CUSIP NO. 45810F 10 1 13D Page 21 of 40 Pages
EXHIBIT XVII
PLEDGE AGREEMENT
dated as of December 9, 1996
by and among
JUPITER INTEGON LIMITED PARTNERSHIP,
JUPITER INDUSTRIES, INC.
and
BANK OF AMERICA ILLINOIS
CUSIP NO. 45810F 10 1 13D Page 22 of 40 Pages
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December 9, 1996 (this "Agreement"), by
and among JUPITER INTEGON LIMITED PARTNERSHIP, an Illinois limited partnership
("Pledgor"), JUPITER INDUSTRIES, INC., a Tennessee corporation ("Account
Party"), and BANK OF AMERICA ILLINOIS ("Lender").
W I T N E S S E T H:
WHEREAS, JBI, Inc. (f/k/a Celebrity Boats, Inc.) ("JBI") and Lender
have previously entered into that certain Reimbursement Agreement, dated as of
April 28, 1995 (as heretofore amended, the "Existing Reimbursement Agreement";
all capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Existing Reimbursement Agreement, as amended
hereby (the "Reimbursement Agreement"));
WHEREAS, under the terms of the Existing Reimbursement Agreement,
Lender issued an Irrevocable Documentary Letter of Credit No. C7273686 in the
stated amount of $2,000,000 for the account of JBI for the benefit of First
National Bank of Chicago, as Escrow Agent, with an expiry date of April 28, 1996
(the "First Letter of Credit");
WHEREAS, on May 4, 1995, Lender issued an Irrevocable Letter of Credit
No. C7274002 in the stated amount of $125,000 for the account of JBI for the
benefit of National Union Fire Insurance Company of Pittsburgh with an expiry
date of April 28, 1996 (the "Second Letter of Credit"; together with the First
Letter of Credit, the "Letters of Credit"), which Second Letter of Credit Lender
and JBI intended to be subject to the terms and conditions of the Existing
Reimbursement Agreement;
WHEREAS, Account Party has previously delivered a Guaranty, dated April
27, 1995 (the "Guaranty"), to Lender guarantying all obligations of JBI to
Lender, including, without limitation, JBI's obligations in respect of the
Letters of Credit;
WHEREAS, on July 25, 1995, Account Party and JBI merged, with Account
Party constituting the surviving corporation and Account Party assuming by
operation of law all obligations of JBI, including, without limitation, JBI's
obligations under the Existing Reimbursement Agreement and in respect of the
Letters of Credit;
WHEREAS, on or about April 29, 1996, Lender extended the maturity date
of the Letters of Credit for one year to April 28, 1997 (the Letters of Credit,
as extended, the "Extended Letters of Credit") in consideration of Account Party
(i) acknowledging and agreeing that Account Party is the "Account Party" under
the Existing Reimbursement Agreement for all purposes as if it were the original
"Account Party" thereto and that each of the Letters of Credit constitutes a
"Letter of Credit" for all purposes under the Existing Reimbursement Agreement,
and (ii) cash collateralizing its obligations under the Existing Reimbursement
Agreement pursuant to that certain Collateral Account Agreement, dated as of
April 5, 1996, between Account Party and Lender (as heretofore amended, the
"Collateral Agreement");
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WHEREAS, Account Party has requested Lender to terminate the Cash
Collateral Agreement and its lien on and security interest in the Collateral (as
defined in the Cash Collateral Agreement, herein the "Cash Collateral");
WHEREAS, Lender is willing to terminate the Cash Collateral Agreement
and its lien on and security interest in the Cash Collateral only if (i) Account
Party acknowledges and agrees that it is the "Account Party" under the
Reimbursement Agreement for all purposes as if it were the original "Account
Party" thereto and that each of the Extended Letters of Credit constitutes a
"Letter of Credit" for all purposes under the Reimbursement Agreement, and (ii)
Pledgor collateralizes the obligations of Account Party under the Reimbursement
Agreement and in respect of the Extended Letters of Credit pursuant to this
Agreement and the other LC Documents (as defined in Section 12 hereof);
WHEREAS, Pledgor desires to grant to Lender a lien on and security
interest in the Collateral (as defined in Section 3 hereof) as security for the
obligations of Account Party under the Reimbursement Agreement and in respect of
the Extended Letters of Credit (collectively, the "Reimbursement Obligations");
WHEREAS, each of Pledgor and Lender desires to evidence the security
arrangement between Pledgor and Lender regarding the Reimbursement Obligations
and the Collateral pursuant to this Agreement and the other LC Documents;
WHEREAS, Account Party owns, either directly or indirectly, 100% of
both the general and limited partnership interests in Pledgor; and
WHEREAS, it is in the best interests of Pledgor to execute this
Agreement and the other LC Documents to which it is a party, inasmuch as the
Pledgor will derive substantial direct and indirect benefits therefrom,
including without limitation, from the termination of the Collateral Agreement
and the release by Lender of its lien on and security interest in the Cash
Collateral;
NOW, THEREFORE, in consideration for the termination of the Collateral
Agreement and the release by Lender of its lien on and security interest in the
Cash Collateral, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Pledgor and Account Party hereby
agree with Lender that:
SECTION 1 Incorporation. The recitals set forth above are incorporated
by reference into this Agreement and made a part hereof.
