EXHIBIT G-2
PLEDGE AGREEMENT dated as of August 25, 1997, between XXXXXX
XXXXXXXX (the "Pledgor") and SALOMON BROTHERS HOLDING COMPANY INC, a
Delaware corporation ("SBHC"), as collateral agent (in such capacity,
the "Collateral Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).
Reference is made to (a) the Credit Agreement dated as of
August 25, 1997 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the Borrower, the lenders
from time to time party thereto (the "Lenders"), the Lender identified
therein as an issuing bank (the "Issuing Bank") and SBHC, as
administrative agent for the Lenders and Collateral Agent.
The Lenders have agreed to make Loans to the Borrower and
pursuant to the Credit Agreement, an Issuing Bank may agree to issue
Letters of Credit for the account of the Borrower, pursuant to, and
upon the terms and subject to the conditions specified in, the Credit
Agreement. Each of Tel-Save, Inc., Emergency Transport Corp., Tel-Save
Holdings of Virginia, Inc. and the Pledgor has agreed to guarantee,
among other things, all the obligations of the Borrower under the
Credit Agreement. The obligations of the Lenders to make Loans and of
any Issuing Bank to issue Letters of Credit are conditioned upon, among
other things, the execution and delivery by the Pledgor of a Pledge
Agreement in the form hereof to secure (a) the due and punctual payment
by the Borrower of (i) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the
Loans, when and as due, whether at maturity, by acceleration, upon one
or more dates set for prepayment or otherwise, (ii) each payment
required to be made by the Borrower under the Credit Agreement in
respect of any Letter of Credit, when and as due, including payments in
respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Borrower to
the Secured Parties under the Credit Agreement and the other Loan
Documents, (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Borrower under or
pursuant to the Credit Agreement and the other Loan Documents (all the
monetary and other obligations referred to in the preceding clauses (a)
through (c) being referred to collectively as the "Obligations").
Capitalized terms used herein and not defined herein shall have
meanings assigned to such terms in the Credit Agreement.
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Accordingly, the Pledgor and the Collateral Agent, on behalf
of itself and each Secured Party (and each of their respective
successors or assigns), hereby agree as follows:
SECTION 1. Pledge. As security for the payment and
performance, as the case may be, in full of the Obligations, the
Pledgor hereby transfers, grants, bargains, sells, conveys,
hypothecates, pledges, sets over and delivers unto the Collateral
Agent, its successors and assigns, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest in all of the Pledgor's right,
title and interest in, to and under the shares of capital stock owned
by him and listed on Schedule I hereto and any shares of capital stock
of the Borrower obtained in the future by the Pledgor and the
certificates representing all such shares (the "Pledged Stock") (b) any
debt securities in the future issued to the Pledgor by the Borrower and
(ii) the promissory notes and any other instruments evidencing such
debt securities (the "Pledged Debt Securities"); (c) all other property
that may be delivered to and held by the Collateral Agent pursuant to
the terms hereof; (d) subject to Section 5, all payments of principal
or interest, dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed, in respect of,
in exchange for or upon the conversion of the securities referred to in
clauses (a) and (b) above; (e) subject to Section 5, all rights and
privileges of the Pledgor with respect to the securities and other
property referred to in clauses (a), (b), (c) and (d) above; and (f)
all proceeds of any of the foregoing (the items referred to in clauses
(a) through (f) above being collectively referred to as the
"Collateral"). Upon delivery to the Collateral Agent, (a) any stock
certificates, notes or other securities now or hereafter included in
the Collateral (the "Pledged Securities") shall be accompanied by stock
powers duly executed in blank or other instruments of transfer
satisfactory to the Collateral Agent and by such other instruments and
documents as the Collateral Agent may reasonably request and (b) all
other property comprising part of the Collateral shall be accompanied
by proper instruments of assignment duly executed by the Pledgor and
such other instruments or documents as the Collateral Agent may
reasonably request. Each delivery of Pledged Securities shall be
accompanied by a schedule describing the securities theretofore and
then being pledged hereunder, which schedule shall be attached hereto
as Schedule I and made a part hereof. Each schedule so delivered shall
supersede any prior schedules so delivered.
TO HAVE AND TO HOLD the Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or
incidental thereto, unto the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, forever;
subject, however, to the terms, covenants and conditions hereinafter
set forth.
SECTION 2. Delivery of the Collateral. (a) The Pledgor agrees
promptly to deliver or cause to be delivered to the Collateral Agent
any and all Pledged Securities, and any and all certificates or other
instruments or documents representing the Collateral.
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(b) The Pledgor will cause any Indebtedness for borrowed money
owed to the Pledgor by any person and pledged hereunder to be evidenced
by a duly executed promissory note that is pledged and delivered to the
Collateral Agent pursuant to the terms thereof.
SECTION 3. Representations, Warranties and Covenants. The
Pledgor hereby represents, warrants and covenants, as to himself and
the Collateral pledged by him hereunder, to and with the Collateral
Agent that:
(a) the Pledged Stock represents that percentage as
set forth on Schedule I of the issued and outstanding shares
of each class of the capital stock of the issuer with respect
thereto;
(b) except for the security interest granted
hereunder, the Pledgor (i) is and will at all times continue
to be the direct owner, beneficially and of record, of the
Pledged Securities indicated on Schedule I, (ii) holds the
same free and clear of all Liens, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or
permit to exist any security interest in or other Lien on, the
Collateral, other than pursuant hereto, and (iv) subject to
Section 5, will cause any and all Collateral, whether for
value paid by the Pledgor or otherwise, to be forthwith
deposited with the Collateral Agent and pledged or assigned
hereunder;
(c) the Pledgor (i) has the capacity to pledge the
Collateral in the manner hereby done or contemplated and (ii)
will defend his title or interest thereto or therein against
any and all Liens (other than the Lien created by this
Agreement), however arising, of all persons whomsoever;
(d) no consent of any other person (including
creditors of the Pledgor) and no consent or approval of any
Governmental Authority or any securities exchange was or is
necessary to the validity of the pledge effected hereby;
(e) by virtue of the execution and delivery by the
Pledgor of this Agreement, when the Pledged Securities,
certificates or other documents representing or evidencing the
Collateral are delivered to the Collateral Agent in accordance
with this Agreement, the Collateral Agent will obtain a valid
and perfected first lien upon and security interest in such
Pledged Securities as security for the payment and performance
of the Obligations;
(f) the pledge effected hereby is effective to vest
in the Collateral Agent, on behalf of the Secured Parties, the
rights of the Collateral Agent in the Collateral as set forth
herein;
(g) all of the Pledged Stock has been duly authorized
and validly issued and is fully paid and nonassessable; and
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(h) all information set forth herein relating to the
Pledged Stock is accurate and complete in all material
respects as of the date hereof; and
(i) unless Pledgor shall have given Pledgee not less
than 30 days' prior notice thereof, Pledgor will not change
(i) his name or (ii) the location of his residence or place of
business.
SECTION 4. Registration in Nominee Name; Denominations. The
Collateral Agent, on behalf of the Secured Parties, shall have the
right (in its sole and absolute discretion) to hold the Pledged
Securities in its own name as pledgee, the name of its nominee (as
pledgee or as sub-agent) or the name of the Pledgor, endorsed or
assigned in blank or in favor of the Collateral Agent. The Pledgor will
promptly give to the Collateral Agent copies of any notices or other
communications received by it with respect to Pledged Securities
registered in the name of the Pledgor. The Collateral Agent shall at
all times have the right to exchange the certificates representing
Pledged Securities for certificates of smaller or larger denominations
for any purpose consistent with this Agreement.
SECTION 5. Voting Rights; Dividends and Interest, etc. (a)
Unless and until an Event of Default shall have occurred and be
continuing:
(i) The Pledgor shall be entitled to exercise any and
all voting and/or other consensual rights and powers inuring
to an owner of Pledged Securities or any part thereof for any
purpose consistent with the terms of this Agreement, the
Credit Agreement and the other Loan Documents; provided,
however, that the Pledgor will not be entitled to exercise any
such right if the result thereof could materially and
adversely affect the rights inuring to a holder of the Pledged
Securities or the rights and remedies of any of the Secured
Parties under this Agreement or the Credit Agreement or any
other Loan Document or the ability of the Secured Parties to
exercise the same.
(ii) The Collateral Agent shall execute and deliver
to the Pledgor, or cause to be executed and delivered to the
Pledgor, all such proxies, powers of attorney and other
instruments as the Pledgor may reasonably request for the
purpose of enabling the Pledgor to exercise the voting and/or
consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above and to receive the cash
dividends it is entitled to receive pursuant to subparagraph
(iii) below.
(iii) The Pledgor shall be entitled to receive and
retain any and all cash dividends, interest and principal paid
on the Pledged Securities to the extent and only to the extent
that such cash dividends, interest and principal are permitted
by, and otherwise paid in accordance with, the terms and
conditions of the Credit Agreement, the other Loan Documents
and applicable laws. All noncash dividends, interest and
principal, and all dividends, interest and principal paid or
payable in cash or otherwise in connection with a partial or
total liquidation or
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dissolution, return of capital, capital surplus or paid-in
surplus, and all other distributions (other than distributions
referred to in the preceding sentence) made on or in respect
of the Pledged Securities, whether paid or payable in cash or
otherwise, whether resulting from a subdivision, combination
or reclassification of the outstanding capital stock of the
issuer of any Pledged Securities or received in exchange for
Pledged Securities or any part thereof, or in redemption
thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer
may be a party or otherwise, shall be and become part of the
Collateral, and, if received by the Pledgor, shall not be
commingled by the Pledgor with any of its other funds or
property but shall be held separate and apart therefrom, shall
be held in trust for the benefit of the Collateral Agent and
shall be forthwith delivered to the Collateral Agent in the
same form as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event
of Default, all rights of the Pledgor to dividends, interest or
principal that the Pledgor is authorized to receive pursuant to
paragraph (a)(iii) above shall cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall have the
sole and exclusive right and authority to receive and retain such
dividends, interest or principal. All dividends, interest or principal
received by any Pledgor contrary to the provisions of this Section 5
shall be held in trust for the benefit of the Collateral Agent, shall
be segregated from other property or funds of the Pledgor and shall be
forthwith delivered to the Collateral Agent upon demand in the same
form as so received (with any necessary endorsement). Any and all money
and other property paid over to or received by the Collateral Agent
pursuant to the provisions of this paragraph (b) shall be retained by
the Collateral Agent in an account to be established by the Collateral
Agent upon receipt of such money or other property and shall be applied
in accordance with the provisions of Section 7. After all Events of
Default have been cured or waived, the Collateral Agent shall, within
five Business Days after all such Events of Default have been cured or
waived, repay to the Pledgor all cash dividends, interest or principal
(without interest), that the Pledgor would otherwise be permitted to
retain pursuant to the terms of paragraph (a)(iii) above and which
remain in such account.
(c) Upon the occurrence and during the continuance of an Event
of Default, all rights of the Pledgor to exercise the voting and
consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section 5, and the obligations of the
Collateral Agent under paragraph (a)(ii) of this Section 5, shall
cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers,
provided that, unless otherwise directed by the Required Lenders, the
Collateral Agent shall have the right from time to time following and
during the continuance of an Event of Default to permit the Pledgor to
exercise such rights. After all Events of Default have been cured or
waived, the Pledgor will have the right to exercise the voting and
consensual rights and powers that it would otherwise be entitled to
exercise pursuant to the terms of paragraph (a)(i) above.
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SECTION 6. Remedies upon Default. Upon the occurrence and
during the continuance of an Event of Default, subject to applicable
regulatory and legal requirements, the Collateral Agent may sell the
Collateral, or any part thereof, at public or private sale or at any
broker's board or on any securities exchange, for cash, upon credit or
for future delivery as the Collateral Agent shall deem appropriate. The
Collateral Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers
to persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to
the distribution or sale thereof, and upon consummation of any such
sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold.
Each such purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of the Pledgor,
and, to the extent permitted by applicable law, the Pledgor hereby
waives all rights of redemption, stay, valuation and appraisal the
Pledgor now has or may at any time in the future have under any rule of
law or statute now existing or hereafter enacted.
The Collateral Agent shall give a Pledgor 10 days' prior
written notice (which the Pledgor agrees is reasonable notice within
the meaning of Section 9-504(3) of the Uniform Commercial Code as in
effect in the State of New York or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
the Pledgor's Collateral. Such notice, in the case of a public sale,
shall state the time and place for such sale and, in the case of a sale
at a broker's board or on a securities exchange, shall state the board
or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such
board or exchange. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the
Collateral Agent may fix and state in the notice of such sale. At any
such sale, the Collateral, or portion thereof, to be sold may be sold
in one lot as an entirety or in separate parcels, as the Collateral
Agent may (in its sole and absolute discretion) determine. The
Collateral Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact
that notice of sale of such Collateral shall have been given. The
Collateral 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. In case any sale of all or any part of the Collateral
is made on credit or for future delivery, the Collateral so sold may be
retained by the Collateral Agent until the sale price is paid in full
by the purchaser or purchasers thereof, but the Collateral Agent shall
not incur any liability in case any such purchaser or purchasers shall
fail to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may be sold again upon like notice. At
any public (or, to the extent permitted by applicable law, private)
sale made pursuant to this Section 6, any Secured Party may bid for or
purchase, free from any right of redemption, stay or appraisal on the
part of the Pledgor (all said rights being also hereby waived and
released), the Collateral or any part thereof offered for sale and may
make payment on account thereof by using any claim then due and payable
to it
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from the Pledgor as a credit against the purchase price, and it may,
upon compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to the Pledgor therefor.
For purposes hereof, (a) a written agreement to purchase the Collateral
or any portion thereof shall be treated as a sale thereof, (b) the
Collateral Agent shall be free to carry out such sale pursuant to such
agreement and (c) the Pledgor shall not be entitled to the return of
the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Collateral Agent shall have entered into such
an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of
sale herein conferred upon it, the Collateral Agent may proceed by a
suit or suits at law or in equity to foreclose upon the Collateral and
to sell the Collateral or any portion thereof pursuant to a judgment or
decree of a court or courts having competent jurisdiction or pursuant
to a proceeding by a court-appointed receiver. Any sale pursuant to the
provisions of this Section 6 shall be deemed to conform to the
commercially reasonable standards as provided in Section 9-504(3) of
the Uniform Commercial Code as in effect in the State of New York or
its equivalent in other jurisdictions.
SECTION 7. Application of Proceeds of Sale. The proceeds of
any sale of Collateral pursuant to Section 6, as well as any Collateral
consisting of cash, shall be applied by the Collateral Agent as
follows:
FIRST, to the payment of all costs and expenses
incurred by the Collateral Agent in connection with such sale
or otherwise in connection with this Agreement, any other Loan
Document or any of the Obligations, including all court costs
and the reasonable fees and expenses of its agents and legal
counsel, the repayment of all advances made by the Collateral
Agent hereunder or under any other Loan Document on behalf of
the Pledgor and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder
or under any other Loan Document;
SECOND, to the payment in full of the Obligations
(the amounts so applied to be distributed among the Secured
Parties pro rata in accordance with the amounts of the
Obligations owed to them on the date of any such
distribution); and
THIRD, to the Pledgor, his successors or assigns, or
as a court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the
time of application of any such proceeds, moneys or balances in
accordance with this Agreement. Upon any sale of the Collateral by the
Collateral Agent (including pursuant to a power of sale granted by
statute or under a judicial proceeding), the receipt of the purchase
money by the Collateral Agent or of 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
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the Collateral Agent or such officer or be answerable in any way for
the misapplication thereof.
SECTION 8. Reimbursement of Collateral Agent. (a) The Pledgor
agrees to pay upon demand to the Collateral Agent the amount of any and
all reasonable expenses, including the reasonable fees, other charges
and disbursements of its counsel and of any experts or agents, that the
Collateral Agent may incur in connection with (i) the administration of
this Agreement, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the
Collateral Agent hereunder or (iv) the failure by the Pledgor to
perform or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations
under the other Loan Documents, the Pledgor agrees to indemnify the
Collateral Agent and the Indemnitees (as defined in Section 9.05 of the
Credit Agreement) against, and hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, other charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any
way connected with, or as a result of (i) the execution or delivery of
this Agreement or any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations thereunder or the
consummation of the Transactions and the other transactions
contemplated thereby or (ii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto, provided that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to
have resulted from the gross negligence or willful misconduct of such
Indemnitee.
(c) Any amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security
Documents. The provisions of this Section 8 shall remain operative and
in full force and effect regardless of the termination of this
Agreement, the consummation of the transactions contemplated hereby,
the repayment of any of the Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any
other Loan Document or any investigation made by or on behalf of the
Collateral Agent or any other Secured Party. All amounts due under this
Section 8 shall be payable on written demand therefor and shall bear
interest at the rate specified in Section 2.06 of the Credit Agreement.
SECTION 9. Collateral Agent Appointed Attorney-in-Fact. The
Pledgor hereby appoints the Collateral Agent the attorney-in-fact of
the Pledgor for the purpose of carrying out the provisions of this
Agreement and taking any action and executing any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the
purposes hereof, which appointment is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, the
Collateral Agent shall have the right, upon the occurrence and during
the continuance of an Event of Default, with full power of
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substitution either in the Collateral Agent's name or in the name of
the Pledgor, to ask for, demand, xxx for, collect, receive and give
acquittance for any and all moneys due or to become due under and by
virtue of any Collateral, to endorse checks, drafts, orders and other
instruments for the payment of money payable to the Pledgor
representing any interest or dividend or other distribution payable in
respect of the Collateral or any part thereof or on account thereof and
to give full discharge for the same, to settle, compromise, prosecute
or defend any action, claim or proceeding with respect thereto, and to
sell, assign, endorse, pledge, transfer and to make any agreement
respecting, or otherwise deal with, the same; provided, however, that
nothing herein contained shall be construed as requiring or obligating
the Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Collateral
Agent, or to present or file any claim or notice, or to take any action
with respect to the Collateral or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby. The
Collateral Agent and the other Secured Parties shall be accountable
only for amounts actually received as a result of the exercise of the
powers granted to them herein, and neither they nor their officers,
directors, employees or agents shall be responsible to the Pledgor for
any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
SECTION 10. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further
exercise thereof or the exercise of any other right or power. The
rights and remedies of the Collateral Agent hereunder and of the other
Secured Parties under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provisions of this Agreement or consent to any
departure by the Pledgor therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on the Pledgor
in any case shall entitle the Pledgor to any other or further notice or
demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement
entered into between the Collateral Agent and the Pledgor, subject to
any consent required in accordance with Section 9.08 of the Credit
Agreement.
SECTION 11. Securities Act, etc. In view of the position of
the Pledgor in relation to the Pledged Securities, or because of other
current or future circumstances, a question may arise under the
Securities Act of 1933, as now or hereafter in effect, or any similar
statute hereafter enacted analogous in purpose or effect (such Act and
any such similar statute as from time to time in effect being called
the "Federal Securities Laws") with respect to any disposition of the
Pledged Securities permitted hereunder. The Pledgor understands that
compliance with the Federal Securities Laws might very strictly
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limit the course of conduct of the Collateral Agent if the Collateral
Agent were to attempt to dispose of all or any part of the Pledged
Securities, and might also limit the extent to which or the manner in
which any subsequent transferee of any Pledged Securities could dispose
of the same. Similarly, there may be other legal restrictions or
limitations affecting the Collateral Agent in any attempt to dispose of
all or part of the Pledged Securities under applicable Blue Sky or
other state securities laws or similar laws analogous in purpose or
effect. The Pledgor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the
Pledged Securities, limit the purchasers to those who will agree, among
other things, to acquire such Pledged Securities for their own account,
for investment, and not with a view to the distribution or resale
thereof. The Pledgor acknowledges and agrees that in light of such
restrictions and limitations, the Collateral Agent, in its sole and
absolute discretion, (a) may proceed to make such a sale whether or not
a registration statement for the purpose of registering such Pledged
Securities or part thereof shall have been filed under the Federal
Securities Laws and (b) may approach and negotiate with a single
potential purchaser to effect such sale. The Pledgor acknowledges and
agrees that any such sale might result in prices and other terms less
favorable to the seller than if such sale were a public sale without
such restrictions. In the event of any such sale, the Collateral Agent
shall incur no responsibility or liability for selling all or any part
of the Pledged Securities at a price that the Collateral Agent, in its
sole and absolute discretion, may in good xxxxx xxxx reasonable under
the circumstances, notwithstanding the possibility that a substantially
higher price might have been realized if the sale were deferred until
after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 11 will apply
notwithstanding the existence of a public or private market upon which
the quotations or sales prices may exceed substantially the price at
which the Collateral Agent sells.
SECTION 12. Registration, etc. The Pledgor agrees that, upon
the occurrence and during the continuance of an Event of Default
hereunder, if for any reason the Collateral Agent desires to sell any
of the Pledged Securities of the Borrower at a public sale, it will, at
any time and from time to time, upon the written request of the
Collateral Agent, use its best efforts to take or to cause the issuer
of such Pledged Securities to take such action and prepare, distribute
and/or file such documents, as are required or advisable in the
reasonable opinion of counsel for the Collateral Agent to permit the
public sale of such Pledged Securities. The Pledgor further agrees to
indemnify, defend and hold harmless the Collateral Agent, each other
Secured Party, any underwriter and their respective officers,
directors, affiliates and controlling persons from and against all
loss, liability, expenses, costs of counsel (including, without
limitation, reasonable fees and expenses to the Collateral Agent of
legal counsel), and claims (including the costs of investigation) that
they may incur insofar as such loss, liability, expense or claim arises
out of or is based upon any alleged untrue statement of a material fact
contained in any prospectus (or any amendment or supplement thereto) or
in any notification or offering circular, or arises out of or is based
upon any alleged omission to state a material fact required to be
stated therein or necessary to make the statements in any thereof not
misleading, except insofar as the same may have been caused by any
untrue statement or
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omission based upon information furnished in writing to the Pledgor or
the issuer of such Pledged Securities by the Collateral Agent or any
other Secured Party expressly for use therein. The Pledgor further
agrees, upon such written request referred to above, to use its best
efforts to cause the issuer of such Pledged Securities to qualify, file
or register, any of the Pledged Securities under the Blue Sky or other
securities laws of such states as may be requested by the Collateral
Agent and keep effective, or cause to be kept effective, all such
qualifications, filings or registrations. The Pledgor will bear all
costs and expenses of carrying out its obligations under this Section
12. The Pledgor acknowledges that there is no adequate remedy at law
for failure by the Pledgor to comply with the provisions of this
Section 12 and that such failure would not be adequately compensable in
damages, and therefore agrees that his agreements contained in his
Section 12 may be specifically enforced.
SECTION 13. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the grant of a security interest in the
Collateral and all obligations of the Pledgor hereunder, shall be
absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any
agreement with respect to any of the Obligations or any other agreement
or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or
any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument relating to any of the
foregoing, (c) any exchange, release or nonperfection of any other
collateral, or any release or amendment or waiver of or consent to or
departure from any guaranty, for all or any of the Obligations or (d)
any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Pledgor in respect of the
Obligations or in respect of this Agreement (other than the
indefeasible payment in full of all the Obligations).
SECTION 14. Termination or Release. (a) This Agreement and the
security interests granted hereby shall terminate when all the
Obligations have been indefeasibly paid in full and the Lenders have no
further commitment to lend under the Credit Agreement, the L/C Exposure
has been reduced to zero and the Issuing Bank has no further obligation
to issue Letters of Credit under the Credit Agreement.
(b) Upon any sale or other transfer by the Pledgor of any
Collateral that is permitted under the Credit Agreement, or, upon the
effectiveness of any written consent to the release of the security
interest granted hereby in any Collateral pursuant to Section 9.08(b)
of the Credit Agreement, the security interest in such Collateral shall
be automatically released.
(c) In connection with any termination or release pursuant to
paragraph (a) or (b), the Collateral Agent shall execute and deliver to
the Pledgor, at the Pledgor's expense, all documents that the Pledgor
shall reasonably request to evidence such termination or release. Any
execution and delivery of documents pursuant to this Section 14 shall
be without recourse to or warranty by the Collateral Agent.
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SECTION 15. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 9.01 of the Credit
Agreement.
SECTION 16. Further Assurances. The Pledgor agrees to do such
further acts and things, and to execute and deliver such additional
conveyances, assignments, agreements and instruments, as the Collateral
Agent may at any time reasonably request in connection with the
administration and enforcement of this Agreement or with respect to the
Collateral or any part thereof or in order better to assure and confirm
unto the Collateral Agent its rights and remedies hereunder.
SECTION 17. Binding Effect; Several Agreement; Assignments.
Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and assigns of
such party; and all covenants, promises and agreements by or on behalf
of the Pledgor that are contained in this Agreement shall bind and
inure to the benefit of its successors and assigns. This Agreement
shall become effective when a counterpart hereof executed on behalf of
the Pledgor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral
Agent, and thereafter shall be binding upon the Pledgor and the
Collateral Agent and their respective successors and assigns, and shall
inure to the benefit of the Pledgor, the Collateral Agent and the other
Secured Parties, and their respective successors and assigns, except
that the Pledgor shall not have the right to assign its rights
hereunder or any interest herein or in the Collateral (and any such
attempted assignment shall be void), except as expressly contemplated
by this Agreement or the other Loan Documents.
SECTION 18. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by the
Pledgor herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other
Loan Document shall be considered to have been relied upon by the
Collateral Agent and the other Secured Parties and shall survive the
making by the Lenders of the Loans and the issuance of the Letters of
Credit by the Issuing Bank, regardless of any investigation made by the
Secured Parties or on their behalf, and shall continue in full force
and effect as long as the principal of or any accrued interest on any
Loan or any other fee or amount payable under this Agreement or any
other Loan Document is outstanding and unpaid or the L/C Exposure does
not equal zero and as long as the Commitments and the L/C Commitments
have not been terminated.
(b) In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of
itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid
provisions the
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economic effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.
SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 20. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original,
but all of which, when taken together, shall constitute a single
contract, and shall become effective as provided in Section 17.
Delivery of an executed counterpart of a signature page to this
Agreement by facsimile transmission shall be as effective as delivery
of a manually executed counterpart of this Agreement.
G-2-13
SECTION 21. Rules of Interpretation. The rules of
interpretation specified in Section 1.02 of the Credit Agreement shall
be applicable to this Agreement. Section headings used herein are for
convenience of reference only, are not part of this Agreement and are
not to affect the construction of, or to be taken into consideration in
interpreting this Agreement.
SECTION 22. Jurisdiction; Consent to Service of Process. (a)
The Pledgor hereby irrevocably and unconditionally submits, for himself
and his property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally
agrees that, to the extent permitted by applicable law, all claims in
respect of any such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that
the Collateral Agent or any other Secured Party may otherwise have to
bring any action or proceeding relating to this Agreement or the other
Loan Documents against the Pledgor or its properties in the courts of
any jurisdiction.
(b) The Pledgor hereby irrevocably and unconditionally waives,
to the fullest extent he may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this
Agreement or the other Loan Documents in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum
to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 15.
Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
OR HE MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT OR HE
HAVE BEEN INDUCED TO ENTER INTO THIS
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AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION.
* * *
G-2-15
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
XXXXXX XXXXXXXX
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SALOMON BROTHERS HOLDING
COMPANY INC, as Collateral Agent
By: _______________________________________
Name:
Title:
G-2-16
Schedule I to the
Exhibit G-2
CAPITAL STOCK
Number of Registered Number and Percentage
Issuer Certificate Owner Class of Shares of Shares
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G-2-17
