EXHIBIT 4
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PLEDGE AGREEMENT
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This STOCK PLEDGE AGREEMENT (this "Agreement") dated as of
January 27, 1999 is made by C. XXXX XXXXXXXXX (herein referred to as
"Pledgor"), in favor of DGJ, L.L.C., a Delaware limited liability company
(together with its successors and assigns, "Pledgee").
W I T N E S S E T H:
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WHEREAS, Pledgee expects to enter into a certain Securities Purchase
Agreement of even date herewith (as the same may be amended, supplemented
or modified from time to time, the "Agreement") with BPI Packaging
Technologies, Inc., a Delaware corporation ("Company"); terms used herein
but not defined herein shall have the meanings ascribed thereto in the
Agreement;
WHEREAS, in connection with the Agreement, Pledgor, Pledgee and
certain other parties will enter into a Closing Agreement dated the date
hereof (the "Closing Agreement"), pursuant to which Pledgor will agree to
reimburse Pledgee for certain liabilities, costs, damages or expenses and
to pledge shares of capital stock of the Company to secure such obligation;
WHEREAS, as conditions precedent to closing under the Agreement,
Pledgee is requiring Pledgor to execute this Agreement; and
WHEREAS, Pledgor is an affiliate of the Company and acknowledges that
it will be to Pledgor's benefit and advantage (financial and otherwise) to
induce Pledgee to enter into the Agreement;
NOW, THEREFORE, in consideration of the promises hereinafter set
forth, and for other good and valuable consideration, the receipt, adequacy
and sufficiency of which are hereby acknowledged, Pledgor and Pledgee agree
as follows:
1. PLEDGE. Pledgor hereby pledges, grants a security interest in,
mortgages, assigns, transfers, delivers, sets over and confirms unto
Pledgee, its successors and assigns, a first priority security interest in
and lien on those certain shares of stock of the Company described on
SCHEDULE I hereto (collectively, the "Pledged Shares") and any and all
replacements, substitutions, and/or proceeds of and relating to such
Pledged Shares, as collateral security for the prompt payment in full and
performance of all of the obligations, and liabilities of the Pledgor to
Pledgee, whether now existing or hereafter incurred, and whether for rent,
fees, costs or expenses, under the Closing Agreement (collectively, the
"Obligations"). The Pledgor shall deliver to the Pledgee on the date
hereof the Pledged Shares accompanied by stock powers duly endorsed in
blank.
2. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and
warrants to Pledgee, which representations and warranties shall survive the
execution and delivery of this Agreement, that:
(a) Pledgor is, and at the time of any future delivery,
pledge, assignment or other transfer hereunder, will be, the lawful owner
of the Pledged Shares, of record and beneficially;
(b) The Pledged Shares as described on SCHEDULE 1 attached
hereto are duly authorized, validly issued, fully paid and nonassessable;
(c) Except for the pledge in favor of Pledgee hereunder, none
of the Pledged Shares are or will be subject to any contractual
restriction, or any restriction under the charter, operating agreement or
by-laws of the issuer of the Pledged Shares, upon the transfer of such
stock;
(d) Pledgor has good and marketable title to the Pledged
Shares, and at the time of any future delivery, pledge, assignment or other
transfer of other collateral hereunder will have good and marketable title
thereto, free and clear of all pledges, liens, security interests,
restrictions, charges or encumbrances and adverse claims of any kind
whatsoever except as otherwise specifically set forth herein;
(e) The execution, delivery and performance by Pledgor of
this Agreement does not and will not result in any violation or breach of,
or default under, or conflict with, any terms any agreement, indenture or
other instrument, license, judgment, decree, order, law, statute, ordinance
or other governmental rule or regulation applicable to Pledgor;
(f) All acts, conditions and things required to be done and
performed and to have happened precedent to the creation and issuance of
this Agreement and to constitute it and the pledge hereunder the valid and
legally binding obligation of the Pledgor enforceable in accordance with
the terms hereof, including, without limitation, if applicable, the
delivery of stock powers and/or endorsements, have been fully done and
performed; and
(g) Upon the Pledgor's execution and delivery of this
Agreement and the delivery to Pledgee of the original certificates
evidencing the Pledged Shares, this Agreement shall create a valid first
lien upon and perfected security interest in the Pledged Shares and the
proceeds thereof, subject to no prior security interest, lien, charge or
encumbrance, or agreement purporting to grant to any third party a prior
security interest in the Pledged Shares.
