EXECUTION COPY
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (together with all amendments, supplements and other
modifications made from time to time, this "PLEDGE AGREEMENT"), dated as of
October 18, 1996, made by SYMANTEC CORPORATION, a Delaware corporation (the
"PLEDGOR"), in favor of SUMITOMO BANK, LIMITED, SAN XXXXXXXXX XXXXXX, as Agent
for the benefit of the Lenders (the "AGENT"), and Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, as collateral agent (the "COLLATERAL AGENT").
W I T N E S S E T H:
WHEREAS, as a condition to the occurrence of the Documentation Date under
the Participation Agreement dated as of the date hereof (together with all
amendments and other modifications, if any, from time to time thereafter made
thereto, the "PARTICIPATION AGREEMENT"), among the Pledgor, the Lessor, the
Lenders and the Agent, the Pledgor is required to execute and deliver this
Pledge Agreement;
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, it is in the best interests of the Pledgor to execute this Pledge
Agreement inasmuch as the Pledgor will derive substantial benefits from the
transactions contemplated by the Participation Agreement;
NOW, THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION I.1 CERTAIN TERMS. Capitalized terms used but not otherwise
defined in this Pledge Agreement have the respective meanings specified in
APPENDIX A hereto; and the rules of interpretation set forth in APPENDIX A
hereto shall apply to this Pledge Agreement.
ARTICLE II
PLEDGE
SECTION II.1 GRANT OF SECURITY INTEREST. The Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and
transfers to the Agent, for the ratable benefit of each of
the Lenders, and hereby grants to the Agent, for the ratable
benefit of the Lenders, a continuing security interest in,
all of its right, title and interest in, to and under the
following property (the "COLLATERAL"):
(a) all Additional Collateral identified in SCHEDULE I;
(b) all other Pledged Property, whether now or hereafter delivered to
the Collateral Agent in connection with this Pledge Agreement or any other
Operative Document;
(c) all interest and other payments and rights with respect to any
Pledged Property; and
(d) all proceeds of any of the foregoing.
SECTION II.2 SECURITY FOR OBLIGATIONS. The security interest granted by
the Pledgor under this Pledge Agreement secures the payment in full of all the
Pledgor's obligations under the Master Lease and other Operative Documents to
which it is a party now or hereafter existing.
SECTION II.3 DELIVERY OF PLEDGED PROPERTY. All
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certificates or instruments representing or evidencing any Collateral, shall be
delivered to and held by or on behalf of the Collateral Agent pursuant hereto,
shall be in suitable form for transfer by delivery, and shall be accompanied by
all necessary instruments of transfer or assignment, duly executed in blank, all
in form and substance satisfactory to the Agent.
SECTION II.4 VALUATION; DEFICIENCY OR SURPLUS.
(a) The Collateral Agent shall determine the fair market value of the
Additional Collateral held as Collateral daily during the Term in
accordance with its customary practices and procedures with respect to
similar property. Each such valuation by the Collateral Agent shall be
binding on the Participants, the Agent and the Lessee, absent manifest
error. In the event that any such valuation shall indicate that such fair
market value of the Collateral shall be less than 102.0% of the then
outstanding Loan Balance, the Collateral Agent shall give written notice to
each of the Agent, the Lessee and the Lessor of such deficiency.
(b) In the event that any deficiency in the fair market value of the
Additional Collateral shall occur as set forth in SECTION 2.4(a) and
Section 6.1 of the Participation Agreement, the Pledgor shall take such
actions required pursuant to Section 6.1 of the Participation Agreement.
In the event that any surplus in the fair market value of the Collateral
shall occur as set forth in Section 6.1 of the Participation Agreement, the
Agent shall direct in writing the Collateral Agent to take such actions
contemplated by Section 6.1 of the Participation Agreement.
SECTION II.5 CONTINUING SECURITY INTEREST. This Pledge Agreement shall
create a continuing security interest in the Collateral and shall
(a) remain in full force and effect until payment in full of all
Lessor Obligations,
(b) be binding upon the Pledgor and its successors,
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transferees and assigns, and
(c) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of each Lender.
Upon the payment in full of all Lessor Obligations, the security interest
granted herein shall terminate and all rights to the Collateral shall revert to
the Pledgor. Upon any such termination, the Collateral Agent will, at the sole
expense of the Pledgor, and upon written instruction of the Agent, deliver to
the Pledgor, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all
Additional Collateral owned by the Pledgor, together with all other Collateral
held by the Collateral Agent hereunder and execute and deliver to the Pledgor
such documents as the Pledgor shall reasonably request to evidence such
termination.
