EXHIBIT 10.25
PLEDGE AGREEMENT-L/C BORROWERS
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This PLEDGE AGREEMENT-L/C BORROWERS, dated as of March 12, 1998
(together with all amendments, if any, from time to time hereto, this
"Agreement"), by and among AGI INCORPORATED, an Illinois corporation ("AGI"),
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KLEARFOLD, INC., a Pennsylvania corporation ("Klearfold"; and together with AGI,
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each a "Pledgor" and collectively the "Pledgors"), and BANK of AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION, as agent (the "Agent") for the Secured Creditors
(as defined below). Unless otherwise defined in Section 1, terms defined in the
Credit Agreement (as defined below) are used herein as therein defined.
R E C I T A L S:
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A. Pursuant to the Credit Agreement, dated as of even date herewith,
among the Pledgors, IMPAC Group, Inc. (the "Company"), the financial
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institutions from time to time party thereto (the "Lenders") and the Agent (as
from time to time restated, amended or modified, the "Credit Agreement"), the
Lenders have agreed to extend certain credit to the Pledgors and the Company;
B. Pursuant to the Guaranty, dated as of even date herewith (as from time
to time amended or modified, the "Guaranty"), each Pledgor has jointly and
severally guaranteed to the Secured Creditors the payment when due of all
obligations and liabilities of the Company under or with respect to the Secured
Debt Agreements (as defined below) to which the Company is a party;
C. A Pledgor may from time to time be party to one or more Swap Contracts
relating to the L/C Loans (each such Swap Contract with a Swap Creditor (as
defined below), a "Secured Swap Contract") with Bank of America National Trust &
Savings Association ("BofA"), in its individual capacity, any Lender or
syndicate of financial institutions organized by BofA, or an affiliate of BofA
or any Lender (even if BofA or any such Lender ceases to be a Lender under the
Credit Agreement for any reason) and any institution that participates in, and
in each case their subsequent assigns, such Secured Swap Contract (collectively,
the "Swap Creditors");
D. A Pledgor may from time to time incur Indebtedness pursuant to Section
8.05(i) of the Credit Agreement as an account party to one or more letters of
credit (a "Section 8.05 L/C Obligation") (each such Section 8.05 Obligation with
a L/C Creditor (as defined below), a "Secured Letter of Credit") issued by BofA
or a Lender, in each case in its individual capacity (even if BofA or any such
Lender ceases to be a Lender under the Credit Agreement for any reason) and any
institution that participates in, and in each case their subsequent assigns,
such Secured Letter of Credit (collectively, the "L/C Creditors"); and
E. As a condition to entering into a Secured Debt Agreement and extending
credit under such Secured Debt Agreement, the Secured Creditors have required
that the Pledgors grant to the Agent, for the ratable benefit of itself and the
Secured Creditors, a security interest in the Pledged Collateral (as defined
below) on the terms and conditions set forth below.
W I T N E S S E T H:
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1. Definitions. The following shall have (unless otherwise provided
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elsewhere in this Agreement) the following respective meanings (such meanings
being equally applicable to both the singular and plural form of the terms
defined):
"Agent" has the meaning ascribed to it in the Preamble.
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"BofA" has the meaning ascribed to it in the Recitals.
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"Credit Agreement" has the meaning ascribed to it in the Recitals.
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"Event of Default" means any Event of Default under, and as defined
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in, the Credit Agreement, or any payment default, after any applicable grace
period, under any other Secured Debt Agreement.
"Excluded Shares" has the meaning ascribed to it in the definition
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"Pledged Shares".
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"L/C Creditor" has the meaning ascribed to it in the Recitals.
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"Lenders" has the meaning ascribed to it in the Recitals.
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"Pledged Collateral" has the meaning ascribed to it in Section 2.
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"Pledge Debt" means, collectively, (i) those promissory notes and
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instruments listed on Schedule I hereto, and (ii) each additional promissory
note and instrument delivered, or to be delivered, to the Agent pursuant to
Section 2 (iv).
"Pledged Entity" means each Subsidiary of a Pledgor the capital stock
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of which is required to be delivered pursuant to this Agreement.
