EXHIBIT 10(xcix)
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is entered into as of
December 17, 2002 by and among XXXXXXXX BEACH/XXXXXXX-SILEX, INC., a Delaware
corporation (the "Company"), its U.S. Subsidiaries identified as U.S. Subsidiary
Borrowers on the signature pages hereto and any additional U.S. Subsidiaries of
the Company which become parties hereto from time to time (the "U.S. Subsidiary
Borrowers") (hereinafter, the Company and U.S. Subsidiary Borrowers are
collectively referred to as the "Pledgors" and individually as a "Pledgor"), and
WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as the administrative agent
under the Credit Agreement referred to below (in such capacity, the
"Administrative Agent" or the "Agent").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, modified, extended, renewed or replaced from time to time,
the "Credit Agreement"), among the Company, the other Borrowers identified
therein, the Lenders party thereto from time to time, the Agent and ABN AMRO
Bank N.V., Canada Branch, as Canadian Agent, the U.S. Lenders have agreed to
make U.S. Revolving Loans and to issue or participate in Letters of Credit and
the Canadian Lenders have agreed to make Canadian Revolving Loans and to create
Bankers' Acceptances upon the terms and subject to the conditions set forth
therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement, the obligation of the U.S. Lenders to make their respective U.S.
Revolving Loans and to issue or participate in Letters of Credit under the
Credit Agreement and the Canadian Lenders to make Canadian Revolving Loans and
to create Bankers' Acceptances under the Credit Agreement that the Pledgors
shall have executed and delivered this Pledge Agreement to the Agent for the
benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to such terms in the Credit
Agreement, and the following terms which are defined in the Uniform Commercial
Code from time to time in effect in the State of New York (the "UCC") are used
herein as so defined: Control, Entitlement Order, Securities Intermediary,
Securities Account and Security Entitlement. For purposes of this Pledge
Agreement, (a) the term "Lender" shall include any Affiliate of any Lender which
has entered into a Lender Hedging Agreement (to the extent the obligations of
any Borrower thereunder constitute Pledgor Obligations) (b) the term "Domestic
Subsidiary" shall mean any Subsidiary of a Pledgor that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia (c) the term "Foreign
Subsidiary" shall mean any Subsidiary of a Pledgor that is not a Domestic
Subsidiary and (d) the term "Mexican Subsidiary" shall mean any Foreign
Subsidiary that is organized and existing under the laws of the United Mexican
States.
2. Pledge and Grant of Security Interest. To secure the prompt
payment and performance in full when due, whether by lapse of time,
acceleration, mandatory prepayment or otherwise, of the Pledgor Obligations,
each Pledgor hereby pledges and assigns to the Agent, for the benefit of the
Lenders, and grants to the Agent, for the benefit of the Lenders, a continuing
security interest in any and all right, title and interest of such Pledgor in
and to the following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the "Pledged Collateral"):
(a) Pledged Capital Stock. (i) 100% (or, if less, the
full amount owned by such Pledgor) of each class of the issued and
outstanding Capital Stock of each Domestic Subsidiary set forth on
Schedule 2(a) attached hereto and (ii) 65% (or, if less, the full
amount owned by such Pledgor) of each class of the issued and
outstanding Capital Stock entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) ("Voting Equity") and 100% (or, if
less, the full amount owned by such Pledgor) of each class of the
issued and outstanding Capital Stock not entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2)) ("Non-Voting Equity") of
each Foreign Subsidiary set forth on Schedule 2(a) attached hereto, in
each case together with the certificates (or other agreements or
instruments), if any, representing such Capital Stock, and all options
and other rights, contractual or otherwise, with respect thereto
(collectively, together with the Capital Stock described in Section
2(b) and 2(c) below, the "Pledged Capital Stock"), including, but not
limited to, the following:
(y) subject to the percentage restrictions
described above, all shares, securities, membership interests
or other equity interests representing a dividend on any of
the Pledged Capital Stock, or representing a distribution or
return of capital upon or in respect of the Pledged Capital
Stock, or resulting from a stock split, revision,
reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the
holder of, or otherwise in respect of, the Pledged Capital
Stock; and
(z) subject to the percentage restrictions
described above and without affecting the obligations of the
Pledgors under any provision prohibiting such action hereunder
or under the Credit Agreement, in the event of any
consolidation or merger involving the issuer of any Pledged
Capital Stock and in which such issuer is not the surviving
entity, all shares of each class of the Capital Stock of the
successor entity formed by or resulting from such
consolidation or merger.
(b) Additional Interests. (i) 100% (or, if less, the full
amount owned by such Pledgor) of each class of the issued and
outstanding Capital Stock of any Person which hereafter becomes a
Domestic Subsidiary and (ii) 65% (or, if less, the full amount owned by
such Pledgor) of each class of Voting Equity and 100% (or, if less, the
full amount owned by such Pledgor) of each class of Non-Voting Equity
of any Person which hereafter becomes a Foreign Subsidiary, including,
without limitation, the certificates (or other agreements or
instruments) representing such Capital Stock, if any.
2
(c) Other Equity Interests. Subject to the percentage
restrictions described above, any and all other Capital Stock owned by
any Pledgor in any Domestic Subsidiary or any Foreign Subsidiary.
(d) Proceeds. All proceeds and products of the foregoing,
however and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter pledge and deliver additional shares of stock or other interests to
the Agent as collateral security for the Pledgor Obligations. Upon such pledge
and delivery to the Agent, such additional shares of stock or other interests
shall be deemed to be part of the Pledged Collateral of such Pledgor and shall
be subject to the terms of this Pledge Agreement whether or not Schedule 2(a) is
amended to refer to such additional shares.
3. Security for Pledgor Obligations. The security interest
created hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the following, whether now existing or hereafter
incurred (the "Pledgor Obligations"): (a) all of the Obligations, howsoever
evidenced, created, incurred or acquired, whether primary, secondary, direct,
contingent, or joint and several and (b) all reasonable expenses and charges,
legal and otherwise, incurred by the Agent and/or the Lenders in collecting or
enforcing any Obligation or in realizing on or protecting any security therefor,
including without limitation the security granted hereunder.
4. Delivery of the Pledged Collateral; Perfection of Security
Interest. Each Pledgor hereby agrees that:
(a) Delivery of Certificate. Each Pledgor shall deliver
to the Agent (i) simultaneously with or prior to the execution and
delivery of this Pledge Agreement, all certificates representing the
Pledged Capital Stock of such Pledgor and (ii) promptly upon the
receipt thereof by or on behalf of a Pledgor, all other certificates
and instruments constituting Pledged Collateral of a Pledgor. Prior to
delivery to the Agent, all such certificates and instruments
constituting Pledged Collateral of a Pledgor shall be held in trust by
such Pledgor for the benefit of the Agent pursuant hereto. All such
certificates shall be delivered in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, substantially in the form provided in
Exhibit 4(a)-1 attached hereto and in the case of Pledged Stock issued
by a Mexican Subsidiary, duly endorsed in the form provided in Exhibit
4(a)-2 attached hereto. Each Pledgor pledging Pledged Stock issued by a
Mexican Subsidiary shall deliver to the Agent simultaneously with or
prior to the execution and delivery of this Pledge Agreement, a
certification issued by the secretary of the board of directors of such
Mexican Subsidiary certifying that the pledge created hereby has been
properly registered at the stock registry book of such Mexican
Subsidiary.
(b) Additional Securities. If such Pledgor shall receive
by virtue of its being or having been the owner of any Pledged
Collateral, any (i) certificate, including without
3
limitation, any certificate representing a dividend or distribution in
connection with any increase or reduction of capital, reclassification,
merger, consolidation, sale of assets, combination of shares or
membership or equity interests, stock splits, spin-off or split-off,
promissory notes or other instrument; (ii) option or right, whether as
an addition to, substitution for, or an exchange for, any Pledged
Collateral or otherwise; (iii) dividends payable in securities; or (iv)
distributions of securities or other equity interests in connection
with a partial or total liquidation, dissolution or reduction of
capital, capital surplus or paid-in surplus, then, subject to the
percentage restrictions described above in Sections 2(a) and (b), such
Pledgor shall receive such certificate, instrument, option, right or
distribution in trust for the benefit of the Agent, shall segregate it
from such Pledgor's other property and shall deliver it forthwith to
the Agent in the exact form received together with any necessary
endorsement and/or appropriate stock power duly executed in blank,
substantially in the form provided in Exhibit 4(a)-1 or in the case of
a Mexican Subsidiary, in the form provided in Exhibit 4(a)-2, to be
held by the Agent as Pledged Collateral and as further collateral
security for the Pledgor Obligations, together, in the case of
securities issued by a Mexican Subsidiary, with a certification issued
by the secretary of the board of directors of such Mexican Subsidiary
certifying that the pledge created hereby has been properly registered
at the stock registry book of such Mexican Subsidiary.
(c) Financing Statements. Each Pledgor shall execute, if
necessary, and deliver to the Agent such UCC or other applicable
financing statements (or comparable filings) as may be reasonably
requested by the Agent in order to perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor.
(d) Provisions Relating to Securities Entitlements and
Securities Accounts. With respect to any Pledged Collateral consisting
of a Securities Entitlement or held in a Securities Account, (a) the
applicable Pledgor and the applicable Securities Intermediary shall
enter into an agreement with the Agent granting Control to the Agent
over such Pledged Collateral, such agreement to be in form and
substance satisfactory to the Agent and (b) the Agent shall be
entitled, upon the occurrence and during the continuance of an Event of
Default, to notify the applicable Securities Intermediary that it
should follow the Entitlement Orders of the Agent and no longer follow
the Entitlement Orders of the applicable Pledgor. Upon receipt by a
Pledgor of notice from a Securities Intermediary of its intent to
terminate the Securities Account of such Pledgor held by such
Securities Intermediary, prior to the termination of such Securities
Account the Pledged Collateral in such Securities Account shall be (i)
transferred to a new Securities Account which is subject to a control
agreement as provided above or (ii) transferred to an account held by
the Agent (in which it will be held until a new Securities Account is
established).
5. Representations and Warranties. Each Pledgor hereby represents
and warrants to the Agent, for the benefit of the Lenders, on the Closing Date
and the date on which any Loan is made or Letter of Credit or Bankers'
Acceptance is issued, that:
(a) Authorization of Pledged Capital Stock. The Pledged
Capital Stock is duly authorized and validly issued, is fully paid and
nonassessable and is not subject to
4
the preemptive rights of any Person. All other shares of Capital Stock
constituting Pledged Collateral will be duly authorized and validly
issued, fully paid and nonassessable and not subject to the preemptive
rights of any Person.
(b) Title. Each Pledgor has good and indefeasible title
to the Pledged Collateral of such Pledgor and will at all times be the
legal and beneficial owner of such Pledged Collateral free and clear of
any Lien, other than Permitted Liens. There exists no "adverse claim"
within the meaning of Section 8-102 of the UCC with respect to the
Pledged Capital Stock of such Pledgor.
(c) Exercising of Rights. The exercise by the Agent of
its rights and remedies hereunder will not violate any law or
governmental regulation or any material contractual restriction binding
on or affecting a Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or
action by, and no notice or filing with any Governmental Authority, the
issuer of any Pledged Capital Stock or third party is required (except
such that have been duly obtained, made or given, or will be duly
obtained, made or given prior to or contemporaneously with the granting
of the security interest hereunder, and are in full force and effect)
either (i) for the pledge made by a Pledgor or for the granting of the
security interest by a Pledgor pursuant to this Pledge Agreement or
(ii) for the exercise by the Agent or the Lenders of their rights and
remedies hereunder (except as may be required by laws affecting the
offering and sale of securities).
(e) Security Interest/Priority. This Pledge Agreement
creates a valid security interest in favor of the Agent, for the
benefit of the Lenders, in the Pledged Collateral. The taking
possession by the Agent of the certificates (if any) representing the
Pledged Capital Stock and all other certificates and instruments
constituting Pledged Collateral and, with respect to the Capital Stock
of any Mexican Subsidiary, the registration of the pledge in favor of
the Administrative Agent in the stock registry book of such Mexican
Subsidiary, will perfect and establish the first priority of the
Agent's security interest in all certificated Pledged Capital Stock and
such certificates and instruments. Upon the filing of UCC financing
statements in the appropriate filing office in the jurisdiction of each
Pledgor's formation, the Agent will have a first priority perfected
security interest in all uncertificated Pledged Capital Stock
consisting of partnership or limited liability company interests that
do not constitute a security pursuant to Section 8-103(c) of the UCC.
With respect to any Pledged Collateral consisting of a Securities
Entitlement or held in a Securities Account, upon execution and
delivery by the applicable Pledgor, the applicable Securities
Intermediary and the Agent of an agreement granting Control to the
Agent over such Pledged Collateral, the Agent will have a first
priority perfected security interest in such Pledged Collateral. Except
as set forth in this Section 5(e), no action is necessary to perfect or
otherwise protect such security interest.
(f) No Other Capital Stock. Except as set forth on
Schedule 2(a) attached hereto, no Pledgor owns any Capital Stock of the
Company or any of its Subsidiaries.
5
(g) Partnership and Limited Liability Company Interests.
Except as previously disclosed in writing to the Agent, none of the
Pledged Capital Stock consisting of partnership or limited liability
company interests (i) is dealt in or traded on a securities exchange or
in a securities market, (ii) by its terms expressly provides that it is
a security governed by Article 8 of the UCC, (iii) is an investment
company security, (iv) is held in a securities account or (v)
constitutes a "security" or a "financial asset" as such terms are
defined in Article 8 of the UCC.
6. Covenants. Each Pledgor hereby covenants that so long as any
of the Pledgor Obligations remain outstanding or any Credit Document or Lender
Hedging Agreement is in effect or any Letter of Credit shall remain outstanding,
and until all of the Commitments shall have been terminated, such Pledgor shall:
(a) Books and Records. Xxxx its books and records (and
shall cause the issuer of the Pledged Capital Stock of such Pledgor to
xxxx its books and records) to reflect the security interest granted to
the Agent, for the benefit of the Lenders, pursuant to this Pledge
Agreement.