SECTION 2 Amendment of Reimbursement Agreement. As of the date hereof,
but only upon the effectiveness of this Agreement pursuant to Section 12 hereof,
the Existing Reimbursement Agreement is hereby amended such that (i) Account
Party is substituted for JBI as the "Account Party" under the Existing
Reimbursement Agreement for all purposes and as if Account Party were the
original party to the Existing Reimbursement Agreement, (ii) the Extended
Letters of Credit, taken together, constitute the "Letter of Credit" as defined
in the Existing Reimbursement Agreement, for all purposes thereof, (iii)
"Original Stated Amount" in the Existing Reimbursement Agreement means
$2,125,000 and (iv) "Transaction Documents," as defined in the Existing
Reimbursement Agreement, includes this Agreement and the other LC Documents.
Account Party agrees that the Existing Reimbursement
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Agreement, as amended hereby, is and remains in full force and effect and is
hereby ratified and confirmed in all respects and constitutes an obligation of
Account Party as if Account Party were the original party thereto. Account Party
and Lender acknowledge that, upon the effectiveness of this Agreement pursuant
to Section 12 hereof, the Guaranty and the Collateral Agreement are terminated.
SECTION 3 Pledge. (a) In consideration of the termination of the
Collateral Agreement and the release by Lender of its lien on and security
interest in the Cash Collateral, and in consideration of all other financial
accommodations heretofore or hereafter at any time made or granted to Pledgor or
Account Party by Lender, in order to secure the prompt and complete payment and
performance of the Reimbursement Obligations and all obligations and liabilities
related thereto and all costs and expenses (including, without limitation, legal
fees, which legal fees may include the allocated costs of in-house counsel for
Lender) incurred by Lender in connection with the enforcement of the
Reimbursement Obligations, this Agreement and the other LC Documents
(collectively, the "Liabilities"), Pledgor hereby pledges, hypothecates,
assigns, transfers, sets over and delivers unto Lender and hereby grants to
Lender a continuing security interest in all of the following (herein
collectively called the "Collateral"):
(i) the shares of stock listed on Attachment 1 hereto (herein
called the "Pledged Shares") and the certificates representing or evidencing
the Pledged Shares, and all cash, securities, interest, dividends, rights
and other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Shares;
(ii) all other property hereafter delivered to Lender by
Pledgor in substitution for or in addition to any of the foregoing
(including, without limitation, any and all Additional Shares (as defined
below)), all certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends, rights and
other property at any time and from time to time received, receivable or
otherwise distributed in respect of, in exchange for or in addition to any
or all thereof; and
(iii) all proceeds of all of the foregoing;
TO HAVE AND TO HOLD the Collateral, together with all rights, titles,
interests, privileges and preferences appertaining or incidental thereto, unto
Lender, its successors and assigns, forever, subject, however, to the terms,
covenants and conditions hereinafter set forth.
(b) Pledgor hereby agrees that in the event (any such event, a
"Deficiency Event") the Market Value (as defined below) of the Collateral is at
any time less than an amount (the "LC Amount") equal to the product of (i) two,
multiplied by (ii) the sum of (A) the maximum aggregate amount available to be
drawn under the Extended Letters of Credit at any time under any and all
circumstances, plus (B) the aggregate amount of all unreimbursed payments and
disbursements under the Extended Letters of Credit, Pledgor shall pledge,
hypothecate, assign, transfer, set over and deliver unto Lender and grant to
Lender a continuing security interest in, all pursuant to and in accordance with
the terms and conditions of this Agreement and the other LC Documents, a number
of additional shares of the issuer identified on Attachment 1 (the "Issuer")
(any such additional shares, herein "Additional
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Shares"; all of which Additional Shares shall be deemed "Pledged Shares" for all
purposes of this Agreement) (including the certificates representing or
evidencing such Additional Shares, and all cash, securities, interest,
dividends, rights and other property at any time and from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Additional Shares, and all proceeds of such Additional Shares), as is
necessary to cause the Market Value of the Collateral to equal or exceed the LC
Amount; provided, however, that if, upon the occurrence of a Deficiency Event,
Pledgor no longer owns any additional shares of the Issuer, or owns shares of
the Issuer having a Market Value less than the amount by which the LC Amount
exceeds the Market Value of the Collateral at such time, Pledgor shall pledge,
hypothecate, assign, transfer, set over and deliver unto Lender and grant to
Lender a continuing security interest in, all pursuant to and in accordance with
the terms and conditions of this Agreement and the other LC Documents, such
other property as shall be reasonably acceptable to Lender to cause the Market
Value of the Collateral to equal or exceed the LC Amount; and provided, further,
that at any time and from time to time, at Pledgor's expense, Pledgor shall
promptly execute and deliver all instruments, documents or certificates, and
take any and all other actions, as may be necessary or desirable, or that Lender
may reasonably request, in order to effectuate the purpose and intent of this
clause (b). As used in this Agreement, "Market Value" shall mean the value of
any property as reasonably determined by Lender from time to time.
SECTION 4 Representations, Warranties and Covenants.
(a) Pledgor represents, warrants and covenants that: (i) Lender
has a first priority, perfected security interest in all of Pledgor's right,
title and interest in and to the Pledged Shares and the proceeds thereof, and
the Pledged Shares are free and clear of any rights of any other Person (other
than Lender), (ii) the Pledged Shares are duly authorized, validly issued, and
fully paid and non-assessable, and (iii) Pledgor is the sole and lawful record
and beneficial owner of all of the Pledged Shares and, for purposes of, and
within the meaning of, Rule 144 under the Securities Act of 1933, as amended
(the "Act"), at least three years have elapsed since the later of the date the
Pledged Shares were acquired from the Issuer or from an affiliate of the Issuer.
As of the date of the delivery of any Additional Shares (or any other
certificates or instruments related to the Pledged Shares or any Additional
Shares) to Lender, Pledgor represents and warrants that (1) its right, title and
interest in and to such Additional Shares (and such other certificates and
instruments) will be free and clear of any rights of any other Person and (2) it
will have pledged all of its right, title and interest in and to such Additional
Shares (and such certificates and instruments) and will have the right to pledge
such Additional Shares (and such certificates and instruments) to Lender
pursuant to this Agreement and the other LC Documents. Pledgor shall represent
and warrant by delivery of any Additional Shares (or any other certificates or
instruments), that Lender's security interest in all of Pledgor's right, title
and interest in and to such Additional Shares (and such other certificates and
instruments) and the proceeds thereof is protected against all Persons to the
maximum extent permitted by law. All documentary, stamp or other taxes or fees
owing in connection with the issuance, transfer and/or pledge of the Pledged
Shares have been paid in full and will hereafter be paid by Pledgor in full as
such become due and payable.
(b) Pledgor further represents and warrants to Lender that it is
the sole and lawful owner of all of the Collateral, free of all liens, pledges,
security interests, hypothecations or similar encumbrances of any kind, other
than the security interest
CUSIP NO. 45810F 10 1 13D Page 26 of 40 Pages
hereunder, with full right to deliver, pledge, assign and transfer such
Collateral to Lender as Collateral hereunder.
(c) Pledgor additionally represents and warrants to Lender that
(i) it is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Illinois, (ii) it is duly qualified and
in good standing in each jurisdiction where, because of the nature of its
business or properties, such qualification is required, (iii) it has full power
and authority to own and hold under lease its property and to conduct its
business substantially as currently conducted by it, (iv) its execution and
delivery of the LC Documents to which it is a party and its performance of its
obligations thereunder (A) are within its powers, (B) have been duly authorized
by all necessary action (including, without limitation, approval of the limited
partners of Pledgor, to the extent required), (C) have received all necessary
governmental and any other approvals (if any shall be required), (D) do not and
will not contravene or conflict with or create a default under (x) any law, rule
or regulation to which Pledgor or any of its assets is subject, (y) Pledgor's
certificate of limited partnership or limited partnership agreement, or (z) any
contractual or legal restriction, or judgment, order or injunction, binding upon
Pledgor or any of its assets or properties, and (E) will not result in or
require the creation or imposition of any lien or encumbrance on any of
Pledgor's assets or properties, other than in favor of Lender, (v) each LC
Document to which Pledgor is a party is the legal, valid and binding obligation
of Pledgor enforceable against Pledgor in accordance with its terms, and (vi) no
litigation (including, without limitation, derivative actions), arbitration
proceeding or governmental proceeding or investigation is pending or threatened
against Pledgor which purports to affect the legality, validity or
enforceability of any LC Document to which Pledgor is a party.
(d) Account Party represents and warrants to Lender that (i) it is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Tennessee, (ii) it is duly qualified and in good standing
in each jurisdiction where, because of the nature of its business or properties,
such qualification is required, (iii) it has full power and authority to own and
hold under lease its property and to conduct its business substantially as
currently conducted by it, (iv) its execution and delivery of the LC Documents
to which it is a party and its performance of its obligations thereunder (A) are
within its corporate powers, (B) have been duly authorized by all necessary
corporate action (including, without limitation, shareholder approval, to the
extent required), (C) have received all necessary governmental and any other
approvals (if any shall be required), (D) do not and will not contravene or
conflict with or create a default under (x) any law, rule or regulation to which
Account Party or any of its assets is subject, (y) Account Party's certificate
of incorporation or bylaws, or (z) any contractual or legal restriction, or
judgment, order or injunction, binding upon Account Party or any of its assets
or properties, and (E) will not result in or require the creation or imposition
of any lien or encumbrance on any of Pledgor's assets or properties, other than
in favor of Lender, (v) each LC Document to which Account Party is a party is
the legal, valid and binding obligation of Account Party enforceable against
Account Party in accordance with its terms, (vi) no litigation (including,
without limitation, derivative actions), arbitration proceeding or governmental
proceeding or investigation is pending or threatened against Account Party which
purports to affect the legality, validity or enforceability of any LC Document
to which Account Party is a party, and (vii) its execution and delivery of each
LC Document to which Pledgor is a party, as the general partner and on behalf of
Pledgor, (A) are within its powers, (B) have been duly authorized by all
necessary action (including, without limitation, approval of the limited
partners of Pledgor, to the extent
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required), (C) have received all necessary governmental and any other approvals
(if any shall be required), (D) do not and will not contravene or conflict with
or create a default under (x) any law, rule or regulation to which Pledgor or
any of its assets is subject, (y) Pledgor's certificate of limited partnership
or limited partnership agreement, or (z) any contractual or legal restriction,
or judgment, order or injunction, binding upon Pledgor or any of its assets or
properties, and (E) will not result in or require the creation or imposition of
any lien or encumbrance on any of Pledgor's assets or properties, other than in
favor of Lender.
