Exhibit 10.2
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") dated as of August 30,
2002 is by and among the parties identified as "Pledgors" on the signature pages
hereto and such other parties as may become Pledgors hereunder after the date
hereof (individually a "Pledgor", and collectively the "Pledgors") and BANK OF
AMERICA, N.A., as administrative agent (in such capacity, the "Administrative
Agent") for the holders of the Secured Obligations referenced below.
W I T N E S S E T H
WHEREAS, a $200 million credit facility has been established in favor
of FTI Consulting, Inc., a Maryland corporation (the "Borrower"), pursuant to
the terms of that Credit Agreement (as amended, modified, supplemented and
extended from time to time, the "Credit Agreement") among the Borrower, the
Guarantors identified therein, the Lenders identified therein and Bank of
America, N.A., as Administrative Agent; and
WHEREAS, this Pledge Agreement is required under the terms of the
Credit Agreement.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
(a) Capitalized terms used and not otherwise defined herein shall
have the meanings provided in the Credit Agreement.
(b) As used herein, the following terms shall have the meanings
assigned thereto in the Uniform Commercial Code in effect in the State of North
Carolina on the date hereof: Accession, Financial Asset, Proceeds and Security.
(c) As used herein, the following terms shall have the meanings
set forth below:
"Event of Default" has the meaning provided in Section 8
hereof.
"Pledged Collateral" has the meaning provided in Section 2
hereof.
"Pledged Shares" has the meaning provided in Section 2 hereof.
"Secured Obligations" means, without duplication, (a) all of
the obligations of the Loan Parties to the Lenders (including the L/C
Issuer and the Swing Line Lender) and the Administrative Agent under
the Credit Agreement or any other Loan Document (including, but not
limited to, any interest accruing after the commencement by or against
any Loan Party of a proceeding under any Debtor Relief Laws, regardless
of whether such interest is an allowed claim under such proceeding),
whether now existing or hereafter arising, due or to become due, direct
or indirect, absolute or contingent, howsoever evidenced, created, held
or acquired, whether primary, secondary, direct, contingent, or joint
and several, as such obligations may be amended, modified, increased,
extended, renewed or replaced from time to time, (b) all of the
obligations owing by the Loan Parties under any Swap Contract with any
Lender or any Affiliate of a Lender, whether now existing or hereafter
arising, and (c) all costs and expenses incurred in connection with
enforcement and collection of the foregoing obligations, including
reasonable attorneys' fees and the allocated cost of internal counsel.
"UCC" means the Uniform Commercial Code.
2. Pledge and Grant of Security Interest. To secure the prompt
payment and performance in full when due, whether by lapse of time,
acceleration, mandatory prepayment or otherwise, of the Secured Obligations,
each Pledgor hereby grants, pledges and assigns to the Administrative Agent, for
the benefit of the holders of the Secured Obligations, a continuing security
interest in, and a right to set-off against, any and all right, title and
interest of such Pledgor in and to the following, whether now owned or existing
or owned, acquired, or arising hereafter (collectively, the "Pledged
Collateral"):
(a) Pledged Shares. (i) One hundred percent (100%) (or, if
less, the full amount owned by such Pledgor) of the issued and
outstanding Capital Stock owned by such Pledgor of each Domestic
Subsidiary set forth on Schedule 2(a) attached hereto and (ii)
sixty-five percent (65%) (or, if less, the full amount owned by such
Pledgor) of the issued and outstanding shares of Capital Stock entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
("Voting Equity") and one hundred percent (100%) (or, if less, the full
amount owned by such Pledgor) of the issued and outstanding Capital
Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) ("Non-Voting Equity") owned by such Pledgor of each
Foreign Subsidiary set forth on Schedule 2(a) attached hereto, in each
case together with the certificates (or other agreements or
instruments), if any, representing such Capital Stock, and all options
and other rights, contractual or otherwise, with respect thereto
(collectively, together with the Capital Stock described in Section
2(b) and 2(c) below, the "Pledged Shares"), including, but not limited
to, the following:
(A) all shares, securities, membership interests or
other equity interests representing a dividend on any of the
Pledged Shares, or representing a distribution or return of
capital upon or in respect of the Pledged Shares, or resulting
from a stock split, revision, reclassification or other
exchange therefor, and any subscriptions, warrants, rights or
options issued to the holder of, or otherwise in respect of,
the Pledged Shares; and
(B) without affecting the obligations of the Pledgors
under any provision prohibiting such action hereunder or under
the Credit Agreement, in the event of any consolidation or
merger involving the issuer of any Pledged Shares and in which
such issuer is not the surviving entity, all Capital Stock of
the successor entity formed by or resulting from such
consolidation or merger.
(b) Additional Shares. (i) One hundred percent (100%) (or,
if less, the full amount owned by such Pledgor) of the issued and
outstanding Capital Stock owned by such Pledgor of any Person that
hereafter becomes a Domestic Subsidiary and (ii) sixty-five percent
(65%) (or, if less, the full amount owned by such Pledgor) of the
Voting Equity and one hundred percent (100%) (or, if less, the full
amount owned by such Pledgor) of the Non-Voting Equity owned by such
Pledgor of any Person that hereafter becomes a Foreign Subsidiary,
including, without limitation, the certificates (or other agreements or
instruments) representing such Capital Stock.
(c) Accessions and Proceeds. All Accessions and all
Proceeds of any and all of the foregoing.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional Capital Stock to the Administrative Agent as
collateral security for the Secured Obligations. Upon delivery to the
Administrative Agent, such additional Capital Stock shall be deemed to be part
of the Pledged Collateral of such Pledgor and
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shall be subject to the terms of this Pledge Agreement whether or not Schedule
2(a) is amended to refer to such additional Capital Stock.
3. Security for Secured Obligations. The security interest
created hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the Secured Obligations.
4. Delivery of the Pledged Collateral. Each Pledgor hereby
agrees that:
(a) Each Pledgor shall deliver to the Administrative Agent (i)
simultaneously with or prior to the execution and delivery of this
Pledge Agreement, all certificates representing the Pledged Shares of
such Pledgor and (ii) promptly upon the receipt thereof by or on behalf
of a Pledgor, all other certificates and instruments constituting
Pledged Collateral of a Pledgor. Prior to delivery to the
Administrative Agent, all such certificates and instruments
constituting Pledged Collateral of a Pledgor shall be held in trust by
such Pledgor for the benefit of the Administrative Agent pursuant
hereto. All such certificates shall be delivered in suitable form for
transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, substantially in the
form provided in Schedule 4(a) attached hereto.
(b) Additional Securities. If such Pledgor shall receive by
virtue of its being or having been the owner of any Pledged Collateral,
any (i) certificate, including without limitation, any certificate
representing a dividend or distribution in connection with any increase
or reduction of capital, reclassification, merger, consolidation, sale
of assets, combination of shares or other equity interests, stock
splits, spin-off or split-off, promissory notes or other instruments;
(ii) option or right, whether as an addition to, substitution for, or
an exchange for, any Pledged Collateral or otherwise; (iii) dividends
payable in securities; or (iv) distributions of securities in
connection with a partial or total liquidation, dissolution or
reduction of capital, capital surplus or paid-in surplus, then such
Pledgor shall receive such certificate, instrument, option, right or
distribution in trust for the benefit of the Administrative Agent,
shall segregate it from such Pledgor's other property and shall deliver
it forthwith to the Administrative Agent in the exact form received
together with any necessary endorsement and/or appropriate stock power
duly executed in blank, substantially in the form provided in Schedule
4(a), to be held by the Administrative Agent as Pledged Collateral and
as further collateral security for the Secured Obligations.
(c) Financing Statements. Each Pledgor authorizes the
Administrative Agent to file one or more financing statements (with
collateral descriptions broader and/or less specific than the
description of the Collateral contained herein) disclosing the
Administrative Agent's security interest in the Pledged Collateral.
Each Pledgor agrees to execute and deliver to the Administrative Agent
such financing statements and other filings as may be reasonably
requested by the Administrative Agent in order to perfect and protect
the security interest created hereby in the Pledged Collateral of such
Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents
and warrants to the Administrative Agent, for the benefit of the holders of the
Secured Obligations, that so long as any of the Secured Obligations remains
outstanding and until all of the commitments relating thereto have been
terminated:
(a) Authorization of Pledged Shares. The Pledged Shares are
duly authorized and validly issued, are fully paid and nonassessable
and are not subject to the preemptive rights of any Person.
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(b) Title. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and is the legal and beneficial
owner of such Pledged Collateral free and clear of any Lien, other than
Permitted Liens. There exists no "adverse claim" within the meaning of
Section 8-102 of the UCC with respect to the Pledged Shares of such
Pledgor.
(c) Exercising of Rights. The exercise by the Administrative
Agent of its rights and remedies hereunder will not violate any law or
governmental regulation or any material contractual restriction binding
on or affecting a Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or action
by, and no notice or filing with any Governmental Authority or with the
issuer of any Pledged Stock is required either (i) for the pledge made
by a Pledgor or for the granting of the security interest by a Pledgor
pursuant to this Pledge Agreement (except as have been already
obtained) or (ii) for the exercise by the Administrative Agent or the
holders of the Secured Obligations of their rights and remedies
hereunder (except as may be required by laws affecting the offering and
sale of securities).
(e) Security Interest/Priority. This Pledge Agreement creates
a valid security interest in favor of the Administrative Agent for the
benefit of the holders of the Secured Obligations, in the Pledged
Collateral. The taking of possession by the Administrative Agent of the
certificates representing the Pledged Shares and all other certificates
and instruments constituting Pledged Collateral will perfect and
establish the first priority of the Administrative Agent's security
interest in the Pledged Shares and, when properly perfected by filing
or registration, in all other Pledged Collateral represented by such
Pledged Shares and instruments securing the Secured Obligations. Except
as set forth in this Section 5(e), no action is necessary to perfect or
otherwise protect such security interest.
(f) Partnership and Membership Interests. Except as previously
disclosed to the Administrative Agent, none of the Pledged Shares
consisting of partnership or limited liability company interests (i) is
dealt in or traded on a securities exchange or in a securities market,
(ii) by its terms expressly provides that it is a security governed by
Article 8 of the UCC, (iii) is an investment company security, (iv) is
held in a securities account or (v) constitutes a Security or a
Financial Asset.
6. Covenants. Each Pledgor hereby covenants, that so long as any
of the Secured Obligations remains outstanding and until all of the commitments
relating thereto have been terminated, such Pledgor shall:
(a) Books and Records. Xxxx its books and records (and shall
cause the issuer of the Pledged Shares of such Pledgor to xxxx its
books and records) to reflect the security interest granted to the
Administrative Agent, for the benefit of the holders of the Secured
Obligations, pursuant to this Pledge Agreement.
(b) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all other parties claiming an
interest therein, keep the Pledged Collateral free from all Liens,
except for Permitted Liens, and not sell, exchange, transfer, assign,
lease or otherwise dispose of Pledged Collateral of such Pledgor or any
interest therein, except as permitted under the Credit Agreement and
the other Loan Documents.
(c) Further Assurances. Promptly execute and deliver at its
expense all further instruments and documents and take all further
action that may be necessary and desirable or that
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the Administrative Agent may reasonably request in order to (i) perfect
and protect the security interest created hereby in the Pledged
Collateral of such Pledgor (including, without limitation, any and all
action necessary to satisfy the Administrative Agent that the
Administrative Agent has obtained a first priority perfected security
interest in all Pledged Collateral); (ii) enable the Administrative
Agent to exercise and enforce its rights and remedies hereunder in
respect of the Pledged Collateral of such Pledgor; and (iii) otherwise
effect the purposes of this Pledge Agreement, including, without
limitation and if requested by the Administrative Agent, delivering to
the Administrative Agent irrevocable proxies in respect of the Pledged
Collateral of such Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any
restriction with respect to any of the Pledged Collateral of such
Pledgor other than pursuant hereto or as may be permitted under the
Credit Agreement.
(e) Compliance with Securities Laws. File all reports and
other information now or hereafter required to be filed by such Pledgor
with the United States Securities and Exchange Commission and any other
state, federal or foreign agency in connection with the ownership of
the Pledged Collateral of such Pledgor.
(f) Issuance or Acquisition of Capital Stock. Not, without
executing and delivering, or causing to be executed and delivered, to
the Administrative Agent such agreements, documents and instruments as
the Administrative Agent may require, issue or acquire any Capital
Stock consisting of an interest in a partnership or a limited liability
company that (i) is dealt in or traded on a securities exchange or in a
securities market, (ii) by its terms expressly provides that it is a
security governed by Article 8 of the UCC, (iii) is an investment
company security, (iv) is held in a securities account or (v)
constitutes a Security or a Financial Asset.
7. Advances by Holders of the Secured Obligations. On failure of
any Pledgor to perform any of the covenants and agreements contained herein, the
Administrative Agent may, at its sole option and in its sole discretion, perform
the same and in so doing may expend such sums as the Administrative Agent may
reasonably deem advisable in the performance thereof, including, without
limitation, the payment of any insurance premiums, the payment of any taxes, a
payment to obtain a release of a Lien or potential Lien, expenditures made in
defending against any adverse claim and all other expenditures that the
Administrative Agent or the holders of the Secured Obligations may make for the
protection of the security hereof or may be compelled to make by operation of
law. All such sums and amounts so expended shall be repayable by the Pledgors on
a joint and several basis promptly upon timely notice thereof and demand
therefor, shall constitute additional Secured Obligations and shall bear
interest from the date said amounts are expended at the default rate specified
in Section 2.08 of the Credit Agreement for Base Rate Revolving Loans. No such
performance of any covenant or agreement by the Administrative Agent or the
holders of the Secured Obligations on behalf of any Pledgor, and no such advance
or expenditure therefor, shall relieve the Pledgors of any default under the
terms of this Pledge Agreement, the other Loan Documents or any other documents
relating to the Secured Obligations. The holders of the Secured Obligations may
make any payment hereby authorized in accordance with any xxxx, statement or
estimate procured from the appropriate public office or holder of the claim to
be discharged without inquiry into the accuracy of such xxxx, statement or
estimate or into the validity of any tax assessment, sale, forfeiture, tax lien,
title or claim except to the extent such payment is being contested in good
faith by a Pledgor in appropriate proceedings and against which adequate
reserves are being maintained in accordance with GAAP.
8. Events of Default. The occurrence of an event that would
constitute an Event of Default under the Credit Agreement shall be an Event of
Default hereunder (an "Event of Default").
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9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and
during the continuation thereof, the Administrative Agent and the holders of the
Secured Obligations shall have, in addition to the rights and remedies provided
herein, in the Loan Documents, in any other documents relating to the Secured
Obligations, or by law (including, without limitation, levy of attachment and
garnishment), the rights and remedies of a secured party under the UCC of the
jurisdiction applicable to the affected Pledged Collateral.
(b) Sale of Pledged Collateral. Upon the occurrence of an Event of Default
and during the continuation thereof, without limiting the generality of this
Section 9 and without notice, the Administrative Agent may, in its sole
discretion, sell or otherwise dispose of or realize upon the Pledged Collateral,
or any part thereof, in one or more parcels, at public or private sale, at any
exchange or broker's board or elsewhere, at such price or prices and on such
other terms as the Administrative Agent may deem commercially reasonable, for
cash, credit or for future delivery or otherwise in accordance with applicable
law. To the extent permitted by law, any holder of the Secured Obligations may
in such event, bid for the purchase of such securities. Each Pledgor agrees
that, to the extent notice of sale shall be required by law and has not been
waived by such Pledgor, any requirement of reasonable notice shall be met if
notice, specifying the place of any public sale or the time after which any
private sale is to be made, is personally served on or mailed, postage prepaid,
to such Pledgor, in accordance with the notice provisions of Section 11.02 of
the Credit Agreement at least ten days before the time of such sale. The
Administrative Agent shall not be obligated to make any sale of Pledged
Collateral of such Pledgor regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(c) Private Sale. Upon the occurrence of an Event of Default and during
the continuation thereof, the Pledgors recognize that the Administrative Agent
may deem it impracticable to effect a public sale of all or any part of the
Pledged Shares or any of the securities constituting Pledged Collateral and that
the Administrative Agent may, therefore, determine to make one or more private
sales of any such Pledged Collateral to a restricted group of purchasers who
will be obligated to agree, among other things, to acquire such Pledged
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Each Pledgor acknowledges that any such private
sale may be at prices and on terms less favorable to the seller than the prices
and other terms that might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sale shall be deemed to
have been made in a commercially reasonable manner and that the Administrative
Agent shall have no obligation to delay sale of any such Pledged Collateral for
the period of time necessary to permit the issuer of such Pledged Collateral to
register such Pledged Collateral for public sale under the Securities Act. Each
Pledgor further acknowledges and agrees that any offer to sell such Pledged
Collateral that has been (i) publicly advertised on a bona fide basis in a
newspaper or other publication of general circulation in the financial community
of New York, New York (to the extent that such offer may be advertised without
prior registration under the Securities Act), or (ii) made privately in the
manner described above shall be deemed to involve a "public sale" under the UCC,
notwithstanding that such sale may not constitute a "public offering" under the
Securities Act, and the Administrative Agent may, in such event, bid for the
purchase of such Pledged Collateral.
(d) Retention of Pledged Collateral. To the extent permitted under
applicable law, in addition to the rights and remedies hereunder, upon the
occurrence of an Event of Default, the Administrative Agent may, after providing
the notices required by Sections 9-620 and 9-621 of the UCC or otherwise
complying with the requirements of applicable law of the relevant jurisdiction,
accept or retain all or any portion of the Pledged Collateral in satisfaction of
the Secured Obligations. Unless and until the Administrative Agent shall have
provided such notices, however, the Administrative Agent shall
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not be deemed to have accepted or retained any Pledged Collateral in
satisfaction of any Secured Obligations for any reason.
(e) Deficiency. In the event that the proceeds of any sale, collection or
realization are insufficient to pay all amounts to which the Administrative
Agent or the holders of the Secured Obligations are legally entitled, the
Pledgors shall be jointly and severally liable for the deficiency, together with
interest thereon at the default rate specified in Section 2.08 of the Credit
Agreement for Base Rate Revolving Loans, together with the costs of collection
and reasonable attorneys' fees (including the allocated cost of internal
counsel). Any surplus remaining after the full payment and satisfaction of the
Secured Obligations shall be returned to the Pledgors or to whomsoever a court
of competent jurisdiction shall determine to be entitled thereto.
10. Rights of the Administrative Agent.
(a) Power of Attorney. In addition to other powers of attorney contained
herein, each Pledgor hereby designates and appoints the Administrative Agent, on
behalf of the holders of the Secured Obligations, and each of its designees or
agents, as attorney-in-fact of such Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following actions upon
the occurrence and during the continuation of an Event of Default:
(i) to demand, collect, settle, compromise and adjust, and give
discharges and releases concerning the Pledged Collateral, all as the
Administrative Agent may reasonably deem appropriate;
(ii) to commence and prosecute any actions at any court for the
purposes of collecting any of the Pledged Collateral and enforcing any
other right in respect thereof;
(iii) to defend, settle or compromise any action brought and, in
connection therewith, give such discharge or release as the Administrative
Agent may reasonably deem appropriate;
(iv) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Pledged
Collateral;
(v) to direct any parties liable for any payment in connection with
any of the Pledged Collateral to make payment of any and all monies due and
to become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct;
(vi) to receive payment of and receipt for any and all monies,
claims, and other amounts due and to become due at any time in respect of
or arising out of any Pledged Collateral;
(vii) to sign and endorse any drafts, assignments, proxies, stock
powers, verifications, notices and other documents relating to the Pledged
Collateral;
(viii) to execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements, security
and pledge agreements, affidavits, notices and other agreements,
instruments and documents that the Administrative Agent may reasonably deem
appropriate in order to perfect and maintain the security interests and
liens granted in this Pledge Agreement and in order to fully consummate all
of the transactions contemplated therein;
(ix) to exchange any of the Pledged Collateral or other property
upon any merger, consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof and, in connection therewith, deposit
any of the Pledged Collateral with any committee, depository,
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transfer agent, registrar or other designated agency upon such terms as the
Administrative Agent may reasonably deem appropriate;
(x) to vote for a shareholder resolution, or to sign an instrument
in writing, sanctioning the transfer of any or all of the Pledged
Collateral into the name of the Administrative Agent or one or more of the
holders of the Secured Obligations or into the name of any transferee to
whom the Pledged Collateral or any part thereof may be sold pursuant to
Section 9 hereof; and
(xi) to do and perform all such other acts and things as the
Administrative Agent may reasonably deem appropriate or convenient in
connection with the Pledged Collateral.
This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Secured Obligations shall remain
outstanding and until all of the commitments relating thereto shall have been
terminated. The Administrative Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and options
expressly or implicitly granted to the Administrative Agent in this Pledge
Agreement, and shall not be liable for any failure to do so or any delay in
doing so. The Administrative Agent shall not be liable for any act or omission
or for any error of judgment or any mistake of fact or law in its individual
capacity or its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct. This power of attorney is
conferred on the Administrative Agent solely to protect, preserve and realize
upon its security interest in the Pledged Collateral.
(b) Performance by the Administrative Agent of Obligations. If any Pledgor
fails to perform any agreement or obligation contained herein, the
Administrative Agent itself may perform, or cause performance of, such agreement
or obligation, and the expenses of the Administrative Agent incurred in
connection therewith shall be payable by the Pledgors on a joint and several
basis pursuant to Section 25 hereof.
(c) Assignment by the Administrative Agent. The Administrative Agent may
from time to time assign the Secured Obligations and any portion thereof and/or
the Pledged Collateral and any portion thereof, and the assignee shall be
entitled to all of the rights and remedies of the Administrative Agent under
this Pledge Agreement in relation thereto.
(d) The Administrative Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Pledged Collateral while being
held by the Administrative Agent hereunder, the Administrative Agent shall have
no duty or liability to preserve rights pertaining thereto, it being understood
and agreed that the Pledgors shall be responsible for preservation of all rights
in the Pledged Collateral, and the Administrative Agent shall be relieved of all
responsibility for the Pledged Collateral upon surrendering it or tendering the
surrender of it to the Pledgors. The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property, which shall be no less than the treatment employed by a reasonable and
prudent agent in the industry, it being understood that the Administrative Agent
shall not have responsibility for (i) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relating
to any Pledged Collateral, whether or not the Administrative Agent has or is
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any of the Pledged
Collateral.
(e) Voting Rights in Respect of the Pledged Collateral.
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(i) So long as no Event of Default shall have occurred and be
continuing, to the extent permitted by law, each Pledgor may exercise any
and all voting and other consensual rights pertaining to the Pledged
Collateral of such Pledgor or any part thereof for any purpose not
inconsistent with the terms of this Pledge Agreement or the Credit
Agreement; and
(ii) Upon the occurrence and during the continuance of an Event of
Default, all rights of a Pledgor to exercise the voting and other
consensual rights that it would otherwise be entitled to exercise pursuant
to paragraph (i) of this subsection shall cease and all such rights shall
thereupon become vested in the Administrative Agent, which shall then have
the sole right to exercise such voting and other consensual rights.
(f) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred and be
continuing and subject to Section 4(b) hereof, each Pledgor may receive and
retain any and all dividends (other than stock dividends and other
dividends constituting Pledged Collateral addressed hereinabove) or
interest paid in respect of the Pledged Collateral to the extent they are
allowed under the Credit Agreement.
(ii) Upon the occurrence and during the continuance of an Event of
Default:
(A) all rights of a Pledgor to receive the dividends and
interest payments that it would otherwise be authorized to receive and
retain pursuant to paragraph (i) of this subsection shall cease and
all such rights shall thereupon be vested in the Administrative Agent,
which shall then have the sole right to receive and hold as Pledged
Collateral such dividends and interest payments; and
(B) all dividends and interest payments that are received by a
Pledgor contrary to the provisions of paragraph (A) of this subsection
shall be received in trust for the benefit of the Administrative
Agent, shall be segregated from other property or funds of such
Pledgor, and shall be forthwith paid over to the Administrative Agent
as Pledged Collateral in the exact form received, to be held by the
Administrative Agent as Pledged Collateral and as further collateral
security for the Secured Obligations.
(g) Release of Pledged Collateral. The Administrative Agent may release
any of the Pledged Collateral from this Pledge Agreement or may substitute any
of the Pledged Collateral for other Pledged Collateral without altering, varying
or diminishing in any way the force, effect, lien, pledge or security interest
of this Pledge Agreement as to any Pledged Collateral not expressly released or
substituted, and this Pledge Agreement shall continue as a first priority lien
on all Pledged Collateral not expressly released or substituted.
11. Rights of Required Lenders. All rights of the Administrative Agent
hereunder, if not exercised by the Administrative Agent, may be exercised by the
Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Pledged Collateral, when received by the
Administrative Agent or any of the holders of the Secured Obligations in cash or
its equivalent, will be applied in reduction of the Secured Obligations in the
order set forth in the Credit Agreement or other document relating to the
Secured Obligations, and each Pledgor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Administrative Agent shall have the continuing and exclusive right to apply and
9
reapply any and all such payments and proceeds in the Administrative Agent's
sole discretion, notwithstanding any entry to the contrary upon any of its books
and records.
13. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in every respect
and shall remain in full force and effect so long as any of the Secured
Obligations remains outstanding and until all of the commitments relating
thereto have been terminated (other than any obligations with respect to the
indemnities and the representations and warranties set forth in the Loan
Documents). Upon such payment and termination, this Pledge Agreement shall be
automatically terminated and the Administrative Agent and the holders of the
Secured Obligations shall, upon the request and at the expense of the Pledgors,
forthwith release all of its liens and security interests hereunder and shall
execute and deliver all UCC termination statements and/or other documents
reasonably requested by the Pledgors evidencing such termination.
Notwithstanding the foregoing, all releases and indemnities provided hereunder
shall survive termination of this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in whole
or in part, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any holder of the Secured
Obligations as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had not been
made; provided that in the event payment of all or any part of the Secured
Obligations is rescinded or must be restored or returned, all reasonable costs
and expenses (including, without limitation, attorneys' fees, the allocated cost
of internal counsel and disbursements) incurred by the Administrative Agent or
any holder of the Secured Obligations in defending and enforcing such
reinstatement shall be deemed to be included as a part of the Secured
Obligations.
14. Amendments and Waivers. This Pledge Agreement and the provisions
hereof may not be amended, waived, modified, changed, discharged or terminated
except as set forth in Section 11.01 of the Credit Agreement.
15. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns, and shall inure, together with the rights
and remedies of the Administrative Agent and the holders of the Secured
Obligations hereunder, to the benefit of the Administrative Agent and the
holders of the Secured Obligations and their successors and permitted assigns;
provided, however, that none of the Pledgors may assign its rights or delegate
its duties hereunder without the prior written consent of the requisite Lenders
under the Credit Agreement. To the fullest extent permitted by law, each Pledgor
hereby releases the Administrative Agent and each holder of the Secured
Obligations, and their respective successors and assigns, from any liability for
any act or omission relating to this Pledge Agreement or the Collateral, except
for any liability arising from the gross negligence or willful misconduct of the
Administrative Agent or such holder, or their respective officers, employees or
agents.
16. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be given as provided in Section 11.02 of the Credit
Agreement.
17. Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
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18. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
19. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE
ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS PLEDGE AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXXXX
XXXXXXXX SITTING IN CHARLOTTE, XXXXX XXXXXXXX XX XX XXX XXXXXX XXXXXX FOR THE
WESTERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS PLEDGE
AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.
THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.
20. Waiver of Right to Trial by Jury.
EACH PARTY TO THIS PLEDGE AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS
PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS PLEDGE
AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY.
21. Severability. If any provision of this Pledge Agreement is determined
to be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
22. Entirety. This Pledge Agreement, the other Loan Documents and the
other documents relating to the Secured Obligations represent the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any, including any commitment
11
letters or correspondence relating to the Loan Documents, any other documents
relating to the Secured Obligations, or the transactions contemplated herein and
therein.
23. Survival. All representations and warranties of the Pledgors hereunder
shall survive the execution and delivery of this Pledge Agreement, the other
Loan Documents and the other documents relating to the Secured Obligations, the
delivery of the Notes and the extension of credit thereunder or in connection
therewith.
24. Other Security. To the extent that any of the Secured Obligations are
now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Administrative Agent shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence of any Event of Default,
and the Administrative Agent shall have the right, in its sole discretion, to
determine which rights, security, liens, security interests or remedies the
Administrative Agent shall at any time pursue, relinquish, subordinate, modify
or take with respect thereto, without in any way modifying or affecting any of
them or the Secured Obligations or any of the rights of the Administrative Agent
or the holders of the Secured Obligations under this Pledge Agreement, under any
of the other Loan Documents or under any other document relating to the Secured
Obligations.
25. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by the
holders of the Secured Obligations, for the mutual benefit, directly and
indirectly, of each of the Pledgors and in consideration of the undertakings of
each of the Pledgors to accept joint and several liability for the obligations
of each of them.
(b) Each of the Pledgors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Pledgors with respect to the payment and
performance of all of the Secured Obligations arising under this Pledge
Agreement, the other Loan Documents and any other documents relating to the
Secured Obligations, it being the intention of the parties hereto that all the
Secured Obligations shall be the joint and several obligations of each of the
Pledgors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained herein, in any
other of the Loan Documents or in any other documents relating to the Secured
Obligations, the obligations of each Guarantor under the Credit Agreement and
the other Loan Documents shall be limited to an aggregate amount equal to the
largest amount that would not render such obligations subject to avoidance under
Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
[Signature Pages Follow]
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Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
PLEDGORS: FTI CONSULTING, INC.,
a Maryland corporation
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Executive Vice President and Chief
Financial Officer
FTI APPLIED SCIENCES (ANNAPOLIS), LLC,
a Maryland limited liability company
FTI CORPORATE RECOVERY, INC.,
a Maryland corporation
FTI LITIGATION CONSULTING, LLC,
a Maryland limited liability company
XXXX CONSULTING, INC.,
a New York corporation
XXXXX, XXXX & XXXXX, INC.,
a Virginia corporation
L.W.G., INC.,
an Illinois corporation
XXXXXXXX & XXXXX, L.L.C.,
a New Jersey limited liability company
RESTORTEK, INC.,
an Illinois corporation
S.E.A., INC.,
an Ohio corporation
TECHNOLOGY & FINANCIAL CONSULTING, INC.,
a Texas corporation
TEKLICON, INC.,
a California corporation
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Treasurer of each of the foregoing Pledgors
Accepted and agreed to as of the date first above written.
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Agency Officer
Schedule 2(a)
Pledged Stock
Number of Certificate Percentage
Pledgor Issuer Shares Number Ownership
FTI Consulting, Inc. FTI Applied Sciences (Annapolis), LLC uncertificated uncertificated 100%
FTI Consulting, Inc. FTI Corporate Recovery, Inc. 1,000 1 100%
FTI Consulting, Inc. FTI Litigation Consulting, LLC uncertificated uncertificated 100%
FTI Consulting, Inc. FTI Merger & Acquisition Advisors, LLC uncertificated uncertificated 100%
FTI Consulting, Inc. Xxxx Consulting, Inc. 2,000 10 100%
FTI Consulting, Inc. Xxxxx, Xxxx & Xxxxx, Inc. 400 15 100%
FTI Consulting, Inc. L.W.G., Inc. 1,000 2 100%
FTI Consulting, Inc. Xxxxxxxx & Xxxxx, L.L.C. uncertificated uncertificated 100%
FTI Consulting, Inc. S.E.A., Inc. 60 13 100%
FTI Consulting, Inc. Technology & Financial Consulting, Inc. 10,000 3 100%
FTI Consulting, Inc. Teklicon, Inc. 100 7 100%
L.W.G., Inc. RestorTek, Inc. 1,000 2 100%
Schedule 4(a)
Form of Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of ____________________, a ____________
corporation:
Number of Shares Certificate Number
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
The effectiveness of a transfer pursuant to this stock power shall be subject to
any and all transfer restrictions referenced on the face of the certificates
evidencing such interest or in the certificate of incorporation or bylaws of the
subject corporation, to the extent they may from time to time exist.
[HOLDER]
By:_____________________________
Name:
Title:
