PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of June 25, 1997 (as amended, modified or
supplemented from time to time, the "Agreement"), made by each of the
undersigned (each, a "Pledgor" and together with any other entity that becomes a
party hereto pursuant to Section 24 hereof, collectively, the "Pledgors"), in
favor of NATIONAL WESTMINSTER BANK PLC, as Collateral Agent (including any
successor collateral agent, the "Pledgee") for the benefit of the Secured
Creditors (as defined below). Except as otherwise defined herein, terms used
herein and defined in the Credit Agreement shall be used herein as therein
defined.
W I T N E S S E T H :
WHEREAS, North Atlantic Trading Company, Inc. (the "Borrower"), the
lenders from time to time party thereto (the "Lenders"), Gleacher NatWest, Inc.,
as Arranging Agent (the "Arranging Agent"), and National Westminster Bank Plc,
as Administrative Agent (the "Administrative Agent" and together with the
Lenders, the Arranging Agent and the Pledgee, the "Lender Creditors"), have
entered into a Credit Agreement, dated as of June 25, 1997 (as amended, modified
or supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans and the issuance of, and participation in, Letters of Credit as
contemplated therein;
WHEREAS, the Borrower may from time to time be a party to one or more
Interest Rate Agreements (each such Interest Rate Agreement with an Interest
Rate Creditor (as defined below), a "Secured Interest Rate Agreement") with
National Westminster Bank Plc, in its individual capacity ("NatWest"), any
Lender or a syndicate of financial institutions organized by NatWest or such
Lender or an affiliate of NatWest or such Lender (even if NatWest or any such
Lender ceases to be a Lender under the Credit Agreement for any reason), and any
institution that participates therein, and in each case their subsequent assigns
(collectively, the "Interest Rate Creditors," and together with the Lender
Creditors, collectively, the "Secured Creditors");
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WHEREAS, pursuant to the Subsidiary Guaranty, dated as of June 25,
1997 (as amended, modified or supplemented from time to time, the "Subsidiary
Guaranty"), each Pledgor (other than the Borrower) has jointly and severally
guaranteed to the Secured Creditors the payment when due of the Guaranteed
Obligations (as defined in the Subsidiary Guaranty);
WHEREAS, it is a condition precedent to the making of Loans and the
issuance of, and participation in, Letters of Credit under the Credit Agreement
that each Pledgor shall have executed and delivered to the Pledgee this
Agreement;
WHEREAS, each Pledgor desires to execute this Agreement to satisfy
the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of such Pledgor, now
existing or hereafter incurred under, arising out of or in connection with
any Credit Document to which such Pledgor is a party and the due
performance of and compliance by such Pledgor with the terms of each such
Credit Document by such Pledgor (all such obligations and liabilities under
this clause (i), except to the extent consisting of obligations or
indebtedness with respect to Secured Interest Rate Agreements, being herein
collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of such Pledgor, now
existing or hereafter
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incurred under, arising out of or in connection with any Secured Interest
Rate Agreement, including all obligations, if any, of such Pledgor under
its Guaranty in respect of Secured Interest Rate Agreements (all such
obligations and liabilities under this clause (ii) being herein
collectively called the "Interest Rate Obligations");
(iii) any and all sums advanced by the Pledgee in order to preserve the
Collateral (as hereinafter defined) and/or its security interest therein;
(iv) in the event of any proceeding for the collection of the
Obligations (as defined below) or the enforcement of this Agreement, after
an Event of Default (such term, as used in this Agreement, shall mean any
Event of Default under the Credit Agreement or any payment default by the
Borrower under any Secured Interest Rate Agreement after the expiration of
any applicable grace period) shall have occurred and be continuing, the
reasonable expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, or of any
exercise by the Pledgee of its rights hereunder, together with reasonable
attorneys' fees and court costs; and
(v) all amounts paid by any Secured Creditor as to which such Secured
Creditor has the right to reimbursement under Section 11 of this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations".
