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EXHIBIT 10.37
AMENDED AND RESTATED
PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of March 24, 1997
(this "Pledge Agreement"), amends and restates that certain Amended and Restated
Pledge Agreement entered into as of September 16, 1996 among IPC, INC., a
Delaware corporation (the "Borrower"), IVEX PACKAGING CORPORATION, a Delaware
corporation ("Holdings"), certain Subsidiaries of the Borrower party thereto
(the "Prior Guarantors") and NATIONSBANK, N.A., in its capacity as agent (in
such capacity, the "Agent") for the lenders from time to time party to the
Original Credit Agreement described below (the "Prior Lenders").
RECITALS
WHEREAS, the Borrower, Holdings, the Prior Guarantors, the Prior Lenders
and the Agent entered into that certain Credit Agreement, dated as of December
7, 1995 (as amended and/or modified from time to time thereafter, the "Original
Credit Agreement");
WHEREAS, the Original Credit Agreement has been amended and restated
pursuant to that certain Amended and Restated Credit Agreement, dated as of the
date hereof (as amended, modified, extended, renewed or replaced from time to
time, the "Credit Agreement"), among the Borrower, Holdings, the Domestic
Subsidiaries of the Borrower party thereto (such Domestic Subsidiaries, together
with Holdings, individually a "Guarantor" and collectively the "Guarantors"),
the lenders from time to time party thereto (the "Lenders") and the Agent; and
WHEREAS, the Lenders have required that the Borrower and the Guarantors
(the Guarantors together with the Borrower, individually a "Pledgor", and
collectively the "Pledgors") secure or resecure, as applicable, their respective
obligations under the Credit Agreement and the other Credit Documents in
accordance with the terms of this Pledge Agreement.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein but not otherwise defined
shall have the meanings ascribed to such terms in the Credit Agreement.
2. Pledge and Grant of Security Interest. To secure the prompt payment
and performance in full when due, whether by lapse of time or otherwise, of the
Pledgor Obligations (as defined in Section 3 hereof), each Pledgor hereby
pledges and assigns to the Agent, for the benefit of the Lenders, and grants to
the Agent, for the benefit of the Lenders, a continuing security interest in any
and all right, title and interest of such Pledgor in and to the following,
whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the "Pledged Collateral"):
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(a) Pledged Shares. (i) 100% (or, if less, the full amount owned by
such Pledgor) of the issued and outstanding shares of capital stock owned
by such Pledgor of each Domestic Subsidiary (as set forth on Schedule 2(a)
attached hereto) and (ii) 65% (or, if less, the full amount owned by such
Pledgor) of the issued and outstanding shares of each class of capital
stock or other ownership interests entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) ("Voting Equity") and 100% (or, if less,
the full amount owned by such Pledgor) of the issued and outstanding shares
of each class of capital stock or other ownership interests not entitled to
vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) ("Non-Voting
Equity") owned by such Pledgor of each first-tier Foreign Subsidiary (as
set forth on Schedule 2(a) attached hereto), in each case together with the
certificates (or other agreements or instruments), if any, representing
such shares, and all options and other rights, contractual or otherwise,
with respect thereto (collectively, together with the shares of capital
stock described in Section 2(b) and 2(c) below, the "Pledged Shares"),
including, but not limited to, the following:
(y) all shares or securities representing a dividend on any of
the Pledged Shares, or representing a distribution or return of
capital upon or in respect of the Pledged Shares, or resulting from a
stock split, revision, reclassification or other exchange therefor,
and any subscriptions, warrants, rights or options issued to the
holder of, or otherwise in respect of, the Pledged Shares; and
(z) without affecting the obligations of such Pledgor under any
provision prohibiting such action hereunder, in the event of any
consolidation or merger in which a Pledgor is not the surviving
corporation, all shares of each class of the capital stock of the
successor corporation formed by or resulting from such consolidation
or merger.
