Exhibit 10.23
SUBSIDIARY PLEDGE AGREEMENT
This SUBSIDIARY PLEDGE AGREEMENT (this "Agreement") is dated as
of __________ and entered into by and between [INSERT NAME OF GRANTOR IN
CAPS], a _____________ corporation ("Pledgor"), and FIRST UNION NATIONAL
BANK, as administrative agent for and representative of (in such capacity
herein called "Secured Party") the financial institutions ("Lenders") party
to the Credit Agreement referred to below and any Interest Rate Exchangers
(as hereinafter defined).
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of (i) the shares
of stock (the "Pledged Shares") described in Part A of Schedule I annexed
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hereto and issued by the corporations named therein and (ii) the
indebtedness (the "Pledged Debt") described in Part B of said Schedule I
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and issued by the obligors named therein.
B. Secured Party, Syndication Agent and Lenders have entered
into a Credit Agreement dated as of October 23, 1997, which Credit
Agreement has been amended and restated by an Amended and Restated Credit
Agreement dated as of January 28, 1999 (said Credit Agreement, as it may
hereafter be further amended, supplemented or otherwise modified from time
to time, being the "Credit Agreement", the terms defined therein and not
otherwise defined herein being used herein as therein defined) with The
Pantry, Inc., a Delaware corporation ("Company"), pursuant to which Lenders
have made certain commitments, subject to the terms and conditions set
forth in the Credit Agreement, to extend certain credit facilities to
Company.
C. Company may from time to time enter, or may from time to time
have entered, into one or more Interest Rate Agreements (collectively, the
"Lender Interest Rate Agreements") with one or more Lenders (in such
capacity, collectively, "Interest Rate Exchangers").
D. Pledgor has executed and delivered that certain Subsidiary
Guaranty dated as of October 23, 1997 (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "Guaranty") in favor of Secured Party for the benefit of Lenders
and any Interest Rate Exchangers, pursuant to which Pledgor has guarantied
the prompt payment and performance when due of all obligations of Company
under the Credit Agreement and all obligations of Company under the Lender
Interest Rate Agreements, including the obligation of Company to make
payments thereunder in the event of early termination thereof.
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E. It is a condition precedent to the extensions of credit by
Lenders under the Credit Agreement that Pledgor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Loans and other extensions of credit under the
Credit Agreement and to induce Interest Rate Exchangers to enter into
Lender Interest Rate Agreements, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Pledgor hereby agrees with Secured Party as follows:
SECTION 1. Pledge of Security. Pledgor hereby pledges and
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assigns to Secured Party, and hereby grants to Secured Party a security
interest in, all of Pledgor's right, title and interest in and to the
following (the "Pledged Collateral"):
(a) the Pledged Shares and the certificates representing the
Pledged Shares and any interest of Pledgor in the entries on the books of
any financial intermediary pertaining to the Pledged Shares, and all
dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) the Pledged Debt and the instruments evidencing the Pledged
Debt, and all interest, 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 Debt;
(c) all additional shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire,
stock of any issuer of the Pledged Shares from time to time acquired by
Pledgor in any manner (which shares shall be deemed to be part of the
Pledged Shares), the certificates or other instruments representing such
additional shares, securities, warrants, options or other rights and any
interest of Pledgor in the entries on the books of any financial
intermediary pertaining to such additional shares, and all dividends, cash,
warrants, rights, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such additional shares, securities, warrants,
options or other rights;
(d) all additional indebtedness from time to time owed to Pledgor
by any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, 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 indebtedness;
(e) all shares of, and all securities convertible into and
warrants, options and other rights to purchase or otherwise acquire, stock
of any Person that, after the date of this Agreement, becomes, as a result
of any occurrence, a direct Restricted Subsidiary of Pledgor (which shares
shall be deemed to be part of the Pledged Shares),
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the certificates or other instruments representing such shares, securities,
warrants, options or other rights and any interest of Pledgor in the
entries on the books of any financial intermediary pertaining to such
shares, and all dividends, cash, warrants, rights, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares,
securities, warrants, options or other rights;
(f) all indebtedness from time to time owed to Pledgor by any
Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct or indirect Restricted Subsidiary of Pledgor, and all
interest, 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 indebtedness; and
(g) to the extent not covered by clauses (a) through (f) above,
all proceeds of any or all of the foregoing Pledged Collateral. For
purposes of this Agreement, the term "proceeds" includes whatever is
receivable or received when Pledged Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes proceeds of any indemnity or
guaranty payable to Pledgor or Secured Party from time to time with respect
to any of the Pledged Collateral.
