EXHIBIT 10.54
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AMENDED AND RESTATED
US PLEDGE AGREEMENT
among
RESOLUTION PERFORMANCE PRODUCTS INC.,
RESOLUTION PERFORMANCE PRODUCTS LLC,
RPP CAPITAL CORPORATION,
VARIOUS SUBSIDIARIES OF RESOLUTION
PERFORMANCE PRODUCTS INC.
and
MORGAN STANLEY & CO., INCORPORATED, as Collateral Agent
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Dated as of November 14, 2000
and
Amended and Restated as of April 9, 2003
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Table of Contents
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1. SECURITY FOR OBLIGATIONS.................................................................................3
2. DEFINITIONS; ANNEXES.....................................................................................5
3. PLEDGE OF SECURITIES, ETC................................................................................9
3.1 Pledge..........................................................................................9
3.2 Procedures.....................................................................................12
3.3 Subsequently Acquired Collateral...............................................................14
3.4 Transfer Taxes.................................................................................14
3.5 Definition of Pledged Notes....................................................................14
3.6 Certain Representations and Warranties Regarding the Collateral................................14
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC............................................................15
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT OR SPECIFIED DEFAULT............................................15
6. DIVIDENDS AND OTHER DISTRIBUTIONS.......................................................................15
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT OR A SPECIFIED DEFAULT..........................................16
8. REMEDIES, ETC., CUMULATIVE..............................................................................17
9. APPLICATION OF PROCEEDS.................................................................................17
10. PURCHASERS OF COLLATERAL................................................................................18
11. INDEMNITY...............................................................................................18
12. FURTHER ASSURANCES; POWER OF ATTORNEY...................................................................18
13. THE PLEDGEE AS COLLATERAL AGENT.........................................................................19
14. TRANSFER BY THE PLEDGORS................................................................................19
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS...............................................19
16. LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING
UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES
THERETO; ETC............................................................................................21
(ii)
Table of Contents
(continued)
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17. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC.....................................................................21
18. REGISTRATION, ETC.......................................................................................22
19. TERMINATION; RELEASE....................................................................................23
20. NOTICES, ETC............................................................................................25
21. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER...............................................26
22. WAIVER; AMENDMENT.......................................................................................26
23. MISCELLANEOUS...........................................................................................27
24. WAIVER OF JURY TRIAL....................................................................................27
25. ADDITIONAL PLEDGORS.....................................................................................27
26. RECOURSE................................................................................................27
27. LIMITED OBLIGATIONS.....................................................................................27
Annex A Schedule of Legal Names, Type of Organization, Jurisdiction of Organization,
Location and Organizational Identification Numbers
Annex B List of Subsidiaries
Annex C List of Stock
Annex D List of Notes
Annex E List of Limited Liability Company Interests
Annex F List of Partnership Interests
Annex G Agreement Regarding Uncertificated Securities, Limited Liability Company Interests and
Partnership Interests
(iii)
AMENDED AND RESTATED
US PLEDGE AGREEMENT
AMENDED AND RESTATED US PLEDGE AGREEMENT, dated as of November 14, 2000
and amended and restated as of April 9, 2003 (as so amended and restated and as
the same may be further modified, supplemented or amended from time to time,
this "Agreement"), among each of the undersigned pledgors (each, a "Pledgor"
and, together with each other entity which becomes a party hereto pursuant to
Section 25 hereof, collectively, the "Pledgors"), MORGAN STANLEY & CO.,
INCORPORATED, as Collateral Agent (together with any successor collateral agent,
the "Pledgee"), for the benefit of the Secured Creditors (as defined below), and
acknowledged and agreed to by DEUTSCHE BANK TRUST COMPANY AMERICAS, as trustee
(together with any successor trustee, the "Senior Secured Notes Trustee") for
the benefit of the holders from time to time of the Senior Secured Notes (as
defined below). Except as otherwise defined herein, all capitalized terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined (or, at any time on or after the first date when all
Credit Document Obligations (as defined below) shall have been repaid in full
and all Letters of Credit and the Total Commitment under (and as defined in) the
Credit Agreement, in each case, have been terminated and thereafter for so long
as no Credit Agreement is in effect, the Credit Agreement as in effect on such
date immediately prior to such repayment and termination).
W I T N E S S E T H:
WHEREAS, Resolution Performance Products Inc. ("Holdings"),
Resolution Performance Products LLC ("RPP USA"), RPP Capital Corporation ("US
Finance Corp." and, together with "RPP USA", the "US Borrowers" and each, a "US
Borrower"), Resolution Europe B.V. (formerly known as Resolution Nederland B.V.)
(the "Dutch Borrower" and, together with the US Borrower, the "Borrowers" and
each, a "Borrower"), the lenders from time to time party thereto (the
"Lenders"), Salomon Smith Barney Inc., as Syndication Agent, JPMorgan Chase Bank
(formerly known as Morgan Guaranty Trust Company of New York), as Documentation
Agent, and Morgan Stanley Senior Funding, Inc., as Lead Arranger, sole Book
Manager and Administrative Agent (in such capacity, together with any successor
Administrative Agent, the "Administrative Agent"), have entered into a Credit
Agreement, dated as of November 14, 2000 (as 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
borrowers or guarantors thereunder or any increase in the amount borrowed
thereunder) all or any portion of the indebtedness under such agreement or any
successor agreement, whether or not with the same agent, trustee,
representative, lenders, holders or group of lenders or holders, (the "Credit
Agreement"), providing for the making of Loans to the Borrowers and the issuance
of, and participation in, Letters of Credit for the account of the US Borrowers
as contemplated therein (the Lenders, the Administrative Agent, each Letter of
Credit Issuer and the Pledgee are herein called the "Lender Creditors");
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WHEREAS, each Borrower or another Pledgor has entered into, and
may at any time and from time to time after the date hereof enter into or
guaranty the obligations of one or more other Pledgors or Subsidiaries thereof
under, one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Lender Creditors or any affiliate thereof (each such
Lender Creditor or affiliate, even if the respective Lender Creditor
subsequently ceases to be a Lender under the Credit Agreement for any reason,
together with such Lender Creditor's or affiliate's successors and assigns, if
any, collectively, the "Other Creditors");
WHEREAS, RPP USA, one or more Wholly-Owned Subsidiaries of RPP
USA and Citibank, N.A. (or any successor by merger thereto) and/or one or more
of its banking affiliates or another bank reasonably acceptable to the
Administrative Agent (collectively, the "Overdraft Creditors" and, together with
the Lender Creditors and the Other Creditors, the "First Lien Creditors") have
entered into, or in the future may enter into, a credit arrangement (as amended,
modified, supplemented, replaced or refinanced from time to time, the "Overdraft
Agreement"), providing for (i) the extension of a line of credit or an overdraft
facility (the "Overdraft Line") to RPP USA and such Wholly-Owned Subsidiaries in
the aggregate principal amount not to exceed $20,000,000 at any time outstanding
and (ii) the guaranty by the respective Pledgors of the obligations of one
another thereunder (although no Foreign Subsidiary of RPP USA shall guaranty the
obligations of RPP USA or a Domestic Subsidiary thereunder) (each, an "Overdraft
Guaranty" and, collectively, the "Overdraft Guarantees");
WHEREAS, the US Borrowers and the Senior Secured Notes Trustee
have entered into an Indenture, dated as of April 9, 2003 (as amended, modified
or supplemented from time to time, the "Senior Secured Note Indenture"),
providing for (i) the issuance by the US Borrowers of their 9-1/2% Senior Second
Secured Notes due April 15, 2010 (the "Senior Secured Notes") to the holders
thereof from time to time (the "Senior Secured Noteholders" and, together with
the Senior Secured Notes Trustee, the "Second Lien Creditors" and, together with
the First Lien Creditors, the "Secured Creditors" ) and (ii) the guaranty by any
future US Credit Party that is a Subsidiary Guarantor of the US Borrowers'
obligations under the Senior Secured Note Indenture and the Senior Secured Notes
(each such guaranty, together with the Senior Secured Note Indenture and the
Senior Secured Notes, are herein called the "Senior Secured Note Documents");
WHEREAS, pursuant to each Guaranty entered into pursuant to the
Credit Agreement, each Pledgor that is a party thereto has guaranteed to the
Lender Creditors and the Other Creditors the payment and performance when due of
all Guaranteed Obligations, all US Guaranteed Obligations or all Dutch
Guaranteed Obligations, as the case may be, as described in each such Guaranty;
WHEREAS, each Pledgor and the Pledgee entered into the US Pledge
Agreement, dated as of November 14, 2000 (as amended, modified or supplemented
through, but not including, the date hereof, the "Original US Pledge
Agreement"), in connection with the Credit Agreement;
WHEREAS, it was a condition precedent to (i) the making of Loans
to the Borrowers and the issuance of, and participation in, Letters of Credit
for the account of the US
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Borrowers under the Credit Agreement, (ii) the Other Creditors entering into
Interest Rate Protection Agreements and Other Hedging Agreements and (iii) the
extension of the Overdraft Line pursuant to the Overdraft Agreement, that each
Pledgor shall have executed and delivered to the Pledgee the Original US Pledge
Agreement;
WHEREAS, it is a condition precedent to the issuance of the
Senior Secured Notes by the US Borrowers under the Senior Secured Note Indenture
that each Pledgor shall have executed and delivered this Agreement; and
WHEREAS, pursuant to the Fourth Amendment to the Credit
Agreement, dated as of April 1, 2003, the Lender Creditors have authorized the
Pledgee to amend the US Pledge Agreement (including such additional pledge
agreements as may be necessary in connection with any pledge by a US Credit
Party of Pledge Agreement Collateral of a Foreign Subsidiary, each of which such
additional pledge agreements shall constitute a "Security Document" within the
meaning of the Credit Agreement), including entering into an amendment and
restatement of the Original US Pledge Agreement in the form of this Agreement
to, inter alia, also secure the obligations in respect of the Senior Secured
Note Documents on the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto agree that the Original US
Pledge Agreement shall be and hereby is amended and restated in its entirety as
follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations,
indebtedness and liabilities (including, without limitation,
indemnities, fees and interest thereon (including, without limitation,
all interest that accrues after the commencement of any case, proceeding
or other action relating to the bankruptcy, insolvency, reorganization
or similar proceeding of any Pledgor at the rate provided for in the
respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding)) owing by such Pledgor to
the Lender Creditors, whether now existing or hereafter incurred under,
arising out of, or in connection with the Credit Agreement and the other
Credit Documents to which such Pledgor is a party (including all such
obligations, liabilities and indebtedness of such Pledgor under any
guaranty constituting a Credit Document) and the due performance and
compliance by each Pledgor with all of the terms, conditions and
agreements contained in the Credit Agreement and in such other Credit
Documents (all such obligations, indebtedness and liabilities under this
clause (i), except to the extent consisting of obligations or
indebtedness with respect to Interest Rate Protection Agreements or
Other Hedging Agreements, being herein collectively called the "Credit
Document Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations,
indebtedness and liabilities (including, without limitation,
indemnities, fees and interest thereon (including, without limitation,
all interest that accrues after the commencement of any case, proceeding
or other action relating to the bankruptcy, insolvency, reorganization
or similar proceeding of any
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Pledgor at the rate provided for in the respective documentation,
whether or not a claim for post-petition interest is allowed in any such
proceeding)) owing by such Pledgor to the Other Creditors, under or with
respect to (including all such obligations and indebtedness of such
Pledgor under any guaranty of) any Interest Rate Protection Agreement or
Other Hedging Agreement, whether such Interest Rate Protection Agreement
or Other Hedging Agreement is now in existence or hereafter arising, and
the due performance and compliance by such Pledgor with all of the
terms, conditions and agreements contained therein (all such
obligations, liabilities and indebtedness under this clause (ii) being
herein collectively called the "Other Obligations");
(iii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations,
liabilities and indebtedness (including, without limitation,
indemnities, fees and interest thereon (including, without limitation,
all interest that accrues after the commencement of any case, proceeding
or other action relating to the bankruptcy, insolvency, reorganization
or similar proceeding of any Pledgor at the rate provided for in the
respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding)) owing by such Pledgor to
the Overdraft Creditors under, or with respect to, the Overdraft
Agreement (including all such obligations, liabilities and indebtedness
under the Overdraft Line and each Overdraft Guaranty to which such
Pledgor is a party) (all such obligations, liabilities and indebtedness
under this clause (iii) being herein collectively called the "Overdraft
Obligations");
(iv) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations,
liabilities and indebtedness (including, without limitation,
indemnities, fees and interest thereon (including, without limitation,
all interest that accrues after the commencement of any case, proceeding
or other action relating to the bankruptcy, insolvency, reorganization
or similar proceeding of any Pledgor at the rate provided for in the
respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding)) of each Pledgor owing to
the Second Lien Creditors, whether now existing or hereafter incurred
under, arising out of, or in connection with the Senior Secured Notes
and the other Senior Secured Note Documents to which such Pledgor is a
party (including all such obligations and indebtedness of such Pledgor
under any guaranty constituting a Senior Secured Note Document) and the
due performance and compliance by such Pledgor with all of the terms,
conditions and agreements contained in the Senior Secured Notes and in
the other Senior Secured Note Documents (all such obligations,
liabilities and indebtedness under this clause (iv) being herein
collectively called the "Second Lien Obligations");
(v) any and all sums advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) and/or preserve its
security interest in the Collateral;
(vi) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations or liabilities of any
Pledgor referred to in clauses (i) through (iv) above, after an Event of
Default 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
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(vii) all amounts paid by any Indemnitee to which such
Indemnitee has the right to reimbursement under Section 11 of this
Agreement,
all such obligations, liabilities, indebtedness, sums and expenses set forth in
clauses (i) through (vii) of this Section 1 being 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. DEFINITIONS; ANNEXES. (a) Unless otherwise defined herein,
all capitalized terms used herein and defined in the Credit Agreement shall be
used herein as therein defined. Reference to singular terms shall include the
plural and vice versa.
(b) The following capitalized terms used herein shall have
the definitions specified below:
"Administrative Agent" shall have the meaning set forth in the
recitals hereto.
"Adverse Claim" shall have the meaning given such term in
Section 8-102(a)(1) of the UCC.
"Agreement" shall have the meaning set forth in the first
paragraph hereof.
"Borrowers" shall have the meaning provided in the recitals
hereto.
"Certificated Security" shall have the meaning given such term
in Section 8-102(a)(4) of the UCC.
"Clearing Corporation" shall have the meaning given such term in
Section 8-102(a)(5) of the UCC.
"Collateral" shall have the meaning set forth in Section 3.1
hereof.
"Collateral Accounts" shall mean any and all accounts
established and maintained by the Pledgee in the name of any Pledgor to which
Collateral may be credited.
"Credit Agreement" shall have the meaning set forth in the
recitals hereto.
"Credit Document Obligations" shall have the meaning set forth
in Section 1 hereof.
"Domestic Corporation" shall have the meaning set forth in the
definition of "Stock."
"Dutch Borrower" shall have the meaning set forth in the
recitals hereto.
"Event of Default" shall mean any Event of Default (or similar
term) under, and as defined in, the Credit Agreement or any Interest Rate
Protection Agreement or Other Hedging Agreement entered into with an Other
Creditor and shall in any event include, without limitation,
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(i) any payment default under any Interest Rate Protection Agreement, any Other
Hedging Agreement, the Overdraft Agreement or any Senior Secured Note Document,
(ii) after the payment in full of the Credit Document Obligations and the Other
Obligations, any "Event of Default" (or similar term) under, and as defined in,
the Overdraft Agreement, and (iii) at any time after the First Lien Obligations
have been paid in full and all Commitments and Letters of Credit under the
Credit Agreement have been terminated, any "Event of Default" (or similar term)
under, and as defined in, any Senior Secured Note Document.
"Financial Asset" shall have the meaning given such term in
Section 8-102(a)(9) of the UCC.
"First Lien Creditors" shall have the meaning set forth in the
recitals hereto.
"First Lien Obligations" shall mean all Credit Document
Obligations, all Other Obligations and all Overdraft Obligations.
"Foreign Corporation" shall have the meaning set forth in the
definition of "Stock."
"Holdings" shall have the meaning set forth in the recitals
hereto.
"Indemnitees" shall have the meaning set forth in Section 11
hereof.
"Instrument" shall have the meaning given such term in Section
9-102(a)(47) of the UCC.
"Investment Property" shall have the meaning given such term in
Section 9-102(a)(49) of the UCC.
"Lender Creditors" shall have the meaning set forth in the
recitals hereto.
"Lenders" shall have the meaning set forth in the recitals
hereto.
"Limited Liability Company Assets" shall mean all assets,
whether tangible or intangible and whether real, personal or mixed (including,
without limitation, all limited liability company capital and interest in other
limited liability companies), at any time owned by any Pledgor or represented by
any Limited Liability Company Interest.
"Limited Liability Company Interests" shall mean the entire
limited liability company membership interest at any time owned by any Pledgor
in any limited liability company (excluding any obligation of any Pledgor to
make any unpaid or uncalled capital commitments or contributions (or any other
payments of a similar nature) in respect of any such limited liability company).
"Location" of any Pledgor shall have the meaning given such term
in Section 9-307 of the UCC.
"Non-Voting Stock" shall mean all capital stock which is not
Voting Stock.
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"Notes" shall mean all promissory notes from time to time issued
to, or held by, each Pledgor.
"Obligations" shall have the meaning set forth in Section 1
hereof.
"Original US Pledge Agreement" shall have the meaning set forth
in the recitals hereto.
"Other Creditors" shall have the meaning set forth in the
recitals hereto.
"Other Obligations" shall have the meaning set forth in Section
1 hereof.
"Overdraft Agreement" shall have the meaning set forth in the
recitals hereto.
"Overdraft Creditors" shall have the meaning set forth in the
recitals hereto.
"Overdraft Guarantees" shall have the meaning set forth in the
recitals hereto.
"Overdraft Line" shall have the meaning set forth in the
recitals hereto.
"Overdraft Obligations" shall have the meaning set forth in the
Section 1 hereof.
"Partnership Assets" shall mean all assets, whether tangible or
intangible and whether real, personal or mixed (including, without limitation,
all partnership capital and interest in other partnerships), at any time owned
by any Pledgor or represented by any Partnership Interest.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by any Pledgor in any
general partnership or limited partnership (excluding any obligation of any
Pledgor to make any unpaid or uncalled capital commitments or contributions (or
any other payments of a similar nature) in respect of any such general
partnership or limited partnership).
"Permitted Liens" shall mean (i) "Permitted Liens" under, and as
defined in, the Credit Agreement, or (ii) after the date on which all First Lien
Obligations have been paid in full in cash in accordance with the terms thereof
and all Commitments and Letters of Credit under the Credit Agreement have been
terminated, those Liens permitted at such time under the Senior Secured Note
Indenture.
"Pledged Notes" shall have the meaning set forth in Section 3.5
hereof.
"Pledgee" shall have the meaning set forth in the first
paragraph hereof.
"Pledgor" shall have the meaning set forth in the first
paragraph hereof.
"Proceeds" shall have the meaning given such term in Section
9-102(a)(64) of the UCC.
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"Registered Organization" shall have the meaning given such term
in Section 9-102(a)(70) of the UCC.
"Required Secured Creditors" shall have the meaning set forth in
the US Security Agreement.
"RPP USA" shall have the meaning set forth in the recitals
hereto.
"Second Lien Creditors" shall have the meaning set forth in the
recitals hereto.
"Second Lien Excluded Collateral" shall have the meaning set
forth in the US Security Agreement.
"Second Lien Obligations" shall have the meaning set forth in
Section 1 hereof.
"Secured Creditors" shall have the meaning set forth in the
recitals hereto.
"Secured Debt Agreements" mean and include this Agreement, the
other Credit Documents, the Overdraft Agreement, the Interest Rate Protection
Agreements and the Other Hedging Agreements entered into with any Other
Creditors and the Senior Secured Note Documents.
"Securities Account" shall have the meaning given such term in
Section 8-501(a) of the UCC.
"Securities Act" shall mean the Securities Act of 1933, as
amended, as in effect from time to time.
"Securities Intermediary" shall have the meaning given such term
in Section 8-102(14) of the UCC.
"Security" and "Securities" shall have the meaning given such
term in Section 8-102(a)(15) of the UCC and shall in any event also include all
Stock and all Notes.
"Security Entitlement" shall have the meaning given such term in
Section 8-102(a)(17) of the UCC.
"Senior Secured Note Documents" shall have the meaning set forth
in the recitals hereto.
"Senior Secured Noteholders" shall have the meaning set forth in
the recitals hereto.
"Senior Secured Note Indenture" shall have the meaning set forth
in the recitals hereto.
"Senior Secured Notes" shall have the meaning set forth in the
recitals hereto.
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"Senior Secured Notes Trustee" shall have the meaning set forth
in the first paragraph hereof.
"Stock" shall mean (x) with respect to corporations incorporated
under the laws of the United States or any State thereof or the District of
Columbia (each, a "Domestic Corporation"), all of the issued and outstanding
shares of capital stock of any corporation at any time owned by any Pledgor of
any Domestic Corporation and (y) with respect to corporations not Domestic
Corporations (each a "Foreign Corporation"), all of the issued and outstanding
shares of capital stock at any time owned by any Pledgor of any Foreign
Corporation.
"Termination Date" shall have the meaning set forth in the US
Security Agreement.
"Transmitting Utility" shall have the meaning given such term in
Section 9-102(a)(80) of the UCC.
"UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York from time to time; provided that all references herein to
specific sections or subsections of the UCC are references to such sections or
subsections, as the case may be, of the Uniform Commercial Code as in effect in
the State of New York on April 9, 2003.
"Uncertificated Security" shall have the meaning given such term
in Section 8-102(a)(18) of the UCC.
"US Borrowers" shall have the meaning set forth in the recitals
hereto.
"US Finance Corp." shall have the meaning set forth in the
recitals hereto.
"Voting Stock" shall mean all classes of capital stock of any
Foreign Corporation entitled to vote.
3. PLEDGE OF SECURITIES, ETC.
3.1 Pledge. To secure the Obligations now or hereafter owed
or to be performed by each Pledgor, each Pledgor does hereby create, grant,
pledge and assign to the Pledgee for the benefit of the Secured Creditors
(except as otherwise provided in clause (z) of the last paragraph of this
Section 3.1), and does hereby create (and, to the extent the following
constitutes "Collateral" under, and as defined in, the Original US Pledge
Agreement, does hereby reconfirm (without interruption) its creation, grant,
pledge and assignment to the Pledgee under the Original US Pledge Agreement of)
a continuing security interest (subject to Permitted Liens) in, all of the
right, title and interest in and to the following, whether now existing or
hereafter from time to time acquired (collectively, the "Collateral") (it being
understood and agreed that the security interest granted herein (x) for the
benefit of the First Lien Creditors shall be senior in priority in all respects
to the security interest granted herein for the benefit of the Second Lien
Creditors and (y) for the benefit of the Second Lien Creditors shall be subject
and subordinated in all respects to the security interest granted herein for the
benefit of the First Lien Creditors):
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(a) each of the Collateral Accounts (to the extent a
security interest therein is not created pursuant to the Security
Agreement), including any and all assets of whatever type or kind
deposited by such Pledgor in such Collateral Account, whether now owned
or hereafter acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property, moneys, checks,
drafts, Instruments, Securities or interests therein of any type or
nature deposited or required by the Credit Agreement or any other
Secured Debt Agreement to be deposited in such Collateral Account, and
all investments and all certificates and other Instruments (including
depository receipts, if any) from time to time representing or
evidencing the same, and all dividends, interest, distributions, cash
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
foregoing;
(b) all Securities owned by such Pledgor from time to time
and all options and warrants owned by such Pledgor from time to time to
purchase Securities;
(c) all Limited Liability Company Interests of such Pledgor
from time to time and all of its right, title and interest in each
limited liability company to which each such interest relates, whether
now existing or hereafter acquired, including, without limitation:
(A) all its capital therein and its interest in all
profits, losses, Limited Liability Company Assets and other
distributions to which such Pledgor shall at any time be
entitled in respect of such Limited Liability Company Interests;
(B) all other payments due or to become due to such
Pledgor in respect of Limited Liability Company Interests,
whether under any limited liability company agreement or
otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if
any, under any limited liability company agreement or operating
agreement, or at law or otherwise in respect of such Limited
Liability Company Interests;
(D) all present and future claims, if any, of such
Pledgor against any such limited liability company for moneys
loaned or advanced, for services rendered or otherwise;
(E) all of such Pledgor's rights under any limited
liability company agreement or operating agreement or at law to
exercise and enforce every right, power, remedy, authority,
option and privilege of such Pledgor relating to such Limited
Liability Company Interests, including any power to terminate,
cancel or modify any limited liability company agreement or
operating agreement, to execute any instruments and to take any
and all other action on behalf of and in the name of any of such
Pledgor in respect of such Limited Liability Company Interests
and any such limited liability company, to make determinations,
to exercise any election (including, but not limited to,
election of remedies) or option or to give or receive any
notice, consent, amendment, waiver or approval, together
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with full power and authority to demand, receive, enforce,
collect or receipt for any of the foregoing or for any Limited
Liability Company Asset, to enforce or execute any checks, or
other instruments or orders, to file any claims and to take any
action in connection with any of the foregoing (with all of the
foregoing rights only to be exercisable upon the occurrence and
during the continuation of an Event of Default); and
(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(d) all Partnership Interests of such Pledgor from time to
time and all of its right, title and interest in each partnership to
which each such interest relates, whether now existing or hereafter
acquired, including, without limitation:
(A) all its capital therein and its interest in all
profits, losses, Partnership Assets and other distributions to
which such Pledgor shall at any time be entitled in respect of
such Partnership Interests;
(B) all other payments due or to become due to such
Pledgor in respect of Partnership Interests, whether under any
partnership agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if
any, under any partnership agreement or operating agreement, or
at law or otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of such
Pledgor against any such partnership for moneys loaned or
advanced, for services rendered or otherwise;
(E) all of such Pledgor's rights under any
partnership agreement or operating agreement or at law to
exercise and enforce every right, power, remedy, authority,
option and privilege of such Pledgor relating to such
Partnership Interests, including any power to terminate, cancel
or modify any partnership agreement or operating agreement, to
execute any instruments and to take any and all other action on
behalf of and in the name of any of such Pledgor in respect of
such Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not
limited to, election of remedies) or option or to give or
receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive,
enforce, collect or receipt for any of the foregoing or for any
Partnership Asset, to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any action
in connection with any of the foregoing (with all of the
foregoing rights only to be
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exercisable upon the occurrence and during the continuation of
an Event of Default); and
(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(e) all Security Entitlements of such Pledgor from time to
time in any and all of the foregoing;
(f) all Financial Assets and Investment Property of such
Pledgor from time to time; and
(g) all Proceeds of any and all of the foregoing.
Notwithstanding anything to the contrary contained in this
Section 3.1, (x) except as otherwise provided in Section 8.12 of the Credit
Agreement, no Pledgor (to the extent that it is Holdings or a Domestic
Subsidiary of Holdings) shall be required at any time to pledge hereunder (and
the Collateral of such Pledgor shall not include) in excess of 65% of the Voting
Stock of any Foreign Corporation except to the extent such excess Collateral is
solely to secure the Dutch Borrower's Obligations, including any guaranty
thereof under the applicable Guaranty, in which case such Pledgor shall be
required to pledge (and the term Collateral shall include) 100% of all such
Voting Stock as security for such Obligations of the Dutch Borrower, (y) each
Pledgor shall be required to pledge hereunder 100% of any Non-Voting Stock at
any time and from time to time acquired by such Pledgor of any Foreign
Corporation and (z) (I) the Second Lien Creditors shall not have a security
interest in, and the grant of security interests pursuant to this Section 3.1
for the benefit of the Second Lien Creditors shall not extend to, any Second
Lien Excluded Collateral, and (II) with respect to the Second Lien Creditors,
the term "Collateral" shall not include the Second Lien Excluded Collateral.
3.2 Procedures. (a) To the extent that any Pledgor at any
time or from time to time owns, acquires or obtains any right, title or interest
in any Collateral, such Collateral shall automatically (and without the taking
of any action by the respective Pledgor) be pledged pursuant to Section 3.1 of
this Agreement and, in addition thereto, such Pledgor shall (to the extent
provided below) take the following actions as set forth below (as promptly as
practicable and, in any event, within 10 days after it obtains such Collateral)
for the benefit of the Pledgee and the Secured Creditors:
(i) with respect to a Certificated Security (other than a
Certificated Security credited on the books of a Clearing Corporation or
Securities Intermediary), the respective Pledgor shall physically
deliver such Certificated Security to the Pledgee, indorsed to the
Pledgee or indorsed in blank;
(ii) with respect to an Uncertificated Security (other than
an Uncertificated Security credited on the books of a Clearing
Corporation or Securities Intermediary), the respective Pledgor shall
cause the issuer of such Uncertificated Security to duly authorize
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and execute, and deliver to the Pledgee, an agreement for the benefit of
the Pledgee and the other Secured Creditors substantially in the form of
Annex G hereto (appropriately completed to the satisfaction of the
Pledgee and with such modifications, if any, as shall be satisfactory to
the Pledgee) pursuant to which such issuer agrees to comply with any and
all instructions originated by the Pledgee without further consent by
the registered owner and not to comply with instructions regarding such
Uncertificated Security (and any Partnership Interests and Limited
Liability Company Interests issued by such issuer) originated by any
other Person other than a court of competent jurisdiction;
(iii) with respect to a Certificated Security, Uncertificated
Security, Partnership Interest or Limited Liability Company Interest
credited on the books of a Clearing Corporation or Securities
Intermediary (including a Federal Reserve Bank, Participants Trust
Company or The Depository Trust Company), the respective Pledgor shall
promptly notify the Pledgee thereof and shall promptly take (x) all
actions required (i) to comply with the applicable rules of such
Clearing Corporation or Securities Intermediary and (ii) to perfect the
security interest of the Pledgee under applicable law (including, in any
event, under Sections 9-314(a), (b) and (c), 9-106 and 8-106(d) of the
UCC) and (y) such other actions as the Pledgee deems necessary or
desirable to effect the foregoing;
(iv) with respect to a Partnership Interest or a Limited
Liability Company Interest (other than a Partnership Interest or Limited
Liability Company Interest credited on the books of a Clearing
Corporation or Securities Intermediary), (1) if such Partnership
Interest or Limited Liability Company Interest is represented by a
certificate and is a Security for purposes of the UCC, the procedure set
forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest
or Limited Liability Company Interest is not represented by a
certificate or is not a Security for purposes of the UCC, the procedure
set forth in Section 3.2(a)(ii) hereof;
(v) with respect to any Note, physical delivery of such Note
to the Pledgee, indorsed to the Pledgee or indorsed in blank; and
(vi) after an Event of Default has occurred and is continuing,
with respect to cash, to the extent not otherwise provided for in the US
Security Agreement, (i) establishment by the Pledgee of a cash account
in the name of such Pledgor over which the Pledgee shall have "control"
within the meaning of the UCC (and no withdrawals or transfers may be
made therefrom by any Person except with the prior written consent of
the Pledgee) and (ii) deposit of such cash in such cash account.
(b) In addition to the actions required to be taken pursuant
to preceding Section 3.2(a) hereof, each Pledgor shall take the following
additional actions with respect to the Securities and Collateral:
(i) with respect to all Collateral of such Pledgor whereby
or with respect to which the Pledgee may obtain "control" thereof within
the meaning of Section 8-106 of the UCC (or under any provision of the
UCC as same may be amended or supplemented from time to time, or under
the laws of any relevant State other than the State of New York), the
respective Pledgor shall take all actions as may be requested from time
to
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time by the Pledgee so that "control" of such Collateral is obtained and
at all times held by the Pledgee; and
(ii) each Pledgor shall from time to time cause appropriate
financing statements (on Form UCC-1 or other appropriate form) under the
Uniform Commercial Code as in effect in the various relevant States
(with the form of such financing statements to be satisfactory to the
Pledgee), to be filed in the relevant filing offices so that at all
times the Pledgee has a security interest in all Investment Property and
other Collateral which is perfected by the filing of such financing
statements (in each case to the maximum extent perfection by filing may
be obtained under the laws of the relevant States, including, without
limitation, Section 9-312(a) of the UCC).
3.3 Subsequently Acquired Collateral. Subject to the last
sentence of Section 3.1 hereof, if any Pledgor shall acquire (by purchase, stock
dividend or otherwise) any additional Collateral at any time or from time to
time after the date hereof, such Collateral shall automatically (and without any
further action being required to be taken) be subject to the pledge and security
interests created pursuant to Section 3.1 hereof and, furthermore, such Pledgor
will promptly thereafter take (or cause to be taken) all action with respect to
such Collateral in accordance with the procedures set forth in Section 3.2
hereof, and will promptly thereafter deliver to the Pledgee (i) a certificate
executed by a principal executive officer of such Pledgor describing such
Collateral and certifying that the same has been duly pledged in favor of the
Pledgee (for the benefit of the Secured Creditors) hereunder and (ii)
supplements to Annexes A through F hereto as are necessary to cause such annexes
to be complete and accurate at such time.
3.4 Transfer Taxes. Each pledge of Collateral under Section
3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps
required in connection with the pledge of such Collateral.
3.5 Definition of Pledged Notes. All Notes at any time
pledged or required to be pledged hereunder are hereinafter called the "Pledged
Notes".
3.6 Certain Representations and Warranties Regarding the
Collateral. Each Pledgor represents and warrants that on the date hereof: (i)
each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in
Annex B hereto; (ii) the Stock (and any warrants or options to purchase Stock)
held by such Pledgor consists of the number and type of shares of the stock (or
warrants or options to purchase any stock) of the corporations as described in
Annex C hereto; (iii) such Stock referenced in clause (ii) of this paragraph
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as is set forth in Annex C hereto; (iv) the Notes held by
such Pledgor consist of the promissory notes described in Annex D hereto where
such Pledgor is listed as the lender; (v) the Limited Liability Company
Interests held by such Pledgor consist of the number and type of interests of
the Persons described in Annex E hereto; (vi) each such Limited Liability
Company Interest referenced in clause (v) of this paragraph constitutes that
percentage of the issued and outstanding equity interest of the issuing Person
as set forth in Annex E hereto; (vii) the Partnership Interests held by such
Pledgor consist of the number and type of interests of the Persons described in
Annex F hereto; (viii) each such Partnership Interest referenced in clause (vii)
of this paragraph constitutes that
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percentage or portion of the entire partnership interest of the Partnership as
set forth in Annex F hereto; (ix) the Pledgor has complied with the respective
procedure set forth in Section 3.2(a) hereof with respect to each item of
Collateral described in Annexes C through F hereto; and (x) on the date hereof,
such Pledgor owns no other Securities, Limited Liability Company Interests or
Partnership Interests.
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 Collateral, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, indorsed 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 EVENT OF DEFAULT OR SPECIFIED
DEFAULT. Unless and until there shall have occurred and be continuing an Event
of Default or a Default under (or of the type described in) Section 10.01 or
10.05 of the Credit Agreement (each such Default, a "Specified Default"), each
Pledgor shall be entitled to exercise all voting rights attaching to any and all
Collateral 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 any
Secured Debt Agreement, or which would have the effect of impairing the value of
the Collateral or any part thereof or the position or interests of the Pledgee
or any other Secured Creditor therein. All such rights of a Pledgor to vote and
to give consents, waivers and ratifications shall cease in case an Event of
Default or a Specified Default shall occur and be continuing and Section 7
hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an
Event of Default or a Specified Default shall have occurred and be continuing,
all cash dividends, cash distributions, cash Proceeds and other cash amounts
payable in respect of the Collateral shall be paid to the respective Pledgor.
Subject to Section 3.2 hereof, the Pledgee shall be entitled to receive
directly, and to retain as part of the Collateral:
(i) all other or additional stock, notes, limited liability
company interests, partnership interests, instruments or other
securities or property (including, but not limited to, cash dividends
other than as set forth above) paid or distributed by way of dividend or
otherwise in respect of the Collateral;
(ii) all other or additional stock, notes, limited liability
company interests, partnership interests, instruments or other
securities or property (including, but not limited to, cash) paid or
distributed in respect of the Collateral by way of stock-split,
spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and
(iii) all other or additional stock, notes, limited liability
company interests, partnership interests, instruments or other
securities or property (including, but not limited to, 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.
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Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive the 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 respective Pledgor contrary to the
provisions of this Section 6 or Section 7 hereof shall be received in trust for
the benefit of the Pledgee, shall be segregated from other property or funds of
such Pledgor and shall be forthwith paid over to the Pledgee as Collateral in
the same form as so received (with any necessary indorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT OR A SPECIFIED
DEFAULT. In the event an Event of Default or a Specified Default shall have
occurred and be continuing, 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 by any other Secured Debt Agreement or by law) for the
protection and enforcement of its rights in respect of the Collateral,
including, without limitation, all the rights and remedies of a secured party
upon default under the Uniform Commercial Code as in effect in any relevant
jurisdiction, and the Pledgee shall be entitled, without limitation, to exercise
any or all of the following rights, which each Pledgor hereby agrees to be
commercially reasonable:
(i) to receive all amounts payable in respect of the
Collateral otherwise payable under Section 6 hereof to such Pledgor;
(ii) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(iii) 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 (including, without limitation, to make
any demand for payment thereon);
(iv) to vote all or any part of the Collateral (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 (each
Pledgor hereby irrevocably constituting and appointing the Pledgee the
proxy and attorney-in-fact of such Pledgor, with full power of
substitution to do so);
(v) 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 each 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 such Pledgor. The Pledgee shall not be obligated
to make such sale of Collateral regardless of whether any such notice of
sale has theretofore been given. Each purchaser at any such sale shall
hold the property so sold absolutely free from any claim or right on the
part of each Pledgor, and each Pledgor hereby waives and releases to the
fullest extent permitted by law any right or equity of redemption with
respect to the Collateral, whether
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before or after sale hereunder, all rights, if any, of marshalling the
Collateral and any other security for the Obligations or otherwise, and
all rights, if any, of stay and/or appraisal which it now has or may at
any time in the future have under rule of law or statute now existing or
hereafter enacted. At any such sale, unless prohibited by applicable
law, the Pledgee on behalf of all Secured Creditors (or certain of them)
may bid for and purchase (by bidding in Obligations or otherwise) all or
any part of the Collateral so sold free from any such right or equity of
redemption. Neither the Pledgee nor any other 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; and
(vi) to set-off any and all Collateral against any and all
Obligations, and to withdraw any and all cash or other Collateral from
any and all Collateral Accounts and to apply such cash and other
Collateral to the payment of any and all Obligations.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy
of the Pledgee provided for in this Agreement or in any other Secured Debt
Agreement, 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 in any other Secured Debt Agreement 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 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. Unless otherwise
required by the respective Secured Debt Agreements, no notice to or demand on
any Pledgor in any case shall entitle such Pledgor to any other or further
notice or demand in similar 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 demand or notice. By accepting the benefits
of this Agreement and each other Security Document, the Secured Creditors
expressly acknowledge and agree that this Agreement and each other Security
Document 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 to seek to enforce or to enforce this
Agreement or any other Security Document or to realize upon the security to be
granted hereby or thereby.
9. APPLICATION OF PROCEEDS. (a) All monies collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other monies received by the Pledgee
hereunder, shall be applied to the payment of the Obligations in the manner (and
to the extent and subject to the limitations) provided in Section 9.4 of the US
Security Agreement.
(b) It is understood and agreed that each Pledgor shall
remain liable for its Obligations to the extent of any deficiency between the
amount of proceeds of the Collateral hereunder and the aggregate amount of the
Obligations for such Pledgor.
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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 the Pledgee or the
officer making such sale of the purchase money paid as consideration pursuant to
such 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. Each Pledgor jointly and severally agrees (i)
to indemnify and hold harmless the Pledgee, each other Secured Creditor that is
an indemnitor under Section 6 of Annex N to the US Security Agreement and their
respective successors, assigns, employees, agents and servants (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 (ii) to reimburse each Indemnitee
for all reasonable costs and expenses, including reasonable attorneys' fees, in
each case arising out of or resulting from this Agreement or the exercise by any
Indemnitee of any right or remedy granted to it hereunder or under any other
Secured Debt Agreement (but excluding any claims, demands, losses, judgments and
liabilities (including liabilities for penalties) or expenses of whatsoever kind
or nature to the extent incurred or arising by reason of gross negligence or
willful misconduct of such Indemnitee (as determined by a court of competent
jurisdiction in a final and non-appealable decision)). In no event shall any
Indemnitee hereunder 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 monies or other property actually received
by it in accordance with the terms hereof. If and to the extent that the
obligations of any Pledgor under this Section 11 are unenforceable for any
reason, each Pledgor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law. The indemnity obligations of each Pledgor contained in this
Section 11 shall continue in full force and effect notwithstanding the full
payment of all the Notes issued under the Credit Agreement, the full repayment
of all of the outstanding Senior Secured Notes, the termination of all Interest
Rate Protection and Other Hedging Agreements and Letters of Credit, and the
payment of all other Obligations and notwithstanding the discharge thereof.
12. FURTHER ASSURANCES; POWER OF ATTORNEY. (a) Each Pledgor
agrees that it will join with the Pledgee in executing and, at such Pledgor's
own expense, file and refile under the Uniform Commercial Code such financing
statements, continuation statements and other documents in such offices as the
Pledgee (acting on its own or on the instructions of the Required Secured
Creditors) may reasonably 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 hereunder and hereby authorizes the Pledgee to file
financing statements and amendments thereto relative to all or any part of the
Collateral (including, without limitation, (x) financing statements which list
the Collateral specifically and/or "all assets" as collateral and (y) "in lieu
of" financing statements) without the signature of such 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 or thereunder.
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(b) Each Pledgor hereby appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such 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 deem
necessary or advisable to accomplish the purposes of this Agreement.
13. THE PLEDGEE AS COLLATERAL 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 by each Secured
Creditor that by accepting the benefits of this Agreement each such Secured
Creditor acknowledges and agrees (i) 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 and in Annex N to the US Security
Agreement and (ii) to the other provisions of Annex N to the US Security
Agreement. The Pledgee shall act hereunder on the terms and conditions set forth
herein and in Annex N to the US Security Agreement.
14. TRANSFER BY THE PLEDGORS. No Pledgor will 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 in
accordance with the terms of this Agreement and the other Secured Debt
Agreements).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.
(a) Each Pledgor represents, warrants and covenants that:
(i) it is the legal, beneficial and record owner of, and has
good and marketable title to, all Collateral consisting of one or more
Securities, Partnership Interests and Limited Liability Company
Interests and that it has sufficient interest in all Collateral in which
a security interest is purported to be created hereunder for such
security interest to attach (subject, in each case, to no pledge, lien,
mortgage, hypothecation, security interest, charge, option, Adverse
Claim or other encumbrance whatsoever, except the liens and security
interests created by this Agreement (or any other US Pledge Agreement
that encumbers any such Collateral) or permitted under the respective
Secured Debt Agreements);
(ii) it has full power, authority and legal right to pledge
all the Collateral pledged by it pursuant to this Agreement;
(iii) this Agreement has been duly authorized, executed and
delivered by such Pledgor and constitutes a legal, valid and binding
obligation of such Pledgor enforceable against such Pledgor in
accordance with its terms, except to the extent that the enforceability
hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law);
(iv) except to the extent already obtained or made, no
consent of any other party (including, without limitation, any
stockholder, member, partner or creditor of such Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization
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of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained
by such Pledgor in connection with (a) the execution, delivery or
performance of this Agreement, (b) the validity or enforceability of
this Agreement (except as set forth in clause (iii) above), (c) the
perfection or enforceability of the Pledgee's security interest in the
Collateral or (d) except for compliance with or as may be required by
applicable securities laws, the exercise by such Pledgee of any of its
rights or remedies provided herein;
(v) 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 such Pledgor, or of the certificate or articles of
incorporation, certificate of formation, operating agreement, limited
liability company agreement, partnership agreement or by-laws of such
Pledgor or of any securities issued by such Pledgor or any of its
Subsidiaries, or of any mortgage, deed of trust, indenture, lease, loan
agreement, credit agreement or other contract, agreement or instrument
or undertaking to which such Pledgor or any of its Subsidiaries is a
party or which purports to be binding upon such Pledgor or any of its
Subsidiaries or upon any of their respective assets and will not result
in the creation or imposition of (or the obligation to create or impose)
any lien or encumbrance on any of the assets of such Pledgor or any of
its Subsidiaries except as contemplated by the Secured Debt Agreements;
(vi) all of the Collateral (consisting of Securities, Limited
Liability Company Interests or Partnership Interests) has been duly and
validly issued, is fully paid and non-assessable and is subject to no
options to purchase or similar rights;
(vii) each of the Pledged Notes constitutes, or when executed
by the obligor thereof will constitute, 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 other
similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at
law);
(viii) the pledge, collateral assignment and delivery to the
Pledgee of the Collateral consisting of Certificated Securities and
Pledged Notes pursuant to this Agreement creates a valid and perfected
first priority security interest in such Certificated Securities and
Pledged Notes, and the proceeds thereof, subject to no prior Lien or
encumbrance or to any agreement purporting to grant to any third party a
Lien or encumbrance on the property or assets of such Pledgor which
would include such Certificated Securities and Pledged Notes (other than
Permitted Liens) and the Pledgee is entitled to all the rights,
priorities and benefits afforded by the UCC or other relevant law as
enacted in any relevant jurisdiction to perfect security interests in
respect of such Collateral; and
(ix) "control" (as defined in Section 8-106 of the UCC) has
been obtained by the Pledgee over all Collateral consisting of
Securities (including Notes which are Securities)
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with respect to which such "control" may be obtained pursuant to Section
8-106 of the UCC.
(b) Each 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 each 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.
(c) Each Pledgor covenants and agrees that it will take no
action which would violate any of the terms of any Secured Debt Agreement.
16. LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A
REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY); JURISDICTION OF
ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES THERETO;
ETC. The exact legal name of each Pledgor, the type of organization of such
Pledgor, whether or not such Pledgor is a Registered Organization, the
jurisdiction of organization of such Pledgor, such Pledgor's Location, the
organizational identification number (if any) of such Pledgor, and whether or
not such Pledgor is a Transmitting Utility, is listed on Annex A hereto for such
Pledgor. No Pledgor shall change its legal name, its type of organization, its
status as a Registered Organization (in the case of a Registered Organization),
its status as a Transmitting Utility or as a Person which is not a Transmitting
Utility, as the case may be, its jurisdiction of organization, its Location, or
its organizational identification number (if any) from that used in Annex A
hereto for such Pledgor, except that any such changes shall be permitted (so
long as not in violation of the applicable requirements of the Secured Debt
Agreements and so long as same do not involve (x) a Registered Organization
ceasing to constitute same or (y) such Pledgor changing its jurisdiction of
organization or Location from the United States of America or a State thereof to
a jurisdiction of organization or Location, as the case may be, outside the
United States of America or a State thereof) if (i) it shall have given to the
Pledgee not less than 30 days' prior written notice of each change to the
information listed on Annex A hereto for such Pledgor (as adjusted for any
subsequent changes thereto previously made in accordance with this sentence),
together with a supplement to such Annex A which shall correct all information
contained therein for such Pledgor, and (ii) in connection with the respective
such change or changes, it shall have taken all action reasonably requested by
the Pledgee to maintain the security interests of the Pledgee in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect. In addition, to the extent that any Pledgor does not have an
organizational identification number on the date hereof and later obtains one,
such Pledgor shall promptly thereafter notify Pledgee of such organizational
identification number and shall take all actions reasonably satisfactory to the
Pledgee to the extent necessary to maintain the security interest of the Pledgee
in the Collateral intended to be granted hereby fully perfected and in full
force and effect.
17. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each 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
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otherwise affected by, any circumstance or occurrence whatsoever (other than
termination of this Agreement pursuant to Section 19 hereof), including, without
limitation:
(i) any renewal, extension, amendment or modification of, or
addition or supplement to or deletion from any Secured Debt Agreement
(other than this Agreement in accordance with its terms), or any other
instrument or agreement referred to therein, or any assignment or
transfer of any thereof;
(ii) any waiver, consent, extension, indulgence or other
action or inaction under or in respect of any such agreement or
instrument or this Agreement (other than a waiver, consent or extension
with respect to this Agreement in accordance with its terms);
(iii) 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;
(iv) 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
(v) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to any Pledgor or any Subsidiary of any 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 such Pledgor shall have
notice or knowledge of any of the foregoing.
18. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and any Pledgor shall have received from the Pledgee
a written request or requests that such 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 Collateral consisting of
Securities, Limited Liability Company Interests or Partnership Interests, such
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 Collateral consisting of Securities, Limited
Liability Company Interests or Partnership Interests, 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 governmental requirements; provided, that the Pledgee shall furnish to
such Pledgor such information regarding the Pledgee as such Pledgor may request
in writing and as shall be required in connection with any such registration,
qualification or compliance. Each 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 and other documents
incident thereto as the Pledgee from time to time may reasonably request, and
will indemnify, to the extent permitted by law, the Pledgee and all other
Secured Creditors participating in the distribution of such Collateral
consisting of Securities, Limited Liability Company Interests or Partnership
Interests against all claims, losses, damages and liabilities caused by any
untrue statement (or
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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 such Pledgor by the Pledgee expressly for
use therein.
(b) If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Collateral consisting of
Securities, Limited Liability Company Interests or Partnership Interests
pursuant to Section 7 hereof, and such Collateral 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 Collateral or part thereof by private sale in
such manner and under such circumstances as the 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 Collateral 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 Collateral
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 Collateral 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 the
registration as aforesaid.
19. TERMINATION; RELEASE. (a) After the Termination Date, this
Agreement and the security interest created hereby shall terminate (provided
that all indemnities set forth herein including, without limitation, in Section
11 hereof and in Section 6 of Annex N to the US Security Agreement shall survive
any such termination) and the Pledgee, at the request and expense of the
respective Pledgor, will execute and deliver to such Pledgor a proper instrument
or instruments acknowledging the satisfaction and termination of this Agreement
(including, without limitation, UCC termination statements and instruments of
satisfaction, discharge and/or reconveyance), and will duly assign, transfer and
deliver to such Pledgor (without recourse and without any representation or
warranty) such of the Collateral as may be in the possession of the Pledgee and
as has not theretofore been sold or otherwise applied or released pursuant to
this Agreement, together with any monies at the time held by the Pledgee or any
of its sub-agents hereunder and, with respect to any Collateral consisting of an
Uncertificated Security (other than an Uncertificated Security credited on the
books of a Clearing Corporation or a Securities Intermediary), a Partnership
Interest or a Limited Liability Company Interest, a termination of the agreement
relating thereto executed and delivered by the issuer of such Uncertificated
Security pursuant to Section 3.2(a)(ii) hereof or by the respective partnership
or limited liability company pursuant to Section 3.2(a)(iv) hereof; provided,
however, at such time as (x) all First Lien Obligations have been paid in full
in cash in accordance with the terms thereof and all Commitments and Letters of
Credit under the Credit Agreement have been terminated or (y) the First Lien
Creditors have released their Liens on all of the Collateral then, in either
case, this Agreement and the security interests created hereby shall terminate
(provided
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that all indemnities set forth herein (including, without limitation, in Section
11 hereof) and in Section 6 of Annex N to the US Security Agreement shall
survive such termination) unless, in the case of preceding clause (x), any Event
of Default under the Senior Secured Note Indenture exists as of the date on
which the First Lien Obligations are repaid in full and terminated as described
in such clause (x), in which case the security interests created under this
Agreement in favor of the Second Lien Creditors will not be released except to
the extent the Collateral or any portion thereof was disposed of in order to
repay the First Lien Obligations (although the security interests created in
favor of the Second Lien Creditors will be released when such Event of Default
and all other Events of Default under the Senior Secured Note Indenture cease to
exist).
(b) In the event that any part of the Collateral is sold or
otherwise disposed of (to a Person other than a Credit Party) in connection with
a sale or disposition permitted by the respective Secured Debt Agreements or is
otherwise released at the direction of the Required Secured Creditors, and the
proceeds of such sale or disposition (or from such release) are applied in
accordance with the terms of the respective Secured Debt Agreement, as the case
may be, to the extent required to be so applied, the Pledgee, at the request and
expense of such Pledgor, will duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or released and as may be in
possession of the Pledgee and has not theretofore been released pursuant to this
Agreement and, to the extent requested by such Pledgor, deliver, at such
Pledgor's expense, appropriate UCC termination statements and instruments of
satisfaction, discharge and or reconveyance, as the case may be.
(c) At any time that any Pledgor desires that Collateral be
released as provided in the foregoing Section 19(a) or (b) hereof, such Pledgor
shall deliver to the Pledgee a certificate signed by a principal executive
officer of such Pledgor stating that the release of the respective Collateral is
permitted pursuant to Section 19(a) or (b) hereof. If reasonably requested by
the Pledgee (although the Pledgee shall have no obligation to make any such
request), the relevant Pledgor shall furnish appropriate legal opinions (from
counsel reasonably acceptable to the Pledgee) to the effect set forth in the
immediately preceding sentence.
(d) The Pledgee shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it as permitted
(or which the Pledgee in the absence of gross negligence or willful misconduct
(as determined by a court of competent jurisdiction in a final and
non-appealable decision) believes to be permitted) by this Section 19.
(e) Without limiting the foregoing provisions of this
Section 19 to the extent applicable following the qualification of the Senior
Secured Note Indenture under the Trust Indenture Act (but only insofar as this
Agreement applies to the Second Lien Creditors), (i) the Pledgors shall comply
with Section 314(d) of the Trust Indenture Act in connection with the release of
property or Liens hereunder and (ii) the parties hereto agree that if any
amendments to this Agreement or any other Security Document are required in
order to comply with the provisions of the Trust Indenture Act, such parties
shall cooperate and act in good faith to effect such amendments as promptly as
practicable.
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20. NOTICES, ETC. All notices and communications hereunder
shall be in writing and sent or delivered by mail, telegraph, telecopy, cable or
overnight courier service and all such notices and communications shall, when
mailed, telegraphed, telecopied, or cabled or sent by overnight courier, be
effective when delivered to the Person to whom such notice or communication is
addressed, except that notices and communications to the Pledgee or any Pledgor
shall not be effective until received by the Pledgee or such Pledgor, as the
case may be. All such notices and other communications shall be addressed as
follows:
(a) if to any Pledgor, at:
1600 Smith Street, 24th Floor
Houston, TX 77002
Attention: Vice-President and General Counsel
Telephone No.: (832) 366-2316
Telecopier No.: (832) 366-2586
(b) if to the Pledgee, at:
Morgan Stanley & Co., Incorporated
1633 Broadway - 25th Floor
New York, New York 10019
Attention: Erma Dell'Aquila
Telephone No.: (212) 537-1532
Telecopier No.: (212) 537-1867
with a copy to:
Morgan Stanley & Co., Incorporated
750 Seventh Avenue - 11th Floor
New York, New York 10019
Attention: Susan Saxe
Telephone No.: (212) 762-2820
Telecopier No.: (212) 762-0346
(iii) if to any Lender (other than the Pledgee), at such
address as such Lender shall have specified in the Credit Agreement;
(iv) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to Holdings and the Pledgee;
(v) if to any Overdraft Creditor, at such address as such
Overdraft Creditor shall have specified in writing to each Pledgor and
the Pledgee;
(vi) if to the Senior Secured Notes Trustee or any other
Second Lien Creditor, at:
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Deutsche Bank Trust Company Americas
Corporate Trust and Agency Services
280 Park Avenue
New York, New York 10017
Attention: Dorothy Robinson
Telephone No.: (212) 454-4274
Telecopier No.: (212) 454-2223
or at such address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
21. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER.
(a) Nothing herein shall be construed to make the Pledgee or any other Secured
Creditor liable as a member of any limited liability company or partnership and
neither the Pledgee nor any other Secured Creditor by virtue of this Agreement
or otherwise (except as referred to in the following sentence) shall have any of
the duties, obligations or liabilities of a member of any limited liability
company or partnership. The parties hereto expressly agree that, unless the
Pledgee shall become the absolute owner of Collateral consisting of a Limited
Liability Company Interest or Partnership Interest pursuant hereto, this
Agreement shall not be construed as creating a partnership or joint venture
among the Pledgee, any other Secured Creditor and/or any Pledgor.
(b) Except as provided in the last sentence of paragraph (a)
of this Section 21, the Pledgee, by accepting this Agreement, did not intend to
become a member of any limited liability company or partnership or otherwise be
deemed to be a co-venturer with respect to any Pledgor or any limited liability
company or partnership either before or after an Event of Default shall have
occurred. The Pledgee shall have only those powers set forth herein and the
Secured Creditors shall assume none of the duties, obligations or liabilities of
a member of any limited liability company or partnership or any Pledgor except
as provided in the last sentence of paragraph (a) of this Section 21.
(c) The Pledgee and the other Secured Creditors shall not be
obligated to perform or discharge any obligation of any Pledgor as a result of
the pledge hereby effected.
(d) The acceptance by the Pledgee of this Agreement, with
all the rights, powers, privileges and authority so created, shall not at any
time or in any event obligate the Pledgee or any other Secured Creditor to
appear in or defend any action or proceeding relating to the Collateral to which
it is not a party, or to take any action hereunder or thereunder, or to expend
any money or incur any expenses or perform or discharge any obligation, duty or
liability under the Collateral.
22. WAIVER; AMENDMENT. Except as contemplated in Section 25
hereof, none of the terms and conditions of this Agreement may be amended,
changed, waived, discharged or terminated in any manner whatsoever except in
accordance with the terms of the US Security Agreement.
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23. MISCELLANEOUS. This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full force and
effect, subject to release and/or termination as set forth in Section 19 hereof,
(ii) be binding upon each Pledgor, its successors and assigns; provided,
however, that no Pledgor shall assign any of its rights or obligations hereunder
without the prior written consent of the Pledgee and otherwise in accordance
with the terms of the respective Secured Debt Agreements, and (iii) inure,
together with the rights and remedies of the Pledgee hereunder, to the benefit
of the Pledgee, the other Secured Creditors and their respective successors,
transferees and assigns. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. The headings of the
several sections and subsections 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 together 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.
24. WAIVER OF JURY TRIAL. Each Pledgor hereby irrevocably
waives all right to a trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Agreement or the transactions contemplated
hereby.
25. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of Holdings that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the requirements of the respective
Secured Debt Agreements shall automatically become a Pledgor hereunder by
executing a counterpart hereof and delivering the same to the Pledgee.
26. RECOURSE. This Agreement is made with full recourse to the
Pledgors and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of the Pledgors contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
27. LIMITED OBLIGATIONS. It is the desire and intent of each
Pledgor and the Secured Creditors that this Agreement shall be enforced against
each Pledgor to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is sought.
Notwithstanding anything to the contrary contained herein, in furtherance of the
foregoing, it is noted that the obligations of each Pledgor that is a Subsidiary
of RPP USA and which has executed a guaranty of the Obligations pursuant to a
Secured Debt Agreement, the obligations of such Subsidiary thereunder may have
been limited as provided therein. To the extent not otherwise provided in a
guaranty given by a Pledgor in respect of the Second Lien Obligations, each
Pledgor, other than Holdings, RPP USA, US Finance Corp. and any other Subsidiary
of Holdings that is not also a Subsidiary of RPP USA (collectively, the "second
lien pledgors"), the Senior Secured Notes Trustee and each other Second Lien
Creditor hereby confirm that it is the intention of all such Persons that the
grant of the security interest hereunder by the second lien pledgors with
respect to the Second Lien Obligations and the Second Lien Obligations of each
such second lien pledgor hereunder not constitute a fraudulent
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transfer or conveyance for purposes of any bankruptcy law (as hereinafter
defined), the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act or any similar foreign, federal or state law to the extent applicable to
this Agreement and the Second Lien Obligations of the second lien pledgors
hereunder. To effectuate the foregoing intention, the Senior Secured Notes
Trustee, the other Second Lien Creditors and the second lien pledgors hereby
irrevocably agree that the Second Lien Obligations of the second lien pledgors
hereunder at any time shall be limited to the maximum amount (after taking into
account any guaranty of the First Lien Obligations by the second lien pledgors)
as will result in the Second Lien Obligations of the second lien pledgors
hereunder not constituting a fraudulent transfer or conveyance. For purposes
hereof, "bankruptcy law" means any proceeding of the type referred to in Section
6.1(vi) or (vii) of the Senior Secured Note Indenture or Title 11, U.S. Code, or
any similar foreign, federal or state law for the relief of debtors.
* * * *
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IN WITNESS WHEREOF, each Pledgor, the Pledgee and the Senior
Secured Notes Trustee have caused this Agreement to be executed by their duly
elected officers duly authorized as of the date first above written.
RESOLUTION PERFORMANCE PRODUCTS
INC., as a Pledgor
By: /s/ Marvin O. Schlanger
-----------------------------------
Title: Chairman
RESOLUTION PERFORMANCE PRODUCTS
LLC, as a Pledgor
By: /s/ Marvin O. Schlanger
-----------------------------------
Title: Chairman
RPP CAPITAL CORPORATION,
as a Pledgor
By: /s/ Marvin O. Schlanger
-----------------------------------
Title: Chairman
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MORGAN STANLEY & CO.,
INCORPORATED, as Collateral Agent and
Pledgee
By: /s/ Michael Hart
-----------------------------------
Title: Managing Director
Acknowledged and Agreed:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as the Senior Secured Notes Trustee on its
own behalf and on behalf of the other
Second Lien Creditors
By: /s/ Wanda Camacho
-----------------------------------
Title: Vice President
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