(b) Additional Shares. 100% (or, if less, the full amount owned by
such Pledgor) of the issued and outstanding shares of capital stock owned
by such Pledgor of any Person which hereafter becomes a Domestic Subsidiary
and 65% (or, if less, the full amount owned by such Pledgor) of the Voting
Equity and 100% (or, if less, the full amount owned by such Pledgor) of the
Non-Voting Equity owned by such Pledgor of any Person which hereafter
becomes a first-tier Foreign Subsidiary, including, without limitation, the
certificates representing such shares.
(c) Other Equity Interests. Any and all other equity interests of
each Pledgor in any Domestic Subsidiary or any first-tier Foreign
Subsidiary.
(d) Proceeds. All proceeds and products of the foregoing, however
and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby specifically
understood and agreed that a Pledgor may from time to time hereafter deliver
additional shares of stock to the Agent as collateral security for the Pledgor
Obligations. Upon delivery to the Agent, such additional
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shares of stock shall be deemed to be part of the Pledged Collateral of such
Pledgor and shall be subject to the terms of this Pledge Agreement whether or
not Schedule 2(a) is amended to refer to such additional shares.
3. Security for Pledgor Obligations. The security interest created
hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the following, whether now existing or hereafter
incurred (the "Pledgor Obligations"):
(a) In the case of the Borrower, the prompt performance and
observance by the Borrower of all obligations of the Borrower under the
Credit Agreement, the Notes, this Pledge Agreement and the other Credit
Documents to which the Borrower is a party;
(b) In the case of the Guarantors, the prompt performance and
observance by such Guarantor of all obligations of such Guarantor under the
Credit Agreement, this Pledge Agreement and the other Credit Documents to
which such Guarantor is a party, including, without limitation, its
guaranty obligations arising under Section 5 of the Credit Agreement; and
(c) Subject to subclause 25(c)(iii) hereof, all other indebtedness,
liabilities and obligations of any kind or nature owing from any Pledgor to
any Lender or the Agent in connection with (i) this Pledge Agreement or any
other Credit Document, whether now existing or hereafter arising, due or to
become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, together with any and all modifications,
extensions, renewals and/or substitutions of any of the foregoing, (ii)
collecting and enforcing the Credit Party Obligations and (iii) liabilities
arising under interest rate protection agreements entered into pursuant to
the Credit Agreement.
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees that:
(a) Each Pledgor shall deliver to the Agent (i) simultaneously with
or prior to the execution and delivery of this Pledge Agreement, all
certificates representing the Pledged Shares of such Pledgor and (ii)
promptly upon the receipt thereof by or on behalf of a Pledgor, all other
certificates and instruments constituting Pledged Collateral of a Pledgor.
Prior to delivery to the Agent, all such certificates and instruments
constituting Pledged Collateral of a Pledgor shall be held in trust by such
Pledgor for the benefit of the Agent pursuant hereto. All such
certificates shall be delivered in suitable form for transfer by delivery
or shall be accompanied by duly executed instruments of transfer or
assignment in blank, in form provided in Schedule 4(a) attached hereto.
(b) Additional Securities. If such Pledgor shall receive by virtue
of its being or having been the owner of any Pledged Collateral, any (i)
stock certificate, including without limitation, any certificate
representing a stock dividend or distribution in connection with any
increase or reduction of capital, reclassification, merger, consolidation,
sale of assets, combination of shares, stock splits, spin-off or split-off,
promissory notes or other instrument; (ii) option or right, whether as an
addition to,
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substitution for, or an exchange for, any Pledged Collateral or otherwise;
(iii) dividends payable in securities; or (iv) distributions of securities
in connection with a partial or total liquidation, dissolution or reduction
of capital, capital surplus or paid-in surplus, then such Pledgor shall
receive such stock certificate, instrument, option, right or distribution
in trust for the benefit of the Agent, shall segregate it from such
Pledgor's other property and shall deliver it forthwith to the Agent in the
exact form received together with any necessary endorsement and/or
appropriate stock power duly executed in blank in the form provided in
Schedule 4(a), to be held by the Agent as Pledged Collateral and as further
collateral security for the Pledgor Obligations.
(c) Financing Statements. Each Pledgor shall execute and deliver to
the Agent such UCC or other applicable financing statements as may be
reasonably requested by the Agent in order to perfect and protect the
security interest created hereby in the Pledged Collateral of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that so long as any of
the Pledgor Obligations remain outstanding or any Credit Document is in effect
or any Letter of Credit shall remain outstanding, and until all of the
Commitments shall have been terminated:
(a) Authorization of Pledged Shares. The Pledged Shares are duly
authorized and validly issued, are fully paid and nonassessable and are not
subject to the preemptive rights of any Person. All other shares of stock
constituting Pledged Collateral will be duly authorized and validly issued,
fully paid and nonassessable and not subject to the preemptive rights of
any Person.
(b) Title. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal and
beneficial owner of such Pledged Collateral free and clear of any Lien,
except for the security interest created by this Pledge Agreement and other
Permitted Liens. There exists no "adverse claim" within the meaning of
Section 8-302 of the Uniform Commercial Code as in effect in the State of
New York (the "UCC") with respect to the Pledged Shares of such Pledgor.
(c) Exercising of Rights. The exercise by the Agent of its rights
and remedies hereunder will not violate any law or governmental regulation
or any material contractual restriction binding on or affecting a Pledgor
or any of its property.
(d) Pledgor's Authority. No authorization, approval or action by,
and no notice or filing with any Governmental Authority or with the issuer
of any Pledged Stock is required either (i) for the pledge made by a
Pledgor or for the granting of the security interest by a Pledgor pursuant
to this Pledge Agreement; or (ii) for the exercise by the Agent or the
Lenders of their rights and remedies hereunder (except as may be required
by laws affecting the offering and sale of securities).
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(e) Security Interest/Priority. This Pledge Agreement creates a
valid security interest in favor of the Agent for the benefit of the
Lenders, in the Pledged Collateral. The taking possession by the Agent of
the certificates representing the Pledged Shares and all other certificates
and instruments constituting Pledged Collateral will perfect and establish
the first priority of the Agent's security interest in the Pledged Shares
and, when properly perfected by filing or registration, in all other
Pledged Collateral represented by such Pledged Shares and instruments
securing the Pledgor Obligations. Except as set forth in this Section
5(e), no action is necessary to perfect or otherwise protect such security
interest.
(f) No Other Shares. No Pledgor owns any shares of stock other than
as set forth on Schedule 2(a) attached hereto.
6. Covenants. Each Pledgor hereby covenants, that so long as any of the
Pledgor Obligations remain outstanding or any Credit Document is in effect
(other than any obligations with respect to the indemnities and the
representations and warranties set forth in the Credit Documents) or any Letter
of Credit shall remain outstanding, and until all of the Commitments shall have
been terminated, such Pledgor shall:
(a) Books and Records. Xxxx its books and records (and shall cause
the issuer of the Pledged Shares of such Pledgor to xxxx its books and
records) to reflect the security interest granted to the Agent, for the
benefit of the Lenders, pursuant to this Pledge Agreement.
(b) Defense of Title. Warrant and defend title to and ownership of
the Pledged Collateral of such Pledgor at its own expense against the
claims and demands of all other parties claiming an interest therein, keep
the Pledged Collateral free from all Liens, except for those created
hereunder and the security interest created hereby and except for Permitted
Liens, and not sell, exchange, transfer, assign, lease or otherwise dispose
of Pledged Collateral of such Pledgor or any interest therein, except as
permitted under the Credit Agreement and the other Credit Documents.
(c) Further Assurances. Promptly execute and deliver at its expense
all further instruments and documents and take all further action that may
be necessary and desirable or that the Agent may reasonably request in
order to (i) perfect and protect the security interest created hereby in
the Pledged Collateral of such Pledgor (including without limitation any
and all action necessary to satisfy the Agent that the Agent has obtained a
first priority perfected security interest in any other capital stock);
(ii) enable the Agent to exercise and enforce its rights and remedies
hereunder in respect of the Pledged Collateral of such Pledgor; and (iii)
otherwise effect the purposes of this Pledge Agreement, including, without
limitation and if requested by the Agent, delivering to the Agent
irrevocable proxies in respect of the Pledged Collateral of such Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or
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enter into any agreement or allow to exist any restriction with respect to
any of the Pledged Collateral of such Pledgor other than pursuant hereto or
as may be permitted under the Credit Agreement.
(e) Compliance with Securities Laws. File all reports and other
information now or hereafter required to be filed by such Pledgor with the
United States Securities and Exchange Commission and any other state,
federal or foreign agency in connection with the ownership of the Pledged
Collateral of such Pledgor.
7. Advances by Lenders. On failure of any Pledgor to perform any of the
covenants and agreements contained herein, the Agent may, at its sole option and
in its sole discretion, perform the same and in so doing may expend such sums as
the Agent may reasonably deem advisable in the performance thereof, including,
without limitation, the payment of any insurance premiums, the payment of any
taxes, a payment to obtain a release of a Lien or potential Lien, expenditures
made in defending against any adverse claim and all other expenditures which the
Agent or the Lenders may make for the protection of the security hereof or which
may be compelled to make by operation of law. All such sums and amounts so
expended shall be repayable by the Pledgors on a joint and several basis
(subject to Section 25 hereof) promptly upon timely notice thereof and demand
therefor, shall constitute additional Pledgor Obligations and shall bear
interest from the date said amounts are expended at the default rate provided in
Section 3.1(b) of the Credit Agreement for Revolving Loans that are Base Rate
Loans. No such performance of any covenant or agreement by the Agent or the
Lenders on behalf of any Pledgor, and no such advance or expenditure therefor,
shall relieve the Pledgors of any default under the terms of this Pledge
Agreement or the other Credit Documents. The Lenders may make any payment
hereby authorized in accordance with any xxxx, statement or estimate procured
from the appropriate public office or holder of the claim to be discharged
without inquiry into the accuracy of such xxxx, statement or estimate or into
the validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by a Pledgor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
8. Events of Default. The occurrence of an event which under the Credit
Agreement would constitute an Event of Default shall be an Event of Default
hereunder (an "Event of Default").
9. Remedies Upon Default. If any Event of Default shall have occurred and
be continuing:
(a) Rights and Remedies. The Agent may exercise in respect of the
Pledged Collateral of any Pledgor, in addition to other rights and remedies
provided for herein or otherwise available to it, all rights and remedies
of a secured party on default under the UCC or any other applicable law.
(b) Sale of Pledged Collateral. Without limiting the generality of
this Section and without notice, the Agent may, in its sole discretion,
sell or otherwise dispose of or
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realize upon the Pledged Collateral, or any part thereof, in one or more
parcels, at public or private sale, at any exchange or broker's board or
elsewhere, at such price or prices and on such other terms as the Agent may
deem commercially reasonable, for cash, credit or for future delivery or
otherwise in accordance with applicable law. To the extent permitted by
law, any Lender may in such event, bid for the purchase of such securities.
Each Pledgor agrees that, to the extent notice of sale shall be required by
law and has not been waived by such Pledgor, any requirement of reasonable
notice shall be met if notice, specifying the place of any public sale or
the time after which any private sale is to be made, is personally served
on or mailed, postage prepaid, to Holdings, on behalf of such Pledgor, in
accordance with the notice provisions of Section 12.1 of the Credit
Agreement at least 10 days before the time of such sale. The Agent shall
not be obligated to make any sale of Pledged Collateral of such Pledgor
regardless of notice of sale having been given. The Agent may adjourn any
public or private sale from time to time by announcement at the time and
place fixed therefore, and such sale may, without further notice, be made
at the time and place to which it was so adjourned.
(c) Private Sale. The Pledgors recognize that the Agent may deem it
impracticable to effect a public sale of all or any part of the Pledged
Shares or any of the securities constituting Pledged Collateral and that
the Agent may, therefore, determine to make one or more private sales of
any such securities to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such securities for
their own account, for investment and not with a view to the distribution
or resale thereof. Each Pledgor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than the prices
and other terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sale shall be
deemed to have been made in a commercially reasonable manner and that the
Agent shall have no obligation to delay sale of any such securities for the
period of time necessary to permit the issuer of such securities to
register such securities for public sale under the Securities Act of 1933.
Each Pledgor further acknowledges and agrees that any offer to sell such
securities which has been (i) publicly advertised on a bona fide basis in a
newspaper or other publication of general circulation in the financial
community of New York, New York (to the extent that such offer may be
advertised without prior registration under the Securities Act of 1933), or
(ii) made privately in the manner described above shall be deemed to
involve a "public sale" under the UCC, notwithstanding that such sale may
not constitute a "public offering" under the Securities Act of 1933, and
the Agent may, in such event, bid for the purchase of such securities.
(d) Retention of Pledged Collateral. The Agent may, after providing
the notices required by Section 9-505(2) of the UCC or otherwise complying
with the requirements of applicable law of the relevant jurisdiction,
retain all or any portion of the Pledged Collateral in satisfaction of the
Pledgor Obligations. Unless and until the Agent shall have provided such
notices, however, the Agent shall not be deemed to have retained any
Pledged Collateral in satisfaction of any Pledgor Obligations for any
reason.
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(e) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which the
Agent or the Lenders are legally entitled, the Pledgors shall be jointly
and severally liable (subject to Section 25 hereof) for the deficiency,
together with interest thereon at the default rate provided in Section
3.1(b) of the Credit Agreement for Revolving Loans that are Base Rate
Loans, together with the costs of collection and the reasonable fees of any
attorneys employed by the Agent to collect such deficiency. Any surplus
remaining after the full payment and satisfaction of the Pledgor
Obligations shall be returned to the Pledgors or to whomsoever a court of
competent jurisdiction shall determine to be entitled thereto.
10. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the Agent, on
behalf of the Lenders, and each of its designees or agents as
attorney-in-fact of such Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following actions
upon the occurrence and during the continuance of an Event of Default:
(i) to demand, collect, settle, compromise, adjust and give
discharges and releases concerning the Pledged Collateral of such
Pledgor, all as the Agent may reasonably determine;
(ii) to commence and prosecute any actions at any court for the
purposes of collecting any of the Pledged Collateral of such Pledgor
and enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action brought and, in
connection therewith, give such discharge or release as the Agent may
deem reasonably appropriate;
(iv) to pay or discharge taxes, liens, security interests, or
other encumbrances levied or placed on or threatened against the
Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any payment under any of
the Pledged Collateral of such Pledgor to make payment of any and all
monies due and to become due thereunder directly to the Agent or as
the Agent shall direct;
(vi) to receive payment of and receipt for any and all monies,
claims, and other amounts due and to become due at any time in respect
of or arising out of any Pledged Collateral of such Pledgor;
(vii) to sign and endorse any drafts, assignments, proxies, stock
powers, verifications, notices and other documents relating to the
Pledged Collateral of such Pledgor;
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(viii) to settle, compromise or adjust any suit, action or
proceeding described above and, in connection therewith, to give such
discharges or releases as the Agent may deem reasonably appropriate;
(ix) execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements, pledge
agreements, affidavits, notices and other agreements, instruments and
documents that the Agent reasonably may determine necessary in order
to perfect and maintain the security interests and liens granted in
this Pledge Agreement and in order to fully consummate all of the
transactions contemplated therein;
(ix) to exchange any of the Pledged Collateral or other property
upon any merger, consolidation, reorganization, recapitalization or
other readjustment of the issuer thereof and, in connection therewith,
deposit any of the Pledged Collateral of such Pledgor with any
committee, depository, transfer agent, registrar or other designated
agency upon such terms as the Agent may determine;
(xi) to vote for a shareholder resolution, or to sign an
instrument in writing, sanctioning the transfer of any or all of the
Pledged Shares of such Pledgor into the name of the Agent or one or
more of the Lenders or into the name of any transferee to whom the
Pledged Shares of such Pledgor or any part thereof may be sold
pursuant to Section 9 hereof; and
(xi) to do and perform all such other acts and things as the
Agent may reasonably deem to be necessary, proper or convenient in
connection with the Pledged Collateral of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Pledgor Obligations remain
outstanding, any Credit Document is in effect (other than any obligations
with respect to the indemnities and the representations and warranties set
forth in the Credit Documents) or any Letter of Credit shall remain
outstanding and (ii) until all of the Commitments shall have been
terminated. The Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Agent in this Pledge Agreement, and shall not be
liable for any failure to do so or any delay in doing so. The Agent shall
not be liable for any act or omission or for any error of judgment or any
mistake of fact or law in its individual capacity or its capacity as
attorney-in-fact except acts or omissions resulting from its gross
negligence or willful misconduct. This power of attorney is conferred on
the Agent solely to protect, preserve and realize upon its security
interest in Pledged Collateral.
(b) Performance by the Agent of Pledgor's Obligations. If any
Pledgor fails to perform any agreement or obligation contained herein,
after the occurrence and during the continuance of an Event of Default, the
Agent itself may perform, or cause performance
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of, such agreement or obligation, and the expenses of the Agent incurred in
connection therewith shall be payable by the Pledgors on a joint and
several basis pursuant to Section 12 hereof.
(c) Assignment by the Agent. The Agent may from time to time assign
the Pledged Collateral and any portion thereof to another Person acting as
agent for the Lenders under the Credit Agreement, and the assignee shall be
entitled to all of the rights and remedies of the Agent under this Pledge
Agreement in relation thereto.
(d) The Agent's Duty of Care. Other than the exercise of reasonable
care to assure the safe custody of the Pledged Collateral while being held
by the Agent hereunder, the Agent shall have no duty or liability to
preserve rights pertaining thereto, it being understood and agreed that
Pledgors shall be responsible for preservation of all rights in the Pledged
Collateral of such Pledgor, and the Agent shall be relieved of all
responsibility for Pledged Collateral upon surrendering it or tendering the
surrender of it to the Pledgors. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equal to that which the Agent accords its own
property, which shall be no less than the treatment employed by a
reasonable and prudent agent in the industry, it being understood that the
Agent shall not have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Pledged Collateral, whether or not the Agent has or
is deemed to have knowledge of such matters; or (ii) taking any necessary
steps to preserve rights against any parties with respect to any Pledged
Collateral.
(e) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default (as defined herein) shall
have occurred and be continuing, to the extent permitted by law, each
Pledgor may exercise any and all voting and other consensual rights
pertaining to the Pledged Collateral of such Pledgor or any part
thereof for any purpose not inconsistent with the terms of this Pledge
Agreement or the Credit Agreement; and
(ii) Upon the occurrence and during the continuance of an Event
of Default, all rights of a Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant to paragraph (i) of this Section shall cease and all such
rights shall thereupon become vested in the Agent which shall
thereupon have the sole right to exercise such voting and other
consensual rights.
(f) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred and be
continuing and subject to Section 4(b) hereof, each Pledgor may
receive and
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retain any and all dividends (other than stock dividends and other
dividends constituting Pledged Collateral which are addressed
hereinabove) or interest paid in respect of the Pledged Collateral to
the extent they are allowed under the Credit Agreement.
(ii) Upon the occurrence and during the continuance of an Event
of Default:
(A) all rights of a Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to
receive and retain pursuant to paragraph (i) of this Section
shall cease and all such rights shall thereupon be vested in the
Agent which shall thereupon have the sole right to receive and
hold as Pledged Collateral such dividends and interest payments;
and
(B) all dividends and interest payments which are received
by a Pledgor contrary to the provisions of paragraph (A) of this
Section shall be received in trust for the benefit of the Agent,
shall be segregated from other property or funds of such Pledgor,
and shall be forthwith paid over to the Agent as Pledged
Collateral in the exact form received, to be held by the Agent as
Pledged Collateral and as further collateral security for the
Pledgor Obligations.
(g) Release of Pledged Collateral. The Agent may release any
of the Pledged Collateral from this Pledge Agreement or may substitute
any of the Pledged Collateral for other Pledged Collateral without
altering, varying or diminishing in any way the force, effect, lien,
pledge or security interest of this Pledge Agreement as to any Pledged
Collateral not expressly released or substituted, and this Pledge
Agreement shall continue as a first priority lien, security interest,
pledge and charge on all Pledged Collateral not expressly released or
substituted when any of the Pledgor Obligations remain outstanding
with respect to the Lenders.
11. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Pledgor Obligations in the order set forth in Section 3.7 of
the Credit Agreement, and each Pledgor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
the Agent shall have the continuing and exclusive right to apply and reapply any
and all such payments and proceeds in the Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.
12. Costs of Counsel. At all times hereafter, the Pledgors agree to
promptly pay upon demand any and all reasonable documented costs and expenses of
the Agent or the Lenders, (i) as required under Section 12.5 of the Credit
Agreement and (ii) as necessary to protect the Pledged Collateral or to exercise
any rights or remedies under this Pledge Agreement or with respect to
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12
any Pledged Collateral. All of the foregoing costs and expenses shall
constitute Pledgor Obligations hereunder.
13. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in
every respect and shall remain in full force and effect so long as the
Credit Agreement is in effect or any amounts payable thereunder or
under any other Credit Document or any Letter of Credit shall remain
outstanding, and until all of the Commitments thereunder shall have
terminated (other than any obligations with respect to the indemnities
and the representations and warranties set forth in the Credit
Documents). Upon such payment and termination, this Pledge Agreement
shall be automatically terminated and, the Lenders shall, upon the
request and at the expense of the Pledgors, forthwith release all of
its liens and security interests hereunder. Notwithstanding the
foregoing all releases and indemnities provided hereunder shall
survive termination of this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment,
in whole or in part, of any of the Pledgor Obligations is rescinded or
must otherwise be restored or returned by the Agent or any Lender as a
preference, fraudulent conveyance or otherwise under any bankruptcy,
insolvency or similar law, all as though such payment had not been
made; provided that in the event payment of all or any part of the
Pledgor Obligations is rescinded or must be restored or returned, all
reasonable costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Agent or any
Lender in defending and enforcing such reinstatement shall be deemed
to be included as a part of the Pledgor Obligations.
14. Amendments; Waivers; Modifications. This Pledge Agreement and
the provisions hereof may not be amended, waived, modified, changed, discharged
or terminated except as set forth in Section 12.6 of the Credit Agreement.
15. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders and their successors and assigns; provided, however, that none
of the Pledgors may assign its rights or delegate its duties hereunder without
the prior written consent of each Lender or the Required Lenders, as required by
the Credit Agreement. To the fullest extent permitted by law, each Pledgor
hereby releases the Agent and each Lender, and its successors and assigns, from
any liability for any act or omission relating to this Pledge Agreement or the
Collateral, except for any liability arising from the gross negligence or
willful misconduct of the Agent, or such Lender, or its officers, employees or
agents.
16. Notices. All notices required or permitted to be given under
this Pledge Agreement shall be in conformance with Section 12.1 of the Credit
Agreement.
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13
17. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
18. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
19. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal
action or proceeding with respect to this Pledge Agreement may be
brought in the courts of the State of North Carolina, or of the United
States for the Western District of North Carolina, and, by execution
and delivery of this Pledge Agreement, each Pledgor hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Each Pledgor
further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address for notices pursuant to Section 12.1 of
the Credit Agreement, such service to become effective 30 days after
such mailing. Nothing herein shall affect the right of the Agent to
serve process in any other manner permitted by law or to commence
legal proceedings or to otherwise proceed against any Pledgor in any
other jurisdiction.
(b) Each Pledgor hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Pledge Agreement brought in the courts referred to in subsection
(a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
20. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
21. Severability. If any provision of any of the Pledge Agreement
is determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
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14
22. Entirety. This Pledge Agreement and the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
23. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement and
the other Credit Documents, the delivery of the Notes and the making of the
Loans and the issuance of the Letters of Credit under the Credit Agreement.
24. Other Security. To the extent that any of the Pledgor
Obligations are now or hereafter secured by property other than the Pledged
Collateral (including, without limitation, real property and securities owned by
an Pledgor), or by a guarantee, endorsement or property of any other Person,
then the Agent and the Lenders shall have the right to proceed against such
other property, guarantee or endorsement upon the occurrence of any Event of
Default, and the Agent and the Lenders have the right, in their sole discretion,
to determine which rights, security, liens, security interests or remedies the
Agent and the Lenders shall at any time pursue, relinquish, subordinate, modify
or take with respect thereto, without in any way modifying or affecting any of
them or any of the Agent's and the Lenders' rights or the Pledgor Obligations
under this Pledge Agreement or under any other of the Credit Documents.
25. Joint and Several Obligations of Pledgors.
(a) Subject to clause (c), each of the Pledgors is accepting
joint and several liability hereunder in consideration of the
financial accommodation to be provided by the Lenders under the Credit
Agreement, for the mutual benefit, directly and indirectly, of each of
the Pledgors and in consideration of the undertakings of each of the
Pledgors to accept joint and several liability for the obligations of
each of them.
(b) Subject to clause (c), each of the Pledgors jointly and
severally hereby irrevocably and unconditionally accepts, not merely
as a surety but also as a co-debtor, joint and several liability with
the other Pledgors with respect to the payment and performance of all
of the Pledgor Obligations arising under this Pledge Agreement and the
other Credit Documents, it being the intention of the parties hereto
that all the Pledgor Obligations shall be the joint and several
obligations of each of the Pledgors without preferences or distinction
among them.
(c) Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents,
(i) to the extent the obligations of a Guarantor shall be
adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state
or federal law relating to fraudulent conveyances or transfers)
then the obligations of each Guarantor hereunder shall be limited
to the
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15
maximum amount that is permissible under applicable law (whether
federal or state and including, without limitation, the
Bankruptcy Code), and
(ii) the obligations of Holdings hereunder shall be limited
hereunder and in all the Credit Documents, in the aggregate, to
an amount equal to $153,000,000.
26. Rights of Required Lenders. All rights of the Agent hereunder,
if not exercised by the Agent, may be exercised by the Required Lenders.
[remainder of page intentionally left blank]
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16
Each of the Pledgors has caused a counterpart of this Amended and
Restated Pledge Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: IPC, INC.,
a Delaware corporation
By:
----------------------------------
Name:
--------------------------------
Title:
------------------------------
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17
GUARANTORS: IVEX PACKAGING CORPORATION,
a Delaware corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
IVEX PAPER MILL CORPORATION,
a Delaware corporation
IPMC HOLDING CORPORATION,
a Delaware corporation
IPMC, INC.,
a Delaware corporation
VALLEY EXPRESS LINES, INC.,
a Delaware corporation
KAMA OF ILLINOIS CORPORATION,
a Delaware corporation
PACKAGING PRODUCTS, INC.,
a Delaware corporation
CFI INDUSTRIES, INC.,
a Delaware corporation
PLASTOFILM INDUSTRIES, INC.,
a Delaware corporation
CFI RECYCLING, INC.,
a Delaware corporation
TRIO PRODUCTS, INC.,
a Delaware corporation
By:
-----------------------------
Name:
---------------------------
Title: of each of
--------------------------
the above named Guarantors
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Accepted and agreed to as of the date first above written.
NATIONSBANK, N.A., as Agent
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
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19
Schedule 4(a)
to
Amended and Restated
Pledge Agreement
dated as of March 24, 1997
in favor of NationsBank, N.A.
as Agent
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of _____________________, a ____________
corporation:
No. of Shares Certificate No.
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent
and attorney-in-fact may substitute and appoint one or more persons to act for
him. The effectiveness of a transfer pursuant to this stock power shall be
subject to any and all transfer restrictions referenced on the face of the
certificates evidencing such interest or in the certificate of incorporation or
bylaws of the subject corporation, to the extent they may from time to time
exist.
[Pledgor]
By:______________________________
Name:____________________________
Title:___________________________
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