SECTION 2. Security for Obligations. This Agreement secures,
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and the Pledged Collateral is collateral security for, the prompt payment
or performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
(S)362(a)), of all obligations and liabilities of every nature of Pledgor
now or hereafter existing under or arising out of or in connection with the
Guaranty and all extensions or renewals thereof, whether for principal,
interest (including interest that, but for the filing of a petition in
bankruptcy with respect to Company, would accrue on such obligations,
whether or not a claim is allowed against Company for such interest in the
related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Interest Rate
Agreements, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that
are paid, to the extent all or any part of such payment is avoided or
recovered directly or indirectly from Secured Party, Syndication Agent,
Documentation Agent or any Lender or Interest Rate Exchanger as a
preference, fraudulent transfer or otherwise, and all obligations of every
nature of Pledgor now or hereafter existing under this Agreement (all such
obligations of Pledgor being the "Secured Obligations").
SECTION 3. Delivery of Pledged Collateral. All certificates or
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instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and
shall be in suitable form for
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transfer by delivery or, as applicable, shall be accompanied by Pledgor's
endorsement, where necessary, or duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to Secured
Party. Upon the occurrence and during the continuation of an Event of
Default (as defined in the Credit Agreement), Secured Party shall have the
right, without notice to Pledgor, to transfer to or to register in the name
of Secured Party or any of its nominees any or all of the Pledged
Collateral, subject only to the revocable rights specified in Section 7(a).
In addition, Secured Party shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral
for certificates or instruments of smaller or larger denominations.
SECTION 4. Representations and Warranties. Pledgor represents
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and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral. All of the
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Pledged Shares have been duly authorized and validly issued and are fully
paid and non-assessable. All of the Pledged Debt has been duly authorized,
authenticated or issued, and delivered and is the legal, valid and binding
obligation of the issuers thereof and is not in default.
(b) Description of Pledged Collateral. The Pledged Shares
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constitute all of the issued and outstanding shares of stock of each issuer
thereof, and there are no outstanding warrants, options or other rights to
purchase, or other agreements outstanding with respect to, or property that
is now or hereafter convertible into, or that requires the issuance or sale
of, any Pledged Shares. The Pledged Debt constitutes all of the issued and
outstanding intercompany indebtedness evidenced by a promissory note of the
respective issuers thereof owing to Pledgor.
(c) Ownership of Pledged Collateral. Pledgor is the legal,
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record and beneficial owner of the Pledged Collateral free and clear of any
Lien except for the security interest created by this Agreement or any
other Collateral Document or Permitted Encumbrances.
SECTION 5. Transfers and Other Liens; Additional Pledged
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Collateral; etc. Pledgor shall:
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(a) not, except as expressly permitted by the Credit Agreement,
(i) sell, assign (by operation of law or otherwise) or otherwise dispose
of, or grant any option with respect to, any of the Pledged Collateral,
(ii) create or suffer to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the security interest under this Agreement,
or (iii) permit any issuer of Pledged Shares to merge or consolidate unless
all the outstanding capital stock of the surviving or resulting corporation
is, upon such merger or consolidation, pledged hereunder and no cash,
securities or other property is distributed in respect of the outstanding
shares of any other constituent corporation; provided that in the event
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Pledgor makes an Asset Sale permitted by the Credit Agreement and the
assets subject to such Asset Sale are Pledged Collateral, Secured Party
shall release the Pledged Collateral that is the subject of such Asset Sale
to
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Pledgor free and clear of any Lien and security interest under this
Agreement or any other Collateral Document concurrently with the
consummation of such Asset Sale; provided, further that, as a condition
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precedent to such release, Secured Party shall have received evidence
satisfactory to it that arrangements satisfactory to it have been made for
delivery to Secured Party of the Net Asset Sale Proceeds of such Asset Sale
to the extent required under the Credit Agreement;
(b) (i) cause each issuer of Pledged Shares not to issue any
stock or other securities in addition to or in substitution for the Pledged
Shares issued by such issuer, except to Pledgor, (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and
all additional shares of stock or other securities of each issuer of
Pledged Shares, and (iii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all shares of stock
of any Person that, after the date of this Agreement, becomes, as a result
of any occurrence, a direct Restricted Subsidiary of Pledgor;
(c) (i) pledge hereunder, immediately upon their issuance, any