2. DEFINITION OF STOCK, NOTES, PARTNERSHIP INTERESTS, MEMBERSHIP
INTERESTS, SECURITIES, ETC. As used herein, (i) the term "Stock" shall mean (x)
all of the issued and outstanding shares of stock at any time owned by any
Pledgor of any corporation (other than a corporation that is not organized under
the laws of the United States or any State or territory thereof (a "Foreign
Corporation")) and (y) with respect to a Foreign Corporation that is a
first-tier Foreign Subsidiary, all of the issued and outstanding shares of
capital stock at any time owned by any Pledgor of any Foreign Corporation,
provided that such Pledgor shall not be required to pledge hereunder (and the
term "Stock" shall not include) more than 65% of the total combined voting power
of all classes of capital stock of any Foreign Corporation entitled to vote;
(ii) the term "Notes" shall mean all promissory notes at any time issued to, or
held by, any Pledgor, provided that such Pledgor shall not be required to pledge
hereunder (and the term "Notes" shall not include) any promissory notes issued
to such Pledgor by any Subsidiary of such Pledgor which is a Foreign
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Corporation; (iii) the term "Partnership Interest" shall mean the entire
partnership interest at any time owned by any Pledgor in any partnership (any
such partnership, a "Pledged Partnership"); (iv) the term "Membership Interest"
shall mean the entire membership interest at any time owned by any Pledgor in
any limited liability company (any such limited liability company, a "Pledged
LLC"); and (v) the term "Securities" shall mean all of the Stock, Notes,
Partnership Interests and Membership Interests. Each Pledgor represents and
warrants that on the date hereof: (a) each Subsidiary of such Pledgor, and the
direct ownership thereof, is listed on Annex A hereto; (b) the Stock held by
such Pledgor consists of the number and type of shares of the stock of the
corporations as described in Annex B hereto; (c) such Stock constitutes that
percentage of the issued and outstanding capital stock of the issuing
corporation as set forth in Annex B hereto; (d) the Notes held by such Pledgor
consist of the promissory notes described in Annex C hereto; (e) such Pledgor is
the holder of record and sole beneficial owner of the Stock and Notes held by
such Pledgor and there exists no options or preemption rights in respect of any
of the Stock; (f) the Partnership Interests and Membership Interests, as the
case may be, held by such Pledgor constitute that percentage of the entire
interest of the respective Pledged Partnership or Pledged LLC, as the case may
be, as is set forth under its name in Annex D hereto; and (g) on the date
hereof, such Pledgor owns or possesses no other Securities except as described
on Annexes B, C and D hereto.
3. PLEDGE OF SECURITIES, ETC.
3.1 Pledge. To secure the Obligations and for the purposes set
forth in Section 1, each Pledgor hereby:
(i) grants and pledges to the Pledgee a security interest in all
of the Collateral owned by such Pledgor;
(ii) pledges and deposits as security with the Pledgee the
Securities owned by such Pledgor on the date hereof, if any, and delivers
to the Pledgee certificates or instruments therefor, duly endorsed in blank
in the case of Notes and accompanied by undated stock or other powers duly
executed in blank by such Pledgor in the case of Stock, Partnership
Interests or Membership Interests, as the case may be, or such other
instruments of transfer as are acceptable to the Pledgee;
(iii) assigns, transfers, hypothecates, mortgages, charges and sets
over to the Pledgee all of such Pledgor's right, title and interest in and
to
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such Securities (and in and to all certificates or instruments evidencing
such Securities), to be held by the Pledgee, upon the terms and
conditions set forth in this Agreement;
(iv) grants, pledges, assigns and transfers to the Pledgee all of
such Pledgor's (x) Partnership Interest and all of such Pledgor's right,
title and interest in each Pledged Partnership and (y) Membership Interest
and all of such Pledgor's right, title and interest in each Pledged LLC, in
each case including, without limitation:
(a) all the capital thereof and its interest in all profits, losses
and other distributions to which such Pledgor shall at any time be entitled
in respect of such Partnership Interest and/or Membership Interest;
(b) all other payments due or to become due to such Pledgor in respect
of such Partnership Interest and/or Membership Interest, whether under any
partnership agreement, limited liability company agreement or otherwise,
whether as contractual obligations, damages, insurance proceeds or
otherwise;
(c) all of its claims, rights, powers, privileges, authority, options,
security interest, liens and remedies, if any, under any partnership
agreement, limited liability company agreement or at law or otherwise in
respect of such Partnership Interest and/or Membership Interest;
(d) all present and future claims, if any, of the Pledgor against any
Pledged Partnership and any Pledged LLC for moneys loaned or advanced, for
services rendered or otherwise;
(e) all of such Pledgor's rights under any partnership agreement or
limited liability company agreement or at law to exercise and enforce every
right, power, remedy, authority, option and privilege of such Pledgor
relating to the Partnership Interest and/or Membership Interest, including
any power to terminate, cancel or modify any partnership agreement or any
limited liability company agreement, to execute any instruments and to take
any and all other action on behalf of and in the name of such Pledgor in
respect of any Partnership Interest or Membership Interest and any Pledged
Partnership and any Pledged LLC to make determinations, to exercise any
election (including, but not limited to, election of remedies) or option or
to give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to
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demand, receive, enforce, collect or receipt for any of the foregoing, to
enforce or execute any checks, or other instruments or orders, to file
any claims and to take any action in connection with any of the foregoing;
(f) all other property hereafter delivered in substitution for or in
addition to any of the foregoing, 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 or in
exchange for any or all thereof; and
(g) to the extent not otherwise included, all proceeds of any or all
of the foregoing.
