially all of
the equity interests in each Guarantor and the Borrower provides each Guarantor
with financial, management, administrative, and technical support which enables
such Guarantor to conduct its business in an orderly and efficient manner in the
ordinary course.
F. Each Guarantor will benefit, directly or indirectly, from credit and
other financial accommodations extended by the Banks to the Borrower.
NOW, THEREFORE, for and in consideration of the execution and delivery by
the Banks of the Credit Agreement, and other good and valuable consideration,
receipt whereof is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. TERMS DEFINED IN CREDIT AGREEMENT. All capitalized terms used
herein without definition shall have the same meanings herein as such terms have
in the Credit Agreement. The term "Pledgor" and "Pledgors" as used herein shall
mean and include the Pledgors collectively and also each individually, with all
grants, representations, warranties and covenants of and by the Pledgors, or any
of them, herein contained to constitute joint and several grants,
representations, warranties and covenants of and by the Pledgors; PROVIDED,
HOWEVER, that unless the context in which the same is used shall otherwise
require, any grant, representation, warranty or covenant contained herein
related to the Collateral shall be made by each Pledgor only with respect to the
Collateral owned by it or represented by such Pledgor as owned by it.
SECTION 2. GRANT OF SECURITY INTEREST IN THE COLLATERAL. Each Pledgor
hereby grants to the Agent a security interest in, in each case for the ratable
benefit of the Banks and the Hedging Creditors, and acknowledges and agrees that
the Agent has and shall
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continue to have for the ratable benefit of the Banks a continuing security
interest in, any and all right, title and interest of each Pledgor, whether now
owned or existing or hereafter created, acquired or arising, in and to the
following (collectively, the "COLLATERAL"):
(a) STOCK COLLATERAL. (i) All shares of the capital stock of each of
the issuers listed and described on Schedule A attached hereto owned or
held by such Pledgor, whether now owned or hereafter acquired (those shares
delivered to and deposited with the Agent on the date hereof being listed
and described on Schedule A attached hereto), and all substitutions and
additions to such shares (herein, the "PLEDGED SECURITIES"), (ii) all
dividends, distributions and sums distributable or payable from, upon or in
respect of the Pledged Securities and (iii) all other rights and privileges
incident to the Pledged Securities (all of the foregoing being hereinafter
referred to collectively as the "STOCK COLLATERAL");
(b) PARTNERSHIP INTEREST COLLATERAL. (i) Each partnership identified
on Schedule B attached hereto and made a part hereof (such partnerships
being hereinafter referred to collectively as the "PARTNERSHIPS" and
individually as a "PARTNERSHIP") and (ii) any and all payments and
distributions of whatever kind or character, whether in cash or other
property, at any time made, owing or payable to such Pledgor in respect of
or on account of its present or hereafter acquired interests in the
Partnerships, whether due or to become due and whether representing
profits, distributions pursuant to complete or partial liquidation or
dissolution of any such Partnership, distributions representing the
complete or partial redemption of such Pledgor's interest in any such
Partnership or the complete or partial withdrawal of such Pledgor from any
such Partnership, repayment of capital contributions, payment of management
fees or commissions, or otherwise, and the right to receive, receipt for,
use and enjoy all such payments and distributions (all of the foregoing
being hereinafter collectively called the "PARTNERSHIP INTEREST
COLLATERAL"); and
(c) PROCEEDS. All proceeds of the foregoing.
All terms which are used in this Agreement which are defined in the Uniform
Commercial Code of the State of Illinois ("UCC") shall have the same meanings
herein as such terms are defined in the UCC, unless this Agreement shall
otherwise specifically provide.
SECTION 3. OBLIGATIONS HEREBY SECURED. This Agreement is made and
given to secure, and shall secure, the payment and performance of (i) (x) any
and all indebtedness, obligations and liabilities of the Borrower to the Agent,
the Banks, or any of them
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individually, evidenced by or otherwise arising out of or relating to the Credit
Agreement or any promissory note of the Borrower issued at any time under the
Credit Agreement (including all notes issued in extension or renewal thereof or
in substitution or replacement therefor), (y) any and all Hedging Liability of
the Borrower to the Banks or any of them individually, and (z) any liability of
the Guarantors, or any of them individually, arising out of the Credit
Agreement, as well as for any and all other indebtedness, obligations and
liabilities of the Debtors, or any of them individually, to the Agent, the
Banks, or any of them individually, evidenced by or otherwise arising out of or
relating to this Agreement or any other Loan Document, in each case, whether now
existing or hereafter arising (and whether arising before or after the filing of
a petition in bankruptcy), due or to become due, direct or indirect, absolute or
contingent, and howsoever evidenced, held or acquired, and (ii) any and all
expenses and charges, legal or otherwise, suffered or incurred by the Agent, the
Banks, or any of them individually, in collecting or enforcing any of such
indebtedness, obligations or liabilities or in realizing on or protecting or
preserving any security therefor, including, without limitation, the lien and
security interest granted hereby (all of the foregoing being hereinafter
referred to as the "OBLIGATIONS"). Notwithstanding anything in this Agreement
to the contrary, the right of recovery against any Pledgor (other than the
Borrower to which this limitation shall not apply) under this Agreement shall
not exceed $1 less than the amount which would render such Pledgor's obligations
under this Agreement void or voidable under applicable law, including fraudulent
conveyance law.
SECTION 4. COVENANTS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES. Each
Pledgor hereby covenants and agrees with, and represents and warrants to, the
Agent and the Banks that:
(a) Each Pledgor is and shall be the sole and lawful legal, record
and beneficial owner of its Collateral. Each Pledgor's chief executive
office or place of business at the address listed under such Pledgor's name
on Schedule A and Schedule B hereto, as applicable. Each Pledgor agrees
that it will not change any location set forth on the applicable Schedule
hereto without the Agent's prior written consent. No Pledgor shall,
without the Agent's prior written consent, sell, assign, or otherwise
dispose of the Collateral or any interest therein. The Collateral, and
every part thereof, is and shall be free and clear of all security
interests, liens, rights, claims, attachments, levies and encumbrances of
every kind, nature and description and whether voluntary or involuntary,
except for the security interest of the Agent hereunder and for other Liens
which are expressly permitted by the Credit Agreement. Each Pledgor shall
warrant and defend the Collateral against any claims and demands of all
persons at any time claiming the same or any interest in the Collateral
adverse to the Agent and the Banks.