and all instruments or other evidences of additional indebtedness from time
to time owed to Pledgor by any obligor on the Pledged Debt, and (ii) pledge
hereunder, immediately upon their issuance, any and all instruments or
other evidences of indebtedness from time to time owed to Pledgor by any
Person that after the date of this Agreement becomes, as a result of any
occurrence, a direct or indirect Restricted Subsidiary of Pledgor;
(d) promptly notify Secured Party of any event of which Pledgor
becomes aware causing loss of the Pledged Collateral;
(e) promptly deliver to Secured Party all written notices
received by it with respect to the Pledged Collateral; and
(f) pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Pledged
Collateral, except to the extent the validity thereof is being contested in
good faith; provided that Pledgor shall in any event pay such taxes,
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assessments, charges, levies or claims not later than five days prior to
the date of any proposed sale under any judgement, writ or warrant of
attachment entered or filed against Pledgor or any of the Pledged
Collateral as a result of the failure to make such payment.
SECTION 6. Further Assurances; Pledge Amendments.
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(a) Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may request, in order to perfect and
protect any security interest granted or purported to be granted hereby or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral. Without limiting the
generality of the foregoing, Pledgor will: (i) execute and file such
financing or continuation statements, or
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amendments thereto, and such other instruments or notices, as may be
necessary or desirable, or as Secured Party may request, in order to
perfect and preserve the security interests granted or purported to be
granted hereby and (ii) at Secured Party's request, appear in and defend
any action or proceeding that may affect Pledgor's title to or Secured
Party's security interest in all or any part of the Pledged Collateral.
(b) Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged
hereunder as provided in Section 5(b) or (c), promptly (and in any event
within five Business Days) deliver to Secured Party a Pledge Amendment,
duly executed by Pledgor, in substantially the form of Schedule II annexed
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hereto (a "Pledge Amendment"), in respect of the additional Pledged Shares
or Pledged Debt to be pledged pursuant to this Agreement. Pledgor hereby
authorizes Secured Party to attach each Pledge Amendment to this Agreement
and agrees that all Pledged Shares or Pledged Debt listed on any Pledge
Amendment delivered to Secured Party shall for all purposes hereunder be
considered Pledged Collateral; provided that the failure of Pledgor to
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execute a Pledge Amendment with respect to any additional Pledged Shares or
Pledged Debt pledged pursuant to this Agreement shall not impair the
security interest of Secured Party therein or otherwise adversely affect
the rights and remedies of Secured Party hereunder with respect thereto.
SECTION 7. Voting Rights; Dividends; Etc.
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(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this
Agreement or the Credit Agreement; provided, however, that Pledgor shall
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not exercise or refrain from exercising any such right if Secured Party
shall have notified Pledgor that, in Secured Party's judgment, such action
would have a material adverse effect on the value of the Pledged Collateral
or any part thereof; and provided, further, that Pledgor shall give Secured
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Party at least five Business Days' prior written notice of the manner in
which it intends to exercise, or the reasons for refraining from
exercising, any such right. It is understood, however, that neither (A) the
voting by Pledgor of any Pledged Shares for or Pledgor's consent to the
election of directors at a regularly scheduled annual or other meeting of
stockholders or with respect to incidental matters at any such meeting nor
(B) Pledgor's consent to or approval of any action otherwise permitted
under this Agreement and the Credit Agreement shall be deemed inconsistent
with the terms of this Agreement or the Credit Agreement within the meaning
of this Section 7(a)(i), and no notice of any such voting or consent need
be given to Secured Party;
(ii) Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all dividends
and interest paid in respect of the Pledged Collateral; provided, however,
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that any and all
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(A) dividends 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,
(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 or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for any Pledged
Collateral, shall be, and shall forthwith be delivered to Secured Party to
hold as, Pledged Collateral and shall, if received by Pledgor, be received
in trust for the benefit of Secured Party, be segregated from the other
property or funds of Pledgor and be forthwith delivered to Secured Party as
Pledged Collateral in the same form as so received (with all necessary
indorsements); and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies, dividend
payment orders and other instruments as Pledgor may from time to time
reasonably request for the purpose of enabling Pledgor to exercise the
voting and other consensual rights which it is entitled to exercise
pursuant to paragraph (i) above and to receive the dividends, principal or
interest payments which it is authorized to receive and retain pursuant to
paragraph (ii) above.
