EXHIBIT 10.86
PLEDGE AND SECURITY AGREEMENT
(Subsidiaries)
THIS PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT"), dated as of
December 22, 2000, is by and among each of the undersigned Subsidiaries and any
Subsidiary who may become a party hereto pursuant to the execution and delivery
of a Joinder Agreement (each a "DEBTOR") and collectively the "DEBTORS"), and
BANK OF AMERICA, N.A., as Administrative Agent for the Lenders referred to below
(in such capacity, the "SECURED PARTY").
R E C I T A L S:
A. First Investors Financial Services, Inc. ("BORROWER"), a Texas
corporation, has entered into that certain Credit Agreement, dated as of
December 22, 2000, with the lenders party thereto (each individually a "LENDER"
and collectively, the "LENDERS"), Secured Party as Administrative Agent for the
Lenders and Banc of America Securities LLC, as lead arranger and sole book
manager (such agreement as it may be amended or otherwise modified from time to
time is referred to herein as the "CREDIT AGREEMENT").
B. The execution and delivery of this Agreement is required by the Credit
Agreement as a condition to making extensions of credit thereunder.
C. Terms defined in the Credit Agreement, and not otherwise defined
herein, are used herein with their meanings as set forth in the Credit
Agreement.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy, receipt, and sufficiency of which are
hereby acknowledged, and in order to induce Secured Party and the Lenders to
make Loans pursuant to the Credit Agreement, the parties hereto hereby agree as
follows:
ARTICLE I.
DEFINITIONS
Section 1.1. DEFINITIONS. As used in this Agreement, the following terms
have the following meanings:
"ACCOUNT" means any "account," as such term is defined in Article or
Chapter 9 of the UCC, now owned or hereafter acquired by Debtor, and, in
any event, shall include, without limitation, each of the following,
whether now owned or hereafter acquired by Debtor: (a) all rights of
Debtor to payment for goods sold or leased, services rendered or the
license of Intellectual Property, whether or not earned by performance;
(b) all accounts receivable of Debtor; (c) all rights of Debtor to receive
any payment of money or other form of consideration; (d) all security
pledged, assigned, or granted to or held by Debtor to secure any of the
foregoing; (e) all guaranties of, or indemnifications with respect to, any
of the foregoing; (f) all rights of Debtor as an unpaid seller of goods or
services, including, but not
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 1
limited to, all rights of stoppage in transit, replevin, reclamation, and
resale; and (g) all rights to brokerage commissions.
"AMENDMENT" means any amendment of this Agreement between Debtor and
Secured Party required hereby or entered into pursuant to the terms of the
Credit Agreement, including, without limitation, any amendment in the form
of EXHIBIT A hereto.
"CAPITAL STOCK" means corporate stock and any and all shares,
partnership interests, equity interests, rights, securities or other
equivalent evidences of ownership (however designated) issued by any
entity (whether a corporation, partnership, limited liability company,
limited partnership or other type of entity).
"CHATTEL PAPER" means any "chattel paper," as such term is defined
in Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor.
"COLLATERAL" has the meaning specified in SECTION 2.1 of this
Agreement.
"COPYRIGHT LICENSE" means any written agreement now or hereafter in
existence granting to Debtor any right to use any Copyright, including,
without limitation, the agreements identified on SCHEDULE 3.5.
"COPYRIGHTS" means all of the following: (a) all copyrights, works
protectable by copyright, copyright registrations, and copyright
applications, including, without limitation, those identified on SCHEDULE
3.5; (b) all renewals, extensions, and modifications thereof; (c) all
income, royalties, damages, profits, and payments relating to or payable
under any of the foregoing; (d) the right to xxx for past, present, or
future infringements of any of the foregoing; and (e) all other rights and
benefits relating to any of the foregoing throughout the world; in each
case, whether now owned or hereafter acquired by Debtor.
"COPYRIGHT SECURITY AGREEMENT" means a security agreement in form
and substance satisfactory to Secured Party pursuant to which Debtor
grants to Secured Party, for the benefit of the Lenders, a first priority
security interest in its Copyrights and Copyright Licenses for purposes of
recording such security interest with any copyright office of a
Governmental Authority, as such agreement may hereafter be amended,
supplemented, or otherwise modified from time to time.
"DEPOSIT ACCOUNTS" means any and all deposit accounts, certificates
of deposit, or other bank accounts now owned or hereafter acquired or
opened by Debtor, and any account which is a replacement or substitute for
any of such accounts including, without limitation, those deposit accounts
identified on SCHEDULE 3.2.
"DOCUMENT" means any "document," as such term is defined in Article
or Chapter 9 of the UCC, now owned or hereafter acquired by Debtor,
including, without limitation, all documents of title and all receipts
covering, evidencing, or representing goods now owned or hereafter
acquired by Debtor.
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 2
"EQUIPMENT" means any "equipment," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by Debtor
and, in any event, shall include, without limitation, all machinery,
furniture, trailers, rolling stock, vessels, aircraft, and vehicles now
owned or hereafter acquired by Debtor and any and all additions,
substitutions, and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment, and
accessories installed thereon or affixed thereto.
"FINANCIAL ASSETS" means any "financial asset," as such term is
defined in Article or Chapter 8 of the UCC.
"FIXTURES" means any "fixtures," as such term is defined in Article
or Chapter 9 of the UCC, now owned or hereafter acquired by Debtor and in
any event shall include, without limitation, all plant fixtures, business
fixtures, other fixtures, and storage office facilities, wherever located,
and all additions and accessions thereto and replacements therefor.
"GENERAL INTANGIBLES" means any "general intangibles," as such term
is defined in Article or Chapter 9 of the UCC, now owned or hereafter
acquired by Debtor and, in any event, shall include, without limitation,
each of the following, whether now owned or hereafter acquired by Debtor:
(a) all of Debtor's Intellectual Property together with all of Debtor's
trade secrets, proprietary information, customer lists, designs, and
inventions; (b) all of Debtor's books, records, data, plans, manuals,
computer software, computer tapes, computer disks, computer programs,
source codes, object codes, and all rights of Debtor to retrieve data and
other information from third parties; (c) all of Debtor's contract rights,
which include, without limitation, (i) all rights of Debtor to receive
moneys due and to become due under or pursuant to such agreements, (ii)
all rights of Debtor to receive proceeds of any insurance, indemnity,
warranty, or guaranty with respect to such agreements, (iii) all claims of
Debtor for damages arising out of or for breach of or default under such
agreements, (iv) all rights of Debtor to terminate such agreements, to
perform thereunder, and to compel performance and otherwise exercise all
rights and remedies thereunder, and (v) any rights to Liens securing
Pledged Collateral, Accounts, (d) all rights or interests of Debtor in any
partnership or joint venture; (e) all rights of Debtor to payment under
letters of credit and similar agreements; (f) all tax refunds and tax
refund claims of Debtor; (g) all choses in action and causes of action of
Debtor (whether arising in contract, tort, or otherwise and whether or not
currently in litigation) and all judgments in favor of Debtor; (h) all
rights and claims of Debtor under warranties and indemnities; and (i) all
rights of Debtor under any insurance, surety, or similar contract or
arrangement, including, without limitation, all claims under governmental
health care programs and claims under private insurance to which Debtor is
entitled or which have been assigned to it.
"INSTRUMENT" means any "instrument," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor, and, in any event, shall include all promissory notes, drafts,
bills of exchange, and trade acceptances, whether now owned or hereafter
acquired by Debtor.
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 3
"INTELLECTUAL PROPERTY" means the Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, and Trademark Licenses.
"INVENTORY" means any "inventory," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor, and, in any event, shall include, without limitation, each of the
following, whether now owned or hereafter acquired by Debtor: (a) all
goods and other personal property that are held for sale or lease or to be
furnished under any contract of service; (b) all raw materials,
work-in-process, finished goods, inventory, supplies, and materials; (c)
all wrapping, packaging, advertising, and shipping materials; (d) all
goods that have been returned to, repossessed by, or stopped in transit by
Debtor; and (e) all Documents evidencing any of the foregoing.
"INVESTMENT PROPERTY" means any "investment property" as such term
is defined in Article or Chapter 9 of the UCC, now owned or hereafter
acquired by Debtor, and, in any event, shall include, without limitation,
each of the following, whether now owned or hereafter acquired: (a) any
security, whether certificated or uncertificated; (b) any security
entitlement; (c) any securities account (including, without limitation,
those described on SCHEDULE 3.2); (d) any commodity contract; and (e) any
commodity account (including, without limitation, those identified on
SCHEDULE 3.2).
"OBLIGATIONS" means and includes the "Obligations" as such term is
defined in the Credit Agreement and the "Guaranteed Indebtedness" as such
term is defined in the Subsidiary Guaranty to which Debtor is a party.
"PATENT LICENSE" means any written agreement now or hereafter in
existence granting to Debtor any right to use any invention on which a
Patent is in existence, including, without limitation, the agreements
identified on SCHEDULE 3.5.
"PATENTS" means any and all of the following: (a) all patents,
patent applications, and patentable inventions, including, without
limitation, those identified on SCHEDULE 3.5, and all of the inventions
and improvements described and claimed therein; (b) all continuations,
divisions, renewals, extensions, modifications, substitutions,
continuations-in-part, or reissues of any of the foregoing; (c) all
income, royalties, profits, damages, awards, and payments relating to or
payable under any of the foregoing; (d) the right to xxx for past,
present, and future infringements of any of the foregoing; and (e) all
other rights and benefits relating to any of the foregoing throughout the
world; in each case, whether now owned or hereafter acquired by Debtor.
"PATENT SECURITY AGREEMENT" means a security agreement in form and
substance satisfactory to Secured Party pursuant to which Debtor grants to
Secured Party, for the benefit of the Lenders, a first priority security
interest in its Patents and Patent Licenses for purposes of recording such
security interest with any patent office of a Governmental Authority, as
such agreement may be amended, supplemented, or otherwise modified from
time to time.
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 4
"PLEDGED COLLATERAL" means the Pledged Shares and the Instruments
evidencing the obligations of Subsidiaries to Debtor described in SECTION
2.1(C).
"PLEDGED SHARES" means the Capital Stock identified on SCHEDULE 1.1
attached hereto or on SCHEDULE 1 to an Amendment.
"PROCEEDS" means any "proceeds," as such term is defined in Article
or Chapter 9 of the UCC and, in any event, shall include, but not be
limited to, (a) any and all proceeds of any insurance, indemnity,
warranty, or guaranty payable to Debtor from time to time with respect to
any of the Collateral, (b) any and all payments (in any form whatsoever)
made or due and payable to Debtor from time to time in connection with any
requisition, confiscation, condemnation, seizure, or forfeiture of all or
any part of the Collateral by any Governmental Authority (or any Person
acting, or purporting to act, for or on behalf of any Governmental
Authority), and (c) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.
"PROJECT BRAVE PURCHASE AGREEMENTS" means that certain Amended and
Restated Contract Purchase Agreement, dated as of August 8, 2000, by and
between First Investors Servicing Corporation and FIFS Acquisition Funding
Company, L.L.C. and that certain Amended and Restated NIM Collateral
Purchase Agreement, dated as of August 8, 2000, by and between First
Investors Servicing Corporation, ALAC Receivables Corp. and FIFS
Acquisition Funding Company, L.L.C., as amended by that certain First
Amendment to Amended and Restated NIM Collateral Purchase Agreement, dated
as of September 15, 2000.
"TRADEMARK LICENSE" means any written agreement now or hereafter in
existence granting to Debtor any right to use any Trademark, including,
without limitation, the agreements identified on SCHEDULE 3.5.
"TRADEMARKS" means all of the following: (a) all trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, other business identifiers,
prints and labels on which any of the foregoing appear, all registrations
and recordings thereof, and all applications in connection therewith,
including, without limitation, registrations, recordings, and applications
in the United States Patent and Trademark Office or in any similar office
or agency of the United States, any state thereof or any other country or
any political subdivision thereof, including, without limitation, those
identified in SCHEDULE 3.5; (b) all reissues, extensions, and renewals
thereof; (c) all income, royalties, damages, and payments now or hereafter
relating to or payable under any of the foregoing, including, without
limitation, damages or payments for past or future infringements of any of
the foregoing; (d) the right to xxx for past, present, and future
infringements of any of the foregoing; (e) all rights corresponding to any
of the foregoing throughout the world; and (f) all goodwill associated
with and symbolized by any of the foregoing; in each case, whether now
owned or hereafter acquired by Debtor.
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 5
"TRADEMARK SECURITY AGREEMENT" means a security agreement in form
and substance satisfactory to Secured Party pursuant to which Debtor
grants to Secured Party, for the benefit of the Lenders, a first priority
security interest in its Trademarks and Trademark Licenses for purposes of
recording such security interest with the trademark office of any
Governmental Authority, as such agreement may be amended, supplemented, or
otherwise modified from time to time.
"UCC" means the Uniform Commercial Code as in effect in the State of
Texas and/or any other jurisdiction the laws of which may be applicable to
or in connection with the creation, perfection or priority of any Lien on
any Collateral.
Section 1.2. OTHER DEFINITIONAL PROVISIONS. References to "Sections,"
"subsections," "Exhibits," and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. All definitions contained in this Agreement are equally
applicable to the singular and plural forms of the terms defined. All references
to statutes and regulations shall include any amendments of the same and any
successor statutes and regulations. References to particular sections of the UCC
should be read to refer also to parallel sections of the Uniform Commercial Code
as enacted in each state or other jurisdiction where any portion of the
Collateral is or may be located. Terms used herein, which are defined in the
UCC, unless otherwise defined herein or in the Credit Agreement, shall have the
meanings determined in accordance with the UCC.
ARTICLE II.
SECURITY INTEREST
Section 2.1. SECURITY INTEREST. As collateral security for the prompt
payment and performance in full when due of the Obligations (whether at stated
maturity, by acceleration, or otherwise), each Debtor hereby pledges and assigns
to Secured Party, and grants to Secured Party a continuing lien on and security
interest in, all of Debtor's right, title, and interest in and to the following,
whether now owned or hereafter arising or acquired and wherever located
(collectively with respect to any Debtor or all Debtors, as the context
requires, the "COLLATERAL"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Instruments, including, without limitation, or in addition, all
instruments evidencing indebtedness from time to time owed to Debtor
by the Subsidiaries, and all interest, cash, and other property from
time to time received, receivable, or otherwise distributed or
distributable in respect of or in exchange for any or all of such
Instruments;
(d) all General Intangibles;
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 6
(e) all Documents;
(f) all Equipment;
(g) all Fixtures;
(h) all Inventory;
(i) all Financial Assets and Investment Property, including, without
limitation, or in addition, the following:
(1) all of the Pledged Shares and the certificates (if any)
representing the Pledged Shares, and all dividends, cash,
Instruments, and other property from time to time received,
receivable, or otherwise distributed or distributable in
respect of or in exchange for any or all of the Pledged
Shares;
(2) all additional Capital Stock from time to time owned or
acquired by Debtor in any manner, and all dividends, cash,
Instruments, and other property from time to time received,
receivable, or otherwise distributed or distributable in
respect of or in exchange for any or all of such Capital
Stock; and
(j) all of Debtor's Deposit Accounts and all funds, certificates,
Documents, Instruments, checks, drafts, wire transfer receipts, and
other earnings, profits, or other Proceeds from time to time
representing, evidencing, deposited into, or held in the Deposit
Accounts; and
(k) all products and Proceeds, in cash or otherwise, of any of the
property described in the foregoing CLAUSES (A) THROUGH (J);
PROVIDED, HOWEVER, that the Collateral shall not include (i) any of the property
described in the foregoing CLAUSES (A) THROUGH (K) which has been or is required
to be transferred under the Project Brave Purchase Agreements, and (ii) Deposit
Accounts held on behalf of Debtor for the benefit of any Exempt Subsidiary in
order to facilitate collection activities.
Notwithstanding anything to the contrary contained in this Agreement, the
Obligations secured under this Agreement shall not exceed an aggregate amount
equal to the greatest amount that would not render each Debtor's indebtedness,
liabilities or obligations under this Agreement subject to avoidance under
Sections 544, 548 or 550 of the Federal Bankruptcy Code or subject to being set
aside or annulled under any applicable state law relating to fraud on creditors;
PROVIDED, HOWEVER, that, for purposes of the immediately preceding clause, it
shall be presumed that the Obligations secured hereunder do not equal or exceed
any aggregate amount which would render each Debtor's indebtedness, liabilities
or obligations under this Agreement subject to being so avoided, set aside or
annulled, and the burden of proof to the contrary shall be on the party
asserting to the contrary. Subject to but without limiting the generality of the
foregoing sentence, the provisions of this Agreement are severable and, in any
legally binding action or proceeding involving any state
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 7
corporate law or any bankruptcy, insolvency or other laws of general application
relating to the enforcement of creditors' rights and general principles of
equity, if the indebtedness, liabilities or obligations of each Debtor hereunder
would otherwise be held or determined to be void, invalid or unenforceable on
account of the amount of its indebtedness, liabilities or obligations under this
Agreement, then, notwithstanding any other provision of this Agreement to the
contrary, the amount of such indebtedness, liabilities or obligations shall,
without any further action by each Debtor, Secured Party or any other Person, be
automatically limited and reduced to the greatest amount which is valid and
enforceable as determined in such action or proceeding.
Section 2.2. DEBTOR REMAINS LIABLE. Notwithstanding anything to the
contrary contained herein, (a) each Debtor shall remain liable under the
documentation included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by Secured Party of any
of its rights or remedies hereunder shall not release each Debtor from any of
its duties or obligations under such documentation, (c) Secured Party shall not
have any obligation under any of such documentation included in the Collateral
by reason of this Agreement, and (d) Secured Party shall not be obligated to
perform any of the obligations of any Debtor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
Section 2.3 RELEASE OF ACCOUNTS UPON SALE. As provided in SECTION 11.8 of
the Credit Agreement, any Debtor is authorized to sell its Accounts, including
Receivables, to Borrower for the purpose of resale (i) to FIRC pursuant to the
FIRC Purchase Agreement, (ii) to First Investors Auto Capital Corporation in
connection with the repurchase of the ACAC Automobile Trust 1998-01
Securitization, and (iv) to any other Exempt Subsidiary for inclusion in a
Securitization program and, upon completion of such sale, the lien on and
security interest in such sold Accounts shall be automatically released and of
no further force or effect, without necessity of any action on the part of any
Secured Party, until such time, if ever, that such Accounts are reacquired by
such Debtor.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
To induce Secured Party and the Lenders to enter into this Agreement and
the Credit Agreement, each Debtor represents and warrants as follows:
Section 3.1. LOCATION OF EQUIPMENT, FIXTURES, AND INVENTORY; THIRD PARTIES
IN POSSESSION. All of the Equipment, Fixtures and Inventory are located at the
places specified in SCHEDULE 3.1. SCHEDULE 3.1 correctly identifies the
landlords or mortgagees, if any, of each location identified in SCHEDULE 3.1.
Except for the Persons identified on SCHEDULE 3.2, no Person other than each
Debtor and Secured Party has possession of any of the Collateral. None of the
Collateral other than the Pledged Collateral has been located in any location
within the past four months other than as set forth on SCHEDULE 3.1 for such
Debtor.
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 8
Section 3.2. DEPOSIT, COMMODITY, AND SECURITIES ACCOUNTS. SCHEDULE 3.2
correctly identifies all deposit, commodity, and securities accounts owned by
Debtor and the institutions holding such accounts. No Person other than Debtor
has control over any Investment Property.
Section 3.3. OFFICE LOCATIONS; FICTITIOUS NAMES; TAX I.D. NUMBER. The
principal place of business and the chief executive office of Debtor is
identified on SCHEDULE 3.1. SCHEDULE 3.1 also sets forth all other places where
Debtor keeps its books and records and all other locations where Debtor has a
place of business. Debtor does not do business and has not done business during
the past five (5) years under any trade-name or fictitious business name except
as disclosed on SCHEDULE 3.3. Debtor's United States Federal Income Tax
Identification Number is set forth on SCHEDULE 3.3.
Section 3.4. DELIVERY OF COLLATERAL. Except as provided by SECTION 4.3,
Debtor has delivered to Secured Party all Collateral the possession of which is
necessary to perfect the security interest of Secured Party therein. All
certificates of title evidencing its Equipment have been delivered to Secured
Party to the extent required to perfect the security interest of Secured Party
therein.
Section 3.5. INTELLECTUAL PROPERTY. All of Debtor's Intellectual Property
that is registered with or for which an application for registration has been
filed with any Governmental Authority is identified on SCHEDULE 3.5, and such
information is true, correct, and complete.
Section 3.6. BENEFIT. The value of the consideration received and to be
received by Debtor as a result of Borrower, Secured Party and Lenders entering
into the Credit Agreement and Debtor's executing and delivering this Agreement
and the other Loan Documents to which it is a party is reasonably worth at least
as much as its liability and obligation hereunder and thereunder, and such
liability and obligation and the Credit Agreement have benefitted and may
reasonably be expected to benefit Debtor directly or indirectly.
ARTICLE IV.
COVENANTS
Each Debtor covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment under the Credit
Agreement, such Debtor will perform and observe each of the following covenants:
Section 4.1. ACCOUNTS. Subject to SECTION 2.3 hereof and SECTION 11.8 of
the Credit Agreement, Debtor shall, in accordance with its customary business
practices, endeavor to collect or cause to be collected from each account debtor
under its Accounts, as and when due, any and all amounts owing under such
Accounts. Without the prior written consent of Secured Party, Debtor shall not,
except in the ordinary course of business and in no event when any Default
exists, (a) grant any extension of time for any payment with respect to any of
the Accounts beyond sixty (60) days after such payment's due date, (b)
compromise, compound, or settle any of the Accounts for less than the full
amount thereof, (c) release, in whole or in part, any Person liable for payment
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 9
of any of the Accounts, (d) allow any credit or discount for payment with
respect to any Account other than trade or other customary discounts granted in
the ordinary course of business, or (e) release any Lien or guaranty securing
any Account unless the Account has been paid.
Section 4.2. FURTHER ASSURANCES; EXCEPTIONS TO PERFECTION. At any time and
from time to time, upon the request of Secured Party, and at the sole expense of
Debtor, Debtor shall promptly execute and deliver all such further agreements,
documents, and instruments and take such further action as Secured Party may
reasonably deem necessary or appropriate to preserve and perfect its security
interest in the Collateral and carry out the provisions and purposes of this
Agreement or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any of the Collateral. Without limiting the
generality of the foregoing, Debtor shall upon reasonable request by Secured
Party (a) execute and deliver to Secured Party such financing statements as
Secured Party may from time to time require, (b) take such action after a
Default as Secured Party may request to permit Secured Party to have control
over any Investment Property or any Deposit Account, (c) deliver to Secured
Party all Collateral the possession of which is necessary to perfect the
security interest therein, duly endorsed and/or accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Secured Party; EXCEPT that, prior to the occurrence of a Default, Debtor may:
(i) retain for collection in the ordinary course of business checks representing
Proceeds of Accounts received in the ordinary course of business; (ii) retain
any letters of credit received in the ordinary course of business; (iii) retain
and utilize in the ordinary course of business all dividends and interest paid
in respect to any of the Pledged Collateral or any other Investment Property;
and (iv) retain any Documents received and further negotiated in the ordinary
course of business, (d) deliver any and all certificates of title, applications
for title or similar evidence of ownership of Equipment and cause Secured Party
to be named as lienholder thereon, and (e) execute and deliver to Secured Party
such other agreements, documents, and instruments as Secured Party may
reasonably require to perfect and maintain the validity, effectiveness, and
priority of the Liens intended to be created by this Agreement or any other Loan
Document.
Section 4.3. THIRD PARTIES IN POSSESSION OF COLLATERAL. Except in
connection with sales of Accounts permitted by SECTION 11.8 of the Credit
Agreement, Debtor shall not permit any third Person, except for the engagement
of third party contractors in connection with the administration and disposition
of receivables, (including any warehouseman, bailee, agent, consignee, or
processor) to hold any Collateral, unless Debtor shall: (i) notify such third
Person of the security interests created hereby; (ii) instruct such Person to
hold all such Collateral for Secured Party's account subject to Secured Party's
instructions; and (iii) take all other actions Secured Party reasonably deems
necessary to perfect and protect its and Debtor's interests in such Collateral
pursuant to the requirements of the UCC of the applicable jurisdiction where
such warehouseman, bailee, consignee, agent, processor, or other third Person is
located (including the filing of financing statements in the proper
jurisdictions naming the applicable third Person as debtor and Debtor as secured
party and notifying the third Person's secured lenders of Debtor's interest in
such Collateral before the third Person receives possession of the Collateral in
question).
Section 4.4. CORPORATE CHANGES. Debtor shall not change its name,
identity, corporate structure, or its United States Tax Identification Number in
any manner that might make any financing statement filed in connection with this
Agreement seriously misleading unless Debtor shall
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 10
have given Secured Party not less than thirty (30) days prior written notice
thereof and shall have taken all action reasonably deemed necessary or desirable
by Secured Party to protect its Liens with the perfection and priority thereof
required by the Loan Documents. Debtor shall not change its principal place of
business, chief executive office, or the place where it keeps its books and
records unless it shall have given Secured Party not less than thirty (30) days
prior written notice thereof and shall have taken all action deemed necessary or
desirable by Secured Party to cause its security interest in the Collateral to
be perfected with the priority required by the Loan Documents.
Section 4.5. EQUIPMENT, FIXTURES, AND INVENTORY. Debtor shall keep the
Equipment, Fixtures, and Inventory at (or in transit to) any of the locations
specified on SCHEDULE 3.1 for such Debtor hereto or, upon not less than thirty
(30) days prior written notice to Secured Party, at such other places within the
United States of America where all actions required to perfect Secured Party's
security interest in such Collateral with the priority required by the Loan
Documents shall have been taken.
Section 4.6. WAREHOUSE RECEIPTS NON-NEGOTIABLE. Debtor agrees that if any
warehouse receipt or receipt in the nature of a warehouse receipt is issued in
respect of any portion of the Collateral, such warehouse receipt or receipt in
the nature thereof shall not be "negotiable" (as such term is used in Section
7.104 of the UCC) unless such warehouse receipt or receipt in the nature thereof
is delivered to Secured Party.
Section 4.7. VOTING RIGHTS; DISTRIBUTIONS, ETC. So long as no Event of
Default shall have occurred and be continuing, Debtor shall be entitled to
exercise any and all voting and other consensual rights (including, without
limitation, the right to give consents, waivers, and notifications) pertaining
to any of the Pledged Collateral or any other Investment Property; PROVIDED,
HOWEVER, that without the prior written consent of Secured Party no vote shall
be cast or consent, waiver, or ratification given or action taken which would be
inconsistent with or violate any provision of this Agreement or any other Loan
Document.
Section 4.8. TRANSFERS AND OTHER LIENS; ADDITIONAL INVESTMENTS. Except as
provided otherwise by the Credit Agreement or this Agreement, Debtor agrees that
it will (i) cause each issuer of any of the Pledged Collateral not to issue any
Capital Stock, notes, or other securities or instruments in addition to or in
substitution for any of the Pledged Collateral, (ii) pledge hereunder,
immediately upon its acquisition thereof, any and all such Capital Stock, notes,
or other securities or instruments, and (iii) promptly (and in any event within
three (3) Business Days) deliver to Secured Party an Amendment, duly executed by
Debtor, in respect of such Capital Stock, notes, or other securities or
instruments, together with all certificates, notes, or other securities or
instruments representing or evidencing the same. Debtor hereby (i) authorizes
Secured Party to attach each Amendment to this Agreement, and (ii) agrees that
all such Capital Stock, notes, or other securities or instruments listed on any
Amendment delivered to Secured Party shall for all purposes hereunder constitute
Pledged Collateral.
Section 4.9. INTELLECTUAL PROPERTY COVENANTS. If, before the Obligations
are paid in full, Debtor obtains any new Intellectual Property or rights thereto
or becomes entitled to the benefit of any Intellectual Property, Debtor shall
give to Secured Party prompt written notice thereof, and shall
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 11
execute and deliver, in form and substance satisfactory to Secured Party, a
Copyright Security Agreement, Patent Security Agreement, or Trademark Security
Agreement, as applicable, describing any such new Intellectual Property. Debtor
shall (a) prosecute diligently any copyright, patent, or trademark application
at any time pending which is necessary for the conduct of Debtor's business, (b)
make application on all new copyrights, patents, and trademarks as reasonably
deemed appropriate by Debtor, (c) preserve and maintain all rights in the
Intellectual Property that is necessary for the conduct of Debtor's business,
and (d) upon and after the occurrence and during the continuance of an Event of
Default, use its reasonable efforts to obtain any consents, waivers, or
agreements necessary to enable Secured Party to exercise its remedies with
respect to the Intellectual Property. Debtor shall not, without the prior
written consent of Secured Party, abandon any pending copyright, patent, or
trademark application, or Copyright, Patent, Trademark, or any other
Intellectual Property which is necessary for the conduct of Debtor's business.
Section 4.10. DEPOSIT, COMMODITY, AND SECURITY ACCOUNTS. Debtor shall not
open any new deposit, commodity, or securities account or otherwise utilize any
such account other than the accounts identified on SCHEDULE 3.2 for such Debtor
unless Debtor shall have given Secured Party not less than thirty (30) days
prior written notice thereof and shall have taken all action deemed necessary or
desirable by Secured Party to cause its security interest therein to be
perfected with the priority required by the Loan Documents. Prior to the
occurrence and continuance of any Event of Default, Debtor may make purchases
and sales of Investment Property or Financial Assets in accordance with the
restrictions on investment set out in the Credit Agreement. After the occurrence
and during the continuance of an Event of Default, Debtor shall not be
authorized to make purchases and sales of the Investment Property or Financial
Assets and Debtor shall take such steps as Secured Party may reasonably request
to give Secured Party control over all Investment Property and Financial Assets.
Debtor will not give any party control over any Investment Property or Financial
Assets.
ARTICLE V
RIGHTS OF SECURED PARTY
Section 5.1. POWER OF ATTORNEY. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH DEBTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS SECURED PARTY AND ANY
OFFICER OR AGENT THEREOF, WITH FULL POWER OF SUBSTITUTION, AS ITS TRUE AND
LAWFUL ATTORNEY-IN-FACT WITH FULL IRREVOCABLE POWER AND AUTHORITY IN THE NAME OF
SUCH DEBTOR OR IN ITS OWN NAME, TO TAKE, WHEN A DEFAULT EXISTS, ANY AND ALL
ACTIONS AND TO EXECUTE ANY AND ALL DOCUMENTS AND INSTRUMENTS WHICH SECURED PARTY
AT ANY TIME AND FROM TIME TO TIME DEEMS NECESSARY TO ACCOMPLISH THE PURPOSES OF
THIS AGREEMENT AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SUCH
DEBTOR HEREBY GIVES SECURED PARTY THE POWER AND RIGHT ON BEHALF OF DEBTOR AND IN
ITS OWN NAME TO DO ANY OF THE FOLLOWING WHEN A DEFAULT EXISTS, WITHOUT NOTICE
TO, OR THE CONSENT OF, ANY DEBTOR:
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 12
(a) to demand, xxx for, collect, or receive, in the name of Debtor
or in Secured Party's own name, any money or property at any time payable
or receivable on account of or in exchange for any of the Collateral and,
in connection therewith, endorse checks, notes, drafts, acceptances, money
orders, documents of title, or any other instruments for the payment of
money under the Collateral or any policy of insurance;
(b) to pay or discharge taxes, Liens, or other encumbrances
levied or placed on or threatened against the Collateral;
(c) to notify post office authorities to change the address for
delivery of Debtor's mail to an address designated by Secured Party and to
receive, open, and dispose of mail addressed to Debtor;
(d) (i) to direct account debtors and any other parties liable for
any payment under any of the Collateral to make payment of any and all
monies due and to become due thereunder directly to Secured Party or as
Secured Party shall direct (each Debtor agrees that if any Proceeds of any
Collateral (including payments made in respect of Accounts) shall be
received by each Debtor while a Default exists, such Debtor shall promptly
deliver such Proceeds to Secured Party with any necessary endorsements,
and until such Proceeds are delivered to Secured Party, such Proceeds
shall be held in trust by such Debtor for the benefit of Secured Party and
shall not be commingled with any other funds or property of such Debtor);
(ii) 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 Collateral; (iii) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, proxies, stock powers, verifications, and
notices in connection with accounts and other documents relating to the
Collateral; (iv) to commence and prosecute any suit, action, or proceeding
at law or in equity in any court of competent jurisdiction to collect the
Collateral or any part thereof and to enforce any other right in respect
of any Collateral; (v) to defend any suit, action, or proceeding brought
against such Debtor with respect to any Collateral; (vi) to settle,
compromise, or adjust any suit, action, or proceeding described above and,
in connection therewith, to give such discharges or releases as Secured
Party may deem appropriate; (vii) to exchange any of the Collateral for
other property upon any merger, consolidation, reorganization,
recapitalization, or other readjustment of the issuer thereof and, in
connection therewith, deposit any of the Collateral with any committee,
depositary, transfer Agent, registrar, or other designated agency upon
such terms as Secured Party may determine; (viii) to add or release any
guarantor, indorser, surety, or other party to any of the Collateral; (ix)
to renew, extend, or otherwise change the terms and conditions of any of
the Collateral; (x) to grant or issue any exclusive or nonexclusive
license under or with respect to any of the Intellectual Property (subject
to the rights of third parties under pre-existing licenses); (xi) to
endorse such Debtor's name on all applications, documents, papers, and
instruments necessary or desirable in order for Secured Party to use any
of the Intellectual Property; (xii) to make, settle, compromise, or adjust
any claims under or pertaining to any of the Collateral (including claims
under any policy of insurance); and (xiii) to sell, transfer, pledge,
convey, make any agreement with respect to, or otherwise deal with any of
the Collateral as fully and completely as though Secured Party
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 13
were the absolute owner thereof for all purposes, and to do, at Secured
Party's option and such Debtor's expense, at any time, or from time to
time, all acts and things which Secured Party deems necessary to protect,
preserve, maintain, or realize upon the Collateral and Secured Party's
security interest therein.
THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE UNTIL TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH SECTION 7.11
HEREOF. Secured Party 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 Secured Party in this Agreement, and shall not be liable
for any failure to do so or any delay in doing so. Neither Secured Party nor any
Person designated by Secured Party shall be liable for any act or omission or
for any error of judgment or any mistake of fact or law, except any of the same
resulting from its or their gross negligence or willful misconduct. This power
of attorney is conferred on Secured Party solely to protect, preserve, maintain,
and realize upon its security interest in the Collateral. Secured Party shall
not be responsible for any decline in the value of the Collateral and shall not
be required to take any steps to preserve rights against prior parties or to
protect, preserve, or maintain any Lien given to secure the Collateral.
Section 5.2. ASSIGNMENT BY SECURED PARTY. Secured Party and each Lender
may at any time assign or otherwise transfer all or any portion of their rights
and obligations under this Agreement and the other Loan Documents (including,
without limitation, the Obligations) to any other Person, to the extent
permitted by, and upon the conditions contained in, the Credit Agreement, and
such Person shall thereupon become vested with all the benefits thereof granted
to Secured Party or the Lenders, as applicable, herein or otherwise.
Section 5.3. POSSESSION; REASONABLE CARE. Secured Party may, from time to
time, in its sole discretion, appoint one or more agents to hold physical
custody, for the account of Secured Party, of any or all of the Collateral that
Secured Party has a right to possess. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property, it being understood that
Secured Party shall not have any responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders, or
other matters relative to any Collateral, whether or not Secured Party has or is
deemed to have knowledge of such matters, or (b) taking any necessary steps to
preserve rights against any parties with respect to any Collateral.
ARTICLE VI
DEFAULT
Section 6.1. RIGHTS AND REMEDIES. If an Event of Default shall have
occurred and be continuing, Secured Party shall have the following rights and
remedies:
(a) In addition to all other rights and remedies granted to Secured
Party in this Agreement or in any other Loan Document or by applicable
law, Secured Party shall have
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 14
all of the rights and remedies of a secured party under the UCC (whether
or not the UCC applies to the affected Collateral). Without limiting the
generality of the foregoing, Secured Party may (i) without demand or
notice to any Debtor or any other person, collect, receive, or take
possession of the Collateral or any part thereof and for that purpose
Secured Party may enter upon any premises on which the Collateral is