EXECUTION COPY
Exhibit 10(ee)
PLEDGE AGREEMENT
Dated as of June 3, 1998
between
AMERICAN CRYSTAL SUGAR COMPANY
and
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
as Collateral Agent
TABLE OF CONTENTS
PAGE
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Section 1. Definitions; Interpretations. 1
Section 2. Representations; Warranties and Covenants. 2
Section 3. The Pledge. 4
Section 4. Covenants. 5
Section 5. Further Assurances; Remedies. 7
5.01 Delivery and Other Perfection. 7
5.02 Other Financing Statements and Liens. 8
5.03 Preservation of Rights. 8
5.04 Collateral. 8
5.05 Events of Default, Etc. 9
5.06 Deficiency. 10
5.07 Removals, Etc. 10
5.08 Private Sale. 11
5.09 Application of Proceeds. 11
5.10 Attorney-in-Fact. 11
5.11 Perfection. 11
5.12 Termination. 11
5.13 Expenses. 12
5.14 Further Assurances. 12
Section 6. Miscellaneous. 12
6.01 No Waiver. 12
6.02 Notices. 12
6.03 Waivers, Etc. 13
6.04 Successors and Assigns. 13
6.05 Counterparts. 13
6.06 Agents. 13
6.07 Severability. 13
6.08 Headings. 13
6.09 Limitation of Liability. 13
6.10 Security Interest Absolute. 13
6.11 Subrogation. 14
6.12 Reinstatement. 14
6.13 Jurisdiction and Process. 15
6.14 No Third Party Beneficiaries. 15
6.15 Governing Law. 16
6.16 Waiver of Jury Trial. 16
PLEDGE AGREEMENT (this "AGREEMENT") dated as of June 3, 1998
between American Crystal Sugar Company, a Minnesota Cooperative corporation
(the "PLEDGOR") and First Union Trust Company, National Association, as
Collateral Agent for the Noteholders under the Note Purchase Agreement
referred to below (in such capacity, together with its successors in such
capacity, the "COLLATERAL AGENT").
CRYSTECH, LLC, a Delaware limited liability company (the
"COMPANY"), and Crystech Senior Lender Trust (the "PURCHASER") are parties to
a Note Purchase Agreement dated as of June 3, 1998 (as amended, modified and
supplemented and in effect from time to time, the "NOTE PURCHASE AGREEMENT"),
providing, subject to the terms and conditions thereof, INTER ALIA, for the
issuance by the Company to the Purchaser of U.S. $86,005,000 aggregate
principal amount of its Senior Secured Notes due 2007 (together with all
notes delivered in substitution or exchange for any of said Notes pursuant to
the Note Purchase Agreement and additional Notes issued in lieu of interest
or fees payable under the Note Purchase Agreement, the "NOTES").
To induce the Purchaser to purchase the Notes and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgor has agreed to pledge and grant a security interest
in the Collateral (as hereinafter defined) as security for the Secured
Obligations (as hereinafter defined). Accordingly, the parties hereto agree
as follows:
Section 1. DEFINITIONS; INTERPRETATIONS.
(a) DEFINITIONS. Terms defined in the Note Purchase Agreement are
used herein as defined therein, unless otherwise defined herein. In
addition, as used herein the following terms shall have the following
respective meanings (all terms defined in this Section 1 and in the
other provisions of this Agreement in the singular to have the same
meanings when used in the plural and VICE VERSA):
"COLLATERAL" shall have the meaning assigned to such term in
Section 3 hereof.
"COMPANY LLC AGREEMENT" shall mean the Limited Liability Company
Agreement of Crystech, LLC, entered into and made effective as of May 1,
1998 by and among the Pledgor and each other holder of a Membership
Interest of the Company.
"MEMBERSHIP INTERESTS" shall have the meaning assigned to such term
in the Company LLC Agreement.
"RECORDS" shall have the meaning assigned to such term in Section
2(a) hereof.
"SECURED OBLIGATIONS" shall mean (a) the principal of, interest on
and Make-Whole Amount, if any, payable with respect to the Notes and (b)
all other amounts from
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time to time payable to the Collateral Agent or any Noteholder under the
Note Purchase Agreement or any other Financing Document.
"TERMINATION DATE" shall mean the date on which the Secured Parties
shall have received final payment in full of all Secured Obligations and
all other amounts owing to the Secured Parties under the Financing
Documents.
"UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code as
adopted by the State of New York.
(b) INTERPRETATION. Except as otherwise specified in this
Agreement or as the context otherwise requires, any reference in this
Agreement to any agreement, contract or document shall mean such
agreement, contract or document and all schedules, exhibits,
attachments, appendices and annexes thereto, as amended, supplemented or
modified and in effect from time to time. Unless otherwise stated, any
reference in this Agreement to any Person shall include its permitted
successors and assigns and, in the case of any Government Agency, any
Person succeeding to its functions and capacities. In addition, any
term defined or used herein in the singular will be deemed to have the
same meanings when used in the plural and VICE VERSA. Any reference in
this Agreement to any Section or Annex means and refers to the Section
contained in or Annex attached to this Agreement.
