Document:

EXHIBIT 10.18

 

 

PLEDGE AGREEMENT

 

This PLEDGE AGREEMENT, dated as of July 3, 2003
(as amended, restated, amended and restated, supplemented or otherwise modified
from time to time, this “Agreement”), is made by ACG HOLDINGS, INC., a
Delaware corporation (the “Parent”), AMERICAN COLOR GRAPHICS, INC., a
New York corporation (the “Company”; the Parent and the Company, are
collectively referred to as the “Pledgors” and individually as a “Pledgor”),
in favor of THE BANK OF NEW YORK, as collateral agent (in such capacity
together with any successor collateral agent, the “Agent”) for each of
the Holders (as defined in the Indenture referred to below).

 

W I T N E S S E T H:

 

WHEREAS, the Company and The Bank of New
York, as the trustee and the collateral agent (in its capacity as collateral
agent and any successor collateral agent thereunder, the “Trustee”) under the
Indenture referred to below, propose to enter into an Indenture, dated as of
July 3, 2003 (as such Indenture may be amended, amended and restated,
supplemented or otherwise modified, from time to time at the option of the
parties thereto, the “Indenture”) governing the rights and duties of the
Company under the 10% Senior Secured Notes due 2010 (the “Senior Secured
Notes”), which duties will be secured by a second lien on certain property of
the Company, including the Collateral (as defined below);

 

WHEREAS, each Pledgor has duly authorized
the execution, delivery and performance of this Agreement;

 

NOW THEREFORE, in consideration of the
premises and mutual covenants herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1          Definitions.   The following terms (whether or not underscored)
when used in this Agreement, including its preamble and recitals, shall have
the following meanings (such definitions to be equally applicable to the
singular and plural forms thereof):

 

“Agent” is defined in the preamble.

 

“Agreement” is defined in the preamble.

 

“Collateral” is defined in Section 2.1.

 

“Company” is defined in the preamble.

 

“Designated Investment” is defined in Section 3.1(a).

 

“Distributions” means all Equity Interest dividends, other
dividends, including liquidating dividends, Equity Interests resulting from (or
in connection with the exercise of) splits, reclassifications, warrants,
options, non-cash dividends and all other distributions (whether

 

 

similar or dissimilar to the foregoing) on or with respect to any
Pledged Equity Interests or other Equity Interests constituting Collateral, but
shall not include Dividends.

 

“Dividends” means cash dividends and cash distributions with
respect to any Pledged Equity Interests made in the ordinary course of business
and not as a liquidating dividend.

 

“Domestic Subsidiary” means a Subsidiary that is organized under
the laws of a political subdivision of the United States.

 

“Equity Interests” means, with respect to any Person, all
shares, interests, participations or other equivalents (however, designated,
whether voting or non-voting) of such Person’s capital, whether now outstanding
or issued after the Closing Date.

 

“Excluded Foreign Subsidiary” means any Foreign Subsidiary of a
Pledgor, the pledge of all or any part of whose Equity Interests or other
property or assets as Collateral, or the guaranty of the Obligations by, would
result in material adverse tax consequences to such Pledgor; provided, however,
that for purposes of this definition (a) the term “Foreign Subsidiary” shall
not include any Subsidiary (i) which is properly treated as a partnership or
branch of such Pledgor or a Domestic Subsidiary of such Pledgor for United
States federal income tax purposes and (ii) the pledge of all of any part of
whose Equity Interests or other property or assets as Collateral, or the
guaranty of the Obligations by, would not result in material adverse tax
consequences to such Pledgor and (b) any determination as to whether a
Subsidiary is an Excluded Foreign Subsidiary shall be approved by the Agent.

 

“Foreign Subsidiary” means a Subsidiary that is not organized
under the laws of a political subdivision of the United States.

 

“Indemnified Party” is defined in Section 6.5.

 

“Indenture” is defined in the first recital.

 

“Intercreditor Agreement” has the meaning given to such term in Section 7.10
hereof.

 

“Investment” means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person,
(b) a loan, advance or capital contribution to, Guaranty or assumption of debt
of, or purchase or other acquisition of, any other debt or equity participation
or interest in, another Person, including any partnership or joint venture
interest in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit.

 

“LLC Agreement” means the limited liability company agreement,
operating agreement and other organizational document of a Securities Issuer
which is a limited liability company, as the same may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time.

 

“Parent” is defined in the preamble.

 

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“Partnership Agreement” means the partnership agreement and
other organizational document of a Securities Issuer which is a partnership, as
the same way be amended, restated, amended and restated, supplemented or
otherwise modified from time to time.

 

“Person” is defined in the Indenture.

 

“Pledged Equity Interests” means all Pledged Shares, Pledged
Partnership Interests and Pledged Membership Interests.

 

“Pledged Membership Interests” is defined in Section 2.1(d).

 

“Pledged Bonds” is defined in Section 2.1(b).

 

“Pledged Notes” is defined in Section 2.1(a).

 

“Pledged Partnership Interests” is defined in Section 2.1(d).

 

“Pledged Shares” is defined in Section 2.1(c).

 

“Pledgor” and “Pledgors” is defined in the preamble.

 

“Proceeds” is defined in the UCC.

 

“Requirement of Law” means, as to any Person, any law (statutory
or common), treaty, rule, order, regulation or determination of an arbitrator
or of a governmental authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property is
subject.

 

“Responsible Officer” means the chief executive officer or the
president of the Company, or any other officer having substantially the same authority
and responsibility.

 

“Security Agreement” is defined in the Indenture.

 

“Securities Act” is defined in Section 6.2.

 

“Securities Issuer” means any Person listed on Schedule I
hereto (as such Schedule may be supplemented from time to time pursuant to
Section 4.1(b) hereto) that has issued or may issue a Pledged
Equity Interest, a Pledged Note or a Pledged Bond.

 

“Termination Date” means the date on which all Obligations have
been indefeasibly paid in full.

 

“UCC” is defined in the Security Agreement.

 

1.2          Security Agreement Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its
preamble and recitals, have the meanings provided in the Security Agreement.

 

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1.3          UCC Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the UCC
are used in this Agreement, including its preamble and recitals, with such
meanings.

 

ARTICLE II

PLEDGE

 

2.1          Grant of Security Interest.  Each Pledgor hereby pledges, assigns,
charges, mortgages, delivers, and transfers to the Agent the benefit of the
Agent, the Trustee and each of the Holders, and hereby grants to the Agent, for
the benefit of the Agent, Trustee and the Holders, a continuing security
interest in all of its right, title and interest in and to the following
property of such Pledgor, whether now or hereafter existing or acquired
(collectively, the “Collateral”):

 

(a)           all promissory notes of each
Securities Issuer identified in Item A of Schedule I hereto
(as such Schedule may be supplemented from time to time pursuant to Section 4.1(b))
opposite the name of such Pledgor and all other promissory notes of any such
Securities Issuer issued from time to time to such Pledgor, as such promissory
notes are amended, modified, supplemented, restated or otherwise modified from
time to time and together with any promissory note of any Securities Issuer
taken in extension or renewal thereof or substitution therefor (such promissory
notes being referred to herein as the “Pledged Notes”);

 

(b)           all bonds of each Securities Issuer
issued pursuant to the Sylacauga IRB financing identified in Item B of
Schedule I hereto as such Schedule may be supplemented from time to
time pursuant to Section 4.1(b)) opposite the name of such Pledgor
and all other bonds of any such Securities Issuer issued from time to time to
such Pledgor, as such bonds are amended, modified, supplemented, restated or
otherwise modified from time to time and together with any bonds of any
Securities Issuer taken in extension or renewal thereof or substitution
therefor (such bonds being referred to herein as the “Pledged Bonds”)

 

(c)           all issued and outstanding shares of
capital stock of each Securities Issuer which is a corporation (or similar type
of issuer) identified in Item C of Schedule I hereto (as
such Schedule may be supplemented from time to time pursuant to Section 4.1(b))
opposite the name of such Pledgor and all additional shares of capital stock of
any such Securities Issuer from time to time acquired by such Pledgor in any
manner (other than voting capital stock in any Excluded Foreign Subsidiary, in
which case, only 66% of the issued and outstanding shares of the voting capital
stock of such Pledgor in such Excluded Foreign Subsidiary), and the
certificates representing such shares of capital stock (such shares of capital
stock being referred to herein as the “Pledged Shares”);

 

(d)           all Equity Interests of each
Securities Issuer which is a limited liability company or partnership
identified in Item D or Item E, respectively, of Schedule I
hereto (as such Schedule may be supplemented from time to time pursuant to
Section 4.1(b)) opposite the name of such Pledgor and all additional
Equity Interests of any such Securities Issuer from time to time acquired by
such Pledgor in any manner, including, in each case, (i) the LLC Agreement or
Partnership Agreement, as the case may be, of such Securities Issuer, (ii) all
rights (but not obligations) of such Pledgor as a member or partner thereof, as
the case may be, and all rights to receive Dividends and Distributions from
time to time received, receivable, or otherwise

 

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distributed thereunder, (iii) all claims of such Pledgor for damages
arising out of or for breach of or default under such LLC Agreement or
Partnership Agreement, (iv) the right of such Pledgor to terminate such LLC
Agreement or Partnership Agreement, to perform and exercise consensual or
voting rights thereunder, and to compel performance and otherwise exercise all
remedies thereunder, (v) all rights of such Pledgor, whether as a member or
partner thereof, as the case may be, or otherwise, to all property and assets
of such Securities Issuer (whether real property, inventory, equipment,
accounts, general intangibles, securities, instruments, chattel paper,
documents, choses in action, financial assets, or otherwise) and (vi) all
certificates or instruments evidencing such Equity Interests (such Equity
Interests being referred to herein, in the case of membership interests, as the
“Pledged Membership Interests” and, in the case of partnership
interests, as the “Pledged Partnership Interests”);

 

(e)           all Dividends, Distributions,
principal, interest, and other payments and rights with respect to any of the
items listed in clauses (a), (b), (c) and (d)
above; and

 

(f)            all Proceeds of any and all of the
foregoing Collateral.

 

2.2          Security for Obligations.  The Collateral of each Pledgor under this
Agreement secures the prompt payment in full of all Obligations of such Pledgor
under the Indenture and the Security Documents.

 

2.3          Delivery of Collateral.  All certificates or instruments representing
or evidencing any Collateral, including all Pledged Equity Interests, all
Pledged Notes and all Pledged Bonds, shall be delivered to and held by or on
behalf of the Agent pursuant hereto, shall be in suitable form for transfer by
delivery, and shall be accompanied by all necessary instruments of transfer or
assignment, duly executed in blank.

 

2.4          Dividends on Pledged Equity Interests
and Payments on Pledged Notes and Pledged Bonds.  In the event that any Dividend is permitted
to be paid on any Pledged Equity Interest or any payment of principal or
interest or other amount is permitted to be made on any Pledged Note or Pledged
Bond at a time when no Event of Default has occurred and is continuing, such
Dividend or payment may be paid directly to the applicable Pledgor.  If any Event of Default has occurred and is
continuing, then any such Dividend or payment shall be paid directly to the
Agent.

 

2.5          Continuing Security Interest; Transfer
of Loans.  This
Agreement shall create a continuing security interest in the Collateral and
shall remain in full force and effect until the Termination Date, be binding
upon each Pledgor and its successors, transferees and assigns, and inure,
together with the rights and remedies of the Agent hereunder, to the benefit of
the Agent, the Trustee and each Holder. 
Without limiting the generality of the foregoing, any Holder may assign
or otherwise transfer (in whole or in part) any Note held by it to any other
Person, and such other Person shall thereupon become vested with all the rights
and benefits in respect thereof granted to such Note under any Security
Document (including this Agreement) or otherwise, subject, however, to any
contrary provisions in such assignment or transfer.

 

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2.6          Security Interest Absolute.  All rights of the Agent and the security
interests granted to the Agent hereunder, and all obligations of each Pledgor
hereunder, shall be, absolute and unconditional, irrespective of any of the
following conditions, occurrences or events:

 

(a)           any lack of validity or
enforceability of the Indenture or any Security Document;

 

(b)           the failure of any Holder to assert
any claim or demand or to enforce any right or remedy against the Parent, the
Company, any other Pledgor or any other Person under the provisions of  the Indenture or any Security Document, or
otherwise or to exercise any right or remedy against any other guarantor of, or
collateral securing, any Obligation;

 

(c)           any change in the time, manner or
place of payment of, or in any other term of, all or any of the Obligations or
any other extension, compromise or renewal of any Obligation, including any
increase in the Obligations resulting from the extension of additional credit
to any Pledgor or otherwise;

 

(d)           any reduction, limitation, impairment
or termination of any Obligation for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to (and
each Pledgor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, non-genuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any Obligation or otherwise;

 

(e)           any amendment to, rescission, waiver,
or other modification of, or any consent to departure from, any of the terms of
the Indenture or any Security Document;

 

(f)            any addition, exchange, release,
surrender or non-perfection of any collateral (including the Collateral), or
any amendment to or waiver or release of or addition to or consent to departure
from any guaranty, for any of the Obligations; or

 

(g)           any other circumstances which might
otherwise constitute a defense available to, or a legal or equitable discharge
of, the Parent, the Company, any other Pledgor  or otherwise.

 

2.7          Pledgors Remain Liable.  Anything herein to the contrary
notwithstanding (a) the exercise by the Agent of any of its rights hereunder
shall not release any Pledgor from any of its duties or obligations under any
contracts or agreements included in the Collateral and (b) none of the Agent,
the Trustee or any other Holder shall have any obligation or liability under
any such contracts or agreements included in the Collateral by reason of this
Agreement, nor shall the Agent, the Trustee or any other Holder be obligated to
perform any of the obligations or duties of any Pledgor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.

 

2.8          Subrogation.  Until the Termination Date, no Pledgor shall
exercise any claim or other rights which it may now or hereafter acquire
against any other Pledgor that arises from the existence, payment, performance
or enforcement of such Pledgor’s obligations under this Agreement, including
any right of subrogation, reimbursement, exoneration or indemnification,

 

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any right to participate in any claim or remedy against any other
Pledgor or any collateral which the Agent now has or hereafter acquires,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including the right to take or receive from any other
Pledgor, directly or indirectly, in cash or other property or by set-off or in
any manner, payment or security on account of such claim or other rights.  If any amount shall be paid to any Pledgor
in violation of the preceding sentence, such amount shall be deemed to have
been paid for the benefit of the Holders, and shall forthwith be paid to the
Agent to be credited and applied upon the Obligations, whether matured or
unmatured.  Each Pledgor acknowledges
that it will receive direct and indirect benefits for the financing
arrangements contemplated by the Indenture and the Security Documents and that
the agreement set forth in this Section is knowingly made in contemplation
of such benefits.

 

2.9          Release; Termination.  (a) 
Upon any sale, transfer or other disposition of any item of Collateral
of any Pledgor in accordance with the Indenture, the Agent will, at such
Pledgor’s expense and without any representations, warranties or recourse of
any kind whatsoever, execute and deliver to such Pledgor such documents as such
Pledgor shall reasonably request to evidence the release of such item of
Collateral from the pledge, assignment and security interest granted hereby; provided,
however, that (i) such Pledgor shall have delivered to the Agent a
written request for release describing the item of Collateral, together with a
form of release for execution by the Agent (which release shall be in form and
substance satisfactory to the Agent) and a certificate of such Pledgor to the
effect that the transaction is in compliance with the Indenture and the
Security.

 

(a)           Subject to the terms of the
Intercreditor Agreement, upon the Termination Date, (i) the pledge, assignment
and security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Pledgor, and (ii) the Agent will,
within a reasonable time thereafter, at the applicable Pledgor’s expense and
without any representations, warranties or recourse of any kind whatsoever,
execute and deliver to such Pledgor such documents as such Pledgor shall
reasonably request to evidence such termination and deliver to such Pledgor all
certificates and instruments representing or evidencing the Collateral then
held by the Agent.

 

ARTICLE III 

REPRESENTATIONS AND WARRANTIES

 

Each Pledgor represents and warrants unto the Agent
and each Holder, as at the date of each pledge and delivery hereunder (including
each pledge and delivery of a Pledged Equity Interest and each pledge and
delivery of a Pledged Note or a Pledged Bond) by such Pledgor to the Agent of
any Collateral, as set forth in this Article.

 

3.1          Ownership; No Liens, etc.  (a) Schedule I hereto accurately
identifies as of the date hereof and as of each date such Schedule is
supplemented pursuant to Section 4.1(b) hereof each Investment in
any other Person maintained by such Pledgor as of such date, other than
Investments permitted by the Indenture (the “Designated Investments”)
and the following other investments not pledged under this Agreement:

 

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(i)            in the case of Investments in a
Securities Issuer which is an Excluded Foreign Subsidiary, 34% of the issued
and outstanding voting capital stock of such Person;

 

(ii)           financial assets maintained in
deposit accounts or securities accounts pursuant to the Security Agreement and
subject to any account control agreement as may be required thereunder; and

 

(iii)          permitted Guarantees.

 

(b)           Such Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) such Collateral, free and clear of all
Liens, except for First Priority Lien and this security interest granted
pursuant hereto in favor of the Agent.

 

3.2          Valid Security Interest.  The delivery of such Collateral to the Agent
(or its bailee) is effective to create a valid, perfected, first priority
security interest in such Collateral and all Proceeds thereof, subject to no
other Liens other than First Priority Liens, securing the payment of the
Obligations.  No filing or other action
will be necessary to perfect or protect such security interest.

 

3.3          As to Pledged Notes and Pledged Bonds.
To the best of Pledgor’s knowledge, each Pledged Note and each Pledged Bond has
been duly authorized, executed, indorsed, issued and delivered, and is the
legal, valid and binding obligation of the relevant Securities Issuer thereof,
and is not in default.

 

3.4          As to Pledged Shares.  In the case of any Pledged Share
constituting such Collateral, all of such Pledged Shares are duly authorized
and validly issued, fully paid, and non-assessable, and constitute 100% (or, in
the case of a Securities Issuer that is an Excluded Foreign Subsidiary, 66%) of
the issued and outstanding voting capital stock and 100% of the non-voting
shares of capital stock of each Securities Issuer thereof.  The Pledgors have no Subsidiaries other than
those set forth on Schedule 3.4 hereto.

 

3.5          As to Pledged Membership Interests and
Pledged Partnership Interests, etc.   (a) In the case of any Pledged Membership Interests and Pledged
Partnership Interests constituting a part of the Collateral, all of such
Pledged Equity Interests are duly authorized and validly issued, fully paid,
and non-assessable, and constitute all of the issued and outstanding Equity
Interests held by such Pledgor in the applicable Securities Issuer.

 

(b)           Each
LLC Agreement and Partnership Agreement to which such Pledgor is a party, true
and complete copies of which have been furnished to the Agent, has been duly
authorized, executed, and delivered by such Pledgor, has not been amended or
otherwise modified except as permitted hereunder, is in full force and effect,
and is binding upon and enforceable against such Pledgor in accordance with its
terms, except as such enforceability may be affected by the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights or remedies of
creditors generally.  There exists no
default under any such LLC Agreement or Partnership Agreement by such Pledgor.

 

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(c)           Each such LLC Agreement and
Partnership Agreement, as the case may be, expressly provides  that
the Pledged Membership Interests or Pledged Partnership Interests, as the case
may be, are not “securities” governed by Article 8 of the applicable
Uniform Commercial Code.

 

(d)           Such Pledgor’s Equity Interest in the
applicable Securities Issuer is set forth in Schedule I hereto, as
supplemented from time pursuant to Section 4.1(b), and Schedule I,
as so supplemented, accurately reflects whether such Equity Interest is in
certificated form.

 

(e)           Such Pledgor had and has the power
and legal capacity to execute and carry out the provisions of all such LLC
Agreements and Partnership Agreements, as the case may be, to which it is a
party.  Such Pledgor has substantially
performed all of its obligations to date under all such LLC Agreements and
Partnership Agreements, as the case may be, and has not received notice of the
failure of any other party thereto to perform its obligations thereunder.

 

(f)            The state of organization of each
Securities Issuer is as set forth in Schedule I hereto.

 

3.6          Authorization, Approval, etc.  No authorization, approval, or other action
by, and no notice to or filing with, any Governmental Authority or any other
Person is required either:

 

(a)           for the pledge by such Pledgor of any
Collateral pursuant to this Agreement or for the execution, delivery, and
performance of this Agreement by such Pledgor; or

 

(b)           for the exercise by the Agent of the
voting or other rights provided for in this Agreement or the remedies in
respect of the Collateral pursuant to this Agreement, except, with respect to
the Pledged Equity Interests, as may be required in connection with a
disposition of such Pledged Equity Interests by any Requirement of Law
affecting the offering and sale of securities generally.

 

3.7          Security Documents.  Each Pledgor makes each representation and
warranty made in each of the Security Documents by the Parent or the Company or
any other Guarantor with respect to such Pledgor as if such representation and
warranty were expressly set forth herein.

 

ARTICLE IV 

COVENANTS

 

Each Pledgor covenants and agrees that, until the
Termination Date, such Pledgor will, unless the Agent with the consent of the
Required Holders shall otherwise agree in writing, perform the obligations set
forth in this Section.

 

4.1          Protect Collateral; Further
Assurances, etc.  (a)
No Pledgor will create or suffer to exist any Lien on the Collateral (except a
Lien in favor of the Agent and First Priority Liens).  Each Pledgor will warrant and defend the right and title herein
granted unto the Agent in

 

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and to the Collateral (and all right, title, and interest represented
by the Collateral) against the claims and demands of all Persons whomsoever.

 

(b)           Promptly following any Investment
(other than a Designated Investment) made by any Pledgor in any other Person
after the date hereof which is not described in Schedule I hereto
and, in any case, not later than 30 days after each such Investment, each of
the Parent and the Company, on behalf of such Pledgor, shall deliver a
supplement to Schedule I hereto which supplement shall accurately
describe such Investment, together with a certificate of Responsible Officers
certifying that, as of the date thereof and after giving effect to the
supplement to such schedule delivered therewith, the representations and
warranties in Article III hereof are true and correct.  Following receipt by any Pledgor of any
promissory note or certificate evidencing any such Investment made by any
Pledgor in any such Person which has not been delivered by such Pledgor to the
Agent in pledge hereunder, such Pledgor shall deliver such promissory note or
other certificate to the Agent (or its bailee), indorsed and accompanied by instruments
of transfer or assignment as contemplated by Section 2.3 hereof.

 

(c)           Each Pledgor agrees that at any time,
and from time to time, at the expense of such Pledgor, such Pledgor will
promptly execute and deliver all further instruments, and take all further
action, that may be necessary, or that the Agent may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral; provided that every two
years on the anniversary of the Closing Date and within 15 days after the
Agent’s request therefor, the Company shall furnish the Agent an Opinion of
Counsel with respect to such perfection and maintenance.

 

(d)           Each Pledgor will not permit any
Securities Issuer of any Pledged Equity Interests pledged by such Pledgor
hereunder to issue any certificated Equity Interest unless the same (or, in the
case of a Securities Issuer that is an Excluded Foreign Subsidiary, 66% of the
same that are voting Equity Interests) is immediately delivered in pledge to
the Agent hereunder.

 

4.2          Powers, Control, etc.  (a) Each Pledgor agrees that all
certificated Pledged Equity Interests (and all other certificated Equity
Interests constituting Collateral) delivered by such Pledgor pursuant to this
Agreement will be accompanied by duly executed undated blank powers, or other
equivalent instruments of transfer acceptable to the Agent.

 

(b)           With
respect to any Pledged Equity Interests in which any Pledgor has any right,
title or interest and that constitutes an uncertificated security, such Pledgor
will cause the applicable Securities Issuer either (i) to register the Agent
(or its bailee) as the registered owner of such Pledged Equity Interest or (ii)
to deliver a written acknowledgement and agreement to the Agent (or its bailee)
(A) to acknowledge the security interest of the Agent in such Pledged Equity
Interest granted hereunder, (B) to confirm that such Securities Issuer has
marked the company register for such Pledged Equity Interest or other
applicable records to reflect such security interest of the Agent, (C) to
confirm to the Agent that it has not received notice of any other Lien in such
Pledged Equity Interest (and has not agreed to accept instructions from any
other Person in respect of such Pledged Equity Interest and will not accept or
execute any instructions to transfer ownership of such Pledged Equity Interest
unless consented to in writing by the Agent) and (D) to agree with such Pledgor
and the Agent that, after the occurrence and

 

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during the continuation of an Event of Default, such Securities Issuer
will comply with instructions with respect to such Pledged Equity Interest
originated by the Agent without further consent of such Pledgor, such
acknowledgement and agreement to be in form and substance reasonably
satisfactory to the Agent.

 

(c)           Each Pledgor which is the Securities
Issuer of any Pledged Equity Interests in which any other Pledgor has any
right, title, or interest, hereby (i) acknowledges the security interest of the
Agent in such Pledged Equity Interests granted by such other Pledgor hereunder,
(ii) confirms that it has marked its register for such Pledged Equity Interests
or other applicable company records to reflect such security interest of the
Agent, (iii) confirms that it has not received notice of any other Lien in such
Pledged Equity Interests (and has not agreed to accept instructions from any
other person in respect of such Pledged Equity Interests and will not accept or
execute any instructions to transfer ownership of such Pledged Equity Interest
unless consented to in writing by the Agent), (iv) agrees that it will comply
with the instructions with respect to such Pledged Equity Interests originated
by the Agent without further consent of such other Pledgor and (v) unless the
Partnership Agreement or LLC Agreement, as the case may be, of any such Pledgor
already so provides on the date such Pledgor becomes a party to this Agreement,
agrees to promptly prepare, execute and deliver to each of its partners or
members, as the case may be, any amendment or supplement to such Partnership
Agreement or LLC Agreement, as the case may be, as may be necessary to
expressly provide  that the Equity Interests of such Pledgor are not
“securities” governed by Article 8 of the applicable Uniform Commercial
Code (and each Pledgor which is a partner or member of such Pledgor shall
promptly execute and deliver such amendment).

 

(d)           Each Pledgor will, from time to time
upon the request of the Agent, promptly deliver to the Agent such powers,
instruments, and similar documents, satisfactory in form and substance to the
Agent, with respect to the Collateral as the Agent may reasonably request and
will, from time to time upon the request of the Agent after the occurrence of
any Event of Default, promptly transfer any Pledged Equity Interests or other
Equity Interests constituting Collateral into the name of any nominee
designated by the Agent.

 

4.3          Continuous Pledge.  Subject to Section 2.4, each
Pledgor will, at all times, keep pledged to the Agent pursuant hereto all
Pledged Equity Interests and all other Equity Interests constituting
Collateral, all Dividends and Distributions with respect thereto, all Pledged
Notes, all Pledged Bonds, all interest, principal and other proceeds received
by any Pledgor with respect to the Pledged Notes, the Pledged Bonds, and all
other Collateral and other securities, instruments, proceeds, and rights from
time to time received by or distributable to such Pledgor in respect of any
Collateral.

 

4.4          Voting Rights; Dividends, etc.  Each Pledgor agrees:

 

(a)           after any Event of Default shall have
occurred and be continuing, promptly upon receipt thereof by such Pledgor and
without any request therefor by the Agent, to deliver (properly indorsed where
required hereby or requested by the Agent) to the Agent (or its bailee) all
Dividends, Distributions, interest, principal, other cash payments, and
proceeds of the Collateral, all of which shall be held by the Agent (or its
bailee) as additional Collateral for use in accordance with Section 6.4;
and

 

11

 

(b)           after any Event of Default shall have
occurred and be continuing and the Agent has notified such Pledgor of the
Agent’s intention to exercise its voting rights under this clause:

 

(i)            the Agent may exercise (to the
exclusion of such Pledgor) the voting power and all other incidental rights of
ownership with respect to any Pledged Equity Interests or other Equity
Interests constituting Collateral and such Pledgor hereby grants the Agent an
irrevocable proxy, exercisable under such circumstances, to vote the Pledged
Equity Interests and such other Collateral; and

 

(ii)           such Pledgor shall promptly deliver
to the Agent such additional proxies and other documents as may be necessary to
allow the Agent to exercise such voting power.

 

All
Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by any Pledgor but which
such Pledgor is then obligated to deliver to the Agent (or its bailee) as a
result of the occurrence of an Event of Default, shall, until delivery to the
Agent (or its bailee), be held by each Pledgor separate and apart from its
other property in trust for the Agent. 
The Agent agrees that until an Event of Default shall have occurred and
be continuing and the Agent shall have given the notice referred to in clause
(b) above, each Pledgor shall have the exclusive voting power with respect
to any Equity Interests constituting Collateral and the Agent shall, upon the
written request of each Pledgor, promptly deliver such proxies and other
documents, if any, as shall be reasonably requested by each Pledgor which are
necessary to allow such Pledgor to exercise voting power with respect to any
such Equity Interests constituting Collateral; provided, however,
that no vote shall be cast, or consent, waiver, or ratification given, or
action taken or any action not taken by the Pledgor that would impair any
Collateral or be inconsistent with or violate any provision of the Indenture or
any Security Document (including this Agreement).

 

4.5          As to LLC Agreements and Partnership
Agreements.  (a) Each
Pledgor of a Pledged Membership Interest and/or Pledged Partnership Interests
shall at its own expense:

 

(i)            perform and observe all the terms
and provisions of each LLC Agreement and/or Partnership Agreement, as the case
may be, to which it is a party and each other contract and agreement included
in all the Collateral to be performed or observed by it, maintain such LLC
Agreement and/or Partnership Agreement, as the case may be, and each such other
contract and agreement in full force and effect, enforce such LLC Agreement
and/or Partnership Agreement, as the case may be, and each such other contract
and agreement in accordance with its terms, and take all such action to such
end as may from time to time be reasonably be requested by the Agent; and

 

(ii)           furnish to the Agent promptly upon
receipt thereof copies of all material notices, requests and other documents
received by such Pledgor under or pursuant to such LLC Agreement and/or
Partnership Agreement, as the case may be, and any other contract or agreement
included in the Collateral to which it is a party, and from time to time (A)
furnish to the Agent such information and reports regarding the Collateral as
the Agent may reasonably request, and (B) upon the reasonable request of the Agent,
make to any other party to such LLC

 

12

 

Agreement and/or Partnership Agreement, as the case may be, or any such
other contract or agreement such demands and requests for information and
reports or for action as such Pledgor is entitled to make thereunder.

 

(b)           No Pledgor of a Pledged Membership
Interest and/or Pledged Partnership Interest, as the case may be, shall, except
as otherwise permitted by the Indenture or any Security Documents:

 

(i)            cancel or terminate any LLC
Agreement, Partnership Agreement or any other contract or agreement included in
the Collateral to which it is a party or consent to or accept any cancellation
or termination thereof;

 

(ii)           amend or otherwise modify any such
LLC Agreement, Partnership Agreement or any such contract or agreement or give
any consent, waiver, or approval thereunder;

 

(iii)          waive any default under or breach of
any such LLC Agreement, Partnership Agreement or any such other contract or
agreement; or

 

(iv)          take any other action in connection
with any such LLC Agreement or any such other contract or agreement that would
impair the value of the interest or rights of such Pledgor thereunder or that
would impair the interest or rights of the Agent.

 

4.6          As to Pledged Notes and Pledged Bonds.  No Pledgor will, without the prior written
consent of the Agent:

 

(a)           enter into any agreement amending,
supplementing, or waiving any provision of any Pledged Note or Pledged Bond
(including any underlying instrument pursuant to which such Pledged Note or
Pledged Bond is issued) or compromising or releasing or extending the time for
payment of any obligation of the maker thereof or obligor thereon; or

 

(b)           take or omit to take any action the
taking or the omission of which could result in any impairment or alteration of
any obligation of the maker or obligor on of any Pledged Note, Pledged Bond or
other instrument constituting Collateral.

 

ARTICLE V 

THE AGENT

 

5.1          Appointment as Attorney-in-Fact.  Each Pledgor hereby irrevocably constitutes
and appoints the Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Pledgor and in the name of
such Pledgor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take, upon the occurrence and during the continuation of any
Event of Default, any and all appropriate action and to execute any and all
documents and instruments that may be necessary or desirable to accomplish the
purposes of this Agreement. Without limiting the generality of the foregoing
(and in addition to the powers and rights granted to the Agent pursuant to
Section 17 of the Security Agreement), each Pledgor hereby gives the

 

13

 

Agent the power and right, on behalf of such Pledgor, without notice to
or assent by such Pledgor, to do any or all of the following:

 

(a)           in the name of such Pledgor or its
own name, or otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
under or in respect of any Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Agent for the purpose of collecting any and all such moneys
due under or in respect of any Collateral whenever payable; and

 

(b)           (i) direct any party liable for any
payment under any of the Collateral to make payment of any and all moneys due
or to become due thereunder directly to the Agent or as the Agent shall direct;
(ii) ask or demand for, collect, and receive payment of and give receipt for,
any and all moneys, claims and other amounts due or to become due at any time
in respect of or arising out of any Collateral; (iii)  receive, collect, sign and
indorse any drafts or other instruments, documents and chattel paper in
connection with any of the Collateral; (iv) commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce
any other right in respect of any Collateral; (v) defend any suit, action or
proceeding brought against such Pledgor with respect to any Collateral; (vi)
settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Agent may deem
appropriate; and (vii) generally, sell, transfer, pledge and make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though the Agent were the absolute owner thereof for all
purposes, and do, at the Agent’s option and such Pledgor’s expense, at any
time, or from time to time, all acts and things that the Agent deems necessary
to protect, preserve or realize upon the Collateral and the Holder’s security
interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Pledgor might do.

 

Each Pledgor hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section is irrevocable and coupled with
an interest.

 

5.2          Agent May Perform.  If any Pledgor fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of the Agent incurred in
connection therewith shall be payable by such Pledgor pursuant to Section 6.5.

 

5.3          Agent Has No Duty.  (a) 
In addition to, and not in limitation of, Section 2.7, the
powers conferred on the Agent hereunder are solely to protect its interest (on
behalf of the Trustee and the Holders) in the Collateral and shall not impose
any duty on it to exercise any such powers. Neither the Agent nor any of its
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof (including the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral). 
Neither the Agent nor any of its officers, directors, employees or
agents shall be responsible to any Pledgor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

 

14

 

(b)           Each
Pledgor assumes all responsibility and liability arising from or relating to
the use, sale or other disposition of the Collateral.  The Obligations shall not be affected by any failure of the Agent
to take any steps to perfect the pledge and security interest granted hereunder
or to collect or realize upon the Collateral, nor shall loss or damage to the
Collateral release any Pledgor from any of its Obligations.

 

ARTICLE VI 

REMEDIES

 

6.1          Certain Remedies.  If any Event of Default shall have occurred
and be continuing:

 

(a)           The Agent may exercise in respect of
the Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the UCC and also may, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by applicable Requirements of Law referred to below) to or upon
any Pledgor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), sell, lease, assign, give option
or options to purchase, or otherwise dispose of and deliver the Collateral or
any part thereof (or contract to do any of the foregoing) in one or more parcels
at public or private sale, at any of the Agent’s offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the Agent
may deem commercially reasonable.  Each
Pledgor agrees that, to the extent notice of sale shall be required by
applicable Requirements of Law, at least ten (10) days’ prior written notice to
such Pledgor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.  The Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given.  The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.

 

(b)           The Agent may:

 

(i)            transfer all or any part of the
Collateral into the name of the Agent or its nominee, with or without
disclosing that such Collateral is subject to the lien and security interest
hereunder;

 

(ii)           notify the parties obligated on any
of the Collateral to make payment to the Agent of any amount due or to become
due thereunder;

 

(iii)          enforce collection of any of the
Collateral by suit or otherwise, and surrender, release or exchange all or any
part thereof, or compromise or extend or renew for any period (whether or not
longer than the original period) any obligations of any nature of any party
with respect thereto;

 

(iv)          indorse any checks, drafts, or other
writings in each Pledgor’s name to allow collection of the Collateral;

 

(v)           take control of any proceeds of the
Collateral;

 

15

 

(vi)          execute (in the name, place and stead
of each Pledgor) indorsements, assignments, stock powers and other instruments
of conveyance or transfer with respect to all or any of the Collateral; and

 

(vii)         enforce compliance with, and take any
and all actions with respect to, a LLC Agreement or Partnership Agreement, as
the case may be, to the full extent as though the Agent were the absolute owner
of the Pledged Membership Interests, Pledged Partnership Interests and other
Collateral, including the right to receive all distributions and other payments
that are made pursuant to such LLC Agreement or Partnership Agreement, as the
case may be.

 

The Agent shall give the Pledgors ten (10) days’ prior
written notice (which each Pledgor agrees is reasonable notice within the
meaning of Section 9-612 of the UCC) of the Agent’s intention to make any
sale of Collateral.  Such notice, in the
case of a public sale, shall state the time and place for such sale and, in the
case of a sale at a broker’s board or on a securities exchange, shall state the
board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange.  Any such public sale shall be
held at such time or time within ordinary business hours and at such place or
places as the Agent may fix and state in the notice (if any) of such sale.  At any such sale, the Collateral, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Agent may (in its sole and absolute discretion) determine.  The Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given.  The Agent may, without notice or publication
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale
may, without further notice, be made at the time and place to which the same
was so adjourned.  In case any sale of
all or any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Agent until the sale price is paid by
the purchase or purchasers thereof, but the Agent shall not incur any liability
in case any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may be
sold again upon like notice.  At any
public (or, to the extent permitted by applicable Requirements of Law, private)
sale made pursuant to this Section, the Agent (for the Holders) may bid for or
purchase, free (to the extent permitted by applicable Requirements of Law) from
any right of redemption, stay, valuation or appraisal on the part of any
Pledgor (all said rights being also hereby waived and released to the extent
permitted by applicable Requirements of Law), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
claim then due and payable to such Holder from any Pledgor as a credit against
the purchase price, and the Agent (for such Holder) may upon compliance with
the terms of sale, hold, retain and dispose of such property without further
accountability to any Pledgor therefor.

 

6.2          Securities Laws.  If the Agent shall determine to exercise its
right to sell all or any of the Collateral pursuant to Section 6.1,
each Pledgor agrees that, upon request of the Agent, such Pledgor will, at its
own expense:

 

(a)           execute and deliver, and cause each
issuer of the Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts and things, as may be necessary or, in

 

16

 

the opinion of the Agent, advisable to register such Collateral under
the provisions of the Securities Act of 1933, as from time to time amended (the
“Securities Act”), and to cause the registration statement relating
thereto to become effective and to remain effective for such period as
prospectuses are required by Law to be furnished, and to make all amendments
and supplements thereto and to the related prospectus which, in the opinion of
the Agent, are necessary or advisable, all in conformity with the requirements
of the Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto;

 

(b)           use its best efforts to qualify the
Collateral under the state securities or “Blue Sky” Laws and to obtain all
necessary governmental approvals for the sale of the Collateral, as requested
by the Agent;

 

(c)           cause each such issuer to make
available to its security holders, as soon as practicable, an earnings
statement that will satisfy the provisions of Section 11(a) of the
Securities Act; and

 

(d)           do or cause to be done all such other
acts and things as may be necessary to make such sale of the Collateral or any
part thereof valid and binding and in compliance with applicable Requirements
of Law.

 

Each Pledgor further acknowledges the impossibility of ascertaining the
amount of damages that would be suffered by the Agent or the Holders by reason
of the failure by such Pledgor to perform any of the covenants contained in
this Section 6.2 and, consequently, to the extent permitted under
applicable Requirements of Law, agrees that, if such Pledgor shall fail to
perform any of such covenants, it shall pay, as liquidated damages and not as a
penalty, an amount equal to the value (as determined by the Agent) of the
Collateral on the date the Agent shall demand compliance with this Section 6.2.

 

6.3          Compliance with Restrictions.  Each Pledgor agrees that in any sale of any
of the Collateral whenever an Event of Default shall have occurred and be
continuing, the Agent is hereby authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable Requirements of Law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and each
Pledgor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Agent be liable nor accountable to any Pledgor for any discount
allowed by reason of the fact that such Collateral is sold in compliance with
any such limitation or restriction.

 

6.4          Application of Proceeds.  All cash proceeds received by the Agent in
respect of any sale of, collection from, or other realization upon, all or any
part of the Collateral shall be applied (after payment of any amounts payable
to the Agent pursuant to Section 20 of the Security Agreement and Section 6.5
below) in whole or in part by the Agent for the benefit of

 

17

 

the Holders against all or any part of the Obligations in accordance
with the Indenture.  Any surplus of such
cash or cash proceeds held by the Agent and remaining after payment in full in
cash of all the Obligations and the termination of this Agreement as provided
in Section 2.9(b) hereof, shall be paid over to the applicable
Pledgor or to whomsoever may be lawfully entitled to receive such surplus.

 

6.5          Indemnity and Expenses.  Each Pledgor agrees to jointly and severally
indemnify and hold harmless the Agent and the Holders and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (each, an “Indemnified Party”) from and against, and
shall pay on demand, any and all liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs and expenses and
disbursements (including reasonable attorneys’ fees and expenses) of any kind
or nature whatsoever which may be at any time imposed on, incurred by or
asserted against such Indemnified Party in any way relating to or arising out
of or in connection with this Agreement, the Indenture and the other Security
Documents (including enforcement of this Agreement and the other Security
Documents), provided that such indemnity shall not, as to any
Indemnified Party, be available to the extent that such liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted primarily
from the gross negligence or willful misconduct of such Indemnified Party. Each
Pledgor will, upon demand, pay to the Agent the amount of any and all
reasonable expenses, including reasonable attorneys’ fees and expenses and the
reasonable fees and disbursements of any experts and agents, which the Agent
may incur, subject to the foregoing limitations, in connection with the
following:

 

(a)           the administration of this Agreement
and the other Security Documents;

 

(b)           the custody, preservation, use or operation
of, or the sale of, collection from, or other realization upon, any of the
Collateral;

 

(c)           the exercise or enforcement of any of
the rights of the Agent hereunder or of any Holder; or

 

(d)           the failure by any Pledgor to perform
or observe any of the provisions hereof.

 

6.6          Waivers.  Each Pledgor hereby waives any right, to the
extent permitted by applicable Requirements of Law, to receive prior notice of
or a judicial or other hearing with respect to any action or prejudgment remedy
or proceeding by the Agent to take possession, exercise control over or dispose
of any item of Collateral where such action is permitted under the terms of
this Agreement, the Indenture or any other Security Document or by applicable
Requirements of Law or the time, place or terms of sale in connection with the
exercise of the Agent’s rights hereunder. 
Each Pledgor waives, to the extent permitted by applicable Requirements
of Law, any bonds, security or sureties required by the Agent with respect to
any of the Collateral.  Each Pledgor
also waives any damages (direct, consequential or otherwise) occasioned by the
enforcement of the Agent’s rights under this Agreement, the Indenture or any
other Security Document, including, the taking of possession of any Collateral,
all to the extent that such waiver is permitted by applicable Requirements of
Law.  These waivers and all other

 

18

 

waivers provided for in this Agreement, the Indenture and the other
Security Documents have been negotiated by the parties and each Pledgor
acknowledges that it has been represented by counsel of its own choice and has
consulted such counsel with respect to its rights hereunder.

 

ARTICLE VII 

MISCELLANEOUS PROVISIONS

 

7.1          Security Document.  (a) 
This Agreement is a Security Document executed pursuant to the Indenture
and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof.

 

(b)           Concurrently herewith each Pledgor is
executing and delivering the Security Agreement pursuant to which such Pledgor
is granting a security interest to the Agent in all of the properties and
assets of such Pledgor (other than the Collateral hereunder).  Such security interests shall be governed by
the terms of the Security Agreement and not by this Agreement.

 

7.2          Amendments,
etc.; Successors and Assigns.

 

(a)           No amendment to or waiver of any
provision of this Agreement nor consent to any departure by any Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent and, with respect to any such amendment, by the
Pledgors, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

 

(b)           Upon delivery by the Company of each
certificate of Responsible Officers certifying a supplement to Schedule I
pursuant to Section 4.1(b), the schedule supplement attached
to each such certificate shall be incorporated into and become part of and
supplement Schedule I hereto, and the Agent may attach such
schedule supplement to such Schedule and each reference to such
Schedule shall mean and be a reference to such Schedule, as supplemented
pursuant hereto.

 

(c)           This Agreement shall be binding upon
each Pledgor and its successors, transferees and assigns and shall inure to the
benefit of the Agent, the Trustee and each Holder and their respective
successors, transferees and assigns; provided, however, that no
Pledgor may assign its obligations hereunder without the prior written consent
of the Agent.

 

7.3          Addresses for Notices.  All notices and other communications
provided for hereunder shall be in writing and mailed, delivered or transmitted
by facsimile to either party hereto at the address set forth in
Section 12.02 of the Indenture (with any notice to a Pledgor other than
the Company being delivered to such Pledgor in care of the Company).  All such notices and other communications
shall be deemed to be given or made at the times provided in Section 12.02
of the Indenture; provided, however that notice to the Agent shall be delivered
to the following address or such other address as notified by the Agent from
time to time:

 

The Bank of New York

101 Barclay Street

Floor 8 West

New York, New York  10286

Attention: 
Corporate Trust Administration

 

Fax:  212-815-5704

 

19

 

7.4          Section Captions.  Section captions used in this Agreement
are for convenience of reference only, and shall not affect the construction of
this Agreement.

 

7.5          Severability.  If any provision of this Agreement is held
to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement shall not be
affected or impaired thereby and (b) the parties shall endeavor in good faith
negotiations to replace the illegal, invalid or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

 

7.6          Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.

 

7.7          Governing
Law, etc.  (a)  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY
OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK; PROVIDED, THAT THE AGENT SHALL RETAIN
ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN
NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY SHALL BE BROUGHT, AT THE AGENT’S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH PLEDGOR AND THE AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH OF THE PLEDGORS AND THE AGENT IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR OTHER DOCUMENT RELATED THERETO. 
EACH PLEDGOR HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEM OF NEW YORK,
NEW YORK AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE SERVICE OF ANY AND

 

20

 

ALL PROCESS WHICH MAY BE SERVED
IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED TO IN THIS
SECTION 7.7 AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION
OR PROCEEDING UPON CT CORPORATION OF NEW YORK, NEW YORK IN ANY MANNER PERMITTED
BY LAW OR BY THE MAILING OF A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO SUCH PLEDGOR’S ADDRESS REFERRED
TO IN SECTION 7.3.  EACH PLEDGOR
AGREES THAT SUCH SERVICE (i) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE
OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (ii) SHALL, TO
THE FULLEST EXTENT PERMITTED BY LAW, BE TAKEN AND HELD TO BE VALID PERSONAL
SERVICE UPON AND PERSONAL DELIVERY TO IT. 
NOTHING IN THIS SECTION 7.7 SHALL AFFECT THE RIGHT OF THE AGENT OR
ANY HOLDER TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR LIMIT THE RIGHT
OF THE ADMININSTRATIVE AGENT OR ANY HOLDER TO BRING PROCEEDINGS AGAINST ANY
PLEDGOR IN THE COURTS OF ANY JURISDICTION OR JURISDICTIONS.

 

7.8          Waiver
of Jury Trial.  EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY SECURITY DOCUMENT OR IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO ANY SECURITY DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS
AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

7.9          Entire
Agreement.  THIS AGREEMENT, THE
INDENTURE AND THE OTHER SECURITY DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES OR BY PRIOR OR
CONTEMPORANEOUS WRITTEN AGREEMENTS. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

7.10        Intercreditor
Agreement.  The parties hereto acknowledge
that the Company, the Agent and the Trustee are parties to that certain
Intercreditor Agreement dated as of the date hereof among the Agent, the
Trustee and the Company (as amended, restated or supplemented from time to
time, the “Intercreditor Agreement”) and to the extent any agreement, covenant
or term herein conflicts with the Intercreditor Agreement, the Intercreditor
Agreement shall control.

 

21

 

[Signature Page Follows]

 

22

 

IN WITNESS WHEREOF, each Pledgor has caused this
Agreement to be duly executed and delivered by its respective officer thereunto
duly authorized as of the date first above written.

 

	
   

  	
  ACG
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick Kellick

  	
   

  
	
   

  	
  Name: Patrick Kellick

  
	
   

  	
  Title:   SVP/CFO

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN
  COLOR GRAPHICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Patrick
  Kellick

  	
   

  
	
   

  	
  Name: Patrick Kellick

  
	
   

  	
  Title:   SVP/CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED AND ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE BANK OF NEW YORK,

  as Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Robert
  A. Massimillo

  	
   

  	
   

  	
   

  
	
  Name: Robert A. Massimillo

  	
   

  	
   

  
	
  Title:   Vice President

  	
   

  	
   

  
						

 

23<Page>

                                                                     EXHIBIT 4.3

                               RAYOVAC CORPORATION

                    8 1/2% SENIOR SUBORDINATED NOTES DUE 2013

                             ----------------------

                             SUPPLEMENTAL INDENTURE
                          DATED AS OF OCTOBER 24, 2003

                                       TO

                                    INDENTURE
                         DATED AS OF SEPTEMBER 30, 2003

                             ----------------------

                                    U.S. BANK
                              NATIONAL ASSOCIATION,
                                   AS TRUSTEE

                             ----------------------

<Page>

                             SUPPLEMENTAL INDENTURE

     SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE") among Rayovac
Corporation, a Wisconsin corporation (the "COMPANY"), the Guarantors (as defined
in the Indenture referred to herein) and U.S. Bank National Association, as
Trustee under the Indenture referred to below (the "TRUSTEE"), dated as of
October 24, 2003.

                                   WITNESSETH

     WHEREAS, the Company, the Guarantors and the Trustee have heretofore
executed and delivered an Indenture, dated as of September 30, 2003 (the
"INDENTURE"), providing for the issuance of the Company's 8 1/2% Senior
Subordinated Notes due 2013 (the "NOTES"); and

     WHEREAS, the Company desires to simplify its corporate structure by (a)
converting Vestar Shaver Corp., a Delaware corporation, into Vestar Shaver,
L.L.C., a Delaware limited liability company and Vestar Razor Corp., a Delaware
corporation, into Vestar Razor, L.L.C., a Delaware limited liability company and
(b) merging each of Vestar Shaver, L.L.C, Vestar Razor, L.L.C., Remington
Capital Corp., Remington Rand Corporation and Remington Corporation, L.L.C. with
and into Remington Products Company, L.L.C. (each such merger a "CONSOLIDATION"
and, collectively, the "CONSOLIDATIONS"), as permitted by Section 4.20(c) of the
Indenture; and

     WHEREAS, the Company desires to amend the definition of "Guarantors" set
forth in the Indenture to reflect each Consolidation, effective in each case
upon the filing of a certificate of merger or similar document (in each case,
the "CERTIFICATE OF MERGER") with the appropriate governmental official to
evidence such Consolidation; and

     WHEREAS, Section 9.01(c) of the Indenture provides that the Company, the
Guarantors and the Trustee may amend or supplement the Indenture, the Guarantees
or the Notes without the consent of any Holder of a Note to provide for the
assumption of any Guarantor's obligations to the Holders of the Notes in the
case of a merger or consolidation or sale of all or substantially all of the
assets of such Guarantor; and

     WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

     NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, the Guarantors and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

     SECTION 1      DEFINITIONS.

     (a)  Capitalized terms used herein without definition shall have the
   meanings assigned to them in the Indenture.

     (b)  For all purposes of this Supplemental Indenture, except as otherwise
   herein expressly provided or unless the context otherwise requires: (i) the
   terms and expressions used herein shall have the same meanings as
   corresponding terms and expressions used in the Indenture; and (ii) the words
   "herein," "hereof" and "hereby" and other words of similar

                                        2
<Page>

   import used in this Supplemental Indenture refer to this Supplemental
   Indenture as a whole and not to any particular section hereof.

     SECTION 2.     GUARANTORS. Pursuant to Section 9.01 of the Indenture,
the Company, Guarantors and the Trustee hereby amend the definition of the term
"Guarantors" set forth in the Indenture by deleting reference to, as
appropriate, upon the filing of the applicable Certificate of Merger, Remington
Capital Corporation, Remington Rand Corporation, Remington Corporation, L.L.C.,
Vestar Shaver Corp. and Vestar Razor Corp. from Schedule I to the Indenture to
reflect each Consolidation. For purposes of clarification, upon consummation of
all of the Consolidations and the filing of all of the Certificates of Merger,
Schedule I to the Indenture shall be identical to Schedule I-A attached hereto.

     SECTION 3.     RATIFICATION OF INDENTURE; SUPPLEMENTAL INDENTURES PART OF
INDENTURE. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. Upon the execution and delivery of this
Supplemental Indenture by the Company, the Guarantors and the Trustee and the
effectiveness of each provision hereof in accordance with its terms and
conditions, this Supplemental Indenture shall form a part of the Indenture for
all purposes, and every holder of Notes heretofore or hereafter authenticated
and delivered shall be bound hereby. Any and all references to the Indenture,
whether within the Indenture or in any notice, certificate or other instrument
or document, shall be deemed to include a reference to this Supplemental
Indenture (whether or not made), unless the context shall otherwise require.

     SECTION 4.     GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     SECTION 5.     SUCCESSORS.  All agreements of the Company in this
Supplemental Indenture shall bind its successors. All agreements of the Trustee
in this Supplemental Indenture shall bind its successors.

     SECTION 6.     SEVERABILITY.  In case any provision in this Supplemental
Indenture shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

     SECTION 7.     COUNTERPARTS.  The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.

     SECTION 8.     EFFECT OF HEADINGS.  The Section headings herein are for
convenience only and shall not affect the construction hereof.

     SECTION 9.     THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guarantors and the Company.

     SECTION 10.    ENTIRE AGREEMENT. This Supplemental Indenture, together
with the Indenture as amended hereby, the Guarantees and the Notes, contains the
entire agreement of the

                                        3
<Page>

parties, and supersedes all other representations, warranties, agreements and
understandings between the parties, oral or otherwise, with respect to the
matters contained herein and therein.

     SECTION 11.    BENEFITS OF SUPPLEMENTAL INDENTURE. Nothing in this
Supplemental Indenture, the Indenture, the Guarantees or the Notes, express or
implied, shall give to any Person, other than the parties hereto and thereto and
their successors hereunder and thereunder, and the Holders, any benefit of any
legal or equitable right, remedy or claim under the Indenture, the Supplemental
Indenture, the Guarantees or the Notes.

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all effective as of the dates
referenced.

Dated:  October 24, 2003

                                       RAYOVAC CORPORATION

                                       By: /s/ James T. Lucke
                                           --------------------------------
                                           Name: James T. Lucke
                                           Title: Senior Vice President, General
                                                  Counsel & Secretary

                                       ROV HOLDING, INC.

                                       By: /s/ James T. Lucke
                                           --------------------------------
                                           Name: James T. Lucke
                                           Title: Secretary & Treasurer

                                       ROVCAL, INC.

                                       By: /s/ James T. Lucke
                                           --------------------------------
                                           Name: James T. Lucke
                                           Title: Secretary & Treasurer

                                       REMINGTON PRODUCTS
                                       COMPANY, L.L.C.

                                       By: /s/ James T. Lucke
                                           --------------------------------
                                           Name: James T. Lucke
                                           Title: Secretary & Treasurer

                                        4
<Page>

                                       VESTAR SHAVER, L.L.C.

                                       By: /s/ James T. Lucke
                                           --------------------------------
                                           Name: James T. Lucke
                                           Title: Secretary & Treasurer

                                       VESTAR RAZOR, L.L.C.

                                       By: /s/ James T. Lucke
                                           --------------------------------
                                           Name: James T. Lucke
                                           Title: Secretary & Treasurer

                                       REMINGTON CAPITAL CORP.

                                       By: /s/ James T. Lucke
                                           --------------------------------
                                           Name: James T. Lucke
                                           Title: Secretary & Treasurer

                                       REMINGTON RAND
                                       CORPORATION

                                       By: /s/ James T. Lucke
                                           --------------------------------
                                           Name: James T. Lucke
                                           Title: Secretary & Treasurer

                                       REMINGTON CORPORATION, L.L.C.

                                       By: /s/ James T. Lucke
                                           --------------------------------
                                           Name: James T. Lucke
                                           Title: Secretary & Treasurer

                                       U.S. BANK NATIONAL
                                       ASSOCIATION, as Trustee

                                       By: /s/ Richard H. Prokosch
                                           --------------------------------
                                           Name: Richard H. Prokosch
                                           Title: Vice President

                                        5
<Page>

                                  SCHEDULE I-A

                                   GUARANTORS

                                ROV Holding, Inc.
                                  Rovcal, Inc.
                       Remington Products Company, L.L.C.

                                        6

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