EXHIBIT 99.5
PLEDGE AGREEMENT
OF
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
THIS PLEDGE AGREEMENT entered into as of June 11, 1999 by and between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ("Pledgor") and KEYBANK NATIONAL ASSOCIATION ("Bank") is as
follows:
SECTION 1. RECITALS.
Pledgor is a shareholder of the Debtor. Debtor and Shareholder have
asked the Bank to extend financial accommodations to Debtor. Bank is willing
to make such financial accommodations and continue existing financial
accommodations provided Pledgor executes and delivers this Pledge Agreement
for the benefit of Bank.
SECTION 2. DEFINITIONS.
All capitalized terms used herein and not otherwise defined herein shall
have the meaning attributed to them in the Security Agreement, and the
following terms shall have the meanings set forth below (with all such
meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"LIABILITIES" means all Obligations and all of Pledgor's obligations
hereunder.
"PLEDGED COLLATERAL" means all of Pledgor's property and interests in
property described in Section 3(A) below.
"PLEDGED SHARES" means 1,897,500 shares of the Debtor's issued and
outstanding common stock evidenced by a certificate for 2,656,500 shares
bearing CUSIP No. ▇▇▇▇▇▇▇▇▇.
"SECURITY AGREEMENT" means that certain Security Agreement dated as of
June 11, 1999 between Bank and Debtor as such Security Agreement may be
amended from time to time.
SECTION 3. PLEDGE; DELIVERY.
(A) To secure the full and prompt performance of all of the
Liabilities, Pledgor hereby pledges to Bank and grants to Bank a security
interest in (i) the Pledged Shares, (ii) the certificate(s) representing the
Pledged Shares, (iii) all dividends, cash, instruments and other property
from time to time received, receivable
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or otherwise distributed in respect of or in exchange for any of the Pledged
Shares and (iv) all proceeds thereof.
(B) Contemporaneously herewith, Pledgor has delivered to McDonald
Investments, Inc. as agent for Bank all of the certificates representing the
Pledged Shares, together with separate stock transfer forms duly endorsed, in
blank, for the transfer of the Pledged Shares. If at any time Pledgor
obtains possession of any other certificate, document or other evidence
representing any of the Pledged Collateral, Pledgor will immediately deliver
such certificate, document or other evidence to Bank or agent designated by
Bank. During such time as any such certificate, document or other evidence
representing any of the Pledged Collateral is in Pledgor's possession or
control, Pledgor shall hold or control such certificate, document or other
evidence in trust for Bank's benefit. All certificates, documents or other
evidence delivered to Bank or its agent shall be accompanied by separate
stock powers duly endorsed, in blank, for transfer.
(C) At any time after the occurrence of an Event of Default, Bank, at
its option and without any obligation to do so, may transfer to or register
in its name, or the name of any nominee, all or any part of the Pledged
Collateral.
(D) Upon the final, irrevocable payment of the Liabilities, Bank shall
return all Pledged Collateral to Pledgor, less such amounts as needed to pay
the Liabilities in accordance with the terms of this Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Pledgor hereby represents and warrants to Bank as follows:
(i) there is no stamp duty, tax, levy, impost, deduction, charge,
withholding or similar duty, tax or fee imposed on or by virtue of the
execution or delivery of this Agreement or any other document to be furnished
hereunder or in connection herewith;
(ii) to ensure the legality, validity, enforceability or admissibility
in evidence of this Agreement, it is not necessary that this Agreement or any
other document be filed or recorded with any governmental, administrative or
judicial authority or regulatory body;
(iii) the Pledged Shares have been duly authorized and validly issued
and are fully paid and non-assessable with no personal liability attaching to
the ownership thereof (e.g., the Pledged Shares do not oblige the owner
thereof to make any further payments in respect thereof);
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(iv) there are no restrictions upon the transfer of any of the Pledged
Shares, and Pledgor has the unqualified right to transfer the Pledged Shares
without obtaining the consent of any Person, except for restrictions imposed
by applicable securities laws;
(v) the Pledged Shares are registered in Pledgor's name;
(vi) Pledgor is the sole legal and beneficial owner of the entire
right, title and interest in and to the Pledged Collateral, free and clear of
any Lien or contractual obligation, except for the security interests created
by this Agreement, and Pledgor will defend Bank's rights and title to the
Pledged Collateral against the claims of all Persons:
(vii) the pledge and delivery of the Pledged Shares pursuant to this
Agreement creates a valid and perfected first priority security interest in
the Pledged Shares securing payment and performance of the Liabilities; and
(viii) no authorization, approval or other action by, and no notice to
or filing with any governmental, administrative or judicial authority or
regulatory body is required (a) for the pledge by Pledgor of the Pledged
Collateral pursuant to this Agreement, (b) for the execution, delivery or
performance of this Agreement by Pledgor, or (c) for the exercise by Bank of
the voting or other rights provided for in this Agreement or the remedies in
respect of the Pledged Collateral pursuant to this Agreement (except as may
be required in connection with the disposition of the Pledged Collateral by
laws affecting the offering and sale of securities generally).
