Exhibit 10.46
CONTROL AGREEMENT
This CONTROL AGREEMENT, dated as of December 18, 2000, (the "Control
Agreement") is entered into between Heartland Partners, L.P., a Delaware
limited liability partnership (the "Partnership"), HTI Class B, LLC, a
Delaware limited liability company (the "Grantor"), and PG Oldco, Inc., a
Michigan corporation (the "Secured Party").
1. The Grantor and the Secured Party have entered into a certain
Subordinated Security Agreement dated as of the date hereof (the
"Security Agreement") and the Secured Party, the Grantor, the
Partnership and CMC Heartland Partners have entered into that certain
Lien Subordination and Inter-Creditor Agreement dated as of the date
hereof (the "Inter-Creditor Agreement"). Unless otherwise defined
herein, all capitalized terms used in this Control Agreement shall have
the meaning ascribed to them in the Security Agreement. Pursuant to
the Security Agreement, the Grantor has granted the Secured Party a
junior security interest in the Collateral, including the Class B
Limited Partnership Interest in the Partnership (the "Pledged
Collateral"). The parties are entering into this Control Agreement to
perfect the Secured Party's security interest in the Pledged Collateral.
2. The Partnership represents and warrants to the Secured Party that:
2.1. The Partnership is the issuer of the Pledged Collateral.
2.2. The Pledged Collateral is a security within the meaning of
8-102(a)(15) of the UCC.
2.3. No certificate has been issued to represent the Pledged
Collateral, and the Pledged Collateral is an uncertificated
security within the meaning of 8-102(a)(18) of the UCC.
2.4. The Partnership does not know of any claim to or interest in the
Pledged Collateral, except for claims and interests of the Senior
Debt Holder and the Secured Party.
3. The Partnership shall comply with all notifications it receives
directing it to transfer or redeem the Pledged Collateral (each an
entitlement order) originated by the Secured Party without further
consent by the Grantor, subject to the terms and provisions of the
Inter-Creditor Agreement.
4. Except as otherwise provided in this section, the Partnership shall
comply with entitlement orders originated by the Grantor without
further consent by the Secured Party. If the Secured Party notifies
the Partnership that the Secured Party will exercise exclusive control
over the Pledged Collateral (a "notice of exclusive control"), the
Partnership shall cease complying with entitlement orders or other
directions concerning the Pledged Collateral originated by the Grantor
and distributing to the Grantor interest and dividends on property in
the Pledged Collateral. Until the Partnership receives a notice of
exclusive control, the Partnership may distribute to the Grantor all
interest and regular cash dividends on property in the Pledged
Collateral. Except as specifically provided in the immediately
preceding sentence, the Partnership shall not comply with any
entitlement order originated by the Grantor that would require the
Partnership to make a delivery to the Grantor or any other person of
all or any part of the Collateral.
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5. The Partnership shall not agree with any third party, other than the
Senior Debt Holder and, subject to Section 12 hereof, the Pari Passu
Debt Holders, that the Partnership will comply with entitlement orders
originated by the third party.
6. The Partnership shall send copies of all statements and confirmations
for the Pledged Collateral simultaneously to the Grantor and the
Secured Party. The Partnership shall use reasonable efforts promptly
to notify the Secured Party and the Grantor if any other person, other
than the Senior Debt Holder and the Pari Passu Debt Holders, claims
that it has a property interest in property in the Pledged Collateral
and that it is a violation of that person's rights for anyone else to
hold, transfer, or deal with the property.
7. Except for permitting a withdrawal, delivery, or payment in violation
of section 4, the Partnership will not be liable to the Secured Party
for complying with entitlement orders from the Grantor that are
received by the Partnership before the Partnership receives and has a
reasonable opportunity to act on a notice of exclusive control. The
Partnership shall not be liable to the Grantor for complying with a
notice of exclusive control or with entitlement orders originated by
the Secured Party, even if the Grantor notifies the Partnership that
the Secured Party is not legally entitled to issue the entitlement
order or notice of exclusive control, unless the Partnership takes the
action after it is served with an injunction, restraining order, or
other legal process enjoining it from doing so, issued by a court of
competent jurisdiction, and had a reasonable opportunity to act on the
injunction, restraining order or other legal process, or the
Partnership acts in collusion with the Secured Party in violating the
Grantor's rights.
8. This Control Agreement does not create any obligation of the
Partnership except for those expressly set forth in this Control
Agreement. In particular, the Partnership shall not be obligated to
investigate whether the Secured Party is entitled under the Secured
Party's agreements with the Grantor to give an entitlement order or a
notice of exclusive control. The Partnership may rely on notices and
communications it believes given by the appropriate party.
9. The Grantor shall indemnify the Partnership, its officers, directors,
employees, and agents against claims, liabilities, and expenses arising
out of this Control Agreement (including reasonable attorneys' fees and
disbursements), except to the extent the claims, liabilities, or
expenses are caused by the Partnership's gross negligence or willful
misconduct.
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10. The Secured Party may terminate this Control Agreement by notice to the
Partnership and the Grantor. The Partnership shall not terminate this
Control Agreement at any time prior to the full satisfaction of all
obligations to the Secured Party under the PG Loan Agreements (as that
term is defined in the Inter-Creditor Agreement).
11. If the Secured Party notifies the Partnership that the Secured Party's
security interest in the Pledged Collateral has terminated, this
Security Agreement will immediately terminate. Sections 8 and 9 will
survive termination of this Control Agreement.
12. The Grantor and the Partnership shall not enter into any control
agreement with any Pari Passu Debt Holder without the prior written
consent of the Secured Party which consent will be given so long as the
related Pari Passu Debt (and any future advance in respect thereof) is
incurred in compliance with the Collateral Value Ratio.
13. This Control Agreement shall be governed by the laws of the State of
Delaware. The Partnership and the Grantor may not change the law
governing the Pledged Collateral without the Secured Party's express
written agreement.
14. This agreement is the entire agreement, and supersedes any prior
agreements and contemporaneous oral agreements, of the parties
concerning its subject matter.
15. No amendment of, or waiver of a right under, this Control Agreement
will be binding unless it is in writing and signed by the party to be
charged.
16. To the extent a provision of this Control Agreement is unenforceable,
this Control Agreement will be construed as if the unenforceable
provision were omitted.
17. All property credited to the Pledged Collateral will be treated as
financial assets under Article 8 of the Delaware Uniform Commercial
Code.
18. This Control Agreement and any control agreement entered into between
the Grantor, the Partnership and a Senior Debt Holder (each a "Senior
Debt Holder Control Agreement"), whether prior to, as of or after the
date of this Control Agreement, shall be subject to the provisions of
the Inter-Creditor Agreement and to the extent that any rights of the
Secured Party under this Control Agreement conflict or are inconsistent
with the rights of a Senior Debt Holder under a Senior Debt Holder
Control Agreement, such conflict or inconsistency shall be resolved in
accordance with the provisions of the Inter-Creditor Agreement.
19. A successor to or assignee of the Secured Party's rights and
obligations under the Security Agreement will succeed to the Secured
Party's rights and obligations under this Control Agreement.
20. A notice or other communication to a party under this Control Agreement
will be in writing, will be sent to the party's address set forth below
or to such other address as the party may notify the other parties and
will be effective on receipt.
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IN WITNESS WHEREOF, the Partnership, Grantor and Secured Party have
caused this Control Agreement to be duly executed as of the day and year
first above written.
HEARTLAND PARTNERS, L.P.
By: HTI Interests, LLC
Its General Partner
By s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its President & CEO
PG OLDCO, INC.
By s/▇▇▇▇▇ ▇.▇▇▇▇▇▇▇▇▇▇
Its President
HTI CLASS B, LLC
By s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its President & CEO
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