3.2 Subsequently Acquired Securities. If any Pledgor shall acquire
(by purchase, stock dividend or otherwise) any additional Securities at any time
or from time to time after the date hereof, such Pledgor will forthwith pledge
and deposit such Securities (or certificates or instruments representing such
Securities) as security with the Pledgee and deliver to the Pledgee certificates
or instruments thereof, duly endorsed in blank in the case of Notes and
accompanied by undated stock or other powers duly executed in blank by such
Pledgor (and accompanied by any transfer tax stamps required in connection with
the pledge of such Securities) in the case of Stock, Partnership Interests or
Membership Interests, as the case may be, or such other instruments of transfer
as are acceptable to the Pledgee, and will promptly thereafter deliver to the
Pledgee a certificate executed by a principal executive officer of such Pledgor
describing such Securities and certifying that the same have been duly pledged
with the Pledgee hereunder. No Pledgor shall be required at any time to pledge
hereunder (x) any Stock which is more than 65% of the total combined voting
power of all classes of capital stock of any Foreign Corporation entitled to
vote or (y) any promissory notes issued to such Pledgor by any Subsidiary of
such Pledgor which is a Foreign Corporation.
3.3 Uncertificated Securities. Notwithstanding anything to the
contrary contained in Sections 3.1 and 3.2, if any Securities (whether or not
now owned or hereafter acquired) are uncertificated securities, the respective
Pledgor shall promptly notify the Pledgee thereof, and shall promptly take all
actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York Uniform Commercial Code if applicable). Each Pledgor further agrees to
take such actions as the Pledgee deems necessary or desirable to effect the
foregoing and to permit the Pledgee to exercise any of its rights and remedies
hereunder, and agrees to provide an opinion of counsel reasonably
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satisfactory to the Pledgee with respect to any such pledge of uncertificated
Securities promptly upon request of the Pledgee.
3.4 Definitions of Pledged Stock, Pledged Notes, Pledged Partnership
Interests, Pledged Membership Interests, Pledged Securities and Collateral. All
Stock at any time pledged or required to be pledged hereunder is hereinafter
called the "Pledged Stock, all Notes at any time pledged or required to be
pledged hereunder are hereinafter called the "Pledged Notes", all Partnership
Interests at any time pledged or required to be pledged hereunder are
hereinafter called the "Pledged Partnership Interests," all Membership Interests
at any time pledged or required to be pledged hereunder are hereinafter called
the "Pledged Membership Interests", all Pledged Stock, Pledged Notes, Pledged
Partnership Interests and Pledged Membership Interests, together are called the
"Pledged Securities"; and the Pledged Securities, together with all proceeds
thereof, including any securities and moneys received and at the time held by
the Pledgee hereunder, are hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS,
ETC. The Pledgee shall have the right to appoint one or more sub-agents for the
purpose of retaining physical possession of the Pledged Securities, which may be
held (in the discretion of the Pledgee) in the name of the relevant Pledgor,
endorsed or assigned in blank or in favor of the Pledgee or any nominee or
nominees of the Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and
until there shall have occurred and be continuing an Event of Default, each
Pledgor shall be entitled to exercise all voting rights attaching to any and all
Pledged Securities owned by it, and to give consents, waivers or ratifications
in respect thereof, provided that no vote shall be cast or any consent, waiver
or ratification given or any action taken which would violate, result in breach
of any covenant contained in, or be inconsistent with, any of the terms of this
Agreement, the Credit Agreement, any other Credit Document or any Secured
Interest Rate Agreement (collectively, the "Secured Debt Agreements"), or which
would have the effect of impairing the value of the Collateral or any part
thereof or the position or interests of the Pledgee or any other Secured
Creditor therein. All such rights of a Pledgor to vote and to give consents,
waivers and ratifications shall cease in case an Event of Default shall occur
and be continuing and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an Event of
Default shall have occurred and be continuing, all cash dividends, distributions
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or other amounts payable in respect of the Pledged Securities shall be paid to
the respective Pledgor, provided that all dividends, distributions or other
amounts payable in respect of the Pledged Securities which are determined by the
Pledgee, in its absolute discretion, to represent in whole or in part an
extraordinary, liquidating or other distribution in return of capital not
permitted by the Credit Agreement shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution in return of
capital, to the Pledgee and retained by it as part of the Collateral (unless
such cash dividends or distributions are applied to repay the Obligations
pursuant to Section 9 of this Agreement). The Pledgee shall also be entitled to
receive directly, and to retain as part of the Collateral:
(i) all other or additional stock, or other securities or property
(other than cash) paid or distributed by way of dividend or otherwise in
respect of the Collateral;
(ii) all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Collateral by way of
stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement; and
(iii) all other or additional stock or other securities or property