"Pledged Shares" means, collectively, (i) with respect to a Domestic
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Subsidiary, all of the issued and outstanding shares of capital stock at any
time owned by a Pledgor of such Domestic Subsidiary, (ii) with respect to a
first-tier Foreign Subsidiary other than _____________, all of the issued and
outstanding shares of capital stock at any time owned by the Pledgor of such
Foreign Subsidiary; provided that such Pledgor shall not be required to pledge
hereunder (and the term "Pledged Shares" shall not include) more than 65% of the
total combined voting power of all classes of capital stock of such Foreign
Subsidiary entitled to vote (the "Excluded Shares") until such time as such
Pledgor is required to deliver such Excluded Shares to the Agent pursuant to
Section 7.15 of the Credit Agreement and (iii) each additional share of capital
stock delivered, or to be delivered, to the Agent pursuant to Section 2(ii).
"Pledgor" has the meaning ascribed to it in the Preamble.
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"Secured Creditors" means, collectively, the Agent, each Lender, each
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L/C Creditor and each Swap Creditor.
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"Secured Debt Agreements" means, collectively, the Credit Agreement
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and the other Loan Documents, each Secured Letter of Credit and each Secured
Swap Contract.
"Secured Letter of Credit" has the meaning ascribed to it in the
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Recitals.
"Secured Obligations" means, collectively, (i) all "Obligations" as
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defined in the Credit Agreement, (ii) all "Obligations" as defined in the
Guaranty, (iii) the payment when due of all obligations of a Pledgor to Swap
Creditors pursuant to any Secured Swap Contract and the due performance and
compliance with all the terms of the Secured Swap Contracts by a Pledgor and
(iv) the payment when due of all obligations of a Pledgor to L/C Creditors
pursuant to any Secured Letter of Credit and the due performance and compliance
with all the terms of the Secured Letter of Credit by a Pledgor.
"Secured Swap Contract" has the meaning ascribed to it in the
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Recitals.
"Security Agreement" means the Security Agreement, dated as of even
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date herewith, among the Pledgors and the Agent, as the same may be amended or
modified from time to time.
"Swap Creditor" has the meaning ascribed to it in the Recitals.
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2. Pledge. Each Pledgor hereby pledges to the Agent, for the
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benefit of itself and the Secured Creditors, and grants to the Agent, for the
benefit of itself and the Secured Creditors, a first priority security interest
in all of the following (collectively, the "Pledged Collateral"):
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(i) 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 of such Pledgor;
(ii) any additional shares of stock (other than Excluded Shares) of a
Pledged Entity from time to time acquired by such 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 shares;
(iii) the Pledged Debt and the promissory notes or instruments
evidencing the Pledged Debt, and all interest, cash, instruments and other
property and assets from time to time received, receivable or otherwise
distributed in respect of the Pledged Debt; and
(iv) all additional Indebtedness for borrowed money arising after the
date hereof and owing to a Pledgor by a Subsidiary of a 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 Debt.
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3. Security for Secured Obligations. This Agreement secures, and
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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 and liabilities of any kind of each Pledgor under or in the Secured
Debt Agreements.
4. Delivery of Pledged Collateral. All certificates representing or
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evidencing the Pledged Shares and all promissory notes and instruments
evidencing Pledged Debt shall be delivered to and held by or on behalf of the
Agent, for the benefit of itself and the Secured Creditors, pursuant hereto and
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Agent, and all promissory
notes or other instruments evidencing the Pledged Debt shall be endorsed by the
appropriate Pledgor.
5. Representations and Warranties. Each Pledgor represents and
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warrants to the Agent and each Secured Creditor that:
(a) it is, and at the time of delivery of the Pledged Collateral to
the Agent pursuant to Section 4 hereof will be, the sole holder of record
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and the sole beneficial owner of the Pledged Collateral pledged by it free
and clear of any Lien thereon or affecting the 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;
(c) to the Pledgors' knowledge, the Pledged Debt (to the extent not
issued by a Credit Party or a Subsidiary of a Credit Party) has been duly
authorized, authenticated or issued and delivered by, and is the legal,
valid and binding obligation of, the issuer thereof, and no such issuer is
in default thereunder;
(d) none of the Pledged Shares, Excluded Shares or Pledged Debt 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 such Pledgor,
and are presently represented by the stock certificates listed on Schedule
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I hereto, and, as of the date hereof, there are no existing options,
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warrants, calls or commitments of any character whatsoever relating to the
Pledged Shares;
(f) no consent, approval, authorization or other order of any Person
and no consent, authorization, approval, or other action by, and no notice
to or filing with, any governmental authority is required for the exercise
by the 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 Agent or the offering and sale of securities generally;
and
(g) the Pledged Shares of a Domestic Subsidiary constitute 100% of
the issued and outstanding shares of stock of such Domestic Subsidiary, and
the Pledged Shares of a
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Foreign Subsidiary constitute 65% (100% in the event Excluded Shares are
delivered to the Agent) of the issued and outstanding shares of stock of
such Foreign Subsidiary.
The representations and warranties set forth in this Section 5 shall
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survive the execution and delivery of this Agreement.
6. Covenants. From the date of this Agreement, and thereafter
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until this Agreement is terminated, each Pledgor:
(a) will defend the title to the Pledged Collateral and the Liens
of Agent or the Pledged Collateral against the claim of any Person and will
maintain and preserve such Liens; and
(b) will, upon obtaining any additional shares (other than Excluded
Shares) of stock of a Pledged Entity or promissory notes of instruments,
which shares, notes or instruments are not already Pledged Collateral,
promptly (and in any event within five (5) Business Days) deliver to the
Agent a Pledge Amendment, duly executed by such Pledgor, in substantially
the form of Schedule II hereto (a "Pledge Amendment") in respect of any
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such additional shares, notes or instruments pledging to the Agent, on
behalf of itself and the Secured Creditors, all of such additional shares,
notes or instruments. Each Pledgor hereby authorizes the Agent to attach
each Pledge Amendment to this Agreement and agrees that all Pledged Shares
and Pledged Debt listed on any Pledge Amendment delivered to the Agent
shall for all purposes hereunder be considered Pledged Collateral.
7. Pledgors' Rights. Until an Event of Default shall have
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occurred and be continuing and written notice shall be given to a Pledgor in
accordance with Section 8(a) hereof:
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(a) each 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, any Secured Debt Agreement and any other document executed in
connection with any such agreement; provided, however, that no vote shall
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be cast, and no consent shall be given or action taken, which would have
the effect of impairing the position or interest of the Agent or any
Secured Creditor in respect of the Pledged Collateral or which would
authorize or effect (except as 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 the Agent; (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) each Pledgor shall be entitled, from time to time, to collect
and receive for its own use all cash dividends, principal and interest paid
in respect of the Pledged Collateral to the extent not in violation of the
Secured Debt Agreements other than any and all; (A)
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dividends, principal and interest paid or payable other than in cash in
respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Pledged
Collateral; and (B) dividends and other distributions paid or payable in
cash in respect of any Pledged Collateral in connection with a partial or
total liquidation or dissolution so long as no Default or Event of Default
has occurred; and (C) cash paid, payable or otherwise distributed, in
respect of principal of, or in redemption of, or in exchange for, any
Pledged Collateral so long as no Default or Event of Default has occurred;
provided, however, that until actually paid all rights to such
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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 a Pledgor in accordance with
clause (i) above) and all other distributions in respect of any of the
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Pledged Collateral of such Pledgor, whenever paid or made, shall be
delivered to the Agent to hold as Pledged Collateral and shall, if received
by such Pledgor, be received in trust for the benefit of the Agent, for the
benefit of itself and the Secured Creditors, be segregated from the other
property or funds of such Pledgor, and be forthwith delivered to the Agent
as Pledged Collateral in the same form as so received (with any necessary
indorsement).
8. Defaults and Remedies. (a) Upon the occurrence and continuance
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of an Event of Default, then on or at any time after such declaration (provided
that such declaration is not rescinded by the Secured Creditors) and upon
written notice to a Pledgor, the Agent (personally or through an agent) is
hereby authorized and empowered (subject to instructions agreeable to the
Secured Creditors) 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 Shares for
certificates or instruments of smaller or larger denominations, to exercise the
voting and all other rights as a stockholder with respect thereto, to collect
and receive all cash dividends, interest and principal and other distributions
made thereon, to sell in one or more sales after ten (10) days' written notice
of the time and place of any public sale or of the time after which a private
sale is to take place (which notice each 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 the Agent was the outright
owner thereof, each Pledgor hereby irrevocably constituting and appointing the
Agent as the proxy and attorney-in-fact of such Pledgor, with full power of
substitution to do so, and which shall remain in effect until the Obligations
are indefeasibly paid in full; provided, however, the Agent shall not have any
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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. Any sale shall be made
at a public or private sale at the Agent's place of business, or at any place to
be named in the notice of sale, either for cash or upon credit or for future
delivery at such price as the Agent may deem fair, and the Agent or any Secured
Creditor 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 a
Pledgor or any right of redemption. Each sale shall be made to the highest
bidder, but the 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 the
Agent.
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(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 the Agent,
in its discretion, the unlikelihood of the proceeds of the sales of the whole of
the Pledged Collateral being sufficient to discharge all the Secured
Obligations, the 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 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
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after ten (10) days' written notice to a Pledgor.
(c) The proceeds of any sale, disposition or other realization upon
all or any part of the Pledged Collateral shall be distributed by the Agent in
accordance with Section 9 of the Security Agreement.
(d) If, at any time when the 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
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Collateral 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"), the
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relevant 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
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Pledged Collateral 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 Collateral covered
by such registration statement whenever the Agent shall desire to sell or
otherwise dispose of the Pledged Collateral;
(iii) furnish to the 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 the Agent may reasonably request in order
to facilitate the public sale or other disposition of the Pledged
Collateral by the Agent;
(iv) use commercially reasonable efforts to register or qualify
the Pledged Collateral covered by such registration statement under such
other securities or blue sky laws of such jurisdictions within the United
States and Puerto Rico as the Agent shall reasonably request, and do such
other reasonable acts and things as may be required of it to enable the
Agent to consummate the public sale or other disposition in such
jurisdictions of the Pledged Collateral by the Agent;
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(v) furnish, at the reasonable request of the 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 shares of Pledged Collateral 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
Collateral is not being sold through underwriters, then to the 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 Collateral is not
being sold through underwriters, then to the Agent, in a customary form and
covering matters of the type customarily covered by such comfort letters
and as the underwriters or the 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 the 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 the 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.
(e) All reasonable expenses incurred in complying with Section 8(d)
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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 reasonable fees and expenses of counsel for the Agent,
reasonable expenses of the independent certified public accountants (including
any special audits incident to or required by any such registration) and
reasonable expenses of complying with the securities or blue sky laws or any
jurisdictions, shall be paid by the Pledgors.
(f) If, at any time when the 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 Act, the 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 the Agent may deem necessary or advisable, but subject to the
other requirements of this Section 8, and shall not be required to effect such
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registration or to cause the same to be effected. Without limiting the
generality of the foregoing, in any such event, the 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
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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 part thereof. In
addition to a private sale as provided above in this Section 8, if any of the
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Pledged Collateral shall not be freely distributable to the public without
registration under the Act (or similar statute) at the time of any proposed sale
pursuant to this Section 8, then the Agent shall not be required to effect such
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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 the
relevant 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 the 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.
(g) Each Pledgor recognizes that the 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 (f) above. Each
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
be deemed to have been made in a commercially reasonable manner. The 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 registrant to register such
securities for public sale under the Act, or under applicable state securities
laws, even if the relevant Pledgor would agree to do so.
(h) Each 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
each Pledgor waives the benefit of all such laws to the extent it lawfully may
do so. Each Pledgor agrees that it will not interfere with any right, power and
remedy of the 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 the Agent of any one or more of such rights, powers or remedies.
No failure or delay on the part of the Agent to exercise any such right, power
or remedy and no notice or demand which may be given to or made upon a Pledgor
by the Agent with respect to any such remedies shall operate as a waiver
thereof, or limit or impair the 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 the Pledgors in any respect.
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(i) Each Pledgor further agrees that a breach of any of the covenants
contained in this Section 8 will cause irreparable injury to the Agent and the
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Secured Creditors, that the Agent and the Secured Creditors 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
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enforceable against the Pledgors, and each 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 the Agent's or any Secured Creditors' part
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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 any Pledgor by the Agent or
a Secured Creditor with respect to any power of sale, Lien, option or other
right hereunder, shall constitute a waiver thereof, or limit or impair the
Agent's or any Secured Creditors' 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 the Agent's or any Secured Creditors' rights as against the
Pledgors in any respect.
10. Assignment. The Agent and the Secured Creditors may assign,
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indorse or transfer any instrument evidencing all or any part of the Secured
Obligations as provided in, and in accordance with, the applicable Secured Debt
Agreement and the holder of such instrument shall be entitled to the benefits
of this Agreement.
11. Termination. This Agreement shall continue in effect
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(notwithstanding the fact that from time to time there may be no Secured
Obligations or commitments therefor outstanding) until the payment in full of
the Secured Obligations and the termination of the Secured Debt Agreements in
accordance with its terms thereunder, at which time the security interests
granted hereby shall terminate and any and all rights to the Pledged Collateral
shall revert to the relevant Pledgor. Upon such termination, the Agent shall
promptly return to the relevant Pledgor, at such Pledgor's expense, such of the
Pledged Collateral held by the Agent as shall not have been sold or otherwise
applied pursuant to the terms hereof. The Agent will promptly execute and
deliver to the relevant Pledgor such other documents as such Pledgor shall
reasonably request to evidence such termination.
12. Lien Absolute. All rights of the Agent hereunder, and all
-------------
obligations of each Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any Secured Debt
Agreement, any other document executed in connection with either agreement
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 any Secured
Debt Agreement, or any other agreement or instrument governing or
evidencing any Secured Obligations;
10
(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; or
(d) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, any Pledgor.
13. Release. Each Pledgor consents and agrees that the Agent and the
-------
Secured Creditors 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 Pledged Collateral, or any part
thereof, by whomsoever deposited, which is now or may hereafter be held by the
Agent in connection with all or any of the Secured Obligations; all in such
manner and upon such terms as the Agent and the Secured Creditors may deem
proper, and without notice to or further assent from any Pledgor, it being
hereby agreed that each Pledgor shall be and remain bound upon this Agreement,
irrespective of the value or condition of any of the Pledged 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 relevant Secured Debt Agreement, or any other agreement governing
any Secured Obligations. Each 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 any Pledgor. No act or omission of any kind on
the 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 a
Pledgor or any Pledged Entity for liquidation or reorganization, should a
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 a 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.
15. Miscellaneous. (a) The 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) Each Pledgor jointly and severally agrees to promptly reimburse
the Agent for actual out-of-pocket expenses, including, without limitation,
reasonable counsel fees, incurred by the Agent in connection with the
administration and enforcement of this Agreement. Each
11
Pledgor's obligation to reimburse the Agent pursuant to the preceding sentence
shall be a Secured Obligation payable on demand.
(c) None of the Agent, any Secured Creditor nor any of their
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.
(d) Each Pledgor hereby irrevocably appoints the Agent as such
Pledgor's attorney-in-fact, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor or otherwise, from time to time in the
Agent's discretion reasonably exercised, to take any action and to execute any
instrument that the Agent deems reasonably necessary or advisable to accomplish
the purposes of this Agreement, including, without limitation, to receive,
endorse and collect all instruments made payable to such Pledgor representing
any dividend, or other proceeds or distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same, when and
to the extent permitted by this Agreement.
(e) The terms and provisions of this Agreement shall be binding upon
and inure to the benefit of the Pledgors, the Agent and the Secured Creditors
and their respective successors and assigns, except that a Pledgor shall not
have the right to assign its rights or obligations under this Agreement or any
interest herein, without the prior written consent of the Agent and the Secured
Creditors.
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. (a) Any notice required or permitted to be given under
-------
this Agreement shall be given (i) in the case of a Pledgor, the Agent, and each
Lender, in accordance the Credit Agreement, (ii) in the case of a L/C Creditor,
in accordance with the relevant Secured Letter of Credit and (iii) in the case
of a Swap Creditor, in accordance with the relevant Secured Swap Contract.
(b) Any Pledgor or any Secured Creditor may change the address for
service of notice upon it by a notice in writing to the other.
18. CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
-------------
WITH THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS, OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
19. 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.
12
20. Counterparts. This Agreement may be executed in any number of
------------
counterparts, which shall, collectively and separately, constitute one
agreement.
21. Limitation on Duty of the Agent with Respect to Pledged
-------------------------------------------------------
Collateral. BOA has been appointed as Agent for the Secured Creditors
----------
hereunder, and the Agent has agreed to act (and any successor Agent shall act)
as such hereunder only on the express conditions contained in Article X of the
Credit Agreement. Any successor Agent appointed pursuant to Article X of the
Credit Agreement shall be entitled to all the rights, interests and benefits of
the Agent hereunder. Beyond the safe custody thereof, the Agent shall not have
any duty with respect to any Pledged Collateral in its possession or control (or
in the possession or control of any agent or bailee) or with respect to any
income thereon or the preservation of rights against prior parties or any other
rights pertaining thereto. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which it accords its own property. The Agent shall not be liable or
responsible for any loss or damage to any of the Pledged Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any agent
or bailee selected by the Agent in good faith.
[SIGNATURE PAGE FOLLOWS]
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
KLEARFOLD, INC.,
as a Pledgor
By /s/ Xxxxxxx Xxxxx
------------------------------------------
Name: Xxxxxxx Xxxxx
-------------------------------------
Title: President
------------------------------------
AGI INCORPORATED,
as a Pledgor
By /s/ Xxxxxxx Xxxxx
------------------------------------------
Name: Xxxxxxx Xxxxx
-------------------------------------
Title: President
------------------------------------
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
as Agent
By /s/ Xxxxx Xxxxxxxx
------------------------------------------
Name: Xxxxx Xxxxxxxx
-------------------------------------
Title: Vice President
------------------------------------
S-1
[TO PLEDGE AGREEMENT-L/C BORROWER]
SCHEDULE I
PLEDGED SHARES
--------------
================================================================================
A. Klearfold, Inc.
--------------
================================================================================
Class Stock Certificate Number Percentage of
Stock Issuer of Stock Number(s) of Shares Outstanding Shares
-------------- -------- ----------------- --------- ------------------
KF - Delaware, Inc. Common 100 100%
Stock
================================================================================
================================================================================
KF - International Common 1,000 100%
Inc. Stock
================================================================================
================================================================================
B. AGI Incorporated
----------------
================================================================================
Class Stock Certificate Number Percentage of
Stock Issuer of Stock Number(s) of Shares Outstanding Shares
-------------- -------- ----------------- --------- ------------------
================================================================================
None
================================================================================
================================================================================
PLEDGED DEBT
------------
A. Klearfold, Inc.
---------------
Initial Principal
Issuer Amount Issue Date Maturity Date Interest Rate
------ ------ ---------- ------------- -------------
B. AGI Incorporated
----------------
Initial Principal
Issuer Amount Issue Date Maturity Date Interest Rate
------ ------ ---------- ------------- -------------
SCHEDULE II
FORM OF PLEDGE AMENDMENT
------------------------
This Pledge Amendment, dated ________________, ___ is delivered
pursuant to Section 6(b) of the Pledge Agreement referred to below. 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 shares pledged prior to this Pledge Amendment and as to the shares pledged
pursuant to this Pledge Amendment. The undersigned further agrees that this
Pledge Amendment may be attached to that certain Pledge Agreement-L/C Borrowers,
dated March __, 1998, by the undersigned, as a Pledgor, to Bank of America
National Trust & Savings Association, as the Agent, and that the Pledged Shares
and/or Pledged Debt 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 shares not included in the Pledged Shares or promissory
notes or instruments not included in the Pledged Debt at the discretion of the
Agent may not otherwise be pledged or otherwise used as security by the
undersigned.
[NAME OF PLEDGOR]
By______________________________________________
Name:_________________________________________
Title:________________________________________
PLEDGED SHARES
--------------
================================================================================
Name and Class Certificate Number
Address of the Pledgor Issuer of Stock Number(s) of Shares
------------------------ ------ -------- -------------- ---------
================================================================================
================================================================================
================================================================================
PLEDGED DEBT
------------
Initial Principal
Issuer Amount Issue Date Maturity Date Interest Rate
------ ------ ---------- ------------- -------------