(e) Account Party additionally represents and warrants to Lender,
that (i) Account Party is the sole general partner of Pledgor and directly and
beneficially owns 100% of the general partnership interest in Pledgor, (ii) GME
Holdings, Inc., a Delaware corporation ("GME"), and WJG, Inc., a Delaware
corporation ("WJG"), are the only limited partners of Pledgor and together own
100% of the limited partnership interests in Pledgor, and (iii) Account Party
directly and beneficially owns 100% of the issued and outstanding voting stock
of each of GME and WJG.
(f) So long as any of the Liabilities remain outstanding, Pledgor
will, unless Lender shall otherwise consent in writing:
(i) at its sole expense, promptly deliver to Lender from time
to time upon request of Lender such stock powers and other documents,
satisfactory in form and substance to Lender, with respect to the Collateral
as Lender may reasonably request to preserve and protect, and to enable
Lender to enforce, its rights and remedies hereunder;
(ii) not sell, assign, exchange or otherwise transfer any of
its rights to any of the Collateral;
(iii) not create or suffer to exist any lien, pledge,
security interest, hypothecation or similar encumbrance of any kind against,
in or with respect to any of Pledgor's right, title or interest in and to
the Collateral, except for the pledge hereunder and the security interest
created hereby;
(iv) not make or consent to any modification with respect to
any of the Collateral, or enter into any agreement or permit to exist any
restriction with respect to any of Pledgor's right, title or interest in and
to the Collateral, other than pursuant hereto; and
(v) not take or fail to take any action which would in any
manner impair the enforceability of Lender's security interest in any of the
Collateral.
SECTION 5 Care of Collateral. Lender shall be deemed to have exercised
reasonable care with respect to Pledgor's interests in the custody and
preservation of the Collateral if it takes such action for that purpose as
Pledgor shall request in writing, but failure of Lender to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care, and
no failure of Lender to preserve or protect any rights with respect to the
Collateral against prior parties, or to do any act with respect to preservation
of
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the Collateral not so requested by Pledgor shall of itself be deemed a failure
to exercise reasonable care in the custody or preservation of the Collateral.
SECTION 6 Certain Rights Regarding Collateral and Liabilities.
(a) Subject to Sections 6(c) and 7 hereof, Lender may from time to
time after the occurrence of any Default (as defined in Section 8 hereof)
without notice to Pledgor (i) transfer all or any part of the Collateral into
the name of Lender or its nominee, with or without disclosing that such
Collateral is subject to the lien and security interest hereunder, (ii) notify
the parties obligated on any of the Collateral to make payment to Lender of any
amounts due or to become due thereunder, (iii) enforce collection of any of the
Collateral by suit or otherwise, and surrender, release or exchange all or any
part thereof, or compromise or extend or renew for any period (whether or not
longer than the original period) any obligations of any nature of any party with
respect thereto, and (iv) take control of any proceeds of the Collateral.
(b) Lender may, from time to time, at its sole discretion and
without notice to Pledgor take any or all of the following actions: (i) retain
or obtain a lien upon or a security interest in any property to secure any of
the Liabilities or any obligation hereunder, (ii) retain or obtain the primary
or secondary obligation of any obligor or obligors, in addition to Account Party
and Pledgor with respect to any of the Liabilities, (iii) extend or renew for
one or more periods (whether or not longer than the original period), alter or
exchange any of the Liabilities, or release or compromise any obligation of
Pledgor hereunder or any obligation of any nature of any other obligor with
respect to any of the Liabilities, (iv) release or fail to perfect its lien upon
or security interest in, or impair, surrender, release or permit any
substitution or exchange for, all or any part of any property securing any of
the Liabilities or any obligation hereunder, or extend or renew for one or more
periods (whether or not longer than the original period) or release, compromise,
alter or exchange any obligations of any nature of any obligor with respect to
any such property, and (v) resort to the Collateral for payment of any of the
Liabilities, whether or not Lender (A) shall have resorted to any other property
securing any of the Liabilities or any obligation hereunder or (B) shall have
proceeded against any other obligor primarily or secondarily obligated with
respect to any of the Liabilities (all of the actions referred to in the
preceding clauses (i) through (v) being hereby expressly waived by Pledgor).
(c) Lender shall have no right to vote the Pledged Shares or give
consents, waivers or ramifications in respect thereof prior to the occurrence of
a Default. After the occurrence of a Default, Pledgor shall have the right to
vote any and all of the Pledged Shares and give consents, waivers and
ramifications in respect thereof unless and until it receives notice from Lender
that such right has been terminated.
SECTION 7 Dividends, etc.