SECTION II.6 SECURITY INTEREST ABSOLUTE. All rights of the Agent and the
security interests granted to the Agent hereunder, and all obligations of the
Pledgor hereunder, shall be absolute and unconditional, irrespective of
(a) any lack of validity or enforceability of the Pledge Agreement or
any other Operative Document,
(b) the failure of any Lender to assert any claim or demand or to
enforce any right or remedy against Lessee, the Lessor or any other Person
under the provisions of any Operative Document or otherwise, or
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of obligations the Lessor Obligations or any
other extension, compromise or renewal of any Lessor Obligation,
(d) any reduction, limitation, impairment or termination of any
Lessor Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and
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the Pledgor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, the Lessor
or otherwise,
(e) any amendment to, rescission, waiver, or other modification of,
or any consent to departure from, any of the terms of the any Operative
Document,
(f) any addition, exchange, release, surrender or non-perfection of
any collateral (including the Collateral), or any amendment to or waiver or
release of or addition to or consent to departure from any guaranty, for
any of the Lessor Obligations, or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Lessee, the
Lessor or any other Person.
SECTION II.7 WAIVER OF SUBROGATION. The Pledgor hereby irrevocably waives
any claim or other rights which it may now or hereafter acquire against the
Lessee, the Lessor or any other Person that arise from the existence, payment,
performance or enforcement of the Pledgor's obligations under this Pledge
Agreement or any other Operative Document, including any right of subrogation,
reimbursement, exoneration, or indemnification, any right to participate in any
claim or remedy of the Lenders against the Lessee, the Lessor or any other
Person or any collateral which the Agent now has or hereafter acquires, whether
or not such claim, remedy or right arises in equity, or under contract, statute
or common law, including the right to take or receive from the Lessee, the
Lessor or any other Person, directly or indirectly, in cash or other property or
by set-off or in any manner, payment or security on account of such claim or
other rights. If any amount shall be paid to the Pledgor in violation of the
preceding sentence and the Lessor Obligations shall not have been paid in cash
in full, such amount shall be deemed to have been paid to the Pledgor for the
benefit of, and held in
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trust for, the Lenders, and shall forthwith be paid to the Lenders to be
credited and applied upon the Lessor Obligations, whether matured or unmatured.
The Pledgor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Pledge Agreement and that the
waiver set forth in this Section is knowingly made in contemplation of such
benefits.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION III.1 WARRANTIES, ETC. The Pledgor represents and warrants for
itself unto the Agent and each Lender, as at the date of each pledge and
delivery hereunder by the Pledgor to the Collateral Agent of any Collateral
pledged by the Pledgor pursuant to this Pledge Agreement as follows:
(a) OWNERSHIP, NO LIENS, ETC. The Pledgor is the legal and
beneficial owner of, and has good and valid title to (and has full right
and authority to pledge and assign) the Collateral, free and clear of all
Liens, security interests, options, or other charges or encumbrances,
except any Lien or security interest granted pursuant hereto in favor of
the Agent.
(b) VALID SECURITY INTEREST. The delivery of the Collateral to the
Collateral Agent is effective to create a valid, perfected, first priority
security interest in such Collateral and all proceeds thereof, securing the
Lessor Obligations. No filing or other action will be necessary to perfect
or protect such security interest.
(c) AUTHORIZATION, APPROVAL, ETC. No authorization, approval, or
other action by, and no notice to or filing with, any governmental
authority, regulatory body or any other Person is required either
(i) for the pledge by the Pledgor of any
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Collateral pursuant to this Pledge Agreement or for the execution,
delivery, and performance of this Pledge Agreement by the Pledgor, or
(ii) for the exercise by the Agent of any of the rights provided
for in this Pledge Agreement, or, except as may be required in
connection with a disposition of Additional Collateral by laws
affecting the offering and sale of securities generally, the remedies
in respect of the Collateral pursuant to this Pledge Agreement.
ARTICLE IV
COVENANTS
SECTION IV.1 CERTAIN COVENANTS. The Pledgor covenants and agrees that, so
long as any portion of the Lessor Obligations shall remain unpaid:
(a) except as permitted by the Operative Documents, it will not sell,
assign, transfer, pledge, or encumber in any other manner the Collateral
owned by it (except in favor of the Agent hereunder);
(b) the Pledgor will warrant and defend the right and title herein
granted unto the Agent in and to the Collateral (and all right, title, and
interest represented by the Collateral) against the claims and demands of
all Persons whomsoever;
(c) at any time, and from time to time, at the expense of the
Pledgor, the Pledgor will promptly execute and deliver all further
instruments, and take all further action, that may be necessary or
desirable, or that the Agent may reasonably request, in order to perfect
and protect any security interest granted or purported to be granted hereby
or to enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to
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any Collateral.
ARTICLE V
THE AGENT
SECTION V.1 AGENT APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time upon the occurrence and during the continuance
of any Event of Default, to take any action and to execute any instrument which
the Agent may deem necessary or advisable to accomplish the purposes of this
Pledge Agreement, including without limitation:
(a) to ask, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with CLAUSE (a) above; and
(c) to file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Agent with respect to any of the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION V.2 AGENT MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by the Pledgor pursuant to SECTION 6.5.
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SECTION V.3 NO DUTY. (a) The powers conferred on the Agent and Collateral
Agent hereunder are solely to protect the interests of the Lenders in the
Collateral and shall not impose any duty on them to exercise any such powers.
Except (i) as set forth in SECTION 2.4, and (ii) for reasonable care of any
Collateral in its possession by the Collateral Agent and the accounting by the
Collateral Agent or the Agent for moneys actually received by it hereunder,
neither the Agent nor the Collateral Agent shall have any duty as to any
Collateral or responsibility for
(i) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Property, whether or not the Agent or the Collateral Agent has or is deemed
to have knowledge of such matters, or
(ii) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
(b) Notwithstanding anything to the contrary, the Collateral Agent shall
have no duties, obligations or responsibilities except as expressly set forth in
this Agreement or as may be directed in writing by the Agent. The Collateral
Agent shall have no liability whatsoever for any action taken or omitted by it
or in connection herewith (including by direction, whether oral or written, of
the Agent) unless caused by its gross negligence or willful misconduct. The
Collateral Agent shall have no fiduciary duty, obligation or responsibility in
respect of any party hereto or any indirect beneficiary of this Agreement or the
Collateral.
SECTION V.4 REASONABLE CARE. The Collateral Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; PROVIDED, HOWEVER, the Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as the Pledgor reasonably
requests in writing at times other than
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upon the occurrence and during the continuance of any Event of Default, but
failure of the Collateral Agent to comply with any such request at any time
shall not in itself be used as a factor in determining whether the Collateral
Agent has exercised reasonable care.
ARTICLE VI
REMEDIES
SECTION VI.1 CERTAIN REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in addition
to other rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party on default under the
U.C.C. (whether or not the U.C.C. applies to the affected Collateral) and
also may, without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any
of the Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Agent may deem commercially
reasonable. The Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten days' prior notice to the Pledgor of the time
and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of 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.
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(b) The Agent may
(i) transfer all or any part of the Collateral into the name of
the Agent or its nominee, with or without disclosing that such
Collateral is subject to the lien and security interest hereunder,
(ii) notify the parties obligated on any of the Collateral to
make payment to the Agent of any amount due or to become due
thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any party
with respect thereto,
(iv) endorse any checks, drafts, or other writings in the
Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
SECTION VI.2 SECURITIES LAWS. If the Agent shall exercise its right to
sell all or any of the Collateral on behalf of the Lenders pursuant to SECTION
6.1, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at
its own expense do or cause to be done all such acts and things as may be
necessary to make such sale of the Collateral owned by the Pledgor or any part
thereof valid and binding and in compliance with applicable law.
SECTION VI.3 COMPLIANCE WITH RESTRICTIONS. The Pledgor agrees that in any
sale of any of the Collateral owned by the
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Pledgor whenever an Event of Default shall have occurred and be continuing, the
Agent is hereby authorized to comply with any limitation or restriction in
connection with such sale as it may be advised by counsel is necessary in order
to avoid any violation of applicable law (including compliance with such
procedures as may restrict the number of prospective bidders and purchasers,
require that such prospective bidders and purchasers have certain
qualifications, and restrict such prospective bidders and purchasers to persons
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such
Collateral), or in order to obtain any required approval of the sale or of the
purchaser by any governmental regulatory authority or official, and the Pledgor
further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Agent be liable nor accountable to the Pledgor for any discount
allowed by the reason of the fact that such Collateral is sold in compliance
with any such limitation or restriction.
SECTION VI.4 APPLICATION OF PROCEEDS. All cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization upon, all
or any part of the Collateral may, in the discretion of the Agent and the
Lessor, be held by the Agent as additional collateral security for, or then or
at any time thereafter be applied in whole or in part by the Agent against, all
or any part of the Lessor Obligations PRO RATA in such order as determined
pursuant to Section 7.6 of the Participation Agreement. Any surplus of such
cash or cash proceeds held by the Agent and remaining after payment in full of
all the Lessor Obligations, shall be paid over to the Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
SECTION VI.5 INDEMNITY AND EXPENSES. The Pledgor hereby jointly and
severally indemnifies and holds harmless each of the Agent and the Collateral
Agent from and against any and all claims, losses, and liabilities arising out
of or resulting from this Pledge Agreement (including enforcement of this Pledge
Agreement), except the claims, losses, or liabilities of the Agent resulting
from the Agent's gross negligence or wilful misconduct, and except the claims,
losses or liabilities of the Collateral Agent, resulting from the Collateral
Agent's gross negligence or willful
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misconduct, as the case may be. Upon demand, the Pledgor will pay to the Agent
or the Collateral Agent, as the case may be, the amount of any and all
reasonable expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, which the Agent or the Collateral Agent,
as the case may be, may incur in connection with:
(a) the administration of this Pledge Agreement, including the
valuations of Additional Collateral pursuant to SECTION 2.4;
(b) the custody, preservation, use, or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral,
including pursuant to SECTION 7.3;
(c) the exercise or enforcement of any of the rights of the Agent or
Collateral Agent hereunder; or
(d) the failure by the Pledgor to perform or observe any of the
provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION VII.1 OPERATIVE DOCUMENT. This Pledge Agreement is an Operative
Document executed pursuant to the Participation Agreement and shall (unless
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions of the Participation Agreement, including, without
limitation, Article XIV thereof.
SECTION VII.2 SUCCESSORS, TRANSFEREES AND ASSIGNS. This Pledge Agreement
shall be binding upon the Pledgor and its successors, transferees and assigns
and shall inure to the benefit of and be enforceable by each the Agent, each
Lender and
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each holder of a Note and their respective successors and assigns); PROVIDED,
HOWEVER, that the Pledgor may not assign any of its obligations hereunder
without the prior written consent of the Required Lenders.
SECTION VII.3 AMENDMENTS, ETC. No amendment to or waiver of any provision
of this Pledge Agreement, nor consent to any departure by the Pledgor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION VII.4 PROTECTION OF COLLATERAL. The Agent may from time to time,
at its option, perform any act which the Pledgor agrees hereunder to perform and
which the Pledgor shall fail to perform after being requested in writing so to
perform (it being understood that no such request need be given after the
occurrence and during the continuance of an Event of Default) and the Agent may
from time to time take any other action which the Agent reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.
SECTION VII.5 ADDRESSES FOR NOTICES TO THE PLEDGOR. All notices, demands,
requests, consents, approvals and other communications hereunder shall be in
writing (including by facsimile) and directed to the address or facsimile number
described in, and deemed received in accordance with the provisions of, Section
14.3 of the Participation Agreement.
SECTION VII.6 NO WAIVER; REMEDIES. In addition to, and not in limitation
of, SECTION 2.2 and SECTION 2.4, no failure on the part of the Agent, any Lender
or any holder of a Note to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
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SECTION VII.7 SECTION CAPTIONS. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION VII.8 SEVERABILITY. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
SECTION VII.9 GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA.
SECTION VII.10 WAIVER OF JURY TRIAL. THE PLEDGOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS PLEDGE AGREEMENT. THE PLEDGOR ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS ENTERING INTO THE
LOAN AGREEMENT AND THE PARTICIPATION AGREEMENT.
SECTION VII.11 EXECUTION IN COUNTERPARTS. This Pledge Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
SYMANTEC CORPORATION,
as Pledgor
By
-------------------------
Name:
Title:
SUMITOMO BANK, LIMITED, SAN
XXXXXXXXX XXXXXX, as Agent
By
-------------------------
Name:
Title:
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION, as
Collateral Agent
By
-------------------------
Name:
Title:
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SCHEDULE I
TO PLEDGE AGREEMENT
LIST OF ADDITIONAL COLLATERAL