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(b) Each Pledgor agrees to execute and deliver to the Agent such
further agreements, assignments, instruments and documents and to do all
such other things as the Agent may deem necessary or appropriate to assure
the Agent its lien and security interest hereunder, including such
assignments, acknowledgments (including acknowledgments of assignment in
the form attached hereto as Schedule C) stock powers, financing statements,
instruments and documents as the Agent may from time to time require in
order to comply with the Uniform Commercial Code as enacted in the State of
Illinois and any successor statute(s) thereto (the "UCC"). Each Pledgor
hereby agrees that a carbon, photographic or other reproduction of this
Agreement or any such financing statement is sufficient for filing as a
financing statement by the Agent without notice thereof to such Pledgor
wherever the Agent in its discretion desires to file the same. In the
event for any reason the law of any jurisdiction other than Illinois
becomes or is applicable to the Collateral or any part thereof, or to any
of the Obligations, each Pledgor agrees to execute and deliver all such
agreements, assignments, instruments and documents and to do all such other
things as the Agent in its sole discretion deems necessary or appropriate
to preserve, protect and enforce the lien and security interest of the
Agent under the law of such other jurisdiction to at least the same extent
as such security interests would be protected under the UCC.
(c) If, as and when any Pledgor (x) delivers any securities for
pledge hereunder in addition to those listed on Schedule A hereto or
(y) pledges interests in any Partnership in addition to those listed on
Schedule B hereto, the Pledgors shall furnish to the Agent a duly completed
and executed amendment to such Schedule in substantially the form (with
appropriate insertions) of Schedule D hereto reflecting the securities
pledged hereunder after giving effect to such addition.
(d) None of the Collateral constitutes margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System).
(e) On failure of any Pledgor to perform any of the agreements and
covenants herein contained, the Agent may, at its option, perform the same
and in so doing may expend such sums as the Agent may deem advisable in the
performance thereof, including, without limitation, the payment of any
taxes, liens and encumbrances, expenditures made in defending against any
adverse claim, and all other expenditures which the Agent may be compelled
to make by operation of law or which Agent may make by agreement or
otherwise for the protection of the security hereof. All such sums and
amounts so expended shall be repayable by the Pledgors immediately without
notice or demand, shall constitute additional Obligations secured
hereunder and shall bear interest from the date said amounts
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are expended at the rate per annum (computed on the basis of a 360-day year
for the actual number of days elapsed) determined by adding 3% to the Base
Rate (such rate per annum as so determined being hereinafter referred to as
the "DEFAULT RATE"). No such performance of any covenant or agreement by
the Agent on behalf of such Pledgor, and no such advancement or expenditure
therefor, shall relieve such Pledgor of any default under the terms of this
Agreement or in any way obligate the Agent or any Bank to take any further
or future action with respect thereto. The Agent, in making any payment
hereby authorized, may do so according to any ▇▇▇▇, statement or estimate
procured from the appropriate public office or holder of the claim to be
discharged without inquiry into the accuracy of such ▇▇▇▇, statement or
estimate, or into the validity of any tax assessment, sale, forfeiture, tax
lien or title or claim. The Agent, in performing any act hereunder, shall
be the sole judge of whether the relevant Pledgor is required to perform
the same under the terms of this Agreement. The Agent is hereby authorized
to charge any depository or other account of any Pledgor maintained with
the Agent for the amount of such sums and amounts so expended.
SECTION 5. SPECIAL PROVISIONS RE: STOCK COLLATERAL.
(a) Each Pledgor has the right to vote the Pledged Securities and
there are no restrictions upon the voting rights associated with, or the
transfer of, any of the Pledged Securities, except as provided by federal
and state laws applicable to the sale of securities generally.
(b) The certificates for all shares of the Pledged Securities shall
be delivered by the relevant Pledgor to the Agent duly endorsed in blank
for transfer or accompanied by an appropriate assignment or assignments or
an appropriate undated stock power or powers, in every case sufficient to
transfer title thereto. The Agent may at any time after the occurrence of
an Event of Default cause to be transferred into its name or into the name
of its nominee or nominees any and all of the Pledged Securities. The
Agent shall at all times have the right to exchange the certificates
representing the Pledged Securities for certificates of smaller or larger
denominations.
(c) The Pledged Securities have been validly issued and are fully
paid and non-assessable. There are no outstanding commitments or other
obligations of the issuers of any of the Pledged Securities to issue, and
no options, warrants or other rights of any individual or entity to
acquire, any share of any class or series of capital stock of such issuers.
The Pledged Securities listed and described on Schedule A attached hereto
constitute the percentage of the issued and outstanding
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capital stock of each series and class of the issuers thereof as set forth
thereon owned by the relevant Pledgor. Each Pledgor further agrees that in
the event any such issuer shall issue any additional capital stock of any
series or class (whether or not entitled to vote) to such Pledgor or
otherwise on account of its ownership interest therein, each Pledgor will
forthwith pledge and deposit hereunder, or cause to be pledged and
deposited hereunder, all such additional shares of such capital stock.
SECTION 6. SPECIAL PROVISIONS RE: PARTNERSHIP INTEREST COLLATERAL.
(a) Each Pledgor further warrants to and agrees with the Agent and
the Banks as follows:
(i) that said Partnerships are valid and existing entities of
the type listed on Schedule B and are duly organized and existing
under applicable law;
(ii) that the Partnership Interest Collateral listed and
described on Schedule B attached hereto constitutes the percentage of
the equity interest in each Partnership set forth thereon owned by the
relevant Pledgor;
(iii) that the copies of the partnership agreements (each such
agreement being hereinafter referred to as "ORGANIZATIONAL AGREEMENT")
for the Partnerships heretofore delivered to the Agent are true and
correct copies thereof and have not been amended or modified in any
respect, except for such amendments or modifications as are attached
to the copies thereof delivered to the Agent; and
(iv) that the Partnerships have no loans outstanding to the
Pledgors, and no Pledgor will borrow money from the Partnerships.
(b) The Pledgors shall not, without the prior written consent of the
Agent, consent to any amendment or modification to any of the
Organizational Agreements which would in any manner adversely affect or
impair the Partnership Interest Collateral or reduce or dilute the rights
of the Pledgor with respect to any of the Partnerships, any of such done
without such prior written consent to be null and void. The Pledgors shall
promptly send to the Agent copies of all notices and communications with
respect to each Partnership alleging the existence of a default by an
Pledgor in the performance of any of its obligations under any
Organizational Agreement. Each Pledgor agrees that it will promptly notify
the Agent of any
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litigation which might adversely affect such Pledgor or a Partnership or
any of their respective properties and of any material adverse change in
the operations, business properties, assets or conditions, financial or
otherwise, of any Pledgor or any Partnership. Each Pledgor shall promptly
perform all of its obligations under each Organizational Agreement. In the
event any Pledgor fails to pay or perform any obligation arising under any
Organizational Agreement or otherwise related to any Partnership, the Agent
may, but need not, pay or perform such obligation at the expense and for
the account of the Pledgors and all funds expended for such purposes shall
constitute Obligations secured hereby which the Pledgors promise to pay to
the Agent together with interest thereon at the Default Rate.
SECTION 7. VOTING RIGHTS AND DIVIDENDS. Unless and until an Event of
Default hereunder has occurred and thereafter until notified by the Agent
pursuant to Section 9(b) hereof:
(a) Each Pledgor shall be entitled to exercise all voting and/or
consensual powers pertaining to the Collateral of such Pledgor, or any part
thereof, for all purposes not inconsistent with the terms of this Agreement
or any other document evidencing or otherwise relating to any of the
Obligations.
(b) Each Pledgor shall be entitled to receive and retain all
dividends and distributions in respect of the Collateral which are paid in
cash of whatsoever nature; PROVIDED, HOWEVER, that such dividends and
distributions representing:
(i) stock or liquidating dividends or a distribution or return
of capital upon or in respect of the Pledged Securities or any part
thereof or resulting from a split-up, revision or reclassification of
the Pledged Securities or any part thereof or received in addition to,
in substitution of or in exchange for the Pledged Securities or any
part thereof as a result of a merger, consolidation or otherwise, or
(ii) distributions in complete or partial liquidation of any
Partnership or the interest of such Pledgor therein,
in each case, shall be paid, delivered or transferred, as appropriate,
directly to the Agent immediately upon the receipt thereof by such Pledgor
and shall, in the case of cash, be applied by the Agent to the satisfaction
of Obligations in accordance with the provisions of Section 10 hereof,
whether or not the same may then be due or otherwise adequately secured and
shall, in the case of all other property, together with any cash received
by the Agent and not applied as aforesaid, be held by the
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Agent pursuant hereto as part of the Pledged Securities as additional
Pledged Securities pledged under and subject to the terms of this
Agreement; or
(c) In order to permit each Pledgor to exercise such voting and/or
consensual powers which it is entitled to exercise under subsection (a)
above and to receive such distributions which such Pledgor is entitled to
receive and retain under subsection (b) above, the Agent will, if
necessary, upon the written request of such Pledgor, from time to time
execute and deliver to such Pledgor appropriate proxies and dividend
orders.
SECTION 8. POWER OF ATTORNEY. Each Pledgor hereby appoints the Agent,
and each of its nominees, officers, agents, attorneys, and any other person whom
the Agent may designate, as such Pledgor's attorney-in-fact, with full power and
authority to ask, demand, collect, receive, receipt for, ▇▇▇ for, compound and
give acquittance for any and all sums or properties which may be or become due,
payable or distributable in respect of the Collateral or any part thereof, with
full power to settle, adjust or compromise any claim thereunder or therefor as
fully as such Pledgor could itself do, to endorse or sign the Pledgor's name on
any assignments, stock powers, or other instruments of transfer and on any
checks, notes, acceptances, money orders, drafts, and any other forms of payment
or security that may come into the Agent's possession and on all documents of
satisfaction, discharge or receipt required or requested in connection
therewith, and, in its discretion, to file any claim or take any other action or
proceeding, either in its own name or in the name of such Pledgor, or otherwise,
which the Agent may deem necessary or appropriate to collect or otherwise
realize upon all or any part of the Collateral, or effect a transfer thereof, or
which may be necessary or appropriate to protect and preserve the right, title
and interest of the Agent in and to such Collateral and the security intended to
be afforded hereby. Each Pledgor hereby ratifies and approves all acts of any
such attorney and agrees that neither the Agent nor any such attorney will be
liable for any such acts or omissions nor for any error of judgment or mistake
of fact or law other than such person's gross negligence or willful misconduct.
The Agent may file one or more financing statements disclosing its security
interest in all or any part of the Collateral without any Pledgor's signature
appearing thereon, and each Pledgor also hereby grants the Agent a power of
attorney to execute any such financing statements, and any amendments or
supplements thereto, on behalf of such Pledgor without notice thereof to such
Pledgor. The foregoing powers of attorney, being coupled with an interest, are
irrevocable until the Obligations have been fully satisfied and any commitment
of the Banks to extend credit constituting Obligations to the Borrower has
terminated; PROVIDED, HOWEVER, that the Agent agrees, as a personal covenant to
the relevant Pledgor, not to exercise the powers of attorney set forth in this
Section unless an Event of Default exists.
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SECTION 9. DEFAULTS AND REMEDIES. (a) The occurrence of any event or
the existence of any condition which is specified as an "Event of Default" under
the Credit Agreement shall constitute an "EVENT OF DEFAULT" hereunder.
(b) Upon the occurrence of any Event of Default, all rights of the
Pledgors to receive and retain the distributions which they are entitled to
receive and retain pursuant to Section 7(b) hereof shall, at the option of the
Agent cease and thereupon become vested in the Agent which, in addition to all
other rights provided herein or by law, shall then be entitled solely and
exclusively to receive and retain the distributions which the Pledgors would
otherwise have been authorized to retain pursuant to Section 7(b) hereof and all
rights of the Pledgors to exercise the voting and/or consensual powers which
they are entitled to exercise pursuant to Section 7(a) hereof shall, at the
option of the Agent, cease and thereupon become vested in the Agent which, in
addition to all other rights provided herein or by law, shall then be entitled
solely and exclusively to exercise all voting and other consensual powers
pertaining to the Collateral and to exercise any and all rights of conversion,
exchange or subscription and any other rights, privileges or options pertaining
thereto as if the Agent were the absolute owner thereof including, without
limitation, the right to exchange, at its discretion, the Collateral or any part
thereof upon the merger, consolidation, reorganization, recapitalization or
other readjustment of the respective issuer thereof or upon the exercise by or
on behalf of any such issuer or the Agent of any right, privilege or option
pertaining to the Collateral or any part thereof and, in connection therewith,
to deposit and deliver the Collateral or any part thereof with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Agent may determine. In the event the Agent in good faith
believes any of the Collateral constitutes restricted securities within the
meaning of any applicable securities law, any disposition thereof in compliance
with such laws shall not render the disposition commercially unreasonable.
(c) Upon the occurrence of any Event of Default, the Agent shall have, in
addition to all other rights provided herein or by law, the rights and remedies
of a secured party under the UCC (regardless of whether the UCC is the law of
the jurisdiction where the rights or remedies are asserted and regardless of
whether the UCC applies to the affected Collateral), and further the Agent may,
without demand and without advertisement, notice, hearing or process of law, all
of which each Pledgor hereby waives to the extent permitted by law, at any time
or times, sell and deliver any or all of the Collateral held by or for it at
public or private sale, at any securities exchange or broker's board or at any
of the Agent's offices or elsewhere, for cash, upon credit or otherwise, at such
prices and upon such terms as the Agent deems advisable, in its sole discretion.
In the exercise of any such remedies, the Agent may sell the Collateral as a
unit even though the sales price thereof may be in excess of the amount
remaining unpaid on the
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Obligations. Also, if less than all the Collateral is sold, the Agent shall
have no duty to marshal or apportion the part of the Collateral so sold as
between the Pledgors, or any of them, but may sell and deliver any or all of the
Collateral without regard to which of the Pledgors are the owners thereof. In
addition to all other sums due the Agent or any Bank hereunder, each Pledgor
shall pay the Agent and the Banks all costs and expenses incurred by the Agent
and such Banks, including reasonable attorneys' fees and court costs, in
obtaining, liquidating or enforcing payment of Collateral or the Obligations or
in the prosecution or defense of any action or proceeding by or against the
Agent, such Banks or any Pledgor concerning any matter arising out of or
connected with this Agreement or the Collateral or the Obligations including,
without limitation, any of the foregoing arising in, arising under or related to
a case under the United States Bankruptcy Code (or any successor statute). Any
requirement of reasonable notice shall be met if such notice is personally
served on or mailed, postage prepaid, to the Pledgors in accordance with
Section 14(b) hereof at least ten days before the time of sale or other event
giving rise to the requirement of such notice; PROVIDED, HOWEVER, no
notification need be given to a Pledgor if such Pledgor has signed, after an
Event of Default has occurred, a statement renouncing any right to notification
of sale or other intended disposition. The Agent shall not be obligated to make
any sale or other disposition of the Collateral regardless of notice having been
given. The Agent or any Bank may be the purchaser at any sale or other
disposition of the Collateral or any part thereof. Each Pledgor hereby waives
all of its rights of redemption from any sale or other disposition of the
Collateral or any part thereof. The Agent may postpone or cause the
postponement of the sale of all or any portion of the Collateral by announcement
at the time and place of such sale, and such sale may, without further notice,
be made at the time and place to which the sale was postponed or the Agent may
further postpone such sale by announcement made at such time and place.
EACH PLEDGOR AGREES THAT IF ANY PART OF THE COLLATERAL IS SOLD AT ANY
PUBLIC OR PRIVATE SALE, THE AGENT MAY ELECT TO SELL ONLY TO A BUYER WHO WILL
GIVE FURTHER ASSURANCES, SATISFACTORY IN FORM AND SUBSTANCE TO THE AGENT,
RESPECTING COMPLIANCE WITH THE REQUIREMENTS OF THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, AND A SALE SUBJECT TO SUCH CONDITION SHALL BE DEEMED
COMMERCIALLY REASONABLE.
EACH PLEDGOR FURTHER AGREES THAT IN ANY SALE OF ANY PART OF THE COLLATERAL,
THE AGENT IS HEREBY AUTHORIZED TO COMPLY WITH ANY LIMITATION OR RESTRICTION IN
CONNECTION WITH SUCH SALE AS IT MAY BE ADVISED BY COUNSEL IS NECESSARY IN ORDER
TO AVOID ANY VIOLATION OF APPLICABLE LAW (INCLUDING, WITHOUT LIMITATION,
COMPLIANCE WITH SUCH PROCEDURES AS MAY RESTRICT THE NUMBER OF PROSPECTIVE
BIDDERS AND PURCHASERS AND/OR FURTHER RESTRICT SUCH PROSPECTIVE
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BIDDERS OR PURCHASERS TO PERSONS WHO WILL REPRESENT AND AGREE THAT THEY ARE
PURCHASING FOR THEIR OWN ACCOUNT FOR INVESTMENT AND NOT WITH A VIEW TO THE
DISTRIBUTION OR RESALE OF SUCH COLLATERAL ), OR IN ORDER TO OBTAIN ANY REQUIRED
APPROVAL OF THE SALE OR OF THE PURCHASER BY ANY GOVERNMENTAL REGULATORY
AUTHORITY OR OFFICIAL, AND EACH PLEDGOR FURTHER AGREES THAT SUCH COMPLIANCE
SHALL NOT RESULT IN SUCH SALE BEING CONSIDERED OR DEEMED NOT TO HAVE BEEN MADE
IN A COMMERCIALLY REASONABLE MANNER, NOR SHALL THE AGENT BE LIABLE OR
ACCOUNTABLE TO ANY PLEDGOR FOR ANY DISCOUNT ALLOWED BY REASON OF THE FACT THAT
SUCH COLLATERAL IS SOLD IN COMPLIANCE WITH ANY SUCH LIMITATION OR RESTRICTION.
(d) In the event the Agent shall sell any part of the Partnership Interest
Collateral at a foreclosure sale, each Pledgor hereby grants the purchaser of
such portion of the Partnership Interest Collateral to the fullest extent of its
capacity, the ability (but not the obligation) to become a partner in the
relevant Partnership (subject to the approval of the general partner of the
relevant Partnership, in the exercise of its sole discretion), in the place and
stead of such Pledgor. To exercise such right, the purchaser shall give written
notice to the relevant Partnership of its election to become a partner in such
Partnership. Following such election and giving of consent by all necessary
partners of the relevant Partnership as to the purchaser becoming a partner, the
purchaser shall have the right and powers and be subject to the liabilities of a
partner under the relevant Organizational Agreement and the partnership act
governing the Partnership.
(e) Upon the occurrence and during the continuation of any Event of
Default, in addition to all other rights provided herein or by law, the Agent
shall have the right to cause all or any part of the Partnership Interest
Collateral of any of the Pledgors in any one or more of the Partnerships to be
redeemed and to cause a withdrawal, in whole or in part, of any Pledgor from any
Partnership or any of its Partnership Interest Collateral therein.
