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(i)
all of the Pledged Shares;
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(ii)
all additional shares of stock or other securities of any issuer of the Pledged
Shares from time to time acquired by the Pledgor in any manner (any such shares
being “Additional Shares”);
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(iii)
the certificates representing the shares referred to in clauses (i) and (ii)
above; and
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(iv)
all dividends, cash, instruments and other property or proceeds, from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the foregoing.
SECTION 2.
Security for Obligations. This Agreement secures and the Pledged Collateral is
security for the prompt and complete payment (whether at stated maturity, by
acceleration or otherwise) of, and the performance and observance of, the
Obligations.
SECTION 3.
Delivery of Pledged Collateral. All certificates or instruments representing or
evidencing the Pledged Collateral shall be delivered to and held by or on
behalf of the Agent pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments of transfer
or assignment in blank, all in form and substance satisfactory to the Agent.
The Agent shall have the right, at any time in its discretion and without
notice to the Pledgor, to transfer to or to register in its name or in the name
of any of its nominees any or all of the Pledged Collateral. In addition, the
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing any of the Pledged Collateral for certificates or
instruments of smaller or larger denominations.
SECTION 4.
Representations and Warranties. The Pledgor makes the following representations:
(a) The Pledged
Shares (i) have been duly authorized and validly issued; (ii) are fully paid
and non-assessable; and (iii) constitute 100% of the issued and outstanding
shares of stock of the issuers owned by the Pledgor named in Schedule I hereto.
(b) The Pledgor
is the legal and beneficial owner of the Pledged Collateral free and clear of
any mortgage, pledge, lien, charge, security interest, conditional sale or
other title retention agreement or other encumbrance of any kind or
description, including, without limitation, any agreement to give or xxxxx x
xxxx (“Lien”), except for the Lien created by this Agreement (the
“Permitted Liens”).
(c) Assuming
continuous possession of the Pledged Shares by the Agent, the pledge of the
Pledged Shares pursuant to this Agreement creates a valid and perfected first
priority security interest in the Pledged Collateral, securing the payment of
all of the Obligations.
(d) No consent,
authorization, approval, or other action by, and no notice to or filing with,
any governmental authority is required either (i) for the pledge by the Pledgor
of the
Pledged Collateral pursuant to this Agreement or for the due
execution, delivery or performance of this Agreement by the Pledgor, or (ii)
for the exercise by the Agent of the voting or other rights provided for in
this Agreement or of the remedies in respect of the Pledged Collateral pursuant
to this Agreement, except as may be required in connection with the disposition
of the Pledged Collateral by laws affecting the offering and sale of securities
generally.
SECTION 5.
Further Assurances, Etc. (a) The Pledgor agrees that at any time and from time
to time, at the cost and expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may reasonably
request, in order to perfect and protect the Lien granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Pledged Collateral.
(b) The Pledgor
agrees to defend the title to the Pledged Collateral and the Lien thereon of
the Agent against the claim of any other Person and to maintain and preserve
such Lien until indefeasible payment in full of all of the Obligations.
SECTION 6.
Voting Rights; Dividends; Etc.
(a) As long as
no Event of Default shall have occurred and be continuing (and, in the case of
subsection (a)(i) of this Section 6, as long as no notice thereof shall have
been given by the Agent to the Pledgor):
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(i)
The Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral or any part thereof for
any purpose not inconsistent with the terms of this Agreement, the Credit
Agreement or any other Loan Document; provided, however, that the Pledgor shall
not exercise or shall refrain from exercising any such right if such action
could reasonably be expected to have a material adverse effect on the value of
the Pledged Collateral.
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(ii)
The Pledgor shall be entitled to receive and retain any and all dividends paid
in respect of the Pledged Collateral, other than any and all:
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(A)
dividends paid or payable other than in cash in respect of, and instruments and
other property received, receivable or otherwise distributed in respect of, or
in exchange for, any Pledged Collateral;
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(B)
dividends and other distributions paid or payable in cash in respect of any
Pledged Collateral in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid-in-surplus; and
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(C)
cash paid, payable or otherwise distributed in redemption of, or in exchange
for, any Pledged Collateral,
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all
of which shall be forthwith delivered to the Agent to hold as Pledged
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor, and be forthwith delivered to the Agent as Pledged Collateral in the
same form as so received (with any necessary indorsement).
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The Agent shall execute and deliver (or cause to be executed and delivered) to
the Pledgor all such proxies and other instruments for the purpose of enabling
the Pledgor to exercise the voting and other rights which it is entitled to
exercise pursuant to paragraph (i) above and to receive the dividends which it
is authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the
occurrence and during the continuance of an Event of Default (and, in the case
of subsection (a)(i) of this Section 6, upon notice thereof given by the Agent
to the Pledgor):
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(i)
Upon notice by the Agent to the Pledgor, all rights of the Pledgor to exercise
the voting and other consensual rights which it would otherwise be entitled to
exercise pursuant to Section 6(a)(i) above shall cease, and all such rights
shall thereupon become vested in the Agent who shall thereupon have the sole
right to exercise such voting and other consensual rights;
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(ii)
All rights of the Pledgor to receive the dividends which it would otherwise be
authorized to receive and retain pursuant to Section 6(a)(ii) above shall
cease, and all such rights shall thereupon become vested in the Agent who shall
thereupon have the sole right to receive and hold as Pledged Collateral such
dividends;
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(iii)
All dividends which are received by the Pledgor contrary to the provisions of
paragraph (ii) of this Section 6(b) shall be received in trust for the benefit
of the Agent, shall be segregated from other funds of the Pledgor and shall be
forthwith paid over to the Agent as Pledged Collateral in the same form as so
received (with any necessary indorsement); and
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(iv)
The Pledgor shall, if necessary to permit the Agent to exercise the voting and
other rights which it may be entitled to exercise pursuant to Section 6(b)(i)
above and to receive all dividends and distributions which it may be entitled
to receive under Section 6(b)(ii) above, execute and deliver to the Agent, from
time to time and upon written notice of the Agent, appropriate proxies,
dividend payment orders and other instruments as the Agent may reasonably
request. The foregoing shall not in any way limit the Agent’s power and
authority granted pursuant to Section 8 hereof.
SECTION 7.
Transfers and Other Liens; Additional Shares. (a) The Pledgor agrees that it
will not (i) sell or otherwise dispose of, or grant any option or warrant with
respect
to, any of the Pledged Collateral, or (ii) create or permit to
exist any Lien upon or with respect to any of the Pledged Collateral, except
for the Permitted Liens.
(a) The Pledgor
agrees that it will (i) cause each issuer of the Pledged Shares not to issue
any shares of stock or other securities in addition to or in substitution for
the Pledged Shares, except, with the written consent of the Agent, to the
Pledgor, (ii) pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all Additional Shares, and (iii) promptly (and in
any event within three Business Days) deliver to the Agent a Pledge Amendment,
duly executed by the Pledgor, in substantially the form of Schedule II hereto
(a “Pledge Amendment”), in respect of the Additional Shares, together
with all certificates or instruments representing or evidencing the same. The
Pledgor hereby (i) authorizes the Agent to attach each Pledge Amendment to this
Pledge Agreement, (ii) agrees that all Additional Shares listed on any Pledge
Amendment delivered to the Agent shall for all purposes hereunder constitute
Pledged Shares, and (iii) is deemed to have made, upon such delivery, the
representations and warranties contained in Section 4 hereof with respect to
such Pledged Collateral.
SECTION 8.
Agent Appointed Attorney-in-Fact and Proxy. The Pledgor hereby irrevocably
constitutes and appoints the Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact and proxy with
full irrevocable power and authority in the place and stead of the Pledgor and
in the name of the Pledgor or in its own name, from time to time in the Agent’s
discretion upon the occurrence and during the continuance of any Event of
Default, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute and deliver any and all documents
and instruments which the Agent may deem necessary or advisable to accomplish
the purposes of this Agreement, including, without limitation, to receive,
indorse and collect all instruments made payable to the Pledgor representing
any dividend or other distribution or payment in respect of the Pledged
Collateral or any part thereof and to give full discharge of the same and to
vote or grant any consent in respect of the Pledged Shares authorized by
Section 6(b) hereof; provided, however, that the Agent will forbear from
exercising the power of attorney or any of the rights granted to the Agent
pursuant to this Section 8 unless and until the Agent shall have requested that
Pledgor take such action, and Pledgor shall have failed to take such action
within five (5) days of its receipt of such request. The Pledgor hereby
ratifies, to the extent permitted by law, all that any said attorney shall
lawfully do or cause to be done by virtue hereof. This power, being coupled
with an interest, is irrevocable until the Obligations are paid in full and all
commitments under the Credit Agreement and the Loan Documents have terminated.
SECTION 9.
Agent Perform. If the Pledgor fails to perform any agreement contained herein,
the Agent may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Agent incurred in connection therewith shall be
payable by the Pledgor under Section 12 hereof and shall constitute Obligations
secured hereby.
SECTION 10.
Reasonable Care. The Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment substantially equal to
that which the Agent accords its own property, it being understood that neither
the Agent nor any Lender shall have responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Pledged Collateral, whether or not the
Agent or any other Lender has or is deemed to have knowledge of any such
matter, or (ii) taking any necessary steps to preserve rights against any
Person with respect to any Pledged Collateral.
SECTION 11.
Remedies Upon Default. If any Event of Default shall have occurred and be
continuing:
(a) The Agent
may exercise in respect of the Pledged Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party after default under the Uniform Commercial Code
(the “Code”) in effect in the State of Illinois at that time, and the
Agent may also, without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, broker’s board or at any office of the Agent or
elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Agent may deem commercially reasonable. The Pledgor agrees that,
to the extent notice of sale shall be required by law, at least ten (10) days’ notice
to the Pledgor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. The
Agent shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. The Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. The Pledgor hereby waives any claims
against the Agent arising by reason of the fact that the price at which any
Pledged Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if the Agent
accepts the first offer received and does not offer such Pledged Collateral to
more than one offeree.
(b) If the
Agent shall determine to exercise its right to sell all or any of the Pledged
Collateral pursuant to this Section 11, the Pledgor agrees that, upon request
of the Agent, the Pledgor will, at its own cost and expense:
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(i)
execute and deliver, and use its best efforts to cause each issuer of the
Pledged Shares and its directors and officers to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts and
things, as may be necessary or, in the opinion of the Agent, necessary or
advisable to register such Pledged Shares under the provisions of the
Securities Act of 1933, as from time to time amended (the “Securities Act”),
and to cause the registration statement relating thereto to become effective
and to remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the opinion of the Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission (“SEC”)
applicable thereto;
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(ii)
use its best efforts to qualify the Pledged Collateral under the state
securities or “Blue Sky” laws and to obtain all necessary
governmental approvals for the sale of the Pledged Collateral, as requested by
the Agent;
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(iii)
make available to its security holders, as soon as practicable, an earnings
statement which will satisfy the provisions of section 11(a) of the Securities
Act; and
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(iv)
do or cause to be done all such other acts and things as may be necessary to
make such sale of the Pledged Collateral or any part thereof valid and binding
and in compliance with applicable law.
The Pledgor further acknowledges the impossibility of
ascertaining the amount of damages which would be suffered by the Agent by
reason of the failure by the Pledgor to perform any of the covenants contained
in this Section 11 and, consequently, agrees that, if the Pledgor shall fail to
perform any of such covenants, it shall pay, as liquidated damages and not as a
penalty, an amount equal to the value of the Pledged Collateral on the date the
Agent shall demand compliance with this Section.
(c) The Pledgor
recognizes that, by reason of the aforementioned requirements and certain
prohibitions contained in the Securities Act and applicable state securities
laws, the Agent may, at its option, elect not to require the Pledgor to
register all or any part of the Pledged Collateral and may therefore be
compelled, with respect to any sale of all or any part of the Pledged
Collateral, to limit purchasers to those who will agree, among other things, to
acquire such securities for their own account, for investment, and not with a
view to the distribution or resale thereof. The Pledgor acknowledges and agrees
that any such sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale without such restrictions and,
notwithstanding such circumstances, agrees that any such sale shall be deemed
to have been made in a commercially reasonable manner. The Agent shall be under
no obligation to delay the sale of any of the Pledged Collateral for the period
of time necessary to permit the Pledgor to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if the Pledgor would agree to do so.
(d) If the
Agent determines to exercise its right to sell any or all of the Pledged
Collateral pursuant to this Section 11, upon written request, the Pledgor
shall, from time to time, furnish to the Agent all such information as the
Agent may request in order to determine the number of shares and other
instruments included in the Pledged Collateral which may be sold by the Agent
as exempt transactions under the Securities Act and rules of the SEC
thereunder, as the same are from time to time in effect.
(e) Subject to
the requirements set forth in the Loan Documents, any cash held by the Agent as
Pledged Collateral and all cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Pledged Collateral shall be applied by the Agent in the order of priorities set
forth in the Loan Documents.
SECTION 12.
Expenses. The Pledgor will upon demand pay to the Agent the amount of any and
all reasonable expenses, including, without limitation, the reasonable fees and
expenses of the Agent’s counsel and of any expert, and agents, which the
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights and remedies hereunder of the Agent, or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.
SECTION 13.
Amendments, Etc. No amendment or waiver of any provision of this Agreement nor
consent to any departure by the Pledgor herefrom shall in any event be
effective unless the same shall be in writing and signed by the Agent and the
Pledgor, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 14. No
Waiver; Remedies. (a) No failure on the part of Agent to exercise, and no delay
in exercising any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative, may be exercised singly or concurrently, and
are not exclusive of any remedies provided by law or the Credit Agreement or
other Loan Documents.
(b) Failure by
the Agent or any other Lender at any time or times hereafter to require strict
performance by the Pledgor or any other Person of any of the provisions,
warranties, terms or conditions contained in the Credit Agreement or other Loan
Documents now or at any time or times hereafter executed by the Pledgor or any
such other Person and delivered to any of the Agent shall not waive, affect or
diminish any right of the Agent at any time or times hereafter to demand strict
performance thereof, and such right shall not be deemed to have been modified
or waived by any course of conduct or knowledge of the Agent, or any agent,
officer or employee of Agent.
SECTION 15.
Addresses for Notices. Except as otherwise provided herein, all notices and
correspondences hereunder shall be in writing and shall be delivered and deemed
to be effective in the manner and at the time set forth in Section 10.4 of the
Credit Agreement.
SECTION 16.
Continuing Security Interest; Transfer of Obligations. This Pledge Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(i) remain in full force and effect until payment in full of the Obligations
and the termination of any commitments under the Credit Agreement or any Loan
Document, (ii) be binding upon the Pledgor, its successors and assigns, and
(iii) inure, together with the rights and remedies of the Agent hereunder, to
the benefit of and be enforceable by the Agent and its successors, transferees
and assigns. Without limiting the generality of the foregoing clause (iii), any
Lender may assign or otherwise transfer all or any portion of the Obligations
owing to it to any other Person, and such other Person shall thereupon become
vested with all the rights in respect thereof granted to
such Lender herein or otherwise with respect to such of the
Obligations so transferred or assigned, subject, however, to compliance with
the provisions of the Credit Agreement and Loan Documents in respect of
assignments. Upon the payment in full of the Obligations, the Pledgor shall be
entitled to the return, upon its request and at its expense, of such of the
Pledged Collateral as shall not have been sold or otherwise applied pursuant to
the terms hereof.
SECTION 17.
Governing Law; Severability Terms. This agreement shall be governed by, and be
construed and interpreted in accordance with, the internal law of the State of
Illinois, without regard to conflict of law principles. Wherever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and without invalidating the remaining provisions of this Agreement.
Unless otherwise defined herein, terms defined in Article 9 of the Uniform
Commercial Code as in effect in the State of Illinois are used herein as
therein defined.
SECTION 18.
WAIVER OF JURY TRIAL. THE PLEDGOR AND THE AGENT HEREBY IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT THEY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS AGREEMENT.
SECTION 19.
Section Titles. The Section titles contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not part
of this Agreement.
1.
2.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS
WHEREOF, the Pledgor has caused this Agreement to be duly executed and
delivered by its duly authorized officer on the date first above written.
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| TOWER AIR, INC.
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| By: s/s Xxxxxxx Carnaval
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| Its: Vice President & CFO
ACCEPTED AND ACKNOWLEDGED:
GMAC BUSINESS CREDIT, LLC, as Agent
By: s/s Xxxxx Xxxxxx
Its: Vice President
SCHEDULE I TO PLEDGE AGREEMENT
Attached to and forming a part of that certain Pledge
Agreement, dated as of September 10, 1999 by Tower Air, Inc. to GMAC Business
Credit, LLC, as Agent.
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Issuer
| Jurisdiction ofIncorporation
| Class ofStock
| CertificateNumbers
| Par Value
| Capital StockOutstanding
| PercentageOwnership
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| Equant Corporation
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| [_________]
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| [_____]
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| [___]
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| $[___]/share
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| [_____] shares
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| [____]%
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SCHEDULE II TO PLEDGE AGREEMENT
PLEDGE AMENDMENT This Pledge
Amendment, dated [______ __], 1999, is delivered pursuant to Section 7 of the
Pledge Agreement referred to below. The undersigned hereby agrees that this
Pledge Amendment may be attached to the Pledge Agreement, dated as of September
10, 1999, made by the undersigned to GMAC Business Credit, LLC, as Agent on
behalf of and for the benefit of itself and such other lenders (“Lenders”)
that become party to that certain Credit Agreement dated as of September 10,
1999, and that the Additional Shares listed on this Pledge Amendment shall be
and become part of the Pledged Collateral referred to in the Pledge Agreement
and shall secure all Obligations of the undersigned. The terms defined in the
Pledge Agreement are being used herein as therein defined.
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| TOWER AIR, INC.
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| By:Its:
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| Issuer
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| Class of Stock
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| Certificate Nos.
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| Par Value
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| Number of Shares
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