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EXHIBIT 4.3
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "PLEDGE AGREEMENT"), executed by THE XXXXX
GROUP, INC., a Tennessee corporation (the "PLEDGOR") in favor of SUNTRUST BANK,
a Georgia banking corporation, in its capacity as Collateral Agent (the
"COLLATERAL AGENT") for itself and other lending institutions (the "LENDERS")
that are signatories to the Credit Agreement (as defined below).
WITNESSETH:
WHEREAS, the Pledgor, the Lenders, SunTrust Bank, as Administrative
Agent, and Bank of America, N.A., as the Documentation Agent are parties to that
Credit Agreement, dated as of March 31, 1998, as amended by that certain First
Amendment to Credit Agreement, effective December 26, 1998, as amended by that
certain Second Amendment to Credit Agreement, effective October 5, 2000 and by
that certain Third Amendment to Credit Agreement, effective November 2, 2000 (as
amended or modified, the "CREDIT AGREEMENT");
WHEREAS, the Pledgor has executed that certain Promissory Note in the
amount of $5,000,000 in favor of SunTrust Bank, formerly known as SunTrust Bank,
Chattanooga, ("SUNTRUST") (as amended or modified, the "SUNTRUST NOTE");
WHEREAS, it is a condition to the obligations of the Administrative
Agent and the Lenders under the Credit Agreement and the obligations of SunTrust
under the SunTrust Note that Pledgor grant to the Collateral Agent a security
interest in all of its Pledged Collateral as defined below, and Pledgor wishes
to fulfill said condition;
WHEREAS, Pledgor is the record and beneficial owner of the issued and
outstanding shares of common stock of those companies listed on Schedule I
attached hereto (the "PLEDGED SHARES").
NOW, THEREFORE, in consideration of the premises and 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.
2. Pledge. Pledgor hereby pledges to the Collateral Agent, for
its benefit in such capacity, for its benefit as lender under the SunTrust Note
and for the benefit of the Lenders (the Collateral Agent, SunTrust and Lenders
referred to herein as the "SECURED PARTIES" and each a "SECURED PARTY") and
grants to the Collateral Agent, for its benefit and the benefit of the Secured
Parties, a security interest in all of Pledgor's rights, title and interests in,
to and under the following property, whether now owned by or owing to, or
hereafter acquired by or arising in favor of Pledgor (collectively, the "PLEDGED
COLLATERAL"):
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(a) the Pledged Shares and the certificates representing
the Pledged Shares, and 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 so that the Collateral Agent maintains at all times
under this Pledge Agreement a pledge of and security interest in and to
all shares of the authorized and issued and outstanding capital stock
of those companies listed on Schedule I now or hereafter owned by the
Pledgor;
(b) Any stock or other securities acquired by the Pledgor
or the 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, on 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 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 the Pledgor,
all new shares or other securities so acquired by the Pledgor, which
shall immediately be assigned and delivered to the Collateral Agent and
held under the terms of this Pledge Agreement in the same manner as the
Pledged Shares originally pledged hereunder; and
(d) Any and all proceeds, monies, income and benefits
arising from or by virtue of, and all dividends and distributions (cash
or otherwise) payable and/or distributable with respect to, all or any
of the Pledged Shares or other securities and rights and interests
described in this Section 2.
3. Security For Secured Obligations. This Pledge Agreement and
the Pledged Collateral secure the prompt payment, in full when due, whether at
stated maturity, or by acceleration or otherwise, and performance of all
Obligations of any kind under or in connection with the Credit Agreement and the
other Credit Documents, the payment in full when due and performance of all
obligations under or in connection with the SunTrust Note and all obligations of
Pledgor now or hereafter existing under this Pledge Agreement (collectively, the
"SECURED OBLIGATIONS"). Such Secured Obligations include, without limitation,
all interest, charges, expenses, fees, attorneys' fees and other sums required
to be paid by Pledgor under the Credit Agreement, under the SunTrust Note, under
this Pledge Agreement or under any of the other Credit Documents.
4. Delivery Of Pledged Collateral. All certificates representing
or evidencing the Pledged Shares shall be delivered to and held by or on behalf
of the Collateral Agent pursuant hereto, and shall be accompanied by duly
executed, undated instruments of transfer or assignment endorsed in blank, all
in form and substance satisfactory to the Collateral Agent and, if the
Collateral Agent so requests, 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. After
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the occurrence and during the continuation of an Event of Default, the
Collateral Agent shall have the right, at any time in its discretion and without
notice to Pledgor, to transfer to or to register in the name of the Collateral
Agent or any of its nominees any or all of the Pledged Shares. In addition, the
Collateral 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. Pledgor represents and
warrants to the Secured Parties as follows:
(a) the Pledged Shares represent, all of the issued and
outstanding shares of the voting capital stock of those companies
listed on Schedule I owned by the Pledgor.
(b) Pledgor is, and at the time of delivery of the
Pledged Shares to the Collateral Agent pursuant to Section 4 hereof
will be, the sole holder of record and the sole beneficial owner of the
Pledged Shares, free and clear of any Lien thereon or affecting the
title thereto except for the Lien created by this Pledge Agreement.
(c) All of the Pledged Shares 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 the Pledgor as same becomes due and payable.
(d) No dispute, counterclaim or defense exists with
respect to all or any part of the Pledged Collateral.
(e) Pledgor has the requisite corporate authority to
pledge, assign, transfer, deliver, deposit and set over its Pledged
Collateral to the Collateral Agent as provided herein.
(f) There are no restrictions upon the transfer,
hypothecation or pledge of any of the Pledged Collateral.
(g) None of the Pledged Shares has 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.
(h) 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, (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.
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(i) The pledge by Pledgor of its Pledged Collateral is
not in contravention of any law or of any agreement to which Pledgor is
party or by which 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
Pledgor of the Pledged Collateral pursuant to this Pledge Agreement or
for the execution, delivery or performance of this Pledge Agreement by
Pledgor or (y) for the exercise by the Collateral 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).
(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 9-306 of
the Uniform Commercial Code as in effect in the State of Georgia (the
"U.C.C.") 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 Section 9-115(4)(b) of the U.C.C. 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 Collateral Agent does not have "control" (as such terms are
defined in the U.C.C.).
(k) All of the representations and warranties contained
in the Credit Agreement, the SunTrust Note and the other Credit
Documents are true and correct in all material respects, are
incorporated herein by this reference and are reaffirmed and deemed
made herein by Pledgor for purposes of this Pledge Agreement.
The representations and warranties set forth in this Section 5 shall
survive the execution and delivery of this Pledge Agreement.
6. Covenants. Pledgor covenants and agrees that from and after
the date of this Pledge Agreement and until all Commitments have been terminated
and all Secured Obligations, other than Secured Obligations in respect of
indemnification that are not yet due and payable and other similar contingent
obligations which are not yet due and payable and survive the termination of
this Agreement, have been paid in full:
(a) Pledgor will not sell, assign, transfer, pledge, or
otherwise encumber any of its rights in or to the Pledged Collateral or any
unpaid dividends or other distributions or payments with respect to the Pledged
Collateral or xxxxx x Xxxx in the Pledged Collateral, except pursuant to this
Pledge Agreement.
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(b) Pledgor will not cause any issuer of Pledged Shares
to issue or grant any warrants, stock options of any nature or other instruments
convertible into shares of any class of capital stock or issue any additional
shares of capital stock or sell or transfer any treasury stock.
(c) Pledgor will, at its own cost and expense, promptly
execute, acknowledge and deliver all such instruments and take all such action
as the Collateral Agent from time to time may request in order to perfect and
protect the Lien granted or purported to be granted hereby or to enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to the Pledged Collateral.
(d) Pledgor has and will, at its own cost and expense,
defend the title to its Pledged Collateral and the Liens of the Collateral Agent
thereon against the claim of any Person and will maintain and preserve such
Liens until the payment and performance, in full, of all Secured Obligations;
including the filing of any necessary financing statements, which may be filed
by Collateral Agent with or (to the extent permitted by law) without the
signature of Pledgor, and will cooperate with Collateral Agent, at Pledgor's
expense, in obtaining all necessary approvals and making all necessary filings
under federal, state, local or foreign law in connection with such Liens or any
sale or transfer of the Pledged Collateral;.
(e) Pledgor will pay all taxes, assessments and charges
levied, assessed or imposed upon its Pledged Collateral before the same become
delinquent or become Liens upon any of its Pledged Collateral except where the
same may be contested in good faith by appropriate proceedings and as to which
adequate reserves have been provided.
7. Adjustments and Distributions Concerning Pledged Collateral.
Should the Pledged Collateral, or any part thereof, ever be converted in any
manner into another type of property or any money or other proceeds ever be paid
or delivered to Pledgor as a result of 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 immediately be and
become part of the Pledged Collateral, and the Pledgor covenants and agrees to
forthwith pay and deliver all money so received to the Collateral Agent; and, if
the Collateral Agent deems it necessary and so requests, to properly endorse,
assign or transfer any and all such other proceeds to the Collateral Agent and
to deliver to the Collateral Agent any and all such other proceeds which require
perfection by possession under the U.C.C. 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 Collateral
Agent, the Pledgor will forthwith execute and deliver to the Collateral Agent
whatever the Collateral Agent shall deem necessary or proper for such purposes.
8. Pledgor's Rights; Termination Of Rights.
(a) As long as no Event of Default (as defined in Section
9 hereof) shall have occurred and be continuing:
(i) 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
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purposes permitted by the Credit Agreement and not
inconsistent with the provisions of this Pledge Agreement, the
Credit Agreement or any other Credit Documents; provided,
that, without limitation of the foregoing, no vote shall be
cast, and no consent shall be given or action taken by
Pledgor, which would have the effect of impairing the position
of the Collateral Agent hereunder or which would authorize or
effect (except if and to the extent expressly 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 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, the stated capital or the authorized shares of any
issuer of the Pledged Collateral or the issuance of any
additional shares of capital stock thereof, or (E) the
alteration of the voting rights with respect to the capital
stock of any issuer of the Pledged Collateral;
(ii) Pledgor shall be entitled, from time to
time, to collect and receive for its own use all dividends
paid in respect of its Pledged Shares to the extent not in
violation of the Credit Agreement other than any and all: (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
of its Pledged Collateral, (B) dividends and other
distributions paid or payable in cash in respect of any of its
Pledged Collateral in connection with a partial or total
liquidation or dissolution, and (C) cash paid, payable or
otherwise distributed in redemption of, or in exchange for,
any of its Pledged Collateral; provided, that until actually
paid all rights to such dividends shall remain subject to the
Lien created by this Pledge Agreement.
(b) All dividends (other than such cash
dividends as are permitted to be paid to Pledgor in accordance with
Section 8(a)(ii) above) and all other distributions in respect of any
of the Pledged Shares, whenever paid or made, shall be delivered to the
Collateral Agent to hold as Pledged Collateral and shall, if received
by Pledgor, be received in trust for the benefit of the Collateral
Agent, be segregated from the other property or funds of Pledgor, and
be forthwith delivered to the Collateral Agent as Pledged Collateral of
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 Pledgor's rights to
exercise voting and other consensual rights pursuant to Section 8(a)(i)
hereof and all of Pledgor's rights to receive any cash dividends
pursuant to Section 8(a)(ii) hereof shall cease and all such rights
shall thereupon become vested in the Collateral 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 Pledgor would
otherwise be authorized to exercise pursuant to Section 8(a)(i) hereof
and to receive and retain the dividends which Pledgor would otherwise
be authorized to receive and retain pursuant to Section 8(a)(ii)
hereof. Upon the occurrence
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of an Event of Default (as defined in Section 9 hereof) and during the
continuation thereof, Pledgor shall pay over to the Collateral Agent,
for the benefit of the Secured Parties, any dividends received by
Pledgor with respect to its Pledged Collateral and any and all money
and other property paid over to or received by the Collateral Agent
shall be retained by the Collateral Agent, for the benefit of the
Secured Parties, as Pledged Collateral hereunder and shall be applied
in accordance with the provisions hereof.
9. Default. The Pledgor 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"):
(a) The occurrence of a "Default" or an "Event of
Default" as defined in the Credit Agreement;
(b) The occurrence of a default or event of default under
or in connection with the SunTrust Note;
(c) The filing of any financing statement with regard to
the Pledged Collateral, other than relating to or permitted by this
Pledge Agreement, or the attachment of any additional lien or security
interest to any portion of the Pledged Collateral, for the benefit of
any Person other than the Collateral Agent; and
(d) Failure of Pledgor to observe any of its respective
covenants set forth in this Pledge Agreement;
10. Remedies Upon An Event Of Default.
(a) Upon the occurrence of an Event of Default and during
the continuation thereof, the Collateral Agent may exercise all rights
of a secured party under the U.C.C. (whether or not the U.C.C. applies
to the affected collateral). In addition, the Collateral 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 of the time and
place of any public sale or of the time after which a private sale is
to take place (which notice 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 Collateral Agent was the legal and record
owner thereof. Pledgor hereby irrevocably constitutes and appoints the
Collateral Agent, for the benefit of the Secured Parties, as the proxy
and attorney-in-fact of Pledgor, with full power of substitution to
exercise any of the rights provided in the preceding sentence;
provided, that the Collateral 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 Collateral 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 Collateral Agent may
deem fair, and any
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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 Pledgor or any right of redemption, which
Pledgor hereby waives to the extent permitted by applicable law. Each
sale shall be made to the highest bidder, but the Collateral 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 Collateral 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 Collateral 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 Collateral 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
from the Collateral Agent to the Pledgor.
(c) If, at any time that the Collateral 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 Collateral 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
Collateral Agent may deem necessary or advisable, but subject to the
other requirements of this Section 10, 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
Collateral 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 Collateral
Agent shall not be required to effect such registration or cause the
same to be effected but, in its discretion (subject only to applicable
requirements of law), may require that any sale hereunder
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(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 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 Collateral 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 U.C.C. and other laws
affecting the enforcement of creditors' rights and the Act and all
applicable state securities laws.
(d) Pledgor acknowledges that, notwithstanding the legal
availability of a private sale or a sale subject to the restrictions
described above in paragraph (c), the Collateral Agent may, in its
discretion, elect to register any or all the Pledged Collateral under
the Act (or any applicable state securities law). Pledgor, however,
recognizes that the Collateral 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. 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 Collateral 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 Pledgor
would agree to do so.
(e) Any cash held by the Collateral Agent as Pledged
Collateral and all cash proceeds received by the Collateral Agent in
respect of any sale of, collection from, or other realization upon all
or any part of the Pledged Collateral may, in the discretion of the
Collateral Agent, be held by the Collateral Agent as collateral for,
and/or then or at any time thereafter be applied (after payment of any
amounts payable to the Collateral Agent pursuant to Section 13 hereof)
in whole or in part by the Collateral Agent for the benefit of the
Secured Parties in their individual and various agency capacities and
any other holder of any Secured Obligations against, all or any part of
the Secured Obligations in accordance with the terms hereof. Any
surplus of such cash or cash proceeds held by the Collateral Agent and
remaining after payment in full of all the Secured Obligations shall be
paid over to Pledgor or to whomsoever may be lawfully entitled to
receive such surplus.
(f) 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
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thereof by any purchaser at any sale hereunder, and Pledgor waives the
benefit of all such laws to the extent it lawfully may do so. Pledgor
agrees that it will not interfere with any right, power and remedy of
the Collateral 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 Collateral Agent of
any one or more of such rights, powers, or remedies. No failure or
delay on the part of the Collateral Agent to exercise any such right,
power or remedy and no notice or demand which may be given to or made
upon Pledgor by the Collateral Agent with respect to any such remedies
shall operate as a waiver thereof, or limit or impair the Collateral
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
Pledgor in any respect. Pledgor waives all claims, damages and demands
against the Collateral Agent arising out of the repossession, retention
or sale of the Pledged Collateral.
11. Power Of Attorney. Pledgor appoints the Collateral Agent, or
any other Person whom the Collateral Agent may designate, as Pledgor's true and
lawful attorney-in-fact, with power to endorse 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
Collateral Agent's possession and to do all things necessary to carry out the
terms of this Pledge Agreement. Pledgor ratifies and approves all such acts of
such attorney-in-fact. Neither the Collateral Agent nor any other Person
designated by the Collateral 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 all Commitments
have been terminated and all Secured Obligations, other than Secured Obligations
in respect of indemnification that are not yet due and payable and other similar
contingent obligations which are no yet due and payable and survive the
termination of this Agreement, have been paid in full.
12. Collateral Agent's Right To Take Action. In the event that
Pledgor fails or refuses promptly to perform any of its obligations set forth
herein, including, without limitation, its obligation pursuant to Section 6(e)
hereof to pay taxes, assessments and other charges levied, assessed or imposed
on the Pledged Collateral, or otherwise fails or refuses to pay any amount
necessary for the preservation and protection of the Pledged Collateral, the
Collateral Agent shall have the right, without obligation, to do all things it
deems necessary or advisable to discharge the same (including, without
limitation, to pay any such taxes, assessments, charges or other sums, together
with interest and penalties thereon) and any sums paid by the Collateral Agent,
or the cost thereof, including, without limitation, attorneys' fees, shall be
reimbursed by Pledgor, to the Collateral Agent on demand and, until so
reimbursed, shall bear interest at the highest rate chargeable under Section
4.03(c) of the Credit Agreement.
13. Expenses.
(a) The Pledgor shall pay (i) all reasonable,
out-of-pocket costs and expenses of the Collateral Agent, its
Affiliates and the lenders, including the reasonable fees, charges and
disbursements of counsel for the Collateral Agent and its Affiliates
(but not the other Secured Parties), in connection with the preparation
and administration of
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this Pledge Agreement and any amendments, modifications or waivers
thereof (whether or not the transactions contemplated in this Pledge
Agreement or any other Credit Document shall be consummated), and (ii)
all out-of-pocket costs and expenses (including, without limitation,
the reasonable fees, charges and disbursements of outside counsel and
the allocated cost of inside counsel) incurred by the Collateral Agent
or any Secured Party in connection with the enforcement or protection
of its rights in connection with this Pledge Agreement, including its
rights under this Section, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations.
(b) The Pledgor shall pay, and hold the Collateral Agent
and each of the Secured Parties harmless from and against, any and all
present and future stamp, documentary, and other similar taxes with
respect to this Pledge Agreement and any other Credit Documents, any
collateral described therein, or any payments due thereunder, and save
the Collateral Agent and each Secured Party harmless from and against
any and all liabilities with respect to or resulting from any delay or
omission to pay such taxes.
(c) To the extent that the Pledgor fails to pay any
amount required to be paid to the Collateral Agent under clauses (a) or
(b) hereof, each Secured Party severally agrees to pay to the
Collateral Agent such Secured Party's pro rata share (determined as of
the time that the unreimbursed expense or indemnity payment is sought)
of such unpaid amount; provided, that the unreimbursed expense or
indemnified payment, claim, damage, liability or related expense, as
the case may be, was incurred by or asserted against the Collateral
Agent in its capacity as such.
(d) All amounts due under this Section shall be payable
promptly after written demand therefor.
14. Indemnity. Pledgor 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
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 wilful misconduct. This Section 14 shall survive
termination of this Pledge Agreement.
15. Limitation On the Collateral Agent's Duty In Respect Of
Pledged Collateral. The Collateral Agent shall use reasonable care with respect
to the Pledged Collateral in its possession or under its control. The powers
conferred on the Collateral 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
Collateral 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 Collateral 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
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rights against any parties or any other rights pertaining to any Pledged
Collateral. The Collateral 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 Collateral Agent accords its own property.
16. Security Interest Absolute. All rights of the Collateral Agent
and security interests hereunder, and all obligations of Pledgor hereunder,
shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit
Documents or the SunTrust Note;
(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 Credit Documents including, without limitation, any increase in the
Secured Obligations resulting from the extension of additional credit
to 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 Pledgor or any of its
Subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of Pledgor or any of its Subsidiaries;
or
(f) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, 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 Pledgor for liquidation or reorganization, should 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
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.
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18. Successors And Assigns. This Pledge Agreement and all
obligations of Pledgor hereunder shall be binding upon the successors and
assigns of Pledgor (including any debtor-in-possession on behalf of Pledgor) and
shall, together with the rights and remedies of the Collateral Agent, for the
benefit of the Secured Parties, hereunder, inure to the benefit of the
Collateral Agent, 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 Collateral Agent, for the benefit of the
Secured Parties, hereunder. Pledgor may not assign, sell, hypothecate or
otherwise transfer any interest in or obligation under this Pledge Agreement.
19. Waivers. The rights and remedies of the Secured Parties under
this Pledge Agreement shall be cumulative and not exclusive of any rights or
remedies which they would otherwise have. No failure or delay by any Secured
Party in exercising any right shall operate as a waiver of such right. The
Secured Parties expressly reserve the right to require strict compliance with
the terms of this Pledge Agreement. Any waiver or indulgence granted by any
Secured Party shall not constitute a modification of this Pledge Agreement,
except to the extent expressly provided in such waiver or indulgence, or
constitute a course of dealing by any Secured Party at variance with the terms
of this Pledge Agreement such as to require further notice by the them or their
intent to require strict adherence to the terms of this Pledge Agreement in the
future. Any such actions shall not in any way affect the ability of the Secured
Parties, in their discretion, to exercise any rights available to them under
this Pledge Agreement.
20. Remedies. The rights and remedies of the Secured Parties under
this Pledge Agreement shall be cumulative and nonexclusive of any other rights
and remedies which any Secured Party may have under any other agreement,
including the Credit Documents, or by operation of law or otherwise. Recourse to
the Pledged Collateral shall not be required.
21. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
22. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other party, or whenever any of the parties desires to give or
serve upon any other party any communication with respect to this Pledge
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and given in the manner, and deemed
received in the manner provided for in of the Credit Agreement or the SunTrust
Note, as the case may be.
23. Limitation By Law. All rights, remedies and powers provided in
this Pledge Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the provisions
of this Pledge Agreement are intended to be subject to all applicable mandatory
provisions of law that may be controlling and to be limited to
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the extent necessary so that they shall not render this Pledge Agreement
invalid, unenforceable, in whole or in part, or not entitled to be recorded,
registered or filed under the provisions of any applicable law.
24. Headings. Headings used in this Pledge Agreement are for
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
25. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
such separate counterparts shall together constitute but one and the same
instrument.
26. Time Of The Essence. TIME IS OF THE ESSENCE OF THIS PLEDGE
AGREEMENT.
27. Governing Law; Submission to Jurisdiction.
(i) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF GEORGIA.
(ii) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN ANY COURT OF THE STATE OF GEORGIA OR IN ANY
COURT OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF
GEORGIA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE PLEDGOR
HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND THE PLEDGOR HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, 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
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(iii) PLEDGOR IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO PLEDGOR AT ITS SAID ADDRESS, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
28. No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Pledge Agreement. In the event
an ambiguity or question of intent or interpretation arises, this Pledge
Agreement shall be construed as if drafted jointly by the parties
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hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Pledge
Agreement.
29. 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 the terms hereof.
30. 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 any transaction or event
occurring prior to such termination or cancellation. This Pledge Agreement shall
not terminate until all Commitments have been terminated and all Secured
Obligations, other than Secured Obligations in respect of indemnification that
are not yet due and payable and other similar contingent obligations which are
no yet due and payable and survive the termination of this Agreement, have been
paid in full.
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IN WITNESS WHEREOF, Pledgor has caused this Pledge Agreement to be
executed and delivered by its duly authorized officer as of the date first set
forth above.
THE XXXXX GROUP, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and
Chief Financial Officer
Acknowledged and Agreed to :
SUNTRUST BANK, as Collateral Agent
By: /s/
-------------------------
Name:
Title:
[SIGNATURE PLAGE TO PLEDGE AGREEMENT]
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Schedule I to
Pledge Agreement
Place of Percentage of Shares Shares Issued
Name of Corporation Incorporation Issued and Outstanding Par/No Par And Outstanding
------------------- ------------- ---------------------- ---------- ---------------
Carriage Industries, Inc. Georgia 100% $0.02 2,015,932
Dixie Export, Inc. U.S. Virgin Islands 100% no par 100
Amtex, Inc. Tennessee 100% no par 113
C-Knit Apparel, Inc. Tennessee 100% no par 1,000
Xxxxx Funding, Inc. Tennessee 100% $0.01 100