Section 2. REPRESENTATIONS; WARRANTIES AND COVENANTS.
The Pledgor represents, warrants and covenants to the Secured Parties that:
(a) The chief place of business and chief executive office of the
Pledgor and the office where the Pledgor keeps its records concerning
the Collateral (hereinafter, collectively called the "RECORDS") is
located at __________________________.
(b) The Pledgor is a cooperative corporation duly organized,
validly existing and in good standing under the laws of the State of
Minnesota and is duly qualified to do business and is in good standing
in all places where necessary in light of the business it conducts and
the Property it owns and intends to conduct and own and in light of the
transactions contemplated by this Agreement. No filing, recording,
publishing or other act that has not been made or done is necessary or
desirable in connection with the existence or good standing of the
Pledgor or the conduct of its business.
(c) The Pledgor has the full power, authority and legal right to
execute, deliver and perform its obligations under this Agreement. The
execution, delivery and performance by the Pledgor of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate and
PLEDGE AGREEMENT
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shareholder action. This Agreement has been duly executed and delivered
by the Pledgor, has not been amended or otherwise modified, is in full
force and effect and is the legal, valid and binding obligation of the
Pledgor, enforceable against the Pledgor in accordance with its terms,
except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general principles
of equity (regardless of whether enforcement thereof is sought in a
proceeding at law or in equity). The Pledgor is not in default in the
performance of any covenant or obligation set forth in any indenture or
loan or credit agreement, agreement, lease or instrument to which it is
a party or by which its Properties may be bound or affected, which
default has, or could reasonably be expected to have, a material adverse
effect on the Pledgor or the ability of the Pledgor to fulfill its
obligations under this agreement.
(d) The execution, delivery and performance by the Pledgor of this
Agreement and the consummation of the transactions contemplated hereby
do not and will not (i) require any consent or approval of the board of
directors or any shareholder of the Pledgor or any other Person that has
not been duly obtained and each such consent or approval that has been
obtained is in full force and effect, (ii) violate any provision of the
certificate of incorporation or the by-laws of the Pledgor or any
Governmental Rule or Governmental Approval applicable to the Pledgor,
(iii) conflict with, result in a breach of or constitute a default under
the certificate of incorporation, by-laws or any resolution of the board
of directors of the Pledgor or any indenture or loan or credit agreement
or other agreement, lease or instrument to which the Pledgor is a party
or by which it or its Properties may be bound or affected or (iv) result
in, or require the creation or imposition of, any Lien upon or with
respect to any of the properties now owned or hereafter acquired by the
Pledgor (other than any shares acquired by the Pledgor as a result of a
consolidation or merger of the Company). The Pledgor is not in
violation of any such Governmental Rule or Governmental Approval or such
certificate of incorporation or by-laws or in breach of or default under
any indenture, loan agreement or credit agreement or other material
agreement, lease or instrument referred to in clause (iii) above which
violation, breach or default has or could reasonably be expected to have
a material adverse effect on the Pledgor or the ability of the Pledgor
to fulfill its obligations under this Agreement.
(e) This Agreement creates in favor of the Collateral Agent for
the equal and ratable benefit of the Secured Parties, a legal, valid and
enforceable Lien on and security interest in all of the Collateral,
subject to no equal or prior Lien securing the payment and performance
of the Secured Obligations, and all filings and other actions necessary
or desirable to create, preserve, validate, perfect and protect such
Lien and the priority thereof have been duly made or taken.
PLEDGE AGREEMENT
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(f) No Governmental Approval by, and no filing with, any
Governmental Body is required to be obtained by the Pledgor in
connection with this Agreement and the transactions contemplated hereby
(except for the filing of the financing statements in the jurisdictions
identified in Annex 2 hereto).
(g) The Pledgor is the sole legal and beneficial owner of the
Collateral in which it purports to grant a security interest pursuant to
Section 3 hereof, and no Lien exists or will exist upon the Collateral
at any time (and, with respect to the Collateral, no right or option to
acquire the same exists in favor of any other Person), except for the
pledge and security interest in favor of the Collateral Agent for the
benefit of the Secured Parties created or provided for herein, which
pledge and security interest constitute a valid and enforceable first
priority perfected pledge and security interest in and to all of the
Collateral.
(h) There is no action, suit or proceeding at law or in equity or
by or before any Governmental Body, arbitral tribunal or other body now
pending, or to the best knowledge of the Pledgor, threatened against or
affecting the Pledgor or any of its Property or the Collateral which has
or could reasonably be expected to have a material adverse effect on the
Pledgor or the ability of the Pledgor to fulfill its obligations under
this Agreement.
