Exhibit 10.31
FORM OF PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is made this
____ day of December, 1998, by and among XXXXXXX AMERICAN CORPORATION (the
"Borrower") and the subsidiaries of the Company signatory hereto (each
individually a "Pledgor" and individually and collectively, "Pledgors") in favor
of FIRST UNION NATIONAL BANK, a national banking association ("Agent"), as agent
for the Lenders under the Credit Agreement described below (herein "Pledgee").
W I T N E S S E T H:
-------------------
WHEREAS, Borrower has entered into that certain Credit
Agreement dated of even date herewith (as amended from time to time, the "Credit
Agreement") with the lenders identified therein (together with such additional
financial institutions as may become lenders from time to time as therein
provided, "Lenders") and First Union as Agent for the Lenders ("Agent"); and
WHEREAS, it is a condition to the Credit Agreement that
Pledgors have executed this Pledge Agreement in favor of Pledgee for the benefit
of the Lenders.
NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, Pledgors hereby
agrees with Pledgee as follows:
1. For the purposes of this Pledge Agreement:
(a) Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
(b) The term "Collateral" shall mean all shares of
stock, partnership interests, LLC interests, or other equity interests in any
direct or indirect Subsidiary of Borrower (as defined in the Credit Agreement)
(the "Securities") now or hereafter owned by any Pledgor, together with (i) all
rights to distributions and other rights under organizational documents, or
under any other agreements, with respect thereto, and all contract rights,
general intangibles and investment property associated with or representing such
Pledgor's rights and interests with respect thereto, and (ii) all additions to,
substitutions or exchanges for, proceeds of and distributions on, any of the
foregoing, and all associated secondary rights and secondary considerations of
any kind (subscription rights, bonus shares, etc.). A list of the Securities as
of the date hereof is set forth on Schedule A attached hereto.
(c) The term "Obligations" shall mean any and all
obligations and indebtedness of every kind and description of the Pledgors to
the Lenders pursuant to, under, or in connection with the Loan Documents,
whether such debts or obligations are primary or
secondary, direct or indirect, absolute or contingent, sole, joint or several,
secured or unsecured, due or to become due, contractual or tortious, arising by
operation of law or otherwise, or now or hereafter existing, whether incurred by
any Pledgor as principal, surety, endorser, guarantor, accommodation party or
otherwise, including, without limitation, principal, interest and fees, late
fees and expenses (including, attorneys' fees and costs and/or the allocated
fees and costs of Agent's in-house legal counsel), or that have been or may
hereafter be contracted or incurred, and any obligations of the Pledgors or any
of them under interest rate protection agreements, swaps, hedging contracts or
similar arrangements with any Lender.
2. Pledgors hereby pledge, and xxxxx x xxxx as security with
respect to, the Collateral, to Pledgee as agent for the Lenders, as collateral
security for all of the Obligations.
3. Pledgors represent and warrant that:
(a) The chief place of business, chief executive
offices and the office(s) where their records are kept concerning accounts,
contract rights and other similar Collateral, are as set forth on Schedule B
attached hereto, and as set forth on Schedule B, each Pledgor either owns such
premises free and clear of any mortgage or other liens and encumbrances except
as set forth on Schedule B or it leases such premises from the record owner
identified on Schedule B.
(b) Each Pledgor conducts business under and through
its legal name as set forth on the signature page hereto, and no other names
except as set forth on Schedule B attached hereto.
(c) Pledgors have good title to the Securities free and
clear of all liens and encumbrances except the security interest created hereby;
and such Securities constitute the percentage of the issued and outstanding
shares of each class of the capital stock or other equity interests of the
subsidiaries of Pledgors identified in Schedule A.
(d) The Securities are validly issued, fully paid and
nonassessable and are not subject to any charter, bylaw, statutory, contractual
or other restrictions governing their issuance, transfer, ownership or control
except as indicated on the stock certificates for the Securities.
(e) Pledgors have delivered to Pledgee all certificates
or other instruments or documents representing or evidencing the Securities,
together with corresponding assignment or transfer powers duly executed in blank
by Pledgors, and this Pledge Agreement and such powers have been duly and
validly executed and are binding and enforceable against Pledgor in accordance
with their terms except as such enforceability may be affected by bankruptcy
laws and other laws of general application relating to creditors' rights; and
the pledge of the Securities in accordance with the terms hereof creates a valid
and perfected first priority security interest in the Securities securing
payment of the Obligations.
(f) No authorization, approval, or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required either (i) for the pledge by
Pledgors of the Securities pursuant to this Pledge Agreement or for the
execution, delivery or performance of this Pledge Agreement by Pledgor or (ii)
for the exercise by Pledgee of the voting or other rights provided for in this
Pledge Agreement or the remedies in respect of the Collateral pursuant to this
Pledge Agreement (except as may be required in connection with such disposition
by laws affecting the offering and sale of securities generally).
4. Anything herein to the contrary notwithstanding, (a)
Pledgors shall remain liable under any contracts and agreements included in the
Collateral to perform all of their respective duties and obligations thereunder
to the same extent as if this Agreement had not been executed, (b) the exercise
by Pledgee of any of its rights hereunder shall not release Pledgees from any of
their duties or obligations under any contracts and agreements included in the
Collateral, and (c) Pledgee shall not have any obligation or liability under any
contracts and agreements included in the Collateral by reason of this Agreement,
nor shall Pledgee be obligated to perform any of the obligations or duties of
Pledgors thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
5. Pledgors will promptly notify and provide Pledgee with a
complete description of the opening of any new places of business which would be
required to be disclosed pursuant to Paragraph 3(a) above, the conduct of
business under any names or through any entities other than those set forth
above, the relocation of any of the Collateral, and the acquisition of any new
Collateral. Pledgors will furnish to Pledgee from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Pledgee may reasonably request, all
in reasonable detail.
6. At any time and from time to time, upon the request of
Pledgee, Pledgors will, at their own expense:
(a) defend the Collateral against the claims and
demands of all persons.
(b) deliver and pledge to Pledgee, endorsed or
accompanied by instruments of assignment or transfer satisfactory to Pledgee,
any instruments and documents covered hereby which Pledgee may specify.
(c) give, execute, deliver and file or record in the
proper governmental offices, any instrument, paper or document, including but
not limited to one or more financing statements under the Uniform Commercial
Code, satisfactory to Pledgee, or take any action, which Pledgee reasonably may
deem necessary or desirable in order to create, preserve, perfect, continue,
modify, terminate or otherwise affect any security interest granted pursuant
hereto, or to enable Pledgee to exercise or enforce any of its rights hereunder.
(d) keep, and stamp or otherwise xxxx, any of its
documents and instruments and its individual books and records relating to any
of the Collateral in such manner as Pledgee reasonably may require.
(e) pay, or reimburse Pledgee in the amount of, all
reasonable expenses
(including reasonable fees and expenses of attorneys, experts and Pledgees)
incurred in any way in connection with the exercise, defense or assertion of any
rights or interests of Pledgee hereunder, the enforcement of any provisions
hereof, or the management, preservation, use, operation, maintenance,
collection, possession, disposition or enforcement of any of the Collateral (all
such expenses to be Obligations hereunder).
7. Pledgors agree not to (i) sell or otherwise dispose of, or
grant any option with respect to, any of the Collateral, or (ii) create or
permit to exist any lien, security interest, or other charge or encumbrance upon
or with respect to any of the Collateral, except the security interest under
this Pledge Agreement. Pledgors agree that all additional shares of stock or
other equity interests of any direct or indirect Subsidiary of Borrower (as
defined in the Credit Agreement) acquired by any Pledgor after the date hereof
shall automatically and without any further action of Pledgors be pledged
hereunder and constitute a part of the Collateral hereunder, and in connection
therewith, Pledgors agree to immediately deliver to Pledgee any certificates or
other instruments or documents representing or evidencing the Securities and a
supplement to Schedule A attached hereto describing such additional Collateral.
8. Prior to the full payment and performance of the
Obligations, Pledgee shall be entitled to receive, as additional Collateral, any
and all additional shares of stock or any other property of any kind
distributable on or by reason of the Securities pledged hereunder, whether in
the form of or by way of stock dividends, warrants, partial liquidation,
conversion, prepayments or redemptions (in whole or in part), liquidation, or
otherwise. If any of such property, other than such cash dividends shall come
into the possession or control of Pledgors, Pledgors shall hold or control and
forthwith transfer and deliver the same to Pledgee subject to the provisions
hereof.
9. So long as no default has occurred under any of the
Obligations or Loan Documents and Pledgors are in full compliance with the terms
hereof:
(a) Pledgors shall be entitled to receive and retain
any normal, regularly declared cash dividends paid on the Securities pledged
hereunder.
(b) Pledgors may exercise all voting rights, if any,
pertaining to the Securities for any purpose not inconsistent with the terms
hereof or of the Obligations or Loan Documents. In the event the Securities have
been transferred into the name of Pledgee or a nominee or nominees of Pledgee
prior to default, Pledgee or its nominee will execute and deliver upon request
of Pledgors an appropriate proxy in order to permit Pledgors to vote, if
applicable, the same.
10. Pledgors shall take all actions (and execute and deliver
from time to time all instruments and documents) necessary or appropriate or
reasonably requested by Pledgee, to continue the validity, enforceability and
perfected status of the pledge of Securities hereunder.
11. Pledgee shall be under no obligation to take any actions
and shall have no liability (except for gross negligence or willful misconduct)
with respect to the preservation or
protection of the pledged Securities or any underlying interests represented
thereby as against any prior or other parties. In the event Pledgors request
that Pledgee take or omit to take action(s) with respect to the Collateral,
Pledgee may refuse so to do with impunity if Pledgors do not, upon request of
Pledgee, post sufficient, creditworthy indemnities with Pledgee which, in
Pledgee's sole discretion, are sufficient to hold it harmless from any possible
liability of any kind in connection therewith.
12. Pledgors agree that Pledgee, at any time and without
affecting its rights in the pledged Securities and without notice to Pledgors,
may grant any extensions, releases or other modifications of any kind respecting
the Loan Documents, Obligations and any collateral security therefor and
Pledgors, except as otherwise provided herein or in the Loan Documents, waive
all notices of any kind in connection with the Obligations, the Loan Documents
and any changes therein or defaults or enforcement proceedings thereunder,
whether against Pledgors or any other party. Pledgors hereby waive any rights it
has at equity or in law to require Pledgee to apply any rights of marshaling or
other equitable doctrines in the circumstances.
13. After the occurrence of an Event of Default under the
Credit Agreement:
(a) Pledgee may transfer or cause to be transferred any
of the pledged Securities into its own or a nominee's or nominees' name or
name(s).
(b) Pledgee shall be entitled to receive and apply in
payment of the Obligations any cash dividends, interest or other payment on the
pledged Securities.
(c) Pledgee shall be entitled to exercise in Pledgee's
discretion all voting rights, if any, pertaining thereto and in connection
therewith and at the written request of Pledgee, Pledgors shall execute any
appropriate dividend, payment or brokerage orders or proxies.
(d) Pledgors shall take any action necessary or
required or reasonably requested by Pledgee, in order to allow Pledgee fully to
enforce the pledge of the Securities hereunder and realize thereon to the
fullest possible extent, including but not limited to the filing of any claims
with any court, liquidator or trustee, custodian, receiver or other like person
or party.
(e) Pledgee shall have all the rights and remedies
granted or available to it hereunder, under any statute or the common law, or
under any of the Loan Documents, including the right to sell the pledged
Securities or any portion thereof at one or more public or private sales upon
ten (10) days' written notice and to bid thereat or purchase any part or all
thereof in its own or a nominee's or nominees' names, free and clear of any
equity of redemption; and to apply the net proceeds of the sale, after deduction
for any expenses of sale, including the payment of all Pledgee's reasonable
attorneys' fees in connection with the Obligations and the sale, to the payment
of the Obligations in any manner or order which Pledgee in its sole discretion
may elect, without further notice to or consent of Pledgors and without regard
to any equitable principles of marshaling or other like equitable doctrines.
(f) Pledgee may increase, in its sole discretion, but shall
not be required to do so, the Obligations by making reasonable additional
advances or incurring reasonable expenses for the account of Pledgors deemed
appropriate or desirable by Pledgee in order to protect, enhance, preserve or
otherwise further the sale or disposition of the Collateral or any other
property it holds as security for the Obligations.
14. Pledgors recognize that Pledgee may be unable to effect a sale
to the public of all or part of the Securities by reason of certain prohibitions
or restrictions in applicable securities laws and regulations (herein
collectively called the "Securities Laws"), or the provisions of other laws,
regulations or rulings, but may be compelled to resort to one or more sales to a
restricted group of purchasers who will be required to agree to acquire the
Securities for their own account, for investment and not with a view to the
further distribution or resale thereof without restriction. Pledgors agree that
any sale(s) so made may be at prices and on other terms less favorable to
Pledgors than if the Securities were sold to the public, and that Pledgee has no
obligation to delay sale of the Securities for period(s) of time necessary to
permit the issuer thereof to register the Securities for sale to the public
under any of the Securities Laws. Pledgors agree that negotiated sales whether
for cash or credit made under the foregoing circumstances shall not be deemed
for that reason not to have been made in a commercially reasonable manner.
Pledgors shall cooperate with Pledgee to satisfy any requirements under the
Securities Laws applicable to the sale or transfer of the Securities by Pledgee.
In connection with any sale or disposition of the Collateral,
Pledgee is authorized to comply with any limitation or restriction as it may be
advised by its counsel is necessary or desirable in order to avoid any violation
of applicable law or to obtain any required approval of the purchasers) by any
governmental regulatory body or officer and it is agreed that such compliance
shall not result in such sale being considered not to have been made in a
commercially reasonable manner nor shall Pledgee be liable or accountable by
reason of the fact that the proceeds obtained at such sale(s) are less than
might otherwise have been obtained at public sale.
Pledgee may elect to obtain the advice of any independent
nationally-known investment banking firm, which is a member firm of the New York
Stock Exchange, with respect to the method and manner of sale or other
disposition of any of the Collateral, the best price reasonably obtainable
therefor, the consideration of cash and/or credit terms, or any other details
concerning such sale or disposition. Pledgee, in its sole discretion, may elect
to sell on such credit terms which it deems reasonable.
15. Upon a sale of the Collateral by Pledgee, Pledgee shall apply
the sale proceeds: first, to the amount of any reasonable expenses, including
-----
counsel fees and expenses, incurred by Pledgee in connection with (i) the
administration of this Pledge Agreement, (ii) the custody, preservation, sale or
collection or realization of the Collateral, (iii) the exercise or enforcement
of Pledgee's rights hereunder, or (iv) the failure of Pledgors to perform
hereunder; second, to accrued and unpaid interest and fees; and third, to the
------ -----
principal balance of indebtedness under the Credit Agreement to Lenders on the
basis of their pro rata shares of the outstanding principal balance of the Loans
(as defined therein), except the fees payable under Paragraph 2.13 thereof,
which shall be paid solely to Agent. Such distribution of payments shall be made
promptly in federal funds immediately available at the office of each Lender set
forth in the Credit Agreement.
16. The powers conferred on Pledgee hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for monies actually received by it hereunder,
Pledgee shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve any right of or against other parties pertaining to
any Collateral. Pledgors agree jointly and severally to indemnify Pledgee and
each Secured Party from and against any and all claims, losses and liabilities
growing out of or resulting from this Agreement (including, without limitation,
enforcement of this Agreement) or Pledgee's or any Lender's interest in the
Collateral, except claims, losses or liabilities resulting from such party's
gross negligence or wilful misconduct.
17. The parties agree that this Pledge Agreement shall be governed
as to its validity, interpretation and effect by the internal laws of the
Commonwealth of Pennsylvania without regard to the conflict of laws rules
thereof; and any terms used herein which are defined in the Uniform Commercial
Code as enacted in Pennsylvania shall have the meanings therein set forth.
18. This Pledge Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
19. If Pledgee shall waive any rights or remedies arising
hereunder or under any applicable law, such waiver shall not be deemed to be a
waiver upon the later occurrence or recurrence of any of said events. No delay
by Pledgee in the exercise of any right or remedy shall under any circumstances
constitute or be deemed to be a waiver, express or implied, of the same and no
course of dealing between the parties hereto shall constitute a waiver of
Pledgee's rights or remedies.
20. Pledgor hereby irrevocably appoints Pledgee, effective upon
the occurrence and during the continuation of an Event of Default under the
Credit Agreement, as its attorney-in--fact to execute, deliver and record, if
appropriate, from time to time any instruments or documents in connection with
the Collateral, in Pledgors or Pledgee's names.
21. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
PLEDGE AGREEMENT OR THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS
OF AGENT OR LENDERS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR AGENT'S
ENTERING INTO THIS PLEDGE AGREEMENT ON BEHALF OF THE LENDERS.
22. EACH PLEDGOR ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF
COUNSEL IN THE REVIEW AND EXECUTION OF THIS PLEDGE AGREEMENT AND, SPECIFICALLY,
PARAGRAPH 22 HEREOF, AND FURTHER ACKNOWLEDGES THAT THE MEANING AND EFFECT OF THE
FOREGOING WAIVER OF JURY TRIAL HAVE BEEN FULLY EXPLAINED TO SUCH PLEDGOR BY SUCH
COUNSEL.
23. This Pledge Agreement represents the entire understanding of
the parties with respect to the subject matter and no modification or change
herein shall be effective unless contained in a writing signed by the parties
hereto.
IN WITNESS WHEREOF, the undersigned have executed this Pledge
Agreement as of the day and year first above written.
Attest: XXXXXXX AMERICAN CORPORATION
By: By:
----------------------- --------------------------
Name: Name:
Title: Title:
[Corporate Seal]
Attest: XXXXXXX ENTERPRISES, INC.
By: By:
----------------------- --------------------------
Name Name:
Title Title:
[Corporate Seal]
Attest: XXXXXX-AMERICAN COMPANY, INC.
By: By:
----------------------- --------------------------
Name: Name:
Title: Title:
[Corporate Seal]
Schedule A
Pledged Securities
------------------
Description Percent of
Company of Securities Certificate No. No. of Shares Outstanding Equity
------- ------------- -------------- ------------- ------------------
Schedule B
Disclosure
----------
