Exhibit 4.6
EXECUTION COPY
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COLLATERAL PLEDGE AND SECURITY AGREEMENT
Dated as of March 27, 2001
Among
MICHAEL FOODS ACQUISITION CORP.,
as Pledgor,
BANC OF AMERICA SECURITIES LLC,
BNY MIDWEST TRUST COMPANY
as Trustee,
and
BNY MIDWEST TRUST COMPANY
as Collateral Agent and as Securities Intermediary
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COLLATERAL PLEDGE AND SECURITY AGREEMENT
This COLLATERAL PLEDGE AND SECURITY AGREEMENT (this "Pledge
Agreement") is made and entered into as of March 27, 2001 by MICHAEL FOODS
ACQUISITION CORP., a Minnesota corporation (the "Pledgor"), c/o Vestar Capital
Partners IV, L.P., 1225 Seventeenth Street, Suite 1600, Denver, Colorado 80202,
BANC OF AMERICA SECURITIES LLC ("Banc of America Securities"), having an office
at 100 North Tryon Street, Charlotte, North Carolina 28255, BNY MIDWEST TRUST
COMPANY, an Illinois banking corporation ("BNY"), having an office at 2 North
LaSalle Street, Suite 1020, Chicago, Illinois 60602, as trustee (in such
capacity, the "Trustee") under the Indenture referred to below, and BNY MIDWEST
TRUST COMPANY, as (A) collateral agent (in such capacity, the "Collateral
Agent") for the Secured Parties (as hereinafter defined) and (B) securities
intermediary (in such capacity, the "Securities Intermediary") for the
Collateral Agent and the Pledgor hereunder.
W I T N E S S E T H
WHEREAS, the Pledgor and Banc of America Securities and Bear Stearns
& Co. Inc., each acting as an Initial Purchaser (collectively, the "Initial
Purchasers"), are parties to a Purchase Agreement dated March 27, 2001 (the
"Purchase Agreement"), pursuant to which the Pledgor is issuing and selling to
the Initial Purchasers $200,000,000 aggregate principal amount of 11 3/4% Senior
Subordinated Notes due 2011 (the "Notes"); and
WHEREAS, the Pledgor and the Trustee have entered into that certain
indenture dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), pursuant to which the
Pledgor is issuing the Notes on the date hereof; and
WHEREAS, pursuant to the Purchase Agreement and the Indenture, the
Pledgor is required to deposit on the Closing Date (as defined in the Purchase
Agreement) gross proceeds from the offering of the Notes in the amount of
U.S.$200,000,000 (the "Funds") with the Trustee to be held by the Trustee for
the benefit of the registered holders (the "Holders") of the Notes, to secure
the Pledgor's obligation to redeem on the terms specified in the Indenture all
of the Notes at 101% of their aggregate principal amount, plus interest accrued
thereon to the Special Redemption Date, on the Special Redemption Date (as
defined herein) in the event that the merger of the Pledgor with and into
Michael Foods, Inc. ("Michael Foods"), a Minnesota corporation, pursuant to that
certain Agreement and Plan of Merger dated as of December 21, 2000 (the
"Merger") is not consummated by May 31, 2001 (the "Termination Date") (such
obligation to redeem such Notes being the "Obligations"), and the Pledgor has
agreed (a) to pledge to the Trustee for its benefit and the ratable benefit of
the Holders of the Notes, a security interest in the Collateral (as defined
herein) and (b) to execute and deliver this Pledge Agreement in order to secure
the payment and performance by the Pledgor of all the Obligations; and
WHEREAS, the Collateral Agent has security entitlements with respect
to all the financial assets credited from time to time to the Pledgor's account,
Account No. 881040 (the
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"Collateral Account") with BNY at its office at 2 North LaSalle Street, Suite
1020, Chicago, Illinois 60602; and
WHEREAS, it is a condition precedent to the initial purchase of the
Notes by the Initial Purchasers pursuant to the Purchase Agreement that the
Pledgor shall have granted the security interest and made the pledge
contemplated by this Pledge Agreement; and
WHEREAS, unless otherwise defined herein or in the Indenture, terms
defined in Articles 8 or 9 of the Uniform Commercial Code as in effect in the
State of New York ("NYUCC") and/or the Federal Book Entry Regulations (as
defined below) are used in this Agreement as such terms are defined in such
Article 8 or 9 and/or Federal Book Entry Regulations. The term "Federal
Book-Entry Regulations" means (a) the federal regulations contained in Subpart B
("Treasury/Reserve Automated Debt Entry System (TRADES)") governing book-entry
securities consisting of U.S. Treasury bonds, notes and bills and Subpart D
("Additional Provisions") of 31 C.F.R. Part 357, 31 C.F.R. ss. 357.2, ss. 357.10
through ss. 357.14 and ss. 357.41 through ss. 357.44 and (b) to the extent
substantially identical to the federal regulations referred to in clause (a)
above (as in effect from time to time), the federal regulations governing other
book-entry securities.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and in order to induce the Holders of the Notes to purchase the
Notes, the Pledgor hereby agrees with the Trustee, for the benefit of the
Trustee and for the ratable benefit of the Holders of the Notes, as follows:
SECTION 1. Certain Definitions; Appointment of the Collateral Agent;
Pledge and Grant of Security Interest; Deposit of Funds.
1.1 (a) Certain Definitions. Capitalized terms used herein
will have the respective meanings described to them below:
"Cash Equivalents" means, to the extent owned free and clear of all
Liens other than Liens created hereunder, Government Securities.
"Government Securities" means direct obligations of or obligations
fully guaranteed by the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the option
of the issuer thereof, or any money market fund that invests solely in the
foregoing.
"Lien" means any mortgage, lien, pledge, claim, charge, security
interest or encumbrance of any kind, whether or not filed, recorded or
otherwise perfected under applicable law.
"Offering Memorandum" means the Offering Memorandum dated March 16,
2001 relating to the offering of the Notes issued on the Closing Date.
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"Vestar Agreement" means the agreement between Vestar Capital
Partners IV, L.P., a Delaware limited partnership and BNY, as Trustee
under the Indenture and as Collateral Agent hereunder dated as of the date
hereof, substantially in the form set forth on Exhibit A attached hereto.
(b) Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed thereto in the Indenture.
1.2 Appointment of the Collateral Agent. The Pledgor hereby
appoints BNY as Collateral Agent for the benefit of the Secured Parties in
accordance with the terms and conditions set forth herein and the Collateral
Agent hereby accepts such appointment.
1.3 Pledge and Grant of Security Interest. The Pledgor hereby
pledges to the Collateral Agent for its benefit pursuant to this Pledge
Agreement and for the ratable benefit of the Trustee and the Holders of the
Notes (the "Secured Parties"), and hereby grants to the Secured Parties, a
continuing first priority security interest in and to all of the Pledgor's
right, title and interest in, to and under the following (collectively, the
"Collateral"):
(a) the Collateral Account, all "financial assets" (as defined in
Article 8 of the NYUCC and in the Federal Book Entry Regulations)
(collectively, the "Pledged Financial Assets") credited to the Collateral
Account from time to time and all "security entitlements" (as defined in
Article 8 of the NYUCC and in the Federal Book Entry Regulations) of the
Pledgor with respect to the Pledged Financial Assets (all such security
entitlements collectively the "Pledged Security Entitlements"), including,
without limitation, all dividends, if any, interest, cash, instruments, if
any, and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Security Entitlements or such Pledged Financial Assets;
(b) all proceeds of any and all of the Collateral (including,
without limitation, proceeds that constitute property of the types
described in clause (a) of this Section 1.3 and this clause (b)); and
(c) to the extent not otherwise included, all cash.
1.4 Deposit of Funds. On the Closing Date, the Pledgor shall
deposit all Funds into the Collateral Account.
SECTION 2. Security for Obligations. This Pledge Agreement and the
grant of a security interest in the Collateral hereunder secures the prompt
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of all the Obligations. Without limiting the generality of the
foregoing, this Pledge Agreement and the grant of a security interest in the
Collateral hereunder secures the payment of all amounts that constitute part of
the Obligations and would be owed by the Pledgor to the Trustee or the Holders
under the Notes or the Indenture but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Pledgor.
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SECTION 3. Delivery of Security Collateral. (a) All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Collateral Agent pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
sufficient to establish and maintain in favor of the Collateral Agent a valid
security interest in such Collateral, and shall be credited to the Collateral
Account. In addition, the Collateral Agent shall have the right but shall not be
obligated at any time to exchange security certificates or instruments
representing or evidencing the Collateral for security certificates or
instruments of smaller or larger denominations.
(b) With respect to any Collateral that constitutes an
uncertificated security, the Pledgor will cause the issuer thereof either (i) to
register the Collateral Agent as the registered owner of such security or (ii)
to agree in writing with the Pledgor and the Collateral Agent that such issuer
will comply with instructions with respect to such security originated by the
Collateral Agent without further consent from the Pledgor, such agreement to be
in form and substance satisfactory to the Collateral Agent.
SECTION 4. Creation and Maintenance of the Collateral Account.
(a)Concurrently with or prior to the Closing Date, the Collateral Agent shall
have established (and at all times until the Obligations shall have been paid in
full and this Agreement shall have been terminated, the Securities Intermediary
shall maintain and administer in accordance with this Agreement), the Collateral
Account with BNY at its office at 2 North LaSalle Street, Suite 1020, Chicago,
Illinois 60602.
(b) The Securities Intermediary shall cause the Collateral Account
to be, and the Collateral Account shall be, separate from all other accounts
(including any other Collateral Account) held by or under the control and
dominion of the Collateral Agent, the Securities Intermediary or BNY. It shall
be a term and condition of the Collateral Account, notwithstanding any term or
condition to the contrary in any other agreement relating to the Collateral
Account, and except as otherwise provided by the provisions of Sections 7 and
13, that no amount (including interest on Collateral Investments) shall be paid
or released to or for the account of, or withdrawn by or for the account of, the
Pledgor or any other Person from such account.
(c) To the extent that the assets, property and items from time to
time carried in the Collateral Account consist of cash (other than cash proceeds
of Collateral Investments), the Securities Intermediary shall carry such cash
in, and credit such cash to, the Collateral Account. The Securities Intermediary
shall carry all other property, assets and items in, and credit such other
assets, property and items, to, the Collateral Account.
(d) The Collateral Account shall be subject to such applicable laws,
and such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other applicable banking or governmental authority, as may now
or hereafter be in effect.
SECTION 5. Investing of Amounts in the Collateral Account. On the
Closing Date, the Collateral Agent will, subject to the provisions of Section 7
and Section 14 hereof, direct the Securities Intermediary (a) to invest amounts
on deposit in the Collateral Account in
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Cash Equivalents, each in the name of the Securities Intermediary and (b) to
invest interest paid on the Cash Equivalents referred to in clause (a) above,
and reinvest other proceeds of any such Cash Equivalents that may mature or be
sold, in each case in such Cash Equivalents, each in the name of the Securities
Intermediary; provided, however, that in no event shall such Cash Equivalents
have a maturity more than 7 days from the date of acquisition thereof by the
Securities Intermediary or later than May 31, 2001 or, if applicable, the
Business Day prior to any Special Redemption Date (the Cash Equivalents referred
to in clauses (a) and (b) above and subject to the limitation set forth in the
foregoing proviso being collectively "Collateral Investments"). Interest and
proceeds that are not invested or reinvested in Collateral Investments as
provided above shall be deposited and held in the Collateral Account. None of
the Collateral Agent or the Securities Intermediary shall have any liability in
respect of losses incurred as a result of the liquidation of any Cash Equivalent
prior to its stated maturity unless such losses are caused by the Collateral
Agent's or Securities Intermediary's own gross negligence or willful misconduct.
SECTION 6. Securities Intermediary. BNY represents and warrants to,
and agrees with, the Pledgor and the Collateral Agent as follows:
(a) The Securities Intermediary maintains the Collateral Account for
the Pledgor, and all property held by the Securities Intermediary for the
account of the Pledgor is, and will continue to be, credited to the
Collateral Account.
(b) The Collateral Account is a securities account. The Securities
Intermediary is the securities intermediary with respect to the property
credited from time to time to the Collateral Account. The Pledgor is the
entitlement holder with respect to the property credited from time to time
to the Collateral Account.
(c) The Securities Intermediary (i) has identified (and will
continue to identify) in its records the Collateral Agent as the sole
Person having a security entitlement against the Securities Intermediary
with respect to the Collateral Agent and any and all assets, property and
items from time to time carried in the Collateral Account; and (ii) has
credited and will continue to credit such assets, property and items to
the Collateral Account in accordance with instructions given in accordance
with the terms and conditions of this Agreement.
(d) To the maximum extent permitted by applicable law, all assets,
property and items from time to time carried in the Collateral Account
shall constitute financial assets under Article 8 of the NYUCC, and the
Securities Intermediary shall treat all such assets, property and items as
financial assets.
(e) The securities intermediary's jurisdiction with respect to the
Collateral Account is, and will continue for so long as the security
interest credited hereunder shall be in effect, the State of New York.
(f) The Securities Intermediary will comply with all notifications
it receives directing it to transfer or redeem any property in the
Collateral Account (each an "Entitlement Order") or other directions
concerning the Collateral Account (including,
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without limitation, directions to distribute to the Collateral Agent
proceeds of any such transfer or redemption or interest or dividends on
property in the Collateral Account) originated by the Collateral Agent
without further consent by the Pledgor or any other Person.
(g) The Securities Intermediary will comply with Entitlement Orders
and other direction concerning the Collateral Account originated by, and
only by, the Collateral Agent, except as otherwise permitted by Section
5(a) in respect of investment instructions originated by the Pledgor.
(h) The Securities Intermediary has not entered into and will not
enter into any agreement with any other Person relating to the Collateral
Account and/or any financial assets credited thereto pursuant to which it
has agreed to comply with Entitlement Orders of such Person. The
Securities Intermediary has not entered into any other agreement with the
Pledgor or any other Person purporting to limit or condition the
obligation of the Securities Intermediary to comply with Entitlement
Orders originated by the Collateral Agent as set forth in paragraph (e)
above.
(i) The Collateral Agent is and shall remain the sole Person having
dominion and control of the Collateral Account.
(j) The Securities Intermediary hereby waives and releases any Lien,
right of set-off or other right it may have against the Collateral Account
or any financial asset carried in the Collateral Account or any credit
balance in the Collateral Account (except that the Securities Intermediary
may set off the face amount of any checks which have been credited to the
Collateral Account but are subsequently returned unpaid because of
uncollected or insufficient funds) and agrees that it will not assert any
such Lien or right against the Collateral Account or any financial asset
carried in the Collateral Account or any credit balance in the Collateral
Account.
(k) Anything herein to the contrary notwithstanding, the Securities
Intermediary will not be required to follow any instruction that would
violate any applicable law, decree, regulation or order of any government
or governmental body (including any court or tribunal).
SECTION 7. Disbursements. The Collateral Agent shall hold the assets
in the Collateral Account and release the same, or a portion thereof, only as
follows:
(a) If the Collateral Agent receives, prior to 2:00 P.M., New York
City time, on any date prior to the Termination Date, (i) a certificate
signed by the President or any Vice President of the Pledgor stating that
(A) the Merger has been consummated or will be consummated on
substantially the same terms as described in the Offering Memorandum
promptly upon the release of the funds held in the Collateral Account to
the Pledgor), (B) the Supplemental Indenture, in substantially the form
attached hereto as Exhibit B (the "Supplemental Indenture"), has been duly
authorized, executed and delivered (or will be delivered contemporaneously
with the consummation of the Merger) by Michael Foods and each of its
Domestic Subsidiaries in existence on the date hereof
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(collectively, the "Guarantors"), (C) the Guarantors have duly authorized,
executed and delivered (or will deliver contemporaneously with the
consummation of the Merger) the Registration Rights Agreement dated as of
the date of this Pledge Agreement between the Initial Purchasers and the
Pledgor with respect to the Notes (the "Registration Rights Agreement"),
(D) no Event of Default described in clause (i) or (j) of Section 6.01 of
the Indenture exists and (E) immediately after the consummation of the
Merger, the capitalization of Michael Foods, pro forma for the Merger, as
of December 31, 2000, will be substantially the same as set forth in the
Offering Memorandum (such certificate being referred to herein as the
"Merger Officers' Certificate") and (ii) an opinion of Kirkland & Ellis
substantially in the form attached hereto as Exhibit C (the "Merger
Opinion of Counsel"), the Collateral Agent shall as soon as practicable
(1) liquidate and disburse by the close of business of such date to Banc
of America Securities the Collateral in an amount, in immediately
available funds, equal to 3% of the aggregate principal amount of the
Notes issued on the Issue Date and (2) thereafter, disburse by the close
of business on such date, or at such other time after the receipt of the
Merger Officer's Certificate and the Merger Opinion of Counsel as may be
agreed upon in writing by the Collateral Agent and the Pledgor, all other
funds and/or Cash Equivalents and/or Collateral Investments from the
Collateral Account to the Pledgor; provided, however, that if the Merger
Officer's Certificate and the Merger Opinion of Counsel referred to above
are received by the Collateral Agent (i) on a day other than a Business
Day or (ii) after 2:00 P.M. New York City time on any date, then, in
either instance, the Collateral Agent may disburse the proceeds by the
close of business on the next Business Day, or at such other time after
the receipt of the Merger Officer's Certificate and the Merger Opinion of
Counsel as may be agreed upon in writing by the Collateral Agent and the
Pledgor.
(b) (i) On the Termination Date (or, in the event that at any time
prior to the Termination Date the Trustee and the Collateral Agent receive
a certificate signed by the President or any Vice President of the Pledgor
stating that, in the sole judgment of Pledgor, the Merger will not be
consummated, as soon as practicable but in no event later than on the
second Business Day following the date of receipt by the Collateral Agent
of such certificate), if the conditions required for release of funds
and/or Cash Equivalents as provided in clause (a) above have not been
satisfied, the Pledgor shall mail a notice by first class mail to each
Holder's last address as it appears on the Security Register (as
determined in the Indenture) stating that all of the outstanding Notes
shall be redeemed 5 Business Days after the date of such notice (the
"Special Redemption Date"), at 101% of the aggregate principal amount on
the Notes, plus interest accrued thereon to the Special Redemption Date,
in accordance with the terms of the Indenture, on the Special Redemption
Date (the "Special Redemption Price"), and shall state that the Notes must
be surrendered to the Trustee in order to collect the Special Redemption
Price.
(ii) On or prior to the Business Day prior to the Special Redemption
Date, the Collateral Agent shall accept funds from Vestar in accordance
with the Vestar Agreement and deposit the funds received therefrom into
the Collateral Account, and then shall release such funds and liquidate
and release all Collateral to the Paying Agent.
(iii) On the Special Redemption Date, the Notes shall be redeemed as
specified in the Indenture.
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(c) If the Pledgor is required to effect a Special Redemption
contemplated by clause (b) above and for any reason the amount of
Collateral to be released is insufficient to pay the aggregate Special
Redemption Price, the Pledgor agrees to pay to the Paying Agent, on or
prior to the Special Redemption Date, the amount of funds necessary to
permit the payment of the aggregate Special Redemption Price.
(d) Upon the release of any Collateral from the Collateral Account
in accordance with the terms of this Pledge Agreement, the security
interest evidenced by this Pledge Agreement in such released Collateral
will automatically terminate and be of no further force and effect.
(e) The Collateral Agent shall not be required to liquidate any
Collateral Investment in order to make any payment hereunder unless: (i)
instructed to do so pursuant to the Merger Officers' Certificate; (ii) to
effect a Special Redemption; or (iii) pursuant to Section 14 hereof.
(f) Nothing contained in Section 1, Section 5, Section 6, this
Section 7 or any other provision of this Pledge Agreement shall (i) afford
the Pledgor any right to issue Entitlement Orders with respect to any
security entitlement to any of the Collateral Investments or any
securities account in which any such security entitlement may be carried,
or otherwise afford the Pledgor control of any such security entitlement
or (ii) otherwise give rise to any rights of the Pledgor with respect to
any of the Collateral Investments, any security entitlement thereto or any
securities account in which any such security entitlement may be carried,
other than the Pledgor's beneficial interest under this Pledge Agreement
in Collateral pledged to and subject to the exclusive dominion and control
(consistent with this Pledge Agreement) of the Collateral Agent in its
capacity as such (and not as a securities intermediary). The Pledgor
acknowledges, confirms and agrees that the Collateral Agent holds a
security entitlement to the Collateral Investments solely as Collateral
Agent for the Holders of the Notes and not as a securities intermediary or
financial intermediary.
(g) Nothing in this Section 7 shall affect the Collateral Agent's
rights, upon instruction from the Trustee, to release Collateral for
application thereof to payment of amounts due on the Notes upon
acceleration thereof.
SECTION 8. Representations and Warranties. The Pledgor hereby
represents and warrants that:
(a) The execution and delivery by the Pledgor of, and the
performance by the Pledgor of its obligations under, this Pledge Agreement
will not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Pledgor, or any material agreement or
other material instrument binding upon the Pledgor or any of its
subsidiaries or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Pledgor or any of its
subsidiaries, or result in the creation or imposition of any Lien on any
assets of the Pledgor, except for the security interests granted under
this Pledge Agreement.
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(b) No consent of any other Person and no approval, authorization,
order of, or filing, declaration or qualification with, any governmental
body or agency or other third party is required (i) for the execution,
delivery or performance by the Pledgor of its obligations under this
Pledge Agreement, (ii) for the grant by the Pledgor of the security
interest created hereby or (iii) for the pledge by the Pledgor of the
Collateral pursuant to this Pledge Agreement or for the perfection and
maintenance of such pledge, except for any such consents, approvals,
authorizations or orders as may be required to be obtained by the
Collateral Agent (or the Holders) for the exercise by the Collateral Agent
of the rights provided for in this Pledge Agreement or the remedies in
respect of the Collateral pursuant to this Pledge Agreement.
(c) The Pledgor is the legal and beneficial owner of the Collateral,
free and clear of any Lien or claims of any Person (except for the
security interests created by this Pledge Agreement). No financing
statement or instrument similar in effect covering all or any part of the
Pledgor's interest in the Collateral is on file in any public or recording
office, other than the financing statements filed pursuant to this Pledge
Agreement. The Pledgor has no trade names.
(d) This Pledge Agreement has been duly authorized, validly executed
and delivered by the Pledgor and (assuming due authorization, execution
and delivery by the Collateral Agent) constitutes a valid and binding
agreement of the Pledgor, enforceable against the Pledgor in accordance
with its terms, except as the enforceability hereof may be limited by (i)
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally, or (ii) general principles of equity, whether considered
at law or at equity, including, without limitation, concepts or
materiality, reasonableness, good faith and fair dealing.
(e) All of the Collateral consisting of certificated securities and
instruments has been delivered to the Collateral Agent. All filings and
other actions necessary or desirable to perfect and protect the security
interest in the Collateral created under this Agreement have been duly
made or taken and are in full force and effect, and this Agreement creates
in favor of the Collateral Agent for the benefit of the Trustee and the
Holders of the Notes a valid and, together with such filings and other
actions, perfected first priority security interest in such Collateral,
securing the payment of the Obligations enforceable as such against all
creditors of the Pledgor (and any Persons purporting to purchase any of
the Collateral from the Pledgor).
(f) There are no legal or governmental proceedings pending or, to
the best of the Pledgor's knowledge, threatened to which the Pledgor or
any of its subsidiaries is a party or to which any of the properties of
the Pledgor or any such subsidiary is subject that would materially
adversely affect the power or ability of the Pledgor to perform its
obligations under this Pledge Agreement or to consummate the transactions
contemplated hereby.
(g) The pledge of the Collateral pursuant to this Pledge Agreement
is not prohibited by law or governmental regulation (including, without
limitation, Regulations
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T, U and X of the Board of Governors of the Federal Reserve System)
applicable to the Pledgor.
(h) No Event of Default (as defined herein) exists.
(i) The chief place of business and chief executive office of the
Pledgor are located at c/o Vestar Capital Partners IV, L.P., 1225
Seventeenth Street, Suite 1660, Denver, Colorado 80202, and the Pledgor
keeps its records concerning the Collateral at such location.
SECTION 9. Filing; Further Assurances. (a) Promptly following the
execution and delivery of this Pledge Agreement, the Pledgor shall deliver to
the Trustee acknowledgment copies or stamped receipt copies of proper financing
statements, duly filed on or before the Closing Date in accordance with the
NYUCC, covering the categories of Collateral described in this Pledge Agreement.
(b) The Pledgor agrees that from time to time, at the expense of the
Pledgor, the Pledgor will, promptly as necessary or as requested by the
Collateral Agent (which request the Collateral Agent may submit at the direction
of the Holders of a majority in principal amount at maturity of the Notes then
outstanding), execute and deliver or cause to be executed and delivered, or use
its reasonable best efforts to procure, all assignments, instruments and other
documents deliver any instruments to the Collateral Agent and take any other
actions that may be necessary to perfect, continue the perfection of, or protect
the first priority of the Secured Parties' security interest in and to the
Collateral, including the filing of all necessary financing and continuation
statements, to protect the Collateral against the rights, claims, or interests
of third persons (other than any such rights, claims or interests created by or
arising through the Collateral Agent) or to effect the purposes of this Pledge
Agreement.
(c) The Pledgor hereby authorizes the Collateral Agent to file any
financing or continuation statements in the United States with respect to the
Collateral without the signature of the Pledgor (to the extent permitted by
applicable law); provided, however, that the Collateral Agent shall have no duty
or obligation to perform any of the foregoing actions. A photocopy or other
reproduction of this Pledge Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
(d) The Pledgor will pay all costs incurred in connection with this
Pledge Agreement within 30 days of receipt of an invoice therefor.
(e) The Pledgor agrees, whether or not requested by the Collateral
Agent, to use its best efforts to perfect or continue the perfection of, or to
protect the first priority of, the Secured Parties' security interest in the
Collateral, and to protect the Collateral against the rights, claims or
interests of third persons (other than any such rights, claims or interests
created by or arising through the Collateral Agent).
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SECTION 10. Covenants. The Pledgor covenants and agrees with the
Trustee and the Holders of the Notes from and after the date of this Pledge
Agreement until the Termination Date:
(a) that (i) it will not (and will not purport to) sell or otherwise
dispose of, or grant any option or warrant with respect to, any of the
Collateral or its beneficial interest therein, and (ii) it will not create
or permit to exist any Lien or other adverse interest in or with respect
to its beneficial interest in any of the Collateral (except for the
security interests granted under this Pledge Agreement) and at all times
will be the sole beneficial owner of the Collateral;
(b) that it will not (i) enter into any agreement or understanding
that restricts or inhibits or purports to restrict or inhibit the
Trustee's or the Collateral Agent's rights or remedies hereunder,
including, without limitation, the Collateral Agent's right to sell or
otherwise dispose of the Collateral or (ii) fail to pay or discharge any
tax, assessment or levy of any nature with respect to its beneficial
interest in the Collateral not later than five days prior to the date of
any proposed sale under any judgment, writ or warrant of attachment with
respect to such beneficial interest; and
(c) that it will keep its chief place of business, chief executive
office and the place where it keeps its records concerning the Collateral
at the location therefor specified in Section 8(i), or upon 30 days' prior
written notice to the Collateral Agent, at such other locations in a
jurisdiction where all actions required by Section 9 have been taken with
respect to the Collateral.
SECTION 11. Power of Attorney; Collateral Agent May Perform. Subject
to the terms of this Pledge Agreement, the Pledgor hereby appoints and
constitutes the Collateral Agent as the Pledgor's attorney-in-fact (with full
power of substitution), with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to time to take
any action and to execute any instrument that is necessary or advisable or that
the Collateral Agent may deem necessary or advisable to accomplish the purposes
of this Pledge Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above,
(c) to file any claims or take any action or institute any
proceedings that are necessary or desirable or that the Collateral Agent
may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the Trustee with respect
to any of the Collateral,
(d) to pay or discharge taxes or Liens levied or placed upon the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Collateral Agent, and such
payments made by the Collateral Agent to
12
become part of the Obligations of the Pledgor to the Trustee, due and
payable immediately upon demand, and
(e) to convey any item of Collateral to any purchaser thereof and
give any notices or recordings of any Liens under Section 6 hereof;
provided, however, that the Collateral Agent shall have no duty or obligation to
perform any of the foregoing actions. The Collateral Agent's authority under
this Section 11 shall include, without limitation, the authority to execute or
endorse (a) any checks or instruments representing proceeds of Collateral in the
name of the Pledgor, (b) any receipts for any certificate of ownership or any
document constituting Collateral or transferring title to any item of
Collateral, (c) any financing statements (to the extent permitted by applicable
law) or (d) any other documents deemed necessary or appropriate by the
Collateral Agent or otherwise to preserve, protect or perfect the security
interest in the Collateral and to file the same, prepare, file and sign the
Pledgor's name on any notice of Lien, and to take any other actions arising from
or incident to the powers granted to the Collateral Agent in this Pledge
Agreement. This power of attorney is coupled with an interest and is irrevocable
by the Pledgor.
SECTION 12. No Assumption of Duties; Reasonable Care. The rights and
powers conferred on the Collateral Agent hereunder are solely to preserve and
protect the security interest of the Secured Parties in and to the Collateral
granted hereby and shall not be interpreted to, and shall not impose any duties
or obligations on the Collateral Agent in connection therewith other than those
expressly provided herein or imposed under applicable law. Except as provided by
applicable law or by the Indenture, the Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which the Collateral Agent accords similar property held by the Collateral
Agent for its own account, it being understood that the Collateral Agent in its
capacity as such shall not have any responsibility for (a) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities or other
matters relative to any Collateral, whether or not the Collateral Agent has or
is deemed to have knowledge of such matters, (b) taking any necessary steps to
preserve rights against any parties with respect to any Collateral or (c)
investing or reinvesting any of the Collateral or any loss on any investment.
SECTION 13. Indemnity; Collateral Agent's Limitation of Liability to
Pledgor. (a) The Pledgor shall indemnify, reimburse, hold harmless and defend
the Collateral Agent, the Securities Intermediary and their affiliates and their
directors, officers, agents and employees, from and against any and all claims,
actions, obligations, liabilities and expenses, including reasonable defense
costs, reasonable investigative fees and costs, and reasonable legal fees and
damages arising from the Collateral Agent's or Securities Intermediary's
performance or lack of performance as Collateral Agent or Securities
Intermediary, respectively, under this Pledge Agreement, except to the extent
that such claim, action, obligation, liability or expense is directly caused by
the bad faith, gross negligence or willful misconduct of such indemnified
person; provided, however, that the Securities Intermediary (a) shall not be
excused from, and shall not be excused from liability for, acting or refraining
from acting and (b) shall not be indemnified or held harmless under this Section
13 for the taking or the failure to take any action, in each case hereunder in
its capacity as Securities Intermediary to the extent the taking or the failure
to take
13
any such action violates the duties and obligations expressly imposed upon the
Securities Intermediary under or in accordance with this Agreement or imposed
upon a Securities Intermediary under the Federal Book-Entry Regulations or
Article 8, Part 5 of the NYUCC. This indemnity shall be a continuing obligation
of the Pledgor, its respective successors and assigns, notwithstanding the
termination of this Pledge Agreement and the resignation or removal of the
Collateral Agent or the Securities Intermediary.
(b) If at any time the Collateral Agent is served with any judicial
or administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects Collateral (including, but not
limited to, orders of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of Collateral), the Collateral
Agent is authorized to comply therewith in any manner as it or its legal counsel
of its own choosing deems appropriate and if the Collateral Agent complies with
any such judicial or administrative order, judgment, decree, writ or other form
of judicial or administrative process, the Collateral Agent shall not be liable
to the Pledgor even though such order, judgment, decree, writ or process may be
subsequently modified or vacated or otherwise determined to have been without
legal force or effect.
(c) The Collateral Agent shall not incur any liability to the
Pledgor for not performing any act or fulfilling any duty, obligation or
responsibility hereunder by reason of any occurrence beyond the control of the
Collateral Agent (including, but not limited to, any act or provision or any
present or future law or regulation or governmental authority, any act of God or
war, or the unavailability of the Federal Reserve Bank wire or telex or other
wire or communication facility).
(d) The Collateral Agent shall not be responsible in any respect for
the form, execution, validity, value or genuineness of documents or securities
deposited hereunder, or for any description therein, or for the identity,
authority or rights of persons executing or delivering or purporting to execute
or deliver any such document, security or endorsement.
SECTION 14. Remedies upon Event of Default. If any Event of Default
under the Indenture shall have occurred and be continuing or if a material
default hereunder for a period of five business days after notice to the Pledgor
by the Collateral Agent or the Trustee shall have occurred and be continuing
(any such Event of Default or material default being referred to in this Pledge
Agreement as an "Event of Default"):
(a) The Trustee, the Collateral Agent and the Holders of the Notes
may exercise, in addition to all other rights given by law or by this
Pledge Agreement or the Indenture, all of the rights and remedies with
respect to the Collateral of a secured party under the NYUCC at that time
and also may (i) require the Pledgor to, and the Pledgor hereby agrees
that it will at its expense and upon request of the Collateral Agent
forthwith, assemble all or part of the Collateral as directed by the
Collateral Agent and make it available to the Collateral Agent at a place
to be designated by the Collateral Agent that is reasonably convenient to
both parties and (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at any broker's
board or at public or private sale, in one or more sales or lots, at any
of the Collateral Agent's offices or elsewhere, for cash, on credit or for
future delivery, and
14
upon such other terms as the Collateral Agent may deem, and which the
Pledgor shall accept as, commercially reasonable. Unless any of the
Collateral threatens, in the reasonable judgment of the Collateral Agent,
to decline speedily in value, the Collateral Agent will give the Pledgor
reasonable notice of the time and place of any public sale thereof, or of
the time after which any private sale other intended disposition is to be
made. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral
Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. The purchaser of any or all Collateral so sold shall thereafter
hold the same absolutely, free from any claim, encumbrance or right of any
kind whatsoever created by or through the Pledgor. Any sale of the
Collateral conducted in conformity with reasonable commercial practices of
banks, insurance companies, commercial finance companies, or other
financial institutions disposing of property similar to the Collateral
shall be deemed to be commercially reasonable. The Trustee, the Collateral
Agent or any Holder of Notes may, in its own name or in the name of a
designee or nominee, buy any of the Collateral at any public sale and, if
permitted by applicable law, at any private sale. All expenses (including
court costs and reasonable attorneys' fees, expenses and disbursements)
of, or incident to, the enforcement of any of the provisions hereof shall
be recoverable from the proceeds of the sale or other disposition of the
Collateral.
(b) All cash proceeds received by the Collateral Agent in respect of
any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of the Collateral Agent, be held by
the Collateral Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to the Collateral
Agent or the Trustee pursuant to Section 15) in whole or in part by the
Collateral Agent for the ratable benefit of the Secured Parties against,
all or any part of the Obligations in such order as the Collateral Agent
shall elect consistent with the Indenture. Any surplus of such cash or
cash proceeds held by the Collateral Agent and remaining after payment in
full of all the Obligations shall be paid over to the Pledgor.
(c) The Pledgor further agrees to use its reasonable best efforts to
do or cause to be done all such other acts as may be necessary to make
such sale or sales of all or any portion of the Collateral pursuant to
this Section 14 valid and binding and in compliance with any and all other
applicable requirements of law. The Pledgor further agrees that a breach
of any of the covenants contained in this Section 14 will cause
irreparable injury to the Trustee and the Holders of the Notes, that the
Trustee and the Holders of the Notes have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 14 shall be specifically enforceable against the
Pledgor, and the Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred.
(d) The Collateral Agent may but is not obligated to exercise any
and all rights and remedies of the Pledgor in respect of the Collateral.
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(e) Subject to and in accordance with the terms of this Pledge
Agreement, all payments received by the Pledgor in respect of the
Collateral shall be received 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 so
received (with any necessary endorsement).
SECTION 15. Expenses. The Pledgor agrees to pay to the Collateral
Agent the fees as may be agreed upon from time to time. The Pledgor will upon
demand pay to the Trustee and the Collateral Agent the amount of any and all
expenses, including, without limitation, the reasonable fees, expenses and
disbursements of its counsel, experts and agents retained by the Trustee and the
Collateral Agent, that the Trustee and the Collateral Agent may incur in
connection with (a) the review, negotiation and administration of this Pledge
Agreement, (b) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (c) the exercise or
enforcement of any of the rights of the Trustee, the Collateral Agent or the
Secured Parties hereunder or (d) the failure by the Pledgor to perform or
observe any of the provisions hereof.
SECTION 16. Security Interest Absolute. All rights of the Trustee,
the Collateral Agent and the Holders of the Notes and security interests
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Indenture or Notes
or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture;
(c) any taking, exchange, surrender, release or non-perfection of
any Liens on any other collateral for all or any of the Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Obligations, or any manner of sale or other disposition
of any collateral for all or any of the Obligations or any other assets of
the Pledgor;
(e) any change, restructuring or termination of the corporate
structure or existence of the Pledgor; or
(f) to the extent permitted by applicable law, any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Pledgor in respect of the Obligations or of this Pledge
Agreement.
SECTION 17. Miscellaneous Provisions.
17.1 Notices. Any notice, direction or communication given hereunder
and any deliveries made hereunder shall be sufficiently given if in writing and
delivered in person or mailed by first class mail, commercial courier service or
telecopier communication, addressed as follows:
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if to the Pledgor:
Michael Foods Acquisition Corp.
c/o Vestar Capital Partners IV, L.P.
1225 Seventeenth Street,
Suite 1660
Denver, Colorado 80202
Fax: (303) 292-6639
Attention: J. Christopher Henderson
if to the Trustee:
BNY Midwest Trust Company
2 North LaSalle Street, Suite 1020,
Chicago, Illinois 60602
Fax: 312 827 8542
Attention: Dan Donovan
if to the Collateral Agent:
BNY Midwest Trust Company
2 North LaSalle Street, Suite 1020,
Chicago, Illinois 60602
Fax: 312 827 8542
Attention: Dan Donovan
if to the Securities Intermediary:
BNY Midwest Trust Company
2 North LaSalle Street, Suite 1020,
Chicago, Illinois 60602
Fax: 312 827 8542
Attention: Dan Donovan
or, as to any such party, at such other address as shall be designated by such
party in a written notice to each other party complying as to delivery with the
terms of this Section. All such notices and other communications shall be deemed
to have been duly given: at the time delivered by hand, if personally delivered;
three Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt is confirmed, if telecopied; and on the next Business Day
if timely delivered to an air courier guaranteeing overnight delivery.
17.2 No Adverse Interpretation of Other Agreements. This
Pledge Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge, security or
debt agreement (other than the Indenture) may be used to interpret this Pledge
Agreement.
17.3 Severability. The provisions of this Pledge Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole
17
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect in that jurisdiction only such clause or provision, or part thereof, and
shall not in any manner affect such clause or provision in any other
jurisdiction or any other clause or provision of this Pledge Agreement in any
jurisdiction.
17.4 Headings. The headings in this Pledge Agreement have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
17.5 Counterpart Originals. This Pledge Agreement may be
signed in two or more counterparts, each of which shall be deemed an original,
but all of which shall together constitute one and the same agreement.
17.6 Benefits of Pledge Agreement. Nothing in this Pledge
Agreement, express or implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders of the Notes, any benefit
or any legal or equitable right, remedy or claim under this Pledge Agreement.
17.7 Amendments, Waivers and Consents. Any amendment or waiver
of any provision of this Pledge Agreement and any consent to any departure by
the Pledgor from any provision of this Pledge Agreement shall be effective only
if made in writing and signed by the Collateral Agent and otherwise made or duly
given in compliance with all of the terms and provisions of the Indenture, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. None of the Trustee, the Collateral
Agent or any Holder of Notes shall be deemed, by any act, delay, indulgence,
omission or otherwise, to have waived any right or remedy hereunder or to have
acquiesced in any default or Event of Default or in any breach of any of the
terms and conditions hereof. Failure of the Trustee, the Collateral Agent or any
Holder of Notes to exercise, or delay in exercising, any right, power or
privilege hereunder shall not preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Trustee,
the Collateral Agent or any Holder of Notes of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy that the
Trustee, the Collateral Agent or such Holder of Notes would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
17.8 Interpretation of Agreement. To the extent a term or
provision of this Pledge Agreement conflicts with the Indenture, the Indenture
shall control with respect to the subject matter of such term or provision.
Notwithstanding the foregoing and any other provision of this Pledge Agreement
or the Indenture, the Trustee shall have no fiduciary responsibility under this
Pledge Agreement.
17.9 Continuing Security Interest; Termination. (a) This
Pledge Agreement shall create a continuing security interest in and to the
Collateral and shall, unless otherwise provided in this Pledge Agreement, remain
in full force and effect until the payment in full in cash of the Obligations.
This Pledge Agreement shall be binding upon the Pledgor, its transferees,
successors and assigns, and shall inure, together with the rights and remedies
of the
18
Trustee and the Collateral Agent hereunder, to the benefit of the Trustee, the
Collateral Agent, the Holders of the Notes and their respective successors,
transferees and assigns.
(b) So long as no Event of Default shall have occurred and be
continuing, this Pledge Agreement (other than Pledgor's obligations under
Sections 13 and 15) shall terminate upon the payment in full in cash of the
Obligations. At such time, the Collateral Agent shall, pursuant to a written
order of the Pledgor, reassign and redeliver to the Pledgor all of the
Collateral hereunder that has not been sold, disposed of, retained or applied by
the Collateral Agent in accordance with the terms of this Pledge Agreement and
the Indenture and take all actions requested by the Pledgor that are necessary
to release the security interest created by this Pledge Agreement in and to the
Collateral, including the execution of all termination statements provided to it
necessary to terminate any financing or continuation statements filed with
respect to the Collateral. Such reassignment and redelivery shall be without
warranty by or recourse to the Collateral Agent or the Trustee in its capacity
as such and shall be at the reasonable expense of the Pledgor.
17.10 Survival of Representations and Covenants. All
representations, warranties and covenants of the Pledgor contained herein shall
survive the execution and delivery of this Pledge Agreement, and shall terminate
only upon the termination of this Pledge Agreement. The obligations of the
Pledgor under Sections 13 and 15 hereof shall survive the termination of this
Agreement.
17.11 Waivers. The Pledgor waives presentment and demand for
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
17.12 Authority of the Collateral Agent. (a) The Collateral
Agent shall have and be entitled to exercise all powers hereunder that are
specifically granted to the Collateral Agent by the terms hereof, together with
such powers as are reasonably incident thereto but no duties, obligations or
powers shall be inferred or implied. The Collateral Agent may perform any of its
duties hereunder or in connection with the Collateral by or through agents,
attorneys, experts, accountants, advisors or employees and shall not be
responsible for any misconduct or negligence by any such person appointed with
due care by it hereunder. The Collateral Agent shall be entitled to retain
counsel and to act in reliance upon the advice of counsel concerning any matters
arising hereunder. Except as otherwise expressly provided in this Pledge
Agreement or the Indenture, neither the Collateral Agent nor any director,
officer, employee, attorney or agent of the Collateral Agent shall be liable to
the Pledgor for any action taken or omitted to be taken by the Collateral Agent,
in its capacity as Collateral Agent, hereunder, except for its own bad faith,
gross negligence or willful misconduct, and the Collateral Agent shall not be
responsible for the validity, effectiveness or sufficiency hereof or of any
document or security furnished pursuant hereto. The Collateral Agent and its
directors, officers, employees, attorneys and agents shall be entitled to
conclusively rely on any communication, instrument or document (whether in its
original or facsimile form believed by it or them to be genuine and correct and
to have been signed or sent by the proper person or persons.
19
(b) The Pledgor acknowledges that the rights and responsibilities of
the Collateral Agent under this Pledge Agreement with respect to any action
taken by the Collateral Agent or the exercise or non-exercise by the Collateral
Agent of any option, right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Pledge Agreement shall, as
between the Collateral Agent and the Holders of the Notes, be governed by the
Indenture and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Collateral Agent and the Pledgor,
the Collateral Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and the Pledgor shall not be obligated or entitled to make any inquiry
respecting such authority.
17.13 Successor Collateral Agent by Merger, etc. If the
Collateral Agent consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Collateral
Agent.
17.14 Final Expression. This Pledge Agreement, together with
the Indenture and any other agreement executed in connection herewith, is
intended by the parties as a final expression of this Pledge Agreement and is
intended as a complete and exclusive statement of the terms and conditions
thereof.
17.15 Rights of Holders of the Notes. No Holder of Notes shall
have any independent rights hereunder other than those rights granted to
individual Holders of the Notes pursuant to Section 6.07 of the Indenture;
provided that nothing in this subsection shall limit any rights granted to the
Trustee under the Notes or the Indenture.
17.16 Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial; Waiver of Damages. (a) This Pledge Agreement shall be governed by
and interpreted under the laws of the State of New York, and any dispute arising
out of, connected with, related to, or incidental to the relationship
established between the Pledgor, the Trustee, the Collateral Agent and the
Holders of the Notes in connection with this Pledge Agreement, and whether
arising in contract, tort, equity or otherwise, shall be resolved in accordance
with the laws of the State of New York.
(b) The Pledgor hereby waives personal service of process in any
suit, action or proceeding with respect to this Pledge Agreement and for actions
brought under the U.S. Federal or state securities laws brought in any Federal
or state court located in the City of New York (each a "New York Court") and
consents that all service of process in any such suit, action or proceeding
shall be made by registered mail, return receipt requested, directed to the
Pledgor at the address indicated in Section 17.1. Each of the parties hereto
submits to the jurisdiction of any New York Court and to the courts of its
corporate domicile with respect to any actions brought against it as defendant
in any suit, action or proceeding arising out of, connected with, related to, or
incidental to the relationship established among the Pledgor, the Trustee, the
Collateral Agent and the Holders in connection with this Pledge Agreement, and
each of the parties hereto waives any objection that it may have to the laying
of venue, including any pleading of forum non conveniens, with respect to any
such action and waives any right to which it may be entitled on account of place
of residence or domicile.
20
(c) The Pledgor agrees that the Trustee shall, in its capacity as
Trustee or in the name and on behalf of any Holder of Notes, have the right, to
the extent permitted by applicable law, to proceed against the Pledgor or the
Collateral in a court in any location reasonably selected in good faith (and
having personal or in rem jurisdiction over the Pledgor or the Collateral, as
the case may be) to enable the Trustee to realize on such Collateral, or to
enforce a judgment or other court order entered in favor of the Trustee. The
Pledgor agrees that it will not assert any counterclaims, setoffs or crossclaims
in any proceeding brought by the Trustee to realize on such property or to
enforce a judgment or other court order in favor of the Trustee, except for such
counterclaims, setoffs or crossclaims which, if not asserted in any such
proceeding, could not otherwise be brought or asserted.
(d) The Pledgor agrees that neither any Holder of Notes nor (except
as otherwise provided in this Pledge Agreement or the Indenture) the Collateral
Agent in its capacity as Collateral Agent shall have any liability to the
Pledgor (whether arising in tort, contract or otherwise) for losses suffered by
the Pledgor in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by this Pledge
Agreement, or any act, omission or event occurring in connection therewith,
unless it is determined by a final and nonappealable judgment of a court that is
binding on the Collateral Agent or such Holder of Notes, as the case may be,
that such losses were the result of acts or omissions on the part of the
Collateral Agent or such Holders of Notes, as the case may be, constituting bad
faith, gross negligence or willful misconduct.
(e) To the extent permitted by applicable law, the Pledgor waives
the posting of any bond otherwise required of the Trustee, the Collateral Agent
or any Holder of Notes in connection with any judicial process or proceeding to
enforce any judgment or other court order pertaining to this Pledge Agreement or
any related agreement or document entered in favor of the trustee, the
Collateral Agent or any Holder of Notes, or to enforce by specific performance,
temporary restraining order or preliminary or permanent injunction, this Pledge
Agreement or any related agreement or document between the Pledgor on the one
hand and the Trustee, the Collateral Agent and/or the Holders of the Notes on
the other hand.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have each caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.
Pledgor:
MICHAEL FOODS, ACQUISITION CORP.
By:
----------------------------------------
Name:
Title:
Trustee:
BNY MIDWEST TRUST COMPANY
By:
----------------------------------------
Name:
Title:
Collateral Agent:
BNY MIDWEST TRUST COMPANY
By:
----------------------------------------
Name:
Title:
Securities Intermediary:
BNY MIDWEST TRUST COMPANY
By:
----------------------------------------
Name:
Title:
22
BANC OF AMERICA SECURITIES LLC
By:
----------------------------------------
Name:
Title:
EXHIBIT A
[Form of Vestar Agreement]
EXHIBIT B
[Form of First Supplemental Indenture]
EXHIBIT C
[Draft Opinion of Kirkland & Ellis]
1. The Supplemental Indenture has been duly authorized, executed and
delivered by Michael Foods and each of the Guarantors (as defined in the
Purchase Agreement) and, when executed and delivered by each of the other
parties thereto, will be enforceable against Michael Foods and each of the
Guarantors in accordance with its terms, except as the same may be limited by
(A) applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' right generally, including without limitation the effect of
statutory or other laws regarding fraudulent conveyances or transfers,
preferential transferor distributions by corporations to shareholders, or (B)
general principles of equity, whether considered at law or at equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing.
2. The Registration Rights Agreements has been duly authorized,
executed and delivered by each of the Guarantors and is enforceable against each
of the Guarantors in accordance with its terms, except as the same may be
limited by (A) applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' right generally, including without limitation
the effect of statutory or other laws regarding fraudulent conveyances or
transfers, preferential transferor distributions by corporations to
shareholders, or (B) general principles of equity, whether considered at law or
at equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing.