PLEDGE AGREEMENT
Exhibit
10.3
THIS
PLEDGE AGREEMENT (this “Pledge
Agreement”),
dated as of January 25, 2008, among MAXIMUS, INC., a Virginia
corporation (the “Borrower”), the
Subsidiaries of the Borrower hereafter a party hereto (each a “Subsidiary Pledgor”
and collectively
the “Subsidiaries
Pledgors”; Borrower, each Subsidiary Pledgor and each other Subsidiary
hereafter becoming a party hereto shall be collectively known as the “Pledgors”, and
individually as “Pledgor”), in favor
of SUNTRUST BANK, a
Georgia banking corporation, as Administrative Agent (the “Administrative
Agent”), on its behalf and on behalf of the other Secured Parties (as
defined below).
WITNESSETH:
WHEREAS,
pursuant to the
Revolving Credit Agreement, dated as of the date hereof, by and among the
Borrower, the Administrative Agent, the banks and lending institutions (the
“Lenders”) from time to time party thereto, and SunTrust Bank, as Issuing Bank
and as Swingline Lender (as amended, restated, supplemented, or otherwise
modified from time to time, the “Credit
Agreement”).
WHEREAS,
the Lenders have
agreed to establish a revolving credit facility to the Borrower;
WHEREAS,
it is a condition
precedent to the obligations of the Administrative Agent, the Issuing Bank,
the
Swingline Lender, and the Lenders under the Credit Agreement that each Pledgor
grant to Administrative Agent a security interest in all of its Pledged
Collateral (as defined below), and each Pledgor wishes to fulfill said condition
precedent;
NOW,
THEREFORE, in order to
induce Lenders to extend the Loans and the Issuing Bank to issue Letters of
Credit and to make the financial accommodations as provided for in the Credit
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined
Terms. All capitalized terms used but not otherwise defined
herein have the meanings given to them in the Credit Agreement.
“Excluded
Property”
shall mean (i) any contract, General Intangible, property right or agreement
to
which any Pledgor is a party or any of its rights or interests thereunder if
and
only for so long as the grant of a security interest hereunder shall constitute
or result in a material breach or default under any such contract, General
Intangible, property right or agreement or would give rise to a right to
terminate any such General Intangible (other than to the extent that any such
term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408,
or
9-409 of the UCC of any relevant jurisdiction or any other applicable law or
principles of equity); provided, however, that such security interest shall
attach immediately to any portion of such contract, General Intangible, property
rights or agreement that does not result in any of the consequences specified
above, (ii) any rights or property to the extent that any valid enforceable
law
or regulation applicable to such rights or property prohibits the creation
of a
security interest therein, (iii) any Capital Stock to the extent it represents
more than 65% of the Capital Stock of any Foreign Subsidiary.
“Foreign
Corporate
Documents” means (i) the Shareholders Agreement, dated as of
____, 2005, by and between the Borrower and ORS and (ii) the Articles of
Association of Israel Workforce Solutions Ltd., dated as of _______, 2005,
as
executed by the Borrower and ORS.
“ORS”
means
ORS
Overseas Representation Services Ltd..
"Pledged
Membership
Interests" means the Capital Stock described on Part B of Schedule I
attached hereto other than Excluded Property.
"Pledged
Shares" means
the Capital Stock described on Part A of Schedule I attached hereto other than
Excluded Property.
“Secured
Obligations”
shall mean (i) with respect to the Borrower, all Obligations of the
Borrower,
(ii) with respect to any other Pledgor , all Guaranteed Obligations (as such
term is defined in the Subsidiary Guaranty) of each such Pledgor.
"Secured
Parties"
means the Administrative Agent, the Lenders, the Specified Hedge Providers
and
the Specified Treasury Management Providers. "Secured Party" means
any of the Secured Parties individually.
“Specified
Hedge
Provider” means each party to a Hedging Transaction incurred to limit
interest rate or fee fluctuation with respect to the Loans and Letters of Credit
if at the date of entering into such Hedging Transaction such person was a
Lender or an Affiliate of a Lender and such person executes and delivers to
the
Administrative Agent a letter agreement in form and substance acceptable to
the
Administrative Agent pursuant to which such person (i) appoints the
Administrative Agent as its agent under the applicable Loan Documents and (ii)
agrees to be bound by the provisions of Article 9 and 10 of the Credit
Agreement.
“Specified
Treasury
Management Provider” means each Lender or an Affiliate of a Lender that
offers products of the type described in the definition of “Treasury Management
Obligations” contained in the Credit Agreement and such person executes and
delivers to the Administrative Agent a letter agreement in form and substance
acceptable to the Administrative Agent pursuant to which such person (i)
appoints the Administrative Agent as its agent under the applicable Loan
Documents and (ii) agrees to be bound by the provisions of Article 9 and 10
of
the Credit Agreement.
"Termination
Time"
means the time that all Secured Obligations (other than (i) Obligations related
to Hedging Obligations except to the extent due on or prior to the Termination
Time, (ii) Obligations related to Treasury Management Services except to the
extent due on or prior to the Termination Time and (iii) Unasserted Contingent
Obligations) have been paid in full in cash, all Commitments have been
terminated or otherwise reduced to zero and all LC Exposure has either been
cash
collateralized or back stopped by one or more letters of credit in form
acceptable to the Issuing Lender and in an amount equal to 103% of such LC
Exposure.
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2. Pledge.
Each
Pledgor hereby
pledges to the Administrative Agent, for its benefit and the benefit of Secured
Parties and grants to the Administrative Agent, for its benefit and the benefit
of the Secured Parties, a first priority security interest in all of such
Pledgor’s right, title and interest in, to and under the following property,
whether now owned by or owing to, or hereafter acquired by or arising in favor
of such Pledgor (collectively, the “Pledged
Collateral”):
(a) The
Pledged Shares and the certificates
representing the Pledged Shares, and, except as expressly provided for in Section 8 hereof,
all
dividends, cash, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange
for
any or all of the Pledged Shares;
(b) Any
Capital Stock acquired by any
Pledgor or such Pledgor’s designees with respect to, incident to or in lieu of
the Pledged Shares or with respect to, incident to or in lieu of the Pledged
Collateral (x) due to any dividend, stock-split, stock dividend or distribution
on dissolution, or partial or total liquidation, or for any other reason, (y)
in
connection with a reduction of capital, capital surplus or paid-in-surplus
or
(z) in connection with any spin-off, split-off, reclassification, readjustment,
merger, consolidation, sale of assets, combination of shares or any other plan
of distribution affecting of the those companies listed on Schedule
I;
(c) Any
subscription or other rights or
options issued in connection with the Pledged Shares, and, if exercised by
any
Pledgor, all new Capital Stock so acquired by such Pledgor, which shall promptly
be assigned and delivered to the Administrative Agent and held under the terms
of this Pledge Agreement in the same manner as the Pledged Shares originally
pledged hereunder;
(d) Any
Capital Stock acquired by any
Pledgor after the date hereof, which shall promptly be delivered to the
Administrative Agent and held under the terms of this Pledge Agreement in the
same manner as the Pledged Shares originally pledged hereunder;
(e) Any
and all proceeds, monies, income
and benefits arising from or by virtue of, and all dividends and distributions
(cash or otherwise) payable or distributable with respect to, all or any of
the
Pledged Shares or other securities and rights and interests described in this
Section 2,
except as expressly provided for in Section 8
hereof;
(f) The
Pledged Membership Interests, if
any, and any certificates at any time representing the Pledged Membership
Interests, it being understood that the Pledged Membership Interests are, as
of
the date hereof, uncertificated, and all cash, securities, dividends, rights,
and other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Membership Interests;
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(g) All
of
such Pledgor’s right, title and interest as a member in each limited liability
company listed on Part B of Schedule I (the “LLCs”), whether
now
owned or hereafter acquired, including all of such Pledgor’s right, title and
interest in, to and under the limited liability company agreements described
on
Part B of Schedule I (as such agreements have heretofore been and may hereafter
be amended, restated, supplemented or otherwise modified from time to time,
collectively, the “LLC
Agreements”) to which it is a party (including, the right to vote with
respect to and to manage and administer the business of such LLCs) together
with
all other rights, interests, claims and other property of such Pledgor in any
manner arising out of or relating to its membership interest in the LLCs,
whatever their respective kind or character, whether they are tangible or
intangible property, and wheresoever they may exist or be located, and further
including, without limitation, (1) all rights of such Pledgor to receive
distributions of any kind, in cash or otherwise, due or to become due under
or
pursuant to each such LLC Agreement or otherwise in respect of such LLCs, (2)
all rights of such Pledgor to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to each such LLCs, (3) all claims of such
Pledgor for damages arising out of, or for the breach of, or for a default
under, each such LLC Agreement, (4) any certificated security or
uncertificated security evidencing any of the foregoing issued by such LLCs
to
such Pledgor, (5) any interest of such Pledgor in the entries on the books
of
any financial intermediary pertaining to such Pledgor’s interest as a member in
the LLCs and (6) to the extent not included in the foregoing, all proceeds
of
any and all of the foregoing; provided, however,
that
notwithstanding anything herein to the contrary;
(i) Each
Pledgor shall remain liable under the LLC Agreements to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Pledge Agreement had not been executed;
(ii) The
exercise by the Administrative Agent of any of its rights hereunder shall not
release any Pledgor from any of its duties or obligations under the LLC
Agreements (other than to the extent a Pledgor is precluded from performing
such
duties solely as a result of the Administrative Agent’s having exercised such
rights or remedies);
(iii) Administrative
Agent shall not have any obligation or liability under the LLC Agreements by
reason of this Pledge Agreement, nor shall the Administrative Agent be obligated
to perform any of the obligations or duties of the Pledgors thereunder, to
make
any payment, to make any inquiry as to the nature or sufficiency of any payment
received by the Pledgors or the sufficiency of any performance by any party
under any such LLC Agreement, or to take any action to collect or enforce any
claim for payment assigned hereunder; and
(iv) Without
limiting the generality of the foregoing, neither the grant of the security
interest in the Pledged Collateral in favor of the Administrative Agent as
provided herein nor the exercise by the Administrative Agent of any of its
rights hereunder nor any action by the Administrative Agent in connection with
a
foreclosure on the Pledged Collateral shall be deemed to constitute the
Administrative Agent or any other Secured Party a member of any limited
liability company;
Notwithstanding
the foregoing, the
Pledged Collateral shall not include (i) any Excluded Property or (ii) any
Pledged Shares to the extent that a grant of a security interest in such shares
would require an offer for sale pursuant to, or would result in a violation
of,
the applicable terms of any Foreign Corporate Document.
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3. Security
For Secured Obligations. This Pledge Agreement and the Pledged
Collateral secure the prompt payment, in full when due, whether at stated
maturity, by acceleration or otherwise, and performance of the Secured
Obligations.
4. Delivery
Of Pledged Collateral. All certificates and instruments
representing or evidencing the Pledged Collateral shall be delivered to and
held
by or on behalf of the Administrative Agent pursuant hereto. All Pledged Shares
shall be accompanied by duly executed, undated instruments of transfer or
assignment endorsed in blank, all in form and substance satisfactory to the
Administrative Agent and, if the Administrative Agent so requests after the
occurrence of an Event of Default, with signatures guaranteed by a member of
a
registered national securities exchange or the National Association of
Securities Dealers, Inc. or by a commercial bank or trust company having an
office or correspondent in the United States. Upon the occurrence and during
the
continuance of an Event of Default, the Administrative Agent shall have the
right, at any time in its discretion and upon notice to the applicable Pledgor,
to transfer to or to register in the name of the Administrative Agent or any
of
its nominees any or all of the Pledged Shares or Pledged Membership Interests.
In addition, the Administrative Agent shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged Shares
for certificates or instruments of smaller or larger denominations.
5. Representations
and Warranties. Each Pledgor represents and warrants to the Secured
Parties as follows:
(a) Each
Pledgor is, and at the time of
delivery of the Pledged Shares and Pledged Membership Interests to the
Administrative Agent pursuant to Section 4 hereof will
be, the sole holder of record and the sole beneficial owner of the Pledged
Collateral pledged by such Pledgor, free and clear of any Lien thereon or
affecting the title thereto except for (i) Liens permitted by Section 7.2 of
the
Credit Agreement and (ii) those Liens created by or arising under the terms
of
the Foreign Corporate Documents, if any.
(b) As
of the date hereof, except as set
forth on Schedule I, all of the Pledged Shares and Pledged Membership Interests
have been duly authorized, validly issued and are fully paid and non-assessable
and all documentary, stamp, or other taxes or fees owing in connection with
the
issuance, transfer and/or pledge thereof hereunder have been paid and will
be
hereafter paid by each Pledgor as same becomes due and payable.
(c) As
of the date hereof, no dispute,
counterclaim or defense exists with respect to all or any part of the Pledged
Collateral.
(d) Each
Pledgor has the requisite
corporate authority to pledge, assign, transfer, deliver, deposit and set over
its Pledged Collateral to the Administrative Agent as provided
herein.
(e) As
of the date hereof, there are no
restrictions, other than applicable laws and regulations affecting the offering
and sales of securities generally, upon the transfer, hypothecation or pledge
of
any of the Pledged Collateral, other than those set forth expressly in the
Foreign Corporate Documents.
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(f) None
of the Pledged Shares or Pledged
Membership Interests issued by any Pledgor or any Subsidiary of any Pledgor
have
been issued or transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to which such issuance
or transfer may be subject.
(g) Part
A of Schedule I hereto
lists the authorized shares of common stock, the par value thereof and the
number of issued and outstanding shares of common stock of each issuer of
Pledged Shares as of the date hereof. As of the date hereof, (i) no
subscription, warrant, option or other rights to purchase or acquire any shares
of any class of capital stock of any issuer of Pledged Shares is authorized
and
outstanding, and (ii) there is no commitment by any issuer of Pledged Shares
to
issue any such shares, warrants, options or other such rights or
securities.
(h) Part
B of Schedule I hereto
lists all of the issued and outstanding membership interests of each issuer
of
Pledged Membership Interests as of the date hereof. As of the date
hereof, (i) no subscription, warrant, option or other rights to purchase or
acquire any membership interests of any issuer of Pledged Membership Interests
is authorized and outstanding, and (ii) there is no commitment by any issuer
of
Pledged Membership Interests to issue any such warrants, options or other such
rights or securities.
(i) The
pledge
by each Pledgor of its Pledged Collateral is not in contravention of any law
or
of any agreement to which such Pledgor is party or by which such Pledgor is
otherwise bound, and no consent, approval, authorization or other order of,
or
other action by, any Person or notice to or filing with, any Person is required
(x) for the pledge by such Pledgor of the Pledged Collateral pursuant to this
Pledge Agreement or for the execution, delivery or performance of this Pledge
Agreement by such Pledgor or (y) for the exercise by the Administrative Agent
of
the voting or other rights provided for in this Pledge Agreement or the remedies
in respect of the Pledged Collateral pursuant to this Pledge Agreement (except
as may be required in connection with any disposition of any portion of the
Pledged Collateral by laws affecting the offering and sale of securities
generally), except any consent, approval, authorization or other order, or
other
action, as may be required under applicable laws in jurisdictions other than
the
United States or any state thereof or as is required by any Foreign Corporate
Document.
(j) The
pledge, assignment and delivery of
the Pledged Collateral together with duly executed, undated instruments of
transfer or assignment endorsed in blank pursuant to this Pledge Agreement
will
create a valid first priority Lien on and a first priority perfected security
interest in the Pledged Collateral and the proceeds thereof, securing the
payment of the Secured Obligations and no filing or other
action is necessary to perfect or protect such security interest, except that
(i) the filing of a financing statement, the taking of possession or some other
action may be required under Section 9-315 of the Uniform Commercial Code as
in
effect in the State of New York (the “UCC") to perfect
a
security interest in certain proceeds of the Pledged Collateral that do not
constitute Pledged Shares or other securities or instruments and (ii) the filing
of a financing statement under Sections 9-312 and 9-314 of the UCC may be
required to perfect a security interest in any Pledged Collateral that
constitutes “investment property” (other than the Pledged Shares) with respect
to which the Administrative Agent does not have “control” (as such terms are
defined in the UCC) and (iii) certain other actions may be necessary under
the
laws of the jurisdictions of the Foreign Subsidiaries.
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(k) All
of the
representations and warranties contained in the Credit Agreement and the other
Loan Documents are true and correct in all material respects, are incorporated
herein by this reference and deemed to be made herein by each Pledgor for
purposes of this Pledge Agreement.
(l) This
Pledge Agreement has been duly authorized, executed and delivered by each
Pledgor and constitutes a legal, valid and binding obligation of such Pledgor
enforceable against such Pledgor in accordance with its terms.
(m) Each
Pledgor further acknowledges and agrees that the Pledged Membership Interests,
shall not be for purposes of this Pledge Agreement and the other Loan Documents
a “security” within the meaning of Article 8 of the UCC and shall not be
governed by Article 8 of the UCC. No Pledgor shall at any time elect
to treat any such interest as a “security” within the meaning of Article 8 of
the UCC or issue any certificate representing such interest.
The
representations and warranties set
forth in this Section
5 shall survive the execution and delivery of this Pledge
Agreement.
6. Covenants.
Each Pledgor covenants and agrees that from and after the date of this Pledge
Agreement and until the payment and performance in full of all of the Secured
Obligations of such Pledgor:
(a) Such
Pledgor shall not sell, assign,
transfer, pledge or otherwise encumber any of its rights in or to its Pledged
Collateral or any unpaid dividends or other distributions or payments with
respect thereto except as permitted by the Credit Agreement.
(b) Such
Pledgor will not cause or permit
any issuer of Pledged Shares or Pledged Membership Interests to issue or grant
any warrants, stock options of any nature or other instruments convertible
into
membership interests or shares of any class of capital stock or additional
membership interests or shares of capital stock or sell or transfer any
membership interests or treasury stock except as permitted by the Credit
Agreement.
(c) Such
Pledgor will, at its own cost and
expense, promptly execute, acknowledge and deliver all such instruments and
take
all such action as the Administrative Agent from time to time may reasonably
request in order to perfect and protect the Lien granted or purported to be
granted hereby or to enable the Administrative Agent to exercise and enforce
its
rights and remedies hereunder with respect to the Pledged
Collateral.
(d) Such
Pledgor has and will, at its
own cost and expense, defend the title to its Pledged Collateral and the Liens
of the Administrative Agent thereon against the claim of any Person and will
maintain and preserve such Liens.
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(e) Such
Pledgor will comply with Section
5.8 of the Credit Agreement.
(f)
Such
Pledgor shall not certificate any of the Pledged Membership
Interests.
(g)
Such
Pledgor shall not treat any Pledged Membership Interest as a “security” within
the meaning of Article 8 of the UCC and no Pledged Membership Interest
shall be governed by Article 8 of the UCC.
7. Adjustments
and Distributions Concerning Pledged Collateral. Should the Pledged
Collateral, or any part thereof, ever be converted in any manner by any Pledgor
into another type of property or any money or other proceeds ever be paid or
delivered to any Pledgor as a result of such Pledgor’s rights in the Pledged
Collateral, then in any such event (except as expressly provided in Section 8 hereof),
all such property, money and other proceeds shall promptly be and become part
of
the Pledged Collateral, and each Pledgor covenants and agrees to forthwith
pay
and deliver all money so received to the Administrative Agent, for the benefit
of the Secured Parties, as Pledged Collateral hereunder in accordance with
the
provisions of the Credit Agreement; and, if the Administrative Agent deems
it
necessary and so requests, to properly endorse, assign or transfer any and
all
such other proceeds to the Administrative Agent and to deliver to the
Administrative Agent any and all such other proceeds which require perfection
by
possession under the UCC. With respect to any of such property of a
kind requiring an additional security agreement, financing statement or other
writing to perfect a security interest therein in favor of the Administrative
Agent, each Pledgor will forthwith execute and deliver to the Administrative
Agent, or cause to be executed and delivered to the Administrative Agent,
whatever the Administrative Agent shall reasonably deem necessary or proper
for
such purposes.
8. Pledgors’
Rights; Termination Of Rights.
(a) Unless
an Event of Default shall have
occurred and be continuing:
(i) Each
Pledgor shall have the right, from time to time, to vote and give consents
with
respect to its Pledged Collateral or any part thereof for all purposes permitted
by the Credit Agreement or any other Loan Documents; provided, that,
without limitation of the foregoing, no vote shall be cast, and no consent
shall
be given or action taken by any Pledgor without the prior written consent of
the
Administrative Agent that would authorize or effect (except if and to the extent
permitted by the Credit Agreement: (A) the dissolution or liquidation, in whole
or in part, of any issuer of the Pledged Collateral, (B) the consolidation
or
merger of any issuer of the Pledged Collateral with any other Person (other
than
any Pledgor), (C) the sale, disposition or encumbrance of any portion of the
assets of any issuer of the Pledged Collateral or any business or division
thereof, (D) any change in the authorized number of shares or membership
interests, the stated capital or the authorized shares or member interest
capital of any issuer of the Pledged Collateral or the issuance of any
additional shares of capital stock or membership interests thereof, or (E)
the
alteration of the voting rights with respect to the capital stock or membership
interests of any issuer of the Pledged Collateral);
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(ii) Each
Pledgor shall be entitled, from time to time, to collect and receive for its
own
use all dividends, distributions and other amounts paid in respect of its
Pledged Collateral to the extent not in violation of the Credit
Agreement.
(b) All
dividends (other than such cash
dividends as are permitted to be paid to the Pledgors in accordance with Section 8(a)(ii)
above), distributions and other amounts in respect of any of the Pledged Shares
or Pledged Membership Interests, whenever paid or made, shall be delivered
to
the Administrative Agent to hold as Pledged Collateral and shall, if received
by
any Pledgor, be received in trust for the benefit of the Administrative Agent,
be segregated from the other property or funds of such Pledgor, and be forthwith
delivered promptly to the Administrative Agent as Pledged Collateral of such
Pledgor in the same form as so received (with any necessary endorsement or
assignment).
(c) Upon
the occurrence of an Event of
Default and during the continuation thereof, all of Pledgors’ rights to exercise
voting and other consensual rights pursuant to Section 8(a)(i)
hereof and all of Pledgors’ rights to receive any cash dividends and
distributions pursuant to Section 8(a)(ii)
hereof shall cease and all such rights shall thereupon become vested in the
Administrative Agent, for the benefit of the Secured Parties, who shall have
the
sole and exclusive right to exercise the voting and other consensual rights
which the Pledgors would otherwise be authorized to exercise pursuant to Section 8(a)(i)
hereof and to receive and retain the dividends and distributions which the
Pledgors would otherwise be authorized to receive and retain pursuant to Section 8(a)(ii)
hereof. Upon the occurrence of an Event of Default and during the
continuation thereof, each Pledgor shall pay over to the Administrative Agent,
for the benefit of the Secured Parties, at the Administrative Agent’s election,
any dividends received by such Pledgor with respect to its Pledged Collateral
and any and all money and other property paid over to or received by the
Administrative Agent shall be retained by the Administrative Agent, for the
benefit of the Secured Parties, as Pledged Collateral hereunder and shall be
applied in accordance with the terms of the Credit Agreement.
9. Default. The
Pledgors
shall be in default under this Pledge Agreement upon the happening of any of
the
following events or conditions (hereinafter referred to as an “Event of
Default”):
(i) The
occurrence of an Event of Default as defined in the Credit Agreement;
and
(ii)
Any representation or warranty made by or on behalf of any Pledgor under or
pursuant to this Agreement shall have been false or misleading in any material
respect when made; or
(iii) Failure
of any Pledgor to observe any of its respective covenants set forth in this
Pledge Agreement other than those referenced in paragraphs (i) and (ii) above,
and if such failure is capable of being remedied, such failure shall remain
unremedied for thirty (30) days after notice from the Administrative
Agent.
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10. Remedies
Upon An Event Of Default.
(a) Upon
the occurrence of an Event of
Default and during the continuation thereof, the Administrative Agent may
exercise all rights of a secured party under the UCC (whether or not the UCC
applies to the affected collateral). In addition, the Administrative
Agent is hereby authorized and empowered to transfer and register in
its name or in the name of its nominee the whole or any part of the Pledged
Collateral, exercise the voting rights with respect thereto, collect and receive
all cash dividends and other distributions made thereon, sell in one or more
sales after ten (10) days’ notice (or such longer period as may be afforded by
the UCC) of the time and place of any public sale or of the time after which
a
private sale is to take place (which notice each Pledgor agrees is commercially
reasonable), but without any previous notice or advertisement, the whole or
any
part of the Pledged Collateral and otherwise act with respect to the Pledged
Collateral as though the Administrative Agent was the legal and record owner
thereof. Each Pledgor hereby irrevocably constitutes and appoints the
Administrative Agent, for the benefit of the Secured Parties, as the proxy
and
attorney-in-fact of such Pledgor with respect to the Pledged Collateral, with
full power of substitution to exercise any of the rights provided in the
preceding sentence; provided, that the
Administrative Agent shall not have any duty to exercise any such right or
to
preserve the same and shall not be liable for any failure to do so or for any
delay in doing so. Any sale shall be made at a public or private sale
at the Administrative Agent’s offices or elsewhere to be named in the notice of
sale, either for cash or upon credit or for future delivery at such price as
the
Administrative Agent may deem fair, and any Secured Party may be the purchaser
of the whole or any part of the Pledged Collateral so sold and hold the same
thereafter in its own right free from any claim of any Pledgor or any right
of
redemption, which each Pledgor hereby waives to the extent permitted by
applicable law. Each sale shall be made to the highest bidder, but
the Administrative Agent reserves the right to reject any and all bids at such
sale which, in its discretion, it shall deem inadequate. Demands of
performance, except as otherwise herein specifically provided for, notices
of
sale, advertisements and the presence of property at sale are hereby waived
and
any sale hereunder may be conducted by an auctioneer or any officer or agent
of
the Administrative Agent.
(b) If,
at the original time or times
appointed for the sale of the whole or any part of the Pledged Collateral,
the
highest bid, if there be but one sale, shall be inadequate to discharge in
full
all the Secured Obligations, or if the Pledged Collateral be offered for sale
in
lots, if at any of such sales, the highest bid for the lot offered for sale
would indicate to the Administrative Agent, in its discretion, the unlikelihood
of the proceeds of the sales of the whole of the Pledged Collateral being
sufficient to discharge all the Secured Obligations, the Administrative Agent
may, on one or more occasions and in its discretion, postpone any of said sales
by public announcement at the time of sale or the time of previous postponement
of sale, and no other notice of such postponement or postponements of sale
need
be given, any other notice being hereby waived; provided, that any
sale or sales made after such postponement shall be after ten (10) days’
notice(or such longer period as may be afforded by the UCC) from the
Administrative Agent to any such Pledgor.
10
(c) If,
at any time that the Administrative
Agent shall determine to exercise its rights to sell the whole or any part
of
the Pledged Collateral hereunder, such Pledged Collateral or the part thereof
to
be sold shall not, for any reason whatsoever, be effectively registered under
the Securities Act of 1933, as amended (the “Act”), the
Administrative Agent may, in its discretion (subject only to applicable
requirements of law), sell such Pledged Collateral or part thereof by private
sale in such manner and under such circumstances as the Administrative Agent
may
deem necessary or advisable, but subject to the other requirements of this
Section 9, and shall
not be required to effect such registration or to cause the same to be
effected. Without limiting the generality of the foregoing, in any
such event the Administrative Agent in its discretion (i) may, in accordance
with applicable securities laws, proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Collateral or part thereof could be or shall have been filed under
said Act (or similar statute), (ii) may approach and negotiate with a single
possible purchaser to effect such sale, (iii) may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for
its
own account, for investment and not with a view to the distribution or sale
of
such Pledged Collateral or part thereof, and (iv) may place all or any part
of
the Pledged Collateral with an investment banking firm for private placement,
which firm shall be entitled to purchase all or any part of the Pledged
Collateral for its own account. If any of the Pledged Collateral
shall not be freely distributable to the public without registration under
the
Act (or similar statute), then the Administrative Agent shall not be required
to
effect such registration or cause the same to be effected but, in its discretion
(subject to applicable requirements of law), may require that any sale hereunder
(including a sale at auction) be conducted subject to restrictions (i) as to
the
financial sophistication and ability of any Person permitted to bid or purchase
at any such sale, (ii) as to the content of legends to be placed upon any
certificates representing the Pledged Collateral sold in such sale, including
restrictions on future transfer thereof, (iii) as to the representations
required to be made by each Person bidding or purchasing at such sale relating
to that Person’s access to financial information about any Pledgor or any of its
subsidiaries so sold and such Person’s intentions as to the holding of the
Pledged Collateral so sold for investment, for its own account, and not with
a
view to the distribution thereof, and (iv) as to such other matters as the
Administrative Agent may, in its discretion, deem necessary or appropriate
in
order that such sale (notwithstanding any failure so to register) may be
effected in compliance with the UCC and other laws affecting the enforcement
of
creditors’ rights and the Act and all applicable state securities
laws.
(d) Each
Pledgor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Collateral and may be compelled to resort to one or more private sales
thereof. Each Pledgor also acknowledges that any such private sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees that
any
such private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to
delay a sale of any of the Pledged Collateral for the period of time necessary
to permit the registrant to register such securities for public sale under
the
Act, or under applicable state securities laws, even if each Pledgor would
agree
to do so.
(e) Any
cash held by the Administrative
Agent as Pledged Collateral and all cash proceeds received by the Administrative
Agent in respect of any sale of, collection from, or other realization upon
all
or any part of the Pledged Collateral shall be applied in the manner set forth
in Section 8.2 of the Credit Agreement.
11
(f) Each
Pledgor agrees that following the
occurrence and during the continuation of an Event of Default it will not at
any
time plead, claim or take the benefit of any appraisal, valuation, stay,
extension, moratorium or redemption law now or hereafter in force in order
to
prevent or delay the enforcement of this Pledge Agreement, or the absolute
sale
of the whole or any part of the Pledged Collateral or the possession thereof
by
any purchaser at any sale hereunder, and each Pledgor waives the benefit of
all
such laws to the extent it lawfully may do so. Each Pledgor agrees
that it will not interfere with any right, power and remedy of the
Administrative Agent provided for in this Pledge Agreement or now or hereafter
existing at law or in equity or by statute or otherwise, or the exercise or
beginning of the exercise by the Administrative Agent of any one or more of
such
rights, powers, or remedies. No failure or delay on the part of the
Administrative Agent to exercise any such right, power or remedy and no notice
or demand which may be given to or made upon any Pledgor by the Administrative
Agent with respect to any such remedies shall operate as a waiver thereof,
or
limit or impair the Administrative Agent’s right to take any action or to
exercise any power or remedy hereunder, without notice or demand, or prejudice
its rights as against any Pledgor in any respect. Except for gross
negligence or willful misconduct, each Pledgor waives all claims, damages and
demands against the Administrative Agent arising out of the repossession,
retention or sale of the Pledged Collateral.
11. Power
Of
Attorney. Each Pledgor appoints the Administrative Agent, or
any other Person whom the Administrative Agent may designate, as each Pledgor’s
true and lawful attorney-in-fact, with, upon the occurrence of an Event of
Default, power to endorse each Pledgor’s name on any checks, notes,
acceptances, money orders, drafts or other form of payment or security
representing a portion of the Pledged Collateral that may come into the
Administrative Agent’s possession and to do all things necessary to
carry out the terms of this Pledge Agreement. Each Pledgor ratifies
and approves all such acts of such attorney-in-fact. Except
gross negligence or willful misconduct, neither the Administrative Agent nor
any
other Person designated by the Administrative Agent as attorney-in-fact
hereunder will be liable for any acts or omissions, nor for any errors of
judgment or mistakes of fact or law. This power, coupled with an
interest, is irrevocable until the Termination Time.
12. Administrative
Agent’s Right To Take Action. In the event that any Pledgor fails
or refuses promptly to perform any of its obligations set forth herein, or
otherwise fails or refuses to pay any amount necessary for the preservation
and
protection of the Pledged Collateral, the Administrative Agent shall have the
right, without obligation, by notice to the Pledgors, to do all things it deems
necessary or advisable to discharge the same and any sums paid by the
Administrative Agent, or the cost thereof, including, without limitation,
reasonable attorneys’ fees, shall be reimbursed by the Pledgors, to the
Administrative Agent on demand and, until so reimbursed, shall bear interest
at
the default rate of interest set forth in the Credit Agreement and shall be
additional Secured Obligations hereunder.
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13. Expenses. The
Pledgors shall, jointly and severally, pay (i) all reasonable out-of-pocket
costs, expenses, taxes and fees incurred by the Administrative Agent, including
the reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the negotiation, preparation, execution and delivery
of this Pledge Agreement and all certificates, opinions and other documents
relating to these transactions, in all cases whether or not the transaction
contemplated hereby shall be consummated; (ii) all costs, expenses, taxes and
fees incurred by the Administrative Agent in connection with the perfection,
registration, maintenance, administration, custody and preservation of the
Pledged Collateral; and (iii) all costs, expenses, taxes and fees incurred
by
any of the Secured Parties in connection with or after the occurrence of any
Event of Default, including, without limitation, in connection with (a) the
negotiation, preparation, execution and delivery of any waiver, amendment or
consent by the Secured Parties, (b) the negotiation of any restructuring or
workout transaction, and the preparation, execution and delivery of any
documents prepared in connection therewith, and (c) enforcement or foreclosure
with respect to this Pledge Agreement, in all such cases such costs, expenses,
taxes and fees shall include, without limitation, the reasonable disbursements
and reasonable professional fees actually incurred of counsel to any Secured
Party. To the extent that any such fees and expenses are subject to
value added taxes, such taxes will be paid by the Pledgors. To the
extent reimbursement is sought pursuant to this Section 13 or any
other document executed pursuant hereto, the Secured Parties shall submit to
the
Pledgors a statement of expenses to be paid by the Pledgors. Such
expenses shall be due and payable within thirty (30) days of the date of the
original statement to the extent that such Secured Party is entitled to such
reimbursement.
14. Indemnity. The
Pledgors,
jointly and severally, will indemnify and hold harmless each of the Secured
Parties and each of their respective employees, representatives, officers and
directors from and against any and all claims, liabilities, investigations,
losses, damages, actions, and demands by any party against the Secured Parties
or any of them resulting from any breach or alleged breach by any Pledgor of
any
representation or warranty made hereunder, or otherwise arising out of this
Pledge Agreement, unless, with respect to any of the above, any of the Secured
Parties are finally judicially determined to have acted or failed to act with
gross negligence or willful misconduct. This Section 14 shall
survive termination of this Pledge Agreement.
15. Limitation
On the Administrative Agent’s Duty In Respect Of Pledged Collateral. The
Administrative Agent shall use reasonable care with respect to the Pledged
Collateral in its possession or under its control. The powers conferred on
the
Administrative Agent hereunder are solely to protect its interest in the Pledged
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Pledged Collateral in its possession and
the
accounting for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Pledged Collateral or any income thereon,
as
to ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral, whether
or not the Administrative Agent, or any other Secured Party has or is deemed
to
have knowledge of such matters, or as to the taking of any necessary steps
to
preserve rights against any parties or any other rights pertaining to any
Pledged Collateral. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property.
16. Security
Interest Absolute. All rights of the Administrative Agent and
security interests hereunder, and all obligations of each Pledgor hereunder,
shall be absolute and unconditional irrespective of:
(a) any
lack of validity or enforceability of the Loan Documents;
13
(b) any
change
in the 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 Loan Documents including, without limitation, any
increase in the Secured Obligations resulting from the extension of additional
credit to any Pledgor or any of its Subsidiaries or otherwise;
(c) any
taking, exchange, release or non-perfection of any other collateral, or any
taking, release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Secured Obligations;
(d) any
manner
of application of collateral, or proceeds thereof, to all or any of the Secured
Obligations, or any manner of sale or other disposition of any collateral for
all or any part of the Secured Obligations or any other assets of any Pledgor
or
any of its Subsidiaries;
(e) any
change, restructuring or termination of the corporate structure or existence
of
any Pledgor or any of its Subsidiaries; or
(f) any
other
circumstance which might otherwise constitute a defense available to, or a
discharge of, any Pledgor or a third party pledgor.
17. Reinstatement. This
Pledge
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against any Pledgor for liquidation or
reorganization, should any Pledgor become insolvent or make an assignment for
the benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of any Pledgor’s assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise
be
restored or returned by any obligee of the Secured Obligations, whether as
a
“voidable preference,” “fraudulent conveyance,” “fraudulent transfer” or
otherwise, all as though such payment or performance had not been
made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Secured Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
18. Successors
And Assigns. This Pledge Agreement and all obligations of each
Pledgor hereunder shall be binding upon the successors and assigns of such
Pledgor (including any debtor-in-possession on behalf of such Pledgor) and
shall, together with the rights and remedies of the Administrative Agent, for
the benefit of the Secured Parties, hereunder, inure to the benefit of the
Administrative Agent, the other Secured Parties, all future holders of any
instrument evidencing any of the Secured Obligations and their respective
successors and assigns. No sales of participations, other sales,
assignments, transfers or other dispositions of any agreement governing or
instrument evidencing the Secured Obligations or any portion thereof or interest
therein shall in any manner affect the Lien granted to the Administrative Agent,
for the benefit of the Secured Parties, hereunder. No Pledgor may
assign, sell, hypothecate or otherwise transfer any interest in or obligation
under this Pledge Agreement.
14
19. Waivers;
Amendment.
(a)
No failure or delay by any Secured Party of any kind in exercising any power,
right or remedy hereunder and no course of dealing between any Pledgor on the
one hand and the administrative Agent or the holder of any Note on the other
hand shall operate as a waiver thereof, nor shall any single or partial exercise
of any such power, right or remedy hereunder or under any other Loan Document,
or any abandonment or discontinuance of steps to enforce such a power, right
or
remedy, preclude any other or further exercise thereof or the exercise of any
other power, right or remedy. The rights of the Secured Parties hereunder and
of
the Lenders under the other Loan Documents are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any
provision of this Pledge Agreement or consent to any departure by any Pledgor
therefrom shall in any event be effective unless the same shall be permitted
by
subsection (b) below, and then such waiver and consent shall be effective
only in the specific instance and for the purpose for which given. No
notice or demand on any Pledgor in any case shall entitle such Pledgor to any
other or further notice in similar or other circumstances.
(b)
Neither this Pledge Agreement nor any provision hereof may be waived, amended
or
modified except pursuant to a written agreement entered into between the
Pledgors with respect to which such waiver, amendment or modification relates
and the Administrative Agent, with the prior written consent of the Required
Lenders (except as otherwise provided in the Credit Agreement).
20. Severability. Any
provision of this Pledge Agreement held to be illegal, invalid or unenforceable
in any jurisdiction, shall, as to such jurisdiction, be ineffective to the
extent of such illegality, invalidity or unenforceability without affecting
the
legality, validity or enforceability of the remaining provisions hereof or
thereof; and the illegality, invalidity or unenforceability of a particular
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
21. Notices. All
notices,
requests and other communications to the Pledgors or Administrative Agent
hereunder shall be delivered in the manner required by the Credit Agreement
and
shall be sufficiently given to Administrative Agent or any Pledgor if addressed
or delivered to them at, in the case of the Administrative Agent and Borrower,
its addresses and telecopier numbers specified in the Credit Agreement and
in
the case of any other Pledgor, at their respective addresses and telecopier
numbers provided in the Subsidiary Guaranty Agreement. All such
notices and communications shall be deemed to have been duly given at the times
set forth in the Credit Agreement.
22. Counterparts;
Integration. This Pledge
Agreement may be executed by one or more of the parties to this Pledge Agreement
on any number of separate counterparts (including by telecopy), and all of
said
counterparts taken together shall be deemed to constitute one and the same
instrument. This Pledge Agreement constitutes the entire agreement among the
parties hereto regarding the subject matters hereof and supersedes all prior
agreements and understandings, oral or written, regarding such subject
matter.
15
23. Governing
Law; Jurisdiction; Consent to Service of Process.
(a)
This Pledge Agreement shall be construed in accordance with and be governed
by
the law of the State of New York.
(b)
Each party to this Pledge Agreement hereby irrevocably and unconditionally
submits, for itself and its property, to the non-exclusive jurisdiction of
the
United States courts located within the Southern district
in the
State of New York, and of any state court of the State of New York located
in
New York county and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Pledge Agreement or any other
Loan
Document or the transactions contemplated hereby or thereby, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York state court
or, to the extent permitted by applicable law, such Federal court. Each of
the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this
Pledge Agreement shall affect any right that the Administrative Agent, the
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Pledge Agreement against any Pledgor or its properties in
the
courts of any jurisdiction.
(c)
Each party to this Pledge Agreement irrevocably and unconditionally
waives any objection which it may now or hereafter have to the laying of
venue of any such suit, action or proceeding described in paragraph (b) of
this
Section and brought in any court referred to in paragraph (b) of this
Section. Each party hereto irrevocably waives, to the fullest extent
permitted by applicable law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(d)
Each party to this Pledge Agreement irrevocably consents to the service of
process in the manner provided for notices in Section 10.1 of the Credit
Agreement. Nothing in this Pledge Agreement will affect the right of the
Administrative Agent or any Lender to serve process in any other manner
permitted by law.
24. WAIVER
OF
JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS PLEDGE
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND
(ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
16
25. Benefit
of Secured Parties. All Liens granted or contemplated hereby
shall be for the benefit of the Secured Parties, and all proceeds or payments
realized from Pledged Collateral in accordance herewith shall be applied to
the
Secured Obligations in accordance with Section 8.2 of the Credit
Agreement.
26. Termination
of this Pledge Agreement. No termination or cancellation
(regardless of cause or procedure) of the Credit Agreement shall in any way
affect or impair the powers, obligations, duties, rights and liabilities of
the
parties hereto in any way with respect to (i) any transaction or event occurring
prior to such termination or cancellation, (ii) the Pledged Collateral, or
(iii)
any Pledgor’s undertakings, agreements, covenants, warranties and
representations contained in this Pledge Agreement and all such undertakings,
agreements, covenants, warranties and representations shall survive such
termination or cancellation until the Termination Time. Subject to
Section
17 hereof, this Pledge Agreement and the security interests
granted hereunder shall terminate at the Termination Time. Upon such
termination, Administrative Agent shall return all Pledged Collateral in its
possession to the respective Pledgors and will, at the sole cost and expense
of
the Pledgors, execute such documents, without recourse or warranty, as Pledgors
deem reasonably necessary to release any interests held by Administrative Agent
or the Secured Parties in the Pledged Collateral.
27. Additional
Pledged Collateral. In the event that the any Pledgor is required,
under the terms of any Loan Document or otherwise, to pledge and hypothecate
any
Collateral after the Closing Date, such Pledgor shall pledge and hypothecate
such Collateral, and be bound with respect to such Collateral by all of the
terms and conditions hereof, by delivery to the Administrative Agent of an
executed counterpart of a Supplement to Subsidiary Pledge Agreement in the
form of Exhibit A
attached hereto.
28. Additional
Pledgors. Pursuant to
Section 5.11 of the Credit Agreement, each Subsidiary that that is required
to
become a Subsidiary Loan Party after the date of the Credit Agreement is
required to enter into this Agreement as a Pledgor upon becoming such a
Subsidiary Loan Party. Upon execution and delivery after the date
hereof by the Administrative Agent and such Subsidiary of an instrument in
the
form of Exhibit
B, such Subsidiary shall become a Pledgor hereunder with the same force
and effect as if originally named as a Pledgor herein. The execution
and delivery of any instrument adding an additional Pledgor as a party to this
Pledge Agreement shall not require the consent of any other Pledgor
hereunder. The rights and obligations of each Pledgor hereunder shall
remain in full force and effect notwithstanding the addition of any new Pledgor
as a party to this Pledge Agreement.
[Signature
Pages Follow]
17
IN
WITNESS
WHEREOF, each Pledgor has caused this Pledge Agreement to be executed and
delivered by its duly authorized officer as of the date first set forth
above.
| MAXIMUS, INC., a Virginia corporation | |
| By: |
/s/
Xxxxxxx X.
Xxxxxxx
|
| Name: |
Xxxxxxx
X. Xxxxxxx
|
| Title: |
President
and CEO
|
Acknowledged
and Agreed to:
SUNTRUST
BANK,
as
Administrative Agent
By:
/s/
Xxxxx X.
Xxxxxxxx
Name: Xxxxx
X. Xxxxxxxx
Title: Vice
President
[SIGNATURE
PAGE TO AMENDED AND RESTATED BORROWER PLEDGE
AGREEMENT]