SECTION 5. FURTHER ASSURANCES.
Pledgor, at its expense and from time to time, will promptly execute and
deliver all further instruments and documents, and take all further action
that may be necessary or desirable, or that Bank may request, in order to
(i) continue, perfect and protect the security interest granted hereby, and
(ii) to enable Bank to exercise and enforce its rights and remedies hereunder
with respect to any Pledged Collateral. Without prejudice to the generality of
the foregoing, each such instrument or document shall be in such form as Bank
shall stipulate and shall contain such provisions as Bank reasonably considers
necessary for the perfection or enforcement of the rights granted hereby.
SECTION 6. VOTING RIGHTS.
(A) So long as no Event of Default is continuing:
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(i) Pledgor shall be entitled to exercise all voting and other
consensual rights pertaining to the Pledged Collateral for any purpose
not inconsistent with the terms of the Security Agreement;
(ii) Pledgor may receive and retain any distributions paid in
respect of the Pledged Collateral; provided, however, that all noncash
distributions made in respect of, or in exchange for, any Pledged
Collateral shall be delivered to Bank and held as Pledged Collateral and
shall, if received by Pledgor, be received in trust for the benefit of
Bank, be segregated from Pledgor's other property, and be immediately
delivered to Bank in the same form as so received (with any necessary
endorsement).
(B) During the continuance of an Event of Default:
(i) all of Pledgor's rights pursuant to Section 6(A) shall, at
Bank's election, cease and shall thereupon become vested in Bank, or
such nominee(s) of Bank as Bank shall direct, who shall thereupon have
the sole right to exercise such voting and other consensual rights and
to receive and hold as Pledged Collateral such distributions; and
(ii) all distributions received by Pledgor contrary to the
provisions of Section 6(B)(i) shall be received in trust for the benefit
of Lenders, shall be segregated from Pledgor's other property, and shall
be immediately delivered to Bank, as Pledged Collateral, in the same
form as so received (with any necessary endorsement).
SECTION 7. TRANSFERS AND OTHER LIENS.
Pledgor will not (i) sell, transfer, or otherwise dispose of, or grant
any option or rights to purchase with respect to, or permit any person to be
registered as holder of, any of the Pledged Collateral or (ii) create or
permit to exist any Lien upon any of the Pledged Collateral, except for the
security interest created under this Agreement. Provided, however, that
Pledgor may enter into agreements for the sale of the Pledged Collateral as
part of the sale of a majority interest in ▇▇▇▇▇▇▇▇▇▇ Industries, Inc. Such
agreements shall not impair the rights of Bank, and the Pledged Collateral
shall not be released to Pledgor or any other party except upon full
compliance with the terms of this Agreement.
SECTION 8. ATTORNEY-IN-FACT.
Pledgor hereby irrevocably appoints Bank, and each and every person to
whom Bank shall from time to time delegates the exercise of this power of
attorney, jointly and severally, to be his attorney and in his name and
otherwise on his behalf after the
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occurrence of an Event of Default to sign, seal, execute, deliver, perfect
and do all other acts which may be required (or which Bank considers
necessary) to carry out any obligation imposed on Pledgor pursuant to this
Agreement, to consummate any sale or other dealing by Bank of the Pledged
Collateral, or to enable Bank to exercise the powers conferred on it pursuant
to this Agreement or by law. Bank shall have full power to delegate the power
conferred on it by this Section 8, but no such delegation shall preclude the
subsequent exercise of such power by Bank itself or preclude Bank from making
a subsequent delegation thereof to some other person, and any such delegation
may be revoked by Bank at any time.
Section 9. BANK'S DUTIES.
The powers conferred on Bank hereunder are solely to protect its
interest in the Pledged Collateral and shall not impose any duty upon Bank to
exercise any such powers. Bank shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially
equal to that which Bank accords its own property, it being understood that
Bank shall not have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Pledged Collateral, whether Bank has or is deemed to
have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Pledged Collateral.
Section 10. REMEDIES UPON DEFAULT.
(A) If any Event of Default is continuing:
(i) Bank may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or in the
Security Agreement or otherwise available to it, all the rights and
remedies of a secured party on default under the Code, and Bank may
also, 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, broker's board or any of Bank's offices
or elsewhere, for cash, on credit or for future delivery and upon such
other terms as Bank may deem commercially reasonable. Bank is hereby
authorized at any such sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing the Pledged Shares for
their own account in compliance with Regulation D of the Securities Act
of 1933 (or under any other applicable exemption available under
applicable law). Pledgor agrees that, to the extent notice of sale shall
be required by law, at least five days notice to Pledgor of the time and
place of any public sale or the time after which any private sale is
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to be made shall constitute reasonable notification. Bank is not
obligated to make any sale of the Pledged Collateral, regardless of
notice of sale having been given. Bank 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; and
(ii) any cash held by Bank as Pledged Collateral and all cash
proceeds received by Bank in respect of any sale of, collection from, or
other realization upon the Pledged Collateral may, in Bank's sole
discretion, be held by Bank as collateral for, and/or then or at any
time thereafter applied (after payment of any amounts payable to Bank
pursuant to Section 11(B)) against the Liabilities in such order as Bank
shall elect. Any surplus of such cash or cash proceeds held by Bank and
remaining after payment in full of the Liabilities shall be paid over to
Pledgor or to any other Person lawfully entitled to receive such surplus.
(B) Without precluding any other methods of sale, the sale of the
Pledged Collateral, or any part thereof, shall have been made in a
commercially reasonable manner if conducted in conformity with reasonable
commercial practices of banks or finance companies disposing of similar
property, but in any event, Bank may sell or otherwise dispose of the Pledged
Collateral without assuming any credit risk and without any obligation to
advertise.
(C) Pledgor recognizes that federal and/or state securities and other
laws may limit the flexibility desired to achieve an otherwise commercially
reasonable disposition of the Pledged Collateral, and in the event of
potential conflict between such laws or regulations and what in other
circumstances might constitute commercial reasonableness, it is intended that
consideration for such laws and regulations will prevail over attempts to
achieve such commercial reasonableness. In connection with any sale or other
disposition of the Pledged Collateral, compliance by Bank with the written
advice of its counsel concerning the potential effect of any such law or
regulation shall not be cause for Pledgor, or any other Person, to claim that
such sale or other disposition was not commercially reasonable, it being the
intent of Pledgor that Bank not be obligated to risk contravening any such
law or regulation in order to effect what, but for such law or regulation,
would be a commercially reasonable disposition.
(D) By way of example, and not by way of limitation, with respect to
any sale or other disposition of any of the Pledged Collateral (i) such sale
or disposition shall be commercially reasonable if made by and through a
licensed broker/dealer acting under instructions to obtain in his judgment
the best disposition price known to him in the market (however, this
provision does not suggest that such disposition is
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either preferable or exclusive) and (ii) such sale or disposition shall be
deemed to have been a public sale if, in connection with such sale or
disposition, Bank obtains bids from at least two qualified purchasers.
(E) To the extent permitted by applicable law, Pledgor hereby waives
all rights now or hereafter conferred by statute or otherwise which may
require Bank to give any notice (except the notice of sale provided for in
Section 10(A)(i)), make any demand, or invoke any legal process with respect
to the sale or other disposition of the Pledged Collateral or which may
require Bank to sell or otherwise dispose of the Pledged Collateral in
mitigation of Bank's damages, or which may otherwise limit or modify any of
Bank's remedies or rights under this Agreement.
(F) Bank shall be under no duty to sell or otherwise realize upon
the Pledged Collateral. At any time, Bank may release or surrender all or
any part of the Pledged Collateral to Pledgor.
SECTION 11. INDEMNITY AND EXPENSES.
(A) Pledgor shall indemnify and hold Bank harmless from and against
all claims, damages, losses, liabilities and expenses arising out of or in
connection with or resulting from this Agreement, but otherwise without limit
and without regard to the cause(s) thereof or the negligence of any party,
including, but not limited to, any negligent act or omission of Bank, unless
and to the extent such claim, damage, loss, liability or expense was
attributable to Bank's gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction.
(B) Pledgor, upon demand, will pay to Bank the amount of any
expenses, including the fees and expenses of Bank's attorneys (whether
incurred at the trial or appellate level, in an arbitration proceeding, in
bankruptcy, including, without limitation, any adversary proceeding,
contested matter or motion, or otherwise), that Bank may incur in connection
with (i) the administration of the 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
Bank's rights in respect to enforcement of this Agreement, or (iv) the
failure by Pledgor to perform or observe any of the provisions hereof.
SECTION 12. SECURITY INTEREST ABSOLUTE.
All rights of Bank, all security interests hereunder, and all
obligations of Pledgor hereunder shall be absolute and unconditional
irrespective of:
(i) any invalidity or unenforceability in whole or in part of the
Security Agreement or Note;
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(ii) any change in the time, manner or place of payment of, or in
any other term of, any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Security Agreement or
Note;
(iii) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty for all or any of the Obligations;
(iv) any agreement by Bank to subordinate Debtor's payment of the
Obligations to the payment by Debtor of any other obligations; or
(v) any other circumstance which might otherwise constitute a
defense available to, or discharge of, Pledgor or a third party pledgor.
SECTION 13. MISCELLANEOUS.
(A) No delay, failure or discontinuance of Bank in exercising any right,
power or remedy, hereunder shall affect or operate as a waiver of such right,
power or remedy; nor shall any single or partial exercise of any such right,
power or remedy preclude, waive or otherwise affect any other or further
exercise thereof or the exercise of any other right, power or remedy. Any
waiver, consent or approval of any kind by Bank of any breach of or default
under this Agreement must be in writing and shall be effective only to the
extent set forth in such writing.
(B) Any notice or other communication required or permitted hereunder
shall be in writing, shall be addressed to the party to be notified at the
address set forth below, or at such other address as each party may designate
for itself from time to time by notice hereunder, and will be deemed to have
been delivered (i) five days following deposit in the United States mails
with proper first class postage prepaid, (ii) the next business day after
such notice was delivered to a regularly scheduled overnight delivery carrier
or (iii) upon receipt of notice given by telecopy, mailgram, telegram, telex
or personal delivery:
To Bank: KeyBank National Association
Large Corporate Group
46th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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To Pledgor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇/▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(C) Time is of the essence of each and every provision of this
Agreement.
(D) This Agreement cannot be modified, amended or changed in any
respect orally or by the conduct of the parties. Any amendment, modification
or change may be made only by a writing signed by the party against whom
enforcement is sought.
(E) Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement will be prohibited by or invalid under
applicable law, such provision will be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(F) Each party will promptly execute and deliver to the other parties
all instruments, agreements and documents, and take all further action, that
may be reasonably necessary to enable a party to perform its obligations
hereunder and to exercise and enforce its rights and remedies hereunder.
(G) This Agreement represents the complete undertaking and agreement of
the parties with respect to the subject matter hereof and supersedes any and
all prior and contemporaneous discussions, negotiations or correspondence.
(H) If legal action is required to enforce the terms of this Agreement,
the prevailing party will be entitled to reasonable attorneys' fees and costs
incurred therein, whether incurred at arbitration, trial, on appeal, in a
bankruptcy proceeding, or otherwise.
(I) This Agreement shall be governed by and construed in accordance
with the laws of the State of Oregon.
(J) Until all the Obligations have been fully paid, in cash, and
performed, Pledgor shall have no right of subrogation or any other right to
participate in any security for any of the Obligations or other Liabilities.
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(K) This Agreement shall be binding upon and inure to the benefit of the
respective heirs, successors and assigns of the parties.
(L) UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY
BANK AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH
ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE
BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED
BY BANK TO BE ENFORCEABLE.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
PLEDGOR:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
BANK:
KEYBANK NATIONAL ASSOCIATION
By: [ILLEGIBLE]
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Title: Vice President
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