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EXHIBIT 4.3
SECOND AMENDED AND RESTATED PLEDGE AGREEMENT
THIS SECOND AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of the 29th
day of June, 1998 (this "Agreement"), is made by LASON, INC., a Delaware
corporation (the "Pledgor"), in favor of FIRST UNION NATIONAL BANK, as agent
for the banks and other financial institutions (collectively, the "Lenders")
under to the Credit Agreement referred to below (in such capacity, the
"Agent"), for the benefit of the Secured Parties (as hereinafter defined).
Capitalized terms used herein without definition shall have the meanings given
to them in the Credit Agreement referred to below.
RECITALS
A. The Pledgor, the Lenders and the Agent entered into a Second Amended
and Restated Loan Agreement dated as of the date hereof (as amended, modified,
renewed, supplemented, restated or replaced from time to time, the "Credit
Agreement"), pursuant to which the Lenders have agreed to extend revolving
loans aggregating up to $150,000,000, which amount may be increased to an
amount aggregating up to $200,000,000 pursuant to the terms of the Credit
Agreement, to the Pledgor. Capitalized terms that are not defined herein shall
have the meanings assigned to such terms in the Credit Agreement.
B. The Pledgor, the Lenders and the Agent have heretofore entered into an
Amended and Restated Guarantor Pledge Agreement dated February 21, 1997 (the
"Amended and Restated Pledge Agreement"). This Agreement is an amendment to,
and is in substitution and replacement of the Pledgor's Amended and Restated
Pledge Agreement.
C. As a condition to the extension of credit to the Pledgor under the
Credit Agreement, the Lenders are requiring, among other things, that the
Pledgor secure the Pledgor's obligations under the Credit Agreement through a
pledge of the Pledgor's stock in its Subsidiaries as provided herein.
D. The Secured Parties are relying on this Agreement in their decision to
extend credit to the Pledgor under the Credit Agreement, and would not enter
into the Credit Agreement without the execution and delivery of this Agreement
by the Pledgor.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to induce the Secured Parties to enter into the Credit Agreement
and to induce the Lenders to extend credit to the Pledgor thereunder, the
Pledgor hereby agrees as follows:
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1. Pledge and Grant of Security Interest. The Pledgor hereby pledges,
assigns and delivers to the Agent, for the ratable benefit of the Lenders
(including the Issuing Lender in its capacity as such, and including any Lender
in its capacity as a counterparty to any Hedge Agreement with the Pledgor) and
the Agent (collectively, the "Secured Parties"), and grants to the Agent, for
the ratable benefit of the Secured Parties, a Lien upon and security interest
in, all of the Pledgor's right, title and interest in and to the following, in
each case whether now owned or existing or hereafter acquired or arising
(collectively, the "Collateral"):
(i) all of the issued and outstanding shares, interests or other
equivalents of capital stock of the Subsidiaries as of the date
hereof, at any time now or hereafter owned by the Pledgor, whether
voting or non-voting and whether common or preferred; all partnership,
joint venture, limited liability company or other Pledged Interests in
the Subsidiaries as of the date hereof, at any time now or hereafter
owned by the Pledgor; all options, warrants and other rights to
acquire, and all securities convertible into, any of the foregoing;
all rights to receive interest, income, dividends, distributions,
returns of capital and other amounts (whether in cash, securities,
property, or a combination thereof), and all additional stock,
warrants, options, securities, interests and other property, from time
to time paid or payable or distributed or distributable in respect of
any of the foregoing (but subject to the provisions of Section 7),
including, without limitation, all rights of the Pledgor to receive
amounts due and to become due under or in respect of any partnership
agreement, joint venture agreement, limited liability company
operating agreement, stockholders agreement or other agreement
creating, governing or evidencing any Pledged Interests and to which
the Pledgor is now or hereafter becomes a party, as any such agreement
may be amended, modified, supplemented, restated or replaced from time
to time (collectively, "Ownership Agreements") or upon the termination
thereof; all rights of access to the books and records of the
Subsidiaries; and all other rights, powers, privileges, interests,
claims and other property in any manner arising out of or relating to
any of the foregoing, of whatever kind or character (including any
tangible or intangible property or interests therein), and whether
provided by contract or granted or available under applicable law in
connection therewith, including, without limitation, the Pledgor's
right to vote and to manage and administer the business of the
Subsidiaries pursuant to any applicable Ownership Agreement; together
with all certificates, instruments and entries upon the books of
financial intermediaries at any time evidencing any of the foregoing,
in each case whether now owned or existing or hereafter acquired or
arising (collectively, the "Pledged Interests"); and
(ii) any and all proceeds (as defined in the Uniform Commercial
Code) of or from any and all of the foregoing and, to the extent not
otherwise included in the foregoing, (y) all payments under any
insurance (whether or not the Agent is the loss payee thereunder),
indemnity, warranty or guaranty with respect to any of the foregoing
Collateral and (z) all other amounts from time to time paid or payable
under or with respect to any of the foregoing Collateral
(collectively, "Proceeds"). For purposes of this Agreement, the term
"Proceeds" includes whatever is receivable or received when Collateral
or Proceeds are sold, exchanged, collected or otherwise disposed of,
whether voluntarily or involuntarily.
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2. Security for Secured Obligations. This Agreement and the Collateral
secure the full and prompt payment, at any time and from time to time as and
when due (whether at the stated maturity, by acceleration or otherwise), of all
liabilities and obligations of the Pledgor, whether now existing or hereafter
incurred, created or arising and whether direct or indirect, absolute or
contingent, due or to become due, under, arising out of or in connection with
the Credit Agreement, or any of the other Credit Documents to which it is or
hereafter becomes a party; and (i) all such liabilities and obligations that,
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due, and (ii) all fees, costs and expenses
payable by the Pledgor under Section 11 (the liabilities and obligations of the
Pledgor described in this Section 2, collectively, the "Secured Obligations").
3. Representations and Warranties. The Pledgor represents and warrants as
follows:
(a) As of the date hereof, (i) the Pledged Interests required to be
pledged hereunder by the Pledgor consist of the number and type of shares of
capital stock (in the case of issuers that are corporations) or the percentage
and type of other Pledged Interests (in the case of issuers other than
corporations) as described beneath in Part I of Annex A. All of the Pledged
Interests have been duly and validly issued and are fully paid and
nonassessable (or, in the case of partnership, limited liability company or
similar Pledged Interests, not subject to any capital call or other additional
capital requirement) and not subject to any preemptive rights, warrants,
options or similar rights or restrictions in favor of third parties or any
contractual or other restrictions upon transfer.
(b) The Pledgor owns all Collateral purported to be pledged by it
hereunder, free and clear of any Liens except for the Liens granted to the
Agent, for the benefit of the Secured Parties, pursuant to this Agreement. No
security agreement, financing statement or other public notice with respect to
all or any part of the Collateral is on file or of record in any government or
public office, and the Pledgor has not filed or consented to the filing of any
such statement or notice.
(c) This Agreement, together with (i) in the case of uncertificated
Pledged Interests, registration of transfer thereof to the Agent on the
issuer's books or the execution by the issuer of a control agreement satisfying
the requirements of Section 8-106 (or its successor provision) of the Uniform
Commercial Code, and (ii) the delivery to the Agent of all stock certificates
and instruments included in the Collateral (and assuming continued possession
thereof by the Agent), creates, and at all times shall constitute, a valid and
perfected security interest in and Lien upon the Collateral in favor of the
Agent, for the benefit of the Secured Parties, to the extent a security
interest therein can be perfected by such filings or possession, as applicable,
superior and prior to the rights of all other Persons therein (except for the
security interest created by this Agreement), and no other or additional
filings, registrations, recordings or actions are or shall be necessary or
appropriate in order to maintain the perfection and priority of such Lien and
security interest.
(d) No authorization, consent or approval of, or declaration or filing
with, any Governmental Authority is required for the valid execution, delivery
and performance by the Pledgor of this Agreement, the grant by it of the Lien
and security interest in favor of the Agent provided for herein, or the
exercise by the Agent of its rights and remedies hereunder, except for
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such filings and approvals as may be required in connection with a disposition
of any of the Pledged Interests by laws affecting the offering and sale of
securities generally.
(e) There are no statutory or regulatory restrictions, prohibitions or
limitations on the Pledgor's ability to grant to the Agent a Lien upon and
security interest in the Collateral pursuant to this Agreement or on the
exercise by the Agent of its rights and remedies hereunder (including any
foreclosure upon or collection of the Collateral), and there are no contractual
restrictions on the Pledgor's ability so to grant such Lien and security
interest.
4. Delivery of Collateral. All certificates or instruments representing or
evidencing any Collateral shall be delivered to and held by or on behalf of the
Agent pursuant hereto, shall be in form suitable for transfer by delivery and
shall be delivered together with undated stock powers duly executed in blank,
appropriate endorsements or other necessary instruments of registration,
transfer or assignment, duly executed and in form and substance satisfactory to
the Agent, and in each case such other instruments or documents as the Agent
may reasonably request.
5. Certain Covenants. (a) If the Pledgor shall, at any time and from time
to time after the date hereof, acquire any additional capital stock or other
Pledged Interests of the types described in the definition of the term "Pledged
Interests," the same shall be automatically deemed to be Pledged Interests
hereunder, respectively, and to be pledged to the Agent pursuant to Section 1,
and the Pledgor will forthwith pledge and deposit the same with the Agent and
deliver to the Agent any certificates or instruments therefor, together with
the endorsement of the Pledgor (in the case of any promissory notes or other
instruments), undated stock powers (in the case of Pledged Interests evidenced
by certificates) or other necessary instruments of transfer or assignment, duly
executed in blank and in form and substance satisfactory to the Agent, together
with such other certificates and instruments as the Agent may reasonably
request (including Uniform Commercial Code financing statements or appropriate
amendments thereto), and will promptly thereafter deliver to the Agent a fully
completed and duly executed amendment to this Agreement in the form of Exhibit
A (each, a "Pledge Amendment") in respect thereof. The Pledgor hereby
authorizes the Agent to attach each such Pledge Amendment to this Agreement,
and agrees that all such Collateral listed on any Pledge Amendment shall for
all purposes be deemed Collateral hereunder and shall be subject to the
provisions hereof; provided that the failure of the Pledgor to execute and
deliver any Pledge Amendment with respect to any such additional Collateral as
required hereinabove shall not impair the security interest of the Agent in
such Collateral or otherwise adversely affect the rights and remedies of the
Agent hereunder with respect thereto.
(b) If any Pledged Interests (whether now owned or hereafter acquired)
included in the Collateral are "uncertificated securities" within the meaning
of the Uniform Commercial Code or are otherwise not evidenced by any
certificate or instrument, the Pledgor will promptly notify the Agent thereof
and will promptly take and cause to be taken, all actions required under
Articles 8 and 9 of the Uniform Commercial Code and any other applicable law,
to enable the Agent to acquire "control" of such uncertificated securities
(within the meaning of such term under Section 8-106 (or its successor
provision) of the Uniform Commercial Code) and as may be otherwise necessary or
deemed appropriate by the Agent to perfect the security interest of the Agent
therein.
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(c) The Pledgor will not sell or otherwise dispose of, grant any option
with respect to, or mortgage, pledge, grant any Lien with respect to or
otherwise encumber any of the Collateral or any interest therein, except for
the security interest created in favor of the Agent hereunder and except as may
be otherwise expressly permitted in accordance with the terms of this Agreement
and the Credit Agreement (including any applicable provisions therein regarding
delivery of proceeds of sale or disposition to the Agent).
(d) The Pledgor will cause the Pledged Interests in its Subsidiaries
pledged hereunder to constitute at all times 100% of the capital stock or other
Pledged Interests in its Subsidiaries, and unless the Agent shall have given
its prior written consent, the Pledgor will not cause or permit its
Subsidiaries to issue or sell any new capital stock, any warrants, options or
rights to acquire the same, or other Pledged Interests of any nature to any
Person other than the Pledgor, or cause, permit or consent to the admission of
any other Person as a stockholder, partner or member of any such issuer.
(e) The Pledgor agrees that it will, at its own cost and expense, take any
and all actions necessary to warrant and defend the right, title and interest
of the Secured Parties in and to the Collateral against the claims and demands
of all other Persons.
6. Voting Rights. So long as no Event of Default shall have occurred and
be continuing, the Pledgor shall be entitled to exercise all voting and other
consensual rights pertaining to its Pledged Interests (subject to its
obligations under Section 5(a)), and for that purpose the Agent will execute
and deliver or cause to be executed and delivered to the Pledgor all such
proxies and other instruments as the Pledgor may reasonably request in writing
to enable the Pledgor to exercise such voting and other consensual rights;
provided, however, that the Pledgor will not cast any vote, give any consent,
waiver or ratification, or take or fail to take any action, in any manner that
would, or could reasonably be expected to, violate or be inconsistent with any
of the terms of this Agreement, the Credit Agreement, or any other Credit
Document, or have the effect of impairing the position or interests of the
Agent or any other Secured Party.
7. Dividends and Other Distributions. So long as no Event of Default shall
have occurred and be continuing (or would occur as a result thereof), and
except as provided otherwise herein, all interest, income, dividends,
distributions and other amounts payable in cash in respect of the Pledged
Interests may be paid to and retained by the Pledgor; provided, however, that
all such interest, income, dividends, distributions and other amounts shall, at
all times after the occurrence and during the continuance of an Event of
Default, be paid to the Agent and retained by it as part of the Collateral
(except to the extent applied upon receipt to the repayment of the Secured
Obligations). The Agent shall also be entitled at all times (whether or not
during the continuance of an Event of Default) to receive directly, and to
retain as part of the Collateral, (i) all interest, income, dividends,
distributions or other amounts paid or payable in cash or other property in
respect of any Pledged Interests in connection with the dissolution,
liquidation, recapitalization or reclassification of the capital of the
applicable issuer to the extent representing (in the reasonable judgment of the
Agent) an extraordinary, liquidating or other distribution in return of
capital, (ii) all additional Pledged Interests or other securities or property
(other than cash) paid or payable or distributed or distributable in respect of
any Pledged Interests in connection with any noncash dividend, distribution,
return of capital, spin-off, stock split, split-up,
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reclassification, combination of shares or interests or similar rearrangement,
and (iii) without affecting any restrictions against such actions contained in
the Credit Agreement, all additional Pledged Interests or other securities or
property (including cash) paid or payable or distributed or distributable in
respect of any Pledged Interests in connection with any consolidation, merger,
exchange of securities, liquidation or other reorganization. All interest,
income, dividends, distributions or other amounts that are received by the
Pledgor in violation of the provisions of this Section shall be received in
trust for the benefit of the Agent, shall be segregated from other property or
funds of the Pledgor and shall be forthwith delivered to the Agent as
Collateral in the same form as so received (with any necessary endorsements).
8. Remedies. If an Event of Default shall have occurred and be continuing,
the Agent shall be entitled to exercise in respect of the Collateral all of its
rights, powers and remedies provided for herein or otherwise available to it
under any other Credit Document, by law, in equity or otherwise, including all
rights and remedies of a secured party under the Uniform Commercial Code, and
shall be entitled in particular, but without limitation of the foregoing, to
exercise the following rights, which the Pledgor agrees to be commercially
reasonable:
(a) To notify the parties obligated on any of the Collateral of the
security interest in favor of the Agent created hereby and to direct all such
Persons to make payments of all amounts due thereon or thereunder directly to
the Agent or to an account designated by the Agent; and in such instance and
from and after such notice, all amounts and Proceeds (including wire transfers,
checks and other instruments) received by the Pledgor in respect of any
Collateral shall be received in trust for the benefit of the Agent hereunder,
shall be segregated from the other funds of the Pledgor and shall be forthwith
deposited into such account or paid over or delivered to the Agent in the same
form as so received (with any necessary endorsements or assignments), to be
held as Collateral and applied to the Secured Obligations as provided herein;
(b) To transfer to or register in its name or the name of any of its
agents or nominees all or any part of the Collateral, without notice to the
Pledgor and with or without disclosing that such Collateral is subject to the
security interest created hereunder;
(c) To exercise (i) all voting, consensual and other rights and powers
pertaining to the Pledged Interests (whether or not transferred into the name
of the Agent), at any meeting of shareholders, partners, members or otherwise,
and (ii) any and all rights of conversion, exchange, subscription and any other
rights, privileges or options pertaining to the Pledged Interests as if it were
the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Pledged Interests upon the
merger, consolidation, reorganization, reclassification, combination of shares
or interests, similar rearrangement or other similar fundamental change in the
structure of the applicable issuer, or upon the exercise by the Pledgor or the
Agent of any right, privilege or option pertaining to such Pledged Interests),
and in connection therewith, the right to deposit and deliver any and all of
the Pledged Interests with any committee, depositary, transfer agent, registrar
or other designated agency upon such terms and conditions as the Agent may
determine, and give all consents, waivers and ratifications in respect of the
Pledged Interests, all without liability except to account for any property
actually received by it, but the Agent shall have no duty to exercise any such
right, privilege or option or give any such consent, waiver or ratification and
shall not be responsible for any failure to do so or delay in
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so doing; and for the foregoing purposes the Pledgor will promptly execute and
deliver or cause to be executed and delivered to the Agent, upon request, all
such proxies and other instruments as the Agent may reasonably request to
enable the Agent to exercise such rights and powers; AND IN FURTHERANCE OF THE
FOREGOING AND WITHOUT LIMITATION THEREOF, THE PLEDGOR HEREBY IRREVOCABLY
CONSTITUTES AND APPOINTS THE AGENT AS THE TRUE AND LAWFUL PROXY AND
ATTORNEY-IN-FACT OF THE PLEDGOR, WITH FULL POWER OF SUBSTITUTION IN THE
PREMISES, TO EXERCISE ALL SUCH VOTING, CONSENSUAL AND OTHER RIGHTS AND POWERS
TO WHICH ANY HOLDER OF ANY PLEDGED INTERESTS WOULD BE ENTITLED BY VIRTUE OF
HOLDING THE SAME, WHICH PROXY AND POWER OF ATTORNEY, BEING COUPLED WITH AN
INTEREST, IS IRREVOCABLE AND SHALL BE EFFECTIVE FOR SO LONG AS THIS AGREEMENT
SHALL BE IN EFFECT; and
(d) To sell, resell, assign and deliver, in its sole discretion, all or
any of the Collateral, in one or more parcels, on any securities exchange on
which any Pledged Interests may be listed, at public or private sale, at any of
the Agent's offices or elsewhere, for cash, upon credit or for future delivery,
at such time or times and at such price or prices and upon such other terms as
the Agent may deem satisfactory. If any of the Collateral is sold by the Agent
upon credit or for future delivery, the Agent shall not be liable for the
failure of the purchaser to purchase or pay for the same and, in the event of
any such failure, the Agent may resell such Collateral. In no event shall the
Pledgor be credited with any part of the Proceeds of sale of any Collateral
until and to the extent cash payment in respect thereof has actually been
received by the Agent. Each purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right of whatsoever kind, including any
equity or right of redemption of the Pledgor, and the Pledgor hereby expressly
waives all rights of redemption, stay or appraisal, and all rights to require
the Agent to marshal any assets in favor of the Pledgor or any other party or
against or in payment of any or all of the Secured Obligations, that it has or
may have under any rule of law or statute now existing or hereafter adopted. No
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law, as referred to below), all of which are hereby
expressly waived by the Pledgor, shall be required in connection with any sale
or other disposition of any part of the Collateral. If any notice of a proposed
sale or other disposition of any part of the Collateral shall be required under
applicable law, the Agent shall give the Pledgor at least ten (10) days' prior
notice of the time and place of any public sale and of the time after which any
private sale or other disposition is to be made, which notice the Pledgor
agrees is commercially reasonable. The Agent shall not be obligated to make any
sale of Collateral if it shall determine not to do so, regardless of the fact
that notice of sale may have been given. The Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. Upon each public sale and, to the extent
permitted by applicable law, upon each private sale, the Agent may purchase all
or any of the Collateral being sold, free from any equity, right of redemption
or other claim or demand, and may make payment therefor by endorsement and
application (without recourse) of the Secured Obligations in lieu of cash as a
credit on account of the purchase price for such Collateral.
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9. Application of Proceeds. (a) All Proceeds collected by the Agent upon
any sale, other disposition of or realization upon any of the Collateral,
together with all other moneys received by the Agent hereunder, shall be
applied as follows:
(i) first, to the payment of all costs and expenses of such sale,
disposition or other realization, including the reasonable costs and
expenses of the Agent and the reasonable fees and expenses of its agents
and counsel, all amounts advanced by the Agent for the account of the
Pledgor, and all other amounts payable to the Agent under Section 11;
(ii) second, after payment in full of the amounts specified in clause
(i) above, to the ratable payment of all other Secured Obligations owing
to the Secured Parties; and
(iii) third, after payment in full of the amounts specified in clauses
(i) and (ii) above, and following the termination of this Agreement, to
the Pledgors or any other Person lawfully entitled to receive such
surplus.
(b) For purposes of applying amounts in accordance with this Section, the
Agent shall be entitled to rely upon any Secured Party that has entered into a
Hedge Agreement with the Pledgor for a determination (which such Secured Party
agrees to provide or cause to be provided upon request of the Agent) of the
outstanding Secured Obligations owed to such Secured Party under any such Hedge
Agreement. Unless it has actual knowledge (including by way of written notice
from any such Secured Party) to the contrary, the Agent, in acting hereunder,
shall be entitled to assume that no Hedge Agreements or Secured Obligations in
respect thereof are in existence between any Secured Party and the Pledgor.
(c) The Pledgor shall remain liable to the extent of any deficiency
between the amount of all Proceeds realized upon sale or other disposition of
the Collateral pursuant to this Agreement and the aggregate amount of the sums
referred to in clauses (i) and (ii) of subsection (a) above. Upon any sale of
any Collateral hereunder by the Agent (whether by virtue of the power of sale
herein granted, pursuant to judicial proceeding, or otherwise), the receipt of
the Agent or the officer making the sale shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold, and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Agent or such officer or be answerable in any
way for the misapplication thereof.
(d) Upon the occurrence and during the continuance of an Event of Default,
the Agent shall have the right to cause to be established and maintained, at
its principal office or such other location or locations as it may establish
from time to time in its discretion, one or more accounts (collectively,
"Collateral Accounts") for the collection of cash Proceeds of the Collateral.
Such Proceeds, when deposited, shall continue to constitute Collateral for the
Secured Obligations and shall not constitute payment thereof until applied as
herein provided. The Agent shall have sole dominion and control over all funds
deposited in any Collateral Account, and such funds may be withdrawn therefrom
only by the Agent. Upon the occurrence and during the continuance of an Event
of Default, the Agent shall have the right to (and, if directed by the Required
Lenders
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pursuant to the Credit Agreement, shall) apply amounts held in the Collateral
Accounts in payment of the Secured Obligations in the manner provided for in
subsection (a) above.
10. Registration; Private Sales. (a) If, at any time after the occurrence
and during the continuance of an Event of Default, the Pledgor shall have
received from the Agent a written request or requests that the Pledgor cause
any registration, qualification or compliance under any federal or state
securities law or laws to be effected with respect to all or any part of the
Pledged Interests, the Pledgor will, as soon as practicable and at its expense,
use its best efforts to cause such registration to be effected and be kept
effective and will use its best efforts to cause such qualification and
compliance to be effected and be kept effective as may be so requested and as
would permit or facilitate the sale and distribution of such Pledged Interests,
including, without limitation, registration under the Securities Act of 1933,
as amended (the "Securities Act"), appropriate qualifications under applicable
blue sky or other state securities laws and appropriate compliance with any
other applicable requirements of Governmental Authorities; provided, that the
Agent shall furnish to the Pledgor such information regarding the Agent as the
Pledgor may reasonably request in writing and as shall be required in
connection with any such registration, qualification or compliance. The Pledgor
will cause the Agent to be kept reasonably advised in writing as to the
progress of each such registration, qualification or compliance and as to the
completion thereof, will furnish to the Agent such number of prospectuses,
offering circulars or other documents incident thereto as the Agent from time
to time may reasonably request, and will indemnify the Agent and all others
participating in the distribution of such Pledged Interests against all claims,
losses, damages and liabilities caused by any untrue statement (or alleged
untrue statement) of a material fact contained therein (or in any related
registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same may have been caused by an untrue statement or omission based upon
information furnished in writing to the Pledgor by the Agent or any other
Secured Party expressly for use therein.
(b) The Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws as in
effect from time to time, the Agent may be compelled, with respect to any sale
of all or any part of the Pledged Interests conducted without registration or
qualification under the Securities Act and such state securities laws, to limit
purchasers to any one or more Persons who will represent and agree, among other
things, to acquire such Pledged Interests for their own account, for investment
and not with a view to the distribution or resale thereof. The Pledgor
acknowledges that any such private sales may be made in such manner and under
such circumstances as the Agent may deem necessary or advisable in its sole and
absolute discretion, including at prices and on terms less favorable than those
obtainable through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration statement under
the Securities Act), and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially
reasonable manner and agrees that the Agent shall have no obligation to conduct
any public sales and no obligation to delay the sale of any Pledged Interests
for the period of time necessary to permit its registration for public sale
under the Securities Act and applicable state securities laws, and shall not
have any responsibility or liability as a result of its election so not to
conduct any such public sales or delay the sale of any Pledged Interests,
notwithstanding the
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possibility that a substantially higher price might be realized if the sale
were deferred until after such registration. The Pledgor hereby waives any
claims against the Agent or any other Secured Party arising by reason of the
fact that the price at which any Pledged Interests may have been sold at any
private sale was less than the price that might have been obtained at a public
sale or was less than the aggregate amount of the Secured Obligations, even if
the Agent accepts the first offer received and does not offer such Pledged
Interests to more than one offeree.
(c) The Pledgor agrees that a breach of any of the covenants contained in
this Section will cause irreparable injury to the Agent and the other Secured
Parties, that the Agent and the other Secured Parties have no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section shall be specifically enforceable against
the Pledgors.
11. Indemnity and Expenses. The Pledgor agrees:
(a) To indemnify and hold harmless the Agent, each other Secured Party and
each of their respective directors, officers, employees, agents and affiliates
from and against any and all claims, damages, demands, losses, obligations,
judgments and liabilities (including, without limitation, reasonable attorneys'
fees and expenses) in any way arising out of or in connection with this
Agreement and the transactions contemplated hereby, except to the extent the
same shall arise as a result of the gross negligence or willful misconduct of
the party seeking to be indemnified; and
(b) To pay and reimburse the Agent upon demand for all reasonable costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses) that the Agent may incur in connection with (i) the custody, use or
preservation of, or the sale of, collection from or other realization upon, any
of the Collateral, including the reasonable expenses of re-taking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral, (ii) the exercise or enforcement of any rights or remedies
granted hereunder (including, without limitation, under Sections 8 and 10),
under any of the other Credit Documents or otherwise available to it (whether
at law, in equity or otherwise), or (iii) the failure by the Pledgor to perform
or observe any of the provisions hereof. The provisions of this Section shall
survive the execution and delivery of this Agreement, the repayment of any of
the Secured Obligations, the termination of the Commitments and the termination
or expiration of all Letters of Credit under the Credit Agreement, the
termination of this Agreement or any other Credit Document, and the termination
of, and settlement of the Pledgor's obligations under, any Hedge Agreement to
which the Pledgor and any Lender are parties.
12. The Agent; Standard of Care. The Agent will hold all items of the
Collateral at any time received under this Agreement in accordance with the
provisions hereof. The obligations of the Agent as holder of the Collateral and
interests therein and with respect to the disposition thereof, and otherwise
under this Agreement and the other Credit Documents, are only those expressly
set forth in this Agreement and the other Credit Documents. The Agent shall act
hereunder at the direction, or with the consent, of the Required Lenders on the
terms and conditions set forth in the Credit Agreement. The powers conferred on
the Agent hereunder are solely to protect its interest, on behalf of the
Secured Parties, in the Collateral, and shall not
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impose any duty upon it to exercise any such powers. Except for treatment of
the Collateral in its possession in a manner substantially equivalent to that
which the Agent, in its individual capacity, accords its own property of a
similar nature, and the accounting for moneys actually received by it
hereunder, the Agent shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to the Collateral. Neither the Agent nor any other
Secured Party shall be liable to the Pledgor (i) for any loss or damage
sustained by the Pledgor, or (ii) for any loss, damage, depreciation or other
diminution in the value of any of the Collateral that may occur as a result of
or in connection with or that is in any way related to any exercise by the
Agent or any other Secured Party of any right or remedy under this Agreement,
any failure to demand, collect or realize upon any of the Collateral or any
delay in doing so, or any other act or failure to act on the part of the Agent
or any other Secured Party, except to the extent that the same is caused by its
own gross negligence or willful misconduct.
13. Further Assurances; Attorney-in-Fact. (a) The Pledgor agrees that it
will join with the Agent to execute and, at its own expense, file and refile
under the Uniform Commercial Code such financing statements, continuation
statements and other documents and instruments in such offices as the Agent may
reasonably deem necessary or appropriate, and wherever required or permitted by
law, in order to perfect and preserve the Agent's security interest in the
Collateral, and hereby authorizes the Agent to file financing statements and
amendments thereto relating to all or any part of the Collateral without the
signature of the Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Agent such additional
conveyances, assignments, agreements and instruments as the Agent may
reasonably require or deem advisable to perfect, establish, confirm and
maintain the security interest and Lien provided for herein, to carry out the
purposes of this Agreement or to further assure and confirm unto the Agent its
rights, powers and remedies hereunder.
(b) The Pledgor hereby irrevocably appoints the Agent its lawful
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor, the Agent or otherwise, and with full power of
substitution in the premises (which power of attorney, being coupled with an
interest, is irrevocable for so long as this Agreement shall be in effect),
from time to time in the Agent's discretion after the occurrence and during the
continuance of an Event of Default to take any action and to execute any
instruments that the Agent may deem necessary or advisable to accomplish the
purpose of this Agreement, including, without limitation:
(i) to sign the name of the Pledgor on any financing statement,
continuation statement, notice or other similar document that, in the
Agent's opinion, should be made or filed in order to perfect or continue
perfected the security interest granted under this Agreement;
(ii) to ask, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(iii) to receive, endorse and collect any checks, drafts, instruments,
chattel paper and other orders for the payment of money made payable to
the Pledgor
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representing any interest, income, dividend, distribution or other amount
payable in respect of any of the Collateral and to give full discharge for
the same;
(iv) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or advisable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Agent with respect to any of the Collateral; and
(v) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with any and all of the Collateral as fully
and completely as though the Agent were the absolute owner of the
Collateral for all purposes, and to do from time to time, at the Agent's
option and the Pledgors' expense, all other acts and things deemed
necessary by the Agent to protect, preserve or realize upon the Collateral
and to more completely carry out the purposes of this Agreement.
(c) If the Pledgor fails to perform any covenant or agreement contained in
this Agreement after written request to do so by the Agent (provided that no
such request shall be necessary at any time after the occurrence and during the
continuance of an Event of Default), the Agent may itself perform, or cause the
performance of, such covenant or agreement and may take any other action that
it deems necessary and appropriate for the maintenance and preservation of the
Collateral or its security interest therein, and the reasonable expenses so
incurred in connection therewith shall be payable by the Pledgor under Section
11.
14. Waivers. The Pledgor, to the greatest extent not prohibited by
applicable law, hereby (i) agrees that it will not invoke, claim or assert the
benefit of any rule of law or statute now or hereafter in effect (including,
without limitation, any right to prior notice or judicial hearing in connection
with the Agent's possession, custody or disposition of any Collateral or any
appraisal, valuation, stay, extension, moratorium or redemption law), or take
or omit to take any other action, that would or could reasonably be expected to
have the effect of delaying, impeding or preventing the exercise of any rights
and remedies in respect of the Collateral, the absolute sale of any of the
Collateral or the possession thereof by any purchaser at any sale thereof, and
waives the benefit of all such laws and further agrees that it will not hinder,
delay or impede the execution of any power granted hereunder to the Agent, but
that it will permit the execution of every such power as though no such laws
were in effect, (ii) waives all rights that it has or may have under any rule
of law or statute now existing or hereafter adopted to require the Agent to
marshal any Collateral or other assets in favor of the Pledgor or any other
party or against or in payment of any or all of the Secured Obligations, and
(iii) waives all rights that it has or may have under any rule of law or
statute now existing or hereafter adopted to demand, presentment, protest,
advertisement or notice of any kind (except notices expressly provided for
herein).
15. No Waiver. The rights and remedies of the Secured Parties expressly
set forth in this Agreement and the other Credit Documents are cumulative and
in addition to, and not exclusive of, all other rights and remedies available
at law, in equity or otherwise. No failure or delay on the part of any Secured
Party in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege or be construed to be a waiver of any Default
or Event of Default. No course of dealing
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between the Pledgor and the Secured Parties or their agents or employees shall
be effective to amend, modify or discharge any provision of this Agreement or
any other Credit Document or to constitute a waiver of any Default or Event of
Default. No notice to or demand upon the Pledgor in any case shall entitle the
Pledgor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of any Secured Party to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
16. Pledgor's Obligations Absolute. The Pledgor agrees that its
obligations hereunder, and the security interest granted to and all rights,
remedies and powers of the Agent hereunder, are irrevocable, absolute and
unconditional and shall not be discharged, limited or otherwise affected by
reason of any of the following, whether or not the Pledgor has knowledge
thereof:
(i) any change in the time, manner or place of payment of, or in any
other term of, any Secured Obligations, or any amendment, modification or
supplement to, restatement of, or consent to any rescission or waiver of
or departure from, any provisions of the Credit Agreement, any other
Credit Document or any agreement or instrument delivered pursuant to any
of the foregoing;
(ii) the invalidity or unenforceability of any Secured Obligations or
any provisions of the Credit Agreement, any other Credit Document or any
agreement or instrument delivered pursuant to any of the foregoing;
(iii) the addition of pledgors hereunder or the taking, acceptance or
release of any Secured Obligations or additional Collateral or other
security therefor;
(iv) any sale, exchange, release, substitution, compromise,
nonperfection or other action or inaction in respect of any Collateral or
other direct or indirect security for any Secured Obligations, or any
discharge, modification, settlement, compromise or other action or
inaction in respect of any Secured Obligations;
(v) any agreement not to pursue or enforce or any failure to pursue or
enforce (whether voluntarily or involuntarily as a result of operation of
law, court order or otherwise) any right or remedy in respect of any
Secured Obligations or any Collateral or other security therefor, or any
failure to create, protect, perfect, secure, insure, continue or maintain
any Liens in any such Collateral or other security;
(vi) the exercise of any right or remedy available under the Credit
Documents, at law, in equity or otherwise in respect of any Collateral or
other security for any Secured Obligations, in any order and by any manner
thereby permitted, including, without limitation, foreclosure on any such
Collateral or other security by any manner of sale thereby permitted,
whether or not every aspect of such sale is commercially reasonable;
(vii) any bankruptcy, reorganization, arrangement, liquidation,
insolvency, dissolution, termination, reorganization or like change in the
corporate structure or existence of the Pledgor or any other Person
directly or indirectly liable for any Secured Obligations;
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(viii) any manner of application of any payments by or amounts
received or collected from any Person, by whomsoever paid and howsoever
realized, whether in reduction of any Secured Obligations or any other
obligations of the Pledgor or any other Person directly or indirectly
liable for any Secured Obligations, regardless of what Secured Obligations
may remain unpaid after any such application; or
(ix) any other circumstance that might otherwise constitute a legal or
equitable discharge of, or a defense, set-off or counterclaim available
to, the Pledgor or a surety or guarantor generally, other than the
occurrence of all of the following: (x) the payment in full of the Secured
Obligations, (y) the termination of the Commitments and the termination or
expiration of all Letters of Credit under the Credit Agreement, and (z)
the termination of, and settlement of all obligations of the Pledgor
under, each Hedge Agreement to which the Pledgor and any Lender are
parties (the events in clauses (x), (y) and (z) above, collectively, the
"Termination Requirements").
17. Enforcement. By its acceptance of the benefits of this Agreement, each
Lender agrees that this Agreement may be enforced only by the Agent, acting
upon the instructions or with the consent of the Required Lenders as provided
for in the Credit Agreement, and that no Lender shall have any right
individually to enforce or seek to enforce this Agreement or to realize upon
any Collateral or other security given to secure the payment and performance of
the Secured Obligations.
18. Amendments, Waivers, etc. No amendment, modification, waiver,
discharge or termination of, or consent to any departure by the Pledgor from,
any provision of this Agreement, shall be effective unless in a writing
executed and delivered in accordance with Section 11.6 of the Credit Agreement,
and then the same shall be effective only in the specific instance and for the
specific purpose for which given.
19. Continuing Security Interest; Term; Successors and Assigns;
Assignment; Termination and Release; Survival. This Agreement shall create a
continuing security interest in the Collateral and shall secure the payment and
performance of all of the Secured Obligations as the same may arise and be
outstanding at any time and from time to time from and after the date hereof,
and shall (i) remain in full force and effect until the occurrence of the
Termination Requirements, (ii) be binding upon and enforceable against the
Pledgor and its successors and assigns (provided, however, that the Pledgor may
not sell, assign or transfer any of its rights, interests, duties or
obligations hereunder without the prior written consent of the Lenders) and
(iii) inure to the benefit of and be enforceable by each Secured Party and its
successors and assigns. Upon any sale or other disposition by the Pledgor of
any Collateral in a transaction expressly permitted hereunder or under or
pursuant to the Credit Agreement or any other applicable Credit Document, the
Lien and security interest created by this Agreement in and upon such
Collateral shall be automatically released, and upon the satisfaction of all of
the Termination Requirements, this Agreement and the Lien and security interest
created hereby shall terminate; and in connection with any such release or
termination, the Agent, at the request and expense of the Pledgor, will execute
and deliver to the Pledgor such documents and instruments evidencing such
release or termination as the Pledgor may reasonably request and will assign,
transfer and deliver to the Pledgor, without recourse and without
representation or warranty, such of the
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Collateral as may then be in the possession of the Agent (or, in the case of
any partial release of Collateral, such of the Collateral so being released as
may be in its possession). All representations, warranties, covenants and
agreements herein shall survive the execution and delivery of this Agreement
and any Pledge Amendment or Pledge Accession.
20. Additional Pledgors. The Pledgor recognizes that the provisions of the
Credit Agreement require certain Persons that become Subsidiaries of the
Pledgor, and that are not already parties thereto, to execute and deliver a
Pledge Accession, whereupon each such Person shall become a pledgor under the
Second Amended and Restated Subsidiary Guaranty Agreement, dated as of the date
hereof, with the same force and effect as if originally a pledgor thereunder on
the date hereof, and agrees that its obligations hereunder shall not be
discharged, limited or otherwise affected by reason of the same, or by reason
of the Agent's actions in effecting the same or in releasing any pledgor
thereunder, in each case without the necessity of giving notice to or obtaining
the consent of the Pledgor.
21. Other Terms. All terms in this Agreement that are not capitalized
shall have the meanings provided by the Uniform Commercial Code to the extent
the same are used or defined therein. As used in this Agreement, "Uniform
Commercial Code" shall mean the Uniform Commercial Code as the same may be in
effect from time to time in the State of North Carolina; provided that if, by
reason of applicable law, the validity or perfection of any security interest
in any Collateral granted under this Agreement is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than North Carolina, then
as to the validity or perfection, as the case may be, of such security
interest, "Uniform Commercial Code" shall mean the Uniform Commercial Code as
in effect in such other jurisdiction.
22. Notices. All notices and other communications provided for hereunder
shall be given to the parties in the manner and subject to the other notice
provisions set forth in the Credit Agreement.
23. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of North Carolina (without
regard to the conflicts of law provisions thereof).
24. Severability. To the extent any provision of this Agreement is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
25. Construction. The headings of the various sections and subsections of
this Agreement have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof. Unless the
context otherwise requires, words in the singular include the plural and words
in the plural include the singular.
26. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and
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delivered shall be an original, but all of which shall together constitute one
and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first above
written.
LASON, INC.
By: XXXX X. XXXXXX
--------------------------------------
Title: PRESIDENT AND CEO
-----------------------------------
Accepted and agreed to:
FIRST UNION NATIONAL BANK,
as Agent
By: XXXXX X. XXXXXXXXXX
----------------------------------
Title: XXXXX X. XXXXXXXXXX
-------------------------------
Vice President
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Annex A to Pledge Agreement
First Union National Bank, as Agent
Lason, Inc.
June ______, 1998
-----------------------------------
PLEDGED INTERESTS
Percentage of
Certificate No. of Shares/ outstanding
Number (if Units (if interests in
Pledgor Name of Issuer Type of Interests (applicable) applicable) Issuer
------- -------------- ----------------- ------------ ----------- -------------
Lason, Inc.
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EXHIBIT A to Pledge Agreement
First Union National Bank, as Agent
Lason, Inc.
June ______, 1998
-----------------------------------
PLEDGE AMENDMENT
THIS PLEDGE AMENDMENT, dated as of _______________, _____, is delivered by
LASON, INC. (the "Pledgor") pursuant to Section 5 of the Pledge Agreement
referred to hereinbelow. The Pledgor hereby agrees that this Pledge Amendment
may be attached to the Second Amended and Restated Pledge Agreement, dated as
of June __, 1998, made by the Pledgor in favor of First Union National Bank, as
Agent (as amended, modified or supplemented from time to time, the "Pledge
Agreement," capitalized terms defined therein being used herein as therein
defined), and that the Pledged Interests listed on Annex A to this Pledge
Amendment shall be deemed to be part of the Pledged Interests within the
meaning of the Pledge Agreement and shall become part of the Collateral and
shall secure all of the Secured Obligations as provided in the Pledge
Agreement. This Pledge Amendment and its attachments are hereby incorporated
into the Pledge Agreement and made a part thereof.
LASON, INC.
By: ____________________________________
Title: _________________________________
20
Schedule 1
Information to be added to Annex A of the Pledge Agreement:
Pledged Interests
Percentage of
Outstanding
Type of Certificate No. of shares Interests
Name of Issuer Interests Number (if applicable) in Issuer
-------------- --------- ------ --------------- ---------
Lason Services, Inc. 100%
Lason International, Inc. 100%