3. COVENANTS.
(a) For as long as this Agreement is in force and effect,
Pledgor shall not, directly or indirectly, sell, assign, transfer,
mortgage, pledge, hypothecate or otherwise dispose of any of the Pledged
Shares, or any interest therein, or create, assume or permit any lien or
encumbrance of any kind whatsoever to exist with respect thereto, except
pursuant to this Agreement or upon the prior written approval of Pledgee.
Pledgor shall defend the Pledged Shares at Pledgor's own expense (which
expense shall include, without limitation, reasonable attorneys' fees,
costs and expenses) against the claims of all persons or entities at any
time claiming an interest therein, except for Pledgee.
(b) Except as otherwise specifically provided herein, Pledgor
shall deliver to Pledgee, promptly upon receipt thereof, to be held by
Pledgee in accordance with this Agreement, any and all stock, liquidating
or other dividends (other than cash dividends), distributions in property,
returns of capital and other distributions made on or in respect of the
Pledged Shares, whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of any issuer thereof or
received in any exchange of stock or assets to which such issuer may be a
party or otherwise, and any and all cash and other property received in
exchange for Pledged Shares, accompanied, if deemed by Pledgee to be
appropriate, by proper instruments of assignment or stock powers duly
executed by Pledgor in accordance with Pledgee's instructions.
4. VOTING POWER, DIVIDENDS AND OTHER MATTERS.
(a) Except as otherwise agreed by Pledgee and Pledgor
pursuant to the Agreement dated January 27, 1999 among Pledgor, Pledgee and
Xxxx Xxxxxx, unless and until an Event of Default (as hereinafter defined)
has occurred, except as otherwise agreed by Pledgor and Pledgee, Pledgor
shall have the right to exercise all voting, consensual and other powers
and rights of ownership pertaining to the Pledged Shares.
(b) If any Event of Default shall have occurred, then, and
whether or not Pledgee exercises any available right, remedy or relief
available under this Agreement, Pledgee, or Pledgee's nominee or nominees,
shall forthwith, without further act on the part of any person or entity,
have the sole and exclusive right to exercise all voting, consensual and
other powers and rights of ownership pertaining to the Pledged Shares, as
applicable. Pledgee shall exercise such powers in such manner as Pledgee,
in its sole discretion, shall determine to be necessary, appropriate or
advisable, and if Pledgee shall so request in writing, Pledgor agrees to
and shall execute and deliver to Pledgee such other and additional powers,
authorizations, proxies, dividends and such other documents as Pledgee may
request to secure to Pledgee the rights, powers and authorities intended to
be conferred upon Pledgee by this Agreement.
5. EVENTS OF DEFAULT. Pledgor shall be in default under this
Pledge Agreement upon the occurrence of any one or more of the following
events (an "Event of Default"):
(a) any representation or warranty of Pledgor hereunder shall
have been or be false or misleading in any material respect when made; or
(b) Pledgor has defaulted in the due observance or per-
formance of any covenant, term or agreement contained herein or in
the Closing Agreement, and any grace or notice period therein shall have
passed.
(c) Pledgor makes an assignment for the benefit of creditors,
admits in writing its insolvency or its inability to pay its debts as they
come due, files a voluntary petition in bankruptcy or reorganization, or
becomes subject to any involuntary petition in bankruptcy or reorganization
which is not dismissed within ninety (90) days after filing.
6. SALE OF PLEDGED SHARES UPON THE OCCURRENCE OF AN EVENT OF
DEFAULT.
