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EXHIBIT 10.4
FORM OF
SECURITY AND PLEDGE AGREEMENT
SECURITY AND PLEDGE AGREEMENT, dated as of _____________ (the
"Agreement"), by and between _________ (the "Pledgor"), and Plum Creek
Acquisition Partners, L.P., a Delaware limited partnership (the "Pledgee").
WHEREAS, in consideration for the Pledgee's loan of $_________ to the
Pledgor, the Pledgor is delivering to the Pledgee a duly executed promissory
note, dated the date hereof (such note as it may be amended, modified or
supplemented from time to time together with any replacement thereof, the
"Note"), in the principal amount of $_________ in favor of the Pledgee; and
WHEREAS, the Pledgor has agreed to pledge the Pledged Shares (as defined
below) and the Proceeds (as defined below) to the Pledgee to secure the
Pledgor's obligations under the Note.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Security Interest in Collateral. The Pledgor hereby grants
to the Pledgee, as security for all present and future obligations and
liabilities of all kinds of the Pledgor to the Pledgee under the Note and this
Agreement (collectively referred to as the "Obligations"), a first priority
security interest in the following described property (collectively referred to
as the "Collateral"):
(a) __________ shares of [INSERT NAME OF CORPORATE SUBSIDIARY
OR, ALTERNATIVELY, NAME OF HOLDING COMPANY FOR THE CORPORATE SUBSIDIARY] voting
common stock, par value $.01 per share (the "Pledged Shares"), as more fully
described in Schedule 1 hereto, and the certificates representing the Pledged
Shares and all of the Pledgor's rights and privileges with respect thereto,
together with stock powers executed in blank, each of which has been delivered
to the Pledgee concurrently with the execution hereof; and
(b) the proceeds and accessions of the Pledged Shares (the
"Proceeds").
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2. Pledgor's Covenants.
(a) The Pledgor agrees hereafter not to encumber or grant a
security interest in or a lien or other encumbrance on the Collateral.
(b) The Pledgor agrees not to dispose of any of the Collateral
except in accordance with the terms of this Agreement.
(c) The Pledgor agrees: (i) at any time and from time to time,
upon request of the Pledgee, to give, execute, file and/or record any notice,
financing statement, continuation statement, instrument, document or agreement
that the Pledgee shall consider reasonably necessary or desirable to create,
preserve, continue, perfect or validate any security interest granted hereunder
or which the Pledgee may consider reasonably necessary or desirable to exercise
or enforce its rights hereunder with respect to such security interest; (ii) to
give the Pledgee notice of any litigation filed or claim asserted against the
Pledgor relating to or potentially affecting the Collateral; (iii) if requested
by the Pledgee (and without affecting the validity or enforceability of any
other provisions hereof, including Section 3 herein), to receive and collect the
Proceeds, in trust and as the property of the Pledgee, and to immediately
endorse as appropriate and deliver such Proceeds to the Pledgee when requested
by the Pledgee in the exact form in which they are received; (iv) not to
commingle the Proceeds or collections thereunder with other property; (v) to
keep complete and accurate records regarding all of the Proceeds; (vi) to
provide any service and do other acts or things necessary to keep the Collateral
and the Proceeds free and clear of all defenses, rights of offset and
counterclaim; and (vii) to use any Proceeds to pay principal and interest on the
Note, with payments to be credited first to interest on past due interest, then
to past due interest, then to accrued interest and then to principal.
(d) The Pledgor agrees to: (i) pay promptly the Obligations
secured hereby when due; (ii) indemnify the Pledgee against all loss, claims,
demands and liabilities of every kind arising from the Collateral and the
transactions and other agreements and undertakings contemplated hereby; and
(iii) pay all expenses, including reasonable attorneys' fees, incurred by the
Pledgee in the preservation, realization, enforcement and exercise of its
rights, powers and remedies hereunder.
3. Payment of Taxes, Charges, Liens and Assessments. The Pledgor agrees
to pay, prior to delinquency, all taxes, charges, liens and assessments
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against the Collateral and the Proceeds, and upon the failure of the Pledgor to
do so, the Pledgee, at its option, may pay any of them. Any such payments made
by the Pledgee shall be obligations of the Pledgor to the Pledgee, due and
payable immediately without demand and shall be secured by the Collateral and
the Proceeds, subject to all of the terms and conditions of this Agreement.
4. Powers of Pledgee. The Pledgor appoints the Pledgee his true attorney
in fact to perform any of the following powers, which are coupled with an
interest, are irrevocable until termination of this Agreement and may be
exercised from time to time by the Pledgee's officers and employees, or any of
them, whether or not the Pledgor is in default: (a) to perform any obligations
of the Pledgor hereunder in the Pledgor's name or otherwise; (b) to give notice
of Pledgee's right under the Collateral to enforce the same; (c) to release
security; (d) to resort to security; (e) to prepare, execute, file, record or
deliver notes, assignments, schedules, designation statements, financing
statements, continuation statements, termination statements, statements of
assignment, applications for registration or like papers to perfect, preserve or
release the Pledgee's interest in the Collateral; (f) to verify facts concerning
the Collateral by inquiry of obligors thereon, or otherwise, in its own name or
fictitious name; (g) after an Event of Default, to endorse, collect, deliver and
receive payment under instruments for the payment of money constituting or
relating to the Collateral; (h) after an Event of Default, to preserve or
release the interest evidenced by chattel paper to which the Pledgee is entitled
hereunder and to endorse and deliver evidences of title incidental thereto; (i)
after an Event of Default, to exercise all rights, powers and remedies which the
Pledgor would have, but for this Agreement, under all Collateral subject to this
Agreement; and (j) to do all acts and things and execute all documents in the
name of the Pledgor otherwise, deemed by the Pledgee as necessary, proper and
convenient in connection with the preservation, perfection or enforcement of its
rights hereunder.
5. Events of Default; Remedies.
(a) Each of the following shall constitute an event of default
("Event of Default") hereunder: (i) the Pledgor's failure to pay, within 15 days
after the date when such payment is due, any payment of principal or interest on
the Note; or (ii) the Pledgor's failure to observe or perform any covenant or
agreement contained in the Note; and (iii) the Pledgor's violation of any of
the transfer restrictions contained in the Certificate of Incorporation of
[INSERT NAME OF CORPORATE SUBSIDIARY OR, ALTERNATIVELY, NAME OF HOLDING COMPANY
FOR THE CORPORATE SUBSIDIARY].
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(b) In case an Event of Default shall have occurred and be
continuing, the Pledgee shall be entitled to exercise all of the rights, powers
and remedies (whether vested in it by this Agreement, the Note or by law and
including, without limitation, all rights and remedies of a secured party of a
debtor in default under the Uniform Commercial Code as in force in the State of
Washington) for the protection and enforcement of its rights in respect of the
Collateral. In addition to recourse against the Collateral as provided in this
Agreement, the Pledgee shall be entitled to recourse against the Pledgor for the
payment of any principal of or interest on the Note or for any claim based
thereon (including costs of collection).
6. No Waiver. The failure of the Pledgee to exercise any right or remedy
under this Agreement or the Note, or delay by the Pledgee in exercising same,
will not operate as a waiver thereof. No waiver by the Pledgee will be effective
unless and until it is in writing and signed by the Pledgee. No waiver of any
condition or performance will operate as a waiver of any subsequent condition or
obligation. The Pledgee shall have no obligation to resort to the Collateral or
any other security which is or may become available to it.
7. Miscellaneous.
(a) This Agreement, any amendments or replacement hereof, and
the legality, validity and performance of the terms hereof, shall be governed by
and enforced and construed in accordance with the laws of the State of
Washington without regard to conflicts of laws and principles thereof.
(b) This Agreement and the rights, powers and duties set forth
herein shall be binding upon the Pledgor, its agents, representatives and
successors and shall inure to the benefit of the Pledgee and its successors and
assigns and, in the event of any transfer or assignment of rights by the
Pledgee, the rights and privileges herein conferred upon the Pledgee shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. This Agreement and the rights and
privileges herein conferred upon the Pledgee may be assigned by the Pledgee
without the consent of the Pledgor. This Agreement may not be transferred or
assigned by the Pledgor without the written consent of the Pledgee.
(c) In the event that any provision of this Agreement is invalid
or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be
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modified to conform with such statute or rule of law. Any provision hereof which
may prove invalid or unenforceable under any applicable law shall not effect the
validity or enforceability of any other provisions hereof.
(d) Notices required or permitted to be given under this
Agreement shall be in writing and may be delivered personally or sent to a party
by airmail or first class mail, postage prepaid and addressed to such party, as
follows, or to such other address furnished by notice given in accordance with
this paragraph:
If to the Pledgor:
[NAME]
c/o Plum Creek Timber Company, Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
If to the Pledgee:
Plum Creek Acquisition Partners, L.P.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Any such notice shall be deemed to have been given, (i) if sent by mail, five
days after the date mailed, and (ii) if delivered personally, on the date of
delivery.
(e) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which shall together
constitute one and the same document.
(f) This Agreement and the security interest and pledge
hereunder shall terminate upon the full and final performance of all Obligations
of the Pledgor and payment of all indebtedness secured hereby. At such time, the
Pledgee shall promptly reassign to the Pledgor all of the Collateral hereunder
which has not been sold, disposed of, retained or applied by the Pledgee in
accordance with the terms hereof.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first written above.
PLEDGOR:
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(Signature of Pledgor)
PLEDGEE:
PLUM CREEK ACQUISITION
PARTNERS, L.P.
By:
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Name:
Title:
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SCHEDULE 1
Description of Pledged Shares
Certificate Number Number of Shares
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