(including cash) which may be paid in respect of the Collateral by reason
of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive the proceeds of the Collateral in any form in
accordance with Section 3 of this Agreement. All dividends, distributions or
other payments which are received by the respective Pledgor contrary to the
provisions of this Section 6 or Section 7 shall be received in trust for the
benefit of the Pledgee, shall be segregated from other property or funds of such
Pledgor and shall be forthwith paid over to the Pledgee as Collateral in the
same form as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. (a) In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or any other Secured Debt Agreement or by law) for the protection and
enforcement of its rights in respect of the Collateral, including, without
limitation, all the rights and remedies of a secured party upon default under
the Uniform Commercial
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Code of the State of New York, and the Pledgee shall be entitled, without
limitation, to exercise any or all of the following rights, which each Pledgor
hereby agrees to be commercially reasonable:
(i) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 to such Pledgor;
(ii) to transfer all or any part of the Collateral into the Pledgee's
name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect upon
any Pledged Note (including, without limitation, to make any demand for
payment thereon);
(iv) to vote all or any part of the Pledged Stock, Pledged Partnership
Interests and Pledged Membership Interests (whether or not transferred into
the name of the Pledgee) and give all consents, waivers and ratifications
in respect of the Collateral and otherwise act with respect thereto as
though it were the outright owner thereof (each Pledgor hereby irrevocably
constituting and appointing the Pledgee the proxy and attorney-in-fact of
such Pledgor, with full power of substitution to do so); and
(v) at any time or from time to time to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by each Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of credit
risk, and for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine, provided that at least 10 days' notice
of the time and place of any such sale shall be given to such Pledgor. The
Pledgee shall not be obligated to make such sale of Collateral regardless
of whether any such notice of sale has theretofore been given. Each
purchaser at any such sale shall hold the property so sold absolutely free
from any claim or right on the part of any Pledgor, and each Pledgor hereby
waives and releases to the fullest extent permitted by law any right or
equity of redemption with respect to the Collateral, whether before or
after sale hereunder, all rights, if any, of marshalling the Collateral and
any other security for the
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Obligations or otherwise, and all rights, if any, of stay and/or
appraisal which it now has or may at any time in the future have under
rule of law or statute now existing or hereafter enacted. At any such
sale, unless prohibited by applicable law, the Pledgee on behalf of all
Secured Creditors (or certain of them) may bid for and purchase (by
bidding in Obligations or otherwise) all or any part of the Collateral so
sold free from any such right or equity of redemption. Neither the
Pledgee nor any Secured Creditor shall be liable for failure to collect
or realize upon any or all of the Collateral or for any delay in so doing
nor shall it be under any obligation to take any action whatsoever with
regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee provided for in this Agreement or any other Secured Debt Agreement, or
now or hereafter existing at law or in equity or by statute shall be cumulative
and concurrent and shall be in addition to every other such right, power or
remedy. The exercise or beginning of the exercise by the Pledgee or any other
Secured Creditor of any one or more of the rights, powers or remedies provided
for in this Agreement or any other Secured Debt Agreement or now or hereafter
existing at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Pledgee or any other Secured Creditor of
all such other rights, powers or remedies, and no failure or delay on the part
of the Pledgee or any other Secured Creditor to exercise any such right, power
or remedy shall operate as a waiver thereof. Unless otherwise required by the
Credit Documents, no notice to or demand on any Pledgor in any case shall
entitle it to any other or further notice or demand in similar other
circumstances or constitute a waiver of any of the rights of the Pledgee or any
other Secured Creditor to any other further action in any circumstances without
demand or notice. The Secured Creditors agree that this Agreement may be
enforced only by the action of the Administrative Agent or the Pledgee, in each
case acting upon the instructions of the Required Lenders (or, after the date on
which all Credit Document Obligations have been paid in full, the holders of at
least the majority of the outstanding Interest Rate Obligations) and that no
other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Agreement or to realize upon the security to be granted hereby,
it being understood and agreed that such rights and remedies may be exercised by
the Administrative Agent or the Pledgee or the holders of at least a majority of
the outstanding Interest Rate Obligations, as the case may be, for the benefit
of the Secured Creditors upon the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this
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Agreement, together with all other moneys received by the Pledgee hereunder,
shall be applied in the manner provided in Section 7.4 of the Security
Agreement.
(b) It is understood and agreed that the Pledgor shall remain liable
to the extent of any deficiency between (x) the amount of the Obligations for
which it is responsible directly or as a Guarantor that are satisfied with
proceeds of the Collateral hereunder and (y) the aggregate outstanding amount of
the Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to
indemnify and hold harmless the Pledgee and the other Secured Creditors from and
against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, and (ii) to
reimburse the Pledgee and the other Secured Creditors for all reasonable costs
and expenses, including reasonable attorneys' fees, growing out of or resulting
from this Agreement or the exercise by the Pledgee of any right or remedy
granted to it hereunder or under any other Secured Debt Agreement except, with
respect to clauses (i) and (ii) above, for those arising from the Pledgee's
gross negligence or willful misconduct. In no event shall the Pledgee be liable,
in the absence of gross negligence or willful misconduct on its part, for any
matter or thing in connection with this Agreement other than to account for
moneys or other property actually received by it in accordance with the terms
hereof. If and to the extent that the obligations of any Pledgor under this
Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
12. FURTHER ASSURANCES; POWER OF ATTORNEY. (a) Each
Pledgor agrees that it will join with the Pledgee in executing and, at such
Pledgor's own expense, file and refile under the Uniform Commercial Code such
financing statements, continuation statements and other documents in such
offices as the Pledgee may deem necessary or appropriate and wherever required
or permitted by law in order to perfect and preserve the Pledgee's security
interest in the Collateral hereunder and hereby
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authorizes the Pledgee to file financing statements and amendments thereto
relative to all or any part of the Collateral without the signature of such
Pledgor where permitted by law, and agrees to do such further acts and things
and to execute and deliver to the Pledgee such additional conveyances,
assignments, agreements and instruments as the Pledgee may reasonably require
or deem advisable to carry into effect the purposes of this Agreement or to
further assure and confirm unto the Pledgee its rights, powers and remedies
hereunder or thereunder.
(b) Each Pledgor hereby appoints the Pledgee, such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's reasonable
discretion to take any action and to execute any instrument which the Pledgee
may reasonably deem necessary or advisable to accomplish the purposes of this
Agreement.
13. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will
hold in accordance with this Agreement all items of the Collateral at any time
received under this Agreement. It is expressly understood and agreed that the
obligations of the Pledgee as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement. The Pledgee shall act
hereunder on the terms and conditions set forth herein and in Section 11 of the
Credit Agreement.
14. TRANSFER BY THE PLEDGORS. No Pledgor will sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except in
accordance with the terms of this Agreement and the other Secured Debt
Agreements).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE PLEDGORS. (a) Each Pledgor represents, warrants and covenants that:
(i) it is, or at the time when pledged hereunder will be, the legal,
beneficial and record owner of, and has (or will have) good and marketable
title to, all Securities pledged by it hereunder, subject to no pledge,
lien, mortgage, hypothecation, security interest, charge, option or other
encumbrance whatsoever, except the liens and security interests created by
this Agreement;
(ii) it has full power, authority and legal right to pledge all
the Securities pledged by it pursuant to this Agreement;
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(iii) this Agreement has been duly authorized, executed and delivered
by such Pledgor and constitutes a legal, valid and binding obligation of
such Pledgor enforceable in accordance with its terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally
affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law);
(iv) except to the extent already obtained or made, no consent of any
other party (including, without limitation, any stockholder, limited or
general partner, member or creditor of such Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization
of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained by
such Pledgor in connection with (a) the execution, delivery or performance
of this Agreement, (b) the validity or enforceability of this Agreement,
(c) the perfection or enforceability of the Pledgee's security interest in
the Collateral or (d) except for compliance with or as may be required by
applicable securities laws, the exercise by the Pledgee of any of its
rights or remedies provided herein;
(v) the execution, delivery and performance of this Agreement will
not violate any provision of any applicable law or regulation or of any
order, judgment, writ, award or decree of any court, arbitrator or
governmental authority, domestic or foreign, applicable to such Pledgor, or
of the certificate of incorporation, certificate of formation, by-laws,
certificate of limited partnership, partnership agreement or limited
liability company agreement, as the case may be, of such Pledgor or of any
securities issued by such Pledgor or any of its Subsidiaries, or of any
mortgage, indenture, lease, loan agreement, credit agreement or other
contract, agreement or instrument or undertaking to which such Pledgor or
any of its Subsidiaries is a party or which purports to be binding upon
such Pledgor or any of its Subsidiaries or upon any of their respective
assets and will not result in the creation or imposition of (or the
obligation to create or impose) any lien or encumbrance on any of the
assets of such Pledgor or any of its Subsidiaries except as contemplated by
this Agreement;
(vi) all the shares of the Stock have been duly and validly issued,
are fully paid and non-assessable and are subject to no options to purchase
or similar rights;
Page 14
(vii) each of the Pledged Notes constitutes, or when executed by the
obligor thereof will constitute, the legal, valid and binding obligation of
such obligor, enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law);
(viii) the pledge, assignment and delivery to the Pledgee of the
Securities (other than uncertificated securities) pursuant to this
Agreement creates a valid and perfected first priority Lien in the
Securities and the proceeds thereof, subject to no other Lien or to any
agreement purporting to grant to any third party a Lien on the property or
assets of such Pledgor which would include the Securities; and
(ix) it will defend the Pledgee's right, title and interest in and to
the Partnership Interests, the Membership Interests and in and to the other
Collateral pledged by it pursuant hereto or in which it has granted a
security interest pursuant hereto against the claims and demands of all
other persons whomsoever, and that it will have like title to and right to
pledge any other property at any time hereafter pledged to the Pledgee as
Collateral hereunder and will likewise defend the right thereto and
security interest therein of the Pledgee and the Secured Creditors;
(x) it is the legal and beneficial owner of and has good title to its
Partnership Interests and Membership Interests and has good title to all of
the other Collateral pledged by it pursuant hereto or in which it has
granted a security interest pursuant hereto, free and clear of all claims,
pledges, liens, encumbrances and security interests of every nature
whatsoever, except such as are created pursuant to this Agreement, and has
the unqualified right to pledge and grant a security interest in the same
as herein provided without the consent of any other Person, firm,
association or entity which has not been obtained;
(xi) it has full power, authority and legal right to pledge the
Partnership Interests and the Membership Interests pledged by it pursuant
to this Agreement and such Partnership Interest and Membership Interests
have been validly acquired and is fully paid for and is duly and validly
pledged hereunder;
Page 15
(xii)it is not in default in the payment of any portion of any
mandatory capital contribution, if any, required to be made under any
partnership agreement or limited liability company agreement to which such
Pledgor is a party, and such Pledgor is not in violation of any other
material provisions of any partnership agreement or limited liability
company agreement to which such Pledgor is a party, or otherwise in default
or violation thereunder, no Partnership Interest or Membership Interest is
subject to any defense, offset or counterclaim, nor have any of the
foregoing been asserted or alleged against such Pledgor by any Person with
respect thereto and as of the Closing Date, there are no certificates,
instruments, documents or other writings (other than the partnership
agreements and certificates, if any, delivered to the Collateral Agent)
which evidence any Partnership Interest or Membership Interest of such
Pledgor;
(xiii)the pledge and assignment of the Partnership Interests and the
Membership Interests pursuant to this Agreement, together with the relevant
filings, consents or recordings (which filings and recordings have been
made or obtained), creates a valid, perfected and continuing first security
interest in such Partnership Interests and Membership Interest and the
proceeds thereof, subject to no prior lien or encumbrance or to any
agreement purporting to grant to any third party a lien or encumbrance on
the property or assets of such Pledgor which would include the Collateral;
(xiv)there are no currently effective financing statements under the
UCC covering any property which is now or hereafter may be included in the
Collateral and such Pledgor will, without the prior written consent of the
Pledgee, execute and, until the Termination Date (as hereinafter defined),
there will not ever be on file in any public office, any enforceable
financing statement or statements covering any or all of the Collateral,
except financing statements filed or to be filed in favor of the Pledgee as
secured party;
(xv) it shall give the Pledgee prompt notice of any written claim
relating to the Collateral and shall deliver to the Pledgee a copy of each
other demand, notice or document received by it which may adversely affect
the Pledgee's interest in the Collateral promptly upon, but in any event
within 10 days after, such Pledgor's receipt thereof;
(xvi)it shall not withdraw as a partner of any Pledged Partnership or
member of any Pledged LLC, or file or pursue or take any action which may,
directly or indirectly, cause a dissolution or liquidation of or with
respect to any
Page 16
Pledged Partnership or Pledged LLC or seek a partition of any property of
any Pledged Partnership or Pledged LLC, except as permitted by the Credit
Agreement;
(xvii)a notice in the form set forth in Annex E attached hereto and
by this reference made a part hereof (such notice, the "Pledge Notice"),
appropriately completed, notifying each Pledged Partnership and Pledged LLC
of the existence of this Agreement and attached thereto a copy of this
Agreement have been delivered by such Pledgor to the relevant Pledged
Partnership or Pledged LLC, and such Pledgor has received and delivered to
the Pledgee an acknowledgment in the form set forth in Annex F attached
hereto (such acknowledgement, the "Pledge Acknowledgement"), duly executed
by the relevant Pledged Partnership or Pledged LLC; and
(xviii)as of the date hereof, all of its Partnership Interest and
Membership Interests are uncertificated and each Pledgor covenants and
agrees that it will not approve of any action by any Pledged Partnership or
Pledged LLC to convert such uncertificated interests into certificated
interests; and
(xix) it will take no action which would violate or be inconsistent
with any of the terms of any Secured Debt Agreement, or which would have
the effect of impairing the position or interests of the Pledgee or any
other Secured Creditor under any Secured Debt Agreement except as permitted
by the Credit Agreement.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation:
(i) any renewal, extension, amendment or modification of, or
addition or supplement to or deletion from any of the Secured Debt
Agreements, or any other instrument or agreement referred to therein, or
any assignment or transfer of any thereof;
(ii) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument or this
Agreement;
Page 17
(iii) any furnishing of any additional security to the Pledgee or
its assignee or any acceptance thereof or any release of any security by
the Pledgee or its assignee;
(iv) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof;
or
(v) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
such Pledgor or any Subsidiary of such Pledgor, or any action taken with
respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not such Pledgor shall have notice or
knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If an Event of Default shall have occurred
and be continuing and any Pledgor shall have received from the Pledgee a written
request or requests that such Pledgor cause any registration, qualification or