(a) Upon the occurrence of an Event of Default, Pledgee may,
at its option and in its sole discretion:
(i) Sell the Pledged Shares, or any portion thereof, in
one or more sales, at public or private sale, conducted by any officer or
agent of, or auctioneer or attorney for Pledgee, where designated by
Pledgee, for cash, on credit or for other property, and at such price or
prices and upon such terms as Pledgee shall, in Pledgee's sole discretion,
determine. Pledgee may be the purchaser of any or all of the Pledged
Shares so sold. Pledgee shall give Pledgor at least ten (10) days'
written notice, in case of public or private sale, of such sale and shall
state the time and place fixed for such sale. Any such public sale shall
be held at such time or times
within ordinary business hours as Pledgee shall fix in the
notice of such sale. At any such sale the Pledged Shares may be sold in
one (1) lot as an entirety or in separate parcels. Pledgee shall not be
obligated to make any sale pursuant to any such notice. Pledgee may,
without notice or publication, adjourn any public or private sale from time
to time by announcement at the time and place fixed for such sale, or any
adjournment thereof, and any such sale may be made at any time or place to
which the same may be so adjourned. In case of any sale of all or any part
of the Pledged Shares for credit or for other property, the Pledged Shares
so sold may be retained by Pledgee until the selling price is paid by the
purchaser thereof, but Pledgee shall not incur any liability in case of the
failure of such purchaser to take up and pay for the Pledged Shares so
sold, and in case of any such failure, such Pledged Shares may again be
sold under and pursuant to the provisions hereof; or
(ii) Proceed by a suit or suits at law or in equity to
foreclose upon the pledge and security interest created by this Agreement
and sell the Pledged Shares, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction; or
(iii)Proceed in accordance with Paragraph 12 hereof.
(b) Upon any sale of any Pledged Shares made in accordance
with the terms of this Agreement, Pledgee shall have the right to deliver,
assign and transfer to the purchaser thereof the Pledged Shares so sold.
Each purchaser (including Pledgee) at any such sale shall hold the Pledged
Shares so sold, absolutely free from any claim or right of whatsoever kind
including, without limitation, any equity or right of redemption, of
Pledgor, which Pledgor hereby specifically waives, to the fullest extent it
may lawfully do so, and all rights of redemption, stay or appraisal which
it has or may have under any rule of law or statute now existing or
hereafter adopted.
(c) Pledgee, as attorney-in-fact pursuant to Section 8 hereof
may, in the name and stead of Pledgor, make and execute all conveyances,
assignments and transfers of the Pledged Shares sold pursuant to this
Section 6. Pledgor shall, if so requested by Pledgee, ratify and confirm
any sale or sales by executing and delivering to Pledgee or to such
purchaser or purchasers (including Pledgee), all such instruments as may,
in the judgment of Pledgee, be advisable for such purpose.
(d) The receipt of Pledgee for the purchase money paid at any
such sale made by Pledgee shall be a sufficient discharge therefor to any
purchaser of the Pledged Shares, or any portion thereof, sold as aforesaid;
and no such purchaser (or his or its representatives, successors or
assigns), after paying such purchase money and receiving such receipt,
shall be bound to see to the application of such purchase money or any part
thereof or in any manner whatsoever be answerable for any loss,
misapplication or nonapplication of any such purchase money, or any part
thereof, or be bound to inquire as to the authorization, necessity,
expediency or regularity of any such sale.
7. APPLICATION OF PROCEEDS. The proceeds of any sale, or of
collection, of all or any part of the Pledged Shares shall be applied by
Pledgee first toward the payment of any and all costs or expenses and
reasonable attorneys' fees and costs or expenses thereby incurred by
Pledgee and next toward payment of the Obligations and the obligations
hereunder in such order as Pledgee may elect and the balance to Pledgor;
provided that Pledgor and/or Pledgee shall be credited with the net
proceeds of such sale (as the case may be) only when such proceeds are
actually received by Pledgee.