(b) Upon the occurrence and during the continuation of an Event
of Default:
(i) upon written notice from Secured Party to Pledgor, all
rights of Pledgor to exercise the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant to Section 7(a)(i)
shall cease, and all such rights shall thereupon become vested in Secured
Party who shall thereupon have the sole right to exercise such voting and
other consensual rights;
(ii) all rights of Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive and
retain pursuant to Section 7(a)(ii) shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends and interest
payments; and
(iii) all dividends, principal and interest payments which
are received by Pledgor contrary to the provisions of paragraph (ii) of
this Section 7(b) shall be received in trust for the benefit of Secured
Party, shall be segregated from other funds of Pledgor and shall forthwith
be paid over to Secured Party as Pledged Collateral in the same form as so
received (with any necessary indorsements).
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(c) In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to
Section 7(b)(i) and to receive all dividends and other distributions which
it may be entitled to receive under Section 7(a)(ii) or Section 7(b)(ii),
(i) Pledgor shall promptly execute and deliver (or cause to be executed and
delivered) to Secured Party all such proxies, dividend payment orders and
other instruments as Secured Party may from time to time reasonably request
and (ii) without limiting the effect of the immediately preceding clause
(i), Pledgor hereby grants to Secured Party an irrevocable proxy to vote
the Pledged Shares and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Shares would be entitled
(including giving or withholding written consents of shareholders, calling
special meetings of shareholders and voting at such meetings), which proxy
shall be effective, automatically and without the necessity of any action
(including any transfer of any Pledged Shares on the record books of the
issuer thereof) by any other Person (including the issuer of the Pledged
Shares or any officer or agent thereof), upon the occurrence of an Event of
Default and which proxy shall only terminate upon the payment in full of
the Secured Obligations.
SECTION 8. Secured Party Appointed Attorney-in-Fact. Pledgor
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hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact,
with full authority in the place and stead of Pledgor and in the name of
Pledgor, Secured Party or otherwise, from time to time in Secured Party's
discretion to take any action and to execute any instrument that Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including:
(a) to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Pledged Collateral
without the signature of Pledgor; and
(b) upon the occurrence and during the continuation of an Event
of Default:
(i) to ask, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Pledged Collateral;
(ii) to receive, endorse and collect any instruments made
payable to Pledgor representing any dividend, principal or interest payment
or other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same; and
(iii) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the
rights of Secured Party with respect to any of the Pledged Collateral.
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SECTION 9. Secured Party May Perform. If Pledgor fails to
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perform any agreement contained herein after the period in which such
performance is required, and after reasonable notice, Secured Party may
itself perform, or cause performance of, such agreement, and the expenses
of Secured Party incurred in connection therewith shall be payable by
Pledgor under Section 14(b).
SECTION 10. Standard of Care. The powers conferred on Secured
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Party hereunder are solely to protect its interest in the Pledged
Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the exercise of reasonable care in the custody of any
Pledged Collateral in its possession and the accounting for moneys actually
received by it hereunder, Secured Party shall have no duty as to any
Pledged Collateral, it being understood that Secured Party shall have no
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to
any Pledged Collateral, whether or not Secured Party has or is deemed to
have knowledge of such matters, (b) taking any necessary steps (other than
steps taken in accordance with the standard of care set forth above to
maintain possession of the Pledged Collateral) to preserve rights against
any parties with respect to any Pledged Collateral, (c) taking any
necessary steps to collect or realize upon the Secured Obligations or any
guarantee therefor, or any part thereof, or any of the Pledged Collateral,
or (d) initiating any action to protect the Pledged Collateral against the
possibility of a decline in market value. Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Pledged
Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property consisting of negotiable securities.
SECTION 11. Remedies.