(b) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all third parties claiming an
interest therein, keep the Pledged Collateral free from all Liens,
except for Permitted Liens, and not sell, exchange, transfer, assign,
lease or otherwise dispose of Pledged Collateral of such Pledgor or any
interest therein, except as permitted under the Credit Agreement and
the other Credit Documents.
(c) Further Assurances. Promptly execute and deliver at
its expense all further instruments and documents and take all further
action that may be necessary and desirable or that the Agent may
reasonably request in order to (i) perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor
(including, without limitation, the execution and filing of UCC
financing statements and any and all action necessary to satisfy the
Agent that the Agent has obtained a first priority perfected security
interest in all Pledged Capital Stock); (ii) enable the Agent to
exercise and enforce its rights and remedies hereunder in respect of
the Pledged Collateral of such Pledgor; and (iii) otherwise effect the
purposes of this Pledge Agreement, including, without limitation and if
requested by the Agent, delivering to the Agent proxies in respect of
the Pledged Collateral of such Pledgor, which proxies shall be
irrevocable (i) for so long as any of the Pledgor Obligations remain
outstanding, any Credit Document or any Lender Hedging Agreement is in
effect or any Letter of Credit shall remain outstanding and (ii) until
all of the Commitments shall have been terminated.
(d) Amendments. Not make or consent to any amendment or
other modification or waiver with respect to any of the Pledged
Collateral of such Pledgor or enter into any agreement or allow to
exist any restriction with respect to any of the Pledged Collateral of
such Pledgor other than pursuant hereto or as may be permitted under
the Credit Agreement.
6
(e) Compliance with Securities Laws. File all reports and
other information now or hereafter required to be filed by such Pledgor
with the United States Securities and Exchange Commission and any other
state, federal or foreign agency in connection with the ownership of
the Pledged Collateral of such Pledgor.
(f) Issuance or Acquisition of Capital Stock. Not without
executing and delivering, or causing to be executed and delivered, to
the Agent such agreements, documents and instruments as the Agent may
reasonably require, issue or acquire any Capital Stock consisting of an
interest in a partnership or a limited liability company that (i) is
dealt in or traded on a securities exchange or in a securities market,
(ii) by its terms expressly provides that it is a security governed by
Article 8 of the UCC, (iii) is an investment company security, (iv) is
held in a securities account or (v) constitutes a "security" or a
"financial asset" as such terms are defined in Article 8 of the UCC.
7. Performance of Obligations; Advances by Agent. On failure of
any Pledgor to perform any of the covenants and agreements contained herein, the
Agent may, at its sole option and in its sole discretion, perform or cause to be
performed the same and in so doing may expend such sums as the Agent may
reasonably deem advisable in the performance thereof, including, without
limitation, the payment of any insurance premiums, the payment of any taxes, a
payment to obtain a release of a Lien or potential Lien, expenditures made in
defending against any adverse claim and all other expenditures which the Agent
may make for the protection of the security hereof or which may be compelled to
make by operation of law. All such sums and amounts so expended shall be
repayable by the Pledgors on a joint and several basis promptly upon timely
notice thereof and demand therefor, shall constitute additional Pledgor
Obligations and shall bear interest from the date said amounts are expended at
the default rate set forth in Section 4.2(b) of the Credit Agreement. No such
performance of any covenant or agreement by the Agent on behalf of any Pledgor,
and no such advance or expenditure therefor, shall relieve the Pledgors of any
default under the terms of this Pledge Agreement, the other Credit Documents or
any Lender Hedging Agreement. The Agent may make any payment hereby authorized
in accordance with any xxxx, statement or estimate procured from the appropriate
public office or holder of the claim to be discharged without inquiry into the
accuracy of such xxxx, statement or estimate or into the validity of any tax
assessment, sale, forfeiture, tax lien, title or claim except to the extent such
payment is being contested in good faith by a Pledgor in appropriate proceedings
and against which adequate reserves are being maintained in accordance with U.S.
GAAP.
8. Events of Default. The occurrence of an event which under the
Credit Agreement would constitute an Event of Default shall be an event of
default hereunder (an "Event of Default").
9. Remedies.
(a) General Remedies. Upon the occurrence and during the
continuance of an Event of Default, the Agent shall have, in respect of
the Pledged Collateral of any Pledgor, in addition to the rights and
remedies provided herein, in the Credit Documents, in any Lender
Hedging Agreement or by law, the rights and remedies of a secured party
under the UCC or any other applicable law.