8. PLEDGEE APPOINTED ATTORNEY-IN-FACT; INDEMNITY. Pledgee,
Pledgee's heirs and legal beneficiaries and successors and assigns, as
applicable, is hereby appointed the attorney-in-fact of Pledgor, with full
power of substitution, for the purpose of carrying out the provisions of
this Agreement and taking any action and executing any instruments which
such attorney-in-fact may deem necessary or advisable to accomplish the
purposes hereof, which appointment as attorney-in-fact is coupled with an
interest and thereby irrevocable. Pledgor shall indemnify and save harm-
less Pledgee and each of its officers, directors, employees, and agents,
from and against any liability, cost, expense, suit, action, claim, penalty
or damage which it or any of them may incur in the exercise and performance
of any of Pledgee's powers and duties provided herein; provided, however,
that the Pledgor shall not be required to indemnify Pledgee for any
liability, cost, expense, suit, action, claim, penalty or damage resulting
solely from the gross negligence or willful misconduct of Pledgee, its
officers, agents or assigns.
9. NO WAIVER. No failure on the part of Pledgee to exercise, and
no delay on the part of Pledgee in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise by Pledgee of any right, power or remedy hereunder
preclude any other or further right, power or remedy. The remedies herein
provided are cumulative and are not exclusive of any remedies provided by
applicable law, in equity, or under Agreement Document.
10. TERMINATION. Upon the date one year after the special meeting
of stockholders contemplated by Section 2.5 of the Agreement, provided no
Event of Default exists thereunder, this Agreement shall terminate, and
upon request by Pledgor, Pledgee will forthwith execute and deliver to
Pledgor a proper instrument or instruments acknowledging the satisfaction
and termination of this Agreement, and will forthwith deliver to Pledgor
the Pledged Shares, or portion thereof, which has not theretofore been sold
or otherwise applied or released pursuant to this Agreement, and the
related stock powers which have not theretofore become effective.
11. GENERAL PROVISIONS.
(a) THIS AGREEMENT IS TO BE PERFORMED IN, AND SHALL BE
GOVERNED BY, ENFORCED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS.
(b) This Agreement cannot be changed or amended orally, but
only by an agreement in writing, signed by both parties hereto.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
(d) Pledgor hereby agrees, at Pledgor's own expense, to
execute and deliver, from time to time, any and all further, or other,
instruments, and to perform such acts, as Pledgee may reasonably request to
effect the purposes of this Agreement and to secure to Pledgee the benefits
of all rights, authorities and remedies conferred upon Pledgee by the terms
of this Agreement.
(e) All notices requests, demands and other communications
made in connection with this Agreement shall be in writing and shall be
deemed to have been duly given on the date of delivery, if delivered to the
applicable persons and entities identified below personally, or by a
nationally recognized courier service, or three (3) days after mailing if
mailed by first class certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to Pledgor, to:
c/o BPI Packaging Technologies, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxxxxx 00000
If to Pledgee, to:
DGJ, L.L.C.
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Such addresses may be changed from time to time by means of a notice given
in the manner provided by this subsection 11(e).
(f) This Agreement contains the complete and entire
understanding of the parties hereto with respect to the subject matter
hereof and this Agreement supersedes any and all prior agreements and
understandings (whether written or oral) between the parties hereto with
respect to the subject matter hereof.
(g) The Section and subsection headings herein are for
convenience only and shall not be used to construe or interpret this
Agreement.
(h) This Agreement may be executed in one or more counter-
parts, each of which shall be deemed to be an original but all of
which taken together shall constitute but one and the same document.