(i) The Pledgor has filed or caused to be filed all tax returns
that are required to be filed, and has paid all taxes shown to be due
and payable on said returns or on any assessments made against the
Pledgor or any of its Property and all other Taxes imposed on the
Pledgor by any Governmental Body (other than Taxes the payment of which
are not yet due or which are being contested in good faith and Taxes for
which the failure to so file or pay does not have and could not
reasonably be expected to have a material adverse effect on the Pledgor
or the ability of the Pledgor to fulfill its obligations under this
Agreement), and no tax Liens have been filed and no claims are being
asserted with respect to any such Taxes.
(j) The Pledgor has all right, title, interest in, to and under,
and is the record owner of, the Collateral in which it purports to grant
a security interest pursuant to Section 3 and no Lien exists or will
exist upon the Collateral at any time (and no right to acquire the same
exists in favor of any other Person), except for the pledge and security
interest in favor of the Collateral Agent for the benefit of the Secured
Parties created or provided for herein, which pledge and security
interest constitute a first priority perfected pledge and security
interest in and to all of the Collateral.
(k) The Membership Interests identified in Annex 1 hereto are, and
all other Membership Interests of the Company in which the Pledgor shall
hereafter grant a
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security interest pursuant to Section 3 hereof will be, duly authorized,
validly existing, fully paid and non-assessable, and none of such
interests is or will be subject to any contractual restriction, or any
restriction under the Company LLC Agreement, upon the transfer of such
membership interests, including without limitation the admission of any
such transferee as a Member of the Company (except for such restriction
contained herein).
Section 3. THE PLEDGE
As collateral security for the prompt payment in full when due (whether at
stated maturity, by acceleration or otherwise) of the Secured Obligations,
the Pledgor hereby pledges, assigns, hypothecates and transfers to the
Collateral Agent for the equal and ratable benefit of the Secured Parties,
and hereby grants to the Collateral Agent for the equal and ratable benefit
of the Secured Parties a Lien on and security interest in, all of the
Pledgor's right, title and interest in, to and under the following, whether
now owned by the Pledgor or hereafter acquired and whether now existing or
hereafter coming into existence and wherever located (all being collectively
referred to herein as "COLLATERAL"):
(a) its Membership Interests, together with the certificates (if
any) evidencing the same, including, without limitation, all of its
right, title and interest in, to and under the Company LLC Agreement,
including, without limitation, (i) all rights of the Pledgor to receive
moneys due but unpaid and to become due under or pursuant to the Company
LLC Agreement, (ii) all rights of the Pledgor to participate in the
operation or management of the Company and to take actions or consent to
actions in accordance with the provisions of the Company LLC Agreement,
(iii) all rights of the Pledgor to property of the Company, (iv) all
rights of the Pledgor to receive proceeds of any insurance, bond,
indemnity, warranty or guaranty with respect to the Company LLC
Agreement, (v) all claims of the Pledgor for damages arising out of or
for breach of or default under the Company LLC Agreement and (vi) all
rights of the Pledgor to terminate, amend, supplement, modify or waive
performance under the Company LLC Agreement, to perform thereunder and
to compel performance and otherwise to exercise all remedies thereunder;
(b) all shares, interests, securities, moneys or property
representing a dividend on such Membership Interests or representing a
distribution or return of capital upon or with respect to such
Membership Interests or resulting from a split-up, revision,
reclassification or other like change of the Collateral or otherwise
received in exchange therefor, and any subscription warrants, rights or
options issued to the holders of, or otherwise in respect of the
Collateral; and
(c) all proceeds, products, offspring, rents, profits, royalties,
revenues, issues, income, benefits, accessions, additions, substitutions
and replacements of and to any and
PLEDGE AGREEMENT
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all of the property of the Pledgor described in the preceding clauses
of this Section 3 and, to the extent related to any such property all
books, correspondence, credit files, records, invoices and other papers.
Section 4. COVENANTS.
The Pledgor covenants and agrees that, until the Termination Date:
(a) The Pledgor will not (i) cancel or terminate the Company LLC
Agreement or consent to or accept any cancellation or termination
thereof, (ii) amend, supplement or otherwise modify the Company LLC
Agreement in a manner that would be adverse to the interests of the
Noteholders under the Financing Documents or adversely affect the rights
or remedies of the Collateral Agent hereunder or the value of the
Collateral or (iii) petition, request or take any other legal or
administrative action that seeks, or may reasonably be expected, to
rescind, terminate, amend, modify or suspend the Company LLC Agreement;
PROVIDED that after ACS has purchased the Membership Interests of the
other Member(s) under Section 4.2 of the Company Limited Liability
Company Agreement, ACS may terminate the Company Limited Liability
Company Agreement if prior to such termination the Company has merged
with or consolidated into ACS in a transaction permitted under Section
9.6 of the Note Purchase Agreement and ACS has assumed in writing all of
the Secured Obligations pursuant to an assignment and assumption
agreement satisfactory to the Noteholders and has delivered to the
Noteholders (a) an opinion of counsel satisfactory to the Noteholders
covering the enforceability of such assignment and assumption agreement
and such other matters as the Noteholders may reasonably request and (b)
such other documents and financial information with respect to ACS as
the Noteholders may reasonable request, which documents shall be
satisfactory to the Noteholders.
(b) The Pledgor shall preserve and maintain its corporate
existence and all of its licenses, rights, privileges and franchises
that are necessary or desirable for the maintenance of its existence and
the fulfillment of its obligations under this Agreement.
(c) The Pledgor shall pay and discharge all Taxes now or hereafter
imposed on the Pledgor, on its income or profits, on any of its Property
or upon the Liens provided for herein prior to the date on which
penalties attach thereto for which the failure to so pay and discharge
has or could reasonably be expected to have a material adverse effect on
the Pledgor or the ability of the Pledgor to fulfill its obligations
under this Agreement; PROVIDED that the Pledgor shall have the right to
contest in good faith the validity or amount of any such Tax.
(d) The Pledgor shall not create, incur, assume or suffer to exist
any Lien upon any of the Collateral, except for Permitted Liens.
PLEDGE AGREEMENT
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(e) The Pledgor shall promptly upon obtaining knowledge of any
action, suit or proceeding at law or in equity by or before any
Governmental Body, arbitral tribunal or other body pending or threatened
against the Pledgor which could result in a material adverse effect on
the Pledgor or the ability of the Pledgor to fulfill its obligations
under this Agreement or upon becoming aware of any other circumstance,
act or condition (including, without limitation, the adoption, amendment
or repeal of any Governmental Rule or the Impairment of any Governmental
Approval or notice (whether formal or informal, written or oral) of the
failure to comply with the terms and conditions of any Governmental
Approval) which could result in a material adverse effect on the Pledgor
or the ability of the Pledgor to fulfill its obligations under this
Agreement, furnish to the Collateral Agent a written notice of such
event describing the same in reasonable detail and, together with such
notice or as soon thereafter as possible, a description of the action
that the Pledgor has taken and proposes to take with respect thereto.
(f) Except as permitted by Section 9.2 of the Company LLC
Agreement, ("RIGHT TO PURCHASE AND SELL MEMBERSHIP INTERESTS"), the
Pledgor shall not sell, assign, transfer or otherwise dispose of all or
any part of the Collateral, or consent to the issuance of any Membership
Interests or other equity interest of any class by the Company, without
the prior written consent of the Collateral Agent (which the Collateral
Agent will provide only if instructed to do so by the Majority Holders).
(g) Promptly after the Pledgor knows or has reason to believe that
any Default or Event of Default relating to the Pledgor has occurred,
the Pledgor shall deliver to the Collateral Agent written notice of such
event describing the same in reasonable detail together with, or as soon
thereafter as possible, a written description of the action that the
Pledgor has taken or proposes to take with respect thereto.
Section 5. FURTHER ASSURANCES; REMEDIES.
In furtherance of the grant of the pledge and security interest pursuant to
Section 3 hereof, the Pledgor hereby agrees with the Secured Parties as
follows:
5.01 DELIVERY AND OTHER PERFECTION.
The Pledgor shall:
(a) with respect to the Membership Interests held by the Pledgor,
execute and deliver written instructions to the Company to register the
Lien created hereunder in such ownership interests in the registration
books maintained by the Company for such a purpose and cause the Company
to execute and deliver to the Collateral Agent a written confirmation to
the effect that the Lien created hereunder in such ownership interests
has been duly registered in such registration books;
PLEDGE AGREEMENT
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(b) if any of the certificates, warrants, rights, options or other
Property required to be pledged by the Pledgor under Section 3 hereof
are received by the Pledgor, forthwith (i) transfer and deliver to the
Collateral Agent such certificates, warrants, rights, options or other
Property so received by the Pledgor (together with the certificates for
any such Membership Interests and securities duly endorsed in blank),
all of which thereafter shall be held by the Collateral Agent, pursuant
to the terms of this Agreement, as part of the Collateral and/or (ii)
take such other action as the Collateral Agent shall deem necessary or
appropriate to duly record the Lien created hereunder in such
certificates, warrants, rights, options or other Property;
(c) give, execute, deliver, file and/or record any financing
statement, continuation statement, notice, instrument, document,
agreement or other papers that may be necessary or desirable or
reasonably requested by the Collateral Agent in a notice to the Pledgor
(given by the Collateral Agent upon the written directions of the
Majority Holders) to create, preserve, perfect or validate the security
interest granted pursuant hereto or to enable the Collateral Agent to
exercise and enforce its rights hereunder with respect to such pledge
and security interest including, without limitation, causing any or all
of the Collateral to be transferred of record into the name of the
Collateral Agent or its nominee (and the Collateral Agent agrees that if
any Collateral is transferred into its name or the name of its nominee,
the Collateral Agent will thereafter promptly give to the Pledgor copies
of any written notices and communications received by it with respect to
the Collateral). Without limiting the generality of the foregoing, the
Pledgor shall, if any Collateral shall be evidenced by a promissory note
or other instrument, deliver and pledge to the Collateral Agent for the
equal and ratable benefit of the Secured Parties such note or instrument
duly endorsed or accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Collateral
Agent;
(d) maintain, hold and preserve full and accurate Records, and
stamp or otherwise ▇▇▇▇ such Records in such manner as the Collateral
Agent may reasonably require in order to reflect the security interests
granted by this Agreement;
(e) permit representatives of the Collateral Agent, upon
reasonable notice, at any time during normal business hours to inspect
and make abstracts from its Records, and permit representatives of the
Collateral Agent to be present at the Pledgor's place of business to
receive copies of all communications and remittances relating to the
Collateral, all in such manner as the Collateral Agent may require, and
forward promptly to the Collateral Agent written copies of any notices
or communications received by the Pledgor with respect to the
Collateral; and
(f) if any of the Collateral shall be evidenced by a promissory note
or other
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instrument, deliver and pledge to the Collateral Agent for the equal and
ratable benefit of the Secured Parties any all such notes or
instruments, endorsed and/or accompanied by such executed instruments of
assignment and transfer in such form and substance as the Collateral
Agent may reasonably request.