7
(b) Sale of Pledged Collateral. Upon the occurrence and
during the continuance of an Event of Default, without limiting the
generality of this Section and without notice, the Agent may, in its
sole discretion, sell or otherwise dispose of or realize upon the
Pledged Collateral, or any part thereof, in one or more parcels, at
public or private sale, at any exchange or broker's board or elsewhere,
at such price or prices and on such other terms as the Agent may deem
commercially reasonable, for cash, credit or for future delivery or
otherwise in accordance with applicable law. To the extent permitted by
law, the Agent and any Lenders may in such event, bid for the purchase
of such securities. Each Pledgor agrees that, to the extent notice of
sale shall be required by law and has not been waived by such Pledgor,
any requirement of reasonable notice shall be met if notice, specifying
the place of any public sale or the time after which any private sale
is to be made, is personally served on or mailed, postage prepaid, to
such Pledgor, in accordance with the notice provisions of Section 14.1
of the Credit Agreement at least ten (10) days before the time of such
sale. The Agent shall not be obligated to make any sale of Pledged
Collateral of such Pledgor regardless of notice of sale having been
given. The Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned.
(c) Private Sale. Upon the occurrence and during the
continuance of an Event of Default, the Pledgors recognize that the
Agent may deem it impracticable to effect a public sale of all or any
part of the Pledged Collateral and that the Agent may, therefore,
determine to make one or more private sales of any such Pledged
Collateral to a restricted group of purchasers who will be obligated to
agree, among other things, to acquire such Pledged Collateral for their
own account, for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than the
prices and other terms which might have been obtained at a public sale
and, notwithstanding the foregoing, agrees that such private sale shall
be deemed to have been made in a commercially reasonable manner and
that the Agent shall have no obligation to delay sale of any such
Pledged Collateral for the period of time necessary to permit the
issuer of such Pledged Collateral to register such Pledged Collateral
for public sale under the Securities Act of 1933. Each Pledgor further
acknowledges and agrees that any offer to sell such Pledged Collateral
which has been (i) publicly advertised on a bona fide basis in a
newspaper or other publication of general circulation in the financial
community of New York, New York (to the extent that such offer may be
advertised without prior registration under the Securities Act of
1933), or (ii) made privately in the manner described above shall be
deemed to involve a "public sale" under the UCC, notwithstanding that
such sale may not constitute a "public offering" under the Securities
Act of 1933, and the Agent may, in such event, bid for the purchase of
such Pledged Collateral.
(d) Retention of Pledged Collateral. In addition to the
rights and remedies hereunder, upon the occurrence and during the
continuance of an Event of Default, the Agent may, after providing the
notices and obtaining consents required by Sections 9-620 and 9-621 of
the UCC or otherwise complying with the requirements of applicable law
of
8
the relevant jurisdiction, accept or retain all or any portion of the
Pledged Collateral in satisfaction of the Pledgor Obligations. Unless
and until the Agent shall have provided such notices, however, the
Agent shall not be deemed to have retained any Pledged Collateral in
satisfaction of any Pledgor Obligations for any reason.
(e) Deficiency. In the event that the proceeds of any
sale, collection or realization are insufficient to pay all amounts to
which the Agent and the Lenders are legally entitled, the Pledgors
shall be jointly and severally liable for the deficiency, together with
interest thereon at the default rate set forth in Section 4.2(b) of the
Credit Agreement, together with the costs of collection and the
reasonable fees of any attorneys employed by the Agent to collect such
deficiency. Any surplus remaining after the full payment and
satisfaction of the Pledgor Obligations shall be returned to the
Pledgors or to whomsoever a court of competent jurisdiction shall
determine to be entitled thereto.
(f) Other Security. To the extent that any of the Pledgor
Obligations are now or hereafter secured by property other than the
Pledged Collateral (including, without limitation, real and other
personal property owned by a Pledgor), or by a guarantee, endorsement
or property of any other Person, then the Agent and the Lenders shall
have the right to proceed against such other property, guarantee or
endorsement upon the occurrence and during the continuance of any Event
of Default, and the Agent and the Lenders have the right, in their sole
discretion, to determine which rights, security, liens, security
interests or remedies the Agent and the Lenders shall at any time
pursue, relinquish, subordinate, modify or take with respect thereto,
without in any way modifying or affecting any of them or any of the
Agent's and the Lenders' rights or the Pledgor Obligations under this
Pledge Agreement, under any other of the Credit Documents or under any
Lender Hedging Agreement.
(g) PPSA. In addition to, and not in any way in
limitation of any of the foregoing rights and remedies, the Agent may
exercise any and all remedies available to the Agent under the PPSA.
10. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of
attorney contained herein, each Pledgor hereby designates and appoints
the Agent, on behalf of the Lenders, and each of its designees or
agents as attorney-in-fact of such Pledgor, irrevocably and with power
of substitution, with authority to take any or all of the following
actions upon the occurrence and during the continuation of an Event of
Default:
(i) to demand, collect, settle,
compromise, adjust and give discharges and releases, all as
the Agent may reasonably determine;
(ii) to commence and prosecute any
actions at any court for the purposes of collecting any of the
Pledged Collateral of such Pledgor and enforcing any other
right in respect thereof;
9
(iii) to defend, settle, adjust or
compromise any action, suit or proceeding brought and, in
connection therewith, give such discharge or release as the
Agent may deem reasonably appropriate;
(iv) to pay or discharge taxes, liens,
security interests, or other encumbrances levied or placed on
or threatened against the Pledged Collateral of such Pledgor;
(v) to direct any parties liable for
any payment under any of the Pledged Collateral to make
payment of any and all monies due and to become due thereunder
directly to the Agent or as the Agent shall direct;
(vi) to receive payment of and receipt
for any and all monies, claims, and other amounts due and to
become due at any time in respect of or arising out of any
Pledged Collateral of such Pledgor;
(vii) to sign and endorse any drafts,
assignments, proxies, stock powers, verifications, notices and
other documents relating to the Pledged Collateral of such
Pledgor;
(viii) to execute and deliver all
assignments, conveyances, statements, financing statements (or
comparable filings), renewal financing statements, pledge
agreements, affidavits, notices and other agreements,
instruments and documents that the Agent may determine
necessary in order to perfect and maintain the security
interests and liens granted in this Pledge Agreement and in
order to fully consummate all of the transactions contemplated
herein;
(ix) to exchange any of the Pledged
Collateral of such Pledgor or other property upon any merger,
consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof and, in connection
therewith, deposit any of the Pledged Collateral of such
Pledgor with any committee, depository, transfer agent,
registrar or other designated agency upon such terms as the
Agent may determine;
(x) to vote for a shareholder, partner
or member resolution, or to sign an instrument in writing,
sanctioning the transfer of any or all of the Pledged Capital
Stock of such Pledgor into the name of the Agent or one or
more of the Lenders or into the name of any transferee to whom
the Pledged Capital Stock of such Pledgor or any part thereof
may be sold pursuant to Section 9 hereof; and
(xi) to do and perform all such other
acts and things as the Agent may reasonably deem to be
necessary, proper or convenient in connection with the Pledged
Collateral of such Pledgor.
10
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Pledgor Obligations remain
outstanding, any Credit Document or any Lender Hedging Agreement is in
effect or any Letter of Credit shall remain outstanding and (ii) until
all of the Commitments shall have been terminated. The Agent shall be
under no duty to exercise or withhold the exercise of any of the
rights, powers, privileges and options expressly or implicitly granted
to the Agent in this Pledge Agreement, and shall not be liable for any
failure to do so or any delay in doing so. The Agent shall not be
liable for any act or omission or for any error of judgment or any
mistake of fact or law in its individual capacity or its capacity as
attorney-in-fact except acts or omissions resulting from its gross
negligence or willful misconduct. This power of attorney is conferred
on the Agent solely to protect, preserve and realize upon its security
interest in the Pledged Collateral.
(b) Assignment by the Administrative Agent. The
Administrative Agent may from time to time assign the Pledgor
Obligations and the Pledged Collateral to a successor Administrative
Agent appointed pursuant to Section 13.9 of the Credit Agreement, and
such successor shall be entitled to all of the rights and remedies of
the Administrative Agent under this Pledge Agreement in relation
thereto.
(c) The Agent's Duty of Care. Other than the exercise of
reasonable care to ensure the safe custody of the Pledged Collateral
while being held by the Agent hereunder, the Agent shall have no duty
or liability to preserve rights pertaining thereto, it being understood
and agreed that Pledgors shall be responsible for preservation of all
rights in the Pledged Collateral of such Pledgor, and the Agent shall
be relieved of all responsibility for Pledged Collateral upon
surrendering it or tendering the surrender of it to the Pledgors. The
Agent shall be deemed to have exercised reasonable care in the custody
and preservation of the Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that
which the Agent accords its own property, which shall be no less than
the treatment employed by a reasonable and prudent agent in the
industry, it being understood that the Agent shall not have
responsibility for (i) ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters
relating to any Pledged Collateral, whether or not the Agent has or is
deemed to have knowledge of such matters; or (ii) taking any necessary
steps to preserve rights against any parties with respect to any
Pledged Collateral.
(d) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default
shall have occurred and be continuing, to the extent permitted
by law, each Pledgor may exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral of such
Pledgor or any part thereof for any purpose not inconsistent
with the terms of this Pledge Agreement or the Credit
Agreement; and
(ii) Upon the occurrence and during the
continuance of an Event of Default and receipt of notice from
the Agent, all rights of a Pledgor to
11
exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to paragraph (i) of
this subsection (d) shall cease and all such rights shall
thereupon become vested in the Agent which shall then have the
sole right to exercise such voting and other consensual
rights.
(e) Dividend and Distribution Rights in Respect of the
Pledged Collateral.
(i) So long as no Event of Default shall have
occurred and be continuing and subject to Section 4(b) hereof,
each Pledgor may receive and retain any and all dividends
(other than stock or ownership interest dividends and other
dividends constituting Pledged Collateral which are addressed
hereinabove), distributions or interest paid in respect of the
Pledged Collateral to the extent they are allowed under the
Credit Agreement.
(ii) Upon the occurrence and during the
continuation of an Event of Default:
(A) all rights of a Pledgor to receive
the dividends, distributions and interest payments
which it would otherwise be authorized to receive and
retain pursuant to paragraph (i) of this subsection
(e) shall cease and all such rights shall thereupon
be vested in the Agent which shall then have the sole
right to receive and hold as Pledged Collateral such
dividends, distributions and interest payments; and
(B) all dividends, distributions and
interest payments which are received by a Pledgor
contrary to the provisions of clause (A) of this
paragraph (ii) shall be received in trust for the
benefit of the Agent, shall be segregated from other
property or funds of such Pledgor, and shall be
forthwith paid over to the Agent as Pledged
Collateral in the exact form received, to be held by
the Agent as Pledged Collateral and as further
collateral security for the Pledgor Obligations.
(f) Release of Pledged Collateral. The Agent may release
any of the Pledged Collateral from this Pledge Agreement or may
substitute any of the Pledged Collateral for other Pledged Collateral
without altering, varying or diminishing in any way the force, effect,
lien, pledge or security interest of this Pledge Agreement as to any
Pledged Collateral not expressly released or substituted, and the
security interest created by this Pledge Agreement shall continue as a
first priority lien on all Pledged Collateral not expressly released or
substituted.
(g) Filing of Financing Statements. The Pledgors
authorize the Agent to file financing statements (including renewal
statements and in lieu statements) and PPSA registrations and
amendments thereof and supplements thereto with respect to the Pledged
Collateral in such form and in such filing offices as the Agent
reasonably determines appropriate to perfect the security interests of
the Agent under this Pledge Agreement. Any financing statement or PPSA
registration filed by the Agent may contain a
12
general description of the collateral covered thereby, as permitted by
the UCC and/or the PPSA, which may state that the security interest
attaches to all personal property of the debtor.
11. Rights of Required Lenders. All rights of the Agent hereunder,
if not exercised by the Agent, may be exercised by the Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Pledgor Obligations in the order set forth in Section 4.7 of
the Credit Agreement, and each Pledgor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
the Agent shall have the continuing and exclusive right to apply and reapply any
and all such payments and proceeds in the Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.
13. Costs of Counsel. If at any time hereafter, whether upon the
occurrence of an Event of Default or not, the Agent employs counsel to prepare
or consider amendments, waivers or consents with respect to this Pledge
Agreement, or to take action or make a response in or with respect to any legal
or arbitral proceeding relating to this Pledge Agreement or relating to the
Pledged Collateral, or to protect the Pledged Collateral or exercise any rights
or remedies under this Pledge Agreement or with respect to the Pledged
Collateral, then the Pledgors agree to promptly pay upon demand any and all such
reasonable costs and expenses of the Agent, all of which costs and expenses
shall constitute Pledgor Obligations hereunder.
14. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement
in every respect and shall remain in full force and effect so long as
any of the Pledgor Obligations remain outstanding or any Credit
Document or Lender Hedging Agreement is in effect or any Letter of
Credit shall remain outstanding, and until all of the Commitments
thereunder shall have terminated. Upon such payment and termination,
this Pledge Agreement shall be automatically terminated and the Agent
shall, upon the request and at the expense of the Pledgors, forthwith
release all of its liens and security interests hereunder and shall
execute, if necessary, and deliver all UCC termination statements
and/or other documents reasonably requested by the Pledgors evidencing
such termination. Notwithstanding the foregoing all releases and
indemnities provided hereunder shall survive termination of this Pledge
Agreement.
(b) This Pledge Agreement shall continue to be effective
or be automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Pledgor Obligations is
rescinded or must otherwise be restored or returned by the Agent or any
Lender as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had
not been made; provided that in the event payment of all or any part of
the Pledgor Obligations is rescinded or must be restored or returned,
all reasonable costs and expenses (including without limitation any
13
reasonable legal fees and disbursements) incurred by the Agent or any
Lender in defending and enforcing such reinstatement shall be deemed to
be included as a part of the Pledgor Obligations.
15. Amendments; Waivers; Modifications. This Pledge Agreement and
the provisions hereof may not be amended, waived, modified, changed, discharged
or terminated except as set forth in Section 14.6 of the Credit Agreement.
16. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Pledged 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 Lenders hereunder, to the benefit of
the Agent and the Lenders and their successors and permitted assigns; provided,
however, that none of the Pledgors may assign its rights or delegate its duties
hereunder without the prior written consent of each Lender or the Required
Lenders, as required by the Credit Agreement. To the fullest extent permitted by
law, each Pledgor hereby releases the Agent and each Lender, and its successors
and assigns, from any liability for any act or omission relating to this Pledge
Agreement or the Pledged Collateral, except for any liability arising from the
gross negligence or willful misconduct of the Agent, or such Lender, or its
officers, employees or agents.
17. Notices. All notices required or permitted to be given under
this Pledge Agreement shall be in conformance with Section 14.1 of the Credit
Agreement.
18. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
19. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning,
construction or interpretation of any provision of this Pledge Agreement.
20. Governing Law; Submission to Jurisdiction and Service of
Process; Waiver of Jury Trial. THIS PLEDGE AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The terms of
Sections 14.12 and 14.14 of the Credit Agreement are incorporated herein by
reference, mutatis mutandis, and the parties hereto agree to such terms.
21. Severability. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
22. Entirety. This Pledge Agreement, the other Credit Documents
and any Lender Hedging Agreement represent the entire agreement of the parties
hereto and thereto, and
14
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to this Pledge
Agreement, the other Credit Documents, any Lender Hedging Agreement or the
transactions contemplated herein and therein.
23. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement, the
other Credit Documents and any Lender Hedging Agreement, the delivery of the
Notes and the making of the Loans, the issuance of the Letters of Credit and the
creation of Bankers' Acceptances under the Credit Agreement.
24. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several
liability hereunder in consideration of the financial accommodation to
be provided by the Lenders under the Credit Agreement, for the mutual
benefit, direct and indirect, of each of the Pledgors and in
consideration of the undertakings of each of the Pledgors to accept
joint and several liability for the obligations of each of them.
(b) Each of the Pledgors, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Pledgors with respect to the payment and performance of all of the
Pledgor Obligations arising under this Pledge Agreement, the other
Credit Documents and any Lender Hedging Agreement, it being the
intention of the parties hereto that all the Pledgor Obligations shall
be the joint and several obligations of each of the Pledgors without
preferences or distinction among them.
(c) Notwithstanding any provision to the contrary
contained herein or in any other of the Credit Documents, to the extent
the obligations of a Pledgor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of
any applicable state, provincial or federal law relating to fraudulent
conveyances or transfers) then the obligations of such Pledgor
hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether state, provincial or federal and
including, without limitation, the Bankruptcy Code).
25. Judgment Currency.
(a) If for the purposes of obtaining judgment in any
court it is necessary to convert all or any part of the Pledgor
Obligations or any other amount due to the Lenders hereunder or under
any other Credit Document in respect of the Pledgors' obligations
hereunder in any currency (the "Original Currency") into another
currency (the "Other Currency") each Pledgor to the fullest extent that
it may effectively do so, agrees that the rate of exchange used shall
be that at which, in accordance with normal banking procedures, the
Agent could purchase the Original Currency with the Other Currency at
its principal offices in Charlotte, North Carolina on the Business Day
on which the Agent is open for the transaction of its banking business
at such offices immediately preceding
15
the day on which any such judgment, or any relevant part thereof, is
paid or otherwise satisfied.
(b) The obligation of each Pledgor in respect of any sum
due in the Original Currency from it to the Agent or the Lenders
hereunder or under any other Credit Document in respect of the
Pledgors' obligation hereunder shall, notwithstanding any judgment in
any Other Currency, be discharged only to the extent that on the
Business Day following receipt by the Agent of any sum adjudged to be
so due in such Other Currency or of any other sum in any Other Currency
the Agent may, in accordance with its normal banking procedures,
purchase the Original Currency with such Other Currency. If the amount
of the Original Currency so purchased is less than the sum originally
due to the Agent and the Lenders in the Original Currency, the Pledgors
shall, as a separate obligation and notwithstanding any such judgment,
indemnify the Agent against such loss, and if the amount of the
Original Currency so purchased exceeds the sum originally due to the
Lenders, the Agent shall remit such excess to the Pledgors.
[remainder of page intentionally left blank]
16
Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
BORROWERS: XXXXXXXX BEACH/XXXXXXX-SILEX, INC., a
Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
U.S. SUBSIDIARY BORROWERS: [NONE]
Accepted and agreed to as of the date first above written.
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Agent
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
Title: Director
