Document:

awi-ex104_528.htm

Exhibit 10.4

 

AMENDED AND RESTATED CANADIAN PLEDGE AGREEMENT

 

THIS AMENDED AND RESTATED CANADIAN PLEDGE AGREEMENT (this “Pledge Agreement”), dated as of April 1, 2016, is by and among ARMSTRONG WORLD INDUSTRIES, INC., a Pennsylvania corporation (the “Pledgor”), and BANK OF AMERICA, N.A., as collateral agent (in such capacity, the “Collateral Agent”) for the holders of the Secured Obligations referenced below.

 

W I T N E S S E T H

 

WHEREAS, revolving credit and term loan facilities were established in favour of the Pledgor pursuant to the terms of that certain amended and restated credit agreement dated as of March 15, 2013 (as amended and modified prior to the Closing Date, the “Existing Credit Agreement”) among the Pledgor, Armstrong Wood Products, Inc., a Delaware corporation, certain of their respective Subsidiaries, as guarantors thereunder, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent for the lenders thereunder;

 

WHEREAS, in connection with the Existing Credit Agreement, the Pledgor entered into that certain Amended and Restated Canadian Pledge Agreement dated as of March 15, 2013 (the “Existing Pledge Agreement”);

 

WHEREAS, the Pledgor has requested certain modifications to the revolving credit and term loan facilities under the Existing Credit Agreement;

 

WHEREAS, the Lenders have agreed to the requested modifications on the terms and conditions provided  in that  certain  Amended  and  Restated  Credit  Agreement,  dated  as of  the  date  hereof  (as amended and modified, the “Credit Agreement”), among the Pledgor, certain of its Subsidiaries, as guarantors thereunder, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent for the lenders thereunder; and

 

WHEREAS, this Pledge Agreement is required under the terms of the Credit Agreement, and is given in amendment to, restatement of and substitution for the Existing Pledge Agreement provided in connection with the Existing Credit Agreement.

 

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

 

1.Definitions.

 

(a)        Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the definitions in Section 1.01 of the Credit Agreement provided however that for the purposes hereof, any references to the “Uniform Commercial Code” or “UCC” in such definitions shall and shall be deemed to mean “the UCC, the PPSA or the STA, as applicable”.  In addition, the following terms which are defined, as applicable, in (i) the UCC; (ii) the PPSA; or (iii) the STA are used as defined therein:  Accession, Financial Asset, Investment Property, Proceeds and Security.  For greater certainty, where any such term is defined in more than one of the UCC, PPSA or STA (each, an “Applicable Statute”), its meaning for the purposes of any provision of this Agreement where such term is used shall be the meaning ascribed to such term in the Applicable Statute that applies to such provision.

 

(b)As used herein, the following terms shall have the meanings set forth below:

 

“Collateral  Agent”  has  the  meaning  provided  in  the  introductory  paragraph  hereof, together with its successors and assigns.

 

“Credit Agreement” has the meaning provided in the recitals hereof.

 

“Event of Default” has the meaning provided in Section 8 hereof.

 

“Existing Credit Agreement” has the meaning provided in the recitals hereof.

 

“Existing Pledge Agreement” has the meaning provided in the recitals hereof.

 

“Pledge Agreement” has the meaning provided in the introductory paragraph hereof, as amended and modified.

 

“Pledged Collateral” has the meaning provided in Section 2 hereof.

 

“Pledged Shares” has the meaning provided in Section 2(a) hereof.

 

“Pledgor” has the meaning provided in the introductory paragraph hereof.

 

“PPSA” means the Personal Property Security Act as in force from time to time in the relevant province or territory of Canada.

 

“Secured Obligations” means, without duplication, (a) all Obligations and (b) all costs and expenses incurred in connection with enforcement and collection of the Secured Obligations, including reasonable legal fees and expenses.

 

“STA” means the Securities Transfer Act as in force from time to time in the relevant province or territory of Canada.

 

“UCC” means the Uniform Commercial Code as in effect in the state of New York from time to time.

 

2.          Pledge and Grant of Security Interest.  To secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations, the Pledgor hereby grants, pledges and assigns to the Collateral Agent, for the benefit of the holders of the Secured Obligations, a continuing security interest in any and all right, title and interest of the Pledgor in and to the following, whether now owned or existing or owned, acquired, or arising hereafter (collectively, the “Pledged Collateral”):

 

(a)        Pledged Shares.  Sixty-five percent (65%) (or, if less, the full amount owned by the Pledgor) of the issued and outstanding voting Capital Stock (or 100% of the non-voting Capital Stock) owned by the Pledgor of each Material First-Tier Foreign Subsidiary and each Excluded Subsidiary formed or existing under the laws of Canada, or any province or territory thereof, set forth on Schedule 2(a) attached hereto, in each case together with the certificates (or other agreements or instruments), if any, representing such Capital Stock, and all options and other rights, contractual or otherwise, with respect thereto (collectively, together with the Capital Stock described in Section 2(b) and 2(c) below, the “Pledged Shares”), including the following:

 

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(A)      all shares, securities, membership interests or other equity interests representing a dividend on any of the Pledged Shares, or representing a distribution or return of capital upon or in respect of the Pledged Shares, or resulting from a stock split, revision, reclassification or other exchange therefor, and any subscriptions, warrants, rights or options issued to the holder of, or otherwise in respect of, the Pledged Shares; and

 

(B)      without affecting the obligations of the Pledgor under any provision prohibiting such action hereunder or under the Credit Agreement, in the event of any consolidation or merger involving the issuer of any Pledged Shares and in which such issuer is not the surviving entity, all Capital Stock of the successor entity formed by or resulting from such consolidation or merger.

 

(b)        Additional Shares.  Sixty-five percent (65%) (or, if less, the full amount owned by the Pledgor) of the issued and outstanding voting Capital Stock (or 100% of the non-voting Capital Stock) owned by the Pledgor of any Person that hereafter becomes a Material First-Tier Foreign Subsidiary or an Excluded Subsidiary, formed or existing under the laws of Canada, or any province or territory thereof, including the certificates (or other agreements or instruments) representing such Capital Stock.

 

(c)Proceeds.  All Proceeds of any and all of the foregoing.

 

Without limiting the generality of the foregoing, it is hereby specifically understood and agreed that the Pledgor may from time to time hereafter deliver additional Capital Stock to the Collateral Agent as collateral security for the Secured Obligations.  Upon delivery to the Collateral Agent, such additional Capital Stock shall be deemed to be part of the Pledged Collateral of the Pledgor and shall be subject to the terms of this Pledge Agreement whether or not Schedule 2(a) is amended to refer to such additional Capital Stock.  Notwithstanding anything to the contrary contained herein, the security interests granted under this Pledge Agreement shall not extend to, and the “Pledged Collateral” shall not include, any Excluded Property.

 

3.Security for Secured Obligations.The security interest created hereby in the Pledged

Collateral of the Pledgor constitutes continuing collateral security for all of the Secured Obligations.

 

4.Delivery of the Pledged Collateral. The Pledgor hereby agrees that:

 

(a)        To the extent that Pledged Collateral is certificated, the Pledgor shall (subject to the provisions of Section 7.14 of the Credit Agreement) deliver to the Collateral Agent (i) simultaneously with or prior to the execution and delivery of this Pledge Agreement, all certificates representing the Pledged Shares of the Pledgor and (ii) promptly upon the receipt thereof by or on behalf of the Pledgor, all other certificates and instruments constituting Pledged Collateral of the Pledgor.   The Collateral Agent hereby acknowledges that the certificate representing the Pledged Shares of the Pledgor as of the date hereof was previously delivered to its counsel in connection with the Existing Pledge Agreement.  Prior to delivery to the Collateral Agent, all such certificates and instruments constituting Pledged Collateral of the Pledgor shall be held in trust by the Pledgor for the benefit of the Collateral Agent pursuant hereto.  All such certificates shall be delivered in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment in blank, substantially in the form provided in Exhibit 4(a) attached hereto.

 

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(b)        Additional Securities.  If the Pledgor shall receive by virtue of its being or having been  the  owner  of  any  Pledged  Collateral,  any  (i)  certificate,  including  any  certificate representing a dividend or distribution in connection with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares or other equity interests, stock splits, spin-off or split-off, promissory notes or other instruments; (ii) option or right, whether as an addition to, substitution for, or an exchange for, any Pledged Collateral or otherwise; (iii) dividends payable in securities; or (iv) distributions of securities in connection with a partial or total liquidation, dissolution or reduction of capital, capital surplus or paid-in surplus, then the Pledgor shall receive such certificate, instrument, option, right or distribution in trust for the benefit of the Collateral Agent, shall segregate it from the Pledgor’s other property and shall deliver it forthwith to the Collateral Agent in the exact form received together with any necessary endorsement and/or appropriate stock power duly executed in blank, substantially in the form provided in Exhibit 4(a), to be held by the Collateral Agent as Pledged Collateral and as further collateral security for the Secured Obligations.

 

(c)       Financing Statements.  To the extent required by applicable law, the Pledgor authorizes the Collateral Agent to file one or more financing statements disclosing the Collateral Agent’s security interest in the Pledged Collateral.  The Pledgor shall execute and deliver to the Collateral Agent such other applicable financing statements, other filings and other documents as may be reasonably requested by the Collateral Agent in order to perfect and protect the security interest created hereby in the Pledged Collateral of the Pledgor.

 

5.          Representations  and  Warranties.    The  Pledgor  hereby  represents  and  warrants  to  the Collateral Agent, for the benefit of the holders of the Secured Obligations, that so long as any of the Secured Obligations remains outstanding and until all of the commitments relating thereto have been terminated:

 

(a)        Authorization of Pledged Shares.  The Pledged Shares have been duly authorized and validly issued, are fully paid and non-assessable and are not subject to the pre-emptive rights of any Person.

 

(b)        Title. The Pledgor has good and indefeasible title to the Pledged Collateral of the Pledgor and is the legal and beneficial owner of such Pledged Collateral free and clear of any Lien, other than Permitted Liens.  With respect to the Pledged Shares of the Pledgor, there exists no “adverse claim” within the meaning of (i) Section 8-102 of the UCC or (ii) any corresponding provision of the PPSA.

 

(c)        Exercising of Rights.   The exercise by the Collateral Agent of its rights and remedies hereunder will not violate any Law or governmental regulation or any material contractual restriction binding on or affecting the Pledgor or any of its property.

 

(d)        Pledgor’s Authority.  No authorization, approval or action by, and no notice or filing with, any Governmental Authority or the issuer of any Pledged Shares, its directors or shareholders is required either (i) for the pledge made by the Pledgor or for the granting of the security interest by the Pledgor pursuant to this Pledge Agreement (except as have been already obtained) or (ii) for the exercise by the Collateral Agent or the holders of the Secured Obligations of their rights and remedies hereunder (except as may be required by Laws affecting the offering and sale of securities), except for such authorization, approvals or actions as have already been obtained or performed and are in full force and effect.  Without limiting the generality of the foregoing, there are no restrictions in any of the Organization Documents of the issuer of the Pledged Shares which would limit or restrict the grant of security interest hereunder or the

 

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exercise of the rights and remedies conferred hereby except such restrictions as have already been complied with.

 

(e)        Security Interest/Priority.  This Pledge Agreement creates a valid security interest in favour of the Collateral Agent for the benefit of the holders of the Secured Obligations, in the Pledged Collateral.  The taking of possession by the Collateral Agent or its duly authorized agent of the certificates representing the Pledged Shares, or the acknowledgement by such agent that it holds such certificates for the Agent, together with duly executed instruments of transfer or assignment in blank, substantially in the form provided in Schedule 4(a) attached hereto, and all other certificates and instruments constituting Pledged Collateral, will perfect and establish the first priority of the Collateral Agent’s security interest in the Pledged Shares, and such possession will establish the first priority of such security interest in all other Pledged Collateral represented by such Pledged Shares and instruments securing the Secured Obligations.  Except as set forth in this Section 5(e), no action is necessary at this time to perfect or otherwise protect such security interest.

 

(f)         Partnership  and  Membership  Interests.    As  of  the  date  hereof,  none  of  the Pledged Shares consist of partnership or limited liability company interests.  Except as previously disclosed to the Collateral Agent, none of the Pledged Shares consisting of partnership or limited liability company interests (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a security governed by Article 8 of the UCC or any corresponding provisions of the STA, (iii) is an investment company security, (iv) is held in a securities account or (v) constitutes a Security or a Financial Asset.

 

(g)        No Other Interests.  As of the Closing Date, pursuant to the terms of the Credit Agreement, the Pledgor is not required to pledge any Capital Stock in any Subsidiary other than as  set  forth  on  Schedule  2(a)  attached  hereto  or  as  pledged  pursuant  to  any  other  pledge agreement by the Pledgor to the Collateral Agent to secure the Secured Obligations.

 

(h)        None of the issuers of the Pledged Shares are unlimited liability companies and neither the Collateral Agent nor any other person shall be liable for the obligations of any issuer of the Pledged Shares as a result of the grant of security interest hereunder or the exercise of the rights and remedies conferred hereby.

 

6.Covenants.  The Pledgor hereby covenants, that so long as any of the Secured Obligations remains outstanding and until all of the commitments relating thereto have been terminated, the Pledgor shall:

 

(a)        Books and Records.  Upon the reasonable request of the Collateral Agent, mark its books and records (and shall cause the issuer of the Pledged Shares of the Pledgor to mark its books and records) to reflect the security interest granted to the Collateral Agent, for the benefit of the holders of the Secured Obligations, pursuant to this Pledge Agreement.

 

(b)       Defense of Title.  Warrant and defend title to and ownership of the Pledged Collateral of the Pledgor at its own expense against the claims and demands of all other parties claiming an interest therein, keep the Pledged Collateral free from all Liens, except for Permitted Liens, and not sell, exchange, transfer, assign, lease or otherwise dispose of Pledged Collateral of the Pledgor or any interest therein, except as permitted under the Credit Agreement and the other Loan Documents.

 

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(c)       Further Assurances.   Promptly execute and deliver at its expense all further instruments and documents and take all further action that may be necessary and desirable or that the Collateral Agent may reasonably request in order to (i) perfect and protect the security interest created hereby in the Pledged Collateral of the Pledgor (including any and all action necessary to satisfy the Collateral Agent that the Collateral Agent has obtained a first priority perfected security interest in all Pledged Collateral); (ii) enable the Collateral Agent to exercise and enforce its rights and remedies hereunder in respect of the Pledged Collateral of the Pledgor; and (iii) otherwise effect the purposes of this Pledge Agreement.

 

(d)        Amendments.  Not make or consent to any amendment or other modification or waiver with respect to any of the Pledged Collateral of the Pledgor or enter into any agreement or allow to exist any restriction with respect to any of the Pledged Collateral of the Pledgor other than pursuant hereto or as may be permitted under the Credit Agreement.

 

(e)        Compliance with Securities Laws.  File all reports and other information now or hereafter required to be filed by the Pledgor with the SEC, the Ontario Securities Commission, and any other state, provincial, territorial, federal or foreign agency in connection with the ownership of the Pledged Collateral of the Pledgor.

 

(f)         Issuance  or  Acquisition  of  Capital  Stock  Consisting  of  an  Interest  in  a Partnership or a Limited Liability Company.  Not, without executing and delivering, or causing to be executed and delivered, to the Collateral Agent such agreements, documents and instruments as the Collateral Agent may require, issue or acquire any Capital Stock of a Subsidiary consisting of an interest in a partnership or a limited liability company that (i) is dealt in or traded on a securities exchange or in a securities market, (ii) by its terms expressly provides that it is a security governed by Article 8 of the UCC or the STA, (iii) is an investment company security, (iv) is held in a securities account or (v) constitutes a Security or a Financial Asset.

 

7.          Advances by Holders of the Secured Obligations.  On failure of the Pledgor to perform any of the covenants and agreements contained herein and upon prior written notice to the Pledgor, the Collateral Agent may, at its sole option and in its sole discretion, perform the same and in so doing may expend such sums as the Collateral Agent may reasonably deem advisable in the performance thereof, including the payment of any insurance premiums, the payment of any taxes, a payment to obtain a release of a Lien or potential Lien, expenditures made in defending against any adverse claim and all other expenditures that the Collateral Agent may make for the protection of the security hereof or may be compelled to make by operation of Law.  All such sums and amounts so expended shall be repayable by the Pledgor promptly upon timely notice thereof and demand therefor, shall constitute additional Secured Obligations and shall, subject to Section 2.08 of the Credit Agreement, bear interest from the date said amounts are expended at the rate then applicable to Revolving Loans that are Base Rate Loans.   No such performance of any covenant or agreement by the Collateral Agent on behalf of the Pledgor, and no such advance or expenditure therefor, shall relieve the Pledgor of any default under the terms of this Pledge Agreement, the other Loan Documents or any other documents relating to the Secured Obligations.  The Collateral Agent may make any payment hereby authorized in accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien, title or claim except to the extent such payment is being contested in good faith by the Pledgor in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP.

 

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8.Events of Default.  The occurrence of an event that would constitute an Event of Default under the Credit Agreement shall be an Event of Default hereunder (an “Event of Default”).

 

9.Remedies.

 

(a)        General Remedies.  Upon the occurrence of an Event of Default and during the continuation thereof, the Collateral Agent and the holders of the Secured Obligations shall have, in addition to the rights and remedies provided herein, in the Loan Documents, in any other documents relating to the Secured Obligations, or by Law (including levy of attachment and garnishment), the rights and remedies of a secured party under the UCC or the PPSA, as the case may be, of the jurisdiction applicable to the enforcement of security interests in the affected Pledged Collateral.

 

(b)        Sale of Pledged Collateral.   Upon the occurrence of an Event of Default and during the continuation thereof, without limiting the generality of this Section 9 and without notice, the Collateral Agent may, in its sole discretion, sell or otherwise dispose of or realize upon the Pledged Collateral, or any part thereof, in one or more parcels, at public or private sale, at any exchange or broker’s board or elsewhere, at such price or prices and on such other terms as the Collateral Agent may deem commercially reasonable, for cash, credit or for future delivery or otherwise in accordance with applicable Law.  To the extent permitted by Law, any holder of the Secured Obligations may in such event, bid for the purchase of such securities.   The Pledgor agrees that, to the extent notice of sale shall be required by Law and has not been waived by the Pledgor, any requirement of reasonable notice shall be met if notice, specifying the place of any public sale or the time after which any private sale is to be made, is personally served on or mailed, postage prepaid, to the Pledgor, in accordance with the notice provisions of Section 11.02 of the Credit Agreement at least ten (10) days before the time of such sale or such other notice as may be required by applicable Law.  The Collateral Agent shall not be obligated to make any sale of  Pledged  Collateral  of  the  Pledgor  regardless  of  notice  of  sale  having  been  given.    The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

 

(c)       Private Sale.   Upon the occurrence of an Event of Default and during the continuation thereof, the Pledgor recognizes that the Collateral Agent may deem it impracticable to effect a public sale of all or any part of the Pledged Shares or any of the securities constituting Pledged Collateral and that the Collateral Agent may, therefore, determine to make one or more private sales of any such Pledged Collateral to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such Pledged Collateral for their own account, for investment and not with a view to the distribution or resale thereof.   The Pledgor hereby waives any claims against the Collateral Agent arising by reason that any such private sale shall not have been made in a commercially reasonable manner and agrees that the Collateral Agent shall have no obligation to delay sale of any such Pledged Collateral for the period of time necessary to permit the issuer of such Pledged Collateral to register such Pledged Collateral for public sale under the Securities Act of 1933, as amended (the “Securities Act”) or qualify such Pledged Collateral for sale under the applicable Law as in force from time to time in the relevant province or territory of Canada.  The Pledgor further acknowledges and agrees that any offer to sell such Pledged Collateral that has been (i) publicly advertised on a bona fide basis in a newspaper or other publication of general circulation in the financial community of New York, New York (to the extent that such offer may be advertised without prior registration under the Securities Act or the applicable Law as in force from time to time in the relevant province or

 

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territory of Canada), or (ii) made privately in the manner described above shall be deemed to involve a “public sale” under the UCC and the PPSA, as applicable, notwithstanding that such sale may not constitute a “public offering” under the Securities Act or the applicable Law as in force from time to time in the relevant province or territory of Canada, and the Collateral Agent may, in such event, bid for the purchase of such Pledged Collateral.

 

(d)        Retention of Pledged Collateral.  To the extent permitted under applicable Law, in addition to the rights and remedies hereunder, upon the occurrence and continuance of an Event of Default, the Collateral Agent may, after providing the notices required by Sections 9-

620 and 9-621 of the UCC or Section 65 of the PPSA (Ontario) as applicable, or otherwise complying with the requirements of applicable Law of the relevant jurisdiction, accept or retain

all or any portion of the Pledged Collateral in satisfaction of the Secured Obligations.  Unless and until the Collateral Agent shall have provided such notices, however, the Collateral Agent shall

not be deemed to have accepted or retained any Pledged Collateral in satisfaction of any Secured

Obligations for any reason.

 

(e)        Deficiency.  In the event that the proceeds of any sale, collection or realization are insufficient to pay all amounts to which the Collateral Agent or the holders of the Secured Obligations are legally entitled, the Pledgor shall be liable for the deficiency, together with interest thereon at the Default Rate, together with the costs of collection and reasonable legal fees and expenses.  Any surplus remaining after the full payment and satisfaction of the Secured Obligations shall be returned to the Pledgor or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto.

 

10.        Rights of the Collateral Agent.

 

(a)        Power of Attorney.  In addition to other powers of attorney contained herein, the Pledgor hereby designates and appoints the Collateral Agent, on behalf of the holders of the Secured Obligations, and each of its designees or agents, as attorney-in-fact of the Pledgor, irrevocably and with power of substitution, with authority to take any or all of the following actions upon the occurrence and during the continuation of an Event of Default:

 

(i)         to demand, collect, settle, compromise and adjust, and give discharges and  releases  concerning  the  Pledged  Collateral,  all  as  the  Collateral  Agent  may reasonably deem appropriate;

 

(ii)        to commence and prosecute any actions at any court for the purposes of collecting any of the Pledged Collateral and enforcing any other right in respect thereof;

 

(iii)      to defend, settle or compromise any action brought and, in connection therewith, give such discharge or release as the Collateral Agent may reasonably deem appropriate;

 

(iv)       to pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against the Pledged Collateral;

 

(v)        to direct any parties liable for any payment in connection with any of the Pledged Collateral to make payment of any and all monies due and to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct;

 

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(vi)       to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time in respect of or arising out of any Pledged Collateral;

 

(vii)     to sign and endorse any drafts, assignments, proxies, stock powers, verifications, notices and other documents relating to the Pledged Collateral;

 

(viii)     to   execute   and   deliver   all   assignments,   conveyances,   statements, financing statements, renewal financing statements, security and pledge agreements, affidavits, notices and other agreements, instruments and documents that the Collateral Agent may reasonably deem appropriate in order to perfect and maintain the security interests and liens granted in this Pledge Agreement and in order to fully consummate all of the transactions contemplated therein;

 

(ix)       to exchange any of the Pledged Collateral or other property upon any merger, consolidation, reorganization, recapitalization or other readjustment of the issuer thereof and, in connection therewith, deposit any of the Pledged Collateral with any committee, depository, transfer agent, registrar or other designated agency upon such terms as the Collateral Agent may reasonably deem appropriate;

 

(x)        to vote for a shareholder resolution, or to sign an instrument in writing, sanctioning the transfer of any or all of the Pledged Collateral into the name of the Collateral Agent or one or more of the holders of the Secured Obligations or into the name of any transferee to whom the Pledged Collateral or any part thereof may be sold pursuant to Section 9 hereof; and

 

(xi)       to do and perform all such other acts and things as the Collateral Agent may  reasonably  deem  appropriate  or  convenient  in  connection  with  the  Pledged Collateral.

 

This power of attorney is a power coupled with an interest and shall be irrevocable for so long as any of the Secured Obligations shall remain outstanding and until all of the commitments relating thereto shall have been terminated.   The Collateral Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges and options expressly or implicitly granted to the Collateral Agent in this Pledge Agreement, and shall not be liable for any failure to do so or any delay in doing so.  The Collateral Agent shall not be liable for any act or omission or for any error of judgment or any mistake of fact or Law in its individual capacity or its capacity as attorney-in-fact except acts or omissions resulting from its gross negligence or wilful misconduct.  This power of attorney is conferred on the Collateral Agent solely to protect, preserve and realize upon its security interest in the Pledged Collateral.

 

(b)        Assignment  by  the  Collateral  Agent.    The  Collateral  Agent  may  assign  the Secured  Obligations  and any portion  thereof  and/or  the  Pledged  Collateral  and  any portion thereof to a successor collateral agent appointed pursuant to Section 10.09 of the Credit Agreement, and the assignee shall be entitled to all of the rights and remedies of the Collateral Agent under this Pledge Agreement in relation thereto.

 

(c)        The Collateral Agent’s Duty of Care.  Other than the exercise of reasonable care to assure the safe custody and preservation of the Pledged Collateral while being held by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to preserve rights

 

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pertaining thereto, it being understood and agreed that the Pledgor shall be responsible for preservation of all rights in the Pledged Collateral, and the Collateral Agent shall be relieved of all responsibility for the Pledged Collateral upon surrendering it or tendering the surrender of it to the Pledgor.   The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if such Pledged Collateral is accorded  treatment  substantially  equal  to  that  which  the  Collateral  Agent  accords  its  own property, which shall be no less than the treatment employed by a reasonable and prudent agent in the industry, it being understood that the Collateral Agent shall not have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Pledged Collateral, whether or not the Collateral Agent has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any of the Pledged Collateral.

 

(d)Voting Rights in Respect of the Pledged Collateral.

 

(i)         So long as no Event of Default shall have occurred and be continuing, to the extent permitted by Law, the Pledgor may exercise any and all voting and other consensual rights pertaining to the Pledged Collateral of the Pledgor or any part thereof for any purpose not inconsistent with the terms of this Pledge Agreement or the Credit Agreement; and

 

(ii)        Upon the occurrence and during the continuance of an Event of Default and notice from the Collateral Agent to the Pledgor that the Collateral Agent intends to exercise its rights pursuant to this paragraph (ii), all rights of the Pledgor to exercise the voting and other consensual rights that it would otherwise be entitled to exercise pursuant to paragraph (i) of this subsection shall cease and all such rights shall thereupon become vested in the Collateral Agent, which shall then have the sole right to exercise such voting and other consensual rights.

 

(e)Dividend Rights in Respect of the Pledged Collateral.

 

(i)         So long as no Event of Default shall have occurred and be continuing and subject to Section 4(b) hereof, the Pledgor may receive and retain any and all dividends (other than stock dividends and other dividends constituting Pledged Collateral addressed hereinabove) or interest paid in respect of the Pledged Collateral to the extent they are allowed under the Credit Agreement.

 

(ii)        Upon the occurrence and during the continuance of an Event of Default and notice from the Collateral Agent to the Pledgor that the Collateral Agent intends to exercise its rights pursuant to this paragraph (e):

 

(A)      all rights of the Pledgor to receive the dividends and interest payments that it would otherwise be authorized to receive and retain pursuant to paragraph (i) of this subsection shall cease and all such rights shall thereupon be vested in the Collateral Agent, which shall then have the sole right to receive and hold as Pledged Collateral such dividends and interest payments; and

 

(B)       all  dividends  and  interest  payments  that  are  received  by  the Pledgor contrary to the provisions of paragraph (A) of this subsection shall be received in trust for the benefit of the Collateral Agent, shall be segregated from

 

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other property or funds of the Pledgor, and shall be forthwith paid over to the Collateral Agent as Pledged Collateral in the exact form received, to be held by the Collateral Agent as Pledged Collateral and as further collateral security for the Secured Obligations.

 

(f)         Release of Pledged Collateral. The Collateral Agent may release any of the Pledged Collateral from this Pledge Agreement or may substitute any of the Pledged Collateral for other Pledged Collateral without altering, varying or diminishing in any way the force, effect, lien, pledge or security interest of this Pledge Agreement as to any Pledged Collateral not expressly released or substituted, and this Pledge Agreement shall continue as a first priority lien on all Pledged Collateral not expressly released or substituted.

 

11.        Rights of Required Lenders. All rights of the Collateral Agent hereunder, if not exercised by the Collateral Agent, may be exercised by the Required Lenders.

 

12.        Application of Proceeds.  Upon the occurrence and during the continuation of an Event of Default, any payments in respect of the Secured Obligations and any proceeds of the Pledged Collateral, when received by the Collateral Agent or any of the holders of the Secured Obligations in cash or its equivalent, will be applied in reduction of the Secured Obligations in the order set forth in Section 9.03 of the Credit Agreement as though the word “Obligations” therein were deleted and replaced with the phrase “Secured Obligations,” and the Pledgor irrevocably waives the right to direct the application of such payments and proceeds and acknowledges and agrees that the Collateral Agent shall have the continuing and exclusive right to apply and reapply any and all such payments and proceeds in the Collateral Agent’s sole discretion, notwithstanding any entry to the contrary upon any of its books and records.

 

13.        Costs of Counsel.  At all times hereafter, whether or not upon the occurrence of an Event of Default, the Pledgor agree to promptly pay upon demand any and all reasonable costs and expenses (including reasonable legal fees and expenses) of the Collateral Agent and the holders of the Secured Obligations (a) as required under Section 11.04 of the Credit Agreement and (b) as necessary to protect the Pledged Collateral or to exercise any rights or remedies under this Pledge Agreement or with respect to any of the Pledged Collateral.  All of the foregoing costs and expenses shall constitute Secured Obligations hereunder.

 

14.Continuing Agreement.

 

(a)        This Pledge Agreement shall be a continuing agreement in every respect and shall remain in full force and effect so long as any of the Secured Obligations remains outstanding (other than contingent indemnity obligations not yet due and payable) and until all of the commitments relating thereto have been terminated.  Upon such payment and termination, this Pledge Agreement shall be automatically terminated and the Collateral Agent shall, upon the request and at the expense of the Pledgor, forthwith release and discharge all of its liens and security interests hereunder and shall execute and deliver all UCC termination statements, PPSA discharges and/or other documents reasonably requested by the Pledgor evidencing such termination, release and discharge and shall re-deliver the certificates evidencing the Pledged Shares to the Pledgor or to such other Person as the Pledgor shall direct.  Notwithstanding the foregoing, all indemnities provided hereunder shall survive termination of this Pledge Agreement.

 

(b)        This  Pledge  Agreement  shall  continue  to  be  effective  or  be  automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the Secured Obligations is rescinded or must otherwise be restored or returned by the Collateral Agent or any

 

11
 

holder of the Secured Obligations as a preference, fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar Law, all as though such payment had not been made; provided that in the event payment of all or any part of the Secured Obligations is rescinded or must be restored or returned, all reasonable costs and expenses (including reasonable legal fees and expenses) incurred by the Collateral Agent or any holder of the Secured Obligations in defending and enforcing such reinstatement shall be deemed to be included as a part of the Secured Obligations.

 

15.        Amendments and Waivers.  This Pledge Agreement and the provisions hereof may not be amended, waived, modified, changed, discharged or terminated except as set forth in Section 11.01 of the Credit Agreement; provided that any update or revision to Schedule 2(a) hereof shall not constitute an amendment for purposes of this Section 15 or Section 11.01 of the Credit Agreement.

 

16.        Successors in Interest.  This Pledge Agreement shall create a continuing security interest in the Collateral and shall be binding upon the Pledgor, its successors and assigns, and shall inure, together with the rights and remedies of the Collateral Agent and the holders of the Secured Obligations hereunder, to the benefit of the Collateral Agent and the holders of the Secured Obligations and their successors and  permitted assigns;  provided,  however,  that the Pledgor  may not  assign  its rights  or delegate its duties hereunder without the prior written consent of the requisite Lenders under the Credit Agreement.

 

17.        Notices.  All notices required or permitted to be given under this Pledge Agreement shall be given as provided in Section 11.02 of the Credit Agreement.

 

18.        Counterparts.  This Pledge Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  It shall not be necessary in making proof of this Pledge Agreement to produce or account for more than one such counterpart.

 

19.        Headings.    The  headings  of  the  sections  and  subsections  hereof  are  provided  for convenience only and shall not in any way affect the meaning or construction of any provision of this Pledge Agreement.

 

20.Governing Law; Jurisdiction; Waiver of Right to Trial by Jury; Etc.

 

(a)        THIS PLEDGE AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.

 

(b)       EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE COLLATERAL AGENT, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE PROVINCE OF ONTARIO OR THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES

 

12
 

DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.   EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS PLEDGE AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE COLLATERAL AGENT MAY OTHERWISE HAVE TO BRING ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER, OR ANY OTHER LOAN PARTY OR THEIR PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)       EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)        EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02 OF THE CREDIT AGREEMENT.  NOTHING IN THIS PLEDGE AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY   HERETO   TO   SERVE   PROCESS   IN   ANY   OTHER   MANNER   PERMITTED   BY APPLICABLE LAW.

 

(e)        EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY  (WHETHER  BASED  ON  CONTRACT,  TORT  OR  ANY  OTHER  THEORY).    EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY  OTHER  PERSON  HAS  REPRESENTED,  EXPRESSLY  OR  OTHERWISE,  THAT  SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING  WAIVER  AND  (B) ACKNOWLEDGES  THAT  IT  AND  THE  OTHER  PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS PLEDGE AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

21.        Severability.  If any provision of this Pledge Agreement or any related document is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Pledge Agreement and any other related document 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.

 

13
 

22.        Entirety.  This Pledge Agreement, the other Loan Documents and the other documents relating to the Secured Obligations comprise the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter.  This Pledge Agreement was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favour of any party, but rather in accordance with the fair meaning thereof.

 

23.        Survival.     All  representations  and  warranties  made  hereunder  or  other  document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent, the Collateral Agent and each Lender, regardless of any investigation made by the Administrative Agent, the Collateral Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent, the Collateral Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

24.        Other Security.  To the extent that any of the Secured Obligations are now or hereafter secured by property other than the Pledged Collateral (including real and other personal property owned by the Pledgor), or by a guarantee, endorsement or property of any other Person, then the Collateral Agent shall have the right to proceed against such other property, guarantee or endorsement upon the occurrence of any Event of Default, and the Collateral Agent shall have the right, in its sole discretion, to determine which rights, security, liens, security interests or remedies the Collateral Agent shall at any time pursue, relinquish, subordinate, modify or take with respect thereto, without in any way modifying or affecting any of them or the Secured Obligations or any of the rights of the Collateral Agent or the holders of the Secured Obligations under this Pledge Agreement, under any of the other Loan Documents or under any other document relating to the Secured Obligations.

 

25.        Replacement of Existing Pledge Agreement.  As of the date hereof, the Existing Pledge Agreement shall be amended, restated and superseded and replaced in its entirety by this Pledge Agreement.

 

[Signatures on Following Pages]

 

TOR01: 6249206: v4

 

14
 

Each of the parties hereto has caused a counterpart of this Pledge Agreement to be duly executed and delivered as of the date first above written.

 

	
 
	
PLEDGOR:
	
ARMSTRONG WORLD INDUSTRIES, INC., a Pennsylvania corporation
	
 

 

By: /s/ Brian L. MacNeal

Name: Brian L. MacNeal

Title: Senior Vice President and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARMSTRONG WORLD INDUSTRIES, INC. AMENDED AND RESTATED CANADIAN PLEDGE AGREEMENT

 

 

Accepted and agreed to as of the date first above written.

 

COLLATERAL

	
 
	
AGENT:
	
BANK OF AMERICA, N.A., as Collateral Agent
	
 

 

 

By: /s/ Kimberly D. Williams Name: Kimberly D. Williams Title: Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARMSTRONG WORLD INDUSTRIES, INC. AMENDED AND RESTATED CANADIAN PLEDGE AGREEMENT

 

 

 

SCHEDULES

 

 

 

 

Schedule 2(a)Pledged Shares

 

 

 

 

EXHIBITS

 

 

 

 

Exhibit 4(a)Form of Stock Power

 

 

Schedule 2(a)

 

to

 

Amended and Restated Canadian Pledge Agreement dated as of April 1, 2016

in favour of Bank of America, N.A., as Collateral Agent

 

 

 

PLEDGED SHARES

 

 

 

 

			
	
Subsidiary
	
Class of Shares
	
Number held by Pledgor

	
 

Armstrong World Industries Canada Ltd.
	
 

Common
	
 

500

 

 

Exhibit 4(a)

 

to

 

Amended and Restated Canadian Pledge Agreement dated as of April 1, 2016

in favour of Bank of America, N.A., as Collateral Agent

 

 

 

Form of Irrevocable Stock Power

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to

 

 

 

 

 

the following shares of capital stock of [ISSUER], a

corporation:

 

 

No. of SharesCertificate No.

 

 

 

 

 

and  irrevocably  appoints

its  agent  and  attorney-in-fact  to

 

transfer all or any part of such capital stock and to take all necessary and appropriate action to effect any such transfer.  The agent and attorney-in-fact may substitute and appoint one or more persons to act for him.  The effectiveness of a transfer pursuant to this stock power shall be subject to any and all transfer restrictions referenced on the face of the certificates evidencing such interest or in the certificate of incorporation or bylaws of the subject corporation, to the extent they may from time to time exist.

 

ARMSTRONG WORLD INDUSTRIES, INC.

 

 

 

 

By:  Name:

Title:Exhibit

Exhibit 10.40

November 16, 2017
William Mitchell
9203 Dayflower Street
Prospect, KY 40059
Via Hand Delivery
Dear Bill:
Per your conversation with Nigel Travis, the following constitutes our mutual agreement (the "Agreement") regarding the terms and conditions of the separation of your employment with Dunkin' Brands, Inc. (the "Company"):
Separation Agreement and Release of All Claims
1.  Separation from Employment. You acknowledge and agree that your employment with the Company will be terminated, effective March 16, 2018 (the "Separation Date") and that, effective as of the Separation Date, such termination has resulted in your "Separation from Service" for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"). Effective November 16, 2017 through the Separation Date, you will no longer hold the position of President, International of the Company, or be considered an officer of the Company or its affiliates, however, the Company will continue to pay you your base salary, paid at your current base rate of pay, less appropriate taxes, withholdings and/or deductions, and all benefits as currently provided, subject to any changes applicable to all employees for 2018 and your benefit elections for that year. 
Regardless of whether you sign this Agreement, at the time your employment terminates you will receive the following, less all appropriate taxes, withholdings and/or deductions: (a) Payment at your current base rate of salary for all work you performed for the Company during the last payroll period through the Separation Date; and (b) a lump sum payment for all hours of vacation time that you accrued but had not used as of the Separation Date.

2.  Severance Payment.  As severance, the Company shall provide you with twelve (12) months’ salary, paid at your current base rate of pay, less appropriate taxes, withholdings, and/or deductions.  Payment shall be made on the Company’s usual payroll schedule, beginning with the first payroll date after the effective date of Exhibit A (which shall be at least eight days after Exhibit A is executed by you and you have not, in the interim revoked it) and in no event later than 60 days from the Separation Date.

3.  Outplacement.  The Company will pay for twelve (12) months of outplacement services for you following the Separation Date through a firm selected by the Company.
4. Short Term Incentive. The Company shall pay your short-term incentive payment for 2017 pursuant to the terms of the 2017 Dunkin’ Brands Short-Term Incentive Plan, as determined by performance goals, including your individual performance goals, less applicable taxes and withholdings, no later than March 15, 2018.  You shall not be eligible for STI for 2018.
5. Equity. To view a schedule of your holdings, you can log on to https://www.schwab.com/publis/eac/home. Options must be exercised in accordance with the timetable set forth in the Company's post-

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Exhibit 10.40

termination exercise policy and applicable stock agreements. Pursuant to the terms of the applicable stock agreements, vesting on all stock and stock options shall cease as of the Separation Date, and any unvested shares of restricted stock and unvested stock options shall be forfeited. As set forth in the 2006 Executive Incentive Plan and 2011 Omnibus Long-Term Incentive Plan, you will have three (3) months from the Separation Date to exercise any vested shares subject to the option. During the Transition Period, as defined herein, you shall remain subject to the Company's employee insider trading policy and its addendum. You acknowledge the Company has provided you with a copy of the policy and its addendum.
6.  Benefits. (a) You may be eligible to convert your Company-provided life insurance to an individual plan, at your own cost, in accordance with the terms and conditions of that plan.
(b)  If you are a current participant, your salary deferral and the Company match to the 401(k) Savings Plan will cease coincident with the paycheck representing pay through the Separation Date. You will be provided with information under separate cover on your future participation and certain elections you may make with regard to the 401(k) plan.

(c) Your current participation and that of your eligible dependents in the Company's group health and dental plans will continue through last day of the month in which your employment terminates. Thereafter, you may be eligible to continue your participation and that of your eligible dependents in the Company's group health and dental plans under the federal law known as "COBRA." Such participation is at your own cost, subject to paragraph 6(d) below. You will be provided with additional information regarding COBRA under separate cover.

(d)  If you are eligible and elect to continue your participation and that of your eligible dependents in the Company’s group health and dental plans under COBRA, for three (3) months from the last day of the month in which your employment terminates, the Company will continue to pay that share of the premium cost that it pays for active employees and their covered dependents generally.  You will still be responsible for the applicable employee portion of the premium on a monthly basis, in the manner specified in the COBRA notice.  At the end of such 3-month period, you will be required to pay on a monthly basis the entire COBRA premium for the remainder of the COBRA continuation coverage period, subject to the terms of this Agreement, if you are eligible for and elect to continue COBRA.  
(e)  Except as expressly stated herein, your participation in all Company employee benefit plans will end as of the Separation Date.
7. Release of Claims. (a)  For and in consideration of the payments and benefits set forth herein, to which you acknowledge you are not otherwise entitled, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, you, on your own behalf and on behalf of your heirs, executors, administrators, beneficiaries, representatives and assigns, hereby release and forever discharge the Company, its parents, subsidiaries and affiliates, and all of their respective past and present officers, directors, shareholders, officers, employees, employee benefit plans, insurers, agents, representatives, successors and assigns (collectively hereafter the "Releasees"), both individually and in their official capacities, from any and all liability, claims, demands, actions and causes of action of any type which you have had in the past, now have, or might now have, from the beginning of the world up to the date that you execute this Agreement, in any way resulting from, arising out of or connected with your employment, its termination, or pursuant to any federal, state or local statute, common law, employment law, regulation or other requirement (including without limitation Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act, the Pregnancy Discrimination Act, the Age Discrimination in 

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Exhibit 10.40

Employment Act, the Older Workers Benefit Protection Act, the Worker's Adjustment and Retraining Notification Act, the Fair Credit Reporting Act, the Americans with Disabilities Act, the Rehabilitation Act of 1973, the Occupational Safety and Health Act, the Equal Pay Act, the Employee Retirement Income Security Act of 1974, Sections 1981 through 1988 of Title 42 of the United States Code, the Immigration Reform and Control Act, the Massachusetts Wage Act, G.L. c. 149 Sec. 148, the Massachusetts Fair Employment Practices Act, G.L. c. 151B, all state fair employment practices acts, each as amended, and any and all claims for wrongful discharge, discrimination, harassment, retaliation, common law claims, actions in tort, defamation, breach of contract, and claims of interest in unvested stock options, for wages or for attorneys' fees) as well as any claims arising from any Offer Letter or Amendment thereto, any Company severance plan, policy or program including the former Amended and Restated Executive Separation Pay Plan.

(b)  Notwithstanding the foregoing, this release of claims shall not apply to any claim to enforce the terms of this Agreement, any rights that are vested under the terms of an applicable retirement, benefit or equity award plan, or that may arise after your execution of this Agreement.   
(c) Nothing in this Agreement is intended to, or shall be interpreted to, discourage or interfere with rights under the Older Workers Benefit Protection Act, to test the knowing and voluntary nature of this release of claims under the Age Discrimination in Employment Act, or to prevent the exercise of such rights.  

(d) Nothing in this Agreement prevents you from participating in or cooperating with any governmental, administrative, or regulatory investigation or proceeding regarding the Company, including the Equal Employment Opportunity Commission and comparable state agencies, the National Labor Relations Board, the Occupational Safety and Health Administration or the Securities and Exchange Commission, but you acknowledge and agree that you shall not seek, accept or be entitled to any monetary relief  with respect to any claim released pursuant to this Agreement.   

(e) As a condition of the Company's obligations hereunder, you agree to execute a second Release of Claims, attached as Exhibit A to this Agreement, on the Separation Date, and return it to Rich Emmett, Chief Legal and Human Resources Officer, to release any claims that may have arisen between the date you execute this Agreement and the Separation Date (hereafter the "Transition Period"). 

8. Transfer of Claims. You represent and warrant that you have not assigned, transferred, or purported 
to assign or transfer, to any person, firm, corporation, association, or entity whatsoever, any claim 
released pursuant to this Agreement. You further agree to indemnify and hold Company harmless against, 
without any limitation, any and all rights, claims, warranties, demands, debts, obligations, liabilities, 
costs, court costs, expenses (including attorney's fees), causes of action or judgments based on or 
arising out of any such assignment or transfer.

9. Confidentiality. Subject to paragraph 11(d) of this Agreement, you agree to keep the terms and conditions of this Agreement and the facts and circumstances leading up to it confidential and shall not disclose them to anyone except immediate family members, attorneys and financial advisers, and only if they agree to keep this information confidential and not disclose it to others, or pursuant to court order, subpoena or as otherwise required by law.   

10. Non-Disparagement.  Subject to paragraph 11(d) of this Agreement, you agree that you will not directly or indirectly disparage, in any way cause disparagement of, or encourage others to disparage, the Company, its affiliates, subsidiaries or any of its directors, officers or employees, its products, services, marketing or advertising programs, financial status or business.  The Company agrees that all calls from 

             130 Royall Street Canton, MA 02021    p 781-737-3000 f 781-737-4000

Exhibit 10.40

prospective employers will be directed to CCCVerify, which shall provide only your starting and ending dates of employment and last position held.

11. Company Property/Reaffirmation of Restrictive Covenants. (a) You represent and warrant that as of the Separation Date, you shall return all Company assets, such as computer(s), PDA(s), telephone(s), vehicles, and credit cards, all documents, materials, records, files and information, in any media, related to the business of the Company, including all copies, and all keys or other property of the Company in your possession or control, and cease access to Company systems as of the Separation Date.  

(b)  You expressly acknowledge that you may not use, for the benefit of yourself or any other person or entity, any confidential information, proprietary information or trade secrets of the Company.  You hereby acknowledge and expressly reaffirm your obligations as set forth in the Non-Compete/Non-Solicitation/Confidentiality Agreement dated August 16, 2010, which is attached hereto as Exhibit B and incorporated by reference herein.  

(c)  The confidentiality under this paragraph 11 shall not apply to information which is generally known or readily available to the public at the time of disclosure or becomes generally known through no wrongful act on your part or on the part of any other person having an obligation of confidentiality to the Company.   

(d)  Notwithstanding the foregoing, nothing in this Agreement limits, restricts or in any other way affects your communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to the governmental agency or entity, or requires you to provide prior notice to the Company of the same.  You cannot be held criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed under seal in a lawsuit or other proceeding.   Notwithstanding this immunity from liability, you may be held liable if you unlawfully accesses trade secrets by unauthorized means.
12.    Cooperation. You agree to cooperate reasonably with the Company in its defense of any investigation, litigation or administrative proceeding, including any charges or claims filed against it by current or former employees, regarding all matters occurring during your employment. The Company shall fully reimburse you for reasonable out of pocket expenses incident to such cooperation provided they are properly documented pursuant to the same Company policies applicable to other executives and officers.
13.  Resignation/Transition Period. While you remain an employee until the Separation Date, this Agreement represents your resignation as an Officer of the Company, from any board or committee memberships and other positions which you hold with the Company, and all of its subsidiaries and affiliates, effective November 16, 2017. You agree to execute and return to the Company any documents it deems necessary to separately confirm your resignation from such positions. During the Transition Period, you will not be required to report to Brand Central, but shall make yourself reasonably available to the Company and its Chief Executive Officer, you will complete a special project identifying future opportunities for the Company’s international business, and spend the requisite time necessary to ensure a smooth transition.
14. Breach. Your breach of any of the terms set forth in this Agreement shall constitute a material breach of this Agreement and shall relieve the Company of any further obligations hereunder. In 

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Exhibit 10.40

addition to any other legal or equitable remedy available to the Company, it shall be entitled to recover any monies paid pursuant to you pursuant to this Agreement.
15. No Liability or Wrongdoing. The parties hereto agree and acknowledge that this Agreement is intended only to settle all matters between the parties and nothing contained in this Agreement, nor any of its terms and provisions, nor any of the negotiations or proceedings connected with it, constitutes, will be construed to constitute, will be offered in evidence as or deemed to be evidence of an admission of liability or wrongdoing by any of the Releasees, and any such liability or wrongdoing is hereby expressly denied by each of the Releasees.
16. Method of Payment. All payments contemplated hereunder will be made by the Company using such payment method as it may determine in its discretion, including without limitation direct deposit into your bank account, unless you specifically advise the Company in writing otherwise. Unless you advise the Company of any changes to your banking information, any payments made by direct deposit will be made into such bank account as is currently on file with the Company's payroll department.
17. Accord and Satisfaction. By executing this Agreement, you acknowledge and agree that you are not entitled to any further wages, compensation, stock, commissions, bonuses, severance, incentives or other monies or payments of any nature, or to any benefits from the Company except and unless as explicitly provided in this Agreement. You further acknowledge that no promises, inducements or other consideration not expressly stated in this Agreement have been made or otherwise exist with respect to the terms and conditions of this Agreement, and that this Agreement may only be modified in accordance with paragraph 22(a).
18.  Re-employment. You agree that you will neither apply for nor accept employment with the Company, any of its parents, subsidiaries, affiliates, or any other entity controlled by, or under common control with, the Company (the "Company Entities"), the Company Entities are not obligated to reinstate or reemploy you in the future in any capacity, and you hereby discharge the Company Entities from any liability or obligation to reinstate or re-employ you in any capacity. You acknowledge that your forbearance from doing so is contractual and is in no way discriminatory, retaliatory or involuntary.
19. Payment of Applicable Taxes and 409A. (a)  While this Agreement and the payments and benefits provided hereunder are intended to be exempt from, or comply with, the requirements of Section 409A of the Code, an at all times should be interpreted so as to comply, the Company makes no representation or covenant to ensure that any payment or benefits provided under this Agreement are exempt from, or compliant with Section 409A. The Company shall have no liability to you if a payment or benefit under this Agreement is challenged by any taxing authority or is ultimately determined not to be exempt or compliant. You agree and acknowledge that to the extent some or all of the payments made in consideration of this Agreement may be taxable to you, you shall be responsible for all applicable federal, state and local taxes on said payments, and any costs, interest or penalties incurred as a result of your failure to pay such taxes.  In the event that it is determined that you have failed to make proper payment of such taxes and Company is held liable for your non-payment, or for any fines or penalties connected therewith, Company will be entitled to full and complete indemnification from you for those amounts (including taxes, fines and/or penalties) for which Company is held liable.    
(b)  It is intended that each installment of the severance payment pursuant to paragraph 2, and any payment or benefit hereunder, be treated as a separate "payment" for purposes of Section 409A of the Code. The Company shall not have the right to accelerate or defer delivery of such payments or benefits except to the extent permitted or required pursuant to Section 409A of the Code. All reimbursements and in-kind benefits provided to you under this Agreement are intended to be made or provided in 

             130 Royall Street Canton, MA 02021    p 781-737-3000 f 781-737-4000

Exhibit 10.40

accordance with the requirements of Section 409A of the Code to the extent they are subject to Section 409A. 
20.  Dispute Resolution. With respect to any claims or disputes arising under or in connection with this Agreement, you and the Company agree to attempt in good faith to resolve such claim or dispute informally through discussions with an authorized executive officer of the Company. If after completing the foregoing procedure the dispute is not resolved, the Company and you agree that the dispute or claim shall be resolved by final and binding arbitration before the American Arbitration Association ("AAA"). The arbitration shall be held in Boston, Massachusetts and shall be conducted in accordance with the AAA's National Rules for the Resolution of Employment Disputes then in effect at the time of the arbitration, except that in the process of selecting an arbitrator, the parties may strike names from the AAA's list of arbitrators for good cause, and with the additional condition that all steps reasonably necessary to ensure the confidentiality of the proceedings and the arbitrator's determination will be added to the basic rules and requirements. Notwithstanding the foregoing, any arbitration pursuant to this paragraph shall not impair either party's right to request injunctive or other equitable relief in connection with Exhibit B.
21. Acknowledgement, Acceptance and Revocation. (a) You acknowledge that you are signing this Agreement knowingly, voluntarily, with full understanding of its terms and effects and without duress, coercion, fraud or undue influence;
(b)  You are advised, prior to signing this Agreement, to seek the advice of an attorney of your choosing and all other advice you may require regarding the purpose and effect of this Agreement, its Release of Claims and all matters contained herein, including without limitation those under the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act;
(c) You have twenty-one (21) days from the date you receive this Agreement to consider its terms and the consequences of the Release of Claims contained herein and to accept the terms of this Agreement by signing below and returning it to Dunkin' Brands, Inc., c/o Chief Legal and Human Resources Officer, 130 Royall Street, Canton, MA 02021 (although you may choose to voluntarily execute this Agreement prior to the expiration of the twenty-one (21) day period);
(d) If you thereafter desire to revoke acceptance of this Agreement, you must do so by notice in writing to the Chief Legal and Human Resources Officer within seven (7) days following the execution of this Agreement; and
(e)  This Agreement shall not be effective until the date upon which the revocation period has expired, which shall be the eighth day after this Agreement is executed by you, and you have not revoked it (the "Effective Date"). The parties agree that any changes to the offer in this Agreement, whether material or not, will not restart the running of the 21 day period.
22.  Miscellaneous. (a) This Agreement shall be binding upon the parties and may not be modified in any manner, except by an instrument in writing of concurrent or subsequent date signed by a duly authorized representative of the parties hereto. This Agreement is binding upon and shall inure to the benefit of the parties and their respective agents, heirs, executors, administrators, successors and assigns.

             130 Royall Street Canton, MA 02021    p 781-737-3000 f 781-737-4000

Exhibit 10.40

(b) This Agreement, including Exhibits A through B , contains the entire agreement between you and the Company and replaces all prior and contemporaneous agreements, communications and understandings, whether written or oral, with respect to your employment and its termination and all related matters. You represent that you have carefully read this Agreement, that you are not relying on any promise or representation, whether oral or written, that is not expressly contained herein, that you have been afforded the opportunity to be advised of its meaning and consequences by your own attorney, and have signed the same of your own free will.
(c)  The provisions of this Agreement are severable, and if any provision of this Agreement is found to be unenforceable, the other provisions shall remain fully valid and enforceable.
(d) This Agreement shall be interpreted and construed pursuant to the laws of the Commonwealth of Massachusetts, without regard to conflict of laws provisions.
(e) This Agreement may be executed in counterparts, each of which shall be deemed an original, all of which together shall constitute one and the same instrument.
(f) The section headings in this Agreement are for reference purposes only and shall not be deemed to be a part of this Agreement or to affect the meaning or interpretation of this Agreement.
(g)  The waiver by the Company of any action, right or condition in this Agreement, or of any breach of a provision of this Agreement, shall not constitute a waiver of any other provisions of this Agreement or any other occurrences of the same event.
If you fail to timely return this signed Agreement to the Company within 21 days, this severance offer shall expire and will no longer be available to you.  If you should have any questions, please feel free to contact me.
Sincerely,
/s/ Richard J. Emmett

Richard J. Emmett
Chief Legal and Human Resources Officer
Dunkin' Brands, Inc.

ACCEPTED AND AGREED TO:                    DATE:

/s/ William Mitchell                         November 21, 2017        William Mitchell 

             130 Royall Street Canton, MA 02021    p 781-737-3000 f 781-737-4000

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