(i) The obligations of the Pledgor under this Agreement shall
be absolute and unconditional in accordance with the terms hereof 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: (a)
any change in the time, place or manner of payment of, or in any other term
of, all or any of the Obligations, any waiver, indulgence, renewal,
extension, amendment or modification of or addition, consent or supplement
to or deletion from or any other action or inaction under or in respect of
the Agreement, or any other Agreement Document; (b) any lack of validity or
enforceability of the Agreement or any other Agreement Document; (c) any
furnishing of any additional security or collateral to the Pledgee or its
assignees or any acceptance thereof or any release of any security by the
Pledgee or its assignees; (d) any bankruptcy, insolvency, or similar
proceeding relating to the 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 the Pledgor shall have notice or knowledge of
any of the foregoing; (e) any exchange, release or nonperfection of any
other collateral, or any release, or amendment or waiver of or consent to
departure from any guaranty or security, for all or any of the Obligations;
or (f) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Pledgor.
(j) PLEDGOR IRREVOCABLY AGREES THAT, SUBJECT TO PLEDGEE'S SOLE
AND ABSOLUTE ELECTION, ANY ACTION OR PROCEEDING IN ANY WAY, MANNER OR
RESPECT ARISING OUT OF THIS AGREEMENT OR ARISING FROM ANY DISPUTE OR
CONTROVERSY ARISING IN CONNECTION WITH THIS AGREEMENT, SHALL BE LITIGATED
ONLY IN THE COURTS HAVING SITUS WITHIN THE CITY OF CHICAGO, THE STATE OF
ILLINOIS, AND THE PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND
COMPLAINT OR OTHER PROCESS AND PAPERS THEREIN AND AGREES THAT THE SERVICE
THEREOF MAY BE MADE BY MAIL DIRECTED TO PLEDGOR AT PLEDGOR'S ADDRESS SET
FORTH HEREIN OR OTHER ADDRESS THEREOF OF WHICH PLEDGEE HAS RECEIVED NOTICE
AS PROVIDED HEREIN OR, SERVICE TO BE DEEMED COMPLETE FIVE (5) DAYS AFTER
MAILING, OR AS PERMITTED UNDER THE RULES OF EITHER OF SAID COURTS. PLEDGOR
CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN SUCH CITY AND STATE. THE PLEDGOR HEREBY WAIVES ANY RIGHT
ITS MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT
AGAINST PLEDGOR BY PLEDGEE IN ACCORDANCE WITH THIS SECTION 11(j).
12. STRICT FORECLOSURE; LIQUIDATED DAMAGES. Upon an Event of
Default, Pledgee, at its option, may proceed in accordance with Section 9-
505 of the Uniform Commercial Code as in effect in the State of Illinois.
Upon such exercise, Maker shall be relieved of its obligations under the
Agreement. PLEDGOR HEREBY WAIVES ITS RIGHT TO OBJECT TO Pledgee'S ELECTION
OF SUCH OPTION. In connection therewith, Pledgor further acknowledges and
agrees as follows:
(a) The expense and difficulty of the Agreement and related
transactions, the inconvenience that would be associated with enforcement
of the Agreement and the distances involved make it appropriate that
Pledgor agree to liquidated damages that shall be deemed to have been
caused to Pledgee in the event of a default under this Agreement or any of
the other Agreement Documents. The present and anticipated future value of
the Pledged Shares represents a fair, reasonable estimate of actual damages
that Pledgee would sustain in the event of any such default.
(b) Upon any Event of Default, Pledgee may, at its option,
transfer the Pledged Shares into its own name in satisfaction of the
Obligations. Election of such option shall be deemed made only if notice
thereof is given in writing by Pledgee to Pledgor.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, this Stock Pledge Agreement has been duly
executed by the parties hereto as of the date first set forth above.
PLEDGEE:
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DGJ, L.L.C.
By: /s/ XXXX XXXXXX
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XXXX XXXXXX
PLEDGOR:
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/s/ X. XXXX XXXXXXXXX
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C. XXXX XXXXXXXXX
SCHEDULE 1
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LIST OF PLEDGED SHARES
CLASS OF SHARES ISSUED NUMBER OF
CAPITAL AND SHARES CERTIFICATE RECORD
STOCK OUTSTANDING PLEDGED NUMBER OWNER
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Series B
Preferred 146,695 146,695 __________ Pledgor