(f) The powers conferred upon the Agent hereunder are solely to protect
its interest in the Collateral and shall not impose on it any duties to exercise
such powers. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equivalent to that which the Agent accords
its own property, consisting of similar types securities, it being understood,
however, that the Agent shall have no responsibility for (i) ascertaining or
taking any action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relating to any Collateral, whether or not the Agent
has or is deemed to have knowledge of such matters, (ii) taking any necessary
steps to preserve rights against any parties with respect to any Collateral, or
(iii) initiating
-12-
any action to protect the Collateral or any part thereof against the possibility
of a decline in market value. This Agreement constitutes an assignment of
rights only and not an assignment of any duties or obligations of the Pledgors
in any way related to the Collateral, and the Agent shall have no duty or
obligation to discharge any such duty or obligation. By its acceptance hereof,
the Agent does not undertake to perform or discharge and shall not be
responsible or liable for the performance or discharge of any such duties or
responsibilities and shall not in any event become a "SUBSTITUTED LIMITED
PARTNER" or words of like import (as defined in the relevant Organizational
Agreement) in the relevant Partnership. Neither the Agent or any Bank, nor any
party acting as attorney for the Agent or any Bank, shall be liable hereunder
for any acts or omissions or for any error of judgment or mistake of fact or law
other than such person's gross negligence or willful misconduct.
(g) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Pledgor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. The rights and remedies of the Agent and the Banks
under this Agreement shall be cumulative and not exclusive of any other right or
remedy which the Agent or the Banks may have. For purposes of this Agreement,
an Event of Default shall be construed as continuing after its occurrence until
the same is waived in writing by the Banks or the Required Banks, as the case
may be, in accordance with the Credit Agreement.
SECTION 10. APPLICATION OF PROCEEDS. The proceeds and avails of the
Collateral at any time received by the Agent during the existence of any Event
of Default shall, when received by the Agent in cash or its equivalent, be
applied by the Agent in reduction of, or as collateral security for, the
Obligations in accordance with the terms of the Credit Agreement. The Pledgors
shall remain liable to the Agent and the Banks for any deficiency. Any surplus
remaining after the full payment and satisfaction of the Obligations shall be
returned to the Pledgors, or to whomsoever the Agent reasonably determines is
lawfully entitled thereto.
SECTION 11. CONTINUING AGREEMENT. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until all
of the Obligations, both for principal and interest, have been fully paid and
satisfied and any commitment to extend constituting Obligations to the Borrower
shall have terminated. Upon such termination of this Agreement, the Agent
shall, upon the request and at the expense of the Pledgors, forthwith release
all its liens and security interests hereunder.
-13-
SECTION 12. PRIMARY SECURITY; OBLIGATIONS ABSOLUTE. The lien and
security herein created and provided for stand as direct and primary security
for the Obligations. No application of any sums received by the Agent in
respect of the Collateral or any disposition thereof to the reduction of the
Obligations or any portion thereof shall in any manner entitle any Pledgor to
any right, title or interest in or to the Obligations or any collateral security
therefor, whether by subrogation or otherwise, unless and until all Obligations
have been fully paid and satisfied and any commitments to extend credit
constituting Obligations to the Borrower shall have terminated. Each Pledgor
acknowledges and agrees that the lien and security hereby created and provided
for are absolute and unconditional and shall not in any manner be affected or
impaired by any acts or omissions whatsoever of the Agent, any Bank or any other
holder of any of the Obligations, and without limiting the generality of the
foregoing, the lien and security hereof shall not be impaired by any acceptance
by the Agent, any Bank or any other holder of any of the Obligations of any
other security for or guarantors upon any Obligations or by any failure, neglect
or omission on the part of the Agent, any Bank or any other holder of any of the
Obligations to realize upon or protect any of the Obligations or any collateral
security therefor. The lien and security hereof shall not in any manner be
impaired or affected by (and the Agent and the Banks, without notice to anyone,
are hereby authorized to make from time to time) any sale, pledge, surrender,
compromise, settlement, release, renewal, extension, indulgence, alteration,
substitution, exchange, change in, modification or disposition of any of the
Obligations, or of any collateral security therefor, or of any guaranty thereof,
or of any instrument or agreement setting forth the terms and conditions
pertaining to any of the foregoing. The Banks may at their discretion at any
time grant credit to the Borrower without notice to any Pledgor in such amounts
and on such terms as the Banks may elect without in any manner impairing the
lien and security hereby created and provided for. In order to realize hereon
and to exercise the rights granted the Agent hereunder and under applicable law
as against any Pledgor or any portion of the Collateral in which any such
Pledgor has rights, there shall be no obligation on the part of the Agent, any
Bank or any other holder of any of the Obligations at any time to first resort
for payment to the Borrower or any other Pledgor or any other Person, its
property or estate or to any guaranty of the Obligations or any portion thereof
or to resort to any other collateral security, property, liens or any other
rights or remedies whatsoever, and the Agent shall have the right to enforce
this Agreement as against any Pledgor or any portion of the Collateral in which
any such Pledgor has rights, irrespective of whether or not other proceedings or
steps are pending seeking resort to or realization upon or from any of the
foregoing.
SECTION 13. THE AGENT. In acting under or by virtue of this Agreement,
Agent shall be entitled to all the rights, authority, privileges and immunities
provided in Section 10 of the Credit Agreement, all of which provisions of said
Section 10 are
-14-
incorporated by reference herein with the same force and effect as if set forth
herein in their entirety. The Agent hereby disclaims any representation or
warranty to the Banks or any other holders of the Obligations concerning the
perfection of the liens and security interests granted hereunder or in the value
of the Collateral.
SECTION 14. MISCELLANEOUS. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and
security interest in the Collateral and shall be binding upon each Pledgor, its
successors and assigns, and shall inure, together with the rights and remedies
of the Agent and the Banks hereunder, to the benefit of the Agent and the Banks,
and their successors and assigns; PROVIDED, HOWEVER, that no Pledgor may assign
its rights or delegate its duties hereunder without the Agent's prior written
consent. Without limiting the generality of the foregoing, and subject to the
provisions of the Credit Agreement, any Bank may assign or otherwise transfer
any indebtedness held by it secured by this Agreement to any other person, and
such other person shall thereupon become vested with all the benefits in respect
thereof granted to such Bank herein or otherwise.
(b) All communications provided for herein shall be in writing, except as
otherwise specifically provided for hereinabove, and shall be deemed to have
been given or made, if to any Pledgor when given to the Borrower in accordance
with Section 12.6 of the Credit Agreement, or if to the Agent or any Bank, when
given to such party in accordance with Section 12.6 of the Credit Agreement.
(c) No Bank shall have the right to institute any suit, action or
proceeding in equity or at law for the foreclosure or other realization upon any
Collateral subject to this Agreement or for the execution of any trust or power
hereof or for the appointment of a receiver, or for the enforcement of any other
remedy under or upon this Agreement; it being understood and intended that no
one or more of the Banks shall have any right in any manner whatsoever to
affect, disturb or prejudice the lien and security interest of this Agreement by
its or their action or to enforce any right hereunder, and that all proceedings
at law or in equity shall be instituted, had and maintained by the Agent in the
manner herein provided for the benefit of the Banks.
