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EXHIBIT 4.4
SECOND AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, dated
as of the 29th day of June, 1998 (this "Agreement"), is made by each of the
undersigned Subsidiaries of LASON, INC., a Delaware corporation (the
"Borrower"), and by each other Subsidiary that, after the date hereof, executes
an instrument of accession hereto substantially in the form of Exhibit D (a
"Pledge Accession"; the undersigned and such other Subsidiaries, collectively,
the "Pledgors"), in favor of FIRST UNION NATIONAL BANK, as agent for the banks
and other financial institutions (collectively, the "Lenders") party to the
Credit Agreement referred to below (in such capacity, the "Agent"), for the
benefit of the Secured Parties (as hereinafter defined). Capitalized terms used
herein without definition shall have the meanings given to them in the Credit
Agreement referred to below.
RECITALS
A. Certain of the undersigned Subsidiaries, the Lenders and the Agent
have heretofore entered into an Amended and Restated Security Agreement dated
February 21, 1997 (the "Amended and Restated Security Agreement"). This
Agreement is an amendment to, and is in substitution and replacement of the
Amended and Restated Security Agreement.
B. Certain of the undersigned Subsidiaries, the Lenders and the Agent
have heretofore entered into an Amended and Restated Pledge Agreement dated
February 21, 1997 (the "Amended and Restated Pledge Agreement"). This Agreement
is an amendment to, and is in substitution and replacement of the Amended and
Restated Pledge Agreement.
C. Certain of the undersigned Subsidiaries, the Lenders and the Agent
have heretofore entered into an Amended and Restated Subsidiary Guarantor
Security Agreement dated February 21, 1997 (the "Subsidiary Guarantors' Amended
and Restated Security Agreement"). This Agreement is an amendment to, and is in
substitution and replacement of the Subsidiary Guarantors' Amended and Restated
Security Agreement.
D. The Borrower, the Lenders and the Agent have entered into a Second
Amended and Restated Credit Agreement dated as of the date hereof (together with
any amendments, modifications and supplements thereto, any replacements,
renewals, extensions and restatements thereof, and any substitutes therefor, in
whole or in part, the "Credit Agreement"), the provisions of which are hereby
incorporated by reference. Capitalized terms that are not defined herein shall
have the meanings assigned to such terms in the Credit Agreement.
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E. Pursuant to the terms and conditions of the Credit Agreement, the
Lenders have agreed to make certain loans in the aggregate principal amount of
up to $150,000,000, which amount may be increased up to $200,000,000 under the
terms and conditions of the Credit Agreement.
F. As a condition to the extension of credit to the Borrower under the
Credit Agreement, the Lenders are requiring, among other things, that the
Borrower secure its Obligations through the pledge of its Equity Interest in
each of its Subsidiaries as provided herein.
G. As a further condition to the extension of credit to the Borrower
under the Credit Agreement, each of the Pledgors that is a party to this
Agreement as of the date hereof has entered into a Second Amended and Restated
Subsidiary Guaranty dated as of the date hereof (as amended, modified or
supplemented from time to time, the "Subsidiary Guaranty"), pursuant to which
each such Pledgor has guaranteed to the Secured Parties the payment in full of
the Obligations of the Borrower under the Credit Agreement and the other Credit
Documents. Additionally, certain other Subsidiaries of the Borrower may from
time to time after the date hereof enter into the Subsidiary Guaranty, pursuant
to which such Subsidiaries will guarantee to the Secured Parties the payment in
full of the Obligations of the Borrower under the Credit Agreement and the other
Credit Documents.
H. As a further condition to the extension of credit to the Borrower
under the Credit Agreement, the Lenders are requiring, among other things, that
the Subsidiaries secure their Obligations by granting the Agent, for the benefit
of the Lenders, a security interest in the Collateral on the terms and
conditions set forth herein.
G. The Secured Parties are relying on this Agreement in their decision
to extend credit to the Borrower under the Credit Agreement, and would not enter
into the Credit Agreement without the execution and delivery of this Agreement
by the Pledgors.
H. The Pledgors will obtain benefits as a result of the extension of
credit to the Borrower under the Credit Agreement, which benefits are hereby
acknowledged, and, accordingly, desire to execute and deliver this Agreement.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to induce the Secured Parties to enter into the Credit Agreement
and to induce the Lenders to extend credit to the Borrower thereunder, each
Pledgor hereby agrees as follows:
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ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement, in addition to the
terms defined elsewhere herein, the following terms shall have the meanings set
forth below:
"Accounts" shall mean, collectively, all of each Pledgor's accounts, as
defined in the Uniform Commercial Code, including, without limitation, all of
such Pledgor's accounts receivable, all rights to payment for goods sold or
leased or to be sold or to be leased (including all rights to returned or
repossessed goods) or for services rendered at any time or for services to be
rendered (including any rights to stoppage in transit, repossession and
reclamation and other rights of an unpaid vendor or secured party), all rights
under or evidenced by book debts, notes, bills, drafts or acceptances, all
Instruments evidencing or relating to any of the foregoing, and all rights under
security agreements, guarantees, indemnities and other instruments and contracts
securing or otherwise relating to any of the foregoing, in each case whether now
owned or existing or hereafter acquired or arising.
"Collateral" shall have the meaning given to such term in SECTION 2.1.
"Collateral Accounts" shall have the meaning given to such term in
SECTION 6.3.
"Contracts" shall mean, collectively, all rights of each Pledgor under
all leases, contracts and agreements to which such Pledgor is now or hereafter a
party, including, without limitation, all rights, privileges and powers under
Investment Agreements and Licenses, together with any and all extensions,
modifications, amendments and renewals of such leases, contracts and agreements
and all rights of such Pledgor to receive moneys due or to become due thereunder
or pursuant thereto and to amend, modify, terminate or exercise rights under
such leases, contracts and agreements, but excluding rights under (but not
excluding Proceeds of) any lease, contract or agreement (including, without
limitation, any License) that by the terms thereof, or under applicable law,
cannot be assigned or a security interest granted therein in the manner
contemplated by this Agreement unless consent from the relevant party or parties
has been obtained and under the terms of which lease, contract or agreement any
such assignment or grant of a security interest therein in the absence of such
consent would, or could, result in the termination thereof, but only to the
extent that (y) such rights are subject to such contractual or legal restriction
and (z) such restriction is not, or could not be, rendered ineffective pursuant
to the Uniform Commercial Code of any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code) or principles of equity.
"Copyrights" shall mean, collectively, all of each Pledgor's
copyrights, copyright registrations and applications for copyright registration,
whether under the laws of the United States or any other country or
jurisdiction, including all recordings, supplemental registrations and
derivative or collective work registrations, and all renewals and extensions
thereof, in each case whether now owned or existing or hereafter acquired or
arising.
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"Copyright Collateral" shall mean, collectively, all Copyrights and
Copyright Licenses to which any Pledgor is or hereafter becomes a party and all
other General Intangibles embodying, incorporating, evidencing or otherwise
relating or pertaining to any Copyright or Copyright License, in each case
whether now owned or existing or hereafter acquired or arising.
"Copyright License" shall mean any agreement now or hereafter in effect
granting any right to any third party under any Copyright now or hereafter owned
by any Pledgor or which any Pledgor otherwise has the right to license, or
granting any right to any Pledgor under any property of the type described in
the definition of Copyright herein now or hereafter owned by any third party,
and all rights of any Pledgor under any such agreement.
"Deposit Accounts" shall mean, collectively, all of each Pledgor's
deposit accounts maintained with the Agent or any other bank or depository
institution, whether now owned or existing or hereafter acquired or arising and
including, without limitation, and any Collateral Accounts, together with all
funds held from time to time therein and all certificates and instruments from
time to time representing, evidencing or deposited into such accounts.
"Equipment" shall mean, collectively, all of each Pledgor's equipment,
as defined in the Uniform Commercial Code, including, without limitation, all
machinery, equipment, computer equipment and software, parts, supplies,
appliances, fittings, furniture and fixtures of every kind and nature, wherever
located and whether or not affixed to any real property, all Mobile Goods, and
all accessions, accessories, additions, attachments, improvements, modifications
and upgrades to, replacements of and substitutions for the foregoing, in each
case whether now owned or existing or hereafter acquired.
"Equity Interests" shall mean, collectively, all of the issued and
outstanding shares, interests or other equivalents of capital stock of any
corporation at any time now or hereafter owned by any Pledgor (including,
without limitation, any corporation that is or hereafter becomes a Subsidiary of
such Pledgor), whether voting or non-voting and whether common or preferred; all
partnership, joint venture, limited liability company or other equity interests
in any Person not a corporation at any time now or hereafter owned by any
Pledgor (including, without limitation, any such Person that is or hereafter
becomes a Subsidiary of such Pledgor); all options, warrants and other rights to
acquire, and all securities convertible into, any of the foregoing; all rights
to receive interest, income, dividends, distributions, returns of capital and
other amounts (whether in cash, securities, property, or a combination thereof),
and all additional stock, warrants, options, securities, interests and other
property, from time to time paid or payable or distributed or distributable in
respect of any of the foregoing (but subject to the provisions of SECTION 5.3),
including, without limitation, all rights of such Pledgor to receive amounts due
and to become due under or in respect of any Investment Agreement or upon the
termination thereof; all rights of access to the books and records of any such
Person; and all other rights, powers, privileges, interests, claims and other
property in any manner arising out of or relating to any of the foregoing, of
whatever kind or character (including any tangible or intangible property or
interests therein), and whether provided by contract or granted or available
under applicable law in connection therewith, including, without limitation,
such Pledgor's right to vote and to manage and administer the business of any
such Person pursuant to any applicable
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Investment Agreement; together with all certificates, instruments and entries
upon the books of financial intermediaries at any time evidencing any of the
foregoing, in each case whether now owned or existing or hereafter acquired or
arising provided, however, that "Equity Interests" as applied to any issue of
such interests not incorporated in any state of the United States shall not
exceed at any time 65% of the shares of any class of the Equity Interests of
such issuer, and any Equity Interests of such issuer in excess of 65% of the
Equity Interests of such issuer held at any time by the Agent shall not be
"Equity Interests" hereunder and shall not be subject to the security interest
granted hereby and shall be held by the Agent solely for the benefit of the
Borrower.
"General Intangibles" shall mean, collectively, all of each Pledgor's
general intangibles, as defined in the Uniform Commercial Code, including,
without limitation, all Contracts, all Copyright Collateral, all Patent
Collateral, all Trademark Collateral, all inventions, designs, trade secrets,
trade processes, confidential or proprietary technical or business information,
know-how, registrations, licenses, permits and franchises, all rights under or
evidenced by choses in action, causes of action or Instruments, all
indebtedness, obligations and other amounts at any time owing to such Pledgor
from any Person and all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness, obligations or other amounts
(including, without limitation, all Intercompany Obligations), all judgments,
tax refund claims, claims against carriers and shippers, claims under liens and
insurance policies, all rights under security agreements, guarantees,
indemnities and other instruments and contracts securing or otherwise relating
to any of the foregoing, all invoices, customer lists, books and records, ledger
and account cards, computer tapes, disks, software, printouts and other
corporate or business records relating to the foregoing, and all other
intangible personal property of every kind and nature, and all accessions,
additions, improvements, modifications and upgrades to, replacements of and
substitutions for the foregoing, in each case whether now owned or existing or
hereafter acquired or arising, but excluding Accounts and excluding leases,
contracts and agreements (including, without limitation, Licenses) to the extent
excluded from Contracts under the definition of such term herein.
"Instruments" shall mean, collectively, all instruments, chattel paper
or documents, each as defined in the Uniform Commercial Code, of each Pledgor,
whether now owned or existing or hereafter acquired, including those evidencing,
representing, securing, arising from or otherwise relating to any Accounts,
Intercompany Obligations or other Collateral, including, without limitation, any
promissory notes, drafts, bills of exchange, documents of title and receipts.
"Intercompany Obligations" shall mean, collectively, all indebtedness,
obligations and other amounts at any time owing to any Pledgor from any of its
Subsidiaries or Affiliates and all interest, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness, obligations or
other amounts.
"Inventory" shall mean, collectively, all of each Pledgor's inventory,
as defined in the Uniform Commercial Code, including, without limitation, all
goods manufactured, acquired or
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held for sale or lease, all raw materials, component materials, work-in-process
and finished goods, all supplies, goods and other items and materials used or
consumed in the manufacture, production, packaging, shipping, selling, leasing
or furnishing of such inventory or otherwise in the operation of the business of
such Pledgor, all goods in which such Pledgor now or at any time hereafter has
any interest or right of any kind, and all goods that have been returned to or
repossessed by or on behalf of such Pledgor, in each case whether or not the
same is in transit or in the constructive, actual or exclusive occupancy or
possession of such Pledgor or is held by such Pledgor or by others for the
account of such Pledgor, and in each case whether now owned or existing or
hereafter acquired or arising.
"Investment Agreement" shall mean any partnership agreement, joint
venture agreement, limited liability company operating agreement, stockholders
agreement or other agreement creating, governing or evidencing any Equity
Interests and to which any Pledgor is now or hereafter becomes a party, as any
such agreement may be amended, modified, supplemented, restated or replaced from
time to time.
"License" shall mean any Copyright License, Patent License or Trademark
License.
"Mobile Goods" shall mean, collectively, all of each Pledgor's motor
vehicles, tractors, trailers, aircraft, rolling stock and other like property,
whether or not the title thereto is governed by a certificate of title or
ownership, in each case whether now owned or existing or hereafter acquired.
"Patents" shall mean, collectively, all of each Pledgor's letters patent,
whether under the laws of the United States or any other country or
jurisdiction, all recordings and registrations thereof and applications
therefor, including, without limitation, the inventions described therein, all
reissues, continuations, divisions, renewals, extensions, continuations-in-part
thereof, in each case whether now owned or existing or hereafter acquired or
arising.
"Patent Collateral" shall mean, collectively, all Patents and all
Patent Licenses to which any Pledgor is or hereafter becomes a party and all
other General Intangibles embodying, incorporating, evidencing or otherwise
relating or pertaining to any Patent or Patent License, in each case whether now
owned or existing or hereafter acquired or arising.
"Patent License" shall mean any agreement now or hereafter in effect
granting to any third party any right to make, use or sell any invention on
which a Patent, now or hereafter owned by any Pledgor or which any Pledgor
otherwise has the right to license, is in existence, or granting to any Pledgor
any right to make, use or sell any invention on which property of the type
described in the definition of Patent herein, now or hereafter owned by any
third party, is in existence, and all rights of any Pledgor under any such
agreement.
"Proceeds" shall have the meaning given to such term in SECTION 2.1.
"Secured Parties" shall mean, collectively, the Lenders (including the
Issuing Lender in its capacity as such, and including any Lender in its capacity
as a counterparty to any Hedge Agreement with the Borrower) and the Agent.
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"Securities Act" shall have the meaning given to such term in SECTION
6.5.
"Specified Contracts" shall have the meaning given to such term in
SECTION 3.8.
"Trademarks" shall mean, collectively, all of each Pledgor's
trademarks, service marks, trade names, corporate and company names, business
names, logos, trade dress, trade styles, other source or business identifiers,
designs and general intangibles of a similar nature, whether under the laws of
the United States or any other country or jurisdiction, all recordings and
registrations thereof and applications therefor, all renewals and extensions
thereof, all rights corresponding thereto, and all goodwill associated therewith
or symbolized thereby, in each case whether now owned or existing or hereafter
acquired or arising.
"Trademark Collateral" shall mean, collectively, all Trademarks and
Trademark Licenses to which any Pledgor is or hereafter becomes a party and all
other General Intangibles embodying, incorporating, evidencing or otherwise
relating or pertaining to any Trademark or Trademark License, in each case
whether now owned or existing or hereafter acquired or arising.
"Trademark License" shall mean any agreement now or hereafter in effect
granting any right to any third party under any Trademark now or hereafter owned
by any Pledgor or which any Pledgor otherwise has the right to license, or
granting any right to any Pledgor under any property of the type described in
the definition of Trademark herein now or hereafter owned by any third party,
and all rights of any Pledgor under any such agreement.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as the
same may be in effect from time to time in the State of North Carolina; provided
that if, by reason of applicable law, the validity or perfection of any security
interest in any Collateral granted under this Agreement is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than North
Carolina, then as to the validity or perfection, as the case may be, of such
security interest, "Uniform Commercial Code shall mean the Uniform Commercial
Code as in effect in such other jurisdiction.
1.2 Other Terms. All terms in this Agreement that are not capitalized
shall have the meanings provided by the Uniform Commercial Code to the extent
the same are used or defined therein.
ARTICLE II
CREATION OF SECURITY INTEREST
2.1 Pledge and Grant of Security Interest. Each Pledgor hereby pledges,
assigns and delivers to the Agent, for the ratable benefit of the Secured
Parties, and grants to the Agent, for the ratable benefit of the Secured
Parties, a Lien upon and security interest in, all of such Pledgor's right,
title and interest in and to the following, in each case whether now owned or
existing or hereafter acquired or arising (collectively, the "Collateral"):
(i) all Accounts;
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(ii) all Contracts;
(iii) all Deposit Accounts;
(iv) all Equipment;
(v) all Equity Interests;
(vi) all General Intangibles;
(vii) all Inventory;
(viii) all Instruments;
(ix) to the extent not covered or not specifically excluded by
clauses (i) through (viii) above, all of such Pledgor's other personal
property, whether now owned or existing or hereafter arising or
acquired; and
(x) any and all proceeds, as defined in the Uniform Commercial
Code, products, rents and profits of or from any and all of the
foregoing and, to the extent not otherwise included in the foregoing,
(w) all payments under any insurance (whether or not the Agent is the
loss payee thereunder), indemnity, warranty or guaranty with respect to
any of the foregoing Collateral, (x) all payments in connection with
any requisition, condemnation, seizure or forfeiture with respect to
any of the foregoing Collateral, (y) all claims and rights to recover
for any past, present or future infringement or dilution of or injury
to any Copyright Collateral, Patent Collateral or Trademark Collateral,
and (z) all other amounts from time to time paid or payable under or
with respect to any of the foregoing Collateral (collectively,
"Proceeds"). For purposes of this Agreement, the term "Proceeds"
includes whatever is receivable or received when Collateral or Proceeds
are sold, exchanged, collected or otherwise disposed of, whether
voluntarily or involuntarily.
2.2 Security for Secured Obligations. This Agreement and the Collateral
secure the full and prompt payment, at any time and from time to time as and
when due (whether at the stated maturity, by acceleration or otherwise), of all
liabilities and obligations of each Pledgor, whether now existing or hereafter
incurred, created or arising and whether direct or indirect, absolute or
contingent, due or to become due, under, arising out of or in connection with
the Credit Agreement, the Subsidiary Guaranty, or any of the other Credit
Documents to which it is or hereafter becomes a party, including, without
limitation, (i) in the case of the Borrower, all Obligations, including, without
limitation, all principal of and interest on the Loans, all fees, expenses,
indemnities and other amounts payable by the Borrower under the Credit Agreement
or any other Credit Document (including interest accruing after the filing of a
petition or commencement of a case by or with respect to the Borrower seeking
relief under any applicable federal and state laws pertaining to bankruptcy,
reorganization, arrangement, moratorium, readjustment of debts, dissolution,
liquidation or other debtor relief, specifically including, without limitation,
the Bankruptcy Code and any fraudulent transfer and fraudulent conveyance
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laws, whether or not the claim for such interest is allowed in such proceeding),
and all obligations of the Borrower to any Lender under any Hedge Agreement, and
(ii) in the case of any Guarantor Pledgor, all of its liabilities and
obligations as a Guarantor (as defined in the Subsidiary Guaranty) in respect of
the Obligations; and in each case under (i) and (ii) above, (a) all such
liabilities and obligations that, but for the operation of the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due, and (b) all fees,
costs and expenses payable by such Pledgor under SECTION 8.1 (the liabilities
and obligations of the Pledgors described in this SECTION 2.2, collectively, the
"Secured Obligations").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Pledgor represents and warrants as follows:
3.1 Ownership of Collateral. Each Pledgor owns, or has valid rights as
a lessee or licensee with respect to, all Collateral purported to be pledged by
it hereunder, free and clear of any Liens except for the Liens granted to the
Agent, for the benefit of the Secured Parties, pursuant to this Agreement, and
except for other Permitted Liens. No security agreement, financing statement or
other public notice with respect to all or any part of the Collateral is on file
or of record in any government or public office, and no Pledgor has filed or
consented to the filing of any such statement or notice, except (i) Uniform
Commercial Code financing statements naming the Agent as secured party, (ii)
security instruments filed in the U.S. Copyright Office or the U.S. Patent and
Trademark Office naming the Agent as secured party and (iii) as may be otherwise
permitted by the Credit Agreement.
3.2 Security Interests; Filings. This Agreement, together with (i) the
filing, with respect to each Pledgor, of duly completed and executed Uniform
Commercial Code financing statements naming such Pledgor as debtor, the Agent as
secured party, and describing the Collateral, in the jurisdictions set forth
with respect to such Pledgor on Annex B hereto, which have been duly executed
and delivered by the Pledgors and delivered to the Agent for filing, (ii) to the
extent required by applicable law, the filing, with respect to each relevant
Pledgor, of duly completed and executed assignments in the forms set forth as
Exhibits B and C with the U.S. Copyright Office or the U.S. Patent and Trademark
Office, as appropriate, with regard to registered Copyright Collateral, Patent
Collateral and Trademark Collateral of such Pledgor, as the case may be, (iii)
in the case of uncertificated Investments, registration of transfer thereof to
the Agent on the issuer's books or the execution by the issuer of a control
agreement satisfying the requirements of Section 8-106 (or its successor
provision) of the Uniform Commercial Code, (iv) as to Mobile Goods covered by a
certificate of title or ownership, the notation of the Agent's security interest
therein on the applicable certificates of title or ownership, and (v) the
delivery to the Agent of all stock certificates and Instruments included in the
Collateral (and assuming continued possession thereof by the Agent), creates,
and at all times shall constitute, a valid and perfected security interest in
and Lien upon the Collateral in favor of the Agent, for the benefit of the
Secured Parties, to the extent a security interest therein can be perfected by
such filings or
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possession, as applicable, superior and prior to the rights of
all other Persons therein (except for Permitted Liens), and no other or
additional filings, registrations, recordings or actions are or shall be
necessary or appropriate in order to maintain the perfection and priority of
such Lien and security interest, other than actions required with respect to
Collateral of the types excluded from Article 9 of the Uniform Commercial Code
or from the filing requirements under such Article 9 by reason of Section 9-104
or 9-302 of the Uniform Commercial Code and other than continuation statements
required under the Uniform Commercial Code (it being specifically noted that the
Agent may at its option, but shall not be required to, require that any bank or
other depository institution at which a Deposit Account is maintained enter into
a written agreement or take such other action as may be necessary to perfect the
security interest of the Agent in such Deposit Account and the funds therein).
3.3 Locations. Annex C lists, as to each Pledgor, (i) the addresses of
its chief executive office and each other place of business, (ii) the address of
each location of all original invoices, ledgers, chattel paper, Instruments and
other records or information evidencing or relating to the Collateral of such
Pledgor, and (iii) the address of each location at which any Equipment or
Inventory (other than Mobile Goods and goods in transit) owned by such Pledgor
is kept or maintained, in each instance except for any new locations established
in accordance with the provisions of SECTION 4.2. Except as may be otherwise
noted therein, all locations identified in Annex C are leased by the applicable
Pledgor. No Pledgor presently conducts business under any prior or other
corporate or company name or under any trade or fictitious names, except as
indicated beneath its name on Annex C, and no Pledgor has entered into any
contract or granted any Lien within the past five years under any name other
than its legal corporate name or a trade or fictitious name indicated on Annex
C.
3.4 Authorization; Consent. No authorization, consent or approval of,
or declaration or filing with, any Governmental Authority (including, without
limitation, any notice filing with state tax or revenue authorities required to
be made by account creditors in order to enforce any Accounts in such state) is
required for the valid execution, delivery and performance by any Pledgor of
this Agreement, the grant by it of the Lien and security interest in favor of
the Agent provided for herein, or the exercise by the Agent of its rights and
remedies hereunder, except for (i) the filings described in SECTION 3.2, (ii) in
the case of Accounts owing from any federal governmental agency or authority,
the filing by the Agent of a notice of assignment in accordance with the federal
Assignment of Claims Act of 1940, as amended, and (iii) in the case of Equity
Interests, such filings and approvals as may be required in connection with a
disposition of any such Collateral by laws affecting the offering and sale of
securities generally.
3.5 No Restrictions. There are no statutory or regulatory restrictions,
prohibitions or limitations on any Pledgor's ability to grant to the Agent a
Lien upon and security interest in the Collateral pursuant to this Agreement or
(except for the provisions of the federal Anti-Assignment Act and Anti-Claims
Act, as amended) on the exercise by the Agent of its rights and remedies
hereunder (including any foreclosure upon or collection of the Collateral), and
there are no contractual restrictions on any Pledgor's ability so to grant such
Lien and security interest.
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3.6 Accounts. Each Account is, or at the time it arises will be, (i) a
bona fide, valid and legally enforceable indebtedness of the account debtor
according to its terms, arising out of or in connection with the sale, lease or
performance of goods or services by the Pledgors or any of them, (ii) subject to
no offsets, discounts, counterclaims, contra accounts or any other defense of
any kind and character, other than warranties and discounts customarily given by
the Pledgors in the ordinary course of business and warranties provided by
applicable law, (iii) to the extent listed on any schedule of Accounts at any
time furnished to the Agent, a true and correct statement of the amount actually
and unconditionally owing thereunder, maturing as stated in such schedule and in
the invoice covering the transaction creating such Account, and (iv) not
evidenced by any chattel paper or other Instrument; or if so, such chattel paper
or other Instrument (other than invoices and related correspondence and
supporting documentation) shall promptly be duly endorsed to the order of the
Agent and delivered to the Agent to be held as Collateral hereunder. To the
knowledge of each Pledgor, there are no facts, events or occurrences that would
in any way impair the validity or enforcement of any Accounts except as set
forth above.
3.7 Equity Interests. As of the date hereof, the Equity Interests
required to be pledged hereunder by each Pledgor that owns any Equity Interests
consist of the number and type of shares of capital stock (in the case of
issuers that are corporations) or the percentage and type of other Equity
Interests (in the case of issuers other than corporations) as described beneath
such Pledgor's name in Annex A. All of the Equity Interests have been duly and
validly issued and are fully paid and nonassessable (or, in the case of
partnership, limited liability company or similar Equity Interests, not subject
to any capital call or other additional capital requirement) and not subject to
any preemptive rights, warrants, options or similar rights or restrictions in
favor of third parties or any contractual or other restrictions upon transfer.
3.8 Specified Contracts. As to each Investment Agreement and each other
Material Contract to which any Pledgor is or hereafter becomes a party (the
foregoing, collectively, "Specified Contracts"), (i) such Pledgor is not in
default in any material respect under such Specified Contract, and to the
knowledge of such Pledgor, none of the other parties to such Specified Contract
is in default in any material respect thereunder (except as shall have been
disclosed in writing to the Agent), (ii) such Specified Contract is, or at the
time of execution will be, the legal, valid and binding obligation of all
parties thereto, enforceable against such parties in accordance with the
respective terms thereof, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and no defense, offset, deduction or counterclaim will exist
thereunder in favor of any such party, (iii) the performance by such Pledgor of
its obligations under such Specified Contract in accordance with its terms will
not contravene any Requirement of Law or any contractual restriction binding on
or affecting such Pledgor or any of its properties, and will not result in or
require the creation of any Lien upon or with respect to any of its properties,
and (iv) such Pledgor has (or at the time of execution will have) furnished the
Agent with a correct and complete copy of each Specified Contract to which it is
a party as then in effect.
3.9 Intellectual Property. Annexes D, E and F correctly set forth all
registered Copyrights, Patents and Trademarks owned by any Pledgor as of the
date hereof and used or
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proposed to be used in its business. Each such Pledgor owns or possesses the
valid right to use all Copyrights, Patents and Trademarks; all registrations
therefor have been validly issued under applicable law and are in full force and
effect; no claim has been made in writing or, to the knowledge of such Pledgor,
orally, that any of the Copyrights, Patents or Trademarks is invalid or
unenforceable or violates or infringes the rights of any other Person, and there
is no such violation or infringement in existence; and to the knowledge of such
Pledgor, no other Person is presently infringing upon the rights of such Pledgor
with regard to any of the Copyrights, Patents or Trademarks.
3.10 Documents of Title. No xxxx of lading, warehouse receipt or other
document or instrument of title is outstanding with respect to any Collateral
other than Mobile Goods and other than Inventory in transit in the ordinary
course of business to a location set forth on Annex C or to a customer of a
Pledgor.
ARTICLE IV
COVENANTS
4.1 Use and Disposition of Collateral. So long as no Event of Default
shall have occurred and be continuing, each Pledgor may, in any lawful manner
not inconsistent with the provisions of this Agreement and the other Credit
Documents, use, control and manage the Collateral in the operation of its
businesses, and receive and use the income, revenue and profits arising
therefrom and the Proceeds thereof, in the same manner and with the same effect
as if this Agreement had not been made; provided, however, that no Pledgor will
sell or otherwise dispose of, grant any option with respect to, or mortgage,
pledge, grant any Lien with respect to or otherwise encumber any of the
Collateral or any interest therein, except for the security interest created in
favor of the Agent hereunder and except as may be otherwise expressly permitted
in accordance with the terms of this Agreement and the Credit Agreement
(including any applicable provisions therein regarding delivery of proceeds of
sale or disposition to the Agent).
4.2 Change of Name, Locations, etc. No Pledgor will (i) change its
name, identity or corporate structure, (ii) change its chief executive office
from the location thereof listed on Annex C, or (iii) remove any Collateral
(other than Mobile Goods and goods in transit), or any books, records or other
information relating to Collateral, from the applicable location thereof listed
on Annex C, or keep or maintain any Collateral at a location not listed on Annex
C, unless in each case such Pledgor has (1) given twenty (20) days' prior
written notice to the Agent of its intention to do so, together with information
regarding any such new location and such other information in connection with
such proposed action as the Agent may reasonably request, and (2) delivered to
the Agent ten (10) days prior to any such change or removal such documents,
instruments and financing statements as may be required by the Agent, all in
form and substance satisfactory to the Agent, paid all necessary filing and
recording fees and taxes, and taken all other actions reasonably requested by
the Agent (including, at the request of the Agent, delivery of opinions of
counsel reasonably satisfactory to the Agent to the effect that all such actions
have
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been taken), in order to perfect and maintain the Lien upon and security
interest in the Collateral provided for herein in accordance with the provisions
of SECTION 3.2.
4.3 Records; Inspection. (a) Each Pledgor will keep and maintain at its
own cost and expense satisfactory and complete records of the Accounts and all
other Collateral, including, without limitation, records of all payments
received, all credits granted thereon, all merchandise returned and all other
documentation relating thereto, and will furnish to the Agent from time to time
such statements, schedules and reports (including, without limitation, accounts
receivable aging schedules) with regard to the Collateral as the Agent may
reasonably request.
(b) Each Pledgor shall, from time to time at such times as may be
reasonably requested and upon reasonable notice, (i) make available to the Agent
for inspection and review at such Pledgor's offices copies of all invoices and
other documents and information relating to the Collateral (including, without
limitation, itemized schedules of all collections of Accounts, showing the name
of each account debtor, the amount of each payment and such other information as
the Agent shall reasonably request), and (ii) permit the Agent or its
representatives to visit its offices or the premises upon which any Collateral
may be located, inspect its books and records and make copies and memoranda
thereof, inspect the Collateral, discuss its finances and affairs with its
officers, employees and independent accountants and take any other actions
necessary for the protection of the interests of the Secured Parties in the
Collateral. At the request of the Agent, each Pledgor will legend, in form and
manner satisfactory to the Agent, the books, records and materials evidencing or
relating to the Collateral with an appropriate reference to the fact that the
Collateral has been assigned to the Agent and that the Agent has a security
interest therein. The Agent shall have the right to make test verifications of
Accounts in any reasonable manner and through any reasonable medium, and each
Pledgor agrees to furnish all such reasonable assistance and information as the
Agent may require in connection therewith.
4.4 Accounts. Unless notified otherwise by the Agent in accordance with
the terms hereof, each Pledgor shall endeavor to collect its Accounts and all
amounts owing to it thereunder in the ordinary course of its business consistent
with past practices and shall apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balances thereof, and in
connection therewith shall, at the request of the Agent, take such action as the
Agent may deem necessary or advisable (within applicable laws) to enforce such
collection. No Pledgor shall, except to the extent done in the ordinary course
of its business consistent with past practices and in accordance with sound
business judgment and provided that no Event of Default shall have occurred and
be continuing, (i) grant any extension of the time for payment of any Account,
(ii) compromise or settle any Account for less than the full amount thereof,
(iii) release, in whole or in part, any Person or property liable for the
payment of any Account, or (iv) allow any credit or discount on any Account.
Each Pledgor shall promptly inform the Agent of any disputes with any account
debtor or obligor and of any claimed offset and counterclaim that may be
asserted with respect thereto involving, in each case, $500,000 or more, where
such Pledgor reasonably believes that the likelihood of payment by such account
debtor is materially impaired, indicating in detail the reason for the dispute,
all claims relating thereto and the amount in controversy.
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4.5 Instruments. Each Pledgor agrees that if any Intercompany
Obligations, Accounts or other Collateral shall at any time be evidenced by a
promissory note, chattel paper or other Instrument, the same shall promptly be
duly endorsed to the order of the Agent and delivered to the Agent to be held as
Collateral hereunder.
4.6 Equipment. Each Pledgor will, in accordance with sound business
practices, maintain all Equipment used by it in its business (other than
obsolete Equipment) in good repair, working order and condition (normal wear and
tear excepted) and make all necessary repairs and replacements thereof so that
the value and operating efficiency thereof shall at all times be maintained and
preserved. No Pledgor shall knowingly permit any Equipment to become a fixture
to any real property (other than real property the fee interest in which is
subject to a Mortgage in favor of the Agent).
4.7 Inventory. Each Pledgor will, in accordance with sound business
practices, maintain all Inventory held by it or on its behalf in good saleable
or useable condition. Unless notified otherwise by the Agent in accordance with
the terms hereof, each Pledgor may, in any lawful manner not inconsistent with
the provisions of this Agreement and the other Credit Documents, process, use
and, in the ordinary course of business but not otherwise, sell its Inventory.
Without limiting the generality of the foregoing, each Pledgor agrees that it
shall not permit any Inventory to be in the possession of any bailee,
warehouseman, agent or processor at any time unless such bailee, warehouseman,
agent or processor shall have been notified of the security interest created by
this Agreement and such Pledgor shall have exercised its reasonable best efforts
to obtain, at such Pledgor's sole cost and expense, a written agreement to hold
such Inventory subject to the security interest created by this Agreement and
the instructions of the Agent and to waive and release any Lien (whether arising
by operation of law or otherwise) it may have with respect to such Inventory,
such agreement to be in form and substance reasonably satisfactory to the Agent.
4.8 Contracts. Each Pledgor will, at its expense, at all times perform
and comply with, in all material respects, all terms and provisions of each
Specified Contract to which it is or hereafter becomes a party required to be
performed or complied with by it and enforce the terms and provisions thereof in
accordance with its terms, and will not waive, amend or modify any provision
thereof in any manner other than in the ordinary course of business of such
Pledgor in accordance with past practices and for a valid economic reason
benefiting such Pledgor (provided that in no event may any waiver, amendment or
modification be made that would adversely affect the interests of the Agent and
the other Secured Parties). With regard to all leases, contracts and agreements
that are excluded from the definition of the term "Contracts," each Pledgor
covenants and agrees to exercise all of its material rights and remedies under
such leases, agreements and contracts to which it is a party in a commercially
reasonable manner consistent with the interests of the Agent and the Secured
Parties. No Pledgor will enter into any Specified Contract that by its terms
prohibits the assignment of such Pledgor's rights and interest thereunder in the
manner contemplated by this Agreement, other than as may be entered into in the
ordinary course of business of such Pledgor in accordance with past practices
and for a valid economic reason benefiting such Pledgor. Each Pledgor further
covenants and agrees to use its reasonable best efforts to obtain any required
consent to the collateral assignment of any
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Specified Contract, in form and substance reasonably satisfactory to the Agent,
upon the request of the Agent, and will deliver copies thereof to the Agent
promptly upon execution and delivery thereof. Each Pledgor will notify the Agent
promptly in writing upon any termination of any Specified Contract, in whole or
in part, or any material breach, default or event of default by any party
thereunder.
4.9 Taxes. Each Pledgor will pay and discharge (i) all taxes,
assessments and governmental charges or levies imposed upon it, upon its income
or profits or upon any of its properties, prior to the date on which penalties
would attach thereto, and (ii) all lawful claims that, if unpaid, might become a
Lien upon any of its properties; provided, however, that no Pledgor shall be
required to pay any such tax, assessment, charge, levy or claim that is being
contested in good faith and by proper proceedings and as to which such Pledgor
has maintained adequate reserves with respect thereto in accordance with
Generally Accepted Accounting Principles, unless and until any tax lien notice
has become effective with respect thereto or until any Lien resulting therefrom
attaches to its properties and becomes enforceable against its other creditors.
4.10 Intellectual Property. (a) Each applicable Pledgor will, at its
own expense, execute, deliver and record, as promptly as possible (but in any
event within 10 days) after the date hereof, fully completed assignments in the
forms of Exhibits B and C, as applicable, in the U.S. Copyright Office or the
U.S. Patent and Trademark Office pursuant to 35 U.S.C. Section 261, 15 U.S.C.
Section 1060 or 17 U.S.C. Section 205, as applicable, with regard to any
Copyright Collateral, Patent Collateral or Trademark Collateral, as the case may
be, described in Annex D, E or F hereto. In the event that after the date hereof
any Pledgor shall acquire any registered Copyright, Patent or Trademark, or
effect any registration of any Copyright, Patent or Trademark or file any
application for registration thereof, whether within the United States or any
other country or jurisdiction, such Pledgor shall promptly furnish written
notice thereof to the Agent together with information sufficient to permit the
Agent, upon its receipt of such notice, to (and each Pledgor hereby authorizes
the Agent to) modify this Agreement, as appropriate, by amending Annexes D, E
and F hereto or to add additional exhibits hereto to include any Copyright,
Patent or Trademark that becomes part of the Collateral under this Agreement,
and such Pledgor shall additionally, at its own expense, execute, deliver and
record, as promptly as possible (but in any event within 10 days) after the date
of such acquisition, registration or application, as applicable, with regard to
United States Patents, Trademarks and Copyrights, fully completed assignments in
the forms of Exhibits B and C, as applicable, in the U.S. Copyright Office or
the U.S. Patent and Trademark Office as more fully described hereinabove,
together in all instances with any other agreements, instruments and documents
that the Agent may reasonably request from time to time to further effect and
confirm the assignment and security interest created by this Agreement in such
Copyrights, Patents and Trademarks, and each Pledgor hereby appoints the Agent
its attorney-in-fact to execute, deliver and record any and all such agreements,
instruments and documents for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed and such power, being coupled with an
interest, shall be irrevocable for so long as this Agreement shall be in effect
with respect to such Pledgor.
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(b) Each Pledgor (either itself or through its licensees or its
sublicensees) will, for each Trademark used in the conduct of its business, use
its best efforts to (i) maintain such Trademark in full force and effect, free
from any claim of abandonment or invalidity for non-use, (ii) maintain the
quality of products and services offered under such Trademark, (iii) display
such Trademark with notice of federal registration to the extent required by
applicable law and (iv) not knowingly use or knowingly permit the use of such
Trademark in violation of any third-party rights.
(c) Each Pledgor (either itself or through its licensees or
sublicensees) will refrain from committing any act, or omitting any act, whereby
any Patent used in the conduct of such Pledgor's business may become invalidated
or dedicated to the public, and shall continue to xxxx any products covered by a
Patent with the relevant patent number as required by applicable patent laws.
(d) Each Pledgor (either itself or through its licensees or
sublicensees) will, for each work covered by a Copyright, continue to publish,
reproduce, display, adopt and distribute the work with appropriate copyright
notice as required under applicable copyright laws.
(e) Each Pledgor shall notify the Agent immediately if it knows or has
reason to know that any Patent, Trademark or Copyright used in the conduct of
its business may become abandoned or dedicated to the public, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the U.S. Patent and Trademark
Office, U.S. Copyright Office or any court) regarding such Pledgor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or to
keep and maintain the same.
(f) Each Pledgor will take all necessary steps that are consistent with
the practice in any proceeding before the U.S. Patent and Trademark Office, U.S.
Copyright Office or any office or agency in any political subdivision of the
United States or in any other country or any political subdivision thereof, to
maintain and pursue each application relating to any Patents, Trademarks or
Copyrights (and to obtain the relevant grant or registration) and to maintain
each registration of any Patents, Trademarks and Copyrights used in the conduct
of such Pledgor's business, including the filing of applications for renewal,
affidavits of use, affidavits of incontestability and maintenance fees, and, if
consistent with sound business judgment, to initiate opposition, interference
and cancellation proceedings against third parties.
(g) In the event that any Collateral consisting of a Patent, Trademark
or Copyright used in the conduct of any Pledgor's business is believed
infringed, misappropriated or diluted by a third party, such Pledgor shall
notify the Agent promptly after it learns thereof and shall, if consistent with
sound business judgment, promptly xxx for infringement, misappropriation or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and take such other actions as are appropriate
under the circumstances to protect such Collateral.
(h) Upon the occurrence and during the continuance of any Event of
Default, each Pledgor shall use its reasonable best efforts to obtain all
requisite consents or approvals from the licensor of each License included
within the Copyright Collateral, Patent Collateral or
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Trademark Collateral to effect the assignment of all of such Pledgor's right,
title and interest thereunder to the Agent or its designee.
4.11 Mobile Goods. Upon the request of the Agent at any time, whether
or not an Event of Default shall have occurred and be continuing, each Pledgor
will deliver to the Agent originals of the certificates of title or ownership
for all Mobile Goods owned by it, together (in the case of motor vehicles) with
the manufacturer's statement of origin with the Agent listed as lienholder and
odometer statements and together in all other cases with appropriate instruments
or certificates of transfer and delivery, duly completed and executed, and will
take such other action as the Agent may deem necessary to perfect the security
interest created by this Agreement in all such Mobile Goods.
4.12 Delivery of Collateral. All certificates or instruments
representing or evidencing any Accounts, Intercompany Obligations, Equity
Interests or other Collateral shall be delivered to and held by or on behalf of
the Agent pursuant hereto, shall be in form suitable for transfer by delivery
and shall be delivered together with undated stock powers duly executed in
blank, appropriate endorsements or other necessary instruments of registration,
transfer or assignment, duly executed and in form and substance satisfactory to
the Agent, and in each case such other instruments or documents as the Agent may
reasonably request.
4.13 Protection of Security Interest. Each Pledgor agrees that it will,
at its own cost and expense, take any and all actions necessary to warrant and
defend the right, title and interest of the Secured Parties in and to the
Collateral against the claims and demands of all other Persons.
ARTICLE V
CERTAIN PROVISIONS RELATING TO EQUITY INTERESTS
5.1 Ownership; After-Acquired Equity Interests. (a) Except to the
extent otherwise expressly permitted by or pursuant to the Credit Agreement,
each Pledgor will cause the Equity Interests pledged by it hereunder to
constitute at all times 100% of the capital stock or other Equity Interests in
each issuer thereof, such that the issuer thereof shall be a Wholly Owned
Subsidiary of such Pledgor, and unless the Agent shall have given its prior
written consent, no Pledgor will cause or permit any such issuer to issue or
sell any new capital stock, any warrants, options or rights to acquire the same,
or other Equity Interests of any nature to any Person other than such Pledgor,
or cause, permit or consent to the admission of any other Person as a
stockholder, partner or member of any such issuer.
(b) If any Pledgor shall, at any time and from time to time after the
date hereof, acquire any additional capital stock or other Equity Interests in
any Person of the types described in the definition of the term "Equity
Interests," the same shall be automatically deemed to be Equity Interests, and
to be pledged to the Agent pursuant to SECTION 2.1, and such Pledgor will
forthwith pledge and deposit the same with the Agent and deliver to the Agent
any certificates or
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instruments therefor, together with the endorsement of such Pledgor (in the case
of any promissory notes or other Instruments), undated stock powers (in the case
of Equity Interests evidenced by certificates) or other necessary instruments of
transfer or assignment, duly executed in blank and in form and substance
satisfactory to the Agent, together with such other certificates and instruments
as the Agent may reasonably request (including Uniform Commercial Code financing
statements or appropriate amendments thereto), and will promptly thereafter
deliver to the Agent a fully completed and duly executed amendment to this
Agreement in the form of Exhibit A (each, a "Pledge Amendment") in respect
thereof. Each Pledgor hereby authorizes the Agent to attach each such Pledge
Amendment to this Agreement, and agrees that all such Collateral listed on any
Pledge Amendment shall for all purposes be deemed Collateral hereunder and shall
be subject to the provisions hereof; provided that the failure of any Pledgor to
execute and deliver any Pledge Amendment with respect to any such additional
Collateral as required hereinabove shall not impair the security interest of the
Agent in such Collateral or otherwise adversely affect the rights and remedies
of the Agent hereunder with respect thereto.
(c) If any Equity Interests (whether now owned or hereafter acquired)
included in the Collateral are "uncertificated securities" within the meaning of
the Uniform Commercial Code or are otherwise not evidenced by any certificate or
instrument, each applicable Pledgor will promptly notify the Agent thereof and
will promptly take and cause to be taken, and will (if the issuer of such
uncertificated securities is a Person other than a Subsidiary of the Borrower)
use its best efforts to cause the issuer to take, all actions required under
Articles 8 and 9 of the Uniform Commercial Code and any other applicable law, to
enable the Agent to acquire "control" of such uncertificated securities (within
the meaning of such term under Section 8-106 (or its successor provision) of the
Uniform Commercial Code) and as may be otherwise necessary or deemed appropriate
by the Agent to perfect the security interest of the Agent therein.
5.2 Voting Rights. So long as no Event of Default shall have occurred
and be continuing, each Pledgor shall be entitled to exercise all voting and
other consensual rights pertaining to its Equity Interests (subject to its
obligations under SECTION 5.1), and for that purpose the Agent will execute and
deliver or cause to be executed and delivered to each applicable Pledgor all
such proxies and other instruments as such Pledgor may reasonably request in
writing to enable such Pledgor to exercise such voting and other consensual
rights; provided, however, that no Pledgor will cast any vote, give any consent,
waiver or ratification, or take or fail to take any action, in any manner that
would, or could reasonably be expected to, violate or be inconsistent with any
of the terms of this Agreement, the Credit Agreement or any other Credit
Document, or have the effect of impairing the position or interests of the Agent
or any other Secured Party.
5.3 Dividends and Other Distributions. So long as no Event of Default
shall have occurred and be continuing (or would occur as a result thereof), and
except as provided otherwise herein, all interest, income, dividends,
distributions and other amounts payable in cash in respect of the Equity
Interests may be paid to and retained by the Pledgors; provided, however, that
all such interest, income, dividends, distributions and other amounts shall, at
all times after the occurrence and during the continuance of an Event of
Default, be paid to the Agent and retained
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by it as part of the Collateral (except to the extent applied upon receipt to
the repayment of the Secured Obligations). The Agent shall also be entitled at
all times (whether or not during the continuance of an Event of Default) to
receive directly, and to retain as part of the Collateral, (i) all interest,
income, dividends, distributions or other amounts paid or payable in cash or
other property in respect of any Equity Interests in connection with the
dissolution, liquidation, recapitalization or reclassification of the capital of
the applicable issuer to the extent representing (in the reasonable judgment of
the Agent) an extraordinary, liquidating or other distribution in return of
capital, (ii) all additional Equity Interests or other securities or property
(other than cash) paid or payable or distributed or distributable in respect of
any Equity Interests in connection with any noncash dividend, distribution,
return of capital, spin-off, stock split, split-up, reclassification,
combination of shares or interests or similar rearrangement, and (iii) without
affecting any restrictions against such actions contained in the Credit
Agreement, all additional Equity Interests or other securities or property
(including cash) paid or payable or distributed or distributable in respect of
any Equity Interests in connection with any consolidation, merger, exchange of
securities, liquidation or other reorganization. All interest, income,
dividends, distributions or other amounts that are received by any Pledgor in
violation of the provisions of this Section shall be received in trust for the
benefit of the Agent, shall be segregated from other property or funds of such
Pledgor and shall be forthwith delivered to the Agent as Collateral in the same
form as so received (with any necessary endorsements).
ARTICLE VI
REMEDIES
6.1 Remedies. If an Event of Default shall have occurred and be
continuing, the Agent shall be entitled to exercise in respect of the Collateral
all of its rights, powers and remedies provided for herein or otherwise
available to it under any other Credit Document, by law, in equity or otherwise,
including all rights and remedies of a secured party under the Uniform
Commercial Code, and shall be entitled in particular, but without limitation of
the foregoing, to exercise the following rights, which each Pledgor agrees to be
commercially reasonable:
(a) To notify any or all account debtors or obligors under any
Accounts, Contracts or other Collateral of the security interest in favor of the
Agent created hereby and to direct all such Persons to make payments of all
amounts due thereon or thereunder directly to the Agent or to an account
designated by the Agent; and in such instance and from and after such notice,
all amounts and Proceeds (including wire transfers, checks and other
instruments) received by any Pledgor in respect of any Accounts, Contracts or
other Collateral shall be received in trust for the benefit of the Agent
hereunder, shall be segregated from the other funds of such Pledgor and shall be
forthwith deposited into such account or paid over or delivered to the Agent in
the same form as so received (with any necessary endorsements or assignments),
to be held as Collateral and applied to the Secured Obligations as provided
herein; and by this provision, each Pledgor irrevocably authorizes and directs
each Person who is or shall be a party to or liable for the performance of any
Contract, upon receipt of notice from the Agent to the effect that an Event of
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Default has occurred and is continuing, to attorn to or otherwise recognize the
Agent as owner under such Contract and to pay, observe and otherwise perform the
obligations under such Contract to or for the Agent or the Agent's designee as
though the Agent or such designee were such Pledgor named therein, and to do so
until otherwise notified by the Agent;
(b) To take possession of, receive, endorse, assign and deliver, in its
own name or in the name of any Pledgor, all checks, notes, drafts and other
instruments relating to any Collateral, including receiving, opening and
properly disposing of all mail addressed to any Pledgor concerning Accounts and
other Collateral; to verify with account debtors or other contract parties the
validity, amount or any other matter relating to any Accounts or other
Collateral, in its own name or in the name of any Pledgor; to accelerate any
indebtedness or other obligation constituting Collateral that may be accelerated
in accordance with its terms; to take or bring all actions and suits deemed
necessary or appropriate to effect collections and to enforce payment of any
Accounts or other Collateral; to settle, compromise or release in whole or in
part any amounts owing on Accounts or other Collateral; and to extend the time
of payment of any and all Accounts or other amounts owing under any Collateral
and to make allowances and adjustments with respect thereto, all in the same
manner and to the same extent as any Pledgor might have done;
(c) To notify any or all depository institutions with which any Deposit
Accounts are maintained to remit and transfer all monies, securities and other
property on deposit in such Deposit Accounts or deposited or received for
deposit thereafter to the Agent, for deposit in a Collateral Account or such
other accounts as may be designated by the Agent, for application to the Secured
Obligations as provided herein;
(d) To transfer to or register in its name or the name of any of its
agents or nominees all or any part of the Collateral, without notice to any
Pledgor and with or without disclosing that such Collateral is subject to the
security interest created hereunder;
(e) To require any Pledgor to, and each Pledgor hereby agrees that it
will at its expense and upon request of the Agent forthwith, assemble all or any
part of the Collateral as directed by the Agent and make it available to the
Agent at a place designated by the Agent;
(f) To enter and remain upon the premises of any Pledgor and take
possession of all or any part of the Collateral, with or without judicial
process; to use the materials, services, books and records of any Pledgor for
the purpose of liquidating or collecting the Collateral, whether by foreclosure,
auction or otherwise; and to remove the same to the premises of the Agent or any
designated agent for such time as the Agent may desire, in order to effectively
collect or liquidate the Collateral;
(g) To exercise (i) all voting, consensual and other rights and powers
pertaining to the Equity Interests (whether or not transferred into the name of
the Agent), at any meeting of shareholders, partners, members or otherwise, and
(ii) any and all rights of conversion, exchange, subscription and any other
rights, privileges or options pertaining to the Equity Interests as if it were
the absolute owner thereof (including, without limitation, the right to exchange
at its discretion any and all of the Equity Interests upon the merger,
consolidation, reorganization,
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reclassification, combination of shares or interests, similar rearrangement or
other similar fundamental change in the structure of the applicable issuer, or
upon the exercise by any Pledgor or the Agent of any right, privilege or option
pertaining to such Equity Interests), and in connection therewith, the right to
deposit and deliver any and all of the Equity Interests with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Agent may determine, and give all consents, waivers and
ratifications in respect of the Equity Interests, all without liability except
to account for any property actually received by it, but the Agent shall have no
duty to exercise any such right, privilege or option or give any such consent,
waiver or ratification and shall not be responsible for any failure to do so or
delay in so doing; and for the foregoing purposes each Pledgor will promptly
execute and deliver or cause to be executed and delivered to the Agent, upon
request, all such proxies and other instruments as the Agent may reasonably
request to enable the Agent to exercise such rights and powers; AND IN
FURTHERANCE OF THE FOREGOING AND WITHOUT LIMITATION THEREOF, EACH PLEDGOR HEREBY
IRREVOCABLY CONSTITUTES AND APPOINTS THE AGENT AS THE TRUE AND LAWFUL PROXY AND
ATTORNEY-IN-FACT OF SUCH PLEDGOR, WITH FULL POWER OF SUBSTITUTION IN THE
PREMISES, TO EXERCISE ALL SUCH VOTING, CONSENSUAL AND OTHER RIGHTS AND POWERS TO
WHICH ANY HOLDER OF ANY INVESTMENTS WOULD BE ENTITLED BY VIRTUE OF HOLDING THE
SAME, WHICH PROXY AND POWER OF ATTORNEY, BEING COUPLED WITH AN INTEREST, IS
IRREVOCABLE AND SHALL BE EFFECTIVE FOR SO LONG AS THIS AGREEMENT SHALL BE IN
EFFECT; and
(h) To sell, resell, assign and deliver, in its sole discretion, all or
any of the Collateral, in one or more parcels, on any securities exchange on
which any Equity Interests may be listed, at public or private sale, at any of
the Agent's offices or elsewhere, for cash, upon credit or for future delivery,
at such time or times and at such price or prices and upon such other terms as
the Agent may deem satisfactory. If any of the Collateral is sold by the Agent
upon credit or for future delivery, the Agent shall not be liable for the
failure of the purchaser to purchase or pay for the same and, in the event of
any such failure, the Agent may resell such Collateral. In no event shall any
Pledgor be credited with any part of the Proceeds of sale of any Collateral
until and to the extent cash payment in respect thereof has actually been
received by the Agent. Each purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right of whatsoever kind, including any
equity or right of redemption of any Pledgor, and each Pledgor hereby expressly
waives all rights of redemption, stay or appraisal, and all rights to require
the Agent to marshal any assets in favor of such Pledgor or any other party or
against or in payment of any or all of the Secured Obligations, that it has or
may have under any rule of law or statute now existing or hereafter adopted. No
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law, as referred to below), all of which are hereby expressly
waived by each Pledgor, shall be required in connection with any sale or other
disposition of any part of the Collateral. If any notice of a proposed sale or
other disposition of any part of the Collateral shall be required under
applicable law, the Agent shall give the applicable Pledgor at least ten (10)
days' prior notice of the time and place of any public sale and of the time
after which any private sale or other disposition is to be made, which notice
each Pledgor agrees is commercially reasonable. The Agent shall not be obligated
to make any sale of Collateral if it shall determine not to do so, regardless of
the fact that notice of sale may have
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been given. The Agent 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. Upon each
public sale and, to the extent permitted by applicable law, upon each private
sale, the Agent may purchase all or any of the Collateral being sold, free from
any equity, right of redemption or other claim or demand, and may make payment
therefor by endorsement and application (without recourse) of the Secured
Obligations in lieu of cash as a credit on account of the purchase price for
such Collateral.
6.2 Application of Proceeds. (a) All Proceeds collected by the Agent
upon any sale, other disposition of or realization upon any of the Collateral,
together with all other moneys received by the Agent hereunder, shall be applied
as follows:
(i) first, to the payment of all costs and expenses of
such sale, disposition or other realization, including the reasonable
costs and expenses of the Agent and the reasonable fees and expenses of
its agents and counsel, all amounts advanced by the Agent for the
account of any Pledgor, and all other amounts payable to the Agent
under SECTION 8.1;
(ii) second, after payment in full of the amounts
specified in clause (i) above, to the ratable payment of all other
Secured Obligations owing to the Secured Parties; and
(iii) third, after payment in full of the amounts specified
in clauses (i) and (ii) above, and following the termination of this
Agreement, to the Pledgors or any other Person lawfully entitled to
receive such surplus.
(b) For purposes of applying amounts in accordance with this Section,
the Agent shall be entitled to rely upon any Secured Party that has entered into
a Hedge Agreement with the Borrower for a determination (which such Secured
Party agrees to provide or cause to be provided upon request of the Agent) of
the outstanding Secured Obligations owed to such Secured Party under any such
Hedge Agreement. Unless it has actual knowledge (including by way of written
notice from any such Secured Party) to the contrary, the Agent, in acting
hereunder, shall be entitled to assume that no Hedge Agreements or Secured
Obligations in respect thereof are in existence between any Secured Party and
the Borrower.
(c) Each Pledgor shall remain liable to the extent of any deficiency
between the amount of all Proceeds realized upon sale or other disposition of
the Collateral pursuant to this Agreement and the aggregate amount of the sums
referred to in clauses (i) and (ii) of subsection (a) above. Upon any sale of
any Collateral hereunder by the Agent (whether by virtue of the power of sale
herein granted, pursuant to judicial proceeding, or otherwise), the receipt of
the Agent or the officer making the sale shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold, and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Agent or such officer or be answerable in any
way for the misapplication thereof.
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6.3 Collateral Accounts. Upon the occurrence and during the continuance
of an Event of Default, the Agent shall have the right to cause to be
established and maintained, at its principal office or such other location or
locations as it may establish from time to time in its discretion, one or more
accounts (collectively, "Collateral Accounts") for the collection of cash
Proceeds of the Collateral. Such Proceeds, when deposited, shall continue to
constitute Collateral for the Secured Obligations and shall not constitute
payment thereof until applied as herein provided. The Agent shall have sole
dominion and control over all funds deposited in any Collateral Account, and
such funds may be withdrawn therefrom only by the Agent. Upon the occurrence and
during the continuance of an Event of Default, the Agent shall have the right to
(and, if directed by the Required Lenders pursuant to the Credit Agreement,
shall) apply amounts held in the Collateral Accounts in payment of the Secured
Obligations in the manner provided for in SECTION 6.2.
6.4 Grant of License. Each Pledgor hereby grants to the Agent an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to any Pledgor) to use, license or sublicense any Patent
Collateral, Trademark Collateral or Copyright Collateral now owned or licensed
or hereafter acquired or licensed by such Pledgor, wherever the same may be
located throughout the world, for such term or terms, on such conditions and in
such manner as the Agent shall determine, whether general, special or otherwise,
and whether on an exclusive or nonexclusive basis, and including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license or sublicense by the
Agent shall be exercised, at the option of the Agent, only upon the occurrence
and during the continuation of an Event of Default; provided that any license,
sublicense or other transaction entered into by the Agent in accordance herewith
shall be binding upon each applicable Pledgor notwithstanding any subsequent
cure of an Event of Default.
6.5 Registration; Private Sales. (a) If, at any time after the
occurrence and during the continuance of an Event of Default, any Pledgor shall
have received from the Agent a written request or requests that such Pledgor
cause any registration, qualification or compliance under any federal or state
securities law or laws to be effected with respect to all or any part of the
Equity Interests, such Pledgor will, as soon as practicable and at its expense,
use its best efforts to cause such registration to be effected and be kept
effective and will use its best efforts to cause such qualification and
compliance to be effected and be kept effective as may be so requested and as
would permit or facilitate the sale and distribution of such Equity Interests,
including, without limitation, registration under the Securities Act of 1933, as
amended (the "Securities Act"), appropriate qualifications under applicable blue
sky or other state securities laws and appropriate compliance with any other
applicable requirements of Governmental Authorities; provided, that the Agent
shall furnish to such Pledgor such information regarding the Agent as such
Pledgor may reasonably request in writing and as shall be required in connection
with any such registration, qualification or compliance. Such Pledgor will cause
the Agent to be kept reasonably advised in writing as to the progress of each
such registration, qualification or compliance and as to the completion thereof,
will furnish to the Agent such number of prospectuses, offering circulars or
other documents incident thereto as the Agent from time to time may reasonably
request, and will indemnify the Agent and all others participating in the
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distribution of such Equity Interests against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same may have been caused by an
untrue statement or omission based upon information furnished in writing to such
Pledgor by the Agent or any other Secured Party expressly for use therein.
(b) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws as in
effect from time to time, the Agent may be compelled, with respect to any sale
of all or any part of the Equity Interests conducted without registration or
qualification under the Securities Act and such state securities laws, to limit
purchasers to any one or more Persons who will represent and agree, among other
things, to acquire such Equity Interests for their own account, for investment
and not with a view to the distribution or resale thereof. Each Pledgor
acknowledges that any such private sales may be made in such manner and under
such circumstances as the Agent may deem necessary or advisable in its sole and
absolute discretion, including at prices and on terms less favorable than those
obtainable through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration statement under
the Securities Act), and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner and agrees that the Agent shall have no obligation to conduct any public
sales and no obligation to delay the sale of any Equity Interests for the period
of time necessary to permit its registration for public sale under the
Securities Act and applicable state securities laws, and shall not have any
responsibility or liability as a result of its election so not to conduct any
such public sales or delay the sale of any Equity Interests, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until after such registration. Each Pledgor hereby waives any claims
against the Agent or any other Secured Party arising by reason of the fact that
the price at which any Equity Interests may have been sold at any private sale
was less than the price that might have been obtained at a public sale or was
less than the aggregate amount of the Secured Obligations, even if the Agent
accepts the first offer received and does not offer such Equity Interests to
more than one offeree.
(c) Each Pledgor agrees that a breach of any of the covenants contained
in this Section will cause irreparable injury to the Agent and the other Secured
Parties, that the Agent and the other Secured Parties have no adequate remedy at
law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section shall be specifically enforceable against the
Pledgors.
6.6 The Pledgors Remain Liable. Notwithstanding anything herein to the
contrary, (i) each Pledgor shall remain liable under all Contracts to which it
is a party included within the Collateral (including, without limitation, all
Investment Agreements) to perform all of its obligations thereunder to the same
extent as if this Agreement had not been executed, (ii) the exercise by the
Agent of any of its rights or remedies hereunder shall not release any Pledgor
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from any of its obligations under any of such Contracts, and (iii) except as
specifically provided for hereinbelow, the Agent shall not have any obligation
or liability by reason of this Agreement under any of such Contracts, nor shall
the Agent be obligated to perform any of the obligations or duties of any
Pledgor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder. This Agreement shall not in any way be deemed to
obligate the Agent, any other Secured Party or any purchaser at a foreclosure
sale under this Agreement to assume any of a Pledgor's obligations, duties or
liabilities under any Investment Agreement, including, without limitation, any
Pledgor's obligations, if any, to manage the business and affairs of the
applicable partnership, joint venture, limited liability company or other issuer
(collectively, the "Partner Obligations"), unless the Agent or such other
Secured Party or purchaser otherwise agrees in writing to assume any or all of
such Partner Obligations. In the event of foreclosure by the Agent hereunder,
then except as provided in the preceding sentence, each applicable Pledgor shall
remain bound and obligated to perform its Partner Obligations and neither the
Agent nor any other Secured Party shall be deemed to have assumed any Partner
Obligations. In the event the Agent, any other Secured Party or any purchaser at
a foreclosure sale elects to become a substitute partner or member in place of a
Pledgor, the party making such election shall adopt in writing such Investment
Agreement and agree to be bound by the terms and provisions thereof; and subject
to the execution of such written agreement, each Pledgor hereby irrevocably
consents in advance to the admission of the Agent, any other Secured Party or
any such purchaser as a substitute partner or member to the extent of the Equity
Interests acquired pursuant to such sale, and agrees to execute any documents or
instruments and take any other action as may be necessary or as may be
reasonably requested in connection therewith. The powers, rights and remedies
conferred on the Agent hereunder are solely to protect its interest and
privilege in such Contracts, as Collateral, and shall not impose any duty upon
it to exercise any such powers, rights or remedies.
6.7 Waivers. Each Pledgor, to the greatest extent not prohibited by
applicable law, hereby (i) agrees that it will not invoke, claim or assert the
benefit of any rule of law or statute now or hereafter in effect (including,
without limitation, any right to prior notice or judicial hearing in connection
with the Agent's possession, custody or disposition of any Collateral or any
appraisal, valuation, stay, extension, moratorium or redemption law), or take or
omit to take any other action, that would or could reasonably be expected to
have the effect of delaying, impeding or preventing the exercise of any rights
and remedies in respect of the Collateral, the absolute sale of any of the
Collateral or the possession thereof by any purchaser at any sale thereof, and
waives the benefit of all such laws and further agrees that it will not hinder,
delay or impede the execution of any power granted hereunder to the Agent, but
that it will permit the execution of every such power as though no such laws
were in effect, (ii) waives all rights that it has or may have under any rule of
law or statute now existing or hereafter adopted to require the Agent to marshal
any Collateral or other assets in favor of such Pledgor or any other party or
against or in payment of any or all of the Secured Obligations, and (iii) waives
all rights that it has or may have under any rule of law or statute now existing
or hereafter adopted to demand, presentment, protest, advertisement or notice of
any kind (except notices expressly provided for herein).
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ARTICLE VII
THE AGENT
7.1 The Agent; Standard of Care. The Agent will hold all items of the
Collateral at any time received under this Agreement in accordance with the
provisions hereof. The obligations of the Agent as holder of the Collateral and
interests therein and with respect to the disposition thereof, and otherwise
under this Agreement and the other Credit Documents, are only those expressly
set forth in this Agreement and the other Credit Documents. The Agent shall act
hereunder at the direction, or with the consent, of the Required Lenders on the
terms and conditions set forth in the Credit Agreement. The powers conferred on
the Agent hereunder are solely to protect its interest, on behalf of the Secured
Parties, in the Collateral, and shall not impose any duty upon it to exercise
any such powers. Except for treatment of the Collateral in its possession in a
manner substantially equivalent to that which the Agent, in its individual
capacity, accords its own property of a similar nature, and the accounting for
moneys actually received by it hereunder, the Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to the Collateral. Neither the
Agent nor any other Secured Party shall be liable to any Pledgor (i) for any
loss or damage sustained by such Pledgor, or (ii) for any loss, damage,
depreciation or other diminution in the value of any of the Collateral that may
occur as a result of or in connection with or that is in any way related to any
exercise by the Agent or any other Secured Party of any right or remedy under
this Agreement, any failure to demand, collect or realize upon any of the
Collateral or any delay in doing so, or any other act or failure to act on the
part of the Agent or any other Secured Party, except to the extent that the same
is caused by its own gross negligence or willful misconduct.
7.2 Further Assurances; Attorney-in-Fact. (a) Each Pledgor agrees that
it will join with the Agent to execute and, at its own expense, file and refile
under the Uniform Commercial Code such financing statements, continuation
statements and other documents and instruments in such offices as the Agent may
reasonably deem necessary or appropriate, and wherever required or permitted by
law, in order to perfect and preserve the Agent's security interest in the
Collateral, and hereby authorizes the Agent to file financing statements and
amendments thereto relating to all or any part of the Collateral without the
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things (including, without limitation, making any notice filings with
state tax or revenue authorities required to be made by account creditors in
order to enforce any Accounts in such state) and to execute and deliver to the
Agent such additional conveyances, assignments, agreements and instruments as
the Agent may reasonably require or deem advisable to perfect, establish,
confirm and maintain the security interest and Lien provided for herein, to
carry out the purposes of this Agreement or to further assure and confirm unto
the Agent its rights, powers and remedies hereunder.
(b) Each Pledgor hereby irrevocably appoints the Agent its lawful
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor, the Agent or otherwise, and with full power of
substitution in the premises (which power of attorney, being coupled with an
interest, is irrevocable for so long as this Agreement shall be in effect),
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from time to time in the Agent's discretion after the occurrence and during the
continuance of an Event of Default to take any action and to execute any
instruments that the Agent may deem necessary or advisable to accomplish the
purpose of this Agreement, including, without limitation:
(i) to sign the name of such Pledgor on any financing
statement, continuation statement, notice or other similar document
that, in the Agent's opinion, should be made or filed in order to
perfect or continue perfected the security interest granted under this
Agreement (including, without limitation, any title or ownership
applications for filing with applicable state agencies to enable any
motor vehicles now or hereafter owned by the Company to be retitled and
the Agent listed as lienholder thereon);
(ii) to ask, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(iii) to receive, endorse and collect any checks, drafts,
instruments, chattel paper and other orders for the payment of money
made payable to such Pledgor representing any interest, income,
dividend, distribution or other amount payable in respect of any of the
Collateral and to give full discharge for the same;
(iv) to obtain, maintain and adjust any property or casualty
insurance required to be maintained by such Pledgor hereunder and
direct the payment of proceeds thereof to the Agent;
(v) to pay or discharge taxes, Liens or other encumbrances
levied or placed on or threatened against the Collateral, the legality
or validity thereof and the amounts necessary to discharge the same to
be determined by the Agent in its sole discretion, any such payments
made by the Agent to become Secured Obligations of the Pledgors to the
Agent, due and payable immediately and without demand;
(vi) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or advisable for the
collection of any of the Collateral or otherwise to enforce the rights
of the Agent with respect to any of the Collateral; and
(vii) to use, sell, assign, transfer, pledge, make any
agreement with respect to or otherwise deal with any and all of the
Collateral as fully and completely as though the Agent were the
absolute owner of the Collateral for all purposes, and to do from time
to time, at the Agent's option and the Pledgors' expense, all other
acts and things deemed necessary by the Agent to protect, preserve or
realize upon the Collateral and to more completely carry out the
purposes of this Agreement.
(c) If any Pledgor fails to perform any covenant or agreement contained
in this Agreement after written request to do so by the Agent (provided that no
such request shall be necessary at any time after the occurrence and during the
continuance of an Event of Default), the Agent may itself perform, or cause the
performance of, such covenant or agreement and may
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take any other action that it deems necessary and appropriate for the
maintenance and preservation of the Collateral or its security interest therein,
and the reasonable expenses so incurred in connection therewith shall be payable
by the Pledgors under SECTION 8.1.
ARTICLE VIII
MISCELLANEOUS
8.1 Indemnity and Expenses. The Pledgors agree jointly and severally:
(a) To indemnify and hold harmless the Agent, each other Secured Party
and each of their respective directors, officers, employees, agents and
affiliates from and against any and all claims, damages, demands, losses,
obligations, judgments and liabilities (including, without limitation,
reasonable attorneys' fees and expenses) in any way arising out of or in
connection with this Agreement and the transactions contemplated hereby, except
to the extent the same shall arise as a result of the gross negligence or
willful misconduct of the party seeking to be indemnified; and
(b) To pay and reimburse the Agent upon demand for all reasonable costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses) that the Agent may incur in connection with (i) the custody, use or
preservation of, or the sale of, collection from or other realization upon, any
of the Collateral, including the reasonable expenses of re-taking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral, (ii) the exercise or enforcement of any rights or remedies
granted hereunder (including, without limitation, under ARTICLE VI), under any
of the other Credit Documents or otherwise available to it (whether at law, in
equity or otherwise), or (iii) the failure by any Pledgor to perform or observe
any of the provisions hereof. The provisions of this Section shall survive the
execution and delivery of this Agreement, the repayment of any of the Secured
Obligations, the termination or expiration of all Letters of Credit under the
Credit Agreement, the termination of the Commitments under the Credit Agreement
and the termination of this Agreement or any other Credit Document.
8.2 No Waiver. The rights and remedies of the Secured Parties expressly
set forth in this Agreement and the other Credit Documents are cumulative and in
addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise. No failure or delay on the part of any Secured
Party in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege or be construed to be a waiver of any Default or
Event of Default. No course of dealing between the Pledgors and the Secured
Parties or their agents or employees shall be effective to amend, modify or
discharge any provision of this Agreement or any other Credit Document or to
constitute a waiver of any Default or Event of Default. No notice to or demand
upon any Pledgor in any case shall entitle such Pledgor or any other Pledgor to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of any Secured
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Party to exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
8.3 Pledgors' Obligations Absolute. Each Pledgor agrees that its
obligations hereunder, and the security interest granted to and all rights,
remedies and powers of the Agent hereunder, are irrevocable, absolute and
unconditional and shall not be discharged, limited or otherwise affected by
reason of any of the following, whether or not such Pledgor has knowledge
thereof:
(i) any change in the time, manner or place of payment of, or
in any other term of, any Secured Obligations, or any amendment,
modification or supplement to, restatement of, or consent to any
rescission or waiver of or departure from, any provisions of the Credit
Agreement, the Subsidiary Guaranty, any other Credit Document or any
agreement or instrument delivered pursuant to any of the foregoing;
(ii) the invalidity or unenforceability of any Secured
Obligations or any provisions of the Credit Agreement, the Subsidiary
Guaranty, any other Credit Document or any agreement or instrument
delivered pursuant to any of the foregoing;
(iii) the addition or release of Pledgors hereunder or the
taking, acceptance or release of any Secured Obligations or additional
Collateral or other security therefor;
(iv) any sale, exchange, release, substitution, compromise,
nonperfection or other action or inaction in respect of any Collateral
or other direct or indirect security for any Secured Obligations, or
any discharge, modification, settlement, compromise or other action or
inaction in respect of any Secured Obligations;
(v) any agreement not to pursue or enforce or any failure to
pursue or enforce (whether voluntarily or involuntarily as a result of
operation of law, court order or otherwise) any right or remedy in
respect of any Secured Obligations or any Collateral or other security
therefor, or any failure to create, protect, perfect, secure, insure,
continue or maintain any Liens in any such Collateral or other
security;
(vi) the exercise of any right or remedy available under the
Credit Documents, at law, in equity or otherwise in respect of any
Collateral or other security for any Secured Obligations, in any order
and by any manner thereby permitted, including, without limitation,
foreclosure on any such Collateral or other security by any manner of
sale thereby permitted, whether or not every aspect of such sale is
commercially reasonable;
(vii) any bankruptcy, reorganization, arrangement,
liquidation, insolvency, dissolution, termination, reorganization or
like change in the corporate structure or existence of the Borrower,
any other Pledgor or any other Person directly or indirectly liable for
any Secured Obligations;
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(viii) any manner of application of any payments by or
amounts received or collected from any Person, by whomsoever paid and
howsoever realized, whether in reduction of any Secured Obligations or
any other obligations of the Borrower or any other Person directly or
indirectly liable for any Secured Obligations, regardless of what
Secured Obligations may remain unpaid after any such application; or
(ix) any other circumstance that might otherwise constitute a
legal or equitable discharge of, or a defense, set-off or counterclaim
available to, the Borrower, any Pledgor or a surety or guarantor
generally, other than the occurrence of all of the following: (x) the
payment in full of the Secured Obligations, (y) the termination of the
Commitments and the termination or expiration of all Letters of Credit
under the Credit Agreement, and (z) the termination of, and settlement
of all obligations of the Borrower under, each Hedge Agreement to which
the Borrower and any Lender are parties (the events in clauses (x), (y)
and (z) above, collectively, the "Termination Requirements").
8.4 Enforcement. By its acceptance of the benefits of this Agreement,
each Lender agrees that this Agreement may be enforced only by the Agent, acting
upon the instructions or with the consent of the Required Lenders as provided
for in the Credit Agreement, and that no Lender shall have any right
individually to enforce or seek to enforce this Agreement or to realize upon any
Collateral or other security given to secure the payment and performance of the
Secured Obligations.
8.5 Amendments, Waivers, etc. No amendment, modification, waiver,
discharge or termination of, or consent to any departure by any Pledgor from,
any provision of this Agreement, shall be effective unless in a writing executed
and delivered in accordance with SECTION 11.6 of the Credit Agreement, and then
the same shall be effective only in the specific instance and for the specific
purpose for which given.
8.6 Continuing Security Interest; Term; Successors and Assigns;
Assignment; Termination and Release; Survival. This Agreement shall create a
continuing security interest in the Collateral and shall secure the payment and
performance of all of the Secured Obligations as the same may arise and be
outstanding at any time and from time to time from and after the date hereof,
and shall (i) remain in full force and effect until the occurrence of the
Termination Requirements, (ii) be binding upon and enforceable against each
Pledgor and its successors and assigns (provided, however, that no Pledgor may
sell, assign or transfer any of its rights, interests, duties or obligations
hereunder without the prior written consent of the Lenders) and (iii) inure to
the benefit of and be enforceable by each Secured Party and its successors and
assigns. Upon any sale or other disposition by any Pledgor of any Collateral in
a transaction expressly permitted hereunder or under or pursuant to the Credit
Agreement or any other applicable Credit Document, the Lien and security
interest created by this Agreement in and upon such Collateral shall be
automatically released, and upon the satisfaction of all of the Termination
Requirements, this Agreement and the Lien and security interest created hereby
shall terminate; and in connection with any such release or termination, the
Agent, at the request and expense of the applicable Pledgor, will execute and
deliver to such Pledgor such documents and instruments evidencing such release
or termination as such Pledgor may reasonably request
30
31
and will assign, transfer and deliver to such Pledgor, without recourse and
without representation or warranty, such of the Collateral as may then be in the
possession of the Agent (or, in the case of any partial release of Collateral,
such of the Collateral so being released as may be in its possession). All
representations, warranties, covenants and agreements herein shall survive the
execution and delivery of this Agreement and any Pledge Amendment or Pledge
Accession.
8.7 Additional Pledgors. Each Pledgor recognizes that the provisions of
the Credit Agreement require Persons that become Subsidiaries of the Borrower,
and that are not already parties hereto, to execute and deliver a Pledge
Accession, whereupon each such Person shall become a Pledgor hereunder with the
same force and effect as if originally a Pledgor hereunder on the date hereof,
and agrees that its obligations hereunder shall not be discharged, limited or
otherwise affected by reason of the same, or by reason of the Agent's actions in
effecting the same or in releasing any Pledgor hereunder, in each case without
the necessity of giving notice to or obtaining the consent of such Pledgor or
any other Pledgor.
8.8 Notices. All notices and other communications provided for
hereunder shall be given to the parties in the manner and subject to the other
notice provisions set forth in the Credit Agreement.
8.9 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of North Carolina (without
regard to the conflicts of law provisions thereof).
8.10 Severability. To the extent any provision of this Agreement is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
8.11 Construction. The headings of the various sections and subsections
of this Agreement have been inserted for convenience only and shall not in any
way affect the meaning or construction of any of the provisions hereof. Unless
the context otherwise requires, words in the singular include the plural and
words in the plural include the singular.
8.12 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
31
32
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first above
written.
LASON SERVICES, INC.
By: Xxxx X. Xxxxxx
----------------------------------
Title:
--------------------------------
Xxxx X. Xxxxxx
President and CEO
Accepted and agreed to:
FIRST UNION NATIONAL BANK, as
Agent
By:
-----------------------------------
Title:
----------------------------------
(signatures continued)
31
33
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first above
written.
LASON SERVICES, INC.
By:
----------------------------------
Title:
---------------------------------
Accepted and agreed to:
FIRST UNION NATIONAL BANK, as
Agent
By: Xxxxx X. Xxxxxxxxx
-----------------------------------
Title: XXXXX X. XXXXXXXXX
---------------------------------
Vice President
(signatures continued)
31
34
LASON SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Xxxx X. Xxxxxx
Title: President and CEO
---------------------------------
MICRO-PRO, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxxxx
Title: Treasurer
---------------------------------
LASON INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Xxxx X. Xxxxxx
Title: President and CEO
---------------------------------
32
35
Annex A to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------
PLEDGED EQUITY INTERESTS
Percentage of
Certificate No. of Shares/ outstanding
Number (if Units (if interests in
Pledgor Name of Issuer Type of Interests (applicable) applicable) Issuer
------- -------------- ----------------- ------------ ---------- ------
2
36
Annex B to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------
FILING LOCATIONS
LASON SERVICES, INC.
Secretary of State, Delaware
Department of State, Lansing, Michigan
LASON SYSTEMS, INC.
Secretary of State, Phoenix, Arizona
Secretary of State, California
San Francisco Assessor Recorder, San Francisco County, California
Secretary of State, Denver, Colorado
Secretary of State, Connecticut
Secretary of State, Dover, Delaware
Department of State, Tallahassee, Florida
Clerk of Superior Court, Xxxxxx County, Georgia
Clerk of Superior Court, Gwinnet County, Georgia
Secretary of State, Springfield, Illinois
Secretary of State, Indianapolis, Indiana
Secretary of State, Frankfort, Kentucky
Clerk of Court, Xxxxxxxxx Xxxxxx, Louisiana
Secretary of the Commonwealth, Massachusetts
Town Clerk, Town of Avon, Massachusetts
Register of Deeds, Middlesex County (Southern) Massachusetts
Department of State, Lansing, Michigan
Secretary of State, Minnesota
Secretary of State, Missouri
City Recorder, St. Louis City, Missouri
Secretary of State, Carson City, Nevada
Secretary of State, Trenton, New Jersey
Secretary of State, Santa Fe, New Mexico
Department of State, Albany, New York
County Clerk, Albany County, New York
County Clerk, Erie County, New York
County Clerk, Monroe County, New York
County Clerk, Nassau County, New York
County Clerk, Schenectady County, New York
37
Annex B to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------
Department of Finance, New York County, New York
Secretary of State, North Carolina
Register of Deeds, Mecklenburg County, North Carolina
Secretary of State, Ohio
County Recorder, Xxxxxxxx County, Ohio
Secretary of State, South Carolina
Secretary of State, Austin, Texas
Division of Corporations and Commercial Code, Salt Lake City, Utah
State Corporation Commission, Richmond, Virginia
Clerk of Circuit Court, Hanover County, Virginia
Clerk of Circuit Court, Richmond City, Virginia
MICRO-PRO, INC.
Department of State, Albany, New York
County Clerk, Albany County, New York
County Clerk, Erie County, New York
County Clerk, Monroe County, New York
38
Annex D to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------
LOCATIONS OF CHIEF EXECUTIVE OFFICES,
RECORDS RELATING TO COLLATERAL, AND EQUIPMENT AND INVENTORY
LASON SERVICES, INC.
1. Chief executive office:
----------------------------
----------------------------
----------------------------
2. Records relating to Collateral:
----------------------------
----------------------------
----------------------------
3. Equipment or Inventory:
----------------------------
----------------------------
----------------------------
4. Other places of business:
----------------------------
----------------------------
----------------------------
5. Trade/fictitious or prior corporate names
(last five years):
----------------------------
39
Annex D to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------
LASON SYSTEMS, INC.
1. Chief executive office:
----------------------------
----------------------------
----------------------------
2. Records relating to Collateral:
----------------------------
----------------------------
----------------------------
3. Equipment or Inventory:
----------------------------
----------------------------
----------------------------
4. Other places of business:
----------------------------
----------------------------
----------------------------
5. Trade/fictitious or prior corporate names
(last five years):
----------------------------
40
Annex D to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------
MICRO-PRO, INC.
1. Chief executive office:
----------------------------
----------------------------
----------------------------
2. Records relating to Collateral:
----------------------------
----------------------------
----------------------------
3. Equipment or Inventory:
----------------------------
----------------------------
----------------------------
4. Other places of business:
----------------------------
----------------------------
----------------------------
5. Trade/fictitious or prior corporate names
(last five years):
----------------------------
41
Annex D to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------
LASON INTERNATIONAL, INC.
1. Chief executive office:
----------------------------
----------------------------
----------------------------
2. Records relating to Collateral:
----------------------------
----------------------------
----------------------------
3. Equipment or Inventory:
----------------------------
----------------------------
----------------------------
4. Other places of business:
----------------------------
----------------------------
----------------------------
5. Trade/fictitious or prior corporate names
(last five years):
----------------------------
42
Annex D to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Application or Issue or
Pledgor Registration No. Country Filing Date
------- ---------------- ------- -----------
2
43
Annex E to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------
PATENTS AND PATENT APPLICATIONS
Application or Issue or
Pledgor Registration No. Country Inventor Filing Date
------- ---------------- ------- -------- -----------
44
Annex F to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------
TRADEMARKS AND TRADEMARK APPLICATIONS
Application or Issue or
Pledgor Xxxx Registration No. Country Filing Date
------- ---- ---------------- ------- -----------
45
Exhibit A to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------------
PLEDGE AMENDMENT
THIS PLEDGE AMENDMENT, dated as of _______________, _____, is delivered
by [NAME OF PLEDGOR] (the "Pledgor") pursuant to SECTION 5.1 of the Security
Agreement referred to hereinbelow. The Pledgor hereby agrees that this Pledge
Amendment may be attached to the Second Amended and Restated Pledge and Security
Agreement, dated as of __________, 1998, made by the Pledgor and certain other
pledgors named therein in favor of First Union National Bank, as Agent (as
amended, modified or supplemented from time to time, the "Security Agreement,"
capitalized terms defined therein being used herein as therein defined), and
that the Equity Interests listed on Annex A to this Pledge Amendment shall be
deemed to be part of the Equity Interests within the meaning of the Security
Agreement and shall become part of the Collateral and shall secure all of the
Secured Obligations as provided in the Security Agreement. This Pledge Amendment
and its attachments are hereby incorporated into the Security Agreement and made
a part thereof.
[NAME OF PLEDGOR]
By:
----------------------------------
Title:
---------------------------------
46
Annex A
Equity Interests
Percentage of
Outstanding
Type of Certificate No. of shares Interests
Name of Issuer Interests Number (if applicable) in Issuer
------------- --------- ------ -------------- ---------
47
Exhibit B to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------------
ASSIGNMENT AND GRANT OF SECURITY INTEREST
IN COPYRIGHTS
WHEREAS, [NAME OF PLEDGOR] (the "Pledgor") is the owner of the
copyrights listed on Schedule A attached hereto, which copyrights are registered
or have pending registrations in the United States Copyright Office as set forth
on Schedule A attached hereto (all such copyrights, registrations and
applications, collectively, the "Copyrights"); and
WHEREAS, the Pledgor has entered into a Second Amended and Restated
Pledge and Security Agreement (as amended, modified, restated or supplemented
from time to time, the "Security Agreement"), dated as of _____________, 1998,
in which the Pledgor has agreed with First Union National Bank, as Agent (the
"Agent"), with offices at One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, to execute this Assignment;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, as security for the payment and
performance of the Secured Obligations (as defined in the Security Agreement),
the Pledgor does hereby assign and grant to the Agent a security interest in all
of its right, title and interest in and to the Copyrights, and the use thereof,
together with all proceeds and products thereof and the goodwill of the
businesses symbolized by the Copyrights. This Assignment has been given in
conjunction with the assignment and security interest granted to the Agent under
the Security Agreement, and the provisions of this Assignment are without
prejudice to and in addition to the provisions of the Security Agreement, which
are incorporated herein by this reference.
[NAME OF PLEDGOR]
By:
----------------------------------
Title:
---------------------------------
48
Schedule A
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Application or Issue or
Pledgor Registration No. Country Filing Date
------- ---------------- ------- -----------
2
49
Exhibit C to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------------
ASSIGNMENT AND GRANT OF SECURITY INTEREST
IN PATENTS AND TRADEMARKS
WHEREAS, [NAME OF PLEDGOR] (the "Pledgor") is the owner of the
trademarks and service marks listed on Schedule A attached hereto, which marks
are registered or have pending registrations in the United States Patent and
Trademark Office as set forth on Schedule A attached hereto (all such
trademarks, service marks, registrations and applications, collectively, the
"Trademarks") and is the owner of the patents listed on Schedule A attached
hereto, which patents are registered or have pending applications in the United
States Patent and Trademark Office as set forth on Schedule A attached hereto
(all such patents, registrations and applications, collectively, the "Patents");
and
WHEREAS, the Pledgor has entered into a Second Amended and Restated
Pledge and Security Agreement (as amended, modified, restated or supplemented
from time to time, the "Security Agreement"), dated as of _____________, 1998,
in which the Pledgor has agreed with First Union National Bank, as Agent (the
"Agent"), with offices at One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, to execute this Assignment;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, as security for the payment and
performance of the Secured Obligations (as defined in the Security Agreement),
the Pledgor does hereby assign and grant to the Agent a security interest in all
of its right, title and interest in and to the Trademarks and the Patents, and
the use thereof, together with all proceeds and products thereof and the
goodwill of the businesses symbolized by the Trademarks and the Patents. This
Assignment has been given in conjunction with the assignment and security
interest granted to the Agent under the Security Agreement, and the provisions
of this Assignment are without prejudice to and in addition to the provisions of
the Security Agreement, which are incorporated herein by this reference.
[NAME OF PLEDGOR]
By:
----------------------------------
Title:
---------------------------------
50
TRADEMARKS AND TRADEMARK APPLICATIONS
Application or Issue or
Pledgor Xxxx Registration No. Country Filing Date
------- ---- ---------------- ------- -----------
PATENTS AND PATENT APPLICATIONS
Application or Issue or
Pledgor Registration No. Country Inventor Filing Date
------- ---------------- ------- -------- -----------
2
51
Exhibit D to Pledge and Security Agreement
First Union National Bank, as Agent
Lason Services, Inc.
_____________, 1998
------------------------------------
FORM OF
PLEDGE AND SECURITY ACCESSION
THIS PLEDGE AND SECURITY ACCESSION (this "Accession"), dated as of
_____________, ____, is executed and delivered by ________________________, a
______________ corporation (the "Company"), in favor of First Union National
Bank, in its capacity as agent under the Credit Agreement referred to
hereinbelow (in such capacity, the "Agent"), pursuant to the Pledge and Security
Agreement referred to hereinbelow.
Reference is made to the Second Amended and Restated Credit Agreement,
dated as of ________________, 1998, among Lason, Inc. (the "Borrower"), the
Lenders party thereto, and the Agent (as amended, modified or supplemented from
time to time, the "Credit Agreement"). In connection with and as a condition to
the initial and continued extensions of credit under the Credit Agreement, the
Borrower and certain of its subsidiaries have executed and delivered (i) a
Second Amended and Restated Subsidiary Guaranty, dated as of ________________,
1998 (as amended, modified or supplemented from time to time, the "Subsidiary
Guaranty"), pursuant to which such subsidiaries have guaranteed the payment in
full of the obligations of the Borrower under the Credit Agreement and the other
Credit Documents (as defined in the Credit Agreement), and (ii) a Second Amended
and Restated Pledge and Security Agreement, dated as of ________________, 1998
(as amended, modified or supplemented from time to time, the "Security
Agreement"), pursuant to which they have granted in favor of the Agent a
security interest in and Lien upon the Collateral described therein as security
for their obligations under the Credit Agreement, the Subsidiary Guaranty and
the other Credit Documents. Capitalized terms used herein without definition
shall have the meanings given to them in the Security Agreement.
The Borrower has agreed under the Credit Agreement to cause each of its
future direct and indirect subsidiaries to become a party to the Subsidiary
Guaranty as a guarantor thereunder and to the Security Agreement as a Pledgor
thereunder. The Company is a direct or indirect subsidiary of the Borrower and,
as required by the Credit Agreement, has become a guarantor under the Subsidiary
Guaranty as of the date hereof. The Company will obtain benefits as a result of
the continued extension of credit to the Borrower under the Credit Agreement,
which benefits are hereby acknowledged, and, accordingly, desire to execute and
deliver this Accession. Therefore, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to induce the Lenders to continue to extend credit to the
Borrower under the Credit Agreement, the Company hereby agrees as follows:
1. The Company hereby joins in and agrees to be bound by each and all
of the provisions of the Security Agreement as a Pledgor thereunder. In
furtherance (and without
52
limitation) of the foregoing, pursuant to Section 2.1 of the Security
Agreement, and as security for all of the Secured Obligations, the Company
hereby pledges, assigns and delivers to the Agent, for the ratable benefit of
the Secured Parties, and grants to the Agent, for the ratable benefit of the
Secured Parties, a Lien upon and security interest in, all of its right, title
and interest in and to the Collateral as set forth in Section 2.1 of the
Security Agreement, all on the terms and subject to the conditions set forth in
the Security Agreement.
2. The Company hereby represents and warrants that (i) Schedule 1
hereto sets forth all information required to be listed on Annexes A, B, C, D, E
and F to the Security Agreement in order to make each representation and
warranty contained in Sections 3.1 and 3.2 of the Security Agreement true and
correct with respect to the Company as of the date hereof and after giving
effect to this Accession and (ii) after giving effect to this Accession and to
the incorporation into such Annexes, as applicable, of the information set forth
in Schedule 1, each representation and warranty contained in Article III of the
Security Agreement is true and correct with respect to the Company as of the
date hereof, as if such representations and warranties were set forth at length
herein.
3. This Accession shall be a Credit Document (within the meaning of
such term under the Credit Agreement), shall be binding upon and enforceable
against the Company and its successors and assigns, and shall inure to the
benefit of and be enforceable by each Secured Party and its successors and
assigns. This Accession and its attachments are hereby incorporated into the
Security Agreement and made a part thereof.
2
53
IN WITNESS WHEREOF, the Company has caused this Accession to be
executed under seal by its duly authorized officer as of the date first above
written.
[NAME OF COMPANY]
By:
----------------------------------
Title:
---------------------------------
3