(a)(i) So long as no Default has occurred and is continuing,
Pledgor shall be entitled to receive any and all cash dividends on the Pledged
Shares which it is otherwise entitled to receive, together with any and all
dividends, distributions in property, returns of capital or other distributions
and payments made on or in respect of the Pledged Shares (any and all of the
foregoing, "Dividends"), but any and all stock and/or liquidating dividends,
distributions in property, returns of capital or other distributions made on or
in respect of the
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Pledged Shares, whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of the Issuer, or received in
exchange for the Pledged Shares or any part thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to which the
Issuer may be a party or otherwise, and any and all cash and other property
received in exchange for any Collateral shall be and become part of the
Collateral pledged hereunder and, if received by Pledgor, shall forthwith be
delivered to Lender or its designated nominee (accompanied, if appropriate, by
proper instruments of assignment and/or stock powers executed by Pledgor in
accordance with Lender's instructions) to be held subject to the terms of this
Agreement and the other LC Documents.
(ii) If the Pledged Shares shall have been registered in the
name of Lender or its agent, Lender shall execute and deliver (or cause to
be executed and delivered) to Pledgor all such dividend orders and other
instruments as Pledgor may request for the purpose of enabling Pledgor to
receive the dividends or other payments which it is authorized to receive
and retain pursuant to clause (i) above.
(b) Pledgor agrees to deliver (properly endorsed when required) to
Lender, after a Default shall have occurred, promptly upon request of Lender,
such proxies and other documents as may be necessary for Lender to exercise the
voting power with respect to the Pledged Shares then or previously owned by
Pledgor. In the event any Default has occurred and is continuing, any and all
Dividends paid on or in respect of the Pledged Shares which may at any time and
from time to time be received by Pledgor shall promptly be delivered by Pledgor
to Lender, and until delivery to Lender, any and all such Dividends shall be
held by Pledgor separate and apart from its other property in trust for Lender.
Any and all Dividends paid over to or received by Lender pursuant to the
provisions of this paragraph (b) shall be retained by Lender as additional
Collateral hereunder and be applied in accordance with the provisions hereof.
SECTION 8 Default.
(a) The occurrence of any of the following events shall constitute
a "Default" hereunder: (i) any Default under (and as defined in) the
Reimbursement Agreement, (ii) failure by Pledgor or Account Party to comply with
or perform any of its respective covenants or agreements herein set forth, and
(iii) any warranty or representation made by or on behalf of either Pledgor or
Obligor herein, or otherwise in connection herewith, is inaccurate or incorrect
or is breached or false or misleading in any respect as of the date such
warranty or representation is made.
(b) Upon the occurrence of a Default, Lender may exercise from
time to time any rights and remedies available to it under the Uniform
Commercial Code as in effect from time to time in Illinois or otherwise
available to it, including, without limitation, sale, assignment, or other
disposal of the Pledged Shares in exchange for cash or credit. If any
notification of intended disposition of any of the Collateral is required by
law, such notification, if mailed, shall be deemed reasonably and properly given
if mailed at least ten (10) days before such disposition, postage prepaid,
addressed to Pledgor either at the address of Pledgor shown below, or at any
other address of Pledgor appearing on the records of Lender. Any proceeds of any
disposition of Collateral shall be applied as provided in Section 9 hereof. No
rights and remedies of Lender expressed hereunder are intended to be exclusive
of any other right or remedy, but every such right or remedy shall be cumulative
and shall be
CUSIP NO. 45810F 10 1 13D Page 30 of 40 Pages
in addition to all other rights and remedies herein conferred, or conferred upon
Lender under any other LC Document, agreement or instrument relating to any of
the Liabilities or security therefor or now or hereafter existing at law or in
equity or by statute. No delay on the part of Lender in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by Lender of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy. No action of
Lender permitted hereunder or under any other LC Document shall impair or affect
the rights of Lender in and to the Collateral.
(c)(i) Pledgor agrees that in any sale of any of the Collateral
whenever a Default shall have occurred and be continuing, Lender is hereby
authorized to comply with any limitation or restriction in connection with such
sale as it may be advised by counsel is necessary in order to avoid any
violation of applicable law (including, without limitation, compliance with such
procedures as may restrict the number of prospective bidders and purchasers,
require that such prospective bidders and purchasers have certain
qualifications, and restrict such prospective bidders and purchasers to persons
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such
Collateral), or in order to obtain any required approval of the sale or of the
purchaser by any governmental regulatory authority or official, and Pledgor
further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall Lender be liable nor accountable to Pledgor for any discount allowed
by the reason of the fact that such Collateral is sold in compliance with any
such limitation or restriction.
(ii) Without limiting the rights of Lender under any other
provision of this Agreement or any other LC Document, and in addition
thereto, Pledgor agrees, to the maximum extent permitted by law, after a
Default shall have occurred and be continuing, upon written request from
Lender and at Pledgor's sole expense, to promptly execute and deliver all
instruments, documents or certificates, and take any and all other actions,
as may be necessary or desirable, or that Lender may reasonably request
(including causing counsel to Pledgor or counsel to the Issuer to deliver
such opinions as may be necessary or desirable in order for the Pledged
Shares to be sold pursuant to Rule 144(k) of the Act), in order to permit
Lender to sell, assign and otherwise transfer the Pledged Shares to the
public without registration under the Act, pursuant to and in compliance
with the Act (including using its best efforts to cause the removal of any
restrictive or other legends from the Pledged Shares as Lender may request),
and take comparable action to permit such sales under the securities laws of
such United States jurisdictions as Lender may designate.
(iii) Pledgor further agrees to do or cause to be done all
such other acts and things as may be necessary or desirable, or as may be
reasonably requested by Lender, to make any offer, sale or resale to the
public of all or any portion of the Pledged Shares valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental agencies or instrumentalities, domestic or foreign, having
jurisdiction over any such offer, sale or resale.
Without limiting the foregoing paragraph, if Lender decides to
exercise its right to sell all or any of the Pledged Shares as exempt securities
or in any exempt
CUSIP NO. 45810F 10 1 13D Page 31 of 40 Pages
transaction, upon written request, Pledgor shall, at Pledgor's expense, furnish
or cause to be furnished to Lender all such information as Lender may request,
and shall execute and deliver all instruments, documents or certificates, and
take any and all other actions, as may be necessary or desirable, or that Lender
may reasonably request, in order to qualify such Pledged Shares as exempt
securities, or the sale or resale of such Pledged Shares as exempt transactions,
under federal or state securities laws.
SECTION 9 Application of Proceeds of Sale or Cash Held as Collateral.
The proceeds of sale of Collateral sold pursuant to the terms of Section 8
hereof and, after a Default, the cash held as Collateral hereunder, shall be
applied by Lender as follows:
First: to payment of all of the costs and expenses of Lender,
including the expenses of such sale, the out-of-pocket costs
and expenses of Lender and the reasonable fees and
out-of-pocket costs and expenses of counsel (which may
include the allocated cost of in-house counsel for Lender)
employed in connection therewith, and to the payment of all
advances made by Lender for the account of Account Party or
Pledgor hereunder and the payment of all costs and expenses
incurred by Lender in connection with the administration and
enforcement of this Agreement and the other LC Documents, to
the extent that such advances, costs and expenses shall not
have been reimbursed to Lender;
Second: to the payment in full of the Liabilities in such
order as Lender may determine from time to time in its sole
discretion; and
Third: the balance, if any, of such proceeds shall be paid
to Pledgor, its successors and assigns, or as a court of
competent jurisdiction may direct.
SECTION 10 Authority of Lender. Lender shall have and be entitled to
exercise all such powers hereunder as are specifically delegated to Lender by
the terms hereof, together with such powers as are incidental thereto. Lender
may execute any of its duties hereunder by or through agents or employees and
shall be entitled to retain counsel and to act in reliance upon the advice of
such counsel concerning all matters pertaining to its duties hereunder. Neither
Lender, nor any director, officer or employee of Lender, shall be liable for any
action taken or omitted to be taken by it or them hereunder or under any other
LC Document or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct. Pledgor and Account Party each hereby
agrees, jointly and severally, to reimburse Lender, on demand, for all costs and
expenses incurred by Lender in connection with the administration of this
Agreement and the other LC Documents to which they are parties and for all costs
and expenses of the enforcement of any of Pledgor's and/or Account Party's
covenants made in this Agreement and such other LC Documents (including, without
limitation, costs and expenses incurred by any agent employed by Lender).
SECTION 11 Termination. Pledgor agrees that its pledge hereunder shall
(notwithstanding, without limitation, that at any time or from time to time all
Liabilities may
CUSIP NO. 45810F 10 1 13D Page 32 of 40 Pages
have been paid in full), terminate only when all Liabilities (including, without
limitation, any extensions or renewals of any thereof) and all interest thereon
and all expenses (including, without limitation, attorneys' fees and legal
expenses) paid or incurred by Lender in endeavoring to enforce this Agreement
and the other LC Documents shall have been finally and indefeasibly paid in full
and all other obligations of Account Party and Pledgor hereunder and thereunder
have been fully paid and performed, at which time Lender shall reassign and
redeliver (or cause to be reassigned and redelivered) to Pledgor or to such
Person or Persons as Pledgor shall designate, such of the Collateral (if any) as
shall not have been sold or otherwise applied by Lender pursuant to the terms
hereof and of the other LC Documents and shall still be held by it hereunder and
thereunder, together with appropriate instruments of reassignment and release.
Any such reassignment shall be without recourse upon or representation or
warranty by Lender and at the sole cost and expense of Pledgor.
SECTION 12 Conditions Precedent. This Agreement shall not become
effective until such time that:
(a) Lender shall have received from Pledgor all of (or Lender
shall have duly waived receipt of) the following, each in form and substance
satisfactory to Lender:
(i) a counterpart hereof duly executed by Pledgor;
(ii) duly completed and executed stock powers in respect of
each certificate evidencing the Pledged Shares, each with a medallion
signature guarantee (the "Stock Powers");
(iii) a UCC-1 financing statement duly executed by Pledgor,
covering the Collateral and naming Pledgor as Debtor and Lender as Secured
Party (the "Financing Statement");
(iv) a copy of the certificate of limited partnership and the
limited partnership agreement of Pledgor, duly certified by an officer of
Account Party, as the general partner and on behalf of Pledgor, as a true
and correct copy of such certificate of limited partnership and limited
partnership agreement in full force and effect as of the date hereof,
together with copies of such other documents as may be necessary to evidence
the authority of Pledgor to execute, deliver and perform this Agreement and
the other LC Documents to which it is a party, duly certified by an officer
of Account Party, as the general partner and on behalf of Pledgor;
(v) copies, certified by the secretary or an assistant
secretary of Account Party of (A) resolutions of the Board of Directors of
Account Party, as general partner and on behalf of Pledgor, authorizing or
ratifying the execution, delivery and performance of this Agreement, the
other LC Documents to which Pledgor is a party and the transactions
contemplated hereby by Account Party, as the general partner and on behalf
of Pledgor, and (B) all other documents evidencing any other necessary
corporate action required to be taken by Account Party as the general
partner and on behalf of Pledgor;
(vi) a certificate of the secretary or an assistant secretary
of Account Party, certifying the names of the officer or officers of Account
Party authorized
CUSIP NO. 45810F 10 1 13D Page 33 of 40 Pages
to sign this Agreement and the other LC Documents to which Pledgor is a
party as the general partner and on behalf of Pledgor, together with a
sample of the true signature of each such officer;
(vii) the Acknowledgment and Consent of Limited Partners duly
executed by each limited partner of Pledgor, acknowledging and consenting to
the transactions contemplated by this Agreement and the other LC Documents
(the "Acknowledgment");
(viii) a certificate of existence for Pledgor from the
Secretary of State of the State of Illinois, and each other state where
Pledgor is qualified to do business as a foreign limited partnership;
(ix) an opinion of counsel to Pledgor and Issuer; and
(x) such other documents, certificates and assurances as
Lender shall have requested.