(d) In the event that any provision hereof shall be deemed to be invalid
by reason of the operation of any law or by reason of the interpretation placed
thereon by any court, this Agreement shall be construed as not containing such
provision, but only as to such locations where such law or interpretation is
operative, and the invalidity of such provision shall not affect the validity of
any remaining provision hereof, and any and all other provisions hereof which
are otherwise lawful and valid shall remain in full force and effect. Without
limiting the generality of the foregoing, in the event that this Agreement
-15-
shall be deemed to be invalid or otherwise unenforceable with respect to any
Pledgor, such invalidity or unenforceability shall not affect the validity of
this Agreement with respect to the other Pledgors.
(e) This Agreement shall be deemed to have been made in the State of
Illinois and shall be governed by, and construed in accordance with, the laws of
the State of Illinois. All terms which are used in this Agreement which are
defined in the UCC shall have the same meanings herein as said terms do in the
UCC unless this Agreement shall otherwise specifically provide. The headings in
this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning of any provision hereof.
(f) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same instrument. Each
Pledgor acknowledges that this Agreement is and shall be effective upon its
execution and delivery by such Pledgor to the Agent, and it shall not be
necessary for the Agent to execute this Agreement or any other acceptance hereof
or otherwise to signify or express its acceptance hereof.
(g) In the event the Agent and the Banks shall at any time in their
discretion permit a substitution of Pledgors hereunder or a party shall wish to
become a Pledgor hereunder, such substituted or additional Pledgor shall, upon
executing an agreement in the form attached hereto as Schedule E, become a party
hereto and be bound by all the terms and conditions hereof to the same extent as
though such Pledgor had originally executed this Agreement and, in the case of a
substitution, in lieu of the Pledgor being replaced. No such substitution shall
be effective absent the written consent of Agent and the Banks nor shall it in
any manner affect the obligations of the other Pledgors hereunder.
(h) THE AGENT AND THE PLEDGORS AGREE THAT ALL DISPUTES AMONG THEM ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG 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 ▇▇▇▇ COUNTY, ILLINOIS, BUT EACH OF THE AGENT AND THE PLEDGORS
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF ▇▇▇▇ COUNTY, ILLINOIS. EACH OF THE PLEDGORS WAIVES IN ALL
DISPUTES ANY OBJECTION THAT SUCH PLEDGOR MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE OR ANY OBJECTION THAT SUCH PLEDGOR MAY HAVE THAT ANY
OTHER PARTY HAS NOT BEEN JOINED IN SUCH PROCEEDING. EACH OF THE PLEDGORS AGREES
THAT THE AGENT SHALL HAVE THE RIGHT TO PROCEED AGAINST EACH AND ANY OF THE
PLEDGORS OR THEIR COLLATERAL IN A COURT IN ANY LOCATION TO ENABLE
-16-
THE AGENT TO REALIZE ON THE COLLATERAL, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER ENTERED IN FAVOR OF THE AGENT, WHETHER OR NOT PROCEEDING SEPARATELY
AGAINST ANY PLEDGOR AND ITS PROPERTY OR JOINTLY AGAINST THE BORROWER AND ANY ONE
OR MORE OF THE PLEDGORS AND THEIR PROPERTY. EACH OF THE PLEDGORS AGREES THAT IT
WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT IN
ACCORDANCE WITH THIS PROVISION BY THE AGENT TO REALIZE ON COLLATERAL, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT. EACH OF THE
PLEDGORS WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE AGENT HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH.
[SIGNATURE PAGES TO FOLLOW]
-17-
IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly
executed and delivered as of the date first above written.
PLEDGORS:
PLATINUM ENTERTAINMENT, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Its President
Acknowledged and agreed to as of the date first above written.
BANK OF MONTREAL, as Agent as aforesaid
for the Banks
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Its Director
-18-
SCHEDULE A TO PLEDGE AGREEMENT
THE PLEDGED SECURITIES
NAME AND LOCATION NAME OF ISSUER JURISDICTION OF NO. OF CERTIFICATE NO. PERCENTAGE OF
OF PLEDGOR INCORPORATION SHARES CLASS ISSUER'S STOCK
Platinum LEXICON MUSIC, INC. Delaware 3,000 Common 1 100%
Entertainment, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ STUDIOS, INC. Delaware 450 Common 5 100%
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CGI RECORDS, INC. Delaware 3,000 Common 1 100%
RIVER NORTH RECORDS, INC. Delaware 3,000 Common 4 100%
LIGHT RECORDS, INC. Delaware 3,000 Common 1 100%
THE RECORDING EXPERIENCE, INC. Delaware 3,000 Common 1 100%
PEG PUBLISHING, INC. Delaware 3,000 Common 1 100%
JUSTMIKE MUSIC, INC. Delaware 3,000 Common 1 100%
ROYCE PUBLISHING, INC. Delaware 3,000 Common 1 100%
-2-
SCHEDULE B TO PLEDGE AGREEMENT
PARTNERSHIP INTERESTS
RELEVANT PLEDGOR AND LOCATION NAME OF TYPE OF JURISDICTION PERCENT OF
PARTNERSHIP ORGANIZATION OF ORGANIZATION OWNERSHIP
Platinum Entertainment, Inc. House of Blues Music Company Joint Venture California 50%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE C TO PLEDGE AGREEMENT
Acknowledgment Of Collateral Assignment
____________, 1996
_________________________________
_________________________________
_________________________________
_________________________________
Attention:_______________________
Ladies and Gentlemen:
Platinum Entertainment, Inc. and ___________________ (each a "PLEDGOR" and
collectively the "PLEDGORS") executed a Pledge Agreement dated as of January 31,
1997 (the "SECURITY AGREEMENT") in favor of Bank of Montreal (the "AGENT"), a
copy of which you have received. Pursuant to the Security Agreement, each
Pledgor whose signature appears below (each a "RELEVANT PLEDGOR" and
collectively the "RELEVANT PLEDGORS") assigned its partnership interests in
___________________ (the "PARTNERSHIP") as collateral security for, among other
things, indebtedness and obligations of Platinum Entertainment, Inc. (the
"BORROWER") now or from time to time owing pursuant to that certain Credit
Agreement dated as of January 31, 1997 (such Credit Agreement as the same may be
amended, modified or restated from time to time being hereinafter referred to as
the "CREDIT AGREEMENT") among the Borrower, certain affiliates of the Borrower,
the Agent and various other lenders party thereto.
We ask you, by accepting this letter below on behalf of the Partnership and
as its general partner, to confirm the following:
1. Each Relevant Pledgor is a partner in the Partnership.
' 2. You consent to the collateral assignment of each Relevant
Pledgor's interest in the Partnership to the Agent, notwithstanding
anything to the contrary contained in the Partnership Agreement. This
letter will serve to evidence the consent to this collateral assignment
from the Partnership and its general partner.
3. All parties required by the terms of the Partnership Agreement to
approve the collateral assignment made by the Security Agreement have done
so, and the interest of the Agent by virtue of that assignment has been
reflected on the books and records of the Partnership.
4. The Partnership has been formed under the ______________
Partnership Agreement dated as of ________________, 19___ (the "PARTNERSHIP
AGREEMENT"), and the Partnership Agreement has not subsequently been
modified or amended and continues in full force and effect. The
Partnership Agreement shall not be amended without the consent of the
Agent. The Agent agrees with the Partnership that the Agent will not
unreasonably withhold its consent to modifications or amendments to the
Partnership's Partnership Agreement which do not adversely affect the
interests of the Agent or any of the Banks identified and defined in the
Pledge Agreement.
5. All payments and distributions due and to become due to any
Relevant Pledgor pursuant to the Partnership Agreement shall continue to be
paid directly to such Relevant Pledgor, unless and until the Agent notifies
the Partnership in writing to do otherwise. If the Agent
so notifies the Partnership, the Partnership will immediately cease making
such payments and distributions to the Relevant Pledgors and will as soon
as possible, but in any event within five days after receiving such notice,
remit all such payments and distributions directly to the Agent at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
6. By virtue of the Security Agreement, the Agent has the right at
its option to exercise each Relevant Pledgor's right (if any) to withdraw
all or any part of such Relevant Pledgor's interest in the Partnership by
so notifying the Partnership in writing no less than ten days prior to the
proposed withdrawal date. All payments or distributions due or to become
due under the Partnership Agreement to the Relevant Pledgors as a result of
such withdrawal shall be remitted directly to the Agent as stated above.
If given at all, the notice provided pursuant to this paragraph may (but
need not) be given concurrently with any notice provided pursuant to the
immediately preceding paragraph.
7. Each Relevant Pledgor agrees that any such payment to the Agent
shall be a good receipt and acquittance as against it -- that is to say,
the Partnership should make the payment directly to the Agent and in so
doing, the Partnership discharges any liability to such Relevant Pledgor
for that payment.
8. The Relevant Pledgors have no currently outstanding loans from
the Partnership and the Partnership shall not extend any loans to any
Relevant Pledgor.
9. The terms of the Security Agreement prohibit any Relevant Pledgor
from making any transfer of its interest in the Partnership without the
Agent's prior written consent. You agree not to honor any transfer of any
Relevant Pledgor's interest without such consent.
-2-
The agreements in this letter shall be modified only in a writing signed by
the Agent, each Pledgor and the Partnership. We acknowledge that the
Partnership shall be entitled to assume that the Security Agreement continues in
full force and effect unless and until the Partnership receives actual written
notice of a termination of same from the Agent.
Very truly yours,
BANK OF MONTREAL, as Agent
By
Its____________________________________
-3-
Accepted and Agreed.
[PLATINUM ENTERTAINMENT, INC.]
By__________________________________________
Its_______________________________________
The undersigned, both as the general partner of the Partnership and on
behalf of the Partnership, join in this letter to evidence their acknowledgment
and agreement to the same.
[PARTNERSHIP]
By
Its_______________________________________
[GENERAL PARTNER OF PARTNERSHIP]
By
Its____________________________________
-4-
SCHEDULE D TO PLEDGE AGREEMENT
AMENDMENT TO PLEDGE AGREEMENT
Reference is hereby made to that certain Pledge Agreement dated as of
January 31, 1997 (as the same may be amended, the "PLEDGE AGREEMENT"), from the
Pledgors which are signatories thereto to Bank of Montreal, as Agent.
Capitalized terms not otherwise defined herein shall have the meaning set forth
in the Pledge Agreement.
Subsequent to the Pledgors' delivery of the Pledge Agreement, certain
shares of stock or partnership interests have been added as Collateral under the
Pledge Agreement. As a result of such addition, Schedule A of the Pledge
Agreement does not accurately describe the shares of capital stock and/or
Schedule B does not accurately describe the partnership interests, currently
held by the Agent as collateral under the Pledge Agreement.
The Pledgors now desire to amend Schedule A and/or Schedule B to the Pledge
Agreement to reflect such addition, and this instrument shall constitute an
agreement between the Pledgors and the Agent amending the Pledge Agreement in
the respects, but only in the respects, hereinafter set forth:
1. If an Annex A is attached hereto, Schedule A of the Pledge
Agreement shall be and hereby is amended and as so amended shall be
restated in its entirety to read as Annex A attached hereto.
2. If an Annex B is attached hereto, Schedule B of the Pledge
Agreement shall be and hereby is amended and as so amended shall be
restated in its entirety to read as Annex B attached hereto.
3. As collateral security for the Obligations, each Pledgor hereby
grants to the Agent a continuing security interest in, and acknowledges and
agrees that the Agent has and shall continue to have a continuing security
interest in, all the shares of capital stock of each issuer listed and
described on Annex A attached hereto (if attached) and all of the
partnership interests listed and described on Annex B attached hereto (if
attached) and all the other properties, rights, interests and privileges
comprising the Collateral (as such term is defined in the Pledge Agreement
after giving effect to this Amendment), to the same extent and with the
same force and effect as if (i) the shares of stock described on Annex A
had originally been included on Schedule A to the Pledge Agreement and
(ii) the partnership interests described on Annex B had been originally
included on Schedule B to the Pledge Agreement. The foregoing granting
clause is in addition to and supplemental of and not in substitution for
the granting clause contained in the Pledge Agreement. Neither the
Pledgors nor the Agent intend by this Amendment to in any way impair or
otherwise affect the lien of the Pledge Agreement on such of the Collateral
which was subject to the Pledge Agreement prior to giving effect to this
Amendment.
4. Each Pledgor hereby repeats and reaffirms all of its covenants,
agreements, representations and warranties contained in the Pledge
Agreement, each and all of which shall be applicable to all of the
properties, rights, interests and privileges subject to the lien of the
Pledge Agreement after giving effect to this Amendment. Each Pledgor
hereby certifies that no Event of Default or event which, with notice or
lapse of time or both, would constitute an Event of Default exists under
the Pledge Agreement after giving effect to this Amendment.
5. No reference to this Amendment need be made in any note,
instrument or other document at any time referring to the Pledge Agreement,
any reference in any of such to the Pledge Agreement to be deemed to
reference to the Pledge Agreement as modified hereby. All references in
the Pledge Agreement to the term "Pledged Securities" shall be deemed a
reference to such term as defined in the Pledge Agreement after giving
effect to this Amendment.
6. Except as specifically modified hereby, all the terms and
conditions of the Pledge Agreement shall stand and remain unchanged and in
full force and effect. This Amendment shall be effective upon the
Pledgors' execution and delivery thereof to the Agent, no acceptance by the
Agent being required.
PLEDGOR(S):
[NAME OF RELEVANT PLEDGOR}
By__________________________________________
Its_______________________________________
[NAME OF RELEVANT PLEDGOR}
By__________________________________________
Its_______________________________________
Acknowledged and agreed to as of the date first above written.
BANK OF MONTREAL, as Agent
By
Its_______________________________________
ANNEX A
TO AMENDMENT TO PLEDGE AGREEMENT
THE PLEDGED SECURITIES
NAME AND NAME OF ISSUER JURISDICTION OF NO. OF CERTIFICATE NO. PERCENTAGE OF PERCENT OF
LOCATION OF INCORPORATION SHARES CLASS ISSUER'S STOCK OWNERSHIP
PLEDGOR
ANNEX B
TO AMENDMENT TO PLEDGE AGREEMENT
PARTNERSHIP INTERESTS
NAME OF TYPE OF JURISDICTION
PARTNERSHIP ORGANIZATION OF ORGANIZATION RELEVANT PLEDGOR
SCHEDULE E TO PLEDGE AGREEMENT
ASSUMPTION AND SUPPLEMENTAL PLEDGE AGREEMENT
This Agreement dated as of this _____ day of ______________, 199___ from
[NEW PLEDGOR], a __________ corporation (the "NEW PLEDGOR"), to Bank of Montreal
("BOM"), as agent for the Banks (defined in the Pledge Agreement hereinafter
identified and defined) (BOM acting as such agent and any successor or
successors to ▇▇▇▇▇▇ in such capacity being hereinafter referred to as the
"AGENT");
WITNESSETH THAT:
Whereas, certain Pledgors have executed and delivered to the Agent that
certain Pledge Agreement dated as of January 31, 1997 (such Pledge Agreement, as
the same may from time to time be modified or amended, including supplements
thereto which add additional parties as Pledgors thereunder, being hereinafter
referred to as the "PLEDGE AGREEMENT") pursuant to which such parties (the
"EXISTING PLEDGORS") have granted to the Agent for the benefit of the Banks a
lien on and security interest in such Existing Pledgors' Collateral (as such
term is defined in the Pledge Agreement) to secure the Obligations (as such term
is defined in the Pledge Agreement);
WHEREAS, each Pledgor will benefit, directly and indirectly, from credit
and other financial accommodations extended by the Banks to the Borrower.
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances made
or to be made, or credit accommodations given or to be given, to the Borrower by
the Banks from time to time, the New Pledgor hereby agrees as follows:
1. The New Pledgor acknowledges and agrees that it shall become a
"Pledgor" party to the Pledge Agreement effective upon the date the New
Pledgor's execution of this Agreement and the delivery of this Agreement to the
Agent, and that upon such execution and delivery, all references in the Pledge
Agreement to the terms "Pledgor" or "Pledgors" shall be deemed to include the
New Pledgor. Without limiting the generality of the foregoing, the New Pledgor
hereby repeats and reaffirms all grants (including the grant of a lien and
security interest), covenants, agreements, representations and warranties
contained in the Pledge Agreement as amended hereby, each and all of which are
and shall remain applicable to the Collateral from time to time owned by the New
Pledgor or in which the New Pledgor from time to time has any rights. Without
limiting the foregoing, in order to secure payment of the Obligations, whether
now existing or hereafter arising, the New Pledgor does hereby grant to the
Agent for the benefit of the Banks, and hereby agrees that the Agent has and
shall continue to have for the benefit of the Banks a continuing security
interest in, among other things, all of the New Pledgor's Collateral (as such
term is defined in the Pledge Agreement) described in Section 2 of the Pledge
Agreement, each and all of such granting clauses being incorporated herein by
reference with the same force and effect as if set forth in their entirety
except that all references in such clauses to the Existing Pledgor or any of
them shall be deemed to include references to the New Pledgor. Nothing
contained herein shall in any manner impair the priority of the liens and
security interests heretofore granted in favor of the Agent under the Pledge
Agreement.
2. The following information shall be added to Schedules A and/or B to
the Pledge Agreement, as applicable:
SCHEDULE A
THE PLEDGED SECURITIES
NAME AND NAME OF ISSUER JURISDICTION OF NO. OF CERTIFICATE NO. PERCENTAGE OF PERCENT OF
LOCATION OF INCORPORATION SHARES CLASS ISSUER'S STOCK OWNERSHIP
PLEDGOR
OR
SCHEDULE B
PARTNERSHIP INTERESTS
NAME OF TYPE OF JURISDICTION
PARTNERSHIP ORGANIZATION OF ORGANIZATION RELEVANT PLEDGOR
3. The New Pledgor hereby acknowledges and agrees that the Obligations
are secured by all of the Collateral according to, and otherwise on and subject
to, the terms and conditions of the Pledge Agreement to the same extent and with
the same force and effect as if the New Pledgor had originally been one of the
Existing Pledgors under the Pledge Agreement and had originally executed the
same as such an Existing Pledgor.
4. All capitalized terms used in this Agreement without definition shall
have the same meaning herein as such terms have in the Pledge Agreement, except
that any reference to the term "Pledgor" or "Pledgors" and any provision of the
Pledge Agreement providing meaning to such term shall be deemed a reference to
the Existing Pledgors and the New Pledgor. Except as specifically modified
hereby, all of the terms and conditions of the Pledge Agreement shall stand and
remain unchanged and in full force and effect.
-2-
5. The New Pledgor agrees to execute and deliver such further instruments
and documents and do such further acts and things as the Agent may reasonably
deem necessary or proper to carry out more effectively the purposes of this
Agreement.
6. No reference to this Agreement need be made in the Pledge Agreement or
in any other document or instrument making reference to the Pledge Agreement,
any reference to the Pledge Agreement in any of such to be deemed a reference to
the Pledge Agreement as modified hereby.
7. This Agreement shall be governed by and construed in accordance with
the State of Illinois (without regard to principles of conflicts of law).
[NEW PLEDGOR]
By
_____________________,____________________
(Print or Type Name) (Title)
-3-
