EXHIBIT 10.59
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated as of
January 16, 2002, is made by SPACELABS INTERNATIONAL, INC., a Delaware
corporation (the "Pledgor"), in favor of BANK OF AMERICA, N.A., a national
banking association ("Lender").
RECITALS
A. The Pledgor is a Subsidiary of the Borrowers that are parties to that
certain Credit Agreement, dated as of January 16, 2002, by and among Spacelabs
Medical Inc., a Delaware corporation, Spacelabs Medical, Inc., a California
corporation, Spacelabs Xxxxxxx, Inc., Vita-Stat Medical Services, Inc.,
Lifeclinic Medical Data Corporation, and Xxxxxxxxxx.xxx Corporation (the
"Borrowers") and the Lender (as amended, restated, modified, renewed,
supplemented or extended from time to time, the "Credit Agreement").
B. It is a condition precedent to Lender's obligation to make its
initial Loan under the Credit Agreement that the Pledgor enter into this
Agreement and grant to the Lender the security interests hereinafter provided to
secure the obligations of the Borrowers described below.
NOW, THEREFORE, to induce the Lender to make Loans under the Credit
Agreement, and in consideration of such extensions of credit as the Lender may
hereafter make to the Borrowers, the Pledgor, intending to be legally bound
hereby, covenants and agrees as follows:
SECTION 1. Definitions; Interpretations.
(a) Terms Defined in Credit Agreement. Except as set forth in
subsection (c) hereof, all capitalized terms used in this Agreement and not
otherwise defined herein have the meanings specified in the Credit Agreement.
(b) Certain Defined Terms. As used in this Agreement, the following
terms have the following meanings:
"Book-Entry Shares" means any Pledged Shares evidenced or represented by
a book-entry on the books of a Clearing Corporation.
"Clearing Corporation" means a "clearing corporation", as defined in
Section 62A.8-102(1) of the UCC, at which the Lender and the Pledgor each
maintains a securities account.
"Commission" has the meaning specified in subsection 11(b)(i).
"Indemnified Liabilities" has the meaning specified in subsection 16(b).
"Indemnified Person" has the meaning specified in subsection 16(b).
"Pledged Collateral" has the meaning specified in Section 2.
"Pledged Shares" means all shares of capital stock or other equity
securities referred to in subsections (a) and (b) of Section 2.
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"Secured Obligations" means all advances, debts, liabilities,
obligations, covenants and duties arising under the Credit Agreement, this
Agreement and any other Loan Document owing by the Borrowers to the Lender,
whether for principal, interest, costs, fees, expenses, indemnities or
otherwise, whether now existing or hereafter arising, whether direct or indirect
(including those acquired by assignment), and whether due or to become due,
absolute or contingent, liquidated or unliquidated, determined or undetermined.
"Securities Act" has the meaning specified in subsection 11(b)(i).
"UCC" means the Uniform Commercial Code, as in effect from time to time,
of the State of Washington or of any other state the laws of which are required
as a result thereof to be applied in connection with the issue of perfection of
security interests; provided, that to the extent that the UCC is used to define
any term herein or in any other documents and such term is defined differently
in different Articles or Divisions of the UCC, the definition of such term
contained in Article or Division 9 shall govern.
(c) Terms Defined in UCC. Notwithstanding subsection (a) hereof,
where applicable and except as otherwise defined herein, terms used in this
Agreement shall have the meanings assigned to them in the UCC.
(d) Interpretation. The rules of interpretation and other
definitional provisions set forth in Annex A of the Credit Agreement shall be
applicable to this Agreement and are incorporated herein by this reference.
SECTION 2. Pledge. As security for the payment, in full in cash when
due, whether at stated maturity, by acceleration or otherwise, and performance
of the Secured Obligations, the Pledgor hereby pledges, assigns, transfers,
hypothecates and sets over to the Lender and grants to the Lender a security
interest in all of the Pledgor's right, title and interest in, to and under the
following, whether now existing or owned or hereafter acquired or arising
(collectively, the "Pledged Collateral"):
(a) 66 2/3% of the voting shares and all of the non-voting shares
of capital stock of the following companies (the "Pledged Subsidiaries") that
Pledgor is described as owning on the attached Schedule 1, including, without
limitation, any such securities that are Book-Entry Shares;
(i) Spacelabs Medical Products Pty. Ltd., a corporation formed
under the laws of Australia;
(ii) Spacelabs Medical Ltd., a corporation formed under the laws
of the United Kingdom;
(iii) Spacelabs Medical SARL, a corporation formed under the
laws of France;
(iv) Spacelabs Medical S.r.l., a corporation formed under the
laws of Italy; and
(v) Spacelabs Medical GmbH, a corporation formed under the laws
of Germany.
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(b) 66 2/3% of the voting shares and all of the non-voting shares of
capital stock or other equity securities of the Pledged Subsidiaries hereafter
acquired, received or owned by the Pledgor (whether in connection with any
recapitalization, reclassification or reorganization of the capital of the
Pledged Subsidiaries or otherwise), including, without limitation, any such
securities that are Book-Entry Shares;
(c) all certificates, instruments or other writings representing or
evidencing the Pledged Shares (other than any Book-Entry Shares or any other
Pledged Shares that constitute part of a fungible bulk of securities in the
possession of a Clearing Corporation);
(d) all warrants, options and other rights entitling the Pledgor to
acquire any interest in any Pledged Shares;
(e) all dividends, cash, instruments and other property from time to
time received, receivable or otherwise distributed or distributable in respect
of or in exchange for any or all of the Pledged Shares; and
(f) all cash and non-cash proceeds of the foregoing.
SECTION 3. Delivery or Transfer of Pledged Collateral.
(a) All original certificates, instruments or other writings
representing or evidencing the Pledged Shares (other than certificated
securities that constitute part of a fungible bulk of securities in the
possession of a Clearing Corporation) owned by the Pledgor as of the date of
this Agreement shall be delivered to the Lender concurrently with the execution
and delivery of this Agreement, and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Lender.
(b) In the event that any Pledged Shares are Book-Entry Shares which
are registered in the name of a Clearing Corporation, concurrently with the
execution and delivery of this Agreement, the Pledgor shall cause such Clearing
Corporation to make appropriate entries on its books, indicating that such
Book-Entry Shares are to be held as collateral for the benefit of Lender.
(c) In the event that any Pledged Shares are certificated securities
that constitute part of a fungible bulk of securities in the custody of a
Clearing Corporation and are registered in such Clearing Corporation's name,
concurrently with the execution and delivery of this Agreement, the Pledgor
shall cause such Clearing Corporation to make appropriate entries on its books
indicating such Pledged Shares are to be held as collateral for the benefit of
the Lender.
(d) Upon obtaining any Pledged Shares hereafter, the Pledgor agrees
that it will deliver such additional Pledged Shares to the Lender or otherwise
cause such Clearing Corporation to hold such additional Pledged Shares in the
manner described in subsection (a), (b) or (c) above, as applicable.
(e) In connection with a transfer or assignment pursuant to Section
11.2 of the Credit Agreement, the Lender shall have the right to transfer to or
to register in its name or the name of any of its nominees any or all of the
Pledged Shares, subject to the provisions of Section 7(a). In addition, the
Lender shall have the right at any time to exchange certificates, instruments or
other writings representing or evidencing Pledged Shares for certificates,
instruments or other writings of smaller or larger denominations. As soon as
practicable after the purchase or receipt by the Pledgor of any Book-Entry
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Shares, the Pledgor shall cause the issuer thereof to issue stock certificates
with respect to such shares and shall, immediately upon receipt thereof, deliver
such certificates to the Lender in accordance with this Section.
SECTION 4. Representations and Warranties. The Pledgor represents and
warrants to the Lender that:
(a) The Pledgor is the record legal and beneficial owner of the
Pledged Collateral including, without limitation, 66 2/3% of the voting and all
of the non-voting shares of capital stock of the Pledged Subsidiaries that
Pledgor is described as owning on the attached Schedule 1.
(b) No other Person, except the Lender pursuant to this Agreement,
has any right, title, claim or interest (by way of Lien, purchase option or
otherwise) in or against or to the Pledged Collateral.
(c) The pledge of the Pledged Collateral pursuant to this Agreement
creates in favor of the Lender a legally valid, binding and enforceable, first
priority perfected, security interest in the Pledged Collateral, securing the
payment of the Secured Obligations.
(d) All Pledged Shares have been duly authorized, validly issued and
fully paid and are non-assessable.
(e) The Pledgor (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware; (ii) has
the power and authority and all governmental licenses, authorizations, consents
and approvals to own its assets, carry on its business and to execute, deliver,
and perform its obligations under this Agreement; (iii) is duly qualified as a
foreign corporation and is licensed and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification or license, except where the failure
to so qualify would not have a Material Adverse Effect; and (iv) is in
compliance in all material respects with all Requirements of Law of any
Governmental Authority having jurisdiction over it and its business (including
the Federal Fair Labor Standards Act), except such as may be contested in good
faith, as to which a bona fide dispute may exist or which could not reasonably
be expected to have a Material Adverse Effect.
(f) The execution, delivery and performance by the Pledgor of this
Agreement have been duly authorized by all necessary corporate action and do not
and will not (i) contravene the terms of any of the Pledgor's Organization
Documents, (ii) conflict with or result in any breach or contravention of, or
the creation of any Lien under, any indenture, agreement, lease, instrument,
contractual obligation, injunction, order, decree or undertaking to which the
Pledgor is a party, or (iii) violate any Requirement of Law.
(g) No approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, the Pledgor of this Agreement, the exercise by the Lender
of the voting or other rights provided for in this Agreement, or the remedies in
respect of the Pledged Collateral pursuant to this Agreement, except as may be
required in connection with the disposition of the Pledged Shares by laws
affecting the offering and sale of securities generally.
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(h) The Pledgor has full power, authority and legal right to pledge
the Pledged Collateral pursuant to this Agreement. There are and will be no
restrictions on the transferability of any Pledged Collateral transferred or
delivered by the Pledgor hereunder to the Lender or with respect to the
foreclosure, transfer or disposition thereof by the Lender.
(i) The Pledgor has delivered to the Lender all Pledged Shares or
otherwise caused the Clearing Corporation to hold such Pledged Shares pursuant
to Sections 3(a), 3(b) or 3(c), as applicable.
(j) All Pledged Shares are (i) certificated securities represented
or evidenced by certificates, instruments or other writings, the originals of
which are in the possession of the Pledgor (prior to delivery to the Lender
hereunder), (ii) certificated securities that constitute part of a fungible bulk
of securities in the custody of a Clearing Corporation and registered in such
Clearing Corporation's name, or (iii) uncertificated securities that are
Book-Entry Shares registered in the name of a Clearing Corporation.
(k) Set forth on Schedule 1 attached hereto is a true, complete and
accurate list of all Pledged Shares owned by Pledgor as of the date of this
Agreement. The shares of capital stock of the Pledged Subsidiaries not owned by
Pledgor as of the date of this Agreement are owned by such Persons and in such
number of shares as are described on Schedule 1. All the information set forth
on Schedule 1 attached hereto is true, complete and accurate.
(l) None of the Pledged Shares constitutes Margin Stock.
(m) No options, warrants, calls, commitments or other rights to
acquire, sell or issue any shares of capital stock of the Pledged Subsidiaries
whether upon conversion, exercise or exchange of other securities or otherwise,
are outstanding and no proxies, voting trusts or other agreements or
understandings exist with respect to the voting of such capital stock. Neither
Pledgor nor and of the Pledged Subsidiaries is a party to any stockholder or
similar agreement with respect to the Pledged Collateral.
(n) (i) It will derive substantial and direct benefits from the
transactions contemplated by this Agreement and the other Loan
Documents;
(ii) It would not be able on its own to obtain financing on terms
as favorable as those set forth in the Credit Agreement;
(iii) It has received, will receive, or has the right to receive
consideration that is the reasonable equivalent of the obligations
and liability that it has incurred to the Lender under the terms of
this Agreement;
(iv) It is not insolvent as defined in Section 101 of the
Bankruptcy Code or any applicable Debtor Relief Law, nor, after
giving effect to the consummation of the transactions contemplated
by this Agreement will it be rendered insolvent by its execution and
delivery to the Lender of this Agreement;
(v) It is not engaged or about to be engaged in any business or
transaction for which the assets retained by it will be unreasonably
small capital, taking into consideration its obligations to the
Lender under this Agreement; and
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(vi) It does not intend to, or believe that it will, incur debts
beyond its ability to pay them as they mature.
The foregoing representations and warranties shall survive the execution
and delivery of this Agreement and shall be deemed restated automatically at
each such time as any additional Pledged Collateral is delivered hereunder to
the Lender.
SECTION 5. Covenants. So long as any of the Secured Obligations remain
unsatisfied or Lender shall have any Commitment, the Pledgor agrees that:
(a) Without limiting the scope or effect of any representation or
warranty made or deemed made by the Pledgor hereunder, the Pledgor, for itself
and its successors and assigns, does hereby irrevocably waive and release all
preemptive, first-refusal and other similar rights, if any, of the Pledgor to
purchase any or all of the Pledged Shares upon any sale thereof by the Lender
pursuant to the terms of this Agreement, whether such right to purchase arises
under any of the Pledgor's Organization Documents, by agreement, by operation of
law or otherwise.
(b) The Pledgor warrants and covenants to defend the Lender's
security interest in and to the Pledged Collateral against the claims and
demands of all other Persons, and to appear in and defend any action, suit or
proceeding which may affect its title to, or the Lender's security interest in,
the Pledged Collateral.
(c) The Pledgor agrees that it will not (i) sell, assign, transfer,
surrender or otherwise dispose of, or grant any option, warrant or other right
or interest with respect to, any of the Pledged Collateral, (ii) create or
permit to exist any Lien upon or with respect to any of the Pledged Collateral,
except for the Lien created by this Agreement, or (iii) enter into any
shareholder agreement, voting agreement, voting trust, irrevocable proxies or
any other similar agreement or instrument with respect to any Pledged
Collateral.
(d) The Pledgor shall, immediately upon its acquisition (directly or
indirectly) of any Pledged Shares hereafter, deliver such Pledged Shares to the
Lender or otherwise cause the Clearing Corporation to hold such Pledged Shares
in accordance with Sections 3(a), (b) or (c), as applicable. The Pledgor shall
not cause or permit any issuer of Pledged Shares to issue in favor of any Person
other than the Pledgor or the Clearing Corporation any shares of capital stock
or other equity securities.
(e) The Pledgor shall pay promptly when due all taxes and other
governmental charges, all Liens and all other charges now or hereafter imposed
upon, relating to or affecting any Collateral.
(f) The Pledgor will deliver promptly to the Lender all reports and
notices received by the Pledgor in respect of any Collateral.
SECTION 6. Further Assurances. The Pledgor agrees that at any time and
from time to time, at its own cost and expense, it will promptly procure,
execute and deliver all further instruments, documents and agreements, and take
all further action, that may be necessary or desirable, or that the Lender may
request, in order to establish, maintain, preserve, protect and perfect the
Pledged Collateral, any security interest granted or purported to be granted
hereby and the priority of such security interest, or to enable the Lender to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral. Without limiting the generality of the foregoing, the
Pledgor further agrees that it shall, concurrently with the execution of this
Agreement and at any time and from time to time thereafter (a)
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procure, execute and deliver to the Lender all stock powers, endorsements,
assignments and other instruments of transfer reasonably requested by the
Lender, (b) deliver to the Lender immediately upon receipt the originals of all
Pledged Shares and all certificates, instruments and other writings evidencing
the Pledged Collateral, and (c) cause the Lien of the Lender to be recorded or
registered in the books of any Clearing Corporation requested by the Lender.
SECTION 7. Voting Rights; Dividends.
(a) So long as no Default or Event of Default shall exist and be
continuing or result and continue therefrom (and, in the case of clause (i)
below, so long as written notice has not been given by the Lender to the
Pledgor):
(i) The Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Shares or any
part thereof for any purpose not in violation of the terms of this
Agreement or the Credit Agreement.
(ii) The Pledgor shall be entitled to receive and retain any and
all dividends or distributions paid in respect of the Pledged
Shares, in compliance with the terms of the Credit Agreement, except
the following:
(A) dividends paid or payable other than in cash in respect
of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any
Pledged Shares;
(B) dividends and other distributions paid or payable in cash
in respect of any Pledged Shares in connection with a partial or
total liquidation or dissolution or in connection with a
reduction of capital, capital surplus or paid-in-surplus; and
(C) cash paid, payable or otherwise distributed in redemption
of, or in exchange for, any Pledged Shares;
all of which shall be, and all of which shall be forthwith delivered
to the Lender to hold as, Pledged Collateral and shall, if received
by the Pledgor, be received in trust for the benefit of the Lender,
be segregated from the other property or funds of the Borrowers, and
be forthwith delivered to the Lender as Pledged Collateral in the
same form as so received (with any necessary endorsement and
indemnity).
(b) Upon the occurrence and during the continuance of a Default or
an Event of Default:
(i) All rights of the Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant to Section 7(a)(i) above shall cease upon written notice
thereof from the Lender, and all such rights shall thereupon become
vested in the Lender, who shall thereupon have the sole right to
exercise such voting and other consensual rights.
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(ii) All rights of the Pledgor to receive the dividends or
distributions which it would otherwise be authorized to receive and
retain pursuant to Section 7(a)(ii) above shall cease, and all such
rights shall thereupon become vested in the Lender, who shall
thereupon have the sole right to receive and hold as Pledged
Collateral such dividends.
(iii) All dividends or distributions which are received by the
Pledgor contrary to the provisions of paragraph (ii) of this Section
7(b) shall be received in trust for the benefit of the Lender, shall
be segregated from other funds of the Borrowers and shall be
forthwith paid over to the Lender as Pledged Collateral in the same
form as so received (with any necessary endorsement or indemnity).
(c) In order to permit the Lender to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 7(b)(i) above,
and to receive all dividends and distributions which it may be entitled to
receive under Section 7(b)(ii) above, the Pledgor shall, if necessary, upon
written notice of the Lender, from time to time execute and deliver to the
Lender appropriate proxies, dividend payment orders and other instruments as the
Lender may reasonably request.
SECTION 8. Authorization; Appointed Attorney-in-Fact. After the
occurrence and during the continuation of a Default or an Event of Default, the
Lender shall have the right to, in the name of the Pledgor, or in the name of
the Lender, or otherwise, without notice to or assent by the Pledgor, and the
Pledgor hereby constitutes and appoints the Lender (and any of the Lender's
officers, employees or agents designated by the Lender) as the Pledgor's true
and lawful attorney-in-fact, with full power and authority to take any action
and execute any and all endorsements, assignments, documents or instruments
which the Lender may reasonably deem necessary or desirable to accomplish the
purposes of this Agreement, including, without limitation, (a) to receive,
endorse and collect all instruments made payable to the Pledgor representing any
dividend, interest payment or other distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same, (b) to
perfect or continue perfected, maintain the priority of or provide notice of the
Lender's security interest in the Pledged Collateral, or (c) to maintain,
protect, sell, assign, convey or otherwise transfer title in or dispose of the
Pledged Collateral. The foregoing power of attorney is coupled with an interest
and irrevocable so long as any Commitment shall be in effect or the Secured
Obligations have not been paid and performed in full.
SECTION 9. Lender Performance of Pledgor's Obligations. Upon the
occurrence and during the continuation of an Event of Default, the Lender may
perform or pay any obligation which the Pledgor has agreed to perform or pay
under or in connection with this Agreement, and the Pledgor shall reimburse the
Lender on demand for any amounts paid by the Lender pursuant to Section 16(a).
SECTION 10. No Responsibility for Certain Actions. Notwithstanding any
provision contained in this Agreement, the Lender shall have no responsibility
for (a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Collateral, whether or not the Lender has or is deemed to have knowledge of such
matters, or (b) taking any necessary steps to preserve any rights against any
parties with respect to any Pledged Collateral. The Lender shall have no duty
with respect to the custody, safekeeping and physical preservation of the
Pledged Collateral in its possession other than as set forth in Section
62A.9A-207 of the UCC.
SECTION 11. Remedies in General. Upon the occurrence and during the
continuance of an Event of Default:
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(a) The Lender may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it under the Credit Agreement or any other Loan Document, all the rights and
remedies of a secured party under the UCC and other applicable laws and the
Lender may also, without notice except as specified below, sell the Pledged
Shares or any part thereof in one or more parcels at public or private sale, at
any exchange, broker's board or at any of the Lender's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the Lender
may deem commercially reasonable. The Pledgor agrees that, to the extent notice
of sale shall be required by law, at least ten (10) days' notice to the Pledgor
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Lender shall
not be obligated to make any sale of Pledged Shares regardless of notice of sale
having been given. The Lender may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. The Pledgor hereby waives any claims against the Lender arising by
reason of the fact that the price at which any Pledged Shares may have been sold
at such a private sale was less than the price which might have been obtained at
a public sale, even if the Lender accepts the first offer received and does not
offer such Pledged Shares to more than one offeree.
(b) The Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, the Lender
may be compelled, with respect to any sale of all or any part of the Pledged
Shares, to limit purchasers to those who will agree, among other things, to
acquire such securities for their own account, for investment, and not with a
view to the distribution or resale thereof. The Pledgor acknowledges and agrees
that any such sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale without such restrictions and
notwithstanding such circumstances, agrees that any such sale shall be deemed to
have been made in a commercially reasonable manner. The Lender shall be under no
obligation to delay the sale of any of the Pledged Shares for the period of time
necessary to permit the Pledgor to register such securities for public sale
under the Securities Act, or under applicable state securities laws, even if the
Pledgor would agree to do so.
(c) If the Lender determines to exercise its right to sell any or
all of the Pledged Shares, upon written request, the Pledgor shall, from time to
time, furnish to the Lender all such information as the Lender may reasonably
request in order to determine the number of shares and other instruments
included in the Pledged Shares which may be sold by the Lender as exempt
transactions under the Securities Act of 1933, as from time to time amended, and
rules of the Securities and Exchange Commission thereunder, as the same are from
time to time in effect.
(d) Any and all reasonable expenses which may be charged to or for
the account of Lender, including accounting fees, Attorney Costs, reasonable
costs of sale or transfer shall be reimbursed by or charged to the Pledgor
pursuant to Section 16(a).
(e) Any cash held by the Lender as Pledged Collateral and all cash
proceeds received by the Lender in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Shares shall be applied by
the Lender as follows:
First, to the payment of the reasonable costs and expenses of such sale,
including all reasonable expenses (including, without limitation, Attorney
Costs), liabilities and advances made or incurred by the Lender in connection
therewith;
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Next, to the Lender in respect of all reasonable fees (including,
without limitation, Attorney Costs), expenses and indemnities then due the
Lender under this Agreement, the Credit Agreement or any of the other Loan
Documents;
Next, to the Lender based on the then outstanding principal amount of
the Secured Obligations, for application against interest then due in respect of
the Secured Obligations;
Next, to the Lender based on the then outstanding principal amounts of
the Secured Obligations, for application against the Secured Obligations (other
than interest then due in respect thereof) until the Secured Obligations have
been paid in full; and
Finally, after payment in full in cash of all Secured Obligations and
the termination of the Commitment, to the payment to the Pledgor, or its
successors or assigns, or to whomsoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
SECTION 12. Notices. All notices or other communications hereunder shall
be given in the manner as specified, and shall be effective as provided, in the
Credit Agreement, to the following addresses:
To the Pledgor: Spacelabs International, Inc.
c/o Spacelabs Medical, Inc.
00000 XX 00xx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telecopy No. (000) 000-0000
with copies to: Spacelabs Medical, Inc.
00000 X.X. 00xx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx XxXxxxxx
Telecopy No. (000) 000-0000
King and Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy No. (000) 000-0000
To the Lender: Bank of America, N.A.
00 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Telecopy No. (000) 000-0000
Xxxxxx & Xxxx PC
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxxx
Telecopy No. (000) 000-0000
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SECTION 13. Amendments; Waivers. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Pledgor herefrom, shall
in any event be effective unless the same shall be made as provided in the
Credit Agreement. No failure on the part of the Lender to exercise, and no delay
in exercising, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. Unless otherwise
specified in any such waiver or consent, a waiver or consent given hereunder
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 14. Cumulative Remedies. The rights, powers and remedies of the
Lender under this Agreement are cumulative and shall be in addition to all
rights, powers and remedies available to the Lender pursuant to the Credit
Agreement, the other Loan Documents and at law or in equity, all of which
rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently without impairing the Lender's rights hereunder.
SECTION 15. Certain Waivers. The Pledgor waives, to the fullest extent
permitted by law, any right to require the Lender (i) to proceed against any
Person, (ii) to exhaust any other collateral or security for any of the Secured
Obligations, (iii) to pursue any remedy in the Lender's power, or (iv) to make
or give any presentments, demands for performance, notices of nonperformance,
protests, notices of protests or notices of dishonor in connection with any of
the Pledged Collateral.
SECTION 16. Costs and Expenses; Indemnification; Other Charges.
(a) Costs and Expenses. The Pledgor agrees to pay on demand:
(i) the reasonable out-of-pocket costs and expenses of the
Lender and any of its Affiliates, and the Lender's Attorney Costs,
in connection with the negotiation, preparation, execution, delivery
and administration of this Agreement, and any amendments,
modifications or waivers of the terms thereof, and the custody of
the Pledged Collateral; and
(ii) all reasonable costs and expenses of the Lender and its
Affiliates, including Attorney Costs, in connection with the
enforcement or attempted enforcement of, and preservation of any
rights or interests under, this Agreement, including in any
out-of-court workout or other refinancing or restructuring or in any
bankruptcy case, and the custody or preservation, protection, sale
or collection of, or other realization upon, any of the Pledged
Collateral, including all reasonable expenses of taking, collecting,
holding, sorting, handling, preparing for sale, selling, or the
like, and other such reasonable expenses of sales and collections of
Pledged Collateral, and any and all reasonable losses, costs and
expenses sustained by the Lender as a result of any failure by the
Pledgor to perform or observe its obligations contained herein.
(b) Indemnification. In addition to the agreement to indemnify
contained in Section 11(f), the Pledgor hereby agrees to indemnify the Lender,
any Affiliate of Lender, and Lender's directors, officers, employees, agents,
counsel and other advisors (each an "Indemnified Person") against, and hold each
of them harmless from, any and all liabilities, obligations, losses, claims,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever, including Attorney Costs, to an Indemnified
Person, which may be imposed on, incurred by, or asserted against any
Indemnified Person, in any way relating to or arising out of this Agreement or
the transactions
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contemplated hereby or any action taken or omitted to be taken by it hereunder
(the "Indemnified Liabilities"); provided that the Pledgor shall not be liable
to any Indemnified Person for any portion of such Indemnified Liabilities to the
extent they are found by a final decision of a court of competent jurisdiction
to have resulted from such Indemnified Person's gross negligence or willful
misconduct. If and to the extent that the foregoing indemnification is for any
reason held unenforceable, the Pledgor agrees to make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
(c) Other Charges. The Pledgor agrees to indemnify the Lender
against and hold it harmless from any and all present and future stamp,
transfer, documentary and other such taxes, levies, fees, assessments and other
charges made by any jurisdiction by reason of the execution, delivery,
performance and enforcement of this Agreement.
(d) Interest. Any amounts payable to the Lender under this Section
or otherwise under this Agreement if not paid upon demand shall bear interest
from the date of such demand until paid in full, at the rate of interest
applicable under the Credit Agreement.
SECTION 17. Binding Effect; Transferability; No Third-Party
Beneficiaries. This Agreement shall be binding upon, inure to the benefit of and
be enforceable by the Pledgor and the Lender and their respective successors and
assigns, provided, however, that, except as expressly permitted in the Credit
Agreement, the Pledgor may not assign any of its rights hereunder or interests
herein without the written consent of the Lender. The Pledgor acknowledges that
upon any assignment or other transfer by the Lender of any of the Secured
Obligations in connection with a sale or transfer pursuant to Section 11.2 of
the Credit Agreement, the Lender may transfer its interest herein to the
assignee, transferee, or successor who shall thereupon become vested with all
the rights, remedies, powers, security interests and liens herein granted to the
Lender, subject, however, to the restrictions contained herein. No Persons other
than the Pledgor, the Lender, and the assignees of the Lender are intended to be
benefited hereby or shall have any-rights hereunder, as third-party
beneficiaries or otherwise.
SECTION 18. Governing Law; Choice of Forum; Service of Process.
(a) THIS PLEDGE AND SECURITY AGREEMENT SHALL BE INTERPRETED AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT
PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO
APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF
THE STATE OF WASHINGTON; PROVIDED THAT THE LENDER SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS PLEDGE AND
SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF
THE STATE OF WASHINGTON OR OF THE UNITED STATES OF AMERICA LOCATED IN KING
COUNTY, WASHINGTON, AND BY EXECUTION AND DELIVERY OF THIS PLEDGE AND SECURITY
AGREEMENT, EACH OF THE PLEDGORS AND THE LENDER CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH
OF THE PLEDGORS AND THE LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH COURTS IN RESPECT OF THIS PLEDGE AND SECURITY AGREEMENT OR
ANY
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DOCUMENT RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE LENDER SHALL
HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE PLEDGORS OR THEIR
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE LENDER DEEMS NECESSARY OR
APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS
FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
THE PLEDGORS HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON THEM AND CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED
MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE PLEDGORS AT THEIR ADDRESSES SET
FORTH IN SECTION 12.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE
(5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAIL POSTAGE
PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE LENDER TO SERVE
LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
SECTION 19. Waiver of Jury Trial. PLEDGORS AND THE LENDER EACH
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS PLEDGE AND
SECURITY AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY LENDER-RELATED
PERSON OR PARTICIPANT, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. THE PLEDGORS AND THE LENDER EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THE CREDIT AGREEMENT, THIS PLEDGE AND SECURITY AGREEMENT OR
THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THE CREDIT AGREEMENT, THIS PLEDGE AND SECURITY AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
SECTION 20. Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof.
SECTION 21. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
all applicable laws and regulations. If, however, any provision of this
Agreement shall be prohibited by or invalid under any such law or regulation in
any jurisdiction, it shall, as to such jurisdiction, be deemed modified to
conform to the minimum requirements of such law or regulation, or, if for any
reason it is not deemed so modified, it shall be ineffective and invalid only to
the extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement, or the validity or effectiveness of such provision
in any other jurisdiction.
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SECTION 22. Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same agreement.
SECTION 23. Incorporation of Provisions of the Credit Agreement. To the
extent the Credit Agreement contains provisions of general applicability to the
Loan Documents, such provisions are incorporated herein by this reference.
SECTION 24. No Inconsistent Requirements. The Pledgor acknowledges that
this Agreement and the other Loan Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
agrees that to the extent permitted by law, all such covenants, terms and
provisions are cumulative and all shall be performed and satisfied in accordance
with their respective terms. In the event any covenant, term or provision herein
contradicts any covenant, term or provision of the Credit Agreement, the terms
of the Credit Agreement shall control.
SECTION 25. Continuing Security Interest; Termination. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
apply to all past, present and future Secured Obligations, including Secured
Obligations that arise under transactions that continue any Secured Obligation,
increase or decrease any Secured Obligation, or from time to time create new
Secured Obligations after all or any prior Secured Obligations have been
satisfied. Upon termination of the Commitment of the Lender under the Loan
Documents and the payment and performance in full of all Secured Obligations,
the security interests granted under this Agreement shall terminate and the
Lender shall return, at the Pledgor's expense, all the Pledged Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof.
Notwithstanding the foregoing, the obligations of the Pledgor under Sections
11(f) and 16 shall survive such termination.
IN WITNESS WHEREOF, the Pledgor has executed this Agreement as of the
day and year first above written.
PLEDGOR:
SPACELABS INTERNATIONAL, INC.,
a Delaware corporation
By:
-----------------------------------------
Its:
-------------------------------------
Accepted:
BANK OF AMERICA, N.A., as Lender
By:
--------------------------------
Title:
-----------------------------
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SCHEDULE 1
TO
PLEDGE AND SECURITY AGREEMENT
SHARES SHARES OWNED
SHARES SHARES OWNED BY OTHER BY OTHER
PLEDGED SUBSIDIARY CLASS OF STOCK ISSUED OUTSTANDING PLEDGOR SHAREHOLDER SHAREHOLDER
----------------------------- -------------- --------- ----------- --------- -------------- -----------
Spacelabs Medical Products Common 1,500,100 1,500,100 1,500,099
Pty. Ltd. (Australia) Preferred 1,995 1,995 1,995 Spacelabs Medical, Inc. (CA) 1
Spacelabs Medical Ltd. (UK) Common 1,250,000 1,250,000 1,249,999 Spacelabs Medical, Inc. (CA) 1
Spacelabs Medical SARL (France) Common 194,300 194,300 194,297 Spacelabs Medical, Inc. (CA) 3
Spacelabs Medical SmbH N/A EU25,600 EU25,600 EU25,600
Spacelabs Medical S.r.l. (Italy) Common 2,000 2,000 1,980 Spacelabs Medical, Inc. (CA) 20
A-1
