EXHIBIT 99.f.13
PLEDGE AGREEMENT
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THIS PLEDGE AGREEMENT (this "Agreement") made as of this 24th day of
June, 1998, is between MCG CREDIT CORPORATION, a Delaware corporation having its
principal place of business and chief executive office at 0000 Xxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000 ("Pledgor") and XXXXXX FINANCIAL, INC., a
Delaware corporation having an office at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, as Agent ("Pledgee"), on behalf of all Lenders (as hereinafter
defined).
RECITALS:
WHEREAS, Pledgor is the legal and beneficial owner of all of the
issued and outstanding capital stock of MCG Finance Corporation, a Delaware
corporation ("Borrower"), all of which stock, as of the date hereof, is
described on Exhibit A hereto; and
WHEREAS, Borrower has entered into a Credit Agreement of even date
herewith (as the same may hereafter be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") with Pledgee for the benefit
of all lenders thereunder ("Lenders"), and the Lenders from time to time as
parties thereto; and
WHEREAS, Borrower has received, and may hereafter receive, loans and
other financial accommodations from Lenders under the Credit Agreement, as a
result of which it has incurred, and expects simultaneously with the delivery of
this Agreement to, and will hereafter, incur, "Obligations" (as that term is
defined in the Credit Agreement) to Lenders; and
WHEREAS, Pledgor acknowledges that, as the sole stockholder of
Borrower, it will receive substantial direct and indirect benefits by reason of
the making of loans to Borrower as provided in the Credit Agreement; and
WHEREAS, Pledgor wishes to grant further security and assurance to
Pledgee, for the benefit of Pledgee and Lenders, in order to secure the
performance of the Obligations of Borrower under the Credit Agreement, and to
that effect to pledge to Pledgee, for the benefit of Lenders, all of the present
and future capital stock of Borrower owned by Pledgor;
NOW, THEREFORE, in consideration of the foregoing and in order to
induce Pledgee and Lenders to extend credit and make other financial
accommodations under the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Pledgor hereby agrees with Pledgee, on behalf of and for the benefit of Lenders,
as follows:
1. Defined Terms. Unless otherwise defined herein, all capitalized
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terms used herein shall have the meanings given to such terms in the Credit
Agreement. Terms defined in the Illinois Uniform Commercial Code which are not
otherwise defined in this Agreement or in the Credit Agreement are used in this
Agreement as defined in the Illinois Uniform Commercial Code
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as in effect on the date hereof.
2. Pledge. Pledgor hereby pledges, assigns, hypothecates,
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transfers, delivers and grants to Pledgee, for the benefit of Lenders, a lien on
and security interest in (a) all of the capital stock of Borrower now or
hereafter owned by Pledgor (the "Pledged Shares"), (b) all other property
hereafter delivered to Pledgor in substitution for or in addition to the Pledged
Shares, (c) any other property of Pledgor, as described in Section 4 below, now
or hereafter delivered to, or in the possession or custody of, Pledgee in
connection with the Credit Agreement, and (d) any and all proceeds thereof,
except with respect to dividends and distributions made pursuant to and in
accordance with Section 3.5 of the Credit Agreement and payments for other
services permitted between Borrower and Pledgor under the Credit Agreement (all
such property being hereinafter referred to collectively as the "Collateral"),
as collateral security for (i) the prompt and complete payment and performance
when due (whether at the stated maturity, by acceleration or otherwise) of all
of the Obligations of Borrower, and (ii) the due and punctual payment and
performance by Pledgor of its obligations and liabilities under, arising out of,
or in connection with this Agreement including, without limitation, any taxes
and expenses payable pursuant to Section 18 hereof (all of the foregoing being
hereinafter referred to collectively as the "Liabilities"). All of the issued
and outstanding capital stock of Borrower owned by Pledgor as of the date hereof
is represented by stock certificates listed on Exhibit A hereto, which stock
certificates, together with undated stock powers duly executed in blank by
Pledgor, are being delivered to Pledgee simultaneously herewith. Pledgee shall
maintain possession and custody of the certificates representing the Pledged
Shares in accordance with Section 5 below and shall return the Pledged Shares in
accordance with said section.
3. Representations, Warranties and Covenants of Pledgor.
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(a) Pledge Related Representations and Warranties: Pledgor represents and
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warrants to Pledgee, for the benefit of the Lenders, that:
(1) Exhibit B sets forth, as of the date hereof, (i) the
authorized capital stock of Borrower, (ii) the number of shares of capital
stock of Borrower that are issued and outstanding as of the date hereof and
(iii) the number of shares of capital stock of Borrower held in its
treasury. Pledgor is the record and beneficial owner of, and has good and
marketable title to, the Pledged Shares, and the Collateral is free and
clear of all Liens except the Liens created by this Agreement;
(2) Pledgor has full power, authority and legal right to execute
the pledge provided for herein and to pledge the Collateral to Pledgee, for
the benefit of Lenders;
(3) This Agreement has been duly authorized, executed and
delivered by Pledgor and constitutes a legal, valid and binding obligation
of Pledgor enforceable in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium, or
similar laws or equitable principles relating to or limiting creditor's
rights generally;
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(4) As of the date hereof, Pledgor holds no options, warrants or
other agreements with respect to the issuance of additional shares of
capital stock of Borrower and, to the best of Pledgor's knowledge, no
options, warrants or other agreements with respect to issuance of
additional shares of capital stock of Borrower exist;
(5) The Pledged Shares have been duly and validly authorized and
issued, are fully paid and non-assessable and represent all of the issued
and outstanding shares of capital stock of Borrower;
(6) No consent, approval or authorization of or designation or
filing with any federal, state or other governmental authority or
regulatory body on the part of Pledgor is required in connection with the
execution, delivery and performance of this Agreement, the granting of
Liens in the Collateral by Pledgor or the exercise by Pledgee, for the
benefit of Pledgee and Lenders, of the voting and other rights provided for
in this Agreement, except if the failure to obtain or perform, as the case
may be, such consent, approval, authorization or filing could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect;
(7) The execution, delivery and performance of this Agreement by
Pledgor will not violate any provision of (i) any applicable law or
regulation, (ii) any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, (iii) the
charter or by-laws of Pledgor or Borrower, (iv) any securities issued by
Pledgor or Borrower, or (v) any mortgage, indenture, lease, contract, or
other agreement, instrument or undertaking to which Pledgor or Borrower is
a party or which purports to be binding upon Pledgor or Borrower or upon
any of their respective assets, and will not result in the creation or
imposition of any Lien on any of the assets of Pledgor or Borrower except
as contemplated by this Agreement, and except if such violation or
imposition of Lien could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect; and
(8) The pledge, assignment and delivery of the Pledged Shares
pursuant to this Agreement creates a valid first Lien on the Pledged Shares
in favor of Pledgee, for the benefit of Pledgee and Lenders, subject to no
other Liens nor to any agreement purporting to grant to any third party any
Liens in the property or assets of Pledgor which would include the Pledged
Shares. The pledge or assignment of the Collateral (other than the Pledged
Shares) pursuant to this Agreement, together with the delivery and/or
filing of UCC financing statements in connection therewith, as may be
applicable, creates a valid first Lien on such Collateral in favor of
Pledgee, for the benefit of Pledgee and Lenders, subject to no other Liens
nor to any agreement purporting to grant to any third party any Liens in
the property or assets of Pledgor which would include such Collateral.
Pledgor covenants and agrees that, to the extent commercially reasonable,
it will defend all of the right, title and interest of Pledgee in and to
the Collateral, for the benefit of Pledgee and the Lenders, against the
claims and demands of all persons whomsoever.
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(b) General Representations, Warranties and Covenants: Pledgor further
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represents, warrants and covenants to Pledgee, for the benefit of the Lenders,
that:
(1) Pledgor will (a) comply with (i) the requirements of all
applicable laws, rules, regulations and orders of any governmental
authority (including, without limitation, laws, rules, regulations and
orders relating to taxes, employer and employee contributions, securities,
employee retirement and welfare benefits, environmental protection matters
and employee health and safety) as now in effect and which may be imposed
in the future in all jurisdictions in which Pledgor is now doing business
or may hereafter be doing business and (ii) the obligations, covenants and
conditions contained in all Contractual Obligations of Pledgor, other than
those laws, rules, regulations, orders and provisions of such Contractual
Obligations the noncompliance with which could not be reasonably expected
to have, either individually or in the aggregate, a Material Adverse Effect
and (b) maintain or obtain all licenses, qualifications and permits now
held or hereafter required to be held by Pledgor for which the loss,
suspension, revocation or failure to obtain or renew, could reasonably be
expected to have a Material Adverse Effect, as defined in the Credit
Agreement. Pledgor represents and warrants that as of the date hereof, it
(i) is in compliance with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority as now in effect, and
all Contractual Obligations, other than those applicable laws, rules,
regulations, orders and Contractual Obligations, the non-compliance with
which could not reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect, and (ii) maintains all licenses,
qualifications and permits referred to above, for which the loss,
suspension, revocation or failure to obtain or renew, could reasonably be
expected to have a Material Adverse Effect.
(2) Pledgor will maintain or cause to be maintained, with
financially sound and reputable insurers, public liability and property
damage insurance with respect to its business and properties against loss
or damage of the kinds, errors omissions insurance and key person life
insurance, in each instance as customarily carried or maintained by
corporations of established reputation engaged in similar businesses.
(3) Pledgor shall permit any authorized representatives of Agent
to visit and inspect any of the properties of Pledgor relating to the
Collateral, including its financial and accounting records, and to make
copies and take extracts therefrom, and to discuss its affairs, finances
and business relating to the Collateral with its and their officers and
certified public accountants, at such reasonable times during normal
business hours and as often as may be reasonably requested. Without in any
way limiting the foregoing, Pledgor will participate and will use
commercially reasonable efforts to cause its key management personnel to
participate in a meeting with Agent at least once during each year, which
meeting shall be held at such time and such place as may be reasonably
requested by Agent.
(4) Pledgor will not amend, modify or otherwise alter the terms
of the Servicing and Management Agreement except as expressly permitted
under the Credit Agreement, and shall observe and comply with, in all
material respects, its obligations under the Servicing and Management
Agreement.
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(5) Pledgor will maintain system of accounting established and
administered in accordance with sound business practices to permit
preparation of financial statements in conformity with GAAP (it being
understood that quarterly financial statements are not required to have
footnote disclosures). Pledgor will deliver (to the extent not delivered
by Borrower) each of the financial statements and other reports described
below to Agent (with sufficient copies for distribution to each Lender in
the case of the financial statements and other reports described in
subsections (A), (B), (D), (F) and, to the extent applicable to Pledgor,
(L)) of the Credit Agreement, as applicable. As soon as available and in
any event within thirty (30) days after the end of each fiscal quarter of
the Pledgor (including the last fiscal quarter of Pledgor's fiscal year),
Pledgor will deliver to Pledgee the consolidated and consolidating balance
sheets of, Pledgor, Borrower and Borrower's Subsidiaries, as of the end of
such fiscal quarter, and the related consolidated and consolidating
statements of income, stockholders' equity and cash flow for such fiscal
quarter and for the period from the beginning of the then current fiscal
year of Pledgor to the end of such fiscal quarter. As soon as available
and in any event within ninety (90) days after the end of each fiscal year
of Pledgor, Pledgor will deliver to Pledgee (1) the consolidated and
consolidating balance sheets of Pledgor, Borrower and Borrower's
Subsidiaries, as of the end of such year, and the related consolidated and
consolidating statements of income, stockholders' equity and cash flow for
such fiscal year, and (2) a report with respect to the consolidated
financial statements from a firm of Certified Public Accountants selected
by Pledgor and reasonably acceptable to Agent, which report shall be
prepared in accordance with Statement of Auditing Standards No. 58 (the
"Statement") entitled "Reports on Audited Financial Statements" and such
report shall be "Unqualified" (as such term is defined in such Statement).
(6) Any funds received by Pledgor from Borrower, other than
payments made pursuant to and in accordance with either the Servicing and
Management Agreement or subsection 3.5(c) of the Credit Agreement, shall be
used by Pledgor only as expressly provided in subsections 3.5(a) and 3.3(d)
and Section 3.8 of the Credit Agreement, as applicable. Such funds shall
not be used by Pledgor for making distributions or dividends to it's
stockholders. Any distributions or dividends made by Pledgor to its
stockholders during the three month period immediately prior to or
following the making of a loan or a Restricted Junior Payment by Borrower
to Pledgor shall be presumptively deemed a distribution by Pledgor of such
loan proceeds from Borrower or Restricted Junior Payment proceeds in
violation of this subsection 3(b)(6) and may be set off against future
amounts due and owing to Pledgor under the Servicing and Management
Agreement.
(7) Maintain separate existence from Borrower consistent with
the requirements of Section 2.10 the Credit Agreement, including, taking
all reasonable steps (including, without limitation, in each case, all
steps that the Requisite Lenders may from time to time reasonably request)
to maintain its identity as a separate entity with assets and liabilities
distinct from those of the Borrower.
4. Stock Dividends, Distributions, etc. If, while this Agreement
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is in effect,
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Pledgor shall become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a stock distribution in connection with any reclassification, increase or
reduction of capital, or issued in connection with any reorganization, merger or
consolidation), or any options or rights representing equity interests in
Borrower, whether as an addition to, in substitution for, or in exchange for any
of the Pledged Shares or otherwise, then Pledgor agrees to accept the same as
Pledgee's agent and to hold the same in trust for Pledgee, and to deliver the
same forthwith to Pledgee in the exact form received, with the indorsement of
Pledgor when necessary and/or appropriate undated stock powers duly executed in
blank, to be held by Pledgee as additional Collateral. In case any distribution
of capital shall be made to Pledgor on or in respect of the Pledged Shares or
any property shall be distributed to Pledgor upon or with respect to the Pledged
Shares pursuant to the recapitalization or reclassification of the capital of
the issuer thereof or pursuant to the reorganization, merger or consolidation
thereof, the property so distributed shall be delivered by Pledgor to Pledgee to
be held by Pledgee as additional Collateral. All sums of money and property so
paid or distributed in respect of the Pledged Shares which are received by
Pledgor (except as expressly permitted under subsection 3.5(c) of the Credit
Agreement) or 3(b)6 above shall, until paid or delivered to Pledgee, be held by
Pledgor in trust as additional Collateral.
5. Administration of Security. The following provisions shall
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govern the administration of the Pledged Shares:
(a) So long as no Event of Default has occurred and is
continuing and the Obligations have not been accelerated, Pledgor shall be
entitled (subject to the other provisions hereof and the Credit Agreement,
including, without limitation, Section 8 below and Section 3.5 of the Credit
Agreement) (i) to vote or consent with respect to the Pledged Shares and to
otherwise exercise the incidents of ownership thereof in any manner not
materially inconsistent with this Agreement, the Credit Agreement or any of the
other Loan Documents; and (ii) to receive and retain cash dividends or other
distributions in the ordinary course made in respect of the Pledged Shares.
Pledgor hereby grants to Pledgee or its nominee, for the benefit of Lenders, an
irrevocable proxy to exercise all voting and corporate rights relating to the
Pledged Shares in any instance, including, without limitation, to approve any
merger involving Borrower as a constituent corporation, which proxy shall be
exercisable immediately upon the occurrence of an Event of Default. After the
occurrence and during the continuance of an Event of Default and upon request of
Pledgee, Pledgor agrees to deliver to Pledgee such further evidence of such
irrevocable proxy or such further irrevocable proxies to vote the Pledged Shares
as Pledgee may request.
(b) Upon the occurrence and during the continuance of an Event
of Default, in the event that Pledgor, as record and beneficial owner of the
Pledged Shares, shall have received or shall have become entitled to receive any
cash dividends or other distributions in the ordinary course, Pledgor shall,
upon demand made by Pledgee, deliver to Pledgee, and Pledgee shall be entitled
to receive and hold, on behalf of Pledgee and Lenders, all such cash or other
distributions as additional Collateral; provided, however, that upon such Event
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of Default being cured and the Obligations being reinstated, Pledgee shall
return such portion of any such cash dividends or other distributions received
and retained by Pledgee as have not been applied to cure such Event of Default
to Pledgor.
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(c) Subject to any sale or other disposition by Pledgee of the
Pledged Shares or other property pursuant to this Agreement, upon the
termination pursuant to Section 15 hereof of the Liens hereby granted, the
Pledged Shares and any other property then held as part of the collateral
security for the Liabilities in accordance with the provisions of this Agreement
shall be returned to Pledgor, and Pledgee shall take such other action and
execute such other documents as Pledgor may reasonably request to evidence such
termination.
6. Rights of Pledgee. Neither Pledgee nor Lenders shall be liable
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for any failure to collect or realize upon the Liabilities or any collateral
security or guaranty therefor, or any part thereof, or for any delay in so
doing, nor shall Pledgee or any Lender be under any obligation to take any
action whatsoever with regard thereto. Any or all of the Collateral held by
Pledgee hereunder may, if an Event of Default has occurred and is continuing,
and upon notice to Pledgor, be registered in the name of Pledgee or its nominee,
for the benefit of Pledgee and the Lenders, and Pledgee or its nominee may
thereafter without notice exercise all voting and corporate rights at any
meeting with respect to Borrower and exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to
any of the Pledged Shares, for the benefit of Pledgee and Lenders, as if Pledgee
or its nominee were the absolute owner thereof, including, without limitation,
the right to vote in favor of, and to exchange at its discretion any and all of
the Collateral upon the merger, consolidation, reorganization, recapitalization
or other readjustment with respect to Borrower or upon the exercise by Borrower
or Pledgee, on behalf of Pledgee and Lenders, of any right, privilege or option
pertaining to any of the Collateral, and in connection therewith, to deposit and
deliver any and all of the Collateral with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
Pledgee may determine, all without liability except to account for property
actually received by Pledgee, but Pledgee shall have no duty to exercise any of
the aforesaid rights, privileges or options and shall not be responsible for any
failure to do so or delay in so doing. Notwithstanding the foregoing, Pledgee
shall not take any such actions under this Section except in a commercially
reasonable manner and in accordance with the terms hereof, the other Loan
Documents, applicable law and (if applicable to the property covered under this
Agreement), the standards for the exercise of remedies under Part 5 of Article 9
of the Uniform Commercial Code.
7. Remedies. Upon the occurrence and during the continuance of an
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Event of Default, Pledgee, on behalf of Pledgee and Lenders, without demand of
performance or other demand, advertisement or prior notice of any kind (except
the notice specified below of time and place of public or private sale) to or
upon Pledgor or any other Person (all and each of which demands, advertisements
and/or prior notices are hereby expressly waived), may forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, assign, give an option or options to purchase,
contract to sell or otherwise dispose of (including any disposition in
connection with a merger of Borrower) and deliver the Collateral, or any part
thereof, in one or more portions at public or private sale or sales or
transactions, at any exchange, broker's board or at any of Pledgee's offices or
elsewhere upon such terms and conditions as Pledgee may deem advisable and at
such prices as it may deem best, for any combination of cash and/or securities
or other property or on credit or for future delivery without assumption of any
credit risk, with the right to Pledgee upon any such sale or sales, public or
private, to purchase, on behalf of
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Pledgee and Lenders, the whole or any part of the Collateral so sold free of any
right or equity of redemption in Pledgor, which right or equity of redemption
Pledgor hereby expressly waives and releases. Pledgee shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization,
sale or disposition, after deducting all costs and expenses of every kind
incurred therein or incidental to the safekeeping or otherwise of any and all of
the Collateral or in any way relating to the rights of Pledgee or Lenders
hereunder, including attorneys' fees and expenses, to the payment, in whole or
in part, of the Liabilities in such order (unless a court of competent
jurisdiction shall otherwise direct) as Pledgee may elect. Only after so paying
over such net proceeds and after the payment by Pledgee of any other amount
required by any provision of law, including, without limitation, Section 9-
504(1)(c) of the Uniform Commercial Code of the State of Illinois, need Pledgee
account for the surplus, if any, to Pledgor. Pledgor agrees that Pledgee need
not give more than ten Business Days' notice of the time and place of any public
sale or of the time after which a private sale or other intended disposition is
to take place and that such notice shall constitute commercially reasonable
notification of such matters. No notification need be given to Pledgor if
Pledgor has signed after default a statement renouncing any right to
notification of sale or other intended disposition. In addition to the rights
and remedies granted to Pledgee and Lenders in this Agreement and in any of the
other Loan Documents, Pledgee and Lenders shall have all the rights and remedies
of secured parties under the Uniform Commercial Code of the State of Illinois
and under any other applicable law. Pledgor further agrees, to the full extent
permitted under applicable law, to waive and agrees not to assert any rights or
privileges which it may acquire under clause (c) of Section 9-112 of the Uniform
Commercial Code. Notwithstanding the foregoing, Pledgee shall not take any such
actions under this Section except in a commercially reasonable manner and in
accordance with the terms hereof, the other Loan Documents, applicable law and,
if applicable to the property covered under this Agreement but subject in all
events to the waivers contained in the preceding sentence, the standards for the
exercise of remedies under Part 5 of Article 9 of the Uniform Commercial Code.
8. No Disposition, Liens, etc. Without the prior written consent of
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Pledgee, Pledgor agrees that it will not sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, any of the
Collateral, nor create, incur or permit to exist any Lien on any of the
Collateral, or any interest therein, or any proceeds thereof, except for the
Liens granted pursuant to this Agreement. Without the prior written consent of
Pledgee and except as permitted under the Credit Agreement, Pledgor agrees that
it will not vote to enable Borrower to (a) issue any stock or other securities
of any nature in addition to or in exchange or substitution for the Pledged
Shares or (b) dissolve, liquidate, retire any of its capital stock, reduce its
capital or merge or consolidate with any other Person.
9. Sale of Pledged Shares. (a) Pledgor acknowledges that Pledgee
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may be unable to effect a public sale or disposition (including, without
limitation, any disposition in connection with a merger of Borrower) of any or
all the Collateral by reason of certain prohibitions contained in the Securities
Act of 1933, as amended (the "Securities Act"), and applicable state securities
laws, but may be compelled to resort to one or more private sales or
dispositions thereof to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Pledgor
acknowledges that any such private sale or disposition may result in prices and
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other terms (including the terms of any securities or other property received in
connection therewith) less favorable to the seller than if such sale or
disposition were a public sale or disposition and, notwithstanding such
circumstances, Pledgor agrees that any such private sale or disposition shall be
deemed to be affected in a commercially reasonable manner. Pledgee shall be
under no obligation to delay a sale or disposition of any of the Collateral in
order to permit Pledgor or Borrower to register such securities for public sale
under the Securities Act, or under applicable state securities laws, even if
Pledgor or Borrower would agree to do so.
(b) Pledgor further agrees to do or to use commercially
reasonable efforts to cause to be done all such other acts and things as may be
necessary to make any sale or other disposition of all or any portion of the
Collateral valid and binding and in compliance with any and all applicable laws,
regulations, orders, writs, injunctions, decrees or awards of any and all
courts, arbitrators or governmental instrumentalities, domestic or foreign,
having jurisdiction over any such sale or sales or dispositions and the non-
compliance with which could reasonably be expected to have an adverse effect on
such sale or distribution. If such sale or other disposition is precipitated by
a breach or other action of Pledgor, then all expenses incurred in connection
with such sale or disposition shall be borne by Pledgor and otherwise at
Borrower's expense. Pledgor further agrees that a breach of any of the covenants
contained in Sections 4, 5(b), 8, 9 and 10 of this Agreement will cause
irreparable injury to Pledgee and Lenders, that neither Pledgee nor Lenders have
an adequate remedy at law in respect of such breach and, as a consequence,
agrees, without limiting the right of Pledgee and Lenders to seek and obtain
specific performance of other obligations of Pledgor contained in this
Agreement, that each and every covenant referenced above shall be specifically
enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred under the Credit Agreement.
(d) Pledgor further agrees to waive any and all rights of
subrogation it may have against Borrower upon the sale or other disposition of
all or any portion of the Collateral by Pledgee.
10. Further Assurances. Pledgor agrees that at any time and from
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time to time upon the written request of Pledgee, Pledgor will execute and
deliver all stock powers, financing statements and other documents and do such
further acts and things as Pledgee may reasonably request consistent with the
provisions hereof in order to effect the purposes of this Agreement.
11. Severability. Any provision of this Agreement which is
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prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
12. No Waiver; Cumulative Remedies. Pledgee shall not by any act,
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delay, omission or otherwise be deemed to have waived any of its remedies
hereunder, and no waiver by Pledgee shall be valid unless in writing and signed
by Pledgee, on behalf of the Lenders, and then only to the extent therein set
forth. A waiver by Pledgee of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which Pledgee would
otherwise
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have on any subsequent occasion. No course of dealing between Pledgor and
Pledgee or any Lender and no failure to exercise, nor any delay by Pledgee in
exercising any right, power or privilege hereunder or under the Credit Agreement
on behalf of Lenders, shall impair such right or remedy or operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided are cumulative and may be exercised singly or concurrently, and are not
exclusive of any rights or remedies provided by law.
13. Successors and Assigns. This Agreement and all obligations of
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Pledgor hereunder shall be binding upon the successors and assigns of Pledgor,
and shall, together with the rights and remedies of Pledgee and Lenders
hereunder, inure to the benefit of Pledgee and Lenders and their successors and
assigns, except that Pledgor shall not have the right to assign its rights or
obligations under this Agreement or any interest herein without the prior
written consent of Pledgee.
14. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND BE
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CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS (WITHOUT REFERENCE TO CONFLICTS OF LAW PRINCIPLES), EXCEPT WITH RESPECT
TO ISSUES OF PERFECTION WHICH SHALL, TO THE EXTENT APPLICABLE, BE GOVERNED BY
SECTION 9-103 OF THE UNIFORM COMMERCIAL CODE AS ADOPTED BY THE STATE OF
ILLINOIS.
15. Termination. This Agreement and the Liens granted hereunder
-----------
shall terminate upon the full and complete performance and satisfaction of the
Liabilities (other than contingent indemnification obligations to the extent no
unsatisfied claim giving rise thereto has been asserted).
16. Possession of Collateral. Beyond the exercise of reasonable care
------------------------
to assure the safe custody of the Collateral in the physical possession of
Pledgee pursuant hereto, neither Pledgee nor any Lender, nor any nominee of any
of them, shall have any duty or liability to collect any sums due in respect of
the Collateral or to protect, preserve or exercise any rights pertaining to the
Collateral, and Pledgee, each Lender and any nominee thereof shall be relieved
of all responsibility for any portion of the Collateral surrendered to Pledgor.
17. Survival of Representations. All representations and warranties
---------------------------
of Pledgor contained in this Agreement shall survive the execution and delivery
of this Agreement.
18. Taxes and Expenses. Pledgor will upon demand pay to Pledgee, for
------------------
the benefit of Lenders, (a) any taxes (excluding income taxes, franchise taxes
or other taxes levied on gross earnings, profits or the like) payable or ruled
payable by any federal, state or other governmental authority in respect of this
Agreement, together with interest and penalties, if any, and (b) all expenses,
including the fees and expenses of attorneys, accountants, consultants or other
experts and agents that Pledgee or Lenders may retain in connection with (i) the
exercise or enforcement of any of the rights and remedies of Pledgee or Lenders
hereunder resulting from
10
Pledgor's breach hereunder or under the Service Agreement, or (ii) the failure
of Pledgor to perform or observe any of the provisions hereof.
19. Pledgee Appointed Attorney-In-Fact. Pledgor hereby irrevocably
----------------------------------
appoints Pledgee (until termination of this Agreement under Section 15 hereof)
as Pledgor's attorney-in-fact, with full authority in the place and stead of
Pledgor and in the name of Pledgor or otherwise, from time to time in Pledgee's
discretion, to take any action and to execute any instrument that Pledgee deems
reasonably necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, after the occurrence of an Event of Default and
the acceleration of the Obligations, to receive, endorse and collect all
instruments made payable to Pledgor representing any dividend, interest payment
or other distribution in respect of the Collateral and to give full discharge
for the same, when and to the extent permitted by this Agreement.
20. Notices. Unless otherwise specifically provided herein, any
-------
notice or other communication required or permitted to be given shall be in
writing addressed to the respective party and delivered in accordance with the
provisions of Section 9.3 of the Credit Agreement. Notwithstanding anything
herein or in the Credit Agreement to the contrary, a notice not given as
provided herein or therein, shall, if it is in writing, be deemed given if and
when actually received by the party to whom given.
21. Changes in Writing. No amendment, modification, termination or
------------------
waiver of any provision of this Agreement or consent to any departure by Pledgor
therefrom, shall in any event be effective without the written concurrence of
Pledgee and Pledgor, and then only to the extent specifically set forth in such
writing.
22. Headings. Section and subsection headings in this Agreement are
--------
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
23. Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
24. Entire Agreement. This Agreement embodies the entire agreement
----------------
and understanding among Pledgor, Pledgee and Lenders and supersedes all prior
oral and written agreements and understandings among Pledgor, Pledgee and
Lenders relating to the subject matter hereof.
25. CONSENT OF JURISDICTION. PLEDGOR HEREBY CONSENTS TO THE
-----------------------
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF XXXX,
STATE OF ILLINOIS AND IRREVOCABLY AGREES THAT, SUBJECT TO PLEDGEE'S ELECTION,
ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. PLEDGOR EXPRESSLY
SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF
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FORUM NON CONVENIENS. PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON PLEDGOR BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO PLEDGOR, AT
THE ADDRESS SET FORTH IN THE CREDIT AGREEMENT AND SERVICE SO MADE SHALL BE
COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
26. WAIVER OF JURY TRIAL. PLEDGOR, PLEDGEE AND EACH LENDER HEREBY
--------------------
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
PLEDGOR, PLEDGEE AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
PLEDGOR, PLEDGEE AND EACH LENDER WARRANT AND REPRESENT THAT EACH HAS HAD THE
OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their duly authorized officers on the date
first above written.
MCG CREDIT CORPORATION, a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Its: Pres/CEO
-----------------------------
XXXXXX FINANCIAL, INC., as Agent
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Its: Vice President
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EXHIBIT A
to Pledge Agreement
-------------------
DESCRIPTION OF PLEDGED SHARES
-----------------------------
Certificate Date of No. of State of
Issuer No. Issuance Shares Incorporation
--------------------------------------------------------------------------------
MCG Finance
Corporation
13
EXHIBIT B
---------
to Pledge Agreement
-------------------
DESCRIPTION OF STOCK OF BORROWER
--------------------------------
Issuer Authorized Number Issued and Shares Held
of Shares Outstanding Shares in Treasury
--------------------------------------------------------------------------------
MCG Finance
Corporation
14
