Exhibit 10.3
PLEDGE AGREEMENT
THIS AGREEMENT, dated as of January 26, 1998, among XXXXX & XXXXX
COMPANY, a Delaware corporation (the "Borrower"), each of the undersigned
Subsidiaries of the Borrower, identified in Schedule I attached hereto and
made a part hereof (each a "Guarantor" and collectively with the Borrower
the "Pledgors"), and PNC BANK, NATIONAL ASSOCIATION (the "Agent"), as Agent
for the Banks, as such term is defined in the Amended and Restated Credit
Agreement dated as of January 26, 1998, among, INTER ALIA, the Borrower,
the Guarantors, the Agent and the Banks (the "Credit Agreement")
WITNESSETH THAT:
WHEREAS, each Pledgor is the legal and beneficial owner and the holder
of its respective Pledged Collateral (as defined in Section 1(b) hereof) as
set forth on Exhibit A hereto; and
WHEREAS, pursuant to the Credit Agreement the Banks may make certain
loans to the Borrower and the Agent may issue certain letters of credit for
the account of the Borrower and its Subsidiaries; and
WHEREAS, the obligations of the Banks to make loans and the
obligations of the Agent to issue letters of credit under the Credit
Agreement are subject to the condition, among others, that each Pledgor
secure its obligations to the Agent and the Banks under the Credit
Agreement in the manner set forth therein and herein;
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto covenant and agree as follows:
1. DEFINITIONS. Terms which are defined in the Credit Agreement and not
otherwise defined herein are used herein as defined therein. In addition
to the words and terms defined elsewhere in this Pledge Agreement (the
"Pledge Agreement"), the following words and terms shall have the following
meanings, respectively, unless the context hereof otherwise clearly
requires:
(a) "Code" shall mean the Uniform Commercial Code as in effect in the
Commonwealth of Pennsylvania or other applicable jurisdiction on the date
hereof and as the same may subsequently be amended from time to time.
(b) "Pledged Collateral" shall mean and include with respect to each
Pledgor (i) the securities listed on Exhibit A attached hereto and made a
part hereof, with respect to each Pledgor, and all rights and privileges
pertaining thereto, including, without limitation, all securities and
additional securities receivable in respect of or in exchange for such
securities, all rights to subscribe for securities incident to or arising
from ownership of such securities, all cash, interest,
stock and other dividends or distributions paid or payable on such
securities, and all books and records pertaining to the foregoing,
including, without limitation, all stock record and transfer books, (ii)
any and all other securities hereafter pledged to the Banks to secure the
Obligations and the Pledgor's obligations hereunder, and all rights and
privileges pertaining thereto, including, without limitation, all
securities and additional securities receivable in respect of or in
exchange for such securities, all rights to subscribe for securities
incident to or arising from ownership of such securities, all cash,
interest, stock and other dividends or distributions paid or payable on
such securities, and all books and records pertaining to the foregoing,
including, without limitation, all stock record and stock transfer books,
and (iii) whatever is received when any of the foregoing is sold, exchanged
or otherwise disposed of, including any proceeds as such term is defined in
the Code.
2. NOT A NOVATION. This Pledge Agreement amends and restates that certain
Pledge Agreement dated March 13, 1997, among the Pledgors and PNC Bank,
National Association. This Pledge Agreement is not intended as a novation,
and shall not be a novation, of the obligations of the parties thereto and
hereto.
3. PLEDGE. As security for the due and punctual payment and performance of
the Obligations in full, each Pledgor hereby agrees that the Agent shall
have, and each Pledgor hereby grants to and creates in favor of the Agent
for the benefit of the Banks, a first priority security interest under the
Code in and to all of the Pledged Collateral, which security interest
constitutes a Prior Security Interest.
4. DELIVERY OF CERTIFICATES, ETC. Upon the execution and delivery of this
Pledge Agreement, each Pledgor has delivered to and deposited with the
Agent in pledge, stock certificates and any other instruments evidencing
the Pledged Collateral, together with undated stock powers signed in blank
by such Pledgor as the Agent shall have required.
5. REPRESENTATIONS AND WARRANTIES. Each Pledgor represents and warrants to
the Agent and the Banks as follows:
(a) The Pledgor has good and marketable title to the Pledged
Collateral;
(b) Any shares of capital stock of a Subsidiary forming part of the
Pledged Collateral have been duly authorized and validly issued to the
Pledgor, are fully paid and nonassessable and constitute all of the issued
and outstanding stock of such Subsidiary, and there are no outstanding
options or rights to purchase or acquire any additional shares of capital
stock of such Subsidiary;
(c) Other than the security interest granted to and created in favor
of the Agent hereunder, all of the Pledged Collateral is free and clear of
any pledge, lien, security interest, encumbrance, option or rights of
others, other than Permitted Liens and except to the extent transfer of the
Pledged Collateral may be restricted by the federal Securities Act of 1933,
as amended, and state securities laws; and
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(d) The Pledgor has delivered to the Agent a true and correct copy of
the articles or certificate of incorporation, bylaws and other
organizational documents of each Subsidiary of a Pledgor the shares of
capital stock of which constitute part of the Pledged Collateral.
6. FURTHER ASSURANCES. Each Pledgor will faithfully preserve and protect the
Agent's security interest in the Pledged Collateral as a first priority
perfected security interest under the Code, and will do all such other acts
and things, and will upon request therefor by the Agent execute and deliver
all such other documents and instruments, including, without limitation,
further pledges, assignments, documents and powers of attorney with respect
to its Pledged Collateral consistent with the terms of this Pledge
Agreement and the Credit Agreement, as the Agent may deem necessary or
advisable from time to time in order to preserve, perfect and protect said
security interest.
7. CERTAIN COVENANTS OF THE PLEDGOR. Each Pledgor covenants and agrees that
(a) it will defend the Banks' right, title and security interest in and to
the Pledged Collateral and the proceeds thereof against the claims and
demands of all persons whomsoever other than any Person claiming a right in
the Pledged Collateral pursuant to an agreement between such Person and the
Banks and other than the holder of a Permitted Lien; (b) it will have like
title to and right to pledge any other property at any time hereafter
pledged to the Agent pursuant to the Credit Agreement and will likewise
defend the Agent's right thereto and security interest therein; (c) except
as permitted by the Credit Agreement it will not assign, transfer, pledge,
or otherwise encumber any of its right, title or interest under, in or to
the Pledged Collateral other than pursuant hereto; (d) except as permitted
by the Credit Agreement it will not take or omit to take any action, or
permit any Subsidiary, any shares of capital stock of which constitute a
part of the Pledged Collateral, to take or omit to take any action, the
taking or the omission of which might result in an alteration or impairment
of the Pledged Collateral or of this Pledge Agreement; (e) it will not
permit any Subsidiary, any shares of capital stock of which constitute a
part of the Pledged Collateral, to repeal, amend or modify its articles or
certificate of incorporation, bylaws or other organizational documents,
other than as permitted under the terms of the Credit Agreement; (f) it
will cause each Subsidiary, any shares of capital stock of which constitute
a part of the Pledged Collateral, to maintain accurate stock record and
stock transfer books, and upon request of the Agent, provide the Agent with
access to and copies of such stock record and stock transfer books; (g) it
will not, without the prior written consent of the Agent, waive or release
any obligation of any party to the Pledged Collateral; and (h) it will
execute and deliver to the Agent and record such supplements to this Pledge
Agreement and additional assignments as the Agent reasonably may request to
evidence and confirm the pledge herein contained.
8. PROTECTION OF THE BANKS' INTEREST IN THE PLEDGED COLLATERAL AGAINST OTHERS.
Each Pledgor assumes full responsibility for taking any and all necessary
steps to preserve the Banks' rights, other than Permitted Liens, with
respect to its Pledged Collateral against all others, including the
respective issuers of capital stock forming part of the Pledged Collateral.
The Agent shall be deemed to have exercised reasonable care in the custody
and preservation of the Pledged Collateral in its possession if the Agent
takes such action for that purpose as the Pledgor shall request in writing
(or in the absence of such request, if the Agent deals with it in the same
manner that it deals with
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similar property for its own account) , provided that such requested action
will not, in the judgment of the Agent, impair the security interest in the
Pledged Collateral created hereby or the Banks' rights in, or the value of,
the Pledged Collateral, and provided further that such written request is
received by the Agent in sufficient time to permit the Agent to take the
requested action.
9. CONTINUATION OF PERFECTION OF SECURITY INTEREST. Each Pledgor shall at
such Pledgor's own cost and expense cause the security interest in its
Pledged Collateral granted to and created in favor of the Banks under this
Pledge Agreement to be perfected and continue to be perfected as long as
the Obligations or any part thereof is outstanding and unpaid or not
performed in full, and for such purpose such Pledgor shall from time to
time deliver possession to the Agent of and execute, deliver and file or
record (or cause to be filed or recorded) such instruments, documents and
notices (including, without limitation, amendments or supplements to this
Pledge Agreement, financing statements and continuation statements) as the
Agent may deem necessary or advisable from time to time in order to
confirm, perfect and preserve such security interest. The Agent is hereby
irrevocably appointed attorney-in-fact of each Pledgor to do all acts and
things which the Banks, in the exercise of its responsibilities under the
Credit Agreement, may deem necessary or advisable to perfect and continue
perfected the Banks' security interest in the Pledged Collateral.
10. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default or Potential Default shall have
occurred and is continuing:
(i) Each Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent
with the terms of this Pledge Agreement or the Credit Agreement;
PROVIDED, HOWEVER, that such Pledgor shall not exercise or
refrain from exercising any such right if such action or inaction
would REASONABLY BE LIKELY to have a material adverse effect on
the value of the Pledged Collateral or any part thereof;
(ii) Any and all instruments and other property (other than cash
dividends) received, receivable or otherwise distributed in
respect of, or in exchange for, any of the Pledged Collateral
shall be forthwith delivered to the Agent to hold as part of the
Pledged Collateral and shall, if received by any Pledgor, be
received in trust for the benefit of the Banks, be segregated
from the other property or funds of such Pledgor, and be
forthwith delivered to the Agent as Pledged Collateral in the
same form as so received (with any necessary endorsement). To
the extent permitted by the Credit Agreement, a Pledgor may
receive and retain cash dividends from any of the Subsidiaries;
and
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(iii) The Agent shall execute and deliver (or cause to be
executed and delivered) to any Pledgor all such proxies and other
instruments as such Pledgor may reasonably request for the
purpose of enabling such Pledgor to exercise the voting and other
rights which it is entitled to exercise pursuant to paragraph (i)
above, and to receive the dividends which it is authorized to
receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default or Potential Default under the terms of the Credit Agreement:
(i) All rights of any Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to
exercise pursuant to Section 9(a)(i) and to receive the dividends
which it would otherwise be authorized to receive and retain
pursuant to Section 9(a)(ii) shall cease, and all such rights
shall, upon notice by the Agent to such Pledgor, become vested in
the Agent, who shall thereupon have the sole right to exercise
such voting and other consensual rights and the sole right to
receive and hold as Pledged Collateral such dividends and apply
them to payment of the Obligations; and
(ii) All dividends which are received by any Pledgor contrary to
the provisions of paragraph (i) of this Section 9(b) shall be
received in trust for the benefit of the Banks, shall be
segregated from other funds of such Pledgor and shall be
forthwith paid over to the Agent as Pledged Collateral in the
same form as so received (with any necessary endorsement).
In the event of any inconsistency between the provisions of this Section 9
and Section 9.2.5 of the Credit Agreement, the terms of the Credit
Agreement shall control.
11. REMEDIES UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. If there shall have
occurred and is then continuing an Event of Default under the terms of the
Credit Agreement, then the Agent and the Banks shall have such rights and
remedies with respect to the Pledged Collateral or any part thereof and the
proceeds thereof as are provided by the Code and such other rights and
remedies with respect thereto which it may have at law or in equity or
under this Pledge Agreement, including without limitation, to the extent
not inconsistent with the provisions of the Code, the right to (a) transfer
all or any part of the Pledged Collateral into the Agent's name or into the
name of its nominee and thereafter receive all cash, stock and other
dividends or distributions paid or payable in respect thereof, and
otherwise act with respect thereto for the benefit of the Banks as the
absolute owner thereof, and (b) sell, assign, give an option or options to
purchase or otherwise dispose of all or any part of the Pledged Collateral
at any public or private sale at such place or places and at such time or
times and upon such terms, whether for cash or on credit, and in such
manner as the Banks may determine, and apply the proceeds so received in
accordance with the terms of the Credit Agreement. Each Pledgor shall be
liable for any deficiency if the
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proceeds of any sale, assignment, giving of an option or options to
purchase or other disposition of its Pledged Collateral is insufficient to
pay all amounts to which the Banks are entitled.
12. NOTICE OF SALE OF THE PLEDGED COLLATERAL BY THE AGENT. If any notification
of intended sale of any of the Pledged Collateral is required by law, such
notification shall be deemed reasonable if provided at least ten (10) days
before such sale, addressed to the Pledgor as provided in Section 11.6 of
the Credit Agreement.
13. NATURE OF SALE. Each Pledgor recognizes that the Agent may be compelled to
resort to one or more private sales of the Pledged Collateral to a
restricted group of purchasers who will be obliged to agree, among other
things, to acquire such securities for their own account for investment and
not with a view to the distribution or resale thereof. Each Pledgor
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private
sale shall not, for such reason alone, be deemed to have been made in a
commercially unreasonable manner. The Agent shall not be under any
obligation to delay a sale of any of the Pledged Collateral for the period
of time necessary to permit the issuer of such securities to register such
securities for public sale under the federal Securities Act of 1933, as
amended, or under applicable state securities laws, even if the issuer
would agree to do so.
14. TERMINATION. Upon payment in full of the Loans, Reimbursement Obligations
and Letter of Credit Borrowings and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan
Parties' other Obligations and the termination of the Commitments, this
Pledge Agreement shall terminate and be of no further force and effect, and
the Agent shall thereupon promptly return to each Pledgor such of the
Pledged Collateral and such other documents delivered by such Pledgor
hereunder as may then be in the Agent's possession and execute such
documents, instruments, agreements or any combination thereof as the
Pledgors shall reasonably request to evidence such termination.. Until
such time, however, this Pledge Agreement shall be binding upon and inure
to the benefit of the parties hereto, their respective successors and
assigns.
15. NO WAIVER. No failure or delay on the part of the Agent or the Banks in
exercising any right, remedy, power or privilege hereunder shall operate as
a waiver thereof or of any other right, remedy, power or privilege of the
Agent or the Banks hereunder; nor shall any single or partial exercise of
any such right, remedy, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights and remedies of the Agent and the Banks under this
Pledge Agreement are cumulative and not exclusive of any rights or remedies
which it may otherwise have.
16. NOTICES. All notices, statements, requests and demands given to or made
upon either party hereto in accordance with the provisions of this Pledge
Agreement shall be given or made as provided in Section 11.6 of the Credit
Agreement.
17. SUCCESSORS AND ASSIGNS. This Pledge Agreement shall be binding upon and
inure to the benefit of the Agent and the Banks and their respective
successors and assigns, and each Pledgor and its
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successors and assigns, except that the Pledgors may not assign or transfer
the respective Pledgor's obligations hereunder or any interest herein.
18. GOVERNING LAW. This Pledge Agreement shall be deemed to be a contract
under the laws of the Commonwealth of Pennsylvania and for all purposes
shall be governed by and construed in accordance with the laws of said
Commonwealth excepting its rules relating to conflicts of Law.
19. SURVIVAL. Any provision of this Pledge Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
[Signatures appear on the next page.]
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[SIGNATURE PAGE 1 OF 1 TO PLEDGE AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed and delivered this Pledge Agreement as of the day
and year first above set forth.
XXXXX & XXXXX COMPANY
By /s/ Xxxxx Xxxxxx
-----------------
Xxxxx Xxxxxx
Senior Vice President and Chief
Financial Officer
EACH PLEDGOR LISTED ON SCHEDULE I
By /s/ Xxxxx Xxxxxx
------------------
Xxxxx Xxxxxx
Senior Vice President and Chief
Financial Officer of each Pledgor listed
on Schedule I
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By /s/ Xxx X. Xxxxx
------------------
Xxx X. Xxxxx
Senior Vice President