compliance under any Federal or state securities law or laws to be effected with
respect to all or any part of the Pledged Stock, such Pledgor as soon as
practicable and at its expense will use its best efforts to cause such
registration to be effected (and be kept effective) and will use its best
efforts to cause such qualification and compliance to be effected (and be kept
effective) as may be so requested and as would permit or facilitate the sale and
distribution of such Pledged Stock, including, without limitation, registration
under the Securities Act of 1933, as then in effect (or any similar statute then
in effect), appropriate qualifications under applicable blue sky or other state
securities laws and appropriate compliance with any other governmental
requirements, provided that the Pledgee shall furnish to such Pledgor such
information regarding the Pledgee as such Pledgor may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. Each Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars and other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify, to
the extent permitted by law, the Pledgee, each other Secured Creditor and all
others participating in the distribution of such Pledged Stock against all
claims, losses, damages or liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be
Page 18
stated therein or necessary to make the statements therein not misleading,
except insofar as the same may have been caused by an untrue statement or
omission based upon information furnished in writing to such Pledgor by the
Pledgee or such other Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities pursuant to Section 7,
and such Pledged Securities or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under the Securities Act of 1933,
as then in effect, the Pledgee may, in its sole and absolute discretion, sell
such Pledged Securities or part thereof by private sale in such manner and under
such circumstances as Pledgee may deem necessary or advisable in order that such
sale may legally be effected without such registration. Without limiting the
generality of the foregoing, in any such event the Pledgee, in its sole and
absolute discretion, (i) may proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Pledged
Securities or part thereof shall have been filed under such Securities Act, (ii)
may approach and negotiate with a single possible purchaser to effect such sale
and (iii) may restrict such sale to a purchaser who will represent and agree
that such purchaser is purchasing for its own account, for investment, and not
with a view to the distribution or sale of such Pledged Securities or part
thereof. In the event of any such sale, the Pledgee shall incur no
responsibility or liability for selling all or any part of the Pledged
Securities at a price which the Pledgee, in its sole and absolute discretion,
may in good ▇▇▇▇▇ ▇▇▇▇ reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until the registration as aforesaid.
18. TERMINATION; RELEASE. (a) After the Termination Date (as defined
below), this Agreement shall terminate (provided that all indemnities set forth
herein including, without limitation, in Section 11 hereof shall survive any
such termination) and the Pledgee, at the request and expense of the respective
Pledgor, will execute and deliver to such Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this Agreement as
provided above, and will duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Pledgee and as has not theretofore
been sold or otherwise applied or released pursuant to this Agreement, together
with any moneys at the time held by the Pledgee hereunder. As used in this
Agreement, "Termination Date" shall mean the date upon which the Total
Commitment and all Secured Interest Rate Agreements have been terminated, no
Letter of Credit or no Note under the Credit Agreement is outstanding (and all
Loans
Page 19
have been paid in full) and all other Obligations have been paid in full
(other than arising from indemnities for which no request has been made).
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 8.02 of the Credit Agreement or is
otherwise released at the direction of the Required Lenders (or all the Lenders
if required by Section 12.12 of the Credit Agreement), and the proceeds of such
sale or sales or from such release are applied in accordance with the terms of
the Credit Agreement to the extent required to be so applied, the Pledgee, at
the request and expense of the respective Pledgor will release such Collateral
from this Agreement, duly assign, transfer and deliver to such Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
is then being (or has been) so sold or released and as may be in possession of
the Pledgee and has not theretofore been released pursuant to this Agreement.
(c) At any time that any Pledgor desires that Collateral be released
as provided in the foregoing Section 18(a) or (b), it shall deliver to the
Pledgee a certificate signed by a principal executive officer stating that the
release of the respective Collateral is permitted pursuant to Section 18(a) or
(b). The Pledgee shall have no liability whatsoever to any Secured Creditor as
the result of any release of Collateral by it as permitted by this Section 18.
19. NOTICES, ETC. All notices and other communications hereunder
shall be in writing and shall be delivered or mailed by first class mail,
postage prepaid, addressed:
(i) if to any Pledgor, at its address set forth opposite its signature
below;
(ii) if to the Pledgee, at:
National Westminster Bank Plc
[175 ▇▇▇▇▇ ▇▇▇▇▇▇]
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ______________________
Tel: (212)
Fax: (212)
(iii) if to any Lender (other than the Pledgee), at such address as such
Lender shall have specified in the Credit Agreement;
Page 20
(iv) if to any Interest Rate Creditor, at such address as such Interest
Rate Creditor shall have specified in writing to the Pledgors and the
Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Pledgee (with the consent of the Required
Lenders or, to the extent required by Section 12.12 of the Credit Agreement, all
of the Lenders) and each Pledgor affected thereby, provided that (i) no such
change, waiver, modification or variance shall be made to Section 9 hereof or
this Section 20 without the consent of each Secured Creditor adversely affected
thereby and (ii) any change, waiver, modification or variance affecting the
rights and benefits of a single Class of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors of such Class of Secured Creditors. For the purpose of this
Agreement, the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (x) the Lender Creditors as holders of the Credit Document Obligations
or (y) the Interest Rate Creditors as holders of the Interest Rate Obligations.
For the purpose of this Agreement, the term "Requisite Creditors" of any Class
shall mean each of (x) with respect to each of the Credit Document Obligations,
the Required Lenders and (y) with respect to the Interest Rate Obligations, the
holders of at least a majority of all obligations outstanding from time to time
under the Secured Interest Rate Agreements.
21. PLEDGEE NOT BOUND. (a) Nothing herein shall be construed to make
the Pledgee or any other Secured Creditor liable as a general partner or limited
partner of any Pledged Partnership or a member of any Pledged LLC or a
shareholder of any corporation, and neither the Pledgee nor any Secured Creditor
by virtue of this Agreement or otherwise (except as referred to in the following
sentence) shall have any of the duties, obligations or liabilities of a general
partner or limited partner of any Pledged Partnership or a member of any Pledged
LLC or a stockholder of any corporation. The parties hereto expressly agree
that, unless the Pledgee shall become the absolute owner of a Partnership
Interest, a Membership Interest or Stock pursuant hereto, this Agreement shall
not be construed as creating a partnership or joint venture or membership
agreement among the Pledgee, any other Secured Creditor and/or a Pledgor.
Page 21
(b) Except as provided in the last sentence of paragraph (a) of this
Section 21, the Pledgee, by accepting this Agreement, did not intend to become a
general partner or limited partner of any Pledged Partnership or a member of any
Pledged LLC or a shareholder of any corporation or otherwise be deemed to be a
co-venturer with respect to any Pledgor or any Pledged Partnership or a member
of any Pledged LLC or a shareholder of any corporation either before or after an
Event of Default shall have occurred. The Pledgee shall have only those powers
set forth herein and shall assume none of the duties, obligations or liabilities
of a general partner or limited partner of any Pledged Partnership or of a
member of any Pledged LLC or of a Pledgor.
(c) The Pledgee shall not be obligated to perform or discharge any
obligation of a Pledgor as a result of the collateral assignment hereby
effected.
(d) The acceptance by the Pledgee of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate the Pledgee to appear in or defend any action or proceeding
relating to the Collateral to which it is not a party, or to take any action
hereunder or thereunder, or to expend any money or incur any expenses or perform
or discharge any obligation, duty or liability under the Collateral.
22. MISCELLANEOUS. This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full force and
effect, subject to release and/or termination as set forth in Section 18, (ii)
be binding upon each Pledgor, its successors and assigns; provided that no
Pledgor shall assign any of its rights or obligations hereunder without the
prior written consent of the Pledgee (with the prior written consent of the
Required Lenders or to the extent required by Section 12.12 of the Credit
Agreement, all of the Lenders), and (iii) inure, together with the rights and
remedies of the Pledgee hereunder, to the benefit of the Pledgee, the other
Secured Creditors and their respective successors, transferees and assigns. THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. The headings of the several sections and subsections in this
Agreement are for purposes of reference only and shall not limit or define the
meaning hereof. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument. In the event that any provision of this Agreement shall prove to
be invalid or unenforceable, such provision shall be deemed to be severable from
the other provisions of this Agreement which shall remain binding on all parties
hereto.
Page 22
23. WAIVER OF JURY TRIAL. Each Pledgor and the Pledgee hereby
irrevocably waive all right to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this agreement or the transactions
contemplated hereby.
24. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement pursuant to the Credit Agreement shall become a Pledgor hereunder by
executing a counterpart hereof and delivering the same to the Pledgee and
Annexes A, B, C and D will be modified at such time in a manner acceptable to
the Pledgee to give effect to such additional Pledgor.
25. AUTHORIZATION AND DIRECTION. Each Pledged Partnership and each
Pledged LLC is hereby authorized and directed to register the respective
Pledgor's pledge to the Pledgee on behalf of the Secured Creditors of the
interest of such Pledgor on such entity's books. Each Pledgor agrees to give the
respective Pledged Partnership or Pledged LLC, as the case may be, a Pledge
Notice, and to cause each such Pledged Partnership or Pledged LLC, as the case
may be, to acknowledge such notice with a Pledge Acknowledgement.
* * *
Page 23
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused
this Agreement to be executed and delivered by their duly authorized officers as
of the date first above written.
[EACH PLEDGOR],
as a Pledgor
By
---------------------------------------
Title:
NATIONAL WESTMINSTER BANK PLC,
as Collateral Agent, as Pledgee
By
---------------------------------------
Title: