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Exhibit 10.5
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT, dated as of December 14, 1998 (this
"Agreement"), is made by FORE SYSTEMS HOLDING CORPORATION, a Delaware
corporation (the "Pledgor"), MELLON BANK, N.A., as Construction Lender and
Collateral Agent, and MELLON FINANCIAL SERVICE CORPORATION #4, as Certificate
Purchaser (each a "Pledgee" and collectively, the "Pledgees"), and MELLON BANK,
N.A., as securities intermediary for the Collateral Account (in such capacity,
the "Securities Intermediary").
W I T N E S S E T H:
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WHEREAS, pursuant to the Participation Agreement dated as of the date
hereof, among the Pledgor, the Construction Lender, the Certificate Purchaser
and Wilmington Trust Company, not in its individual capacity, but solely as
Certificate Trustee of Brush Creek Business Trust II, the Participants have
agreed to finance the development of certain Improvements on the Land to be used
by the Pledgor;
WHEREAS, the Construction Lender and the Certificate Trustee have
entered into the Construction Loan Agreement dated as of the date hereof,
pursuant to which the Construction Lender has agreed to make Construction Loans
to the Certificate Trustee, to be evidenced by the Note, to provide a portion of
the funds to pay the Property Improvements Costs, Transactions Costs, accrued
interest and Certificate Yield during construction;
WHEREAS, the Certificate Purchaser has purchased the Certificate,
pursuant to the Trust Agreement dated as of the date hereof, the proceeds of
which will provide a portion of the funds to pay the Property Improvements
Costs, Transaction Costs, accrued interest and Certificate Yield during
construction;
WHEREAS, the principal amount of the loans outstanding as evidenced by
the Note is expected to be refinanced by the Tranche A Loans and the Tranche B
Loans;
WHEREAS, pursuant to the terms of the Participation Agreement, the
Pledgor has agreed to satisfy the Collateral Requirement; and
WHEREAS, the Pledgor acknowledges and agrees that it will derive
substantial benefits from the execution and delivery of the Participation
Agreement, the Operative Documents, the Refinancing Loan Documents, and the
transactions contemplated thereunder, and has executed and delivered to the
Pledgees the Guaranty Agreement dated as of the date hereof, pursuant to which
Pledgor has guaranteed the full and punctual payment of the Obligations;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the Pledgor, the Pledgees, and the Securities
Intermediary, intending to be legally bound, hereby agree as follows:
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ARTICLE 1
DEFINITIONS
SECTION 1.1 Certain Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Additional Pledged Property" is defined in clause (a) of Section 6.1.
"Agreement" is defined in the preamble.
"Authorized Signatory" means, relative to any Person, each of its
officers or any attorney-in-fact of any such officer authorized to deliver
certificates, requests or communications or otherwise act on behalf of such
Person pursuant to an appropriate power of attorney (in form and substance
satisfactory to the Pledgees and the Collateral Agent and certified copies of
which shall have been delivered to the Pledgees, the Securities Intermediary and
the Lenders) granted to such Person.
"Collateral Agent" means Mellon Bank, N.A. in its capacity as
collateral agent for Pledgees pursuant to Section 3.3.
"Collateral Account" is defined in Section 3.1.
"Collateral Value" shall mean 90% of the Fair Market Value of the
Marketable Collateral.
"Collateral Value Notice" is defined in Section 3.2(b).
"Control Agreement" means any agreement establishing or providing
control (as defined in the UCC) in or to any Person with respect to the Pledged
Property.
"Distributions" is defined in clause (b) of Section 5.4.
"Fair Market Value" shall mean in the case of cash, the amount of such
cash, and otherwise, the market value of the applicable Marketable Collateral as
determined by reference to market quotes at the opening of business provided on
the date of valuation by Bloomberg Financial Market Service, or if such rate is
unavailable, by Interactive Data Services Inc., Telerate, Reuters and/or any
major daily financial publication such as The Wall Street Journal or The New
York Times.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"Margin Loans" means all borrowings used to fund the purchase of Margin
Stock, including, without limitation, money borrowed pursuant to the Operative
Documents.
"Margin Stock" shall have the meaning specified for such term in
Regulation U of the F.R.S. Board as from time to time in effect.
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"Pledge" means the pledge of the Pledged Property to Pledgees as
security for the Obligations.
"Pledged Property" is defined in Section 2.1.
"Pledgee" and "Pledgees" are defined in the preamble.
"Pledgor" is defined in the preamble.
"Substituted Pledged Property" is defined in clause (a) of Section 6.1.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the Commonwealth of Pennsylvania.
SECTION 1.2 Participation Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided in the
Participation Agreement, and the rules of interpretation set forth therein shall
apply to this Agreement.
SECTION 1.3 UCC Definitions. Unless otherwise defined herein, in the
Participation Agreement or the context otherwise requires, terms for which
meanings are provided in the UCC are used in this Agreement, including its
preamble and recitals, with such meanings.
ARTICLE 2
PLEDGE
SECTION 2.1 Initial Grant of Security Interest. As collateral security
for the prompt payment in full when due (whether at stated maturity, by
acceleration or mandatory prepayment or otherwise) of the Obligations and all
other obligations of the Lessee, the Construction Agent or any Guarantor under
the Operative Documents, the Pledgor hereby pledges, hypothecates, assigns,
charges, mortgages, delivers, grants and transfers to each Pledgee, for its
benefit, a continuing security interest in and to all of the Pledgor's right,
title and interest in and to the following property whether now owned by the
Pledgor or hereafter acquired and whether now existing or hereafter coming into
existence, and wherever located (all being collectively referred to herein as
"Pledged Property"):
(a) the Collateral Account, together with all cash, Marketable
Collateral and other property from time to time credited to or on
deposit in the Collateral Account;
(b) any and all property received in exchange or substitution
for any such cash, Marketable Collateral or other property;
(c) all moneys or property representing principal of or
interest on any of the foregoing, or representing a dividend on or
other distribution in respect of any of the foregoing, or resulting
from reclassification or other like change of any of the foregoing or
otherwise received in exchange
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therefor, and any subscription, warrants, rights or options issued to
the holders of, or otherwise in respect of, any of the foregoing;
(d) such other property of Pledgor as may be delivered to
Collateral Agent as collateral hereunder and is described in a
Specification of Additional Collateral in the form of Annex I hereto
that has been executed by Pledgor;
(e) any and all corrections or amendments to, or renewals,
extensions or ratifications of, or replacements or substitutions for,
any of the foregoing, or any instrument relating thereto, and all
accounts, contracts, contract rights, general intangibles and nominee
agreements, covering, relating to, or arising from or in connection
with, any of the foregoing, and all other things incident thereto
(including, without limitation, any and all liens, lien rights,
security interests and other rights and interests) which the Pledgor
might at any time have or be entitled to with respect to the foregoing;
and
(f) all proceeds of any of the property of the Pledgor
described in clauses (a) through (e) above (including any proceeds of
insurance thereon).
SECTION 2.2 Security for Obligations. This Agreement secures the
payment in full of all the Obligations and all other obligations of the Lessee,
the Construction Agent or any Guarantor under the Operative Documents and all
obligations of each Guarantor now or hereafter existing under the Guaranty, the
Guaranty Agreement, the Participation Agreement, the Notes and each other
Operative Document to which such Guarantor is or may become a party, whether for
principal, interest, Rent, costs, fees, expenses, penalties or otherwise.
SECTION 2.3 Continuing Security Interest. This Agreement shall create a
continuing security interest in the Pledged Property and shall
(a) remain in full force and effect until the termination of
the Pledge contemplated by Section 7.14 hereof,
(b) be binding upon the Pledgor and its successors,
transferees and assigns, and
(c) inure, together with the rights and remedies of the
Pledgees, to the benefit of each Pledgee and their respective
successors, transferees and assigns.
Upon the termination of the Pledge, the security interest and security
entitlement granted herein shall terminate and all rights to the Pledged
Property shall revert to the Pledgor in accordance with the terms of Section
7.14.
SECTION 2.4 Transfers to Collateral Account. Pledgor shall:
(a) transfer all property that is to constitute a part of the
Pledged Property to the Securities Intermediary for credit to the
Collateral Account or, in the case of any such property that is already
maintained in another account of Pledgor with the Securities
Intermediary, instruct the Securities Intermediary to transfer such
property into the Collateral Account;
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(b) give, execute, deliver, file and record any notice,
instrument, document, agreement, Control Agreement or other papers that
may be necessary or desirable in the reasonable judgment of the
Collateral Agent to create, perfect, preserve and validate the security
interest in the Pledged Property created hereunder, and to enable the
Collateral Agent to exercise and enforce its rights hereunder with
respect to such security interest.
(c) keep full and accurate books and records relating to the
Pledged Property, and stamp or otherwise xxxx such books and records in
such manner as the Collateral Agent may reasonably require in order to
reflect the security interests granted by this Agreement;
(d) permit representatives of the Collateral Agent, upon
reasonable notice and at any time during normal business hours, to
inspect and make abstracts from the Pledgor's books and records
pertaining to the Pledged Property, and forward copies of any notices
or communications received by the Pledgor with respect to the Pledged
Property all in such manner as the Collateral Agent may reasonably
require; and
(e) upon the reasonable request of the Collateral Agent,
deliver to Collateral Agent, at the expense of the Pledgor, opinions of
local counsel, in form and substance satisfactory to the Collateral
Agent and its respective counsel, as to the perfection of the
Collateral Agent's security interest in any of the Pledged Property
contemplated by this Agreement and as to the protection of the
Collateral Agent with respect to adverse claims relating to the Pledged
Property.
ARTICLE 3
COLLATERAL REQUIREMENT
SECTION 3.1 Establishment of Collateral Account; Control.
(a) Concurrently herewith the Pledgor has established at the
branch of the Securities Intermediary located at Xxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, a collateral account designated
on the records of the Securities Intermediary as "Fore Systems Holding
Corporation Collateral Account, Mellon Bank, N.A., as Agent for the
Pledgees", account number S-038218-W (herein, together with any
substitution therefor, the "Collateral Account"). The Collateral
Account shall be segregated from any and all other accounts or other
property of the Pledgor. The Securities Intermediary acknowledges and
agrees that it has established the Collateral Account and that the
Collateral Account constitutes a securities account for purposes of
Article 8 of the UCC. The Securities Intermediary further agrees to
treat all assets credited to the Collateral Account, including without
limitation, any and all cash (whether in the form of money or credit
balances) and Marketable Collateral, as financial assets for purposes
of Article 8 of the UCC. For the avoidance of doubt, the parties agree
that the Collateral Account shall be governed by the laws of the
Commonwealth of Pennsylvania, which shall be the Securities
Intermediary's jurisdiction for purposes of the UCC.
(b) For the purpose of providing control over the Collateral
Account to the Pledgees, the Securities Intermediary hereby agrees as
follows:
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(i) the Securities Intermediary will comply with
entitlement orders originated by either of the Pledgees
(including Mellon Bank, N.A. acting either as Construction
Lender or as Collateral Agent) with respect to the Collateral
Account without further consent from the Pledgor.
(ii) Without limitation of the obligation of the
Securities Intermediary to accept entitlement orders
originated by a Pledgee pursuant to Section 3.1(b)(i), each
Pledgee agrees with and for the sole benefit of the Pledgor
that the Collateral Agent will not originate any entitlement
orders with respect to the Collateral Account except as
permitted under Sections 5.6 and 6.1.
(iii) Notwithstanding the foregoing, the Pledgor
shall be entitled to originate entitlement orders with respect
to the Collateral Account to the extent permitted under
Sections 3.2(d), 3.5 and 6.1.
(iv) The Securities Intermediary will not enter into
a Control Agreement with any party other than the Pledgees
without the prior written consent of the Pledgor and the
Pledgees.
(c) The Pledgor shall deliver with any certificated or
uncertificated securities delivered to the Securities Intermediary for
credit to the Collateral Account, all appropriate undated bond powers,
duly executed or indorsed to the Securities Intermediary or in blank
and any and all other forms related to transfer requested by the
Collateral Agent, completed or executed so as to make such transfer
valid under applicable law and the rules of any securities exchange
or otherwise.
(d) The Pledgor and each Pledgee agree to do or take all
actions (or omit from taking actions) in order to make all transfers
contemplated hereby valid under applicable law and the rules of any
securities exchange or otherwise.
(e) To the extent that any financial assets relating to the
Pledged Property constitute certificated securities, the Securities
Intermediary shall retain physical possession of the certificates or
instruments representing or evidencing such Marketable Collateral or
shall have such financial assets credited to the Securities
Intermediary's account at The Depository Trust Company ("DTC"). To the
extent that any such financial assets constitute uncertificated
securities, the Securities Intermediary shall cause such financial
assets to be (i) credited to the account of Securities Intermediary or
its nominee at DTC or, if appropriate, the Federal Reserve Bank of New
York; or (ii) registered on the books of the issuer thereof in the name
of the Securities Intermediary. In addition, subject to Section 3.5
hereof, the Securities Intermediary shall at all times have the right
to exchange certificates or instruments representing or evidencing
financial assets relating to Marketable Collateral for certificates or
instruments in smaller or larger denominations for any purpose
consistent with its performance of this Agreement; provided that the
aggregate principal amount of the certificates or instruments received
upon such an exchange shall not be less than the aggregate principal
amount of the certificates or instruments tendered for exchange.
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SECTION 3.2 Maintenance of Marketable Collateral.
(a) The Pledgor at all times shall maintain during the Term
Marketable Collateral in the Collateral Account in an amount (the
"Collateral Requirement") having a Collateral Value equal to or greater
than (i) beginning on the Initial Advance Date and until the
Refinancing has occurred, 100 percent of the principal amount plus all
accrued interest with respect to the Construction Loans and (ii)
following the Refinancing, the sum of (A) 100 percent of the aggregate
principal amount of all Tranche A Loans plus any interest accrued
thereon and (B) (x) 50 percent of the aggregate principal amount of all
Tranche B Loans plus any accrued interest thereon, or (y) at all times
when Lessee has elected to refinance the Tranche A Loans pursuant to
Section 3.7(c) of the Participation Agreement, 100 percent of the
aggregate principal balance of all Tranche B Loans and Certificate
Amounts plus any yield and interest accrued thereon.
(b) On the first Business Day of each calendar month during
the Term, the Securities Intermediary shall determine the aggregate
Collateral Value of the Marketable Collateral in the Collateral
Account, and such determination shall be promptly furnished, in
writing, to the Pledgor and each Pledgee ("Collateral Value Notice").
(c) At any time when the Collateral Value Notice reveals there
is insufficient Marketable Collateral in the Collateral Account to
satisfy the Collateral Requirement, the Pledgor shall deposit, no later
than five (5) Business Days after receipt of the Collateral Value
Notice, additional Marketable Collateral in the Collateral Account to
the extent necessary to satisfy the Collateral Requirement.
(d) At any time when (i) the Collateral Value Notice reveals
there is excess Marketable Collateral in the Collateral Account to
satisfy the Collateral Requirement and (ii) no Default or Event of
Default has occurred or is continuing, the Pledgor may request by
written notice to the Pledgees, with a copy to the Securities
Intermediary, to release such excess Marketable Collateral to the
Pledgor or upon its order or the order of its designee, and the
Pledgees shall release and direct the Securities Intermediary to
release such excess Marketable Collateral to the Pledgor or upon its
order, provided, however, that no release of Marketable Collateral
pursuant to this Section 3.2(d) shall occur if such release will
violate the Collateral Requirement.
SECTION 3.3 Appointment of the Collateral Agent.
(a) The Pledgees hereby appoint the Collateral Agent as the
Pledgees' agent for the purpose of (i) obtaining and maintaining
control with respect to such Pledged Property; and (ii) taking any and
all actions necessary for the protection of the Pledgees' interests in
the Pledged Property, all in accordance with the provisions of this
Agreement. All Pledged Property shall be in the Collateral Account and
segregated from all other property, including, without limitation, that
of the Pledgor and the Pledgees. The Collateral Agent hereby accepts
such appointment.
(b) The Collateral Agent acknowledges receipt of this
Agreement, certifies that no notice of any other security agreement or
claim affecting the Pledged Property has been received by it, states
that the Pledged Property will be held in the Collateral Account for
the benefit of the Pledgees and agrees to hold the Pledged Property
solely for the benefit of the Pledgees and subject to the control of
the Pledgees, as provided in this Agreement. The Collateral Agent
agrees to exercise the same degree of care as exercised by banks
generally for similar property in exercising
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its duties under this Agreement. The duties of the Collateral Agent
under this Agreement shall only be those set forth in this Agreement.
SECTION 3.4 Consent of Pledgor. The Pledgor hereby consents to allow
the appointment by the Pledgees of the Collateral Agent, as contemplated by this
Article III, waives any defenses or objections to such transfer given to the
Pledgor in any agreement, including without limitation any of the terms in the
Operative Documents, and shall not challenge, or permit any of its Subsidiaries
to challenge the transfer of the security interests in the Pledged Property
contemplated by the Pledge. The Pledgor further agrees to take all actions and
give other aid reasonably required by the Collateral Agent in meeting the
Pledgor's obligations under this Agreement.
SECTION 3.5 Investment of Pledged Property. So long as no Event of
Default or Default shall have occurred and be continuing, the Securities
Intermediary shall honor entitlement orders or other instructions of Pledgor to
invest all moneys credited or on deposit from time to time (including moneys on
deposit upon the sale or maturity of securities) to or in the Collateral Account
in Marketable Collateral having an equal or greater Collateral Value than the
sold or matured security. Such investments, together with any interest or other
earnings resulting from such investments, shall be maintained in the Collateral
Account and shall be reinvested as provided in this paragraph. Neither the
Securities Intermediary, in the absence of gross negligence or willful
misconduct, nor the Pledgees, shall be liable or responsible for any loss
resulting from any such investments.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Pledgor Warranties, etc. The Pledgor hereby represents and
warrants to each Pledgee and the Collateral Agent, as at the date of each pledge
and delivery hereunder by the Pledgor of any Pledged Property, as follows:
(a) Ownership, No Liens, etc. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full
right and authority to pledge and assign), such Pledged Property, free
and clear of all liens, security interests, options, security
entitlements, Control Agreements or other charges or encumbrances,
except any lien or security interest granted pursuant hereto in favor
of the Pledgees.
(b) Valid Security Interest. The transfer of the Pledged
Property to the Collateral Account, as contemplated by this Agreement,
will be effective to create a valid, perfected, first- priority
security interest in such Pledged Property and all proceeds thereof in
favor of Collateral Agent on behalf of the Pledgees, subject to no
other liens, security interests, options, security entitlements,
Control Agreements or other charges or encumbrances, and such security
interest shall be maintained as such at all times during the Term. No
filing or other action will be necessary to perfect or protect such
security interests.
(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 Pledged
Property pursuant to this Agreement or for the execution,
delivery, and performance of this Agreement by the Pledgor, or
(ii) for the exercise by the Pledgees, or by the
Collateral Agent following its appointment as contemplated by
Article III of this Agreement, of the voting or other rights
provided for in this Agreement, or the remedies in respect of
the Pledged Property pursuant to this Agreement.
(d) Compliance with Laws. The Pledgor is in compliance with
the requirements of all applicable laws (including, without limitation,
the provisions of the Fair Labor Standards Act), rules, regulations and
orders of every governmental authority, the non-compliance with which
might materially adversely affect the business, properties, assets,
operations, condition (financial or otherwise) or prospects of the
Pledgor or the value of the Pledged Property or the worth of the
Pledged Property as Pledged Property security, or otherwise affect the
Pledge.
(e) Office of Pledgor. The Pledgor represents and warrants
that its place of business and chief executive office and the office
where it keeps its records concerning the Pledged Property is located
at 0000 XXXX Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
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ARTICLE 5
COVENANTS; REMEDIES
SECTION 5.1 Covenants. In furtherance of the pledge and grant of the
security interest pursuant to the terms hereof, the Pledgor hereby covenants and
agrees to perform its obligations under this Article V.
SECTION 5.2 Other Financing Statements and Liens. The Pledgor shall
not, without the prior written consent of the Collateral Agent, file or suffer
to be on file, or authorize or permit to be filed or to be on file, in any
jurisdiction, any financing statement, or file or authorize any like instrument,
with respect to the Pledged Property in which the Pledgees or the Collateral
Agent are not named as the sole secured parties. Without the prior written
consent of the Collateral Agent, the Pledgor shall not authorize, permit, or
enter into any Control Agreement granting any Person control of the Pledged
Property other than the Pledgees or the Collateral Agent.
SECTION 5.3 Preservation of Rights. The Collateral Agent shall not be
required to take steps necessary to preserve any rights against other parties
to any of the Pledged Property.
SECTION 5.4 Voting Rights and Distributions.
(a) So long as no Event of Default shall have occurred and be
continuing, the Pledgor shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the Pledged
Property; provided, that the Pledgor agrees that it will not vote any
of the Pledged Property in any manner that is inconsistent with the
terms of this Agreement, the Participation Agreement, the Note or any
other Operative Document; and the Securities Intermediary shall execute
and deliver to the Pledgor or cause to be executed and delivered to the
Pledgor all such proxies, powers of attorney and other orders, and all
such instruments, without recourse, as the Pledgor may reasonably
request for the purpose of enabling the Pledgor to exercise the rights
and powers which it is entitled to exercise pursuant to this Section
5.4.
(b) Any principal of and interest on, and any dividends or
distributions with respect to, any Pledged Property (such principal,
interest, dividends and distributions which the Pledgor is entitled to
receive and retain under this clause being herein called
"Distributions"), shall be paid directly to the Securities
Intermediary, retained by it and deposited into the Collateral Account
as additional Pledged Property, subject to the terms of this Agreement,
and, if the Collateral Agent shall so request in writing, the Pledgor
agrees to execute and deliver to the Securities Intermediary
appropriate orders and documents to effectuate the provisions of this
clause (b).
SECTION 5.5 Events of Default. Each of the following events shall
constitute an event of default under this Agreement (each, an "Event of
Default"):
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(a) The failure of the Pledgor to pay, after three days prior
notice by means of invoice, the reasonable fees and expenses of the
Collateral Agent; or
(b) The failure of the Pledgor to comply with any of the terms
or provisions of this Agreement, which (except as provided in (a)
above) failure shall have continued for a period of five (5) days; or
(c) A Lease Event of Default, Loan Agreement Event of Default
or Construction Agency Agreement Event of Default shall occur and be
continuing.
SECTION 5.6 Remedies, etc. During the period in which an Event of
Default shall have occurred and be continuing:
(a) The Collateral Agent may originate entitlement orders in
respect of the Pledged Property or otherwise exercise in respect of the
Pledged Property, in addition to other rights and remedies provided for
herein or otherwise available to it under the Operative Documents or at
law or in equity, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected
Pledged Property).
(b) The Collateral Agent may:
(i) deliver and pay over all or any portion of the
Pledged Property in the Collateral Account to the Pledgees, to
be applied to satisfy accrued and unpaid Obligations,
(ii) sell the Pledged Property, or any part thereof,
at any public or private sale or on any securities exchange,
for cash, upon credit or for future delivery, as the Pledgees
shall deem appropriate. The Pledgees shall be authorized at
any such sale to restrict the prospective bidders or
purchasers to persons who will represent and agree that they
are purchasing the Pledged Property for their own account for
investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale, the Pledgees
shall have the right to assign and transfer and have the
Collateral Agent transfer and deliver to the purchaser or
purchasers thereof the Pledged Property so sold. Each such
purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of the
Pledgor and its Affiliates, and each of the Pledgor and its
Affiliates hereby waives (to the extent permitted by law) all
rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule or law or
statute now existing or hereafter enacted. The Pledgees shall
give the Pledgor at least ten (10) days' written notice of the
Pledgees' intention to make any such public or private sale or
sales at any broker's board or on any such securities
exchange. Such notice, in case of public sale, shall state the
time and place fixed for such sale. Any such public sale shall
be held at such time or times within ordinary business hours
and at such place or places, as the Pledgees may fix in the
notice of such sale. At any such sale, the Pledged Property,
or portion thereof, to be sold may be sold in one sale as an
entirety or in separate sales, as the Pledgees may (in their
sole and absolute discretion) determine and the Pledgees may
bid (which bid may be in whole or in part, in the form of
cancellation of indebtedness) for and purchase for the account
of the Pledgees the whole or any part of the Pledged Property.
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The Pledgees shall not be obligated to make any sale of
Pledged Property if it shall determine not to do so,
regardless of the fact that notice of sale of Pledged Property
may have been given. The Pledgees may, without notice or
publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the
time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the
same was so adjourned. In case a sale of all or any part of
the Pledged Property is made on credit or for future delivery,
the Pledged Property so sold may be retained by the Pledgees
until the sale price is paid by the purchaser or purchasers
thereof, but the Pledgees shall not incur any liability in
case any such purchaser or purchasers shall fail to take up
and pay for the Pledged Property so sold and, in case of any
such failure, such Pledged Property may be sold again upon
like notice,
(iii) proceed by a suit or suits at law or in equity
to foreclose the security interest granted under this
Agreement and to sell the Pledged Property, or any portion
thereof, pursuant to a judgment or decree of a court or courts
of competent jurisdiction,
(iv) transfer all or any part of the Pledged Property
into the name of the Collateral Agent or its nominee, with or
without disclosing that such Pledged Property is subject to
the lien and security interest hereunder,
(v) notify the parties obligated on any of the
Pledged Property to make payment to the Collateral Agent of
any amount due or to become due thereunder,
(vi) enforce collection of any of the Pledged
Property 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,
(vii) endorse any checks, drafts, or other writings
in the Pledgor's name to allow collection of the Pledged
Property,
(viii) take control of any proceeds of the Pledged
Property, and
(ix) 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 Pledged Property. The Pledgees agree, solely for
the benefit of the Participants, and not for the benefit of
the Lessee, the Guarantor or any other Person, to seek to be
repaid any amounts owing to the Pledgees from the proceeds of
the Pledged Property prior to the proceeds of the Property.
In addition, the Pledgees shall have all of the rights granted to the
Pledgees under this Agreement upon the occurrence of an Event of Default.
The Pledgor and the Lessee shall be liable for the deficiency if the
proceeds of any sale or other disposition of the Pledged Property are
insufficient to pay all amounts to which the Pledgees are entitled, and the fees
and disbursements of any attorneys employed by the Pledgees to collect such
deficiency.
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SECTION 5.7 Change of Address or Name. Without at least 30 days' prior
written notice to the Collateral Agent, the Pledgor shall not maintain any of
its books or records with respect to the Pledged Property at any office or
maintain its chief executive office or its principal place of business at any
place other than at the address specified in Section 4.1(e), or change its name,
or name under which it does business, from the name shown on the signature page
hereto.
SECTION 5.8 Indemnity and Expenses. The Pledgor hereby indemnifies and
holds harmless each Pledgee and the Collateral Agent from and against any and
all claims, losses, and liabilities arising out of or resulting from this
Agreement (including enforcement of this Agreement), except claims, losses, or
liabilities resulting from the Collateral Agent's gross negligence or willful
misconduct. Upon demand, the Pledgor will pay to the Pledgees and the Collateral
Agent the amount of any and all reasonable expenses, including the reasonable
fees and disbursements of its counsel and of any experts and agents, which such
payee may incur in connection with:
(a) the exercise or enforcement of any of the rights of such
party hereunder; or
(b) the failure by the Pledgor to perform or observe any of
the provisions hereof.
The Pledgor also hereby indemnifies, exonerates and holds free and harmless the
Collateral Agent, each Pledgee and their respective counsel from any suits,
actions, causes of action or proceedings brought by any Person relating to or
arising out of this Agreement or any Operative Document.
SECTION 5.9 Further Assurances. The Pledgor covenants and agrees that,
from time to time upon the written request of any Pledgee or the Collateral
Agent, the Pledgor will execute and deliver such further documents and do such
other acts and things as any Pledgee or the Collateral Agent may reasonably
request in order fully to effect the purposes of this Agreement and to protect
and preserve the priority and validity of the security interest granted
hereunder.
SECTION 5.10 Amendments to Other Documents. The Pledgor covenants and
agrees that it shall not consent to any amendment or other modification or
supplement to any of the documentation or instruments relating to any Pledged
Property if, in the reasonable judgment of the Collateral Agent, such
modification would limit the right of the Collateral Agent to exercise
foreclosure remedies with respect thereto or adversely affect the rights of the
Collateral Agent hereunder. The Pledgor shall furnish to the Collateral Agent
promptly after receipt thereof copies of all amendments, modifications and
supplements to documentation relating to the Pledged Property.
SECTION 5.11 Pledgees Appointed Attorney-in-Fact. The Pledgor hereby
appoints the Pledgees and the Collateral Agent, acting either individually or
jointly, as the Pledgor's attorney-in-fact for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instrument
which they may deem necessary or advisable to accomplish the purposes hereof,
which appointment is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, both the Pledgees and the Collateral Agent,
acting either individually or jointly, shall have the right and power to
receive, endorse and correct all checks, drafts and other orders for the payment
of money made payable to the Pledgor representing any interest payment or other
distribution payable or distributable in respect of the Pledged Property or any
part thereof and to give full discharge for the same.
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SECTION 5.12 Change of Collateral Agent. No change in Collateral Agent
may occur without the express written consent of the Pledgees and the Pledgor.
The Collateral Agent may resign by giving thirty (30) days' notice to the
parties to this Agreement. The Pledgees may then appoint a successor Collateral
Agent with the prior written consent of the Pledgor, which shall not be
unreasonably withheld or delayed, whereupon the successor Collateral Agent shall
succeed to the rights, powers and duties of the Collateral Agent.
ARTICLE 6
SALES AND SUBSTITUTIONS OF CASH COLLATERAL;
ADDITIONAL PLEDGED PROPERTY
SECTION 6.1 Sales and Substitutions of Pledged Property; Additional
Pledged Property.
(a) Subject to clauses (b) and (c) below and in addition to its rights
under Section 3.5, upon notice to and with the consent of the Collateral Agent,
the Pledgor (or any Authorized Signatory thereof) shall have the right to sell
Pledged Property, to substitute other Pledged Property (the "Substituted Pledged
Property") or pledge additional Pledged Property (the "Additional Pledged
Property") so long as no Event of Default exists or, in the sole opinion of the
Collateral Agent, would result therefrom, upon giving effect to such sale,
substitution, or additional pledge of Pledged Property. A substitution of
Pledged Property shall be effected by the Collateral Agent originating an
entitlement order, or authorizing the Securities Intermediary to honor an
entitlement order from the Pledgor, to deliver or transfer to the Pledgor or its
designee the Pledged Property being replaced against the receipt by the
Securities Intermediary for credit to the Collateral Account of the Substituted
Pledged Property. The Collateral Agent will execute any documents of release
reasonably requested by the Pledgor. The Collateral Agent shall not be required
to release any Pledged Property to the Pledgor unless (i) the Collateral Agent
shall have determined, in accordance with clause (c) below, that no violation of
any rule or regulation of the Federal Reserve Board would result therefrom and
(ii) the Pledgor shall first reimburse the Collateral Agent and the Pledgees for
any reasonable expenses incurred or taxes imposed in connection with such
release. The Pledgor shall comply with all its obligations under this Agreement
as to Substituted Pledged Property or Additional Pledged Property, including,
but not limited to, its obligations with respect to delivery of the Substituted
Pledged Property or Additional Pledged Property and perfection of the Collateral
Agent's first-priority security interest in the Substituted Pledged Property or
Additional Pledged Property. The Pledgor shall deliver such certificates, if
necessary, and take such other action as may be necessary to transfer such a
first-priority perfected security interest in any Substituted Pledged Property
or Additional Pledged Property to the Collateral Agent.
(b) The delivery of a written notice pursuant to clause (a) above by
the Pledgor to the Collateral Agent, prior to effecting any substitution or
additional pledge of Pledged Property as contemplated by this Section 6.1 shall
constitute a representation and warranty by the Pledgor that no violation of the
rules and regulations of the Federal Reserve Board exists with respect to the
Loans and such sale, substitution or pledge of Pledged Property will not result
in a violation of any rule or regulation of the Federal Reserve Board.
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(c) In order to effect a release of Pledged Property and as
contemplated by clause (a) above, the Collateral Agent will confirm the release
in a certificate, if necessary, and take such other action as may be necessary
to release its security interest therein.
ARTICLE 7
MISCELLANEOUS PROVISIONS
SECTION 7.1 Operative Document. This Agreement is an Operative Document
executed pursuant to the Participation Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof. As such, the Collateral Agent has, on
behalf of itself and each Pledgee, all powers incidental to the execution of
each of the terms of this Agreement, as contemplated by the parties hereto.
SECTION 7.2 Waivers, Amendments, etc. The provisions of this Agreement
may from time to time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by the Pledgor and the
Collateral Agent in accordance with the terms of the Participation Agreement. No
failure or delay on the part of the Collateral Agent or the holder of any Note
in exercising any power or right under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of any other
power or right. No notice to or demand on the Pledgor in any case shall entitle
it to any notice or demand in similar or other circumstances. No waiver or
approval by the Collateral Agent or the holder of any Note under this Agreement
shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 7.3 Protection of Pledged Property. The Collateral 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 Collateral Agent may from time to time take any other action
which the Collateral Agent reasonably deems necessary for the maintenance,
preservation or protection of any of the Pledged Property or of its security
interest therein.
SECTION 7.4 Notices. All notices and other communications provided for
hereunder shall be in writing and addressed and delivered or transmitted to the
respective address or facsimile number specified in the Participation Agreement,
or as to any Person, at such other address or facsimile number as may be
designated by such Person in a notice to each other such Person complying as to
delivery with the terms of this Section 7.4. Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice, if transmitted
by facsimile, shall be deemed given when transmitted (upon electronic
confirmation of transmission).
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SECTION 7.5 Headings. The various headings of this Agreement are
inserted for convenience only and shall not affect the meaning or interpretation
of this Agreement or any provisions hereof.
SECTION 7.6 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 7.7 Execution in Counterparts, Effectiveness, etc. This
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. This Agreement shall become effective
when counterparts hereof executed on behalf of the Pledgor and the Collateral
Agent (or notice thereof satisfactory to the Collateral Agent) shall have been
received by the Collateral Agent.
SECTION 7.8 Governing Law, Entire Agreement, etc. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR CASH COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE COMMONWEALTH OF PENNSYLVANIA. THIS AGREEMENT AND THE OTHER
OPERATIVE DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.9 Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY HERETO SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA OR IN THE UNITED
STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY CASH COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT THE COLLATERAL AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH CASH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE
PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE COMMONWEALTH OF PENNSYLVANIA AND OF THE UNITED STATES DISTRICT
COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE PLEDGOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE COMMONWEALTH OF
PENNSYLVANIA. PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THE PLEDGOR MAY HAVE OR HEREAFTER
MAY
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HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE PLEDGOR
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT.
SECTION 7.10 Waiver of Jury Trial. THE PLEDGOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS THE PLEDGOR MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE OTHER PARTIES HERETO OR
THE PLEDGOR. THE PLEDGOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER OPERATIVE DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE OTHER PARTIES HERETO ENTERING INTO THE PARTICIPATION
AGREEMENT AND EACH SUCH OTHER OPERATIVE DOCUMENT.
SECTION 7.11 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that the Pledgor may not assign or
transfer its rights or obligations hereunder.
SECTION 7.12 The Agents. The Collateral Agent may employ agents and
attorneys-in-fact, which may include branches, Affiliates and Subsidiaries of
the Collateral Agent, in connection herewith and, so long as such agents or
attorneys-in-fact are not branches, Affiliates or Subsidiaries of the Collateral
Agent, the Collateral Agent shall not be responsible for the negligence of any
such agents or attorneys-in-fact selected by it in good faith.
SECTION 7.13 Expenses. The Pledgor agrees to pay to each Pledgee and
the Collateral Agent on demand all out-of-pocket expenses of such payee
(including all reasonable fees and out-of-pocket expenses of counsel to such
payee and of local counsel, if any, who may be retained by counsel to that
payee) relating to the enforcement of any of the provisions of this Agreement,
or performance by the Collateral Agent of any obligations of the Pledgor in
respect of the Pledged Property which the Pledgor has failed or refused to
perform, or any actual or attempted exchange, enforcement, collection,
compromise or settlement in respect of any of the Pledged Property, and for the
care of the Pledged Property and defending or asserting rights and claims of the
Pledgees or the Collateral Agent in respect thereof, by litigation or otherwise,
and all such expenses shall constitute obligations secured under this Agreement.
SECTION 7.14 Termination. When all obligations secured by this
Agreement shall have been paid in full and the Commitment of the Lenders under
the Construction Loan Agreement or any Refinancing Loan Document shall have
expired or been terminated, this Agreement shall terminate, and the
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18
Collateral Agent shall forthwith cause to be assigned, transferred and
delivered, against receipt but without any recourse, warranty or representation
whatsoever (other than as to there being no Liens resulting from any act of or
claim against the Collateral Agent), any remaining Pledged Property and money
received in respect thereof to or on the order of the Pledgor.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge and
Security Agreement to be duly executed as of the day and year first above
written.
FORE SYSTEMS HOLDING CORPORATION,
as Pledgor
By: /s/ XXXX X. XXXXXXX
-------------------------------------
Name: Xxxx X. Xxxxxxx
-----------------------------------
Title: Treasurer
----------------------------------
MELLON FINANCIAL SERVICES CORPORATION #4,
as Pledgee
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxx
----------------------------------
Title: Vice President
---------------------------------
MELLON BANK, N.A., as Pledgee
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President
-----------------------------------
MELLON BANK, N.A., as Securities Intermediary
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President
-----------------------------------
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ANNEX I TO
PLEDGE AND SECURITY AGREEMENT
SPECIFICATION OF ADDITIONAL COLLATERAL
Pursuant to Section 2.1(d) of that certain Pledge and Security
Agreement, dated as of December __, 1998 (the "Agreement"), is made by Fore
Systems Holding Corporation, a Delaware corporation (the "Pledgor"), Mellon
Bank, N.A., as Construction Lender and Collateral Agent and Mellon Financial
Service Corporation #4, as Certificate Purchaser (each a "Pledgee" and
collectively, the "Pledgees"), and Mellon Bank, N.A., as securities intermediary
for the Collateral Account (in such capacity, the "Securities Intermediary"),
Pledgor hereby delivers to Collateral Agent the following property as additional
collateral and as a part of the "Pledged Property" thereunder:
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This Specification of Additional Collateral is made as of this ____ day
of _________, ____.
FORE SYSTEMS HOLDING CORPORATION,
as Pledgor
By:______________________________
Name:
Title:
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