CHARGE OVER SHARES
AND IRREVOCABLE PROXY
CHARGE OVER SHARES is dated as of April 1, 1997 and is made between SLM
International, Inc., a Delaware corporation, (the "Grantor") and The Chase
Manhattan Bank, a New York banking corporation as agent (the "Agent") (i) for
the lenders (the "Lenders") referred to in the Credit Agreement dated as of the
date hereof, among the Grantor, #1 Apparel, Inc. a Delaware corporation and
Maska U.S., Inc., a Vermont corporation (collectively, the "Borrowers") the
Lenders and the Agent (as amended, modified or supplemented from time to time in
accordance with its terms, the "Credit Agreement") and (ii) for itself as issuer
of the Letters of Credit. All capitalized terms used herein and not defined
herein shall have the meanings set forth in the Credit Agreement.
The Agent and the Lenders have agreed to extend Credits to or for the
account of, the Borrowers pursuant to, and subject to the terms and conditions
of, the Credit Agreement. The obligation of the Lenders to extend such Credits
under the Credit Agreement is conditioned on the execution and delivery by the
Grantor of a Charge Over Shares in the form hereof to secure the following
(collectively, the "Secured Obligations"): all Obligations (such Obligations to
include, without limitation, the due and punctual payment and performance of (a)
the principal of and interest on the Loans (including the payment of amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the United States Bankruptcy Code, 11 U.S.C. ss.362(a), and interest
that, but for the filing of a petition in bankruptcy with respect to any
Borrower, would accrue on such obligations, whether or not a claim is allowed
against such Borrower for such interest in the related bankruptcy proceeding),
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, (b) Indebtedness at any time and from time to
time under the Letters of Credit, (c) all obligations of the Grantor at any time
and from time to time under this Charge Over Shares and (d) all other
obligations of the Grantor and the Guarantors at any time and from time to time
under the Credit Agreement and the other Loan Documents).
Accordingly, the Grantor and the Agent hereby agree as follows:
1. Charge Over Shares and Debt. As security for the payment and performance
in full of the Secured Obligations, the Grantor hereby charges unto and grants
to the Agent, for its own benefit and for the benefit of the Lenders, a security
interest in all of the Grantor's right, title and interest in and to, (a) the
shares owned by the Grantor, which shares are listed in Part A of Schedule I
annexed hereto next to the Grantor's name (the "Initial Charged Shares" and any
additional shares of, and all securities convertible into and warrants, options
and other rights to purchase or otherwise acquire, capital stock of the issuers
listed in Part A of Schedule I annexed hereto, or any corporation successor
thereto pursuant to an amalgamation or other reorganization, obtained in the
future by the Grantor (collectively, the Initial Charged
Shares together with all such additional shares and securities pledged in the
future, the "Charged Shares"), (b) all instruments of indebtedness naming
(whether now existing or hereinafter arising) the Grantor as payee thereunder,
which indebtedness shall be listed in Part B of Schedule I annexed hereto next
to the Grantor's name (the "Charged Debt") and (c) subject to Section 5 below,
all proceeds of the Charged Shares or Charged Debt, including, without
limitation, all cash, dividends, securities or other property at any time and
from time to time receivable or otherwise distributed in respect of or in
exchange for pursuant to a purchase, redemption, conversion or cancellation or
other transformation for any of or all such Charged Shares or Charged Debt, all
renewals thereof, and all accessions and substitutions thereto (the items
referred to in clauses (a) through (c) being collectively called the
"Collateral"). Upon delivery to the Agent, all forms of transfer or assignment
securities or notes now or hereafter included in the Collateral including,
without limitation, the Charged Shares and the Charged Debt (the "Charged
Securities") shall be accompanied by undated share certificates, as the case may
be, duly executed in blank or other instruments of transfer satisfactory to the
Agent and by such other instruments and documents as the Agent may reasonably
request. Each delivery of Charged Securities shall be accompanied by a schedule
showing a description of the securities theretofore and then being charged
hereunder, which schedule shall be attached hereto as Schedule I and made a part
hereof. Each schedule so delivered shall supersede any prior schedules so
delivered.
2. Delivery of Collateral. The Grantor agrees to deliver promptly or cause
to be delivered promptly to the Agent, for its own benefit and for the benefit
of the Lenders, any and all stock or share certificates or other documents of
title to or representing the Charged Securities together with such duly executed
transfers or assignments or Stock Transfer forms with the name of the
transferee, date and consideration left blank, as the Agent may require to
enable the Agent to vest the same in the Agent (for its own benefit and for the
benefit of the Lenders) or its nominee, to the intent that the Agent may at any
time following an Event of Default, (subject always to the terms of the Credit
Agreement) present them for registration to the issuer of the Charged
Securities.
3. Representations, Warranties and Covenants. The Grantor hereby
represents, warrants and covenants as to itself and the Collateral charged by it
hereunder to and with the Agent that:
(a) except for the security interest and charge granted to the Agent and
Liens permitted under the Credit Agreement, the Grantor (i) is and, subject to
the provisions of the Credit Agreement, will at all times continue to be the
direct owner, beneficially and of record, of the Charged Shares that it is
charging hereunder and is and will continue to be the holder of the Charged Debt
that it is charging hereunder, (ii) holds the Collateral that it is charging
hereunder free and clear of all Liens, charges, encumbrances and security
interests of every kind and nature, (iii) will make no assignment, pledge,
hypothecation or, subject to the provisions of the Credit Agreement, transfer
of, grant any option or similar right with respect to, or create or suffer to
exist any security interest in, the Collateral (or any part thereof) that it is
charging hereunder including, without limitation, by virtue of becoming bound by
any agreement which restricts in
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any manner the rights of any present or future holder of any Charged Shares with
respect thereto, and (iv) subject to Section 5 below, will cause any and all
Collateral, whether for value paid by the Grantor or otherwise, to be forthwith
deposited with the Agent and charged, pledged or assigned hereunder;
(b) the Grantor (i) has the requisite power and authority to charge and
assign the Collateral it is charging hereunder in the manner hereby done or
contemplated, (ii) will not amend, modify or supplement any Charged Debt without
the prior written consent of the Agent, nor forgive any Indebtedness evidenced
by any Charged Security, and (iii) will defend its title or interest thereto or
therein against any and all Liens, however arising, of all persons whomsoever
(other than the Liens permitted by the Credit Agreement);
(c) no consent or approval not obtained of any governmental body or
regulatory authority or any securities exchange was or is necessary to the
validity of the charge, and security interests effected hereby;
(d) by virtue of the execution and delivery by the Grantor of this Charge
Over Shares, when the certificates, instruments or other documents representing
or evidencing the Collateral are delivered to the Agent in accordance with this
Charge Over Shares, the Agent will obtain a valid and perfected first equitable
mortgage and charge over and security interest in such Collateral as security
for the repayment of the Secured Obligations;
(e) the charge is effective to vest in the Agent the rights of the Agent in
the Collateral as set forth herein;
(f) all of the Charged Shares have been duly authorized and validly issued
and as at the date hereof, the Initial Charged Shares constitute (i) all of the
issued and outstanding shares of the issuers listed on Part A of Schedule I
annexed hereto, and (ii) all outstanding warrants, options or other rights to
purchase, or other agreements outstanding with respect to, or property that is
now or hereafter convertible into, or that requires the issuance or sale of, any
Charged Shares, and such Charged Shares have been validly charged to the Agent
pursuant hereto;
(g) the Charged Debt constitutes all of the issued and outstanding
intercompany Indebtedness, evidenced by a promissory note of the respective
issuers thereof owing to the Grantor;
(h) charge hereunder, immediately upon its acquisition (directly of
indirectly) thereof, any and all shares of any person that, after the date of
this Charge Over Shares, becomes, as a result of any occurrence, a direct
subsidiary of the Grantor; and
(i) (i) charge hereunder, immediately upon their issuance, any and all
instruments or other evidences of additional Indebtedness from time to time owed
to the Grantor
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by any obligor on the Charged Debt, and (ii) charge hereunder, immediately upon
their issuance, any and all instruments or other evidences of Indebtedness from
time to time owed to the Grantor by any person that after the date of this
Charge Over Shares becomes, as a result of any occurrence, a direct or indirect
subsidiary of the Grantor.
All representations, warranties and covenants of the Grantor contained in this
Charge Over Shares shall survive the execution, delivery and performance of this
Charge Over Shares until the termination of this Charge Over Shares pursuant to
Section 14 hereof.
4. Registration in Nominee Name; Denominations. Upon the occurrence and
during the continuance of an Event of Default, the Agent shall have the right
(in its sole and absolute discretion, with subsequent notice to the Grantor) to
transfer the Charged Securities into its own name or the name of its nominee, to
require the directors of the issuer to approve such transfer or assignment of
the Charged Securities (subject to the Articles of Association of the issuers)
and, subject to payment of any stamp duty on the transfer or assignment of such
Charged Securities, to register the Agent or its nominee (as the case may be) as
the holder thereof. In addition, subject always to the Articles of Association
of the issuer, the Agent shall at all times have the right to exchange the
certificates representing any of the Charged Securities for certificates of
smaller or larger denominations for any purpose consistent with this Charge Over
Shares.
5. Voting Rights; Dividends; Irrevocable Proxy; etc. (a) Unless and until
an Event of Default shall have occurred and be continuing:
(i) The Grantor shall be entitled to exercise any and all voting and/or
consensual rights and powers accruing to an owner of Charged Shares or any part
thereof for any purpose not inconsistent with the terms of this Charge Over
Shares, the Credit Agreement and the other Loan Documents, provided that such
action would not adversely affect the rights and remedies inuring to the Agent
or the Lenders under this Charge Over Shares or the Credit Agreement or the
ability of the Agent or the Lenders to exercise the same.
(ii) The Agent shall execute and deliver to the Grantor, or cause to be
executed and delivered to the Grantor, all such proxies, powers of attorney, and
other instruments as the Grantor may reasonably request for the purpose of
enabling the Grantor to exercise the voting and/or consensual rights and powers
which it is entitled to exercise pursuant to subparagraph (i) above and to
receive the cash dividends it is entitled to receive pursuant to subparagraph
(iii) below.
(iii) The Grantor shall be entitled to receive and retain any and all cash
dividends, principal and interest paid on the Charged Securities only to the
extent that such cash dividends, principal and interest are permitted by, and
otherwise paid in accordance with the terms and conditions of the Credit
Agreement, the Articles of Association of the issuer of the Charges Securities,
the other Loan Documents and applicable laws. Any and all
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x noncash dividends,
y. return of capital, capital surplus or paid-in surplus, dividends paid or
payable in cash or otherwise in connection with a partial or total liquidation
or dissolution, principal, interest and
z. other distributions made on or in respect of Charged Securities (other
than contributions described in the initial sentence in (a)(iii) above), whether
paid or payable in cash or otherwise, whether resulting from a subdivision,
combination or reclassification of the outstanding capital stock of the issuer
of any Charged Securities or received in exchange for Charged Securities or any
part thereof, or in redemption thereof, as a result of any merger,
consolidation, acquisition or other exchange of assets to which such issuer may
be a party or otherwise,
shall be and become part of the Collateral, and, if received by the Grantor,
shall not be commingled by the Grantor with any of its other funds or property
but shall be held separate and apart therefrom, shall be held in trust for the
benefit of the Agent and the Lenders and shall be forthwith delivered to the
Agent in the same form as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of Default,
all rights of the Grantor to receive any dividends, principal, interest, stock,
instruments, securities, and other distributions which the Grantor is authorized
to receive pursuant to paragraph (a)(iii) of this Section 5 shall cease, and all
such rights shall thereupon become vested in the Agent, which shall have the
sole and exclusive right and authority to receive and retain such dividends,
principal, interest, stock, instruments, securities and other distributions
which the Grantor is authorized to receive pursuant to paragraph (a)(iii) of
this Section 5. All dividends, principal, interest, stock, instruments,
securities and other distributions which the Grantor is authorized to receive
pursuant to paragraph (a)(iii) of this Section 5 which are received by the
Grantor contrary to the provisions of this Section 5(b) shall be received in
trust for the benefit of the Agent, shall be segregated from other property or
funds of the Grantor and shall be forthwith delivered to the Agent as Collateral
in the same form as so received (with any necessary endorsement). Any and all
money and other property paid over to or received by the Agent pursuant to the
provisions of this Section 5(b) shall be retained by the Agent in an account to
be established by the Agent upon receipt of such money or other property and
shall be applied in accordance with the provisions of Section 9 hereof. After
all Events of Default have been cured or waived, the Agent shall, within five
Business Days after all such Events of Default have been cured or waived, the
Grantor shall again be entitled to receive dividends, principal, interest, stock
instruments, securities and other distributions which the Grantor is entitled to
receive pursuant to paragraph (a)(iii) of this Section 5.
(c) Upon the occurrence and during the continuance of an Event of Default,
all rights of the Grantor to exercise the voting and consensual rights and
powers which it is
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entitled to exercise pursuant to Section 5(a)(i) shall cease, and pursuant to
the irrevocable proxy granted herein, all such rights shall thereupon become
vested in the Agent, which shall have the sole and exclusive right and authority
to exercise such voting and consensual rights and powers; provided that, unless
otherwise directed by the Required Lenders, the Agent shall have the right from
time to time following and during the continuance of an Event of Default to
permit the Grantor to exercise such rights. After all Events of Default have
been cured or waived, the Grantor shall have the right to exercise the voting
and consensual rights and powers that it would otherwise be entitled to exercise
pursuant to the terms of paragraph (a) (i) above and the obligations of the
Agent pursuant to the terms of paragraph (a) (ii) of this Section 5 shall be
reinstated.
(d) As long as the Credit Agreement remains in effect and until all of the
Secured Obligations have been paid fully and indefeasibly, any payments made in
respect of the Charged Debt shall be and become part of the Collateral, and, if
received by the Grantor, shall not be commingled by the Grantor with any of its
other funds or property but shall be held separate and apart therefrom, shall be
held in trust for the benefit of the Agent and the Lenders and shall be
forthwith delivered to the Agent in the same form as so received.
(e) In order to permit the Agent to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant to Section 5(c)
and to receive all dividends and other distributions which it may be entitled to
receive under Section 5(a)(iii) or Section 5(b), the Grantor shall promptly
execute and deliver (or cause to be executed and delivered) to the Agent all
such proxies, dividend payment orders and other instruments as the Agent may
from time to time reasonably request.
Without limiting the effect of the foregoing, the Grantor does constitute
and appoint the Agent as its proxy, and upon the occurrence and during the
continuance of an Event of Default, the Agent shall have the right to exercise
all rights, benefits, privileges and powers accruing to the Grantor, as owner of
the Charged Securities, including, without limitation, giving or withholding
consent, calling and attending shareholders meetings to be held from time to
time with full power to vote and act for and in the name, place and stead of the
Grantor and in the same manner, to the same extent, and with the same effect
that the Grantor would if personally present at such meetings, giving to the
Agent full power of substitution and revocation, which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Charged Shares on the record books of the issuer thereof) by any person
(including the issuer of the Charged Shares or any director, officer or agent
thereof).
Immediately following occurrence of an Event of Default, the Grantor shall
give notice to the Company Secretary of the Issuer of the Charged Shares of the
appointment of the Agent as the Grantor's proxy in accordance with this Section
5 and the Grantor's attorney in accordance with Section 10 hereof in relation to
the Charged Securities.
THIS PROXY IS IRREVOCABLE
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Other than the proxies given by the Grantor to the Indenture Trustee, any
proxy of proxies heretofore given by the Grantor to any person or persons
whatsoever are hereby revoked. THIS PROXY SHALL CONTINUE IN FULL FORCE AND
EFFECT UNTIL SUCH TIME AS ALL SECURED OBLIGATIONS ARE PAID AND SATISFIED IN FULL
IN ACCORDANCE WITH THE TERMS OF THE CREDIT AGREEMENT.
6. Issuance of Additional Shares. Except as may be permitted by the Credit
Agreement, the Grantor agrees that it will cause each of its subsidiaries not to
issue any stock or other securities, whether in addition to, by stock dividend
or other distribution upon, or in substitution for, the Charged Securities or
otherwise.
7. Supplemental Documentation. In connection with the execution and
delivery of this Charge Over Shares the Grantor shall furnish or cause to be
furnished to the Agent on or prior to the Closing Date a certificate,
substantially in the form of Annex A hereto, signed by a Responsible Officer of
the Grantor dated the Closing Date, certifying that, as of the date of such
certificate, all representations and warranties of the Grantor in Section 3
hereof are true and correct and that the Grantor is in compliance with all
conditions, agreements and covenants to be observed or performed hereunder.
8. Remedies upon Event of Default. If an Event of Default shall have
occurred and be continuing, the Agent may, in addition to all other rights and
remedies provided for herein or otherwise available to it, including all the
rights and remedies of a secured party under the United States Uniform
Commercial Code as in effect in any relevant jurisdiction (whether or not the
Uniform Commercial Code applies to the affected Charged Securities), sell or
otherwise dispose of all or any part of the Collateral, at public or private
sale or at any broker's board or on any securities exchange, for cash, upon
credit or for future delivery as the Agent shall deem appropriate. Each such
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of the Grantor, and the Grantor hereby waives (to the
extent permitted by law) all rights of redemption, stay and appraisal which the
Grantor now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted.
The Agent shall give the Grantor 10 days' written notice (which the Grantor
agrees is reasonable notice within the meaning of Section 9-504(3) of the
Uniform Commercial Code as in effect in New York) of the Agent's intention to
make any sale of the Grantor's Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Agent may fix and state in the notice of such
sale. At any such sale, the Collateral, or portion thereof, to be sold may be
sold in one lot as an entirety or in separate parcels, as the Agent may (in its
sole and absolute discretion) determine. The Agent shall not be obligated to
make any sale of any Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of such Collateral shall have been given. The
Agent may, without notice or publication, adjourn any
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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. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Agent until the sale price is paid in full by the purchaser or purchasers
thereof, but the Agent shall not incur any liability in case any such purchaser
or purchasers shall fail to take up and pay for the Collateral so sold and, in
case of any such failure, such Collateral may be sold again upon like notice. At
any public sale made pursuant to this Section 8, the Agent may bid for or
purchase, free (to the extent permitted by law) from any right of redemption,
stay or appraisal on the part of the Grantor (all said rights being also hereby
waived and released to the extent permitted by law), with respect to the
Collateral or any part thereof offered for sale and the Agent may make payment
on account thereof by using any claim then due and payable to the Agent or any
Lender from the Grantor as a credit against the purchase price, and the Agent
may, upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to the Grantor therefor. For purposes
hereof, a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof; the Agent shall be free to carry out such
sale pursuant to such agreement, and the Grantor shall not be entitled to the
return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Agent shall have entered into such an agreement all
Events of Default shall have been remedied and the Secured Obligations paid in
full. As an alternative to exercising the power of sale herein conferred upon
it, the Agent may proceed by a suit or suits at law or in equity to foreclose
this Charge Over Shares and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.
9. Application of Proceeds of Sale. The proceeds of any sale of Collateral,
as well as any Collateral consisting of cash, shall be applied by the Agent as
follows:
FIRST, to the Agent to reimburse the Agent for that portion of the
payments, if any, made by it with respect to Letters of Credit for which a
Lender, as a participant in such Letter of Credit pursuant to Section 2.18 of
the Credit Agreement, failed to pay its pro rata share thereof as required
pursuant to such Section 2.18;
SECOND, to the payment of all reasonable costs and expenses incurred by the
Agent in connection with such collection or sale or otherwise in connection with
this Charge Over Shares or any of the Secured Obligations, including, but not
limited to, all court costs and the reasonable fees and expenses of its agents
and legal counsel, the repayment of all advances made by the Agent hereunder on
behalf of the Grantor any other reasonable costs or expenses incurred in
connection with the exercise of any right or remedy hereunder;
THIRD, to the Agent to be held as cash collateral to the extent of undrawn
amounts, if any, of outstanding Letters of Credit;
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FOURTH, pro rata to the payment in full of principal and interest in
respect of any Loans outstanding (pro rata as among the Lenders in accordance
with the amounts of the Loans made by them pursuant to the Credit Agreement);
FIFTH, to the payment in full of all Secured Obligations (other than those
referred to above) owed to the Lenders (pro rata as among the Lenders in
accordance with the amounts of Secured Obligations owed to them on the date of
any such distribution); and
SIXTH, to the Indenture Trustee for the Senior Secured Notes, the Grantor,
their successors or assigns, or to whosoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may otherwise direct.
10. Agent Appointed Attorney-in-Fact. The Grantor hereby appoints the Agent
its attorney-in-fact upon the occurrence and during the continuance of an Event
of Default solely for the purpose of carrying out the provisions of this Charge
Over Shares and taking any action and executing any instrument which the Agent
may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest. Without limiting the
generality of the foregoing, the Agent shall have the right, upon the occurrence
and during the continuance of an Event of Default, with full power of
substitution either in the Agent's name or in the name of the Grantor, to ask
for, demand, xxx for, collect, receive receipt and give acquittance for any and
all moneys due or to become due and under and by virtue of any Collateral, to
endorse the cheques, drafts, orders and other instruments for the payment of
money payable to the Grantor representing any interest or dividend, or other
distribution payable in respect of the Collateral or any part thereof or on
account thereof and to give full discharge for the same, to settle, compromise,
prosecute or defend any action, claim or proceeding with respect thereto, and to
sell, assign, endorse, pledge, transfer and make any agreement respecting, or
otherwise deal with, the same; provided, however, that nothing herein contained
shall be construed as requiring or obligating the Agent or the Lenders to make
any commitment or to make any inquiry as to the nature or sufficiency of any
payment received by the Agent or the Lenders, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any property covered
thereby, and no action taken by the Agent or the Lenders or omitted to be taken
with respect to the Collateral or any part thereof shall give rise to any
defense, counterclaim or offset in favor of the Grantor or to any claim or
action against the Agent or the Lenders in the absence of the gross negligence
or wilful misconduct of the Agent or the Lenders.
11. No Waiver. No failure on the part of the Agent to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by the Agent preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law. The
Agent and the Lenders shall not be deemed to have waived any rights hereunder or
under any other agreement or instrument unless such waiver shall be in writing
and signed by such parties.
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12. Security Interest Absolute. All rights of the Agent hereunder, the
grant of a security interest in the Collateral and all obligations of the
Grantor hereunder, shall be absolute and unconditional irrespective of (i) any
lack of validity or enforceability of the Credit Agreement, any guarantee or
other agreement with respect to any of the Secured Obligations or any other
agreement or instrument relating to any of the foregoing, (ii) any change in
time, manner or place of payment of, or in any other term of, all or any of the
Secured Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement or any other agreement or instrument, (iii)
any exchange, release or nonperfection of any Lien on other collateral, or any
release or amendment or waiver of or consent to or departure from any guarantee,
for all or any of the Secured Obligations or (iv) any other circumstance which
might otherwise constitute a defense available to, or a discharge of, the
Grantor in respect of the Secured Obligations or in respect of this Charge Over
Shares (other than the indefeasible payment in full of all of the Secured
Obligations and subject to Section 14 of this Charge Over Shares).
13. Agent's Fees and Expenses. The provisions of Section 11.04 of the
Credit Agreement with respect to the reimbursement of fees and expenses and
indemnification are hereby deemed incorporated herein in their entirety and
shall be binding upon the Grantor as if set forth herein, and the Grantor shall
be obligated to, (x) upon demand, pay to the Agent the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its counsel
and of any experts or agents which the Agent may incur in connection with (i)
the administration of this Charge Over Shares, (ii) the custody or preservation
of, or the sale or other disposition of, collection from, or other realization
upon, any of the Collateral, (iii) the exercise or enforcement of any of the
rights of the Agent hereunder or (iv) the failure by the Grantor to perform or
observe any of the provisions hereof, and (y) indemnify the Agent and the
Lenders, in each case to the same extent set forth in Section 11.04 of the
Credit Agreement. Any such amounts payable as provided hereunder or thereunder
shall be additional Secured Obligations secured hereby and by the other Security
Documents.
14. Termination. This Charge Over Shares shall terminate when (a) all the
Secured Obligations have been fully and indefeasibly paid in cash, (b) the
Lenders have no further commitment to make any Loans under the Credit Agreement,
and (c) the Agent shall have no further obligation to issue any Letters of
Credit, at which time the Agent shall reassign without any representations or
warranties and deliver, to the extent required by the Intercreditor Agreement,
to the Indenture Trustee, or otherwise to the Grantor, or to such person or
persons as the Grantor shall designate, against receipt, such of the Collateral
(if any) as shall not have been sold or otherwise still be held by it hereunder,
together with appropriate instruments of reassignment and release; provided,
however, that all indemnities of the Grantor contained in this Charge Over
Shares shall survive, and remain operative and in full force and effect
regardless of, the termination of this Charge Over Shares. Any such reassignment
shall be without recourse to or warranty by the Agent and at the expense of the
Grantor. The security interest hereunder shall automatically terminate in any
Collateral that is permitted to be sold or disposed of by the Credit Agreement
or in the case of any sale that is consented pursuant to Section 11.08 of the
Credit
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Agreement. The Agent shall promptly take such action, and execute such releases,
termination statements or other documents as may be reasonably requested by an
interested party, at the expense of the Grantor, to evidence the termination and
releases contemplated hereby.
15. Notices. All communications and notices hereunder shall be in writing
and shall be given (i) in the case of the Grantor: at 00 Xxxxx 00, Xxxxxxx
Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000 (Telecopy No. (000) 000-0000),
Attention: Xxxxxxx Xxxxx, Vice President - Finance, with a copy to Xxxxxx, Xxxxx
& Xxxxxxx, LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxx
X. Xxxxxx, Esq. (Telecopy No. (000) 000-0000), and (ii) in the case of any other
person, as provided in the Credit Agreement.
16. Further Assurances. The Grantor agrees at its expense to do such
further acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Agent may at any time reasonably
request in connection with the administration and enforcement of this Charge
Over Shares or with respect to the Collateral or any part thereof or in order
better to assure and confirm unto the Agent its rights and remedies hereunder.
17. Binding Agreement; Assignments. This Charge Over Shares, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, except that
the Grantor shall not be permitted to assign this Charge Over Shares or any
interest herein or in the Collateral, or any part thereof, or otherwise charge,
pledge, encumber or grant any option with respect to the Collateral, or any part
thereof, or any cash or property held by the Agent as Collateral under this
Charge Over Shares, except as contemplated or permitted by this Charge Over
Shares or the Credit Agreement.
18. Governing Law/Jurisdiction. This Charge Over Shares shall be governed
by and interpreted and construed in accordance with English law.
The Grantor, for the benefit of the Agent and the Lenders, hereby
irrevocably agrees that any proceedings or disputes in connection this Charge
Over Shares may be brought either in the courts of England and Wales, or in any
competent state court of the State of New York, USA or any federal court within
the State of New York, USA and hereby submits to the non-exclusive jurisdiction
of or any such court.
The Grantor and the Agent irrevocably waive any objection which each may
respectively have, now or hereafter, to the laying of the venue of any
proceedings in any such court as is referred in this Section 18 and any claim
that any such proceedings have been brought in an inconvenient forum and further
irrevocably agree that a judgement in any proceedings brought in any competent
court shall be conclusive and binding upon the Grantor and may be enforced in
the courts of any other jurisdiction.
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19. Severability. In case any one or more of the provisions contained in
this Charge Over Shares should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired.
20. Counterparts. This Charge Over Shares may be executed in two or
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument. This Charge Over
Shares shall be effective when a counterpart which bears the signature of the
Grantor shall have been delivered to the Agent, and the Agent shall have
executed this Charge Over Shares.
21. Section Headings. Section headings used herein are for convenience only
and are not to affect the construction of, or be taken into consideration in
interpreting, this Charge Over Shares.
22. English Language. The parties hereto confirm that it is their wish that
this Charge Over Shares as well as any other documents relating thereto,
including notices, have been and shall be drawn up in the English language only.
Les parties aux presentes confirment leur volonte que cette convention de
meme que tous les documents, y compris tous avis, s'y rattachant, solent rediges
en langue anglaise seulement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Charge Over
Shares as of the day and year first above written.
SLM INTERNATIONAL, INC.
By:______________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as Agent
By_____________________________
Name:
Title:
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