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EXHIBIT 4.7
AMENDED AND RESTATED COMPANY PLEDGE AGREEMENT
PLEDGE AGREEMENT (this "Agreement"), dated as of March 24, 1992,
amended and restated as of December 18, 1996 and further amended and restated as
of March 16, 1998, made by COLTEC INDUSTRIES INC, a Pennsylvania corporation
(the "Pledgor"), to BANKERS TRUST COMPANY, as Collateral Agent, (the "Pledgee")
for the benefit of the Secured Creditors (as defined below) (except as otherwise
defined herein, terms used herein and defined in the Credit Agreement shall be
used herein as therein defined).
W I T N E S S E T H :
WHEREAS, the Pledgor, Coltec Aerospace Canada Ltd., the financial
institutions (the "Banks") from time to time party thereto, Bank of America
National Trust and Savings Association, as Documentation Agent (in such
capacity, the "Documentation Agent"), The Chase Manhattan Bank, as Syndication
Agent (in such capacity, the "Syndication Agent"), Bank of Montreal, as Canadian
Paying Agent (in such capacity, the "Canadian Paying Agent"), and Bankers Trust
Company, as Administrative Agent (together with any successor administrative
agent, the "Administrative Agent" and together with the Pledgee, the
Documentation Agent, the Syndication Agent, the Canadian Paying Agent and the
Banks and their respective successors and assigns, and together with any other
financial institutions from time to time party to the Credit Agreement
hereinafter referred to, the "Bank Creditors"), have entered into a Credit
Agreement, dated as of March 24, 1992, and amended and restated as of January
11, 1994, and further amended and restated as of December 18, 1996, and as
further amended, providing for the making of Loans to the Borrowers and the
issuance of, and participation in, Letters of Credit, all as contemplated
therein (as used herein, the term "Credit Agreement" means the Credit Agreement
described above in this paragraph, as the same has been, and may from time to
time in the future be, amended, modified, extended, renewed, replaced, restated,
supplemented or refinanced from time to time, and including any agreement
extending the maturity of, or refinancing or restructuring (including, but not
limited to, the inclusion of additional guarantors or additional borrowers
thereunder that are Subsidiaries of the Pledgor and whose obligations are
guaranteed by the Pledgor thereunder or any increase in the amount borrowed) all
or any portion of, the Indebtedness under such agreement or any successor
agreements, whether or not with the same agent, trustee, representative,
financial institutions or holders; provided that, with respect to any agreement
providing for the refinancing or replacement of Indebtedness under the Credit
Agreement, such agreement shall only be treated as, or as part of, the Credit
Agreement hereunder if (i) either (A) all obligations under the Credit Agreement
being refinanced or replaced shall be paid in full at the time of such
refinancing or replacement, and all commitments and letters of credit issued
pursuant to the refinanced or replaced Credit Agreement shall have terminated in
accordance with their terms or (B) the Required Banks shall have consented in
writing to the refinancing or replacement Indebtedness being treated, along with
their Indebtedness, as Indebtedness pursuant to the Credit Agreement, (ii) the
refinancing Indebtedness shall be permitted to be incurred under the Credit
Agreement being refinanced (if such Credit Agreement
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is to remain outstanding) and (iii) a notice to the effect that the refinancing
or replacement Indebtedness shall be treated as issued under the Credit
Agreement shall be delivered by the Pledgor to the Pledgee);
WHEREAS, the Pledgor may at any time and from time to time
enter into (or guarantee obligations of one or more of its Subsidiaries under)
one or more of the following agreements: (i) interest rate protection agreements
(including, without limitation, interest rate swaps, caps, floors, collars and
similar agreements), (ii) foreign exchange contracts, currency swap agreements
or other similar agreements or arrangements designed to protect against the
fluctuations in currency values and/or (iii) other types of hedging agreements
from time to time (collectively, the "Interest Rate Protection or Other Hedging
Agreements") with one or more Bank Creditors or affiliates of Bank Creditors
(each such Bank Creditor or affiliate, even if the respective Bank Creditor
subsequently ceases to be a Bank under the Credit Agreement for any reason,
together with such Bank Creditor's or affiliate's successors and assigns,
collectively, the "Interest Rate Protection Creditors");
WHEREAS, the Pledgor may issue New Senior Notes and New Senior
Exchange Notes as provided in the Credit Agreement that may be (to the extent
permitted pursuant to the Credit Agreement) equally and ratably secured
hereunder with the Credit Agreement Obligations as hereinafter provided (with
any holders of New Senior Notes and New Senior Exchange Notes from time to time
being herein collectively called "Senior Noteholders" and with all documentation
evidencing any New Senior Notes or New Senior Exchange Notes, including without
limitation the indenture and any subsidiary guarantees to be entered into in
connection with the New Senior Notes, being herein called "Senior Note
Documents");
WHEREAS, the Pledgor has heretofore entered into a Pledge
Agreement, dated as of March 24, 1992, amended and restated as of January 11,
1994 and further amended and restated as of December 18, 1996 (as amended,
modified or supplemented prior to the date hereof, the "Original Company Pledge
Agreement");
WHEREAS, it is a condition to the extensions of credit under
the Credit Agreement and to the obligations of the initial purchasers of the New
Senior Notes under the purchase agreement to be entered into in connection with
the issuance by the Pledgor of the New Senior Notes that the Pledgor shall have
executed and delivered to the Pledgee this Agreement; and
WHEREAS, the Pledgor desires to execute this Agreement to (i)
satisfy the conditions described in the preceding paragraph and (ii) amend and
restate the Original Company Pledge Agreement;
NOW, THEREFORE, in consideration of the extensions of credit
to be made to the Pledgor under the Credit Agreement and to the obligations of
the initial purchasers of the New Senior Notes under the purchase agreement to
be entered into in connection with the issuance by the Pledgor of the New Senior
Notes and other benefits accruing to the Pledgor, the receipt and sufficiency of
which are hereby acknowledged, the Pledgor hereby makes the following
representations and warranties to the Pledgee for the ratable benefit of the
Secured Creditors and
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hereby covenants and agrees with the Pledgee for the ratable benefit of the
Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by the
Pledgor for the ratable benefit of the Bank Creditors, the Interest Rate
Protection Creditors and the Senior Noteholders, in each case to the extent from
time to time holding Obligations (as defined below) of such Pledgor secured
hereunder (collectively, and together with the Pledgee, the "Secured
Creditors"), to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of (x) the principal of
and interest on the Notes issued, and Loans made, under the Credit
Agreement, and all reimbursement obligations and Unpaid Drawings with
respect to the Letters of Credit under the Credit Agreement and (y) all
other obligations (including obligations which, but for the automatic
stay under Section 362(a) of the Bankruptcy Code, would become due),
liabilities and indebtedness (including, without limitation,
indemnities, Fees and interest thereon) of the Pledgor to the Bank
Creditors, now existing or hereafter incurred under, arising out of, or
in connection with the Credit Agreement and the other Credit Documents,
and the due performance of, and compliance with, all of the terms,
conditions and agreements contained in the Credit Agreement and the
other Credit Documents by the Pledgor (all such principal, interest,
obligations, liabilities and indebtedness described in this clause (i)
being herein collectively called the "Credit Agreement Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due), liabilities and indebtedness of
the Pledgor to the Interest Rate Protection Creditors, now existing or
hereafter incurred under, arising out of or in connection with any
Interest Rate Protection or Other Hedging Agreement (including, without
limitation, all such obligations and liabilities of the Pledgor under
any guarantee by it of obligations pursuant to any Interest Rate
Protection or Other Hedging Agreement), and the due performance of, and
compliance with, all of the terms, conditions and agreements contained
therein by the Pledgor (all such obligations, liabilities and
indebtedness described in this clause (ii) being herein collectively
called the "Interest Rate Protection Obligations");
(iii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all (x) principal of and
interest on the New Senior Notes and the New Senior Exchange Notes and
(y) other obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would
become due), liabilities and indebtedness of the Pledgor to the Senior
Noteholders, whether now existing or hereafter incurred under, arising
out of or in connection with the New Senior Notes, the New Senior
Exchange Notes and the other Senior Note Documents, and the due
performance of, and compliance with, all of the terms, conditions and
agreements contained therein by the Pledgor (all such obligations,
liabilities and indebtedness described in this clause (iii) being
herein collectively called the "Senior Note Obligations");
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(iv) (x) any and all sums advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) or preserve its
security interest in the Collateral in a manner not in violation of the
terms hereof and (y) any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Pledgee in performing its duties
hereunder, or in any way relating to or arising out of its actions as
Pledgee in respect of the Pledge Agreement except for those resulting
solely from the Pledgee's own gross negligence or willful misconduct;
(v) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of the
Pledgor referred to in clauses (i) through (iv) above, after an Event
of Default (such term, as used in this Agreement, shall mean any Event
of Default at any time under, and as defined in, any of the Credit
Agreement and the Senior Note Documents and any payment default (after
the expiration of any applicable grace period) on any of the
Obligations (as defined below) secured hereunder at such time) shall
have occurred and be continuing, the reasonable expenses of retaking,
holding, preparing for sale or lease, selling or otherwise disposing of
or realizing on the Collateral, or of any exercise by the Pledgee of
its rights hereunder, together with reasonable attorneys' fees and
court costs; and
(vi) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of
this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (vi) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used
herein, (i) the term "Stock" shall mean (x) with respect to corporations
incorporated under the laws of the United States or any State or territory
thereof (each a "Domestic Corporation"), all of the issued and outstanding
shares of capital stock of any Domestic Corporation at any time owned by the
Pledgor and (y) with respect to corporations that are not Domestic Corporations
(each a "Foreign Corporation"), all of the issued and outstanding shares of
capital stock of any Foreign Corporation at any time owned by the Pledgor,
provided that, except as provided in the last sentence of this Section 2, the
Pledgor shall not be required to pledge hereunder more than 66% of the total
combined voting power of all classes of capital stock of any Foreign Corporation
entitled to vote and (ii) the term "Notes" shall mean (x) all promissory notes
at any time issued to the Pledgor by any of its Subsidiaries or Affiliates and
(y) all other promissory notes from time to time issued to, or held by, the
Pledgor, provided that, except as provided in the last sentence of this Section
2, the Pledgor shall not be required to pledge hereunder any promissory notes
issued to the Pledgor by any Subsidiary of the Pledgor which is a Foreign
Corporation. As used herein, the term "Securities" shall mean all of the Stock
and Notes. The Pledgor represents and warrants, as to the stock of corporations
and promissory notes owned by the Pledgor, that on the Fifth Amendment Effective
Date (a) the Stock consists of the number and type of shares of the stock of
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the corporations as described in Part I of Annex A hereto; (b) such Stock
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as is set forth in Part I of Annex A hereto; (c) the Notes
consist of the promissory notes described in Part II of Annex A hereto; and (d)
the Pledgor is the holder of record and sole beneficial owner of the Stock and
the Notes and there exist no options or preemption rights in respect of any of
the Stock. In the circumstances and only to the extent provided in Section 8.11
of the Credit Agreement, the 66% limitation set forth in the proviso in clause
(i)(y) and the limitation set forth in the proviso in clause (ii) of this
Section 2 and the last sentence of Section 3.2 shall no longer be applicable.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations and for the purposes
set forth in Section 1, the Pledgor (i) hereby grants to the Pledgee a security
interest in all of the Collateral, (ii) hereby pledges and deposits as security
with the Pledgee the Securities owned by the Pledgor on the date hereof, and
delivers to the Pledgee certificates therefor, duly endorsed in blank in the
case of promissory notes and accompanied by undated stock powers duly executed
in blank by the Pledgor (and accompanied by any transfer tax stamps required in
connection with the pledge of such securities, with signatures appropriately
guaranteed) in the case of capital stock, or such other instruments of transfer
as are acceptable to the Pledgee and (iii) hereby assigns, transfers,
hypothecates, mortgages, charges and sets over to the Pledgee all of the
Pledgor's right, title and interest in and to such Securities (and in and to the
certificates or instruments evidencing such Securities), to be held by the
Pledgee, upon the terms and conditions set forth in this Agreement.
3.2. Subsequently Acquired Securities. If the Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Securities at
any time or from time to time after the date hereof, the Pledgor will promptly
thereafter pledge and deposit such Securities (or certificates or instruments
representing Securities) as security with the Pledgee and deliver to the Pledgee
certificates or instruments therefor, duly endorsed in blank in the case of
promissory notes and accompanied by undated stock powers duly executed in blank
by the Pledgor (and accompanied by any transfer tax stamps required in
connection with the pledge of such securities, with signatures appropriately
guaranteed) in the case of capital stock, or such other instruments of transfer
as are acceptable to the Pledgee, and will promptly thereafter deliver to the
Pledgee a certificate executed by a principal executive officer of the Pledgor
describing such Securities and certifying that the same have been duly pledged
with the Pledgee hereunder. Subject to the last sentence of Section 2, the
Pledgor shall not be required at any time to pledge hereunder any promissory
notes issued to the Pledgor by a Subsidiary which is a Foreign Corporation or
more than 66% of the total combined voting power of all classes of capital stock
of any Foreign Corporation entitled to vote.
3.3. Uncertificated Securities. Notwithstanding anything to
the contrary contained in Sections 3.1 and 3.2, if any Securities (whether now
owned or hereafter acquired) are uncertificated securities, the Pledgor shall
promptly notify the Pledgee thereof, and shall promptly take all actions
required to perfect the security interest of the Pledgee under applicable law.
The Pledgor further agrees to take such actions as the Pledgee deems necessary
or desirable to effect the foregoing and to permit the Pledgee to exercise any
of its rights and remedies
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hereunder, and agrees to provide an opinion of counsel reasonably satisfactory
to the Pledgee with respect to any such pledge of uncertificated Securities
promptly upon request of the Pledgee.
3.4. Definitions of Pledged Stock; Pledged Notes; Pledged
Securities and Collateral. (a) All Stock at any time pledged or required to be
pledged hereunder is hereinafter called the "Pledged Stock"; all Notes at any
time pledged or required to be pledged hereunder are hereinafter called the
"Pledged Notes"; all Pledged Stock and Pledged Notes together are called the
"Pledged Securities"; and the Pledged Securities, together with all proceeds
thereof, including any securities and moneys received and at the time held by
the Pledgee hereunder, are hereinafter called the "Collateral."
(b) If (i) a Bankruptcy Default or Notified Acceleration Event
(as each such term is defined in the Company Security Agreement, provided,
however, references therein to the Assignor and the Collateral Agent shall be
references to the Pledgor and the Pledgee, respectively) has occurred and is
continuing, or (ii) any other Event of Default or Acceleration Event (as each
such term is defined in the Company Security Agreement, provided, however,
references therein to the Assignor and the Collateral Agent shall be references
to the Pledgor and the Pledgee, respectively) has occurred and is continuing,
but in the case of this clause (b) only if, and to the extent that, the Pledgee
(acting at the direction of the Required Secured Creditors (as defined in Annex
B hereto)) has given notice to the Pledgor to take the actions specified below
in this sentence, then in either such case all cash proceeds of, and cash
payments received in respect of, Collateral shall be paid by the Pledgor (or the
respective payor) as directed by the Pledgee. At any time while the
circumstances described in the immediately preceding sentence do not exist, all
cash payments received in respect of the Collateral, but excluding cash proceeds
of sales of Collateral unless the respective sale and release of Collateral is
permitted pursuant to this Agreement and the Credit Agreement, shall be paid to
the Pledgor.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Pledged Securities, which may be held (in
the discretion of the Pledgee) in the name of the Pledgor, endorsed or assigned
in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or
a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO SPECIFIED EVENT OF DEFAULT. Unless
and until there shall have occurred and be continuing (i) a Bankruptcy Default
or Notified Acceleration Event or (ii) any other Event of Default or
Acceleration Event, but in the case of this clause (ii) only to the extent the
Pledgee (acting at the direction of the Required Secured Creditors) has so
notified the Pledgor, the Pledgor shall be entitled to vote any and all Pledged
Securities owned by it, and to give consents, waivers or ratifications in
respect thereof, provided that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate, result in breach of
any covenant contained in, or be inconsistent with, any of the terms of this
Agreement, the Credit Agreement, any other Credit Document, any Interest Rate
Protection or Other Hedging Agreement or any Senior Note Document, or which
would have the effect of impairing the value of the Collateral (other than any
impairment in the form of a decline in the market value of such Pledged Security
which occurred solely as a result of any vote relating to the manner in which
the business of the corporation issuing such Pledged Security is to be
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conducted to the extent the Pledgor shall have voted the Pledged Securities
owned by it in good faith and in accordance with its prudent business judgment)
or any part thereof or the rights, priorities, remedies, position or interests
of the Pledgee or any Secured Creditor. All such rights of the Pledgor to vote
and to give consents, waivers and ratifications shall cease in case either (i) a
Bankruptcy Default or Notified Acceleration Event shall occur and be continuing
or (ii) any other Event of Default or Acceleration Event has occurred and is
continuing but in the case of this clause (ii) only to the extent the Pledgee
(acting at the direction of the Required Secured Creditors) has so notified the
Pledgor, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there
shall have occurred and be continuing (i) a Bankruptcy Default or Notified
Acceleration Event or (ii) any other Event of Default or Acceleration Event, but
in the case of this clause (ii) only to the extent the Pledgee (acting at the
direction of the Required Secured Creditors) has so notified the Pledgor, all
dividends and distributions payable in respect of the Pledged Stock and all
payments in respect of the Pledged Notes shall be paid to the Pledgor. The
Pledgee shall be entitled to receive directly, and to retain as part of the
Collateral:
(a) all other or additional stock or securities paid or
distributed by way of dividend or otherwise, as the case may be, in
respect of the Pledged Stock;
(b) all other or additional stock or other securities paid or
distributed in respect of the Pledged Stock by way of stock-split,
spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and
(c) all other or additional stock or other securities or
property (excluding cash) which may be paid in respect of the
Collateral by reason of any consolidation, merger, exchange of stock,
conveyance of assets, liquidation or similar corporate reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other payments
which are received by the Pledgor contrary to the provisions of this Section 6
and Section 7 shall be received in trust for the benefit of the Pledgee, shall
be segregated from other property or funds of the Pledgor and shall be forthwith
paid over to the Pledgee as Collateral in the same form as so received (with any
necessary endorsement).
7. REMEDIES IN CASE OF SPECIFIED EVENTS. If there shall have
occurred and be continuing (i) a Bankruptcy Default or Notified Acceleration
Event or (ii) any other Event of Default or Acceleration Event, but in the case
of this clause (ii) only to the extent the Required Secured Creditors have so
directed, then and in every such case, the Pledgee shall be entitled to exercise
all of the rights, powers and remedies (whether vested in it by this Agreement
or any other Credit Document, any Interest Rate Protection or Other Hedging
Agreement or any Senior Note Documents, in each case to the extent then in
effect and secured hereby (with all of the documents listed above being herein
collectively called the "Secured Debt Documents") or by law) for the protection
and enforcement of its rights in respect of the Collateral, and the Pledgee
shall be entitled to exercise all the rights and remedies of a secured party
under the Uniform
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Commercial Code and also shall be entitled, without limitation, to exercise the
following rights, which the Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the
Collateral otherwise payable under Section 6 to the Pledgor;
(b) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(c) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect
upon any Pledged Note;
(d) to vote all or any part of the Pledged Stock (whether or
not transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise
act with respect thereto as though it were the outright owner thereof
(the Pledgor hereby irrevocably constituting and appointing the Pledgee
the proxy and attorney-in-fact of the Pledgor, with full power of
substitution to do so); and
(e) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention to
sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by the Pledgor),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Pledgee in its absolute discretion may
determine, provided that at least 10 days' notice of the time and place
of any such sale shall be given to the Pledgor. The Pledgee shall not
be obligated to make any such sale of Collateral regardless of whether
any such notice of sale has theretofore been given. The Pledgor hereby
waives and releases to the fullest extent permitted by law any right or
equity of redemption with respect to the Collateral, whether before or
after sale hereunder, and all rights, if any, of marshalling the
Collateral and any other security for the Obligations or otherwise. At
any such sale, unless prohibited by applicable law, the Pledgee on
behalf of the Secured Creditors may bid for and purchase all or any
part of the Collateral so sold free from any such right or equity of
redemption. Neither the Pledgee nor any Secured Creditor shall be
liable for failure to collect or realize upon any or all of the
Collateral or for any delay in so doing nor shall any of them be under
any obligation to take any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and
remedy of the Pledgee provided for in this Agreement or any other Secured Debt
Document or now or hereafter existing at law or in equity or by statute shall be
cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee or any
other Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or any other Secured Debt Document or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or
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remedies, and no failure or delay on the part of the Pledgee or any other
Secured Creditor to exercise any such right, power or remedy shall operate as a
waiver thereof. No notice to or demand on the Pledgor in any case shall entitle
it to any other or further notice or demand in similar or other circumstances or
constitute a waiver of any of the rights of the Pledgee or any other Secured
Creditor to any other or further action in any circumstances without notice or
demand. The Secured Creditors agree that this Agreement may be enforced only by
the action of the Pledgee acting upon the instructions of the Required Secured
Creditors and that no other Secured Creditor shall have any right individually
or as a group, directly or indirectly, to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby or to cause the
Pledgee or the Required Secured Creditors to take or cause to be taken any
action in respect of this Agreement (except as expressly contemplated hereby),
it being understood and agreed that such rights and remedies may be exercised
only by the Pledgee for the ratable benefit of all Secured Creditors upon the
terms and conditions of this Agreement, it being further understood and agreed
that nothing in this Agreement shall affect the rights of the Secured Creditors
to accelerate their respective Obligations in accordance with their respective
Secured Debt Documents.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Collateral Agent upon any sale or other disposition of the Collateral, together
with all other moneys received by the Collateral Agent hereunder, shall be
applied as follows:
(i) first, to the payment of all Obligations owing to the
Collateral Agent of the type provided in clauses (iv) and (v) of the
definition of Obligations;
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Primary Obligations (as defined below) of the Pledgor
shall be paid to the Secured Creditors as provided in Section 9(e),
with each Secured Creditor receiving an amount equal to its outstanding
Primary Obligations of the Pledgor or, if the proceeds are insufficient
to pay in full all such Primary Obligations, its Pro Rata Share (as
defined below) of the amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary Obligations of the Pledgor shall be
paid to the Secured Creditors as provided in Section 9(e), with each
Secured Creditor receiving an amount equal to its outstanding Secondary
Obligations of the Pledgor or, if the proceeds are insufficient to pay
in full all such Secondary Obligations, its Pro Rata Share of the
amount remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant to
Section 18, to the Pledgor or to whomever may be lawfully entitled to
receive such surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as
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a percentage) equal to a fraction the numerator of which is the then unpaid
amount of such Secured Creditor's Primary Obligations or Secondary Obligations,
as the case may be, of the Pledgor and the denominator of which is the then
outstanding amount of all Primary Obligations or Secondary Obligations, as the
case may be, of the Pledgor, (y) "Primary Obligations" of the Pledgor shall mean
(i) in the case of the Credit Agreement Obligations, all Obligations of the
Pledgor arising out of or in connection with (including, without limitation, as
obligor or guarantor, as the case may be) the principal of, and interest on, all
Loans, all Unpaid Drawings theretofore made (together with all interest accrued
thereon), and the aggregate Stated Amounts of all Letters of Credit issued under
the Credit Agreement and outstanding, and all Fees outstanding and unpaid at the
relevant time, (ii) in the case of the Senior Note Obligations, all Obligations
of the Pledgor secured hereby arising out of or in connection with the principal
of, and interest on, the New Senior Notes and the New Senior Exchange Notes and
(iii) in the case of the Interest Rate Protection Obligations, all Obligations
of the Pledgor arising out of or in connection with (including, without
limitation, as a direct obligor or a guarantor, as the case may be) Interest
Rate Protection or Other Hedging Agreements (other than indemnities, fees
(including, without limitation, attorneys' fees) and similar obligations and
liabilities), and (z) "Secondary Obligations" of the Pledgor shall mean all
Obligations of the Pledgor secured hereby other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 9 only) (i) first, to the Primary Obligations of the Pledgor and (ii)
second, to the Secondary Obligations of the Pledgor. If any payment to any
Secured Creditor of its Pro Rata Share of any distribution would result in
overpayment to such Secured Creditor, such excess amount shall instead be
distributed in respect of the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of the other Secured Creditors, with each
Secured Creditor whose Primary Obligations or Secondary Obligations, as the case
may be, have not been paid in full to receive an amount equal to such excess
amount multiplied by a fraction the numerator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of such Secured
Creditor and the denominator of which is the unpaid Primary Obligations or
Secondary Obligations, as the case may be, of all Secured Creditors entitled to
such distribution.
(d) Each of the Secured Creditors agrees and acknowledges that
if the Bank Creditors are to receive a distribution on account of undrawn
amounts with respect to Letters of Credit issued under the Credit Agreement,
such amounts shall be paid to the Paying Agent under the Credit Agreement and
held by it, for the equal and ratable benefit of the Bank Creditors as such. If
any amounts are held as cash security pursuant to the immediately preceding
sentence, then upon the termination of all outstanding Letters of Credit, and
after the application of all such cash security to the repayment of all
Obligations owing to the Bank Creditors after giving effect to the termination
of all such Letters of Credit, if there remains any excess cash, such excess
cash shall be returned by the Paying Agent to the Collateral Agent for
distribution in accordance with Section 9(a).
(e) Except as set forth in Section 9(d), all payments required
to be made hereunder shall be made (i) if to the Bank Creditors, to the Paying
Agent under the Credit
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Agreement for the account of the Bank Creditors, and (ii) if to any other
Secured Creditors (other than the Collateral Agent), to the trustee, paying
agent or other similar representative (each a "Representative") for such Secured
Creditors or, in the absence of such a Representative, directly to the other
Secured Creditors.
(f) For purposes of applying payments received in accordance
with this Section 9, the Collateral Agent shall be entitled to rely upon (i) the
Paying Agent under the Credit Agreement and (ii) the Representative for any
other Secured Creditors or, in the absence of such a Representative, upon the
respective Secured Creditors for a determination (which the Paying Agent, each
Representative for any other Secured Creditors and the Secured Creditors agree
(or shall agree) to provide upon request of the Collateral Agent) of the
outstanding Primary Obligations and Secondary Obligations owed to the Secured
Creditors. Unless it has actual knowledge (including by way of written notice
from a Representative for any Secured Creditor or directly from a Secured
Creditor) to the contrary, the Collateral Agent, in acting hereunder, shall be
entitled to assume that no Interest Rate Protection or Other Hedging Agreements
are in existence.
(g) It is understood and agreed that the Pledgor shall remain
liable to the extent of any deficiency between the amount of the proceeds of the
Collateral pledged by it hereunder and the aggregate amount of the Obligations
of the Pledgor.
Notwithstanding anything to the contrary in this Agreement (including Annex B),
(i) all actions required or permitted to be taken under this Agreement by the
Senior Noteholders shall be so taken only by the trustee under the indenture
under which the Senior Notes were issued on behalf of the Senior Noteholders
(the "Senior Notes Trustee") as directed by the Senior Noteholders and (ii) all
payments required to be made with respect to the Senior Note Obligations shall
be paid to the Senior Notes Trustee, and the Pledgee shall be entitled (but not
required) to conclusively rely upon and act in accordance with any instructions
from the Senior Notes Trustee subject to the terms and conditions of this
Agreement and to assume that such instructions are being given in accordance
with such indenture.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of sale proceeds by the
Pledgee or the officer making the sale shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold, and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Pledgee or such officer or be answerable in any
way for the misapplication or nonapplication thereof.
11. INDEMNITY. The Pledgor agrees to indemnify and hold
harmless the Pledgee and each other Secured Creditor (other than the Senior
Noteholders) and their respective successors, assigns, employees, agents,
servants and Representatives (including the Administrative Agent) hereunder
(individually an "Indemnitee," and collectively the "Indemnitees") from and
against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, and to
reimburse each Indemnitee for all costs and expenses, including reasonable
attorneys' fees, in each case growing out of or resulting from this
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Agreement or the exercise by any Indemnitee of any right or remedy granted to it
hereunder or under the other Credit Documents or the Interest Rate Protection
and Other Hedging Agreements, provided that the Pledgor shall not be required to
indemnify any Indemnitee in respect of any claims, demands, losses, judgments,
liabilities, costs or expenses to the extent arising from the gross negligence
or willful misconduct of such Indemnitee. In no event shall any Indemnitee be
liable, in the absence of gross negligence or willful misconduct on its part,
for any matter or thing in connection with this Agreement other than to account
for moneys actually received by it in accordance with the terms hereof. If and
to the extent that the obligations of the Pledgor under this Section 11 are
unenforceable for any reason, the Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
12. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) The Pledgor
agrees that it will join with the Pledgee in executing and, at the Pledgor's own
expense, file and refile under the applicable Uniform Commercial Code or other
applicable law such financing statements, continuation statements and other
documents in such offices as the Pledgee may deem necessary or appropriate and
wherever required or permitted by law in order to perfect and preserve the
Pledgee's security interest in the Collateral and hereby authorizes the Pledgee
to file financing statements and amendments thereto relative to all or any part
of the Collateral without the signature of the Pledgor where permitted by law,
and agrees to do such further acts and things and to execute and deliver to the
Pledgee such additional conveyances, assignments, agreements and instruments as
the Pledgee may reasonably require or deem advisable to carry into effect the
purposes of this Agreement or to further assure and confirm unto the Pledgee its
rights, powers and remedies hereunder.
(b) The Pledgor hereby appoints the Pledgee the Pledgor's
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's discretion
to take any action and to execute any instrument which the Pledgee may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. The Pledgee shall act hereunder on the
terms and conditions set forth in Annex B hereto, the terms of which shall be
deemed incorporated herein by reference as fully as if same were set forth
herein in their entirety.
14. TRANSFER BY THE PLEDGOR. The Pledgor will not sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except as may
be permitted in accordance with the terms of the Credit Agreement).
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15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR.
The Pledgor represents and warrants that (a) it is, or at the time when pledged
hereunder will be, the legal, record and beneficial owner of, and has (or will
have) good and marketable title to, all Securities pledged hereunder, subject to
no Lien (except the Lien created by this Agreement); (b) it has full corporate
power, authority and legal right to pledge all the Securities pursuant to this
Agreement; (c) this Agreement has been duly authorized, executed and delivered
by the Pledgor and constitutes a legal, valid and binding obligation of the
Pledgor enforceable in accordance with its terms except to the extent the
enforceability hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by general equitable principles (regardless of whether the issue
of enforceability is considered in a proceeding in equity or at law); (d) except
to the extent already obtained, no consent of any other party (including,
without limitation, any stockholder or creditor of the Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority is required to be obtained by the Pledgor in
connection with (i) the execution, delivery or performance of this Agreement,
(ii) the validity or enforceability of this Agreement, (iii) the perfection or
enforceability of the Pledgee's security interest in the Collateral or (iv) the
exercise by the Pledgee of any of its rights or remedies provided herein; (e)
the execution, delivery and performance of this Agreement will not violate any
provision of any applicable law or regulation or of any order, judgment, writ,
award or decree of any court, arbitrator or governmental authority, domestic or
foreign applicable to the Pledgor, or of the Certificate of Incorporation or
By-Laws of the Pledgor or of any securities issued by the Pledgor or any of its
Subsidiaries, or of any mortgage, indenture, lease, loan agreement, credit
agreement or other material contract, agreement or instrument or undertaking to
which the Pledgor or any of its Subsidiaries is a party or which purports to be
binding upon the Pledgor or any of its Subsidiaries or upon any of their
respective assets and will not result in the creation or imposition of any Lien
or encumbrance on any of the assets of the Pledgor or any of its Subsidiaries
except as contemplated by this Agreement; (f) all the shares of the Stock have
been duly and validly issued, are fully paid and non-assessable and are subject
to no options to purchase or similar rights; (g) each of the Pledged Notes, when
executed by the obligor thereof, will be the legal, valid and binding obligation
of such obligor, enforceable in accordance with its terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally affecting
creditors' rights and equitable principles (regardless of whether enforcement is
sought in equity or at law); and (h) the pledge, assignment and delivery of the
Securities pursuant to this Agreement creates a valid and perfected first
priority Lien in such Securities, and the proceeds thereof (other than any cash
proceeds thereof to the extent not required to be delivered to the Pledgee
pursuant to the terms hereof), subject to no Lien or to any agreement purporting
to grant to any third party a Lien on the property or assets of the Pledgor
which would include the Securities. The Pledgor covenants and agrees that it
will defend the Pledgee's right, title and security interest in and to the
Securities and the proceeds thereof against the claims and demands of all
Persons whomsoever; and the Pledgor covenants and agrees that it will have like
title to and right to pledge any other property at any time hereafter pledged to
the Pledgee as Collateral hereunder and will likewise defend the right thereto
and security interest therein of the Pledgee and the other Secured Creditors.
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16. PLEDGOR'S OBLIGATIONS ABSOLUTE ETC. The obligations of the
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Document or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (b) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument including, without limitation, this Agreement; (c)
any furnishing of any additional security to the Pledgee or its assignee or any
acceptance thereof or any release of any security by the Pledgee or its
assignee; (d) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; or (e) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to the Pledgor or any Subsidiary
of the Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not the
Pledgor shall have notice or knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If there shall have occurred and be
continuing (i) a Bankruptcy Default or Notified Acceleration Event or (ii) any
other Event of Default or Acceleration Event, but in the case of this clause
(ii) only to the extent the Required Secured Creditors have so directed then,
and in every such case, upon receipt by the Pledgor from the Pledgee of a
written request or requests that the Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock, the Pledgor as
soon as practicable and at its expense will use its best efforts to cause such
registration to be effected (and be kept effective) and will use its best
efforts to cause such qualification and compliance to be effected (and be kept
effective) as may be so requested and as would permit or facilitate the sale and
distribution of such Pledged Stock, including, without limitation, registration
under the Securities Act of 1933, as then in effect (or any similar statute then
in effect), appropriate qualifications under applicable blue sky or other state
securities laws and appropriate compliance with any other government
requirements, provided that the Pledgee shall furnish to the Pledgor such
information regarding the Pledgee as the Pledgor may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. The Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars or other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify the
Pledgee and all others participating in the distribution of such Pledged Stock
against all claims, losses, damages and liabilities caused by any untrue
statement (or alleged untrue statement) of a material fact contained therein (or
in any related registration statement, notification or the like) or by any
omission (or alleged omission) to state therein (or in any related registration
statement, notification or the like) a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same may have been caused by an untrue statement or omission
based upon information furnished in writing to the Pledgor by the Pledgee
expressly for use therein.
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(b) If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Pledged Securities pursuant to
Section 7, and such Pledged Securities or the part thereof to be sold shall not,
for any reason whatsoever, be effectively registered under the Securities Act of
1933, as then in effect, the Pledgee may, in its sole and absolute discretion,
sell such Pledged Securities or part thereof by private sale in such manner and
under such circumstances as Pledgee may deem necessary or advisable in order
that such sale may legally be effected without such registration. Without
limiting the generality of the foregoing, in any such event the Pledgee, in its
sole and absolute discretion, (i) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Securities or part thereof shall have been filed under such
Securities Act, (ii) may approach and negotiate with a single possible purchaser
to effect such sale and (iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Pledged
Securities or part thereof. In the event of any such sale, the Pledgee shall
incur no responsibility or liability for selling all or any part of the Pledged
Securities at a price which the Pledgee, in its sole and absolute discretion,
may in good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until after registration as aforesaid.
18. TERMINATION; RELEASE. (a) After the Termination Date (as
defined below), without any action on the part of any Secured Creditor, this
Agreement shall terminate and be of no further force or effect (provided that
all indemnities set forth herein including, without limitation, in Section 11
hereof shall survive any such termination) and the Pledgee, at the request and
expense of the Pledgor, will execute and deliver to the Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to the Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Pledgee and has not theretofore been sold or
otherwise applied or released pursuant to this Agreement, together with any
moneys at the time held by the Pledgee hereunder. As used in this Agreement,
"Termination Date" shall mean the first to occur of (i) that date upon which the
Total Commitment and all Interest Rate Protection or Other Hedging Agreements
have been terminated, no Note under the Credit Agreement is outstanding, all
Letters of Credit have been terminated and all other Credit Agreement
Obligations (excluding normal continuing indemnity obligations which survive in
accordance with their terms, so long as no amounts are then due and payable in
respect thereof) then owing by the Pledgor have been paid in full, (ii) that
date upon which the Collateral is automatically released pursuant to the first
sentence of Section 26 of Part I of the Fifth Amendment to Credit Agreement or
the Administrative Agent directs the Pledgee to release the Collateral pursuant
to the second sentence of Section 26 of Part I of the Fifth Amendment to the
Credit Agreement and (iii) that date upon which the Credit Documents are amended
to release all Collateral subject to this Agreement.
(b) It is expressly acknowledged and agreed that the
Collateral may be sold from time to time to the extent permitted by, and in
accordance with the terms of, the Credit Agreement. In addition, it is expressly
acknowledged and agreed that any or all of the Collateral may be released by the
Pledgee acting at the direction of the Required Secured Creditors. Upon any sale
of the type described in the second preceding sentence or release of any such
Collateral
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as provided in the immediately preceding sentence, the Pledgee shall, at the
request and expense of the Pledgor, and without the further consent of, or
liability to, any Secured Creditor, release such Collateral and execute and
deliver to the Pledgor a proper instrument or instruments acknowledging the
release of such Collateral from this Agreement, and will duly assign, transfer
and deliver to the Pledgor (without recourse and without any representation or
warranty) the Collateral being sold or released as described above.
Notwithstanding anything to the contrary contained above in this Section 18(b),
in the event the Senior Notes Trustee shall have notified the Pledgee in writing
that the Senior Note Obligations have been accelerated in accordance with the
terms of the Senior Note Documents (and (x) the Senior Note Obligations have not
been paid in full and (y) the respective acceleration has not been rescinded),
the Collateral Agent shall not thereafter release any Collateral pursuant to
this Section 18(b) or consent to any termination of this Agreement, except in
each case with the prior written consent of the Senior Noteholders holding a
majority of the then outstanding Senior Note Obligations secured hereby (or
following the payment in full of the Senior Note Obligations or the rescission
of the respective acceleration).
(c) At any time that the Pledgor desires that Collateral be
released as provided in the foregoing Section 18(a) or (b), it shall deliver to
the Pledgee a certificate signed by its chief financial officer stating that the
release of the respective Collateral is permitted pursuant to Section 18(a) or
(b), and the Pledgee shall be entitled (but not required) to conclusively rely
thereon. If requested by the Pledgee (although the Pledgee shall have no
obligation to make any such request), the Pledgor shall furnish appropriate
legal opinions (from counsel acceptable to the Pledgee) to the effect set forth
in the immediately preceding sentence.
(d) Notwithstanding anything to the contrary contained above,
upon the presentment of satisfactory evidence to the Pledgee in its sole
discretion that all obligations evidenced by any Pledged Note have been repaid
in full, and that any payments received by the Pledgor were permitted to be
received by the Pledgor pursuant to Section 6 hereof, the Pledgee shall, upon
the request and at the expense of the Pledgor, duly assign, transfer and deliver
to the Pledgor (without recourse and without any representation or warranty)
such Pledged Note if same is then in the possession of the Pledgee and has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement. The Pledgee shall have no liability whatsoever to any Secured
Creditor as the result of any release of Collateral by it as permitted by this
Section 18. Upon any release of Collateral pursuant to Section 18(a), (b), (c)
or (d), none of the Secured Creditors shall have any continuing right or
interest in such Collateral or the proceeds thereof.
19. NOTICES ETC. All notices and other communications
hereunder shall be in writing and shall be delivered or mailed by first class
mail, postage prepaid, addressed as follows:
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(a) if to the Pledgor, at:
Coltec Industries Inc
3 Coliseum Center
2550 West Tyvola Road
Charlotte, North Carolina 28217
Attention: Thomas B. Jones, Jr.
Telephone: (704) 423-7052
Facsimile: (704) 423-7127
(b) if to the Pledgee, at:
Bankers Trust Company
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Mary Kay Coyle
Telephone: (212) 250-9094
Facsimile: (212) 250-7200
(c) if to any Bank Creditor (other than the Pledgee), either
(x) to the Administrative Agent, at the address of the Administrative
Agent specified in the Credit Agreement or (y) at such address as such
Bank Creditor shall have specified in the Credit Agreement;
(d) if to any other Secured Creditor, either (x) to the
Representative for such Secured Creditor at such address as such
Representative may have provided to the Pledgor and the Pledgee from
time to time, or (y) in the absence of such a Representative, directly
to such Secured Creditor at such address as such Secured Creditor shall
have specified in writing to the Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by the Pledgor and the Pledgee (with
the written consent of the Required Banks (or all the Banks if required by
Section 13.12 of the Credit Agreement)); provided, however, that any change,
waiver, modification or variance materially adversely affecting the rights and
benefits of a single Class (as defined below) of Secured Creditors (and not all
Secured Creditors in a like or similar manner) shall also require the written
consent of the Requisite Class Creditors (as defined below) of such affected
Class; provided, further, that any Class shall not be considered to be affected
differently from any other Class due to the Obligations of any such other Class
being paid, repaid, refinanced, renewed or extended and the Collateral being
released, in
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whole or in part (whether by action of such other Class or otherwise), as
security for such Class and such other Class. Notwithstanding anything to the
contrary contained above, it is understood and agreed that the Required Banks
may agree to modifications to this Agreement for the purpose, among other
things, of securing additional extensions of credit (including, without
limitation, pursuant to the Credit Agreement or any refinancing or extension
thereof). For the purpose of this Agreement, the term "Class" shall mean, at any
time, each class of Secured Creditors with outstanding Obligations secured
hereby at such time, i.e., (x) the Bank Creditors as holders of the Credit
Agreement Obligations secured hereby, (y) the Senior Noteholders as the holders
of Senior Note Obligations secured hereby or (z) the Interest Rate Protection
Creditors as the holders of the Interest Rate Protection Obligations secured
hereby; provided that, without limiting the foregoing, it is expressly
acknowledged and agreed that other creditors may be added as "Secured Creditors"
hereunder (either as part of an existing Class of creditors or as a newly
created Class) with the consent of the Required Secured Creditors, and that such
addition shall not require the written consent of the Requisite Class Creditors
of the various Classes. For the purpose of this Agreement, the term "Requisite
Class Creditors" of any Class shall mean each of (i) with respect to the Credit
Agreement Obligations, the Required Banks and (ii) with respect to any other
Obligations, the holders of at least a majority of all Obligations outstanding
from time to time.
21. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns; provided that the
Pledgor may not assign any of its rights or obligations hereunder without the
prior written consent of the Pledgee (with the consent of the Required Secured
Creditors). THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. The headings in this Agreement
are for purposes of reference only and shall not limit or define the meaning
hereof. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which shall constitute one instrument. In
the event that any provision of this Agreement shall prove to be invalid or
unenforceable, such provision shall be deemed to be severable from the other
provisions of this Agreement which shall remain binding on all parties hereto.
22. AMENDMENT AND WAIVER. Upon the execution and delivery of
this Agreement by the parties hereto, the Original Company Pledge Agreement
shall be amended, restated and superseded in its entirety by this Agreement,
effective as of the date hereof, with all rights, obligations and security
interests created under or granted pursuant to the Original Company Pledge
Agreement continuing from the date thereof.
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IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused
this Agreement to be executed and delivered by their duly elected officers duly
authorized as of the date first above written.
COLTEC INDUSTRIES INC,
(as "Pledgor")
By /s/ THOMAS B. JONES, JR.
___________________________
Title: Vice President
and Treasurer
BANKERS TRUST COMPANY,
as Collateral Agent
(as "Pledgee")
By /s/ ANTHONY LOGRIPPO
__________________________
Title: Vice President
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ANNEX A
ANNEX A
LIST OF PLEDGED STOCK AND PLEDGED NOTES
Part I. Pledged Stock
=========================================================================================================
Percentage of
Name of Issuing Corporation Type of Shares Number of Shares Outstanding Shares of
Capital Stock
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
=========================================================================================================
21
Annex A
Page 2
Part II. Pledged Notes
Principal
Lender Borrower Amount
------ -------- ------
22
Annex A
Page 3
23
ANNEX B
ANNEX B
THE PLEDGEE
1. Appointment. The Secured Creditors, by their acceptance of
the benefits of the Company Pledge Agreement to which this Annex B is attached
(the "Pledge Agreement") hereby irrevocably designate the Collateral Agent (and
any successor Pledgee) to act as Pledgee as specified herein and therein. Unless
otherwise defined herein, all capitalized terms used herein (x) and defined in
the Pledge Agreement, are used herein as therein defined and (y) not defined in
the Pledge Agreement, are used herein as defined in the Credit Agreement
referenced in the Pledge Agreement. Each Secured Creditor hereby irrevocable
authorizes, and each holder of any Obligation by the acceptance of such
Obligation and by the acceptance of the benefits of the Pledge Agreement shall
be deemed irrevocably to authorize, the Pledgee to take such action on its
behalf under the provisions of the Pledge Agreement and any instruments and
agreements referred to therein and to exercise such powers and to perform such
duties thereunder as are specifically delegated to or required of the Pledgee by
the terms thereof and such other powers as are reasonably incidental thereto.
The Pledgee may perform any of its duties hereunder or thereunder by or through
its authorized agents, sub-agents or employees.
2. Nature of Duties. (a) The Pledgee shall have no duties or
responsibilities except those expressly set forth herein or in the Pledge
Agreement. The duties of the Pledgee shall be mechanical and administrative in
nature; the Pledgee (in such capacity) shall not have by reason of this
Agreement, any other Credit Document or any other Secured Debt Document a
fiduciary relationship in respect of any Secured Creditor; and nothing in this
Agreement, any other Credit Document or any other Secured Debt Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Pledgee any obligations in respect of the Pledge Agreement except as
expressly set forth herein and therein.
(b) The Pledgee shall not be responsible for insuring the
Collateral or for the payment of taxes, charges or assessments or discharging of
Liens upon the Collateral or otherwise as to the maintenance of the Collateral.
(c) The Pledgee shall not be required to ascertain or inquire
as to the performance by any Pledgor of any of the covenants or agreements
contained in the Pledge Agreement, any other Credit Document or any other
Secured Debt Document.
(d) The Pledgee shall be under no obligation or duty to take
any action under, or with respect to, the Pledge Agreement if taking such action
(i) would subject the Pledgee to a tax in any jurisdiction where it is not then
subject to a tax , (ii) would require the Pledgee to qualify to do business, or
obtain any license, in any jurisdiction where it is not then so qualified or
licensed or (iii) would subject the Pledgee to in personam jurisdiction in any
locations where it is not then so subject.
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Annex B
Page 2
(e) Notwithstanding any other provision of this Annex B,
neither the Pledgee nor any of its officers, directors, employees, affiliates or
agents shall, in its individual capacity, be personally liable for any action
taken or omitted to be taken by it in accordance with, or pursuant to this Annex
B or the Pledge Agreement except for its own gross negligence or willful
misconduct.
3. Lack of Reliance on the Pledgee. Independently and without
reliance upon the Pledgee, each Secured Creditor, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Pledgor and its
Subsidiaries in connection with the making and the continuance of the
Obligations and the taking or not taking of any action in connection therewith
and (ii) its own appraisal of the creditworthiness of the Pledgor and its
Subsidiaries, and the Pledgee shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Secured Creditor with any
credit or other information with respect thereto, whether coming into its
possession before the extension of any Obligations or the purchase of any notes
or at any time or times thereafter. The Pledgee shall not be responsible in any
manner whatsoever to any Secured Creditor for the correctness of any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of the Pledge Agreement or the security
interests granted thereunder or the financial condition of the Pledgor or any
Subsidiary of the Pledgor or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
the Pledge Agreement, or the financial condition of the Pledgor or any
Subsidiary of the Pledgor, or the existence or possible existence of any default
or event of default. The Pledgee makes no representations as to the value or
condition of the Collateral or any part thereof, or as to the title of the
Pledgor thereto or as to the security afforded by the Pledge Agreement.
4. Certain Rights of the Pledgee. (a) No Secured Creditor
shall have the right to cause the Pledgee to take any action with respect to the
Collateral, with only the Required Secured Creditors having the right to direct
the Pledgee to take any such action, it being understood and agreed that nothing
in this Annex B shall affect the rights of the Secured Creditors to accelerate
their respective Obligations in accordance with their respective Secured Debt
Documents. If the Pledgee shall request instructions from the Required Secured
Creditors, with respect to any act or action (including failure to act) in
connection with the Pledge Agreement, the Pledgee shall be entitled to refrain
from such act or taking such action unless and until it shall have received
instructions from the Required Secured Creditors and to the extent requested,
appropriate indemnification in respect of actions to be taken, and the Pledgee
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, no Secured Creditor shall have any right of action
whatsoever against the Pledgee as a result of the Pledgee acting or refraining
from acting hereunder in accordance with the instructions of the Required
Secured Creditors. As used herein, the term "Required Secured Creditors" shall
mean the Required Banks (or, to the extent required by Section 13.12 of the
Credit Agreement, all of the Banks). Notwithstanding anything to the contrary
contained in the immediately preceding sentence, if at any time the principal of
any Obligations secured hereby has been accelerated, or the final maturity date
with respect to any such principal Obligations has occurred, and as a result
thereof one or more payment Events of Default (where the aggregate principal
amount of such Obligations accelerated or not paid at final maturity equals or
exceeds $100,000,000), which
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Annex B
Page 3
payment Events of Default shall have continued in existence for at least 90
consecutive days after the date of such acceleration or final maturity, and the
Required Secured Creditors at such time (determined without regard to this
sentence) have not directed the Pledgee to commence enforcement proceedings
pursuant to the Pledge Agreement, then so long as such payment Event of Default
is continuing the Secured Creditors holding at least a majority of the
outstanding Obligations secured hereby subject to such payment Event of Default
shall constitute the Required Secured Creditors for purposes of causing the
Pledgee to commence enforcement proceedings pursuant to the Pledge Agreement,
provided that in such event the Secured Creditors which would constitute the
Required Secured Creditors in the absence of this sentence shall have the right
to direct the manner and method of enforcement so long as such directions do not
materially delay or impair the taking of enforcement action.
(b) Notwithstanding anything to the contrary contained herein,
the Pledgee is authorized, but not obligated, (i) to take any action reasonably
required to perfect or continue the perfection of the Liens on the Collateral
for the benefit of the Secured Creditors and (ii) when instructions from the
Required Secured Creditors have been requested by the Pledgee but have not yet
been received, to take any action which the Pledgee, in good faith, believes to
be reasonably required to promote and protect the interests of the Secured
Creditors in the Collateral; provided that once instructions have been received,
the actions of the Pledgee shall be governed thereby and the Pledgee shall not
take any further action which would be contrary thereto.
(c) Notwithstanding anything to the contrary contained herein
or in the Pledge Agreement, the Pledgee shall not be required to take any action
that exposes or, in the good faith judgment of the Pledgee may expose, the
Pledgee or its officers, directors, agents or employees to personal liability,
unless the Pledgee shall be adequately indemnified as provided herein, or that
is, or in the good faith judgment of the Pledgee may be, contrary to the Pledge
Agreement, any Secured Debt Document or applicable law.
5. Reliance. The Pledgee shall be entitled to rely, and shall
be fully protected in relying, upon, any note, writing, resolution, notice,
statement, certificate, telex, teletype message, cablegram, radiogram, order or
other document or telephone message signed, sent or made by the proper Person or
entity, and, with respect to all legal matters pertaining hereto or to the
Pledge Agreement and its duties thereunder and hereunder, upon advice of counsel
selected by it.
6. Indemnification. To the extent the Pledgee is not
reimbursed and indemnified by the Pledgor under the Pledge Agreement, the
Secured Creditors (other than the Senior Noteholders) will reimburse and
indemnify the Pledgee, in proportion to their respective outstanding principal
amounts (including, for this purpose, the Stated Amount of outstanding Letters
of Credit, as well as any unpaid Primary Obligations in respect of Interest Rate
Protection or Other Hedging Agreements, as outstanding principal) of
Obligations, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Pledgee in performing its duties hereunder, or in any way
relating to or arising out of its actions as Pledgee in respect of the Pledge
Agreement except for those resulting solely from the Pledgee's own gross
negligence or willful misconduct. The indemnities set forth in this Section 6
shall survive the repayment of all Obligations, with the respective
indemnification at
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Annex B
Page 4
such time to be based upon the outstanding principal amounts (determined as
described above) of Obligations at the time of the respective occurrence upon
which the claim against the Pledgee is based or, if same is not reasonably
determinable, based upon the outstanding principal amounts (determined as
described above) of Obligations as in effect immediately prior to the
termination of the Pledge Agreement. The indemnities set forth in this Section 6
are in addition to any indemnities provided by the Banks to the Pledgee pursuant
to the Credit Agreement, with the effect being that the Banks shall be
responsible for indemnifying the Pledgee to the extent the Pledgee does not
receive payments pursuant to this Section 6 from the Secured Creditors (other
than the Senior Noteholders) (although in such event, and upon the payment in
full of all such amounts owing to the Pledgee by the Banks, the Banks shall be
subrogated to the rights of the Pledgee to receive payment from such Secured
Creditors).
7. The Pledgee in its Individual Capacity. With respect to its
obligations as a lender under the Credit Agreement and any other Credit
Documents to which the Pledgee is a party, and to act as agent under one or more
of such Credit Documents, the Pledgee shall have the rights and powers specified
therein and herein for a "Bank", or an "Agent", as the case may be, and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the terms "Banks," "Required Banks," "holders of Notes,"
or any similar terms shall, unless the context clearly otherwise indicates,
include the Pledgee in its individual capacity. The Pledgee and its affiliates
may accept deposits from, lend money to, and generally engage in any kind of
banking, investment banking, trust or other business with the Pledgor or any
Affiliate or Subsidiary of the Pledgor as if it were not performing the duties
specified herein or in the other Credit Documents, and may accept fees and other
consideration from the Pledgor for services in connection with the Credit
Agreement, the other Credit Documents and otherwise without having to account
for the same to the Secured Creditors.
8. Holders. The Pledgee may deem and treat the payee of any
note as the owner thereof for all purposes hereof unless and until written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Pledgee. Any request, authority or consent of any
person or entity who, at the time of making such request or giving such
authority or consent, is the holder of any note, shall be final and conclusive
and binding on any subsequent holder, transferee, assignee or endorsee, as the
case may be, of such note or of any note or notes issued in exchange therefor.
9. Resignation by the Pledgee. (a) The Pledgee may resign from
the performance of all of its functions and duties hereunder and under the
Pledge Agreement at any time by giving 15 Business Days' prior written notice to
the Pledgor and the Secured Creditors. Such resignation shall take effect upon
the appointment of a successor Pledgee pursuant to Section 9(b) or (c) below.
(b) If a successor Pledgee shall not have been appointed
within said 15 Business Day period by the Required Secured Creditors, the
Pledgee, with the consent of the Pledgor, which consent shall not be
unreasonably withheld or delayed, shall then appoint a successor Pledgee who
shall serve as Pledgee hereunder or thereunder until such time, if any, as the
Required Secured Creditors appoint a successor Pledgee as provided above.
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Annex B
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(c) If no successor Pledgee has been appointed pursuant to
Section 9(b) above by the 15th Business Day after the date of such notice of
resignation was given by the Pledgee, as a result of a failure by the Pledgor to
consent to the appointment of such a successor Pledgee, the Required Secured
Creditors shall then appoint a successor Pledgee who shall serve as Pledgee
hereunder or thereunder until such time, if any, as the Required Secured
Creditors appoint a successor Pledgee as provided above.