(b) Lender shall have received from Account Party all of (or
Lender shall have duly waived receipt of) the following, each in form and
substance satisfactory to Lender:
(i) a counterpart hereof duly executed by Account Party;
(ii) a Federal Reserve Form U-1 of the Board of Governors of
the Federal Reserve System (the "FRB") pursuant to Regulation U of the FRB,
duly executed by Account Party and Pledgor (the "Form U-1"; and collectively
with this Agreement, the Reimbursement Agreement, the Extended Letters of
Credit, the Financing Statement, the Stock Powers, the Acknowledgment, the
Form U-1 and any other document, instrument or certificate executed and
delivered in connection with this Agreement, herein the "LC Documents").
(iii) copies, certified by the secretary or an assistant
secretary of Account Party of (A) resolutions of the Board of Directors of
Account Party authorizing or ratifying the execution, delivery and
performance of this Agreement, the other LC Documents to which Account Party
is a party and the transactions contemplated hereby by Account Party, and
(B) all other documents evidencing any other necessary corporate action to
be taken by Account Party;
(iv) a certificate of the secretary or an assistant secretary
of Account Party, certifying the names of the officer or officers of Account
Party authorized to sign this Agreement and the other LC Documents to which
Account Party is a party on behalf of Account Party, together with a sample
of the true signature of each such officer;
(v) an opinion of counsel to Account Party; and
(vi) such other documents, certificates and assurances as
Lender shall have requested.
CUSIP NO. 45810F 10 1 13D Page 34 of 40 Pages
(c) For purposes of this Section 12, this Agreement shall be
deemed to have become effective on the date hereof upon the giving by Lender to
Pledgor and Account Party of notice to such effect.
SECTION 13 Notices. Notices forwarded by mail shall be deemed to have
been given three days after the date sent if sent by registered or certified
mail, postage paid, and:
(i) if to Pledgor, addressed to Pledgor at its address shown
below its signature hereto;
(ii) if to Account Party, addressed to Account Party at its
address shown below its signature hereto; or
(iii) if to Lender, addressed to Lender at the address shown
below its signature hereto; or
in the case of any party hereto, at such other address as such party
may, by written notice received by the other parties to this Agreement,
have designated as its address for notices. Notices given by facsimile
shall be deemed to have been given when confirmation of receipt is
received by the sender. Lender shall be entitled to rely upon all
telephone notices and Pledgor and Account Party shall, jointly and
severally, hold Lender harmless from any loss, cost or expense ensuing
from any such reliance.
SECTION 14 Binding Agreement; Assignment. This Agreement, and the
terms, covenants and conditions hereof, shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns,
except that neither Pledgor nor Account Party shall be permitted to assign this
Agreement or any interest herein or in the Collateral, or any part thereof, or
otherwise pledge, encumber or grant any option with respect to the Collateral,
or any part thereof.
SECTION 15 Submission to Jurisdiction; Waiver of Jury Trial. Lender may
enforce any claim arising out of this Agreement or any other LC Document in any
state or federal court having subject matter jurisdiction and located in
Chicago, Illinois. For the purpose of any action or proceeding instituted with
respect to any such claim, Pledgor and Account Party each hereby irrevocably
submits to the jurisdiction of such courts. Nothing herein contained shall
preclude Lender from bringing an action or proceeding in respect hereof in any
other country, state or place having jurisdiction over such action. Pledgor and
Account Party each irrevocably waives, to the fullest extent permitted by law,
any objection which it may have or hereafter have to the laying of the venue of
any such suit, action or proceeding brought in such a court located in Chicago,
Illinois and any claim that any such suit, action or proceeding brought in such
court has been brought in an inconvenient forum. PLEDGOR, ACCOUNT PARTY AND
LENDER EACH HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY OTHER
LC DOCUMENT, OR UNDER ANY OTHER AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH ARISING FROM ANY
CUSIP NO. 45810F 10 1 13D Page 35 of 40 Pages
LENDING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LC
DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
SECTION 16 Governing Law; Interpretation. This Agreement has been made
and delivered at Chicago, Illinois, and shall be governed by the internal laws
of the State of Illinois without regard to conflict of law principles. Wherever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
SECTION 17 Filing as a Financing Statement. At the option of Lender,
this Agreement, or a carbon, photographic or other reproduction of this
Agreement or of any Uniform Commercial Code financing statement covering the
Collateral or any portion thereof shall be sufficient as a Uniform Commercial
Code financing statement and may be filed as such.
SECTION 18 Miscellaneous. (a) No amendment to, modification or waiver
of, or consent with respect to, any provision of this Agreement shall in any
event be effective unless the same shall be in writing and signed and delivered
by Lender, and then any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) The section headings in this Agreement are inserted for
convenience of reference only and shall not be considered a part of this
Agreement or used in its interpretation.
(c) Pledgor agrees that, if at any time all or any part of any
payment theretofore applied by Lender to any of the Liabilities is or must be
rescinded or returned by Lender for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of Account Party or any
of its Subsidiaries), such Liabilities shall, for the purposes of this Agreement
and the other LC Documents, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence, notwithstanding
such application by Lender, and the pledge by Pledgor hereunder shall continue
to be effective or be reinstated, as the case may be, as to such Liabilities,
all as though such application by Lender had not been made.
(d) Pledgor and Account Party each hereby expressly waives: (i)
notice of Lender's acceptance of this Agreement, (ii) notice of the existence or
creation or nonpayment of all or any of the Liabilities, (iii) presentment,
demand, notice of dishonor, protest, and all other notices whatsoever, and (iv)
all diligence in collection or protection of or realization upon the Liabilities
or any thereof, any obligation hereunder or under any other LC Document, or any
security for or guaranty of any of the foregoing.
(e) Lender may, from time to time, without notice to Pledgor,
assign or transfer any or all of the Liabilities or any interest therein, and,
notwithstanding any such assignment or transfer or any subsequent assignment or
transfer thereof, such Liabilities shall be and remain Liabilities for the
purposes of this Agreement and the other LC Documents,
CUSIP NO. 45810F 10 1 13D Page 36 of 40 Pages
and each and every immediate and successive assignee or transferee of any of the
Liabilities or of any interest therein shall, to the extent of the interest of
such assignee or transferee in the Liabilities, be entitled to the benefits of
this Agreement and the other LC Documents to the same extent as if such assignee
or transferee were Lender; provided, however, that, unless Lender shall
otherwise consent in writing, Lender shall have an unimpaired right, prior and
superior to that of any such assignee or transferee, to enforce this Agreement
and the other LC Documents, for the benefit of Lender, as to those of the
Liabilities which Lender has not assigned or transferred.
(f) Lender is the current holder of all Liabilities but may in the
future transfer, assign or sell certain Liabilities and thus acts hereunder and
under the other LC Documents as agent for itself and any and all future holders
of the Liabilities.
(g) No action of Lender permitted hereunder or under any other LC
Document shall in any way affect or impair the rights of Lender and the
obligations of Pledgor and Account Party under this Agreement or any other LC
Document. No claim or defense as to the invalidity or unenforceability of any or
all of the Liabilities shall affect or impair the obligations of Pledgor or
Account Party hereunder or under any other LC Document. The respective
obligations of Pledgor and Account Party under this Agreement or any other LC
Document shall be absolute and unconditional irrespective of any circumstance
whatsoever which might constitute a legal or equitable discharge of Pledgor or
Account Party.
(h) No right or remedy herein conferred is intended to be
exclusive of any other right or remedy, but every such right or remedy shall be
cumulative and shall be in addition to every other right or remedy herein
conferred, or conferred upon Lender by any other LC Document, agreement or
instrument or security, or now or hereafter existing at law or in equity or by
statute. No delay on the part of Lender in the exercise of any right or remedy
shall operate as a waiver thereof and no single or partial exercise by Lender of
any right or remedy shall preclude other or further exercise thereof or the
exercise of any other right or remedy.
(i) This Agreement may be executed in any number of counterparts
and by the different parties on separate counterparts and each such counterpart
shall for all purposes be deemed an original, but all such counterparts shall
together constitute but one and the same Agreement. One or more executed
counterparts of this Agreement may be delivered by facsimile, with the intention
that they shall have the same effect as an original counterpart hereof. Pledgor
and Account Party each hereby acknowledges receipt of a true, correct and
complete counterpart of this Agreement.
[Remainder of Page Intentionally Left Blank]
CUSIP NO. 45810F 10 1 13D Page 37 of 40 Pages
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
JUPITER INTEGON LIMITED PARTNERSHIP
By: Jupiter Industries, Inc., its general partner
By: /s/
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Name:
Title:
Address:
Suite 550
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JUPITER INDUSTRIES, INC.
By: /s/
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Name:
Title:
Address:
Suite 550
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BANK OF AMERICA ILLINOIS
By: /s/
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Name:
Title:
Address:
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CUSIP NO. 45810F 10 1 13D Page 38 of 40 Pages
ATTACHMENT 1
LISTING OF STOCK PLEDGED
Certificates
Pledgor Issuer Class Numbers Shares
------- ------ ----- ------- ------
JUPITER INTEGON INTEGON Common FC0865 100,000
LIMITED CORPORATION FC0866 100,000
PARTNERSHIP FC0868 15,000
FC0869 15,000
FC0870 15,000
FC0871 15,000