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EXHIBIT 10.9
PLEDGE AGREEMENT
This PLEDGE AGREEMENT, dated as of March 24, 2000 (together
with all amendments, if any, from time to time hereto, this "Agreement") between
XXXXXXX PIANO & ORGAN COMPANY, a Delaware corporation (the "Pledgor") and
GENERAL ELECTRIC CAPITAL CORPORATION in its capacity as Agent for Lenders
("Agent").
W I T N E S S E T H:
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WHEREAS, pursuant to that certain Credit Agreement dated as of
the date hereof by and among Pledgor, the Persons named therein as Credit
Parties, Agent and the Persons signatory thereto from time to time as Lenders
(including all annexes, exhibits and schedules thereto, and as from time to time
amended, restated, supplemented or otherwise modified (the "Credit Agreement")
the Lenders have agreed to make Loans to, and incur Letter of Credit Obligations
for the benefit of, Borrowers;
WHEREAS, Pledgor is the record and beneficial owner of the
shares of Stock listed in Part A of Schedule I hereto and the owner of the
promissory notes and instruments listed in Part B of Schedule I hereto;
WHEREAS, Pledgor benefits from the credit facilities made
available to Borrowers under the Credit Agreement;
WHEREAS, in order to induce Agent and Lenders to make the
Loans and to incur the Letter of Credit Obligations as provided for in the
Credit Agreement, Pledgor has agreed to pledge the Pledged Collateral to Agent
in accordance herewith;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained and to induce Lenders to make Loans and to incur
Letter of Credit Obligations under the Credit Agreement, it is agreed as
follows:
1. Definitions. Unless otherwise defined herein, terms defined
in the Credit Agreement are used herein as therein defined, and the following
shall have (unless otherwise provided elsewhere in this Agreement) the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):
"Bankruptcy Code" means title 11, United States Code, as
amended from time to time, and any successor statute thereto.
"Pledged Collateral" has the meaning assigned to such term in
Section 2 hereof.
"Pledged Entity" means an issuer of Pledged Shares or Pledged
Indebtedness.
"Pledged Indebtedness" means the Indebtedness evidenced by
promissory notes and instruments listed on Part B of Schedule I hereto;
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"Pledged Shares" means those shares listed on Part A of
Schedule I hereto.
"Secured Obligations" has the meaning assigned to such term in
Section 3 hereof.
2. Pledge. Pledgor hereby pledges to Agent, and grants to
Agent for itself and the benefit of Lenders, a first priority security interest
in all of the following (collectively, the "Pledged Collateral"):
(a) the Pledged Shares and the certificates
representing the Pledged Shares, and all dividends, distributions,
cash, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares; provided, to the extent
the issuer of any of such Pledged Shares is a Person organized under
the laws of a jurisdiction other than a State of the United States or
the District of Columbia (each, a "Foreign Subsidiary") (other than
Xxxxxxx Canada), such Pledgor shall only be required to pledge Pledged
Shares or certificates representing Pledged Shares of such issuer
possessing up to but not exceeding 65% of the voting power of all
classes of capital stock entitled to vote of such issuer, and all
dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Pledged
Shares; and
(b) such portion, as determined by Agent as provided
in Section 6(d) below, of any additional shares of stock of a Pledged
Entity from time to time acquired by Pledgor in any manner (which
shares shall be deemed to be part of the Pledged Shares), and the
certificates representing such additional shares, and all dividends,
distributions, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such Stock; and
(c) the Pledged Indebtedness and the promissory notes
or instruments evidencing the Pledged Indebtedness, and all interest,
cash, instruments and other property and assets from time to time
received, receivable or otherwise distributed in respect of the Pledged
Indebtedness; and
(d) all additional Indebtedness arising after the
date hereof and owing to Pledgor and evidenced by promissory notes or
other instruments, together with such promissory notes and instruments,
and all interest, cash, instruments and other property and assets from
time to time received, receivable or otherwise distributed in respect
of that Pledged Indebtedness.
3. Security for Obligations. This Agreement secures, and the
Pledged Collateral is security for, the prompt payment in full when due, whether
at stated maturity, by acceleration or otherwise, and performance of all
Obligations of any kind under or in connection with the Credit Agreement and the
other Loan Documents and all obligations of Pledgor now or hereafter existing
under this Agreement including, without limitation, all fees, costs and
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expenses whether in connection with collection actions hereunder or otherwise
(collectively, the "Secured Obligations").
4. Delivery of Pledged Collateral. All certificates and all
promissory notes and instruments evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Agent, for itself and the benefit of
Lenders, pursuant hereto. Subject to the immediately following sentence, all
Pledged Shares shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to Agent, an
irrevocable proxy substantially in the form of Schedule II hereto and all
promissory notes or other instruments evidencing the Pledged Indebtedness shall
be endorsed by Pledgor. All Pledged Shares of Xxxxxxx Canada shall forthwith be
registered in the name of Agent or, at Agent's option, its nominee, in order to
further perfect Agent's security interest therein, and be delivered to and
remain in the custody of Agent or, at Agent's option, its nominee. Pledgor
hereby directs Xxxxxxx Canada to, and Xxxxxxx Canada agrees that it shall,
forthwith upon the issuance of any Pledged Shares, record on its share register
the Pledged Shares of Xxxxxxx Canada in the name of Agent or its nominee in
order to further perfect the security interest of Agent in the Pledged Shares
and all dividends, distributions, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Stock. Xxxxxxx Canada shall
promptly deliver to Agent following such recordation a photocopy of the
applicable share register evidencing such recordation certified by the Secretary
or Assistant Secretary of Xxxxxxx Canada to be a complete photocopy thereof.
5. Representations and Warranties. Pledgor represents and
warrants to Agent that:
(a) Pledgor is, and at the time of delivery of the
Pledged Shares to Agent will be, the sole holder of record (except in
the case of Pledged Shares of Xxxxxxx Canada in respect of which
Pledgor was the sole holder of record immediately prior to (i) the
registration thereof in Agent's or Agent's nominee's name in order to
further perfect Agent's security interest therein and (ii) the delivery
of such Pledged Shares to Agent) and the sole beneficial owner of such
Pledged Collateral pledged by Pledgor free and clear of any Lien
thereon or affecting the title thereto, except for any Lien created by
this Agreement; Pledgor is and at the time of delivery of the Pledged
Indebtedness to Agent will be, the sole owner of such Pledged
Collateral free and clear of any Lien thereon or affecting title
thereto, except for any Lien created by this Agreement;
(b) All of the Pledged Shares have been duly
authorized, validly issued and are fully paid and non-assessable; the
Pledged Indebtedness has been duly authorized, authenticated or issued
and delivered by, and is the legal, valid and binding obligations of,
the Pledged Entities, and no such Pledged Entity is in default
thereunder;
(c) Pledgor has the right and requisite authority to
pledge, assign, transfer, deliver, deposit and set over the Pledged
Collateral pledged by Pledgor to Agent as provided herein;
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(d) None of the Pledged Shares or Pledged
Indebtedness has been issued or transferred in violation of the
securities registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be subject;
(e) All of the Pledged Shares are presently owned by
Pledgor, and are presently represented by the certificates listed on
Part A of Schedule I hereto. As of the date hereof, there are no
existing options, warrants, calls or commitments of any character
whatsoever relating to the Pledged Shares;
(f) No consent, approval, authorization or other
order or other action by, and no notice to or filing with, any
Governmental Authority or any other Person is required (i) for the
pledge by Pledgor of the Pledged Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by
Pledgor, or (ii) for the exercise by Agent of the voting or other
rights provided for in this Agreement or the remedies in respect of the
Pledged Collateral pursuant to this Agreement, except as may be
required in connection with such disposition by laws affecting the
offering and sale of securities generally;
(g) The pledge, assignment and delivery of the
Pledged Collateral pursuant to this Agreement will create a valid first
priority Lien on and a first priority perfected security interest in
favor of the Agent for the benefit of Agent and Lenders in the Pledged
Collateral and the proceeds thereof, securing the payment of the
Secured Obligations, subject to no other Lien;
(h) This Agreement has been duly authorized, executed
and delivered by Pledgor and constitutes a legal, valid and binding
obligation of Pledgor enforceable against Pledgor in accordance with
its terms;
(i) The Pledged Shares constitute 100% of the issued
and outstanding shares of Stock of each Pledged Entity or, in the case
of any Foreign Subsidiary (other than Xxxxxxx Canada) 65%; and
(j) Except as disclosed on Part B of Schedule I, none
of the Pledged Indebtedness is subordinated in right of payment to
other Indebtedness (except for the Secured Obligations) or subject to
the terms of an indenture.
The representations and warranties set forth in this Section 5
shall survive the execution and delivery of this Agreement.
6. Covenants. Pledgor covenants and agrees that until the
Termination Date:
(a) Without the prior written consent of Agent,
Pledgor will not sell, assign, transfer, pledge, or otherwise encumber
any of its rights in or to the Pledged Collateral, or any unpaid
dividends, interest or other distributions or payments with respect to
the Pledged Collateral or xxxxx x Xxxx in the Pledged Collateral,
unless otherwise expressly permitted by the Credit Agreement;
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(b) Pledgor will, at its expense, promptly execute,
acknowledge and deliver all such instruments and take all such actions
as Agent from time to time may request in order to ensure to Agent and
Lenders the benefits of the Liens in and to the Pledged Collateral
intended to be created by this Agreement, including the filing of any
necessary Code financing statements, which may be filed by Agent with
or (to the extent permitted by law) without the signature of Pledgor,
and will cooperate with Agent, at Pledgor's expense, in obtaining all
necessary approvals and making all necessary filings under federal,
state, local or foreign law in connection with such Liens or any sale
or transfer of the Pledged Collateral;
(c) Pledgor has and will defend the title to the
Pledged Collateral and the Liens of Agent in the Pledged Collateral
against the claim of any Person and will maintain and preserve such
Liens; and
(d) Pledgor will, upon obtaining ownership of any
additional Stock or promissory notes or instruments of a Pledged Entity
or Stock or promissory notes or instruments otherwise required to be
pledged to Agent pursuant to any of the Loan Documents, which Stock,
notes or instruments are not already Pledged Collateral, promptly (and
in any event within three (3) Business Days) deliver to Agent a Pledge
Amendment, duly executed by Pledgor, in substantially the form of
Schedule III hereto (a "Pledge Amendment") in respect of any such
additional Stock, notes or instruments, pursuant to which Pledgor shall
pledge to Agent all of such additional Stock, notes and instruments.
Pledgor hereby authorizes Agent to attach each Pledge Amendment to this
Agreement and agrees that all Pledged Shares and Pledged Indebtedness
listed on any Pledge Amendment delivered to Agent shall for all
purposes hereunder be considered Pledged Collateral.
7. Pledgor's Rights. As long as no Default or Event of Default
shall have occurred and be continuing and until written notice shall be given to
Pledgor in accordance with Section 8(a) hereof:
(a) Pledgor shall have the right, from time to time,
to vote and give consents with respect to the Pledged Collateral, or
any part thereof for all purposes not inconsistent with the provisions
of this Agreement, the Credit Agreement or any other Loan Document;
provided, however, that no vote shall be cast, and no consent shall be
given or action taken, which would have the effect of impairing the
position or interest of Agent in respect of the Pledged Collateral or
which would authorize, effect or consent to (unless and to the extent
expressly permitted by the Credit Agreement):
(i) the dissolution or liquidation, in whole
or in part, of a Pledged Entity;
(ii) the consolidation or merger of a
Pledged Entity with any other Person;
(iii) the sale, disposition or encumbrance
of all or substantially all of the assets of a Pledged Entity, except
for Liens in favor of Agent;
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(iv) any change in the authorized number of
shares, the stated capital or the authorized share capital of a Pledged
Entity or the issuance of any additional shares of its Stock; or
(v) the alteration of the voting rights with
respect to the Stock of a Pledged Entity; and
(b) (i) Pledgor shall be entitled, from time to time,
to collect and receive for its own use all cash dividends and interest
paid in respect of the Pledged Shares and Pledged Indebtedness to the
extent not in violation of the Credit Agreement other than any and all:
(A) dividends and interest paid or payable other than in cash in
respect of any Pledged Collateral, and instruments and other property
received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Collateral; (B) dividends and other
distributions paid or payable in cash in respect of any Pledged Shares
in connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in
capital of a Pledged Entity; and (C) cash paid, payable or otherwise
distributed, in respect of principal of, or in redemption of, or in
exchange for, any Pledged Collateral; provided, however, that until
actually paid all rights to such distributions shall remain subject to
the Lien created by this Agreement; and
(ii) all dividends and interest (other than
such cash dividends and interest as are permitted to be paid to Pledgor
in accordance with clause (i) above) and all other distributions in
respect of any of the Pledged Shares or Pledged Indebtedness, whenever
paid or made, shall be delivered to Agent to hold as Pledged Collateral
and shall, if received by Pledgor, be received in trust for the benefit
of Agent, be segregated from the other property or funds of Pledgor,
and be forthwith delivered to Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement).
8. Defaults and Remedies; Proxy.
(a) Upon the occurrence of an Event of Default and
during the continuation of such Event of Default, and concurrently with
written notice to Pledgor, Agent (personally or through an agent) is
hereby authorized and empowered to transfer and register in its name or
in the name of its nominee the whole or any part of the Pledged
Collateral, to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations, to exercise the voting and all other
rights as a holder with respect thereto, to collect and receive all
cash dividends, interest, principal and other distributions made
thereon, to sell in one or more sales after ten (10) days' notice of
the time and place of any public sale or of the time at which a private
sale is to take place (which notice Pledgor agrees is commercially
reasonable) the whole or any part of the Pledged Collateral and to
otherwise act with respect to the Pledged Collateral as though Agent
was the outright owner thereof. Any sale shall be made at a public or
private sale at Agent's place of business, or at any place to be named
in the notice of sale, either for cash or upon credit
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or for future delivery at such price as Agent may deem fair, and Agent
may be the purchaser of the whole or any part of the Pledged Collateral
so sold and hold the same thereafter in its own right free from any
claim of Pledgor or any right of redemption. Each sale shall be made to
the highest bidder, but Agent reserves the right to reject any and all
bids at such sale which, in its discretion, it shall deem inadequate.
Demands of performance, except as otherwise herein specifically
provided for, notices of sale, advertisements and the presence of
property at sale are hereby waived and any sale hereunder may be
conducted by an auctioneer or any officer or agent of Agent.
In furtherance of the foregoing, (i) Pledgor shall promptly execute and
deliver (or cause to be executed and delivered) to Agent all such
proxies, dividend payment orders and other instruments as Agent may
from time to time reasonably request and (ii) without limiting the
effect of the immediately preceding clause (i) and to the extent not
granted pursuant to an irrevocable proxy delivered pursuant to Section
4, PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS AGENT AS THE
PROXY AND ATTORNEY-IN-FACT OF PLEDGOR WITH RESPECT TO THE PLEDGED
COLLATERAL, INCLUDING THE RIGHT TO VOTE THE PLEDGED SHARES, WITH FULL
POWER OF SUBSTITUTION TO DO SO. THE APPOINTMENT OF AGENT AS PROXY AND
ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE
UNTIL THE TERMINATION DATE. IN ADDITION TO THE RIGHT TO VOTE THE
PLEDGED SHARES, THE APPOINTMENT OF AGENT AS PROXY AND ATTORNEY-IN-FACT
SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS,
PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED SHARES WOULD
BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF
SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT
SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND
WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY
PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON
(INCLUDING THE ISSUER OF THE PLEDGED SHARES OR ANY OFFICER OR AGENT
THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. NOTWITHSTANDING
THE FOREGOING, AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT
OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO
SO OR FOR ANY DELAY IN DOING SO.
(b) If, at the original time or times appointed for
the sale of the whole or any part of the Pledged Collateral, the
highest bid, if there be but one sale, shall be inadequate to discharge
in full all the Secured Obligations, or if the Pledged Collateral be
offered for sale in lots, if at any of such sales, the highest bid for
the lot offered for sale would indicate to Agent, in its discretion,
that the proceeds of the sales of the whole of the Pledged Collateral
would be unlikely to be sufficient to discharge all the Secured
Obligations, Agent may, on one or more occasions and in its discretion,
postpone any of said sales by public announcement at the time of sale
or the time of previous
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postponement of sale, and no other notice of such postponement or
postponements of sale need be given, any other notice being hereby
waived; provided, however, that any sale or sales made after such
postponement shall be after ten (10) days' notice to Pledgor.
(c) [If, at any time when Agent in its sole
discretion determines, following the occurrence and during the
continuance of an Event of Default, that, in connection with any actual
or contemplated exercise of its rights (when permitted under this
Section 8) to sell the whole or any part of the Pledged Shares
hereunder, it is necessary or advisable to effect a public registration
of all or part of the Pledged Collateral pursuant to the Securities Act
of 1933, as amended (or any similar statute then in effect) (the
"Act"), Pledgor shall, in an expeditious manner, cause the Pledged
Entities to:
(i) Prepare and file with the Securities and
Exchange Commission (the "Commission") a registration statement with
respect to the Pledged Shares and in good faith use commercially
reasonable efforts to cause such registration statement to become and
remain effective;
(ii) Prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement effective and to comply with the provisions
of the Act with respect to the sale or other disposition of the Pledged
Shares covered by such registration statement whenever Agent shall
desire to sell or otherwise dispose of the Pledged Shares;
(iii) Furnish to Agent such numbers of
copies of a prospectus and a preliminary prospectus, in conformity with
the requirements of the Act, and such other documents as Agent may
request in order to facilitate the public sale or other disposition of
the Pledged Shares by Agent;
(iv) Use commercially reasonable efforts to
register or qualify the Pledged Shares covered by such registration
statement under such other securities or blue sky laws of such
jurisdictions within the United States and Puerto Rico as Agent shall
request, and do such other reasonable acts and things as may be
required of it to enable Agent to consummate the public sale or other
disposition in such jurisdictions of the Pledged Shares by Agent;
(v) Furnish, at the request of Agent, on the
date that shares of the Pledged Collateral are delivered to the
underwriters for sale pursuant to such registration or, if the security
is not being sold through underwriters, on the date that the
registration statement with respect to such Pledged Shares becomes
effective, (A) an opinion, dated such date, of the independent counsel
representing such registrant for the purposes of such registration,
addressed to the underwriters, if any, and in the event the Pledged
Shares are not being sold through underwriters, then to Agent, in
customary form and covering matters of the type customarily covered in
such legal opinions; and (B) a comfort letter, dated such date, from
the independent certified public accountants of such registrant,
addressed to the underwriters, if any, and in the event the Pledged
Shares
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are not being sold through underwriters, then to Agent, in a customary
form and covering matters of the type customarily covered by such
comfort letters and as the underwriters or Agent shall reasonably
request. The opinion of counsel referred to above shall additionally
cover such other legal matters with respect to the registration in
respect of which such opinion is being given as Agent may reasonably
request. The letter referred to above from the independent certified
public accountants shall additionally cover such other financial
matters (including information as to the period ending not more than
five (5) Business Days prior to the date of such letter) with respect
to the registration in respect of which such letter is being given as
Agent may reasonably request; and
(vi) Otherwise use commercially reasonable
efforts to comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as
reasonably practicable but not later than 18 months after the effective
date of the registration statement, an earnings statement covering the
period of at least 12 months beginning with the first full month after
the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Act.
(d) All expenses incurred in complying with Section
8(c) hereof, including, without limitation, all registration and filing
fees (including all expenses incident to filing with the National
Association of Securities Dealers, Inc.), printing expenses, fees and
disbursements of counsel for the registrant, the fees and expenses of
counsel for Agent, expenses of the independent certified public
accountants (including any special audits incident to or required by
any such registration) and expenses of complying with the securities or
blue sky laws or any jurisdictions, shall be paid by Pledgor.]
(e) If, at any time when Agent shall determine to
exercise its right to sell the whole or any part of the Pledged
Collateral hereunder, such Pledged Collateral or the part thereof to be
sold shall not, for any reason whatsoever, be effectively registered
under [the Securities Act of 1933, as amended (or any similar statute
then in effect) (the "Act")/the Act], Agent may, in its discretion
(subject only to applicable requirements of law), sell such Pledged
Collateral or part thereof by private sale in such manner and under
such circumstances as Agent may deem necessary or advisable, but
subject to the other requirements of this Section 8, and shall not be
required to effect such registration or to cause the same to be
effected. Without limiting the generality of the foregoing, in any such
event, Agent in its discretion (x) may, in accordance with applicable
securities laws, proceed to make such private sale notwithstanding that
a registration statement for the purpose of registering such Pledged
Collateral or part thereof could be or shall have been filed under said
Act (or similar statute), (y) may approach and negotiate with a single
possible purchaser to effect such sale, and (z) may restrict such sale
to a purchaser who is an accredited investor under the Act and who will
represent and agree that such purchaser is purchasing for its own
account, for investment and not with a view to the distribution or sale
of such Pledged Collateral or any part thereof. In addition to a
private sale as provided above in this Section 8, if any of the Pledged
Collateral shall not be freely distributable to the public without
registration under the Act (or similar statute) at
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the time of any proposed sale pursuant to this Section 8, then Agent
shall not be required to effect such registration or cause the same to
be effected but, in its discretion (subject only to applicable
requirements of law), may require that any sale hereunder (including a
sale at auction) be conducted subject to restrictions:
(i) as to the financial sophistication and
ability of any Person permitted to bid or purchase at any such sale;
(ii) as to the content of legends to be
placed upon any certificates representing the Pledged Collateral sold
in such sale, including restrictions on future transfer thereof;
(iii) as to the representations required to
be made by each Person bidding or purchasing at such sale relating to
that Person's access to financial information about Pledgor and such
Person's intentions as to the holding of the Pledged Collateral so sold
for investment for its own account and not with a view to the
distribution thereof; and
(iv) as to such other matters as Agent may,
in its discretion, deem necessary or appropriate in order that such
sale (notwithstanding any failure so to register) may be effected in
compliance with the Bankruptcy Code and other laws affecting the
enforcement of creditors' rights and the Act and all applicable state
securities laws.
(f) Pledgor recognizes that Agent may be unable to
effect a public sale of any or all the Pledged Collateral and may be
compelled to resort to one or more private sales thereof in accordance
with clause (e) above. Pledgor also acknowledges that any such private
sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall not be deemed to
have been made in a commercially unreasonable manner solely by virtue
of such sale being private. Agent shall be under no obligation to delay
a sale of any of the Pledged Collateral for the period of time
necessary to permit the Pledged Entity to register such securities for
public sale under the Act, or under applicable state securities laws,
even if Pledgor and the Pledged Entity would agree to do so.
(g) Pledgor agrees to the maximum extent permitted by
applicable law that following the occurrence and during the continuance
of an Event of Default it will not at any time plead, claim or take the
benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay
the enforcement of this Agreement, or the absolute sale of the whole or
any part of the Pledged Collateral or the possession thereof by any
purchaser at any sale hereunder, and Pledgor waives the benefit of all
such laws to the extent it lawfully may do so. Pledgor agrees that it
will not interfere with any right, power and remedy of Agent provided
for in this Agreement or now or hereafter existing at law or in equity
or by statute or otherwise, or the exercise or beginning of the
exercise by Agent of any one or
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more of such rights, powers or remedies. No failure or delay on the
part of Agent to exercise any such right, power or remedy and no notice
or demand which may be given to or made upon Pledgor by Agent with
respect to any such remedies shall operate as a waiver thereof, or
limit or impair Agent's right to take any action or to exercise any
power or remedy hereunder, without notice or demand, or prejudice its
rights as against Pledgor in any respect.
(h) Pledgor further agrees that a breach of any of
the covenants contained in this Section 8 will cause irreparable injury
to Agent, that Agent shall have no adequate remedy at law in respect of
such breach and, as a consequence, agrees that each and every covenant
contained in this Section 8 shall be specifically enforceable against
Pledgor, and Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that the Secured Obligations are not then due and
payable in accordance with the agreements and instruments governing and
evidencing such obligations.
9. Waiver. No delay on Agent's part in exercising any power of
sale, Lien, option or other right hereunder, and no notice or demand which may
be given to or made upon Pledgor by Agent with respect to any power of sale,
Lien, option or other right hereunder, shall constitute a waiver thereof, or
limit or impair Agent's right to take any action or to exercise any power of
sale, Lien, option, or any other right hereunder, without notice or demand, or
prejudice Agent's rights as against Pledgor in any respect.
10. Assignment. Agent may assign, indorse or transfer any
instrument evidencing all or any part of the Secured Obligations as provided in,
and in accordance with, the Credit Agreement, and the holder of such instrument
shall be entitled to the benefits of this Agreement.
11. Termination. Immediately following the Termination Date,
Agent shall deliver to Pledgor the Pledged Collateral pledged by Pledgor at the
time subject to this Agreement and all instruments of assignment executed in
connection therewith, free and clear of the Liens hereof and, except as
otherwise provided herein, all of Pledgor's obligations hereunder shall at such
time terminate.
12. Lien Absolute. All rights of Agent hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the
Credit Agreement, any other Loan Document or any other agreement or
instrument governing or evidencing any Secured Obligations;
(b) any change in the time, manner or place of
payment of, or in any other term of, all or any part of the Secured
Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any
other agreement or instrument governing or evidencing any Secured
Obligations;
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(c) any exchange, release or non-perfection of any
other Collateral, or any release or amendment or waiver of or consent
to departure from any guaranty, for all or any of the Secured
Obligations;
(d) the insolvency of any Credit Party; or
(e) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, Pledgor.
13. Release. Pledgor consents and agrees that Agent may at any time, or
from time to time, in its discretion:
(a) renew, extend or change the time of payment,
and/or the manner, place or terms of payment of all or any part of the
Secured Obligations; and
(b) exchange, release and/or surrender all or any of
the Collateral (including the Pledged Collateral), or any part thereof,
by whomsoever deposited, which is now or may hereafter be held by Agent
in connection with all or any of the Secured Obligations; all in such
manner and upon such terms as Agent may deem proper, and without notice
to or further assent from Pledgor, it being hereby agreed that Pledgor
shall be and remain bound upon this Agreement, irrespective of the
value or condition of any of the Collateral, and notwithstanding any
such change, exchange, settlement, compromise, surrender, release,
renewal or extension, and notwithstanding also that the Secured
Obligations may, at any time, exceed the aggregate principal amount
thereof set forth in the Credit Agreement, or any other agreement
governing any Secured Obligations. Pledgor hereby waives notice of
acceptance of this Agreement, and also presentment, demand, protest and
notice of dishonor of any and all of the Secured Obligations, and
promptness in commencing suit against any party hereto or liable
hereon, and in giving any notice to or of making any claim or demand
hereunder upon Pledgor. No act or omission of any kind on Agent's part
shall in any event affect or impair this Agreement.
14. Reinstatement. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against Pledgor or any Pledged Entity for liquidation or reorganization, should
Pledgor or any Pledged Entity become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of Pledgor's or a Pledged Entity's assets, and shall continue
to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a "voidable
preference", "fraudulent conveyance", or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Secured Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
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15. Miscellaneous.
(a) Agent may execute any of its duties hereunder by
or through agents or employees and shall be entitled to advice of
counsel concerning all matters pertaining to its duties hereunder.
(b) Pledgor agrees to promptly reimburse Agent for
actual out-of-pocket expenses, including, without limitation,
reasonable counsel fees, incurred by Agent in connection with the
administration and enforcement of this Agreement.
(c) Neither Agent, nor any of its respective
officers, directors, employees, agents or counsel shall be liable for
any action lawfully taken or omitted to be taken by it or them
hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct as finally determined by a court of
competent jurisdiction.
(d) THIS AGREEMENT SHALL BE BINDING UPON PLEDGOR AND
ITS SUCCESSORS AND ASSIGNS (INCLUDING A DEBTOR-IN-POSSESSION ON BEHALF
OF PLEDGOR), AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY,
AGENT AND ITS SUCCESSORS AND ASSIGNS, AND SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, AND NONE
OF THE TERMS OR PROVISIONS OF THIS AGREEMENT MAY BE WAIVED, ALTERED,
MODIFIED OR AMENDED EXCEPT IN WRITING DULY SIGNED FOR AND ON BEHALF OF
AGENT AND PLEDGOR.
16. Severability. If for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing or
future law, such invalidity shall not impair the operation of or effect those
portions of this Agreement which are valid.
17. Notices. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give or serve upon any other a communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person or
sent by registered or certified mail, return receipt requested, with proper
postage prepaid, or by facsimile transmission and confirmed by delivery of a
copy by personal delivery or United States Mail as otherwise provided herein:
(a) If to Agent, at:
General Electric Capital Corporation
000 Xxxxxxxxxxx Xxxxxx, Xxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Account Manager - Xxxxxxx Piano
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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with copies to:
O'Melveny & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxxx X. Xxxxxxxx
Telecopier No.: (000)000-0000
Telephone No.: (000) 000-0000
(b) If to Pledgor, at:
Xxxxxxx Piano & Organ Company
0000 Xxxxxxx Xxxxx
Xxxxx, XX 00000-0000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copies to:
Xxxxxxx Head Xxxxxx
000 Xxxxxx Xxxxxx, #0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly served, given or delivered (a) upon the earlier of actual
receipt and three (3) Business Days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (b) upon transmission, when sent by telecopy or other similar facsimile
transmission (with such telecopy or facsimile promptly confirmed by delivery of
a copy by personal delivery or United States Mail as otherwise provided in this
Section 17, (c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid, or (d) when delivered, if hand-delivered by
messenger. Failure or delay in delivering copies of any notice, demand, request,
consent, approval, declaration or other communication to the persons designated
above to receive copies shall in no way adversely affect the effectiveness of
such notice, demand, request, consent, approval, declaration or other
communication.
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18. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
19. Counterparts. This Agreement may be executed in any number
of counterparts, which shall, collectively and separately, constitute one
agreement.
20. Benefit of Lenders. All security interests granted or
contemplated hereby shall be for the benefit of Agent and Lenders, and all
proceeds or payments realized from the Pledged Collateral in accordance herewith
shall be applied to the Obligations in accordance with the terms of the Credit
Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
"Pledgor"
-------
XXXXXXX PIANO & ORGAN COMPANY
By: /s/ XXXXX X. XXXXXX
---------------------------------
Xxxxx X. Xxxxxx
Executive Vice President and
Chief Financial Officer
"Agent"
-----
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ XXXXXXX XXXXXX
---------------------------------
Xxxxxxx Xxxxxx
A Duly Authorized Signatory
Acknowledged and Accepted:
THE XXXXXXX PIANO COMPANY
(CANADA) LIMITED
By: /s/ XXXXX X. XXXXXX
-------------------------
Xxxxx X. Xxxxxx
Vice President and
Chief Financial Officer
S-1
17
SCHEDULE I
PART A
PLEDGED SHARES
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------
Pledged Entity Class Stock Certificate Number Percentage of
-------------- of Stock Number(s) of Shares Outstanding Shares
-------- ----------------- --------- ------------------
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------
100%
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------
100%
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------
100%
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------
100%
-------------------------------------- ----------------- -------------------------- ----------------------- -----------------------
PART B
PLEDGED INDEBTEDNESS
---------------------------------------- ----------------------------- ----------------------- -------------------- ---------------
Pledged Entity Initial Issue Date Maturity Date Interest Rate
-------------- Principal Amount ---------- ------------- -------------
----------------
---------------------------------------- ----------------------------- ----------------------- -------------------- ---------------
---------------------------------------- ----------------------------- ----------------------- -------------------- ---------------
---------------------------------------- ----------------------------- ----------------------- -------------------- ---------------
---------------------------------------- ----------------------------- ----------------------- -------------------- ---------------
---------------------------------------- ----------------------------- ----------------------- -------------------- ---------------
Sch. I-1
18
SCHEDULE II
FORM OF IRREVOCABLE PROXY
([PLEDGOR])
The undersigned, [PLEDGOR],a _________ corporation, being the
holder of all of the Pledged Shares (as defined in the Pledge Agreement referred
to below) of [PLEDGED ENTITY] (the "Company"), does hereby constitute and
appoint General Electric Capital Corporation, in its capacity as agent (together
with its successors in such capacity, the "Agent") for the lenders and their
assigns (the "Lenders"), party from time to time to the Credit Agreement dated
as of March __, 2000 (as the same may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement") among Xxxxxxx Piano &
Organ Company, the other Credit Parties signatory thereto (including the
undersigned), the Agent and the Lenders as its proxy, effective automatically
without the necessity of any action (including any transfer of any shares on the
record books of the Company) by any Person (including the Company or any officer
or agent thereof) upon the occurrence and continuance of an Event of Default (as
defined in the Credit Agreement), to exercise all rights, benefits, and
privileges of the undersigned in respect of the shares, including to act by
consent and to call and attend all meetings of the shareholders of Company to be
held from time to time with full power to vote and act for the undersigned in
the name, place and stead of the undersigned and in the same manner, to the same
extent, and with the same effect that the undersigned would if personally
present at such meetings, giving to Agent full power of substitution and
revocation.
Agent is a pledgee under a valid pledge of the shares owned by
the undersigned, pursuant to that certain Pledge Agreement, dated as of March
___, 2000 between the undersigned and Agent (as the same may be amended,
modified, restated or supplemented from time to time, the "Pledge Agreement").
THIS PROXY IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE
Any proxy or proxies heretofore given by the undersigned to
any person or persons whatsoever are hereby revoked. This proxy shall continue
in full force and effect until the Termination Date (as defined in the Credit
Agreement).
Dated: March __, 2000
[PLEDGOR]
By: ________________________
Name:_______________________
Title:______________________
In presence of:
----------------
Witness
Sch. II-1
19
SCHEDULE III
PLEDGE AMENDMENT
This Pledge Amendment, dated ________________, ___ is
delivered pursuant to Section 6(d) of the Pledge Agreement referred to below.
All defined terms herein shall have the meanings ascribed thereto or
incorporated by reference in the Pledge Agreement. The undersigned hereby
certifies that the representations and warranties in Section 5 of the Pledge
Agreement are and continue to be true and correct, both as to the promissory
notes, instruments and shares pledged prior to this Pledge Amendment and as to
the promissory notes, instruments and shares pledged pursuant to this Pledge
Amendment. The undersigned further agrees that this Pledge Amendment may be
attached to that certain Pledge Agreement, dated ____________ __, ____, between
undersigned, as Pledgor, and General Electric Capital Corporation, as Agent,
(the "Pledge Agreement") and that the Pledged Shares and Pledged Indebtedness
listed on this Pledge Amendment shall be and become a part of the Pledged
Collateral referred to in said Pledge Agreement and shall secure all Secured
Obligations referred to in said Pledge Agreement. The undersigned acknowledges
that any promissory notes, instruments or shares not included in the Pledged
Collateral at the discretion of Agent may not otherwise be pledged by Pledgor to
any other Person or otherwise used as security for any obligations other than
the Secured Obligations.
____________________________
By: ________________________
Name:_______________________
Title:______________________
-------------------------------------------- ------------------------ ---------------- -------------------- -------------------
Name and Class Certificate Number
Address of Pledgor Pledged Entity of Stock Number(s) of Shares
------------------ -------------- -------- ---------- ---------
-------------------------------------------- ------------------------ ---------------- -------------------- -------------------
-------------------------------------------- ------------------------ ---------------- -------------------- -------------------
-------------------------------------------- ------------------------ ---------------- -------------------- -------------------
-------------------------------------------- ------------------------ ---------------- -------------------- -------------------
------------------------------------ ---------------------------- ----------------------- -------------------- ----------------
Pledged Entity Initial Issue Date Maturity Date Interest Rate
-------------- Principal Amount ---------- ------------- -------------
----------------
------------------------------------ ---------------------------- ----------------------- -------------------- ----------------
------------------------------------ ---------------------------- ----------------------- -------------------- ----------------
------------------------------------ ---------------------------- ----------------------- -------------------- ----------------
------------------------------------ ---------------------------- ----------------------- -------------------- ----------------
Sch. III-1