5.02 OTHER FINANCING STATEMENTS AND LIENS.
Without the prior consent of the Collateral Agent (which the Collateral Agent
will provide to the extent directed to do so by the Majority Holders), the
Pledgor shall not file or suffer to be on file, or authorize or permit to be
filed or to be on file, in any jurisdiction, any financing statement,
recordation of Liens or like instrument with respect to the Collateral in
which the Collateral Agent is not named as the sole secured party for the
benefit of the Secured Parties.
5.03 PRESERVATION OF RIGHTS.
The Collateral Agent shall not be required to take steps necessary to
preserve any rights against prior parties to any of the Collateral.
5.04 COLLATERAL.
(a) So long as no Default or Event of Default shall have occurred
and be continuing, the Pledgor shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral for all
purposes not inconsistent with the terms of this Agreement, the Note Purchase
Agreement or any other Financing Document; and, the Collateral Agent shall
execute and deliver to the Pledgor or cause to be executed and delivered to
the Pledgor all such proxies, powers of attorney, dividend and other orders,
and all such instruments, without recourse, as the Pledgor may reasonably
request in a writing delivered to the Collateral Agent for the purpose of
enabling the Pledgor to exercise the rights and powers which it is entitled
to exercise pursuant to this Section 5.04(a).
(b) Unless and until a Default or Event of Default has occurred
and is continuing, the Pledgor shall be entitled to receive, retain and
distribute as dividends or otherwise any dividends on the Collateral paid or
payable in accordance with the terms of the Agency and Disbursement Agreement.
(c) If any Default or Event of Default shall have occurred and be
continuing, and whether or not the Collateral Agent or any other Secured
Party exercises any available right to declare any Secured Obligation due and
payable or seeks or pursues any other relief or remedy available to it under
applicable law or under this Agreement, the Note Purchase Agreement or any
other Financing Document, all dividends and other distributions on the
Collateral received by the Pledgor in trust for the benefit of the Collateral
Agent, shall be segregated from other funds of the Pledgor and shall be
forthwith paid over to the Collateral Agent in the same form as
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received. Subject to the terms of this Agreement, and, if the Collateral
Agent shall so request, the Pledgor agrees to execute and deliver to the
Collateral Agent appropriate additional dividend, distribution and other
orders and documents to that end, PROVIDED that if such Default or Event of
Default is waived or cured, any such dividend or distribution theretofore
paid to the Collateral Agent shall, upon written request of the Pledgor
(except to the extent theretofore applied to the Secured Obligations), be
returned by the Collateral Agent to the Pledgor.
5.05 EVENTS OF DEFAULT, ETC.
During the period during which an Event of Default shall have occurred and be
continuing:
(a) the Collateral Agent shall have all of the rights and remedies
with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in the States of New York and Delaware and any
jurisdiction where any rights and remedies hereunder may be asserted,
including, without limitation, the right, to the maximum extent
permitted by law, to exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if the Collateral Agent were
the sole and absolute owner thereof (and the Pledgor agrees to take all
such reasonable action as may be appropriate to give effect to such
right);
(b) the Collateral Agent may, in its name or in the name of the
Pledgor or otherwise, demand, ▇▇▇ for, collect or receive any money or
property at any time payable or receivable on account of or in exchange
for any of the Collateral, but shall be under no obligation to do so; and
(c) the Collateral Agent may (but shall have no obligation to,
except to the extent required under the Agency and Disbursement
Agreement), upon not less than five Business Days' prior notice to the
Pledgor of the time and place, with respect to the Collateral or any
part thereof which shall then be or shall thereafter come into the
possession, custody or control of the Collateral Agent, the other
Secured Parties or any of their respective agents, sell, lease, assign
or otherwise dispose of all or any part of such Collateral, at such
place or places as the Collateral Agent deems advisable, and for cash or
for credit or for future delivery (without thereby assuming any credit
risk), at public or private sale, without demand of performance or
notice of intention to effect any such disposition or of the time or
place thereof (except such notice as is required above or by applicable
statute and cannot be waived), and the Collateral Agent or any other
Secured Party or anyone else may be the purchaser, lessee, assignee or
recipient of any or all of the Collateral so disposed of at any public
sale (or, to the extent permitted by law, at any private sale conducted
in a commercially reasonable manner) and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind, including
any right or
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equity of redemption (statutory or otherwise), of the Pledgor, any such
demand, notice and right or equity being hereby expressly waived and
released. The Collateral Agent may (but shall have no obligation to,
except to the extent required under the Agency and Disbursement
Agreement), without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at
any time or place to which the sale may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
5.05 shall be applied in accordance with Section 5.09 hereof.
The Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Collateral Agent may be compelled, with respect to any
sale of all or any part of the Collateral, to limit purchasers to those who
will agree, INTER ALIA, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges that any such private sale may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions, and, notwithstanding such circumstances,
agrees that to the extent such private sale shall have been made in a
commercially reasonable manner, the Collateral Agent shall have no obligation
to engage in public sales and no obligation to delay the sale of any
Collateral for the period of time necessary to permit the respective issuer
thereof to register it for public sale.
5.06 DEFICIENCY.
If the proceeds of sale, collection or other realization of or upon the
Collateral pursuant to Section 5.05 hereof are insufficient to cover the
costs and expenses of such realization and the payment in full of the Secured
Obligations, the Pledgor shall remain liable for any deficiency only to the
extent provided in Section 16.6 of the Note Purchase Agreement.
5.07 REMOVALS, ETC.
Without at least 30 days' prior written notice to the Collateral Agent, the
Pledgor shall not (a) maintain any of its Records at any office or maintain
its principal place of business at any place other than at the address
indicated beneath its signature hereto or (b) change its corporate name, or
the name under which it does business, from the name shown on the signature
pages hereto.
5.08 PRIVATE SALE.
The Collateral Agent and the other Secured Parties, respectively, shall incur
no liability as a result of the sale of the Collateral, or any part thereof,
at any private sale, pursuant to Section 5.05 hereof, conducted in a
commercially reasonable manner. The Pledgor hereby waives any claims against
the Collateral Agent or any other Secured Party arising by reason of
PLEDGE AGREEMENT
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the fact that the price at which the Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Secured Obligations,
even if the Collateral Agent accepts the first offer received and does not
offer the Collateral to more than one offeree.
5.09 APPLICATION OF PROCEEDS.
Except as otherwise herein expressly provided, the proceeds of any
collection, sale or other realization of all or any part of the Collateral
pursuant hereto, and any other cash at the time held by the Collateral Agent
under this Section 5, shall be applied by the Collateral Agent in accordance
with Section 7 of the Agency and Disbursement Agreement.
5.10 ATTORNEY-IN-FACT.
Without limiting any rights or powers granted by this Agreement to the
Collateral Agent, while no Default or Event of Default has occurred and is
continuing, upon the occurrence and during the continuance of any Default or
Event of Default the Collateral Agent is hereby appointed the
attorney-in-fact of the Pledgor for the purpose of carrying out the
provisions of this Section 5 and taking any action and executing any
instruments which the Collateral Agent may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, so long as the Collateral Agent shall be entitled under this
Section 5 to make collections in respect of the Collateral, the Collateral
Agent shall have the right and power to receive, endorse and collect all
checks made payable to the order of the Pledgor representing any dividend,
payment or other distribution in respect of the Collateral or any part
thereof and to give full discharge for the same.
5.11 PERFECTION.
Prior to or concurrently with the execution and delivery of this Agreement,
the Pledgor shall deliver to the Collateral Agent all certificates identified
in Annex 1 hereto, accompanied by undated stock powers duly executed in blank
(or otherwise properly indorsed (within the meaning of Section 8-304 of the
UCC).
5.12 TERMINATION.
Upon the Termination Date, the security interest created by this Agreement
shall terminate and all rights to the Collateral shall revert to the Pledgor,
and upon the written request of the Pledgor containing a certification that
the Termination Date has occurred, the Collateral Agent shall forthwith cause
to be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral and
money received in respect thereof, to or on the order of the Pledgor. The
Collateral Agent shall also execute and deliver to the Pledgor upon such
written request and certification such Uniform Commercial Code termination
statements and such other documentation as shall be reasonably requested by
the Pledgor to effect the termination and release of the Liens on the
Collateral.
PLEDGE AGREEMENT
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5.13 EXPENSES.
The Pledgor agrees to reimburse each of the Noteholders and the Collateral
Agent for all costs and expenses of the Noteholders and the Collateral Agent
(including, without limitation, the fees and expenses of legal counsel) in
connection with (a) any Default or Event of Default and any enforcement or
collection proceeding resulting therefrom, including, without limitation, all
manner of participation in or other involvement with (i) performance by the
Collateral Agent of any obligation that the Pledgor has failed or refused to
perform, (ii) bankruptcy, insolvency, receivership, foreclosure, winding up
or liquidation proceedings, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Collateral, and for the care of the Collateral and defending or asserting
rights and claims of the Collateral Agent in respect thereof, by litigation
or otherwise, including expenses of insurance, (iii) judicial or regulatory
proceedings and (iv) workout, restructuring or other negotiations or
proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (b) the enforcement of this Section
5.13, and all such costs and expenses shall be Secured Obligations entitled
to the benefits of the collateral security provided pursuant to Section 3
hereof.
5.14 FURTHER ASSURANCES.
The Pledgor agrees that, from time to time upon the request of the Collateral
Agent, the Pledgor will execute and deliver such further documents and do
such other acts and things as the Collateral Agent may reasonably request in
order fully to effectuate the purposes of this Agreement.
Section 6. MISCELLANEOUS.
6.01 NO WAIVER.
No failure on the part of the Collateral Agent or any of its agents to
exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or remedy hereunder shall operate as a waiver thereof,
and no single or partial exercise by the Collateral Agent or any of its
agents of any right, power or remedy hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided herein are cumulative and are not exclusive of any
remedies provided by law.
6.02 NOTICES.
All notices, requests and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made in writing (including, without
limitation, by telex or telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature page hereof
or, as to any party, at such other address as shall be designated by such
party, in a notice to each
PLEDGE AGREEMENT
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other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telex or telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
6.03 WAIVERS, ETC.
This Agreement may be amended or modified only by an instrument in writing
signed by the Pledgor and the Collateral Agent acting with the written
consent of the Majority Holders and any provision of this Agreement may be
waived by the Collateral Agent acting with written consent of the Majority
Holders; PROVIDED that no amendment, modification or waiver shall, unless by
an instrument in writing signed by each Noteholder or by the Collateral Agent
acting with the written consent of each Noteholder, alter the terms of this
Section 6.03. Any waiver shall be effective only in the specific instance
and for the specified purpose for which it was given.
6.04 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Pledgor, the Collateral Agent, the
other Secured Parties and each holder of any of the Secured Obligations
(PROVIDED, HOWEVER, that the Pledgor shall not assign or transfer its rights
hereunder without the prior consent of the Collateral Agent) (which the
Collateral Agent will provide only if instructed to do so by the Majority
Holders).
6.05 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one
and the same instrument.
6.06 AGENTS.
The Collateral Agent may employ agents and attorneys-in-fact in connection
herewith and shall not be responsible for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it in good faith.
6.07 SEVERABILITY.
If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (a) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (b) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
6.08 HEADINGS.
The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect any of the terms hereof.
PLEDGE AGREEMENT
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6.09 LIMITATION OF LIABILITY.
The liability of the Pledgor for the payment and performance of the Secured
Obligations shall be limited as and to the extent provided under Section 16.6
of the Note Purchase Agreement.
6.10 SECURITY INTEREST ABSOLUTE.
The rights and remedies of the Collateral Agent hereunder, the Liens created
hereby and the obligations of the Pledgor hereunder are absolute, irrevocable
and unconditional, irrespective of:
(a) the validity or enforceability of any of the Secured
Obligations, any other Financing Document or any other agreement or
instrument relating thereto;
(b) any amendment to, waiver of, consent to or departure from, or
failure to exercise any right, remedy, power or privileges under or in
respect of, any of the Secured Obligations, any other Financing Document
or any other agreement or instrument relating thereto;
(c) the acceleration of the maturity of any of the Secured
Obligations or any other modification of the time of payment thereof;
(d) any substitution, release or exchange of any other security
for or guarantee of any of the Secured Obligations or the failure to
create, preserve, validate, perfect or protect any other Lien granted
to, or purported to be granted to, or in favor of, the Collateral Agent
or any other Secured Party; or
(e) any other event or circumstance whatsoever which might
otherwise constitute a legal or equitable discharge of a surety or a
guarantor, it being the intent of this Section 6.10 that the obligations
of the Pledgor hereunder shall be absolute, irrevocable and
unconditional under any and all circumstances.
6.11 SUBROGATION.
The Pledgor shall not exercise, and hereby irrevocably waives, any claim,
right or remedy that it may now have or may hereafter acquire against the
Company arising under or in connection with this Agreement, including,
without limitation, any claim, right or remedy of subrogation, contribution,
reimbursement, exoneration, indemnification or participation arising under
contract, by Governmental Rule or otherwise in any claim, right or remedy of
the Collateral Agent or the Secured Parties against the Company or any other
Person or any Collateral which the Collateral Agent or any Secured Party may
now have or may hereafter acquire. If, notwithstanding the preceding
sentence, any amount shall be paid to the Pledgor on account of such
subrogation rights at any time when any of the Secured Obligations shall not
have been paid in full, such amount shall be held by the Pledgor in trust for
the Collateral Agent and the Secured Parties, segregated from other funds of
the Pledgor and be turned over to the Collateral Agent in the
PLEDGE AGREEMENT
- 18 -
exact form received by the Pledgor (duly endorsed by the Pledgor to the
Collateral Agent, if required), to be applied against the Secured
Obligations, whether matured or unmatured, in accordance with the Note
Purchase Agreement and the Security Documents.
6.12 REINSTATEMENT.
This Agreement and the Lien created hereunder shall automatically be
reinstated if and to the extent that for any reason any payment by or on
behalf of the Company in respect of the Secured Obligations is rescinded or
must otherwise be restored by any holder of the Secured Obligations, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise,
and the Pledgor shall indemnify the Collateral Agent and each other Secured
Party on demand for all reasonable costs and expenses (including, without
limitation, fees and expenses of counsel) incurred by the Collateral Agent or
such other Secured Party in connection with such rescission or restoration.
6.13 JURISDICTION AND PROCESS.
THE PLEDGOR AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR ANY OTHER
DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH, OR ANY LEGAL ACTION OR
PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT OBTAINED AGAINST THE
PLEDGOR, FOR BREACH HEREOF OR THEREOF, OR AGAINST ANY OF ITS PROPERTIES, MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK BY ANY SECURED PARTY OR
ON BEHALF OF SUCH SECURED PARTY, AS SUCH SECURED PARTY MAY ELECT, AND THE
PLEDGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF SUCH COURTS FOR PURPOSES OF ANY SUCH LEGAL ACTION OR
PROCEEDING. THE PLEDGOR HEREBY IRREVOCABLY APPOINTS AND DESIGNATES CT
CORPORATION SYSTEM, WHOSE ADDRESS IS ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, OR
ANY OTHER PERSON HAVING AND MAINTAINING A PLACE OF BUSINESS IN THE STATE OF
NEW YORK WHOM THE PLEDGOR MAY FROM TIME TO TIME HEREAFTER DESIGNATE (HAVING
GIVEN 30 DAYS' NOTICE THEREOF TO THE COLLATERAL AGENT), AS THE TRUE AND
LAWFUL ATTORNEY AND DULY AUTHORIZED AGENT FOR ACCEPTANCE OF SERVICE OF LEGAL
PROCESS. THE PLEDGOR HEREBY AGREES THAT SERVICE OF PROCESS IN ANY SUCH
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID,
TO IT AT ITS ADDRESS SPECIFIED IN SECTION 6.02 OF THIS AGREEMENT OR AT SUCH
OTHER ADDRESS OF WHICH THE COLLATERAL AGENT SHALL HAVE BEEN NOTIFIED PURSUANT
THERETO. IN
PLEDGE AGREEMENT
- 19 -
ADDITION, THE PLEDGOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT EXECUTED IN CONNECTION
HEREWITH OR THEREWITH BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
6.14 NO THIRD PARTY BENEFICIARIES.
THE AGREEMENTS OF THE PARTIES HERETO ARE SOLELY FOR THE BENEFIT OF THE
PLEDGOR, THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES, AND NO PERSON
(OTHER THAN THE PARTIES HERETO, THE OTHER SECURED PARTIES AND THEIR
SUCCESSORS AND ASSIGNS PERMITTED HEREUNDER) SHALL HAVE ANY RIGHTS HEREUNDER.
6.15 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
6.16 WAIVER OF JURY TRIAL.
EACH OF THE PLEDGOR AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
COMPANY LLC AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6.17 BENEFITS OF AGENCY AND DISBURSEMENT AGREEMENT.
For all purposes of this Agreement, in the performance of any duty or
obligation or the exercise of any right, power, or authority of the
Collateral Agent hereunder, including, without limitation, the giving of any
consent hereunder, the Collateral Agent shall be entitled to the benefits of
the Agency and Disbursement Agreement.
PLEDGE AGREEMENT
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above written.
AMERICAN CRYSTAL SUGAR COMPANY
By
-----------------------------------
Title:
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
as Collateral Agent
By
-----------------------------------
Title:
Address for Notices:
First Union Trust Company, National
Association, as Collateral Agent
for Holders of [Notes]
One ▇▇▇▇▇▇ Square, First Floor
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telecopier No.: (▇▇▇)-▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇)-▇▇▇-▇▇▇▇
PLEDGE AGREEMENT
ANNEX 1
MEMBER COLLATERAL
AMERICAN CRYSTAL SUGAR COMPANY
Type of Certificate
Membership Number of No(s).
Interests Units (if any)
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PLEDGE AGREEMENT
