CASH COLLATERAL PLEDGE AGREEMENT

 

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                                                                   EXHIBIT 10(d)

 

                               BANK HAPOALIM B.M.

                        CASH COLLATERAL PLEDGE AGREEMENT

                           (U.S. & NON-U.S. CURRENCY)

 

                                                     Dated as of: March 16, 2005

 

                                 SPECIFIC TERMS

 

Pledgor(s):

PERRIGO INTERNATIONAL, INC.

 

Address and Contact Information of Pledgor(s) (include only one address):

515 Eastern Avenue

Allegan, Michigan 49010

Attn: James R. Ondersma, Treasurer

E-mail: jondersm@perrigo.com

Fax No.: 269-673-1234

 

Description of Deposit Account and Depository:

 

Deposit Account No.: 01068717

 

Branch (check one and complete if necessary):

 

[X]  Bank Hapoalim B.M. New York Branch, 1177 Avenue of the Americas, New York,

     NY 10036 (an uninsured branch)

 

[ ]  Other (specify):

 

Type of deposit(s) in Deposit Account (check all that apply as of the date of

this Agreement):

 

[X]  Time Deposit Account

 

[ ]  Money Market Deposit Account

 

[ ]  Demand Deposit Account

 

Debtor(s), other than or in addition to Pledgor(s), whose obligations are

secured by this Agreement (include full name(s) and address(es)):

 

PERRIGO ISRAEL HOLDINGS LTD. A/K/A PERRIGO ISRAEL HOLDING LTD.

515 Eastern Avenue

Allegan, Michigan 49010

Attn: James R. Ondersma, Treasurer

 

Definitions of certain capitalized terms are included in Section 22.

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     1. Pledge and Assignment; Security for Liabilities: For value received,

Pledgor(s) hereby assigns, transfers and pledges to Bank Hapoalim B.M. (an

Israeli banking corporation acting through its uninsured New York branch), its

offices and subsidiaries (hereinafter, referred to collectively as the "Bank")

and grants to the Bank, as security for any and all Liabilities of Pledgor(s)

and of any Debtor(s) identified in Specific Terms, a security interest in all of

the right, title and interest of Pledgor(s) in, to and under, and control over,

the Collateral described below.

 

     As used herein, "Collateral" shall mean (i) the Deposit Account (including,

without limitation, the $400,000,000.00 deposited therein), (ii) any cash or

other property at any time and from time to time receivable or otherwise

distributable in respect of, in exchange for, or in substitution for, the

Deposit Account or any portion thereof, including interest accruing thereon,

(iii) intentionally omitted, (iv) all replacements, substitutions, extensions,

renewals and proceeds of any and all of the foregoing (including, without

limitation, Accrued Interest that may be deposited in the Accrued Interest

Deposit Account pursuant to Section 33 of this Agreement), and (v) all rights

and privileges of Pledgor(s) with respect to any and all of the foregoing.

 

     2. Guarantee by Pledgor(s) of Liabilities of Named Debtors other than

Pledgor(s): (a) With respect to the Debtors other than or in addition to the

Pledgor(s) identified in the Special Terms, subject to Section 2(b) hereof, each

Pledgor(s) irrevocably and unconditionally guarantees to the Bank payment when

due, whether by demand, acceleration or otherwise, without defense, waiver,

setoff or counterclaim, of each and every Liability of any and all such Debtors

(hereinafter, "Pledgor's Guarantee Undertaking").

 

     (b) With respect to Liabilities incurred by Debtors other than the

Pledgor(s): (i) in the event of any inconsistency with respect to the Pledgor's

Guarantee Undertaking between this Agreement and any other guarantee agreement

executed by Pledgor(s) in favor of the Bank (hereinafter, a "Guarantee"), the

terms of such Guarantee shall apply to the extent the Guarantee gives the Bank

greater rights (and to the extent this Agreement gives the Bank greater rights,

this Agreement, at the Bank's option, shall apply), (ii) the obligation of

Pledgor(s) with respect to the Liabilities of the Debtor(s) shall not exceed the

value from time to time of the Collateral, and (iii) the Bank shall be limited

to enforcing its remedies against Pledgor(s) in connection with this Agreement

with respect to the Liabilities of the Debtor(s) solely against the Collateral.

 

     3. The Deposit Account: (a) On or before the date of this Agreement,

Pledgor(s) has placed a sum or sums in immediately available funds on deposit

with the Bank in an account as further identified above under Specific Terms

(individually and collectively the "Deposit Account"). The Deposit Account and

any interest or other income thereon or proceeds thereof shall be kept on

deposit at the branch, office, or subsidiary of the Bank identified above (such

branch, office, or subsidiary sometimes referred to hereinafter as the

"Depository"). The Deposit Account shall be kept under the sole dominion and

control of the Depository, subject however to the instructions of the Bank and

of each branch, office or subsidiary thereof at which any Liabilities are

carried on the books and records. Other than pursuant to, and in accordance

with, Section 33 of this Agreement, Pledgor(s) shall have no right to withdraw

any amounts from the Deposit Account, including any interest paid thereon,

unless and until the Liabilities shall have been paid in full.

 

     (b) If any Deposit Account or portion thereof is evidenced by a certificate

or instrument, the Pledgor(s) shall deliver and, if necessary, endorse in any

manner necessary to transfer, to the Bank any such certificates or instruments

constituting, representing or evidencing any such Deposit Account or portion

thereof.

 

 

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     (c) Any Deposit Account or portion thereof may be issued by the Depository

in book entry form and, in the discretion of the Depository, a confirmation of

such Deposit Account or such portion, as distinguished from a physical

certificate, may serve to evidence such Deposit Account or portion thereof.

 

     (d) So long as no Event of Default shall have occurred and shall be

continuing hereunder, the Bank shall not Transfer this Agreement, the Guaranty

and/or the Collateral to a Person that is not located in the United States of

America. After the occurrence and during the continuance of an Event of Default

hereunder, the Bank can Transfer this Agreement, the Guaranty and/or the

Collateral to any Person without restriction whatsoever.

 

     4. Rights of Bank with Respect to Deposit Account: The Bank may from time

to time: (a) apply any funds in the Deposit Account to satisfy the Liabilities

(or any part thereof) as the same shall become due or payable in accordance with

the terms thereof and as otherwise provided by applicable law, in each case

regardless of the stated maturity of the Deposit Account or any portion thereof,

(b) in connection with any such application of funds, convert that portion of

any Deposit Account which is denominated in an alternative currency into the

currency in which the Liabilities (or any part thereof) are denominated, (c)

exercise all rights of Pledgor(s) in the Deposit Account, and (d) retain (except

for the release of Accrued Interest to the Pledgor pursuant to, and in

accordance with, Section 33 of this Agreement) all income, interest, or proceeds

of the Deposit Account as additional Collateral.

 

     5. If at any time the Value of the Collateral then existing does not equal

or exceed 100% of the aggregate amount of the Liabilities or such lesser amount

as may be permitted pursuant to the documentation for the Liabilities

(hereinafter the "Base Collateral Value"), the Pledgor(s) shall, upon demand by

the Bank, deposit to the Deposit Account with the Depository an amount in U.S.

dollars such that after giving effect thereto the Value of the Collateral shall

not be less than the Base Collateral Value. Each such additional deposit to the

Deposit Account shall be placed in a time deposit complying with the terms

hereof.

 

     6. Representations, Warranties and Covenants: Pledgor(s) hereby represents

and warrants to, and covenants with, the Bank that (a) the Collateral existing

on the date hereof is and will continue to be, and, as to Collateral arising

after the date hereof, will be, free from all security interests or other

encumbrances except the Bank's rights under this Agreement and the Guaranty, (b)

Pledgor(s) has full right, power and authority to enter into this Agreement,

grant the security interests in the Collateral hereunder and perform Pledgor's

obligations hereunder, (c) the execution, delivery and performance of this

Agreement, the pledge of the Collateral hereunder and the exercise of the Bank's

rights hereunder and/or under applicable law do not and will not violate or

contravene the terms of Pledgor's charter documents or any agreement (including,

without limitation, the Syndicated Credit Agreement (as such term is defined in

the Guarantee)), instrument, law, rule, regulation, or judgment binding on

Pledgor(s) or its properties, (d) no registration with, or consent or approval

of, or other action by or with, any court or governmental body or authority or

any other Person (except for the consent of JP Morgan Chase Bank, N.A. and the

other lenders under the Syndicated Credit Agreement) is required in connection

with the execution, delivery and performance of this Agreement or the exercise

of the Bank's rights hereunder, (e) this Agreement constitutes the legal, valid

and binding obligation of Pledgor(s) enforceable in accordance with its terms,

(f) the security interests granted hereunder to the Bank are and will continue

to be (or will be, in the case of Collateral hereafter arising) a valid first

lien on, and security interest in the Collateral, superior and prior to the

rights of all third Persons, and no filing or other act is required to create

and perfect such lien and security interest (excluding the Bank's own actions

with respect to the Collateral, with respect to which no representation,

warranty or covenant is given), (g) the Pledgor(s) is not currently insolvent

and the transfer and pledge of the Collateral to the Bank does not result in the

insolvency of the Pledgor(s), (h) Pledgor is the sole shareholder of Debtor, (i)

there is no litigation,

 

 

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arbitration, investigation or proceeding of or before any court, arbitrator or

administrative or governmental authority is currently pending or, to the

knowledge of Pledgor, threatened, (A) materially adversely affecting Pledgor, or

any of Pledgor's assets, or (B) that could materially adversely affect the

business operations, assets, liabilities or condition, financial or otherwise,

of Pledgor or such Pledgor's ability to enter into, execute or deliver this

Pledge or prejudice in a material manner such Pledgor's ability to fulfill such

Pledgor's obligations pursuant to this Agreement, (j) Pledgor has not incurred

any indebtedness, or any contingent liability, and will not incur any

indebtedness or contingent liability, that materially adversely affects, or will

materially adversely affect, Pledgor's ability to perform under this Agreement,

other than the indebtedness and contingent liabilities under the Syndicated

Credit Agreement, (k) (i) Pledgor's chief executive office is, and always has

been, located in Allegan, Michigan and, (ii) Pledgor has no assets, and never

had any assets, in any other jurisdiction other than Allegan, Michigan, except

for the funds in the Deposit Account, (l) Pledgor does not employ construction

workers, miners or any other workers engaged in any type of labor listed in, or

covered by, Michigan Comp. Laws Section 570.194, (m) Pledgor has received the

consent of JP Morgan Chase Bank, N.A. and the other lenders referred to in

subsection (d) above, (n) no demand has been made for any tax assessed by the

Internal Revenue Service that Perrigo Company or Pledgor has failed or refused

to pay, and (o) neither Perrigo Company nor the Pledgor has been notified of any

deficiency in its tax returns.

 

     7. Further Assurances; Bank Appointed Attorney-in-Fact: Pledgor(s) agrees

at Pledgor's own expense to take such actions and to execute such writings as

the Bank may request from time to time and irrevocably authorizes the Bank to

take such actions and to execute such writings as Pledgor's agent and

attorney-in-fact, which authorization is irrevocable and coupled with an

interest to perfect, confirm and assure the Bank's security interest in the

Collateral, to assist the Bank's realization thereon and to otherwise accomplish

the purposes hereof.

 

     8. Rights and Remedies Upon Default: Upon the occurrence of any Event of

Default, the Bank shall have, in addition to other rights provided in this

Agreement and the rights of a secured party under the Uniform Commercial Code as

in effect in the State of New York and under any other applicable law as in

effect from time to time, the right, without prior notice (except as may be

required by law and may not be waived) to, or consent from, the Pledgor(s), and

without releasing or affecting this Agreement or the Pledgor's obligation

hereunder, to (i) demand and receive payments on or from the Deposit Account and

give releases, receipts and acquittances therefor, (ii) exercise any right of

setoff the Bank may have with respect to the Deposit Account (regardless of the

stated maturity of any portion thereof), (iii) effect one or more withdrawals

from the Deposit Account (regardless of the stated maturity of any portion

thereof) as may be required to pay wholly or partially any Liability of the

Pledgor(s) or any Debtor(s) referred to in, or any obligation of the Pledgor(s)

created by, this Agreement at any time outstanding, and (iv) apply any amounts

so withdrawn, set off, or received on account of, any Liability referred to in,

or any obligation of the Pledgor(s) created by, this Agreement. In addition to,

and not in limitation of, the above rights, upon the occurrence of any Event of

Default, the Bank shall have the right to commence judicial proceedings against

Pledgor to recover any amounts for which Pledgor is liable under Section 13 of

this Agreement and/or Section 7 of the Guaranty.

 

     In the course of exercising the remedies provided for hereunder and/or

under applicable law, the Bank shall have the right, but not the obligation, to

apply any amount held, realized or received by it first, toward the payment of

any of its costs and expenses in enforcing this Agreement, in realizing upon or

protecting any Collateral and in enforcing or collecting, or preserving its

rights with respect to, the Liabilities (including, without limitation,

attorneys' fees and expenses), second, to the payment of all other Liabilities

in such order as the Bank may elect, and third, as otherwise provided by

applicable law. Any instruments or certificates evidencing any Collateral

remaining after the Liabilities have been paid

 

 

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in full shall be delivered to Pledgor(s) or Pledgor's successors or assigns or

as otherwise required under applicable law.

 

     9. Security Interest Absolute: The obligations of Pledgor(s) hereunder

shall remain in full force and effect without regard to, and shall not be

impaired by: (a) any bankruptcy, insolvency, reorganization, arrangement,

readjustment, composition, liquidation or the like of any Debtor (whether in the

United States, in Israel or elsewhere) or any guarantor, endorser or other

Person providing security or otherwise liable for any of the Liabilities; (b)

any exercise or nonexercise, or any waiver, by the Bank of any right, remedy,

power or privilege under or in respect to the Liabilities or any other

agreement, instrument or document executed in connection with or relating to or

evidencing any of the Liabilities or any security for or any guarantee of any of

the Liabilities (other than this Agreement); (c) any extension, renewal,

continuation of or amendment to or modification of any of the Liabilities, any

agreement, instrument or document executed in connection with or relating to or

evidencing any of the Liabilities or any security for or any guarantee of any of

the Liabilities (other than this Agreement); or (d) the invalidity, irregularity

or unenforceability of all or any part of the Liabilities or any security for or

any guarantee of any of the Liabilities, whether or not Pledgor(s) shall have

notice or knowledge of any of the foregoing.

 

     10. Reinstatement of Liability: If claim is ever made upon the Bank for

repayment or recovery of any amount or amounts received by the Bank in payment

or on account of any of the Liabilities of any Debtor and the Bank repays all or

part of said amount by reason of (a) any judgment, decree or order of any court

or administrative body having jurisdiction over the Bank or any of its property,

or (b) any settlement or compromise of any such claim effected by the Bank with

any such claimant (including such Debtor), then any such judgment, decree,

order, settlement or compromise shall be binding upon Pledgor(s),

notwithstanding any revocation hereof or the cancellation of any note or other

instrument evidencing any liability of such Debtor, and Pledgor(s) shall be and

remain liable to the Bank hereunder for the amount so repaid or recovered to the

same extent as if such amount had never originally been received by the Bank.

 

     11. Waiver of Subrogation and Creditor Status: Pledgor(s) irrevocably

waives and gives up any and all legal and equitable rights and claims arising

from the existence or performance of this Agreement that Pledgor(s) may now or

hereafter have and that would result in the Pledgor(s) being deemed a "creditor"

(under the U.S. federal Bankruptcy Code or any other law) of any Debtor or of

any other person or entity directly or contingently liable for any of the

Liabilities of such Debtor (a "Third Party"), including without limitation all

rights of subrogation, indemnity, reimbursement, exoneration and/or

contribution, and including without limitation any such right or claim against

or with respect to any property (including without limitation any collateral

security) of such Debtor or of any Third Party. In furtherance, and not in

limitation, of the preceding waiver, Pledgor(s) agrees that any exercise by the

Bank of its security interest in any of the Collateral securing any of the

Liabilities of any Debtor shall be deemed a contribution to the capital of such

Debtor, and any such payment shall not constitute Pledgor(s) as a "creditor" of

any such Debtor or of any Third Party.

 

     12. Limitation on Bank Liability: Beyond the exercise of reasonable care to

assure the safe custody of the Collateral in its possession, the Bank shall have

no duty or liability to preserve rights pertaining thereto. Furthermore, the

Bank is under no duty to the Pledgor(s) to protect, secure, insure or obtain or

perfect any security interest in any property pledged by any other Person in

connection with any Liability of the Pledgor(s) or of any Debtor. In any event,

the Bank and its directors, officers and employees or agents shall not be liable

for any special, consequential or punitive damages.

 

 

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     13. Indemnification: Pledgor(s) agrees to indemnify and hold the Bank

and/or any directors, officers, employees or agents of the Bank harmless from

and against, and pay on demand to the Bank or such directors, officers,

employees or agents, any and all loss, liability, cost and expense (limited,

however, to Reserve Costs, Capital Adequacy Costs, Change in Law Costs, and any

and all taxes, withholdings and related costs and expenses of the Bank with

respect to the Loan or the Deposit Account, and reasonable attorneys' fees and

expenses in advising, representing or litigating on behalf of the Bank) in

connection with the Collateral, the Guaranty and/or this Agreement, unless such

loss, liability, cost or expense shall be due to willful misconduct or gross

negligence on the part of the Bank or such directors, officers, employees or

agents. Any such loss, liability, cost or expense shall, from the date incurred,

be part of the Liabilities secured by this Agreement and shall accrue interest

at the Applicable Interest Rate.

 

     14. Waiver of Protest, etc.: Pledgor(s) waives notice of acceptance of this

Agreement and notice of any Liability to which it may apply, and waives

presentment, notice of payment, protest, notice of dishonor or nonpayment of any

Liabilities of any Debtor, or of any suit or the taking of other action by the

Bank against, and any other notice to, any Person liable thereon.

 

     15. Parties: Pledgor(s), if more than one, shall be jointly and severally

liable under this Agreement. Anyone signing this Agreement shall be bound

hereby, whether or not anyone else signs this Agreement at any time. Any

reference herein to the Pledgor(s) or to any other Debtor shall include (a) any

successor or successors to which all or substantially all of the business or

assets of Pledgor(s) or of such Debtor shall have been transferred directly or

indirectly and (b) any other corporation, firm or entity into or with which

Pledgor(s) or any other Debtor shall have merged, consolidated or reorganized.

The term "Bank" includes any agent of the Bank acting for it.

 

     16. Amendments, etc.: None of the terms or conditions of this Agreement may

be changed, waived, modified or varied in any manner whatever unless in a

writing duly signed on behalf of the Bank; and each such waiver, if any, shall

be a waiver only with respect to the specific instance involved and shall in no

way impair the rights of the Bank or the obligations of the Pledgor(s) to the

Bank in any other respect at any other time.

 

     17. Provisions of Other Agreements: Neither the provisions of this

Agreement nor the Bank's acceptance of a pledge of and/or security interest in

the Collateral