EXHIBIT 10.7
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT dated as of June 17, 2005 executed and delivered
by each of the undersigned parties identified as "Pledgors" on the signature
pages hereto in favor of Wachovia Bank, National Association, as Lender (the
"Pledgee").
WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), between Xxxxxx Industries, Inc. (the "Borrower")
and the Pledgee, the Pledgee has agreed to make available to the Borrower
certain financial accommodations on the terms and conditions contained in the
Credit Agreement;
WHEREAS, the Borrower and each of the other Pledgors, though separate
legal entities, are mutually dependent on each other in the conduct of their
respective businesses as an integrated operation and have determined it to be in
their mutual best interests to obtain financing from the Pledgee through their
collective efforts;
WHEREAS, each Pledgor acknowledges that it will receive direct and
indirect benefits from the Pledgee making such financial accommodations
available to the Borrower under the Credit Agreement; and
WHEREAS, it is a condition precedent to the extension of such financial
accommodations under the Credit Agreement that the Pledgors execute and deliver
this Agreement, among other things, to grant to the Pledgee a security interest
in the Collateral as security for the Secured Obligations.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, the parties agree
as follows:
Section 1. DEFINITIONS. Terms not otherwise defined herein are used
herein with the respective meanings given them in the Credit Agreement. Terms
defined in the Uniform Commercial Code as in effect in the State of Georgia
shall have the respective definitions as so defined. In addition, as used in
this Agreement:
"BANKRUPTCY CODE" means United States Bankruptcy Code (11 U.S.C. Section
101 et seq.), as in effect from time to time, and any successor statute thereto.
"ISSUER" means with respect to an Equity Interest, the Person who issued
such Equity Interest and shall include each of the Persons identified as an
Issuer on Schedule 1 attached hereto (or any addendum or supplement thereto),
and any successors thereto, whether by merger or otherwise.
"PROCEEDS" means all proceeds (including proceeds of proceeds) of any of
the Collateral including all: (a) rights, benefits, distributions, premiums,
profits, dividends, interest, cash, instruments, documents of title, accounts,
contract rights, inventory, equipment, general intangibles, payment intangibles,
deposit accounts, chattel paper, and other property from time to time received,
receivable, or otherwise distributed in respect of or in exchange for, or as a
replacement of or a substitution for, any of the Collateral, or proceeds thereof
(including any cash, Equity Interests, or other instruments issued after any
recapitalization, readjustment, reclassification, merger or consolidation with
respect to the Issuers and any security entitlements, as defined in Section
8-102(a)(17) of the UCC, with respect thereto); (b) "proceeds," as such term is
defined in Section 9-102(a)(64) of the UCC; (c) proceeds of any insurance,
indemnity, warranty, or guaranty (including guaranties of delivery) payable from
time to time with respect to any of the Collateral, or proceeds thereof; and (d)
payments (in any form whatsoever) made or due and payable to a Pledgor from time
to time in connection with any requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Collateral, or proceeds thereof.
"SECURED OBLIGATIONS" means, collectively, (a) with respect to the
Borrower, the unpaid principal of and interest on all Loans and the
Reimbursement Obligations and all other indebtedness, liabilities, obligations,
covenants and duties of the Borrower owing to the Pledgee (or, in the case of
any Derivatives Contract, any Affiliate of the Pledgee) of any kind, nature or
description, under or in respect of the Credit Agreement, any other Loan
Document to which the Borrower is a party or any Derivatives Contract entered
into by the Borrower with Pledgee (or with any Affiliate of Pledgee), whether
direct or indirect, absolute or contingent, due or to become due, contractual or
tortious, liquidated or unliquidated, and including all interest (including
interest that accrues after the filing of a case under the Bankruptcy Code) and
any and all costs, fees (including attorneys fees), and expenses which the
Borrower is required to pay pursuant to any of the foregoing, by law, or
otherwise and (b) with respect to any other Pledgor, all indebtedness,
liabilities, obligations, covenants and duties of such Pledgor owing to the
Pledgee of any kind, nature or description, under or in respect of the Guaranty
or any other Loan Document to which such Pledgor is a party, whether direct or
indirect, absolute or contingent, due or to become due, contractual or tortious,
liquidated or unliquidated, and including all interest (including interest that
accrues after the filing of a case under the Bankruptcy Code) and any and all
costs, fees (including attorneys fees), and expenses which such Pledgor is
required to pay or has guaranteed pursuant to any of the foregoing, by law, or
otherwise.
"SECURITIES ACT" means the Securities Act of 1934, as amended.
"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
Section 2. PLEDGE. As security for the prompt performance and payment in
full of the Secured Obligations, each Pledgor hereby pledges to the Pledgee, and
grants to the Pledgee a security interest in, all of such Pledgor's right, title
and interest in, to and under the following (collectively, the "Collateral"):
(a) 100% of the Equity Interests of each Domestic Material
Subsidiary and no more than 65% of the Equity Interests of each first tier
direct Foreign Material Subsidiary now or
2
hereafter owned, acquired or held by such Pledgor, including without limitation,
the Equity Interests described in Schedule 1 attached hereto;
(b) all payments due or to become due to such Pledgor in respect of
any of the foregoing;
(c) all of such Pledgor's claims, rights, powers, privileges,
authority, puts, calls, options, security interests, liens and remedies, if any,
in respect of any of the foregoing;
(d) all of such Pledgor's rights to exercise and enforce any and
every right, power, remedy, authority, option and privilege of such Pledgor
relating to any of the foregoing including, without limitation, any power to (i)
terminate, cancel or modify any agreement, (ii) 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 of the foregoing and the applicable Issuer thereof, (iii)
exercise voting rights or make determinations, (iv) exercise any election
(including, but not limited to, election of remedies), (v) exercise any "put",
right of first offer or first refusal, or other option, (vi) exercise any right
of redemption or repurchase, (vii) give or receive any notice, consent,
amendment, waiver or approval, (viii) demand, receive, enforce, collect or
receipt for any of the foregoing, (ix) enforce or execute any checks, or other
instruments or orders, and (x) file any claims and to take any action in
connection with any of the foregoing;
(f) all certificates and instruments representing or evidencing any
of the foregoing;
(g) all other rights, titles, interests, powers, privileges and
preferences pertaining to any of the foregoing; and
(h) all Proceeds of any of the foregoing.
Section 3. REPRESENTATIONS AND WARRANTIES. Each Pledgor hereby
represents and warrants to the Pledgee as follows:
(a) TITLE AND LIENS. Such Pledgor is, and will at all times continue
to be, the legal and beneficial owner of the Collateral of such Pledgor. None of
the Collateral is subject to any adverse claim or other Lien other than
Permitted Liens. No Person has "control" within the meaning of the UCC of any of
the Collateral other than the Pledgee.
(b) AUTHORIZATION. Such Pledgor has the right and power, and has
taken all necessary action to authorize it, to execute, deliver and perform this
Agreement in accordance with its terms. The execution, delivery and performance
of this Agreement in accordance with its terms, including the granting of the
security interest hereunder, do not and will not, by the passage of time, the
giving of notice, or both: (i) require any governmental approval or violate any
applicable law relating to such Pledgor; (ii) conflict with, result in a breach
of or constitute a default under the organizational documents of such Pledgor,
or any material indenture, agreement or other instrument to which such Pledgor
is a party or by which it or any of the Collateral of such Pledgor or its other
property may be bound; or (iii) result in or require the
3
creation or imposition of any Lien upon or with respect to any of the Collateral
of such Pledgor or such Pledgor's other property whether now owned or hereafter
acquired.
(c) VALIDITY AND PERFECTION OF SECURITY INTEREST. This Agreement is
effective to create in favor of the Pledgee a legal, valid and enforceable
security interest in the Collateral. Such security interest will be perfected
(i) with respect to any such Collateral that is a "security" (as such term is
defined in the UCC) and is evidenced by a certificate, when such Collateral is
delivered to the Pledgee with duly executed stock powers with respect thereto,
(ii) with respect to any such Collateral that is a "security" (as such term is
defined in the UCC) but is not evidenced by a certificate, when UCC financing
statements in appropriate form are filed in the appropriate filing offices in
the jurisdiction of organization of the Pledgors or when control is established
by the Pledgee over such interests in accordance with the provision of Section
8-106 of the UCC, or any successor provision, (iii) with respect to any such
Collateral that is not a "security" (as such term is defined in the UCC), when
UCC financing statements in appropriate form are filed in the appropriate filing
offices in the jurisdiction of organization of the Pledgors. Except as set forth
in this subsection, no action is necessary to perfect the security interest
granted by any Pledgor under this Agreement, with respect to the Equity
Interests of any domestic issuer.
(d) PLEDGED EQUITY INTERESTS. The information set forth on Schedule
1 hereto with respect to the Collateral of such Pledgor is true and correct as
of the date hereof.
(e) NAME, ORGANIZATION, ETC. Such Pledgor's exact legal name, type
of legal entity, jurisdiction of formation, organizational identification number
and location of its chief executive office are as set forth on Schedule 1 as of
the date hereof. Except as set forth on such Schedule as of the date hereof,
such Pledgor has not changed its name or merged with or otherwise combined its
business with any other Person within the last 5 years.
(f) AUTHORIZATION OF EQUITY INTEREST. All Equity Interests which
constitute Collateral are duly authorized, validly issued, fully paid and
nonassessable and are not subject to preemptive rights of any Person.
Section 4. COVENANTS. Each Pledgor hereby unconditionally covenants and
agrees as follows:
(a) NO LIENS; NO SALE OF COLLATERAL. Such Pledgor will not create,
assume, incur or permit or suffer to exist any adverse claim or other Lien on
any of the Collateral other than Permitted Liens and shall not enter into any
document, instrument or agreement (other than this Agreement) which prohibits or
purports to prohibit the creation or assumption of any Lien on any of the
Collateral, except for the Junior Credit Agreement and the Junior Loan Documents
(as defined in the Junior Credit Agreement). Such Pledgor will not sell, lease,
lend, assign, transfer or otherwise dispose of all or any portion of the
Collateral (or any interest therein).
(b) CHANGE OF NAME, ETC. Without giving the Pledgee at least
30-days' prior written notice and to the extent such action is not otherwise
prohibited by any of the Loan Documents, such Pledgor shall not: (i) change its
name; (ii) reorganize or otherwise become formed under
4
the laws of another jurisdiction or (iii) become bound by a security agreement
of another Person under Section 9-203(d) of the UCC.
(c) DEFENSE OF TITLE. Such Pledgor will warrant and defend its title
to and ownership of the Collateral of such Pledgor, at its sole cost and
expense, against the claims of all Persons.
(d) DELIVERY OF CERTIFICATES, ETC. If a Pledgor shall receive any
certificate (including, without limitation, any certificate representing a stock
and/or liquidating dividends, other distributions in property, return of capital
or other distributions made on or in respect of the Collateral, whether
resulting from a subdivision, combination or reclassification of outstanding
Equity Interests or received in exchange for Collateral or any part thereof or
as a result of any merger, consolidation, acquisition or other exchange of
assets or on the liquidation, whether voluntary or involuntary, or otherwise),
instrument, option or rights in respect of any Collateral, whether in addition
to, in substitution of, as a conversion of, or in exchange for, any Collateral,
or otherwise in respect thereof, such Pledgor shall hold the same in trust for
the Pledgee and promptly deliver the same to the Pledgee in the exact form
received, duly indorsed by such Pledgor to the Pledgee, if required, together
with an undated stock power covering such certificate (or other appropriate
instrument of transfer) duly executed in blank by such Pledgor and with, if the
Pledgee so requests, signature guaranteed, to be held by the Pledgee, subject to
the terms of this Agreement, as Collateral.
(e) UNCERTIFICATED SECURITIES. With respect to any Collateral that
constitutes a security and is not represented or evidence by a certificate or
instrument, such Pledgor shall cause the Issuer thereof either (i) to register
the Pledgee as the registered owner of such security or (ii) to agree in writing
with the Pledgee and such Pledgor that such Issuer will comply with the
instructions with respect to such security originated by the Pledgee without
further consent of such Pledgor.
(f) SECURITY ENTITLEMENTS AND SECURITIES ACCOUNTS. With respect to
any Collateral consisting of a security entitlement or a securities account,
such Pledgor shall, and shall cause the applicable securities intermediary, to
enter into an agreement with, and in form and substance acceptable to, the
Pledgee, granting control to the Pledgee over such Collateral.
(g) ADDITIONAL SHARES. Such Pledgor shall not permit any Issuer to
issue any additional Equity Interests unless such Equity Interests are pledged
hereunder as provided herein. Further, such Pledgor shall not permit any Issuer
to amend or modify its articles or certificate of incorporation, articles of
organization, certificate of limited partnership, by-laws, operating agreement,
partnership agreement or other comparable organizational instrument in a manner
which would adversely affect the voting, liquidation, preference or other
similar rights of any holder of the Equity Interests pledged hereunder.
(h) ISSUER ACKNOWLEDGMENT. Such Pledgor shall, upon the Pledgee's
request therefor, cause each Issuer of Collateral pledged by such Pledgor and
which Issuer is not a Pledgor itself, to execute and deliver to the Pledgee an
Acknowledgment and Consent substantially in the form of Schedule 2 attached
hereto.
5
Section 5. VOTING RIGHTS; DIVIDENDS, ETC.
(a) So long as no Event of Default has occurred and is continuing:
(i) each Pledgor shall be entitled to exercise any and all
voting and/or consensual rights and powers accruing to an owner of the
Collateral or any part thereof for any purpose not inconsistent with the
terms and conditions of any of the Loan Documents or any agreement
giving rise to or otherwise relating to any of the Secured Obligations;
and
(ii) each Pledgor shall be entitled to retain and use any and
all cash dividends or interest paid on the Collateral in the normal
course of the applicable Issuer's business, but any and all stock and/or
liquidating dividends, other distributions in property, return of
capital or other distributions made on or in respect of the Collateral,
whether resulting from a subdivision, combination or reclassification of
outstanding Equity Interests or received in exchange for Collateral or
any part thereof or as a result of any merger, consolidation,
acquisition or other exchange of assets or on the liquidation, whether
voluntary or involuntary, or otherwise, shall be and become part of the
Collateral and, if received by a Pledgor, shall forthwith be delivered
to the Pledgee.
The Pledgee agrees to execute and deliver to a Pledgor, or cause to be executed
and delivered to a Pledgor, as appropriate, at the sole cost and expense of such
Pledgor, all such proxies, powers of attorney, dividend orders and other
instruments as such Pledgor may reasonably request for the purpose of enabling
such Pledgor to exercise the voting and/or consensual rights and powers which
such Pledgor is entitled to exercise pursuant to clause (i) above and/or to
receive the dividends which such Pledgor is authorized to retain pursuant to
clause (ii) above.
(b) If an Event of Default has occurred and for so long as it is
continuing, all rights of a Pledgor to exercise the voting and/or consensual
rights and powers which a Pledgor is entitled to exercise pursuant to subsection
(a)(i) above and/or to receive the dividends and distributions which a Pledgor
is authorized to receive and retain pursuant to subsection (a)(ii) above shall
cease, and all such rights thereupon shall become immediately vested in the
Pledgee, which shall have the sole and exclusive right and authority to exercise
such voting and/or consensual rights and powers which any Pledgor shall
otherwise be entitled to exercise pursuant to subsection (a)(i) above and/or to
receive and retain the dividends and distributions which any Pledgor shall
otherwise be authorized to retain pursuant to subsection (a)(ii) above. Any and
all money and other property paid over to or received by the Pledgee pursuant to
the provisions of this subsection (b) shall be retained by the Pledgee as
additional Collateral hereunder and shall be applied in accordance with the
provisions of Section 8. If any Pledgor shall receive any dividends,
distributions or other property which it is not entitled to receive under this
Section, such Pledgor shall hold the same in trust for the Pledgee, without
commingling the same with other funds or property of or held by such Pledgor,
and shall promptly deliver the same to the Pledgee, in the identical form
received, together with any necessary endorsements.
6
Section 8 REMEDIES.
(a) In addition to any right or remedy that the Pledgee may have
under the other Loan Documents or otherwise under applicable law, if an Event of
Default shall have occurred and be continuing, the Pledgee may exercise any and
all the rights and remedies of a secured party under the UCC and may otherwise
sell, assign, transfer, endorse and deliver the whole or, from time to time, any
part of the Collateral at a public or private sale or on any securities
exchange, for cash, upon credit or for other property, for immediate or future
delivery, and for such price or prices and on such terms as the Pledgee in its
discretion shall deem appropriate. With respect to any Collateral held or
maintained with a securities intermediary, the Pledgee shall be entitled to
notify such securities intermediary that such securities intermediary should
follow the entitlement orders of the Pledgee and that such securities
intermediary should no longer follow entitlement orders of the Pledgor, without
further consent of the Pledgor. The Pledgee shall have the right (in its sole
and absolute discretion) to register any Equity Interests which are part of the
Collateral in its own name as pledgee or the name of its nominee (as Pledgee or
as sub-agent), endorsed or assigned in blank or in favor of the Pledgee. The
Pledgee shall be authorized at any sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the Collateral for their own account in
compliance with the Securities Act and any other applicable law and upon
consummation of any such sale the Pledgee shall have the right to assign,
transfer, endorse and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each purchaser at any sale of Collateral shall take and hold
the property sold absolutely free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives (to the fullest extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which such
Pledgor now has or may at any time in the future have under any applicable law
now existing or hereafter enacted. Each Pledgor agrees that, to the extent
notice of sale shall be required by applicable law, at least 10 days' prior
written notice to such Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Pledgee may fix and
shall state in the notice or publication (if any) of such sale. At any such
sale, the Collateral, or portion thereof to be sold, may be sold in one lot as
an entirety or in separate parcels, as the Pledgee may determine in its sole and
absolute discretion. The Pledgee shall not be obligated to make any sale of the
Collateral if it shall determine not to do so regardless of the fact that notice
of sale of the Collateral may have been given. The Pledgee may, 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
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case the sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by the Pledgee until the sale price is paid by the purchaser or
purchasers thereof, but the Pledgee shall not incur any liability to any Pledgor
in case any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may be sold
again upon like notice. At any public sale made pursuant to this Agreement, the
Pledgee and any other holder of any of the Secured Obligations, to the extent
permitted by applicable law, may bid for or purchase, free from any right of
redemption, stay and/or appraisal on the part of any Pledgor (all said rights
being also hereby waived and released to the extent permitted by applicable
law), any part of or all the Collateral offered for sale. For purposes
7
hereof, a written agreement to purchase all or any part of the Collateral shall
be treated as a sale thereof; the Pledgee shall be free to carry out such sale
pursuant to such agreement and no Pledgor shall be entitled to the return of any
Collateral subject thereto, notwithstanding the fact that after the Pledgee
shall have entered into such an agreement all Events of Default may have been
remedied or the Secured Obligations may have been paid in full as herein
provided. Each Pledgor hereby waives any right to require any marshaling of
assets and any similar right. In addition to exercising the power of sale herein
conferred upon it, the Pledgee shall also have the option to proceed by suit or
suits at law or in equity to foreclose this Agreement and sell the Collateral or
any portion thereof pursuant to judgment or decree of a court or courts having
competent jurisdiction. The rights and remedies of the Pledgee under this
Agreement are cumulative and not exclusive of any rights or remedies which any
of them otherwise have.
Section 7 SETOFF. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, the
Pledgee is hereby authorized by each Pledgor, at any time or from time to time
during the continuance of an Event of Default, without prior notice to any
Pledgor or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured) and any other indebtedness at any time
held or owing by the Pledgee or any affiliate of the Pledgee, to or for the
credit or the account of such Pledgor, against and on account of any of the
Secured Obligations, irrespective of whether or not any or all of the Secured
Obligations have been declared to be, or have otherwise become, due and payable,
and although such obligations shall be contingent or unmatured.
Section 8 APPLICATION OF PROCEEDS OF SALE AND CASH. The proceeds of any
sale of the whole or any part of the Collateral, together with any other moneys
held by the Pledgee under the provisions of this Agreement, shall be applied in
accordance with Section 10.4 of the Credit Agreement. Each Pledgor shall remain
liable and will pay, on demand, any deficiency remaining in respect of the
Secured Obligations.
Section 9 PLEDGEE APPOINTED ATTORNEY-IN-FACT. Each Pledgor hereby
constitutes and appoints the Pledgee as the attorney-in-fact of such Pledgor
with full power of substitution either in the Pledgee's name or in the name of
such Pledgor to do any of the following: (a) to perform any obligation of such
Pledgor hereunder in such Pledgor's name or otherwise; (b) to ask for, demand,
xxx for, collect, receive, receipt and give acquittance for any and all moneys
due or to become due under and by virtue of any Collateral; (c) to prepare,
execute, file, record or deliver notices, assignments, financing statements,
continuation statements, applications for registration or like papers to
perfect, preserve or release the Pledgee's security interest in the Collateral;
(d) to issue entitlement orders, instructions and other orders to any securities
intermediary in connection with any of the Collateral held by or maintained with
such securities intermediary; (e) to verify facts concerning the Collateral in
such Pledgor's name, its own name or a fictitious name; (f) to endorse checks,
drafts, orders and other instruments for the payment of money payable to such
Pledgor, representing any interest or dividend or other distribution payable in
respect of the Collateral or any part thereof or on account thereof and to give
full discharge for the same; (g) to exercise all rights, powers and remedies
which such Pledgor would have, but for this Agreement, with respect to any of
the Collateral; and (h) to carry out the provisions of this
8
Agreement and to take any action and execute any instrument which the Pledgee
may deem reasonably necessary or advisable to accomplish the purposes hereof,
and to do all acts and things and execute all documents in the name of such
Pledgor or otherwise, reasonably deemed by the Pledgee as necessary, proper and
convenient in connection with the preservation, perfection or enforcement of its
rights hereunder. Nothing herein contained shall be construed as requiring or
obligating the Pledgee to make any commitment or to make any inquiry as to the
nature or sufficiency of any payment received by it, or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby, and no action taken by the Pledgee or omitted to be
taken with respect to the Collateral or any part thereof shall give rise to any
defense, counterclaim or offset in favor of any Pledgor or to any claim or
action against the Pledgee except as specifically provided herein. The power of
attorney granted herein is irrevocable and coupled with an interest.
Section 10 PLEDGEE'S DUTY OF CARE. Other than the exercise of reasonable
care to ensure that safe custody of the Collateral while being held by the
Pledgee hereunder, the Pledgee shall have no duty or liability to preserve
rights pertaining thereto, it being understood and agreed that each Pledgor
shall responsible for preservation of all rights of such Pledgor in the
Collateral. The Pledgee shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which the Pledgee accords its
own property, it being understood that the Pledgee shall not have responsibility
for (a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Collateral,
whether or not the Pledgee has or is deemed to have knowledge of such matters or
(b) taking any necessary steps to preserve rights against any parties with
respect to any Collateral.
Section 11 REIMBURSEMENT OF PLEDGEE. Each Pledgor agrees to pay upon
demand to the Pledgee the amount of any and all reasonable and actual expenses,
including the reasonable and actual fees disbursements and other charges of its
counsel and of any experts or agents, and its fully allocated internal costs,
that the Pledgee may incur in connection with (a) the administration of this
Agreement, (c) the custody or preservation of, or any sale of, collection from,
or other realization upon, any of the Collateral, (c) the exercise or
enforcement of any of the rights of the Pledgee hereunder, or (d) the failure by
any Pledgor to perform or observe any of the provisions hereof or otherwise in
respect of the Collateral.
Section 12 INDEMNIFICATION. Each Pledgor agrees to pay, indemnify, and
hold the Pledgee and each of its predecessors, affiliates, subsidiaries,
successors and assigns, together with their past, present and future officers,
directors, agents, attorneys, financial advisors, representatives, partners,
joint ventures, affiliates and the successor and assigns of any and all of them
(each, an "Indemnified Person") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
reasonable and actual costs, reasonable and actual expenses or disbursements of
any kind or nature whatsoever ("Indemnified Amounts") brought against or
incurred by an Indemnified Person, in any manner arising out of or, directly or
indirectly, related in any way to or connected with this Agreement, including
without limitation, the exercise by the Pledgee of any of its rights and
remedies under this Agreement or any other action taken by the Pledgee pursuant
to the terms of this Agreement;
9
provided, however, a Pledgor shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Amounts to the extent arising
from the gross negligence or willful misconduct of such Indemnified Party, as
determined by a court of competent jurisdiction in a final, non-appealable
judgment.
Section 13 FURTHER ASSURANCES. Each Pledgor shall, at its sole cost and
expense, take all action that may be necessary or desirable in the Pledgee's
reasonable discretion, so as at all times to maintain the validity, perfection,
enforceability and priority of the Pledgee's security interest in the
Collateral, or to enable the Pledgee to exercise or enforce its rights
hereunder, including without limitation or otherwise in respect of the
Collateral. The Pledgee shall at all times have the right to exchange the
certificates representing such Equity Interests for certificates of smaller or
larger numbers of shares for any purpose consistent with this Agreement.
Section 14 SECURITIES ACT. In view of the position of the Pledgors in
relation to the Collateral, or because of other current or future circumstances,
a question may arise under the Securities Act, or any similar applicable law
hereafter enacted analogous in purpose or effect (the Securities Act and any
such similar applicable law as from time to time in effect being called the
"Federal Securities Laws") with respect to any disposition of the Collateral
permitted hereunder. Each Pledgor understands that compliance with the Federal
Securities Laws might very strictly limit the course of conduct of the Pledgee
if the Pledgee were to attempt to dispose of all or any part of the Collateral
in accordance with the terms hereof, and might also limit the extent to which or
the manner in which any subsequent transferee of any Collateral could dispose of
the same. Similarly, there may be other legal restrictions or limitations
affecting the Pledgee in any attempt to dispose of all or part of the Collateral
in accordance with the terms hereof under applicable Blue Sky or other state
securities laws or similar applicable law analogous in purpose or effect. Each
Pledgor recognizes that in light of the foregoing restrictions and limitations
the Pledgee may, with respect to any sale of the Collateral, limit the
purchasers to those who will agree, among other things, to acquire such
Collateral for their own account, for investment, and not with a view to the
distribution or resale thereof. Each Pledgor acknowledges and agrees that in
light of the foregoing restrictions and limitations, the Pledgee, in its sole
and absolute discretion, may, in accordance with applicable law, (a) proceed to
make such a sale whether or not a registration statement for the purpose of
registering such Collateral or part thereof shall have been filed under the
Federal Securities Laws and (b) approach and negotiate with a single potential
purchaser to effect such sale. Each Pledgor acknowledges and agrees that any
such sale might result in prices and other terms less favorable to the seller
than if such sale were a public sale without such restrictions. In the event of
any such sale, the Pledgee shall incur no responsibility or liability for
selling all or any part of the Collateral in accordance with the terms hereof at
a price that the Pledgee, in its sole and absolute discretion, may in good xxxxx
xxxx reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section will apply notwithstanding the
existence of public or private market upon which the quotations or sales prices
may exceed substantially the price at which the Pledgee sells.
Section 15 [Intentionally Deleted.]
10
Section 16 CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing security interest in the Collateral and shall remain in full force
and effect until it terminates in accordance with its terms.
Section 17 SECURITY INTEREST ABSOLUTE. All rights of the Pledgee
hereunder, the grant of a security interest in the Collateral and all
obligations of each Pledgor hereunder, shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of any Loan Document,
any agreement with respect to any of the Secured Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of the payment of, or in any other term of, all or any of
the Secured Obligations, or any other amendment or waiver of or any consent to
any departure from any Loan Document, or any other agreement or instrument
relating to any of the foregoing, (c) any exchange, release or nonperfection of
any other collateral, or any release or amendment or waiver of or consent to or
departure from any guaranty, for all or any of the Secured Obligations or (d)
any other circumstance that might otherwise constitute a defense available to,
or a discharge of, any Pledgor in respect of the Secured Obligations or in
respect of this Agreement (other than the indefeasible payment in full of all
the Secured Obligations).
Section 18 NO WAIVER. Neither the failure on the part of the Pledgee to
exercise, nor the delay on the part of the Pledgee in exercising any right,
power or remedy hereunder, nor any course of dealing between the Pledgee, on the
one hand, and the Pledgor, on the other hand, shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power, or remedy
hereunder preclude any other or the further exercise thereof or the exercise of
any other right, power or remedy.
Section 19 NOTICES. Notices, requests and other communications required
or permitted hereunder shall be given in accordance with the Section 11.1 of the
Credit Agreement
Section 20 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
SECTION 21 LITIGATION; JURISDICTION; OTHER MATTERS; WAIVERS.
(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY
AMONG ANY OF THE PLEDGORS AND THE PLEDGEE WOULD BE BASED ON DIFFICULT AND
COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE
PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE
PLEDGEE AND THE PLEDGORS HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN
ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT OF OR
RELATING IN ANY WAY TO THIS AGREEMENT OR THE COLLATERAL.
11
(b) EACH OF PLEDGORS AND THE PLEDGEE HEREBY AGREES THAT THE FEDERAL
DISTRICT COURT OF THE NORTHERN DISTRICT OF GEORGIA AND ANY STATE COURT LOCATED
IN GEORGIA, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN OR AMONG THE PLEDGORS AND THE PLEDGEE, PERTAINING DIRECTLY OR INDIRECTLY
TO THIS AGREEMENT, THE COLLATERAL OR TO ANY MATTER ARISING HEREFROM OR
THEREFROM. EACH PLEDGOR AND THE PLEDGEE EXPRESSLY SUBMIT AND CONSENT IN ADVANCE
TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS WITH
RESPECT TO SUCH CLAIMS OR DISPUTES. EACH PARTY FURTHER WAIVES ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN
ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
FORUM, AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET
FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION
BY THE PLEDGEE OR THE ENFORCEMENT BY THE PLEDGEE OF ANY JUDGMENT OBTAINED IN
SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
(c) EACH PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW: (i) ANY CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING
PRIOR TO THE TIME THE PLEDGEE DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS
PROVIDED IN THIS AGREEMENT; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL
THAT SUCH PLEDGOR NOW HAS OR MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY
APPLICABLE LAW NOW EXISTING OR HEREAFTER ENACTED; AND (iii) EXCEPT AS EXPRESSLY
REQUIRED UNDER THIS AGREEMENT OR APPLICABLE LAW, ANY REQUIREMENT OF NOTICE,
DEMAND, OR ADVERTISEMENT FOR SALE.
(d) THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH
PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL
CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE SECURED OBLIGATIONS
AND THE TERMINATION OF THIS AGREEMENT.
Section 22 AMENDMENTS. No amendment or waiver of any provision of this
Agreement nor consent to any departure by any Pledgor herefrom shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Section 23 BINDING AGREEMENT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, except that no Pledgor shall be permitted to
assign this Agreement or any interest herein or in the Collateral or any part
thereof.
Section 24 TERMINATION. Upon indefeasible payment in full of all of the
Secured Obligations and termination of the Commitment, this Agreement shall
terminate. Upon
12
termination of this Agreement in accordance with its terms, the Pledgee agrees
to take such actions as any Pledgor may reasonably request, and at the sole cost
and expense of such Pledgor, to evidence the termination of this Agreement.
Section 25 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provisions shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Agreement.
Section 26 HEADINGS. Section headings used herein are for convenience
only and are not to affect the construction of or be taken into consideration in
interpreting this Agreement.
Section 27 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute but one agreement.
Section 28 JOINT AND SEVERAL OBLIGATIONS OF PLEDGORS. the obligationS of
the PLEDGORs HEREUNDER SHALL BE joint and several, and ACCORDINGLY, each PLEDGOR
THAT IS PARTY TO THE GUARANTY CONFIRMS THAT IT is liable for the full amount of
the "SECURED Obligations" AND ALL OF THE OBLIGATIONS AND LIABILITIES OF EACH OF
THE OTHER PLEDGORS HEREUNDER.
Section 29. FOREIGN SUBSIDIARIES. Notwithstanding anything herein to the
contrary, in no event shall any security interest granted under this Agreement
attach to any of the outstanding capital stock of a Foreign Subsidiary in excess
of 65% of the total voting power of all classes of capital stock of such Foreign
Subsidiary entitled to vote.
[Signatures on Next Page]
13
IN WITNESS WHEREOF, each Pledgor has executed and delivered this Pledge
Agreement under seal as of this the date first written above.
PLEDGORS:
XXXXXX INDUSTRIES, INC.
CENTURY HOLDINGS, INC.
XXXXXX INDUSTRIES INTERNATIONAL, INC.
By: /s/ J. Xxxxxxx Xxxx
---------------------------------
Name: J. Xxxxxxx Xxxx
----------------------------
Title: Chief Financial Officer
---------------------------
Agreed to, accepted and acknowledged
as of the date first written above.
PLEDGEE:
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------
Title: Vice President
---------------------------
14