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(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Pledged
Collateral, in addition to all other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the Uniform Commercial Code as in effect in
any relevant jurisdiction (the "Code") (whether or not the Code applies to
the affected Pledged Collateral), and Secured Party may also in its sole
discretion, without notice except as specified below, sell 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 at any of Secured Party's
offices or elsewhere, for cash, on credit or for future delivery, at such
time or times and at such price or prices and upon such other terms as
Secured Party may deem commercially reasonable, irrespective of the impact
of any such sales on the market price of the Pledged Collateral. Secured
Party or any Lender or Interest Rate Exchanger may be the purchaser of any
or all of the Pledged Collateral at any such public sale and, to the extent
permitted by law, private sale, and Secured Party, as agent for and
representative of Lenders and Interest Rate Exchangers (but not any Lender
or Lenders or Interest Rate Exchanger or Interest Rate Exchangers in its or
their respective individual capacities unless Requisite Obligees (as
defined in Section 16(a)) shall otherwise agree in writing), shall be
entitled, for the purpose of bidding and making settlement or payment of
the
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purchase price for all or any portion of the Pledged Collateral sold at any
such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Pledged Collateral payable
by Secured Party at such sale. Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part of
Pledgor, and Pledgor hereby waives (to the extent permitted by applicable
law) all rights of redemption, stay and/or appraisal which it now has or
may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to Pledgor of the
time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. Secured Party shall
not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Pledgor hereby waives any claims
against Secured Party arising by reason of the fact that the price at which
any Pledged Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if
Secured Party accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree. If the proceeds of any sale or
other disposition of the Pledged Collateral are insufficient to pay all the
Secured Obligations, Pledgor shall be liable for the deficiency and the
fees of any attorneys employed by Secured Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws,
Secured Party may be compelled, with respect to any sale of all or any part
of the Pledged Collateral conducted without prior registration or
qualification of such Pledged Collateral under the Securities Act and/or
such state securities laws, to limit purchasers to those who will agree,
among other things, to acquire the Pledged Collateral for their own
account, for investment and not with a view to the distribution or resale
thereof. Pledgor acknowledges that any such private sales may be at prices
and on terms less favorable than those obtainable through a public sale
without such restrictions (including a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding such
circumstances and the registration rights granted to Secured Party by
Pledgor pursuant to Section 12, Pledgor agrees that the effect of the
foregoing in respect of any such private sale shall not be deemed per se to
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cause such private sale to have not been made in a commercially reasonable
manner and that Secured Party shall have no obligation to engage in public
sales and no obligation to delay the sale of any Pledged Collateral for the
period of time necessary to permit the issuer thereof to register it for a
form of public sale requiring registration under the Securities Act or
under applicable state securities laws, even if such issuer would, or
should, agree to so register it.
(c) If Secured Party determines to exercise its right to sell any
or all of the Pledged Collateral, upon written request, Pledgor shall and
shall cause each issuer of any Pledged Shares to be sold hereunder from
time to time to furnish to Secured Party all such information as Secured
Party may request in order to determine the number of
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shares and other instruments included in the Pledged Collateral which may
be sold by Secured Party in exempt transactions under the Securities Act
and the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
SECTION 12. Registration Rights. If Secured Party shall
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determine to exercise its right to sell all or any of the Pledged
Collateral pursuant to Section 11, Pledgor agrees that, upon request of
Secured Party (which request may be made by Secured Party in its sole
discretion), Pledgor will, at its own expense:
(a) execute and deliver, and use its best efforts to cause each
issuer of the Pledged Collateral contemplated to be sold and the directors
and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as
may be necessary or, in the opinion of Secured Party, advisable to file a
registration statement covering such Pledged Collateral under the
provisions of the Securities Act and to use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for such period as prospectuses are required by law to be
furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the opinion of Secured Party, are necessary or
advisable, all in conformity with the requirements of the Securities Act
and the rules and regulations of the Securities and Exchange Commission
applicable thereto;
(b) use its best efforts to qualify the Pledged Collateral under
all applicable state securities or "Blue Sky" laws and to obtain all
necessary governmental approvals for the sale of the Pledged Collateral, as
requested by Secured Party;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement which will satisfy
the provisions of Section 11(a) of the Securities Act;
(d) to use its best efforts to do or cause to be done all such
other acts and things as may be necessary to make such sale of the Pledged
Collateral or any part thereof valid and binding and in compliance with
applicable law; and
(e) bear all costs and expenses, including reasonable attorneys'
fees, of carrying out its obligations under this Section 12.
Pledgor further agrees that a breach of any of the covenants
contained in this Section 12 will cause irreparable injury to Secured
Party, that Secured Party has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in
this Section 12 shall be specifically enforceable against Pledgor, and
Pledgor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that
no default has occurred giving rise to the Secured Obligations becoming due
and payable prior to their
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stated maturities. Nothing in this Section 12 shall in any way alter the
rights of Secured Party under Section 11.
SECTION 13. Application of Proceeds. All proceeds received by
-----------------------
Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Pledged Collateral shall be applied
as provided in subsection 2.4D of the Credit Agreement.
SECTION 14. Indemnity and Expenses.
----------------------
(a) Pledgor agrees to indemnify Secured Party, Syndication Agent,
Documentation Agent, each Lender and each Interest Rate Exchanger from and
against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including enforcement of this Agreement), except to
the extent such claims, losses or liabilities result solely from Secured
Party's, Syndication Agent's, Documentation Agent's or such Lender's or
Interest Rate Exchanger's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand the amount of
any and all costs and expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that Secured Party may incur
in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the
failure by Pledgor to perform or observe any of the provisions hereof.
(c) In the event of any public sale described in Section 12,
Pledgor agrees to indemnify and hold harmless Secured Party, Syndication
Agent, Documentation Agent, each Lender and each Interest Rate Exchanger
and each of their respective directors, officers, employees and agents from
and against any loss, fee, cost, expense, damage, liability or claim, joint
or several, to which any such Persons may become subject or for which any
of them may be liable, under the Securities Act or otherwise, insofar as
such losses, fees, costs, expenses, damages, liabilities or claims (or any
litigation commenced or threatened in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus, registration statement,
prospectus or other such document published or filed in connection with
such public sale, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse Secured Party and
such other Persons for any legal or other expenses reasonably incurred by
Secured Party and such other Persons in connection with any litigation, of
any nature whatsoever, commenced or threatened in respect thereof
(including any and all fees, costs and expenses whatsoever reasonably
incurred by Secured Party and such other Persons and counsel for Secured
Party and such other Persons in investigating, preparing for, defending
against or providing evidence,
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producing documents or taking any other action in respect of, any such
commenced or threatened litigation or any claims asserted). This indemnity
shall be in addition to any liability which Pledgor may otherwise have and
shall extend upon the same terms and conditions to each Person, if any,
that controls Secured Party or such Persons within the meaning of the
Securities Act.
SECTION 15. Continuing Security Interest; Transfer of Loans.
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This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (a) remain in full force and effect until the payment
in full of all Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters
of Credit, (b) be binding upon Pledgor, its successors and assigns, and (c)
inure, together with the rights and remedies of Secured Party hereunder, to
the benefit of Secured Party and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), but subject to
the provisions of subsection 10.1 of the Credit Agreement, any Lender may
assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in
respect thereof granted to Lenders herein or otherwise. Upon the payment
in full of all Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters
of Credit, the security interest granted hereby shall terminate and all
rights to the Pledged Collateral shall revert to Pledgor. Upon any such
termination Secured Party will, at Pledgor's expense, execute and deliver
to Pledgor such documents as Pledgor shall reasonably request to evidence
such termination and Pledgor shall be entitled to the return, upon its
request and at its expense, against receipt and without recourse to Secured
Party, of such of the Pledged Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof.
SECTION 16. Secured Party as Administrative Agent.
-------------------------------------
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders and, by their acceptance of the benefits hereof,
Interest Rate Exchangers. Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking any
action (including the release or substitution of Pledged Collateral),
solely in accordance with this Agreement and the Credit Agreement; provided
--------
that Secured Party shall exercise, or refrain from exercising, any remedies
provided for in Section 11 in accordance with the instructions of (i)
Requisite Lenders or (ii) after payment in full of all Obligations under
the Credit Agreement and the other Loan Documents, the holders of a
majority of the aggregate notional amount (or, with respect to any Lender
Interest Rate Agreement that has been terminated in accordance with its
terms, the amount then due and payable (exclusive of expenses and similar
payments but including any early termination payments then due) under such
Lender Interest Rate Agreement) under all Lender Interest Rate Agreements
(Requisite Lenders or, if applicable, such holders being referred to herein
as "Requisite Obligees"). In furtherance of the foregoing provisions of
this Section 16(a), each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize
upon any of the Pledged Collateral hereunder, it being understood
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and agreed by such Interest Rate Exchanger that all rights and remedies
hereunder may be exercised solely by Secured Party for the benefit of
Lenders and Interest Rate Exchangers in accordance with the terms of this
Section 16(a).
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of
resignation by Administrative Agent pursuant to subsection 9.5 of the
Credit Agreement shall also constitute notice of resignation as Secured
Party under this Agreement; removal of Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute removal as
Secured Party under this Agreement; and appointment of a successor
Administrative Agent pursuant to subsection 9.5 of the Credit Agreement
shall also constitute appointment of a successor Secured Party under this
Agreement. Upon the acceptance of any appointment as Administrative Agent
under subsection 9.5 of the Credit Agreement by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums, securities and other items of
Collateral held hereunder, together with all records and other documents
necessary or appropriate in connection with the performance of the duties
of the successor Secured Party under this Agreement, and (ii) execute and
deliver to such successor Secured Party such amendments to financing
statements, and take such other actions, as may be necessary or appropriate
in connection with the assignment to such successor Secured Party of the
security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative Agent's
resignation or removal hereunder as Secured Party, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Secured Party hereunder.
SECTION 17. Amendments; Etc. No amendment, modification,
---------------
termination or waiver of any provision of this Agreement, and no consent to
any departure by Pledgor therefrom, shall in any event be effective unless
the same shall be in writing and signed by Secured Party and, in the case
of any such amendment or modification, by Pledgor. Any such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which it was given.
SECTION 18. Notices. Any notice or other communication herein
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required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or
by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage
prepaid and properly addressed. For the purposes hereof, the address of
each party hereto shall be as set forth under such party's name on the
signature pages hereof or, as to either party, such other address as shall
be designated by such party in a written notice delivered to the other
party hereto.
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SECTION 19. Failure or Indulgence Not Waiver; Remedies
------------------------------------------
Cumulative. No failure or delay on the part of Secured Party in the
----------
exercise of any power, right or privilege hereunder shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude any other or further exercise thereof or
of any other power, right or privilege. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
SECTION 20. Severability. In case any provision in or
------------
obligation under this Agreement shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired
thereby.
SECTION 21. Headings. Section and subsection headings in this
--------
Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given
any substantive effect.
SECTION 22. Governing Law; Terms; Rules of Construction. THIS
-------------------------------------------
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless
otherwise defined herein or in the Credit Agreement, terms used in Articles
8 and 9 of the Uniform Commercial Code in the State of New York are used
herein as therein defined. The rules of construction set forth in
subsection 1.3 of the Credit Agreement shall be applicable to this
Agreement mutatis mutandis.
SECTION 23. Consent to Jurisdiction and Service of Process. ALL
----------------------------------------------
JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, PLEDGOR, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
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(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO PLEDGOR AT ITS ADDRESS PROVIDED IN ACCORDANCE
WITH SECTION 18;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER PLEDGOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 23 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-
1402 OR OTHERWISE.
SECTION 24. Waiver of Jury Trial. PLEDGOR AND SECURED PARTY
--------------------
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope
of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of
this transaction, including contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Pledgor and Secured
Party each acknowledge that this waiver is a material inducement for
Pledgor and Secured Party to enter into a business relationship, that
Pledgor and Secured Party have already relied on this waiver in entering
into this Agreement and that each will continue to rely on this waiver in
their related future dealings. Pledgor and Secured Party further warrant
and represent that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN
BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 24 AND
EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
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SECTION 25. Counterparts. This Agreement may be executed in one
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or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed
an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
[NAME OF PLEDGOR], as Pledgor
By:
---------------------------
Title:
Notice Address:
-------------------------
-------------------------
-------------------------
FIRST UNION NATIONAL BANK,
as Secured Party
By:
---------------------------
Title:
Notice Address:
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------------------------
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