EXHIBIT 10.8
PLEDGE AGREEMENT
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[NAC Holdings, Inc.]
THIS PLEDGE AGREEMENT (this "Agreement") dated as of July 10, 1998, is by
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and between NAC HOLDINGS, INC., a Nevada corporation (the "Pledgor"), located at
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0000 Xxxxxxxxx Xxx, Xxxx, Xxxxxx 00000, and CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION (formerly known as Texas Commerce Bank National Association), a
national banking association ("Chase"), not in its individual capacity but
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solely as agent for itself and each of the other banks or lending institutions
(each, a "Bank" and collectively, the "Banks") which is or may from time to time
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become a signatory to the Credit Agreement (hereinafter defined) or any
successor or permitted assignee thereof (Chase in such capacity, together with
its successors in such capacity, the "Agent").
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R E C I T A L S:
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A. CellStar Corporation, a Delaware corporation (the "Borrower"), the
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Agent, The First National Bank of Chicago and National City Bank, as co-agents
(collectively, the "Co-Agents"), and the Banks are parties to that certain
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Credit Agreement dated as of October 15, 1997 (such Credit Agreement, as the
same has been and may be amended, supplemented or modified from time to time,
the "Credit Agreement").
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B. The Credit Agreement requires the Pledgor to execute and deliver this
Agreement.
A G R E E M E N T:
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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:
ARTICLE I
Security Interest and Pledge
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Section 1.1. Terms Defined in Credit Agreement. All capitalized terms
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used and not otherwise defined herein shall have their respective meanings as
specified in the Credit Agreement.
Section 1.2. Security Interest and Pledge. Subject to the terms of this
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Agreement, Pledgor hereby pledges and grants to the Agent, for the pro rata
benefit of the Banks, a first priority security interest in the following
property whether now owned or hereafter acquired by Pledgor (such property being
hereinafter sometimes called the "Collateral"):
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PLEDGE AGREEMENT - Page 1
[NAC Holdings, Inc.]
(a) All present and future issued and outstanding shares of capital
stock or other equity or investment securities issued by Florida
Properties, Inc., a Texas corporation ("Florida Properties"), now owned or
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hereafter acquired by Pledgor, including without limitation 1000 shares of
common capital stock of Florida Properties evidenced by certificate number
01;
(b) All of Pledgor's rights, titles and interests (whether legal,
equitable or beneficial) but not obligations or liabilities (collectively,
the "Partnership Interest") as a limited partner of CellStar Global
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Satellite Service, Ltd., a Texas limited partnership (the "Partnership"),
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and all of Pledgor's rights, titles and interests in, to and under that
certain partnership agreement (the "Partnership Agreement") forming the
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Partnership by and between Pledgor and National Auto Center, Inc., a
Delaware corporation ("NAC"), including, without limitation, the Pledgor's
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undivided interest in partnership properties and assets and any and all
rights to receive distributions, whether in cash or in kind, draws,
proceeds, income, or any other payment of any nature whatsoever, or
assignment or conveyance of undivided interests in assets, whether real or
personal, made or required to be made with respect to the Partnership
Interest, whether upon dissolution or termination of the Partnership or
otherwise, including without limitation all interests of Pledgor in all
payments, gross receipts, accounts, accounts receivable, notes and other
rights to the payment of money and all property and assets of the
Partnership, together with any and all evidence of the Partnership Interest
and any and all certificates, options, rights, or other interests or
distributions issued in addition to, in substitution or exchange for, or on
account of, the Partnership Interest, and any and all exchanges and
substitutions for, increases, products and proceeds of the foregoing, all
of the foregoing whether now owned or hereafter acquired by Pledgor;
(c) All present and future issued and outstanding shares of capital
stock or other equity or investment securities issued by any Subsidiary of
Pledgor not named above, except Foreign Subsidiaries and holding companies
of Foreign Subsidiaries, now owned or hereafter acquired by Pledgor;
(d) All present and future issued and outstanding shares of non-voting
capital stock or other non-voting equity or investment securities issued by
any Subsidiary of Pledgor not named above which is a holding company of any
Foreign Subsidiary, now owned or hereafter acquired by Pledgor;
(e) 65% of all present and future issued and outstanding shares of
voting capital stock or other voting equity or investment securities issued
by any Subsidiary of Pledgor not named above which is a holding company of
any Foreign Subsidiary, now owned or hereafter acquired by Pledgor;
PLEDGE AGREEMENT - Page 2
[NAC Holdings, Inc.]
(f) All present and future increases, profits, combinations,
reclassifications of, and substitutes and replacements for, all or part of
the foregoing, and all present and future accounts, contract rights,
general intangibles, chattel paper, documents, instruments, cash and
noncash proceeds, and other rights arising from or by virtue of, or from
the voluntary or involuntary sale, lease, or other disposition of, or
collections with respect to, all or any part of the foregoing; and
(g) All products, proceeds, revenues, distributions, dividends, stock
dividends, securities, and other property, rights, and interests that
Pledgor receives or is at any time entitled to receive on account of any of
the foregoing.
Section 1.3. Obligations. The security interest granted, ratified and
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confirmed hereby is to secure the payment or performance of the following
obligations, indebtedness, and liabilities of Pledgor, now existing or hereafter
arising (all of such obligations, indebtedness, and liabilities being
hereinafter sometimes called the "Obligations"):
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(a) the indebtedness, liabilities and obligations of Borrower to the
Banks evidenced by those Notes executed by Borrower pursuant to the Credit
Agreement and payable to the order of the Banks in the aggregate principal
amount of $135,000,000;
(b) the indebtedness, liabilities and obligations of Pledgor to the
Agent, the Co-Agents and the Banks under that certain Guaranty of even date
hereof executed by the Pledgor and the other guarantors named therein in
favor of the Agent, the Co-Agents and the Banks;
(c) the indebtedness, liabilities and obligations of the Borrower to
the Agent, the Co-Agents and the Banks pursuant to the Credit Agreement;
(d) all of the "Obligations," as such term is defined in the Credit
Agreement;
(e) all future Advances by the Agent or any Bank to the Borrower;
(f) all costs and expenses, including without limitation all
reasonable attorneys' fees and legal expenses, incurred by the Agent, any
Co-Agent or any Bank to preserve and maintain the Collateral, collect the
obligations herein described and enforce this Agreement;
(g) all other obligations, indebtedness and liabilities of Pledgor to
the Agent, any Co-Agent or any Bank under any of the Loan Documents, now
existing or hereafter arising, regardless of whether such obligations,
indebtedness and liabilities are similar, dissimilar, related, unrelated,
direct, indirect, fixed, contingent, primary, secondary, joint, several, or
joint and several; and
PLEDGE AGREEMENT - Page 3
[NAC Holdings, Inc.]
(h) all extensions, renewals and modifications of any of the
foregoing.
Without limiting the foregoing, this Agreement secures the payment of all
amounts that constitute part of the obligations and would be owed by the
Borrower to the Agent, any Co-Agent or any Bank but for the fact that they are
unenforceable or not allowable due to the existence of bankruptcy,
reorganization, or similar proceedings involving the Borrower.
ARTICLE II
Representations and Warranties
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Pledgor represents and warrants to the Agent that:
Section 2.1. Title. Pledgor owns, and with respect to Collateral
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acquired after the date hereof, Pledgor will own, legally and beneficially, the
Collateral free and clear of any Lien or claim or any right or option on the
part of any third Person to purchase or otherwise acquire the Collateral or any
part thereof. The Collateral is not subject to any restriction on transfer or
assignment except for compliance with applicable federal and state securities
laws and regulations promulgated thereunder. Pledgor has the unrestricted right
to pledge the Collateral as contemplated hereby. All of the Collateral has been
duly and validly issued and is fully paid and nonassessable. Pledgor is the
sole limited partner of the Partnership.
Section 2.2. Organization and Authority. Pledgor is a corporation duly
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organized, validly existing, and in good standing under the laws of its state of
incorporation. Pledgor has the corporate power and authority to execute,
deliver, and perform this Agreement, and the execution, delivery, and
performance of this Agreement by Pledgor have been duly authorized by all
necessary corporate action on the part of Pledgor and do not and will not
violate or conflict with the certificate/articles of incorporation or bylaws of
Pledgor or any law, rule or regulation or any order, writ, injunction, or decree
of any Governmental Authority or arbitrator and do not and will not conflict
with, result in a breach of, or constitute a default under the provisions of any
agreement or instrument to which Pledgor is a party or by which Pledgor or any
of its property is bound or subject.
Section 2.3. Financing Statements. No financing statement covering any
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of the Collateral or its proceeds, except financing statements naming the Agent
as secured party, is on file in any public office. So long as any amount
remains unpaid on any Obligations or the Agent has any Commitment, Pledgor will
not execute or file, or consent to or permit the filing of, any such financing
statement or statements in any public office, except the financing statement
filed or to be filed with respect to the security interest hereby granted.
Section 2.4. Principal Place of Business. The principal place of
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business and chief executive office of Pledgor, and the office where Pledgor
keeps its books and records, is located at the address of Pledgor shown at the
beginning of this Agreement.
PLEDGE AGREEMENT - Page 4
[NAC Holdings, Inc.]
Section 2.5. Percentage of Stock. The shares of capital stock included
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in the Collateral constitute 100% of the issued and outstanding shares of
capital stock of Florida Properties.
Section 2.6. Litigation. Except as disclosed on Schedule 8.5 to the
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Credit Agreement, there is no litigation, investigation, or governmental
proceeding pending or threatened against Pledgor or any of its properties which
if adversely determined would have a material adverse effect on the Collateral
or the financial condition, operations, or business of Pledgor.
Section 2.7. First Priority Perfected Security Interest. Upon the filing
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of UCC financing statements and Agent's taking possession of the certificates
representing the stock included in the Collateral, this Agreement creates in
favor of the Agent a first priority perfected security interest in the
Collateral. There are no conditions precedent to the effectiveness of this
Agreement that have not been fully and permanently satisfied.
Section 2.8. Benefit to Pledgor. The value of the consideration received
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and to be received by the Pledgor as a result of the Borrower, the Agent, the
Co-Agents and the Banks entering into the Credit Agreement and the Pledgor
executing and delivering this Agreement is reasonably worth at least as much as
the liability and obligation of the Pledgor hereunder. Such liability and
obligation of the Pledgor hereunder. Such liability and obligation and the
Borrower's entering the Credit Agreement have benefited and may reasonably be
expected to benefit the Pledgor directly and indirectly. The ability of
Borrower to borrow and obtain letters of credit from time to time under the
Credit Agreement will benefit Pledgor and the consolidated corporate group of
which the Pledgor is a part and are necessary and convenient to the conduct,
promotion and attainment of the business of the Pledgor. The Pledgor has
adequate capital to conduct its business as a going concern, as presently
conducted and as proposed to be conducted. The Pledgor will be able to meet
its obligations hereunder and in respect of its other existing and future
indebtedness and liabilities as and when the same shall be due and payable. The
Pledgor is not insolvent (as that term is defined in 11 U.S.C. (S) 101 or
applicable law) and will not be rendered insolvent by its obligations hereunder.
The foregoing representations are supported by the Pledgor's internal
projections and forecasts. The Pledgor has determined that the execution and
delivery of this Agreement is to its advantage and benefit, taking into account
all relevant facts and circumstances.
ARTICLE III
Affirmative and Negative Covenants
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Pledgor covenants and agrees with the Agent that until the Obligations are
paid and performed in full and all Commitments have terminated:
Section 3.1. Delivery. Prior to or concurrently with the execution and
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delivery of this Agreement, Pledgor shall deliver to the Agent all certificates
identified in subsections (a) and b of
PLEDGE AGREEMENT - Page 5
[NAC Holdings, Inc.]
Section 1.2 hereof, and all other certificates evidencing any other Collateral
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existing on the date hereof, accompanied by undated stock powers duly executed
in blank.
Section 3.2. Encumbrances. Pledgor shall not create, permit, or suffer
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to exist, and shall defend the Collateral against, any Lien on the Collateral
except the Permitted Liens, and shall defend Pledgor's rights in the Collateral
and the Agent's security interest in the Collateral against the claims and
demands of all Persons. Pledgor shall do nothing to impair the rights of the
Agent in the Collateral.
Section 3.3. Disposition of Collateral. Pledgor shall not sell, assign
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(by operation of law or otherwise), or otherwise dispose of, or grant any option
with respect to the Collateral or any part thereof without the prior written
consent of the Agent.
Section 3.4. Distributions. If Pledgor shall become entitled to receive
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or shall receive any stock certificate (including, without limitation, any
certificate representing a stock dividend or a distribution in connection with
any reclassification, increase, or reduction of capital or issued in connection
with any reorganization), option or rights, whether as an addition to, in
substitution of, or in exchange for any Collateral or otherwise, Pledgor agrees
to accept the same as the Agent's agent and to hold the same in trust for the
Agent, and to deliver the same forthwith to the Agent in the exact form
received, with the appropriate endorsement of Pledgor when necessary and/or
appropriate undated stock powers duly executed in blank, to be held by the Agent
as additional Collateral for the Obligations, subject to the terms hereof. Any
sums paid upon or in respect of the Collateral upon the liquidation, dissolution
or winding up of any issuer of Collateral shall be paid over to the Agent to be
held by it as additional Collateral for the Obligations subject to the terms
hereof; and in case any distribution of capital shall be made on or in respect
of the Collateral or any property shall be distributed upon or with respect to
the Collateral pursuant to any recapitalization or reclassification of the
capital of any issuer of Collateral or pursuant to any reorganization of any
issuer of Collateral, the property so distributed shall be delivered to the
Agent to be held by it, as additional Collateral for the Obligations, subject to
the terms hereof. All sums of money and property so paid or distributed in
respect of the Collateral that are received by Pledgor shall, until paid or
delivered to the Agent, be held by Pledgor in trust as additional security for
the Obligations.
Section 3.5. Further Assurances. At any time and from time to time, upon
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the request of the Agent, and at the sole expense of Pledgor, Pledgor shall
promptly execute and deliver all such further instruments and documents and take
such further action as the Agent may deem necessary or desirable to preserve and
perfect its security interest in the Collateral and carry out the provisions and
purposes of this Agreement, including, without limitation, the execution and
filing of such financing statements as the Agent may require. A carbon,
photographic, or other reproduction of this Agreement or of any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement and may be filed as a financing statement. Subject to the
right of Pledgor to receive cash dividends and distributions under Section 4.3
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hereof, in the event any Collateral is ever received by Pledgor, Pledgor shall
promptly transfer and deliver to the Agent such
PLEDGE AGREEMENT - Page 6
[NAC Holdings, Inc.]
Collateral so received by Pledgor (together with any necessary endorsements in
blank, pledge endorsements, other appropriate endorsements, or undated stock
powers duly executed in blank), which Collateral shall thereafter be held by the
Agent pursuant to the terms of this Agreement. The Agent shall at all times have
the right to exchange any certificates representing Collateral for certificates
of smaller or larger denominations for any purpose consistent with this
Agreement.
Section 3.6. Inspection Rights. Pledgor shall permit the Agent and its
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representatives to examine, inspect, and copy Pledgor's books and records at any
reasonable time and as often as the Agent may desire during normal business
hours.
Section 3.7. Taxes. The Pledgor agrees to pay or discharge prior to
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delinquency all taxes, assessments, levies, and other governmental charges
imposed on it or its property, except Pledgor shall not be required to pay or
discharge any tax, assessment, levy, or other governmental charge if (i) the
amounts or validity thereof is being contested by Pledgor in good faith by
appropriate proceedings diligently pursued, (ii) such proceedings do not involve
any risk of sale, forfeiture, or loss of the Collateral or any interest therein,
and (iii) adequate reserves therefor have been established in conformity with
GAAP.
Section 3.8. Notification. Pledgor shall promptly, and in any event
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within five days after Pledgor obtains knowledge or becomes aware of any of the
following, notify the Agent of (a) any Lien or claim that has attached to or
been made or asserted against any of the Collateral, (b) any material damage to
or loss of any of the Collateral, (c) the occurrence of any other event that
could have a material adverse effect on the Collateral or the security interest
created hereunder, and (d) the occurrence or existence of any Default.
Section 3.9. Books and Records; Information. Pledgor shall keep accurate
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and complete books and records of the Collateral and Pledgor's business and
financial condition in accordance with GAAP. Pledgor shall from time to time at
the request of the Agent deliver to the Agent such information regarding the
Collateral and Pledgor as the Agent may request. Pledgor shall xxxx its books
and records to reflect the security interest of the Agent under this Agreement.
Section 3.10. Compliance with Laws and Agreements. Pledgor shall comply
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in all material respects with all applicable laws, rules, regulations, orders
and decrees of any Governmental Authority or arbitrator and all material
agreements, contracts, and instruments binding on it or affecting its properties
or business.
Section 3.11. Additional Securities. Pledgor shall not consent to or
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approve the issuance of any additional shares of any class of capital stock of
any issuer of Collateral, or any securities convertible into, or exchangeable
for, any such shares or any warrants, options, rights, or other commitments
entitling any Person to purchase or otherwise acquire any such shares.
PLEDGE AGREEMENT - Page 7
[NAC Holdings, Inc.]
ARTICLE IV
Rights of Agent and Pledgor
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Section 4.1. Power of Attorney. Pledgor hereby irrevocably constitutes
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and appoints the Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead and in the name of Pledgor or in its
own name, to take any and all action and to execute any and all documents and
instruments which the Agent at any time and from time to time deems necessary or
desirable to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, Pledgor hereby gives the Agent the power and right
on behalf of Pledgor and in its own name to do any of the following (subject to
the rights of Pledgor under Sections 4.2 and 4.3 hereof), without notice to or
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the consent of Pledgor, and whether or not an Event of Default has occurred or
is continuing (except as otherwise expressly provided below):
(i) after the occurrence and during the continuance of an Event of
Default, to demand, xxx for, collect, or receive in the name of Pledgor or
in its own name, any money or property at any time payable or receivable on
account of or in exchange for any of the Collateral and, in connection
therewith, endorse checks, notes, drafts, acceptances, money orders, or any
other instruments for the payment of money under the Collateral;
(ii) to pay or discharge taxes or Liens levied or placed on or
threatened against the Collateral;
(iii) (A) after the occurrence and during the continuance of an Event
of Default, to direct account debtors and any other parties liable for any
payment under any of the Collateral to make payment of any and all monies
due and to become due thereunder directly to the Agent or as the Agent
shall direct; (B) after the occurrence and during the continuance of an
Event of Default, to receive payment of and receipt for any and all monies,
claims, and other amounts due and to become due at any time in respect of
or arising out of any Collateral; (C) after the occurrence and during the
continuance of an Event of Default, to sign and endorse any drafts,
assignments, proxies, stock powers, verifications, notices, and other
documents relating to the Collateral; (D) after the occurrence and during
the continuance of an Event of Default, to commence and prosecute any suit,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce
any other right in respect of any Collateral; (E) after the occurrence and
during the continuance of an Event of Default, to defend any suit, action,
or proceeding brought against Pledgor with respect to any Collateral; (F)
after the occurrence and during the continuance of an Event of Default, to
settle, compromise, or adjust any suit, action, or proceeding described
above and, in connection therewith, to give such discharges or releases as
the Agent may deem appropriate; (G) to exchange any of the Collateral for
other property upon any merger, consolidation, reorganization,
recapitalization, or other
PLEDGE AGREEMENT - Page 8
[NAC Holdings, Inc.]
readjustment of any issuer of Collateral and, in connection therewith,
deposit any of the Collateral with any committee, depositary, transfer
agent, registrar, or other designated agency upon such terms as the Agent
may determine; (H) to add or release any guarantor, indorser, surety, or
other party to any of the Collateral or the Obligations; (I) to renew,
extend, or otherwise change the terms and conditions of any of the
Collateral or Obligations; and (J) after the occurrence and during the
continuance of an Event of Default, to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though the Agent were the absolute owner thereof
for all purposes, and to do, at the Agent's option and Pledgor's expense,
at any time, or from time to time, all acts and things which the Agent
deems necessary to protect, preserve, or realize upon the Collateral and
the Agent's security interest therein.
This power of attorney is a power coupled with an interest and shall be
irrevocable. The Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to the Agent in this Agreement, and shall not be liable for
any failure to do so or any delay in doing so. The Agent shall not be liable
for any act or omission or for any error of judgment or any mistake of fact or
law in its individual capacity or in its capacity as attorney-in-fact except
acts or omissions resulting from its willful misconduct. This power of attorney
is conferred on the Agent solely to protect, preserve, and realize upon its
security interest in the Collateral. The Agent will exercise its best efforts
to notify Pledgor of any action taken by the Agent in its capacity as attorney-
in-fact pursuant to this Section, promptly after such action is taken provided
that any failure by the Agent to so notify Pledgor shall not impose any
liability upon the Agent or affect its rights and remedies hereunder, at law or
in equity. The Agent shall not be responsible for any decline in the value of
the Collateral and shall not be required to take any steps to preserve rights
against prior parties or to protect, preserve, or maintain any security interest
or Lien given to secure the Collateral.
Section 4.2. Voting Rights. Unless and until an Event of Default shall
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have occurred and be continuing, Pledgor shall be entitled to exercise any and
all voting rights pertaining to the Collateral or any part thereof in accordance
with the direction of the Pledgor for any purpose not inconsistent with the
terms of this Agreement or the Credit Agreement.
Section 4.3. Dividends and Distributions. Unless and until an Event of
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Default shall have occurred and be continuing, Pledgor shall be entitled to
receive and retain or distribute to Borrower any dividends and distributions on
the Collateral paid in cash to the extent and only to the extent that such
dividends and distributions are permitted by the Credit Agreement, except as
provided in Section 3.4 hereof.
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Section 4.4. Setoff; Property Held by Agents and the Banks. If an Event
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of Default shall have occurred and be continuing, the Agent, each Co-Agent and
each Bank shall have the right to set off and apply against the Obligations, at
any time and without notice to Pledgor, any and all deposits (general or
special, time or demand, provisional or final) or other sums at any time
credited
PLEDGE AGREEMENT - Page 9
[NAC Holdings, Inc.]
by or owing from the Agent, any Co-Agent or any Bank to Pledgor whether or not
the Obligations are then due. As additional security for the Obligations,
Pledgor hereby grants the Agent, each Co-Agent and each Bank a security interest
in all money, instruments, and other property of Pledgor now or hereafter held
by the Agent, any Co-Agent or any Bank, including, without limitation, property
held in safekeeping. In addition to the Agent's, any Co-Agent's or any Bank's
right of setoff and as further security for the Obligations, Pledgor hereby
grants the Agent, each Co-Agent and each Bank a security interest in all
deposits (general or special, time or demand, provisional or final) and other
accounts of Pledgor now or hereafter on deposit with or held by the Agent, any
Co-Agent or any Bank and all other sums at any time credited by or owing from
the Agent, any Co-Agent or any Bank to Pledgor. The rights and remedies of the
Agent, each Co-Agent and each Bank hereunder are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which the
Agent, any Co-Agent or any Bank may have.
Section 4.5. Performance by Agent. If Pledgor shall fail to perform any
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covenant or agreement contained in this Agreement, the Agent may perform or
attempt to perform such covenant or agreement on behalf of Pledgor. In such
event, Pledgor shall, at the request of the Agent, promptly pay any amount
expended by the Agent in connection with such performance or attempted
performance to the Agent, together with interest thereon at the Default Rate
from and including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that the Agent shall not have any liability or responsibility for the
performance of any obligation of Pledgor under this Agreement.
Section 4.6. Agent's Duty of Care. Other than the exercise of reasonable
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care in the physical custody of the Collateral while held by the Agent
hereunder, the Agent shall have no responsibility for or obligation or duty with
respect to all or any part of the Collateral or any matter or proceeding arising
out of or relating thereto, including, without limitation, any obligation or
duty to collect any sums due in respect thereof or to protect or preserve any
rights against prior parties or any other rights pertaining thereto, it being
understood and agreed that Pledgor shall be responsible for preservation of all
rights in the Collateral. Without limiting the generality of the foregoing, the
Agent shall be conclusively deemed to have exercised reasonable care in the
custody of the Collateral if the Agent takes such action, for purposes of
preserving rights in the Collateral, as Pledgor may reasonably request in
writing, but no failure or omission or delay by the Agent in complying with any
such request by Pledgor, and no refusal by the Agent to comply with any such
request by Pledgor, shall be deemed to be a failure to exercise reasonable care.
ARTICLE V
Default
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Section 5.1. Rights and Remedies. If any Event of Default shall occur,
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the Agent shall have the following rights and remedies:
PLEDGE AGREEMENT - Page 10
[NAC Holdings, Inc.]
(i) In addition to all other rights and remedies granted to the
Agent in this Agreement and in any other Loan Document or by applicable
law, the Agent shall have all of the rights and remedies of a secured party
under the UCC. Without limiting the generality of the foregoing, the Agent
may (A) without demand or notice to Pledgor, collect, receive, or take
possession of the Collateral or any part thereof, (B) sell or otherwise
dispose of the Collateral, or any part thereof, in one or more parcels at
public or private sale or sales, at the Agent's offices or elsewhere, for
cash, on credit, or for future delivery, and/or (C) bid and become a
purchaser at any sale free of any right or equity of redemption in Pledgor,
which right or equity is hereby expressly waived and released by Pledgor.
Upon the request of the Agent, Pledgor shall assemble the Collateral and
make it available to the Agent at any place designated by the Agent that is
reasonably convenient to Pledgor and the Agent. Pledgor agrees that the
Agent shall not be obligated to give more than five days written notice of
the time and place of any public sale or of the time after which any
private sale may take place and that such notice shall constitute
reasonable notice of such matters. The Agent shall not be obligated to make
any sale of the Collateral regardless of notice of sale having been given.
The Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Pledgor shall be liable for all expenses of retaking, holding,
preparing for sale, or the like, and all attorneys' fees and other expenses
incurred by the Agent in connection with the collection of the Obligations
and the enforcement of the Agent's rights under this Agreement, all of
which expenses and fees shall constitute additional Obligations secured by
this Agreement. The Agent may apply the Collateral against the Obligations
in such order and manner as the Agent may elect in its sole discretion.
Pledgor shall remain liable for any deficiency if the proceeds of any sale
or disposition of the Collateral are insufficient to pay the Obligations.
Pledgor waives all rights of marshalling in respect of the Collateral.
(ii) The Agent may cause any or all of the Collateral held by it to
be transferred into the name of the Agent (if the Agent is not yet the
registered owner of the Collateral) or the name or names of the Agent's
nominee or nominees.
(iii) The Agent may collect or receive all money or property at any
time payable or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so.
(iv) The Agent shall have the right, but shall not be obligated to,
exercise or cause to be exercised all voting, consensual, and other powers
of ownership pertaining to the Collateral, including, without limitation,
all rights, titles and interests of Pledgor as limited partner of the
Partnership and Pledgor shall deliver to the Agent, if requested by the
Agent, irrevocable proxies with respect to the Collateral in form
satisfactory to the Agent.
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[NAC Holdings, Inc.]
(v) The Agent may notify or require Pledgor to notify parties
obligated under any accounts, instruments, contracts or agreements which
are part of the Collateral, including, without limitation, the Partnership
Agreement, to make payment directly to the Agent, and the Agent may take
possession of all proceeds of any such instruments and contracts in
Pledgor's possession. Any such payments or distributions received by
Pledgor after an Event of Default shall, until paid or delivered to the
Agent, be held by Pledgor in trust as additional security for the
Obligations.
(vi) Pledgor hereby acknowledges and confirms that the Agent may be
unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the Securities Act of 1933, as amended,
and applicable state securities laws and may be compelled to resort to one
or more private sales thereof to a restricted group of purchasers who will
be obligated to agree, among other things, to acquire any shares of the
Collateral for their own respective accounts for investment and not with a
view to distribution or resale thereof. Pledgor further acknowledges and
confirms that any such private sale may result in prices or 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, and the
Agent shall be under no obligation to take any steps in order to permit the
Collateral to be sold at a public sale. The Agent shall be under no
obligation to delay a sale of any of the Collateral for any period of time
necessary to permit any issuer thereof to register such Collateral for
public sale under the Securities Act of 1933, as amended, or under
applicable state securities laws.
(vii) On any sale of the Collateral, the Agent is hereby authorized
to comply with any limitation or restriction with which compliance is
necessary, in the view of the Agent's counsel, in order to avoid any
violation of applicable law or in order to obtain any required approval of
the purchaser or purchasers by any applicable governmental authority.
(viii) The Agent may subrogate to all of Pledgor's interests, rights,
and remedies with respect to any of the Collateral.
ARTICLE VI
Miscellaneous
-------------
Section 6.1. Expenses. The Pledgor hereby agrees to pay on demand: (a)
--------
all reasonable costs and out-of-pocket expenses of the Agent in connection with
the preparation, negotiation, execution, and delivery of this Agreement and the
other Loan Documents and any and all amendments, modifications, renewals,
extensions, and supplements thereof and thereto, including, without limitation,
the reasonable fees and expenses of legal counsel for the Agent, (b) all costs
and out-of-pocket expenses of the Agent, the Co-Agents and the Banks, or any of
them in connection with any Default and the enforcement of this Agreement or any
other Loan Document, including,
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[NAC Holdings, Inc.]
without limitation, the reasonable fees and expenses of legal counsel for the
Agent, the Co-Agents and the Banks, or any of them, (c) all transfer, stamp,
documentary, or other similar taxes, assessments, or charges levied by any
Governmental Authority in respect of this Agreement or any of the other Loan
Documents, (d) all reasonable costs, out-of-pocket expenses, assessments, and
other charges incurred in connection with any filing, registration, recording,
or perfection of any security interest or Lien contemplated by this Agreement or
any other Loan Document, and (e) all other reasonable costs and out-of-pocket
expenses incurred by the Agent in connection with this Agreement or any other
Loan Document, including, without limitation, all fees, costs, out-of-pocket
expenses, and other charges incurred in connection with performing or obtaining
any audit or appraisal in respect of the Collateral.
Section 6.2. INDEMNIFICATION. THE PLEDGOR HEREBY AGREES TO INDEMNIFY THE
---------------
AGENT AND EACH BANK AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, ATTORNEYS, AGENTS, AND PARTICIPANTS FROM, AND HOLD EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, INTEREST, EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES), AND AMOUNTS PAID IN SETTLEMENT TO WHICH ANY OF THEM
MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE
NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF
ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS, (C) ANY BREACH BY THE BORROWER OR THE PLEDGOR OF ANY REPRESENTATION,
WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS,
(D) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF
ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE
PROPERTIES OR ASSETS OF THE BORROWER, THE PLEDGOR OR ANY SUBSIDIARY, (E) THE USE
OR PROPOSED USE OF ANY LETTER OF CREDIT, (F) ANY AND ALL TAXES, LEVIES,
DEDUCTIONS, AND CHARGES IMPOSED ON THE AGENT OR ANY BANK OR ANY OF THEIR
RESPECTIVE CORRESPONDENTS IN RESPECT OF ANY LETTER OF CREDIT, OR (G) ANY
INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION,
ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, RELATING TO ANY
OF THE FOREGOING; PROVIDED, HOWEVER, THAT NO PERSON TO BE INDEMNIFIED HEREUNDER
-------- -------
SHALL HAVE THE RIGHT TO BE INDEMNIFIED FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER
LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH
PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD
HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, DISBURSEMENTS,
PLEDGE AGREEMENT - Page 13
[NAC Holdings, Inc.]
COSTS, AND EXPENSES (INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM
THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
Section 6.3. No Waiver; Cumulative Remedies. No failure on the part of
------------------------------
the Agent, any Co-Agent or any Bank to exercise and no delay in exercising, and
no course of dealing with respect to, any right, power, or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under this Agreement preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement are
cumulative and not exclusive of any rights and remedies provided by law.
Section 6.4. Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of Pledgor and the Agent and their respective
heirs, successors, and assigns, except that Pledgor may not assign any of its
rights or obligations under this Agreement without the prior written consent of
the Agent.
Section 6.5. AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER
---------------------------
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE
PARTIES HERETO. The provisions of this Agreement may be amended or waived only
by an instrument in writing signed by the parties hereto.
Section 6.6. Notices. All notices and other communications provided for
-------
in this Agreement shall be given or made in writing and telecopied, mailed by
certified mail return receipt requested, or delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof; or, as to any party at such other address as shall be designated by such
party in a notice to the other party given in accordance with this Section.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopy, subject to
telephone confirmation of receipt, or when personally delivered or, in the case
of a mailed notice, when duly deposited in the mails, in each case given or
addressed as aforesaid.
Section 6.7. GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
----------------------------------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT
HAS BEEN ENTERED INTO IN DALLAS COUNTY, TEXAS, AND IT SHALL BE PERFORMABLE FOR
ALL PURPOSES IN DALLAS COUNTY, TEXAS.
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[NAC Holdings, Inc.]
Section 6.8. Headings. The headings, captions, and arrangements used in
--------
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 6.9. Survival. All representations and warranties made in this
--------
Agreement shall survive the execution and delivery of this Agreement, and no
investigation by the Agent or any Bank shall affect the representations and
warranties of Pledgor herein or the right of the Agent or any Bank to rely upon
them.
Section 6.10. Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 6.11. Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 6.12. Construction. Pledgor and the Agent acknowledge that each
------------
of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by Pledgor and the
Agent.
Section 6.13. Termination. If all of the Obligations shall have been paid
-----------
and performed in full and all Commitments shall have expired or terminated, the
Agent shall, upon the written request of Pledgor, execute and deliver to Pledgor
a proper instrument or instruments acknowledging the release and termination of
the security interests created by this Agreement, and shall duly assign and
deliver to Pledgor (without recourse and without any representation or warranty)
such of the Collateral as may be in the possession of the Agent and has not
previously been sold or otherwise applied pursuant to this Agreement. The Agent
shall also return to the Pledgor all documents, including certificates,
instruments of transfer and contract notes in relation to the Collateral.
Section 6.14. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
--------------------
APPLICABLE LAW, PLEDGOR HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
CREDIT AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF THE AGENT, ANY CO-AGENT OR ANY
BANK IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
PLEDGE AGREEMENT - Page 15
[NAC Holdings, Inc.]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first written above.
PLEDGOR:
-------
NAC HOLDINGS, INC., a Nevada corporation
By: /s/ XXXXXX XXXXXXXXX
------------------------------------
Xxxxxx Xxxxxxxxx
President
Address for Notices:
0000 Xxxxxxxxx Xxx
Xxxx, Xxxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Secretary
AGENT:
-----
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION (formerly known as Texas
Commerce Bank National Association), as Agent
By: /s/ XXXXX X. XXXX
-----------------------------------------
Xxxxx X. Xxxx
Vice President
Address for Notices:
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxx
PLEDGE AGREEMENT - Page 16
[NAC Holdings, Inc.]
