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PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, dated as of April 17, 2000 (this "Pledge Agreement")
is made by American Medical Systems, Inc., a Delaware corporation (the
"Borrower"), American Medical Systems Holdings, Inc., a Delaware corporation
(the "Parent"), certain Subsidiaries of the Borrower (together with the Parent,
individually a "Guarantor" and collectively the "Guarantors"; the Guarantors,
together with the Borrower, individually a "Pledgor" and collectively the
"Pledgors") and Bank of America, N.A., in its capacity as agent (in such
capacity, the "Agent") for the lenders from time to time party to the Credit
Agreement described below (the "Lenders").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of March 24,
2000 (as amended, modified, extended, renewed or replaced from time to time, the
"Credit Agreement"), among the Borrower, the Guarantors, the Lenders and the
Agent, the Lenders have agreed to make Loans and issue Letters of Credit upon
the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue Letters of Credit under the Credit Agreement that the Pledgors shall
have executed and delivered this Pledge Agreement to the Agent for the ratable
benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein but not otherwise defined
shall have the meanings ascribed to such terms in the Credit Agreement. For
purposes of this Pledge Agreement, the term "Lender" shall include any Affiliate
of any Lender which has entered into a Hedging Agreement with any Credit Party
(to the extent the obligations of such Credit Party thereunder constitute Credit
Party Obligations).
2. Pledge and Grant of Security Interest. To secure the prompt payment
and performance in full when due, whether by lapse of time or otherwise, of the
Pledgor Obligations (as defined in Section 3 hereof), each Pledgor hereby
pledges and assigns to the Agent, for the benefit of the Lenders, and grants to
the Agent, for the benefit of the Lenders, a continuing security interest in,
and a right to set off against, any and all right, title and interest of such
Pledgor in and to the following, whether now owned or existing or owned,
acquired, or arising hereafter (collectively, the "Pledged Collateral"):
(a) Pledged Capital Stock. (i) 100% (or, if less, the full
amount owned by such Pledgor) of the issued and outstanding Capital Stock
of the Persons set forth on Schedule 2(a) attached hereto that are Domestic
Subsidiaries and
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(ii) 65% (or, if less, the full amount owned by such Pledgor) of the issued
and outstanding Capital Stock of the Persons set forth on Schedule 2(a)
attached hereto that are Foreign Subsidiaries, in each full amount owned by
such Pledgor) of the issued and outstanding Capital Stock of the Persons
set forth on Schedule 2(a) attached hereto that are Foreign Subsidiaries,
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 Sections 2(b) and 2(c) below,
the "Pledged Capital Stock"), including, but not limited to, the following:
(A) all shares, securities, membership interests or other equity
interests representing a dividend on any of the Pledged Capital Stock,
or representing a distribution or return of capital upon or in respect
of the Pledged Capital Stock, 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 Capital Stock; provided, however,
such Pledgor shall not be required to deliver more than 65% of the
Person that is a Foreign Subsidiary of such Pledgor; and
(B) without affecting the obligations of the Pledgors 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 Capital Stock and in which such issuer is not
the surviving entity, the Capital Stock (in the applicable percentage
specified in Section 2(a) above) of the successor entity formed by or
resulting from such consolidation or merger.
(b) Additional Shares. (i) 100% (or, if less, the full amount owned
by such Pledgor) of the issued and outstanding Capital Stock of any Person
which hereafter becomes a Domestic Subsidiary and (ii) 65% (or, if less,
the full amount owned by such Pledgor) of the issued and outstanding
Capital Stock of any Person which hereafter becomes a first-tier Foreign
Subsidiary, in each case together with the certificates (or other
agreements or instruments), if any, representing such Capital Stock.
(c) Proceeds. All proceeds and products of the foregoing, however and
whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby specifically
understood and agreed that each Pledgor may from time to time hereafter deliver
additional shares of Capital Stock to the Agent as collateral security for the
Pledgor Obligations. Upon delivery to the Agent, such additional Capital Stock
shall be deemed to be part of the Pledged Collateral 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.
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3. Security for Pledgor Obligations. The security interest created hereby
in the Pledged Collateral constitutes continuing collateral security for all of
the following, whether now existing or hereafter incurred (the "Pledgor
Obligations"):
(a) In the case of the Borrower, the prompt performance and
observance by the Borrower of all obligations of the Borrower under the
Credit Agreement, the Notes, this Pledge Agreement and the other Credit
Documents to which the Borrower is a party;
(b) Subject to clause (c) of Section 26 hereof, in the case of the
Guarantors, the prompt performance and observance by each Guarantor of all
obligations of such Guarantor under the Credit Agreement, this Pledge
Agreement and the other Credit Documents to which such Guarantor is a
party, including, without limitation, its guaranty obligations arising
under Section 4 of the Credit Agreement; and
(c) All other indebtedness, liabilities, obligations and expenses of
any kind or nature owing from any Credit Party to any Lender or the Agent
in connection with (i) this Pledge Agreement or any other Credit Document,
whether now existing or hereafter arising, due or to become due, direct or
indirect, absolute or contingent, and howsoever evidenced, held or
acquired, together with any and all modifications, extensions, renewals
and/or substitutions of any of the foregoing, (ii) collecting and enforcing
the Credit Party Obligations and (iii) all liabilities and obligations
owing from such Credit Party to any Lender or any Affiliate of any Lender
arising under any Hedging Agreements.
4. Delivery of the Pledged Collateral; Perfection of Security Interest.
Each Pledgor hereby agrees that:
(a) Delivery of Certificates. Each Pledgor shall deliver to the Agent
(i) simultaneously with or prior to the execution and delivery of this
Pledge Agreement, all certificates representing the Pledged Capital Stock
of such Pledgor and (ii) promptly upon the receipt thereof by or on behalf
of a Pledgor, all other certificates and instruments constituting Pledged
Collateral of a Pledgor. Prior to delivery to the Agent, all such
certificates and instruments constituting Pledged Collateral of a Pledgor
shall be held in trust by such Pledgor for the benefit of the 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.
(b) Additional Securities. If such Pledgor shall receive by virtue of
its being, becoming or having been the owner of any Pledged Collateral, any
(i) certificate, including without limitation, 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 membership or equity interests, stock splits,
spin-off or split-off, promissory notes or other instrument; (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 or other
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equity interests in connection with a partial or total liquidation,
dissolution or reduction of capital, capital surplus or paid-in surplus,
then, subject to the percentage limitations set forth in Section 2(a)
above, such Pledgor shall receive such certificate, instrument, option,
right or distribution in trust for the benefit of the Agent, shall
segregate it from such Pledgor's other property and shall deliver it
forthwith to the 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 Agent as Pledged Collateral and as further collateral security for the
Pledgor Obligations.
(c) Financing Statements. Each Pledgor shall execute and deliver to
the Agent such UCC or other applicable financing statements as may be
reasonably requested by the Agent in order to perfect and protect the
security interest created hereby in the Pledged Collateral of such Pledgor.
(d) Control. If necessary to perfect the Lenders' security interest
in any Pledged Collateral consisting of uncertificated Pledged Capital
Stock, upon request of the Agent, (i) the Pledgor shall send to each issuer
of such uncertificated Pledged Capital Stock (each an "Issuer") an
authorization statement substantially in the form provided in Exhibit
4(d)(i) (each an "Authorization Statement") and (ii) the Pledgor shall
cause each such Issuer to, and each such Issuer shall, deliver to the Agent
(A) an Acknowledgement and Consent substantially in the form provided in
Exhibit 4(d)(ii)(A) (each an "Acknowledgement and Consent") and (B) a
Transaction Statement substantially in the form provided in Exhibit
4(d)(ii)(B) (each a "Transaction Statement"), confirming that such Issuer
has registered the pledge effected by this Pledge Agreement on its books.
Each Pledgor hereby authorizes and instructs each Issuer that is a party to
this Pledge Agreement to comply with any instruction received by it from
the Agent in writing that (y) states that an Event of Default has occurred
and is continuing and (z) is otherwise in accordance with the terms of this
Pledge Agreement, without any other or further instructions from such
Pledgor, and such Pledgor agrees to indemnify such Issuer for any loss,
damage or liability incurred by such Issuer in acting upon such
instructions of the Agent.
5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that so long as any of
the Pledgor Obligations remain outstanding (other than any such obligations
which by the terms thereof are stated to survive termination of the Credit
Documents) or any Credit Document or Hedging Agreement between a Credit Party
and any Lender (to the extent the obligations of such Credit Party thereunder
constitute Credit Party Obligations) is in effect, and until all of the
Commitments shall have been terminated:
(a) Authorization of Pledged Capital Stock. The Pledged Capital Stock
is duly authorized and validly issued, is fully paid and, with respect any
Pledged Capital Stock consisting of stock of a corporation, nonassessable
and is not subject to the preemptive rights of any Person. All other shares
of Capital Stock constituting Pledged Collateral will be duly authorized
and validly issued, fully paid and, with respect any Pledged Capital Stock
consisting of stock of a corporation, nonassessable and not subject to the
preemptive rights of any Person.
(b) Title. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal and
beneficial owner of such Pledged Collateral free and clear of any Lien,
other than Permitted Liens. There exists no "adverse claim" within the
meaning of Section 8-102 of the Uniform Commercial Code as in effect in the
State of New York (the "UCC") with respect to the Pledged Capital Stock of
such Pledgor.
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(c) Exercising of Rights. The exercise by the Agent of its rights and
remedies hereunder will not violate any law or governmental regulation or
any material contractual restriction binding on or affecting a 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 with the issuer of
any Pledged Capital Stock is required either (i) for the pledge made by a
Pledgor or for the granting of the security interest by a Pledgor pursuant
to this Pledge Agreement or (ii) for the exercise by the Agent or the
Lenders of their rights and remedies hereunder (except as may be required
by laws affecting the offering and sale of securities).
(e) Security Interest/Priority. This Pledge Agreement creates a valid
security interest in favor of the Agent, for the benefit of the Lenders, in
the Pledged Collateral. The taking possession by the Agent of the
certificates, if any, representing the Pledged Capital Stock and all other
certificates and instruments constituting Pledged Collateral will perfect
and establish the first priority of the Agent's security interest in the
Pledged Capital Stock and such certificates and instruments and, upon the
filing of UCC financing statements or registration of the Agent's security
interest on the books and records of the Issuers of any uncertificated
Pledged Capital Stock, the Agent shall have a first priority perfected
security interest in all other Pledged Collateral represented by such
Pledged Capital Stock. Except as set forth in this Section 5(e), no action
is necessary to perfect or otherwise protect such security interest.
(f) No Other Capital Stock. No Pledgor owns any Capital Stock other
than as set forth on Schedule 2(a) attached hereto.
(g) Partnership and Limited Liability Company Interests. Except as
previously disclosed to the Agent, none of the Pledged Capital Stock
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, (iii) is an investment company security, (iv) is held in a
securities account or (v) constitutes a "security" or a "financial asset"
as such terms are defined in Article 8 of the UCC.
6. Covenants. Each Pledgor hereby covenants, that so long as any of the
Pledgor Obligations remain outstanding (other than any such obligations which
by the terms thereof are stated to survive termination of the Credit Documents)
or any Credit Document or Hedging Agreement between any Credit Party and any
Lender (to the extent the obligations of such Credit Party thereunder
constitute Credit Party Obligations) is in effect, and until all the
Commitments shall have been terminated, such Pledgor shall:
(a) Books and Records. Xxxx its books and records (and shall cause
the issuer of the Pledged Capital Stock of such Pledgor to xxxx its books
and records) to reflect the security interest granted to the Agent, for the
benefit of the Lenders, pursuant to this Pledge Agreement.
(b) Defense of Title. Warrant and defend title to and ownership of
the Pledged Collateral of such 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
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otherwise dispose of Pledged Collateral of such Pledgor or any interest
therein, except as permitted under the Credit Agreement and the other
Credit Documents.
(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 Agent may reasonably request in
order to (i) perfect and protect the security interest created hereby in
the Pledged Collateral of such Pledgor (including, without limitation, the
execution and filing of UCC financing statements and any and all action
necessary to satisfy the Agent that the Agent has obtained a first priority
perfected security interest in all Pledged Capital Stock); (ii) enable the
Agent to exercise and enforce its rights and remedies hereunder in respect
of the Pledged Collateral of such Pledgor; and (iii) otherwise effect the
purposes of this Pledge Agreement, including, without limitation and if
requested by the Agent, delivering to the Agent irrevocable proxies in
respect of the Pledged Collateral of such Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any restriction
with respect to any of the Pledged Collateral of such 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 such Pledgor with the
United States Securities and Exchange Commission and any other state,
federal or foreign agency in connection with the ownership of the Pledged
Collateral of such Pledgor.
(f) Issuance or Acquisition of Capital Stock. Not, without providing
30 days prior written notice to the Agent and without executing and
delivering, or causing to be executed and delivered, to the Agent such
agreements, documents and instruments as the Agent may require, issue or
acquire any Capital Stock 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, (iii) is an
investment company security, (iv) is held in a securities account or (v)
constitutes a "security" or a "financial asset" as such terms are defined
in Article 8 of the UCC.
7. Performance of Obligations and Advances by Agent or Lenders. On
failure of any Pledgor to perform any of the covenants and agreements contained
herein, the Agent or any of the Lenders may, at its sole option and in its
reasonable discretion, perform or cause to be performed the same and in so doing
may expend such sums as the Agent or such Lender may reasonably deem advisable
in the performance thereof, including, without limitation, 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 which the Agent or such Lender may make for the
protection of the security hereof or which may be compelled to make by operation
of law. All such sums and amounts so expended shall be repayable by the Pledgors
on a joint and several basis promptly upon timely notice thereof and demand
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therefor, shall constitute additional Pledgor Obligations and shall bear
interest from the date said amounts are expended at the default rate specified
in Section 3.1 of the Credit Agreement for Revolving Loans that are Base Rate
Loans. No such performance of any covenant or agreement by the Agent or the
Lenders on behalf of any Pledgor, and no such advance or expenditure therefor,
shall relieve the Pledgors of any default under the terms of this Pledge
Agreement, the other Credit Documents or any Hedging Agreement between any
Credit Party and any Lender (to the extent the obligations of such Credit Party
thereunder constitute Credit Party Obligations). The Agent or any Lender may
make any payment hereby authorized in accordance with any xxxx, statement or
estimate procured from the appropriate public office or holder of the claim to
be discharged without inquiry into the accuracy of such xxxx, 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 a Pledgor in appropriate proceedings and against which adequate
reserves are being maintained in accordance with GAAP.
8. Events of Default. The occurrence of an event which under the Credit
Agreement would constitute an Event of Default 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 Agent and the Lenders shall have, in
respect of the Pledged Collateral of any Pledgor, in addition to the rights
and remedies provided herein, in the Credit Documents, in any Hedging
Agreement between any Credit Party and any Lender (to the extent the
obligations of such Credit Party thereunder constitute Credit Party
Obligations) or by law, the rights and remedies of a secured party under
the UCC or any other applicable law.
(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 and without notice, the 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 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 Lender
may in such event bid for the purchase of such securities. Each Pledgor
agrees that, to the extent notice of sale shall be required by law and has
not been waived by such 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 such Pledgor in accordance with the notice provisions of
Section 11.1 of the Credit Agreement at least 10 days before the time of
such sale. The Agent shall not be obligated to make any sale of Pledged
Collateral of such Pledgor regardless of notice of sale having been given.
The Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
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(c) Private Sale. Upon the occurrence of an Event of Default and
during the continuation thereof, the Pledgors recognize that the Agent may
deem it impracticable to effect a public sale of all or any part of the
Pledged Collateral and that the 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. Each Pledgor
acknowledges that any such private sale may be at prices and on terms less
favorable to the seller than the prices and other terms which might have
been obtained at a public sale and, notwithstanding the foregoing, agrees
that such private sale shall be deemed to have been made in a commercially
reasonable manner and that the 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. Each Pledgor further
acknowledges and agrees that any offer to sell such Pledged Collateral
which 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 of 1933), or (ii) made
privately in the manner described above shall be deemed to involve a
"public sale" under the UCC, notwithstanding that such sale may not
constitute a "public offering" under the Securities Act of 1933, and the
Agent may, in such event, bid for the purchase of such Pledged Collateral.
(d) Retention of Pledged Collateral. In addition to the rights and
remedies hereunder, upon the occurrence of an Event of Default, the Agent
may, after providing the notices required by Section 9-505(2) of the UCC or
otherwise complying with the requirements of applicable law of the relevant
jurisdiction, retain all or any portion of the Pledged Collateral in
satisfaction of the Pledgor Obligations. Unless and until the Agent shall
have provided such notices, however, the Agent shall not be deemed to have
retained any Pledged Collateral in satisfaction of any Pledgor 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
Agent or the Lenders are legally entitled, the Pledgors shall be jointly
and severally liable for the deficiency, together with interest thereon at
the default rate specified in Section 3.1 of the Credit Agreement for
Revolving Loans that are Base Rate Loans and together with the costs of
collection and the reasonable fees of any attorneys employed by the Agent
to collect such deficiency. Any surplus remaining after the full payment
and satisfaction of the Pledgor Obligations shall be returned to the
Pledgors or to whomsoever a court of competent jurisdiction shall determine
to be entitled thereto.
10. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the Agent, on
behalf of the Lenders,
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and each of its designees or agents as attorney-in-fact of such Pledgor,
irrevocably and with power of substitution, with authority to take any or all of
the following actions upon the occurrence and during the continuance of an Event
of Default:
(i) to demand, collect, settle, compromise, adjust and give
discharges and releases concerning the Pledged Collateral of such
Pledgor, all as the Agent may reasonably determine;
(ii) to commence and prosecute any actions at any court for the
purposes of collecting any of the Pledged Collateral of such Pledgor
and enforcing any other right in respect thereof;
(iii) to defend, settle, adjust or compromise any action, suit
or proceeding brought and, in connection therewith, give such
discharge or release as the Agent may deem reasonably appropriate;
(iv) to pay or discharge taxes, liens, security interests, or
other encumbrances levied or placed on or threatened against the
Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any payment under any of
the Pledged Collateral to make payment of any and all monies due and
to become due thereunder directly to the Agent or as the Agent shall
direct;
(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 of such Pledgor;
(vii) to sign and endorse any drafts, assignments, proxies,
stock powers, verifications, notices and other documents relating to
the Pledged Collateral of such Pledgor;
(viii) to execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements, pledge
agreements, affidavits, notices and other agreements, instruments and
documents that the Agent may determine necessary 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 herein;
(ix) to exchange any of the Pledged Collateral of such Pledgor
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 of such
Pledgor with any committee, depository, transfer agent, registrar or
other designated agency upon such terms as the Agent may determine;
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(x) to vote for a shareholder or member resolution, or to sign
an instrument in writing, sanctioning the transfer of any or all of
the Pledged Capital Stock of such Pledgor into the name of the Agent
or one or more of the Lenders or into the name of any transferee to
whom the Pledged Capital Stock of such Pledgor 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
Agent may reasonably deem to be necessary, proper or convenient in
connection with the Pledged Collateral of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Pledgor Obligations remain
outstanding (other than any such obligations which by the terms thereof are
stated to survive termination of the Credit Documents) or any Credit
Document or any Hedging Agreement between any Credit Party and any Lender
(to the extent the obligations of such Credit Party thereunder continue
Credit Party Obligations) is in effect and (ii) until all of the
Commitments shall have been terminated. The 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 Agent in this Pledge
Agreement and shall not be liable for any failure to do so or any delay in
doing so. The 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 willful misconduct. This power of attorney is
conferred on the Agent solely to protect, preserve and realize upon its
security interest in the Pledged Collateral.
(b) Assignment by the Agent. The Agent may from time to time assign
the Pledgor Obligations and any portion thereof and/or the Pledged
Collateral and any portion thereof, and the assignee shall be entitled to
all of the rights and remedies of the Agent under this Pledge Agreement in
relation thereto.
(c) The Agent's Duty of Care. Other than the exercise of reasonable
care to ensure the safe custody of the Pledged Collateral while being held
by the Agent hereunder, the Agent shall have no duty or liability to
preserve rights pertaining thereto, it being understood and agreed that
each of the Pledgors shall be responsible for preservation of all rights in
the Pledged Collateral of such Pledgor, and the Agent shall be relieved of
all responsibility for such Pledged Collateral upon surrendering it or
tendering the surrender of it to such Pledgor. The 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 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
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 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 Pledged
Collateral.
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(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, each Pledgor may
exercise any and all voting and other consensual rights pertaining to
the Pledged Collateral of such 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, all rights of a Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to paragraph (i) of this Section shall cease and all
such rights shall thereupon become vested in the Agent which shall
then have the sole right to exercise such voting and other consensual
rights.
(f) Dividend and Distribution 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, each Pledgor may
receive and retain any and all dividends (other than stock dividends
and other dividends constituting Pledged Collateral which are
addressed hereinabove), distributions 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:
(A) all rights of a Pledgor to receive the dividends,
distributions and interest payments which it would otherwise be
authorized to receive and retain pursuant to subsection (i) of
this Section shall cease and all such rights shall thereupon be
vested in the Agent which shall then have the sole right to
receive and hold as Pledged Collateral such dividends,
distributions and interest payments; and
(B) all dividends, distributions and interest payments
which are received by a Pledgor contrary to the provisions of
subsection (A) of this Section shall be received in trust for the
benefit of the Agent, shall be segregated from other property or
funds of such Pledgor, and shall be forthwith paid over to the
Agent as Pledged Collateral in the exact form received, to be
held by the Agent as Pledged Collateral and as further collateral
security for the Pledgor Obligations.
(g) Release of Pledged Collateral. The 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
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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 Agent hereunder, if not
exercised by the Agent, may be exercised by the Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Pledgor Obligations in the order set forth in Section 3.15(b)
of the Credit Agreement, and each Pledgor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
the Agent shall have the continuing and exclusive right to apply and reapply any
and all such payments and proceeds in the Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.
13. Costs and Expenses. At all times hereafter, the Pledgors agree to
promptly pay upon demand any and all reasonable costs and expenses of the Agent
or the Lenders, (a) as required under Section 11.5 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 Pledged Collateral.
All of the foregoing costs and expenses shall constitute Pledgor 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
Pledgor Obligations remain outstanding (other than any such obligations
which by the terms thereof are stated to survive termination of the Credit
Documents) or any Credit Document or Hedging Agreement between any Credit
Party and any Lender (to the extent the obligations of such Credit Party
thereunder constitute Credit Party Obligations) is in effect, and until all
of the Commitments thereunder shall have terminated. Upon such payment and
termination this Pledge Agreement shall be automatically terminated and the
Agent and the Lenders shall, upon the request and at the expense of the
Pledgors, (i) return all certificates representing the Pledged Capital
Stock, all other certificates and instruments constituting Pledged
Collateral and all instruments of transfer or assignment which have been
delivered to the Agent pursuant to this Pledge Agreement and (ii) forthwith
release all of its liens and security interests hereunder and shall execute
and deliver all UCC termination statements and/or other documents
reasonably requested by the Pledgors evidencing such termination.
Notwithstanding the foregoing, all releases and 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 Pledgor Obligations is rescinded or must
otherwise be restored or returned by the Agent or any Lender 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 Pledgor
Obligations is rescinded or must be restored or returned, all reasonable
costs and expenses (including without limitation any reasonable legal fees
and disbursements) incurred by the Agent or any Lender in
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defending and enforcing such reinstatement shall be deemed to be included
as a part of the Pledgor Obligations.
15. Amendments; Waivers; Modifications. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.6 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 each
Pledgor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders and their successors and permitted assigns; provided, however,
that none of the Pledgors may assign its rights or delegate its duties hereunder
without the prior written consent of each Lender or the Required Lenders, as
required by the Credit Agreement. To the fullest extent permitted by law, each
Pledgor hereby releases the Agent and each Lender, and its successors and
assigns, from any liability for any act or omission relating to this Pledge
Agreement or the Collateral, except for any liability arising from the gross
negligence or willful misconduct of the Agent, or such Lender, or its officers,
employees or agents.
17. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
18. Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which where 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,
construction or interpretation of any provision of this Pledge Agreement.
20. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Pledge Agreement may be brought in the
courts of the State of North Carolina or the State of New York, or of the
United States for either the Western District of North Carolina or the
Southern District of New York, and, by execution and delivery of this
Pledge Agreement, each Pledgor hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of
such courts. Each Pledgor further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address for notices pursuant to Section
11.1 of the Credit Agreement, such service to become effective 30 days
after such mailing. Nothing herein
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shall affect the right of the Agent to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise proceed
against any Pledgor in any other jurisdiction.
(b) Each Pledgor hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Pledge
Agreement brought in the courts referred to in subsection (a) hereof and
hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
21. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
22. Severability. If any provision of this Pledge Agreement is determined
to be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
23. Entirety. This Pledge Agreement, the other Credit Documents and the
Hedging Agreements between any Credit Party and any Lender (to the extent the
obligations of such Credit Party thereunder constitute Credit Party Obligations)
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents, such
Hedging Agreements or the transactions contemplated herein and therein.
24. Survival. All representations and warranties of the Pledgors hereunder
shall survive the execution and delivery of this Pledge Agreement, the other
Credit Documents and the Hedging Agreements between any Credit Party and any
Lender (to the extent the obligations of such Credit Party thereunder constitute
Credit Party Obligations), the delivery of the Notes, the making of the Loans
and the issuance of the Letters of Credit.
25. Other Security. To the extent that any of the Pledgor Obligations are
now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Agent and the Lenders shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence of any Event of Default,
and the Agent and the Lenders have the right, in their sole discretion, to
determine which rights, security, liens, security interests or remedies the
Agent and the Lenders shall at any time pursue, relinquish, subordinate, modify
or take with respect thereto, without in any way modifying or affecting any of
them or any of the Agent's and the Lenders' rights or the Pledgor Obligations
under this Pledge Agreement, under any other of the Credit Documents or under
any
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Hedging Agreement between any Credit Party and any Lender (to the extent the
obligations of such Credit Party thereunder constitute Credit Party
Obligations).
26. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by
the Lenders under the Credit Agreement, for the mutual benefit, directly
and indirectly, of each of the Pledgors and in consideration of the
undertakings of each of the Pledgors to accept joint and several liability
for the obligations of each of them.
(b) Each of the Pledgors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Pledgors with respect to the
payment and performance of all of the Pledgor Obligations arising under
this Pledge Agreement, the other Credit Documents and the Hedging
Agreements between any Credit Party and any Lender (to the extent the
obligations of such Credit Party thereunder constitute Credit Party
Obligations), it being the intention of the parties hereto that all the
Pledgor Obligations shall be the joint and several obligations of each of
the Pledgors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained herein or
in any other of the Credit Documents, to the extent the obligations of a
Pledgor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal
law relating to fraudulent conveyances or transfers) then the obligations
of such Pledgor hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and including,
without limitation, the Bankruptcy Code).
[remainder of page intentionally left blank]
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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.
PLEDGORS: AMERICAN MEDICAL SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Vice President-Finance, Treasurer
and Chief Financial Officer
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Vice President-Finance, Treasurer
and Chief Financial Officer
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------
INFLUENCE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Chief Financial Officer
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------
Accepted and agreed as of the date first above written.
BANK OF AMERICA, N.A., as Agent
By: /s/ Xxxx X. X'Xxxxx
--------------------------------------
Title: Managing Director
-----------------------------------
Name: Xxxx X. X'Xxxxx
------------------------------------
17
Schedule 2(a)
to
Pledge Agreement
dated as of , 2000 in favor of
Bank of America, N.A.,
as Agent
PLEDGED CAPITAL STOCK
PLEDGOR: AMERICAN MEDICAL SYSTEMS
HOLDINGS, INC.
Name of Number of Certificate Percentage Percentage
Domestic Subsidiary Shares Number Ownership Pledged
------------------- ------ ------ --------- -------
American Medical Systems, Inc. 100% 100%
PLEDGOR: AMERICAN MEDICAL SYSTEMS,
INC.
Name of Number of Certificate Percentage Percentage
Domestic Subsidiary Shares Number Ownership Pledged
------------------- ------ ------ --------- -------
Influence, Inc. 10,000,000 100% 100%
18
Exhibit 4(a)
to
Pledge Agreement
dated as of __________, 2000 in favor of
Bank of America, N.A.,
as Agent
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of , a corporation:
No. of Shares Certificate 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.
--------------------------------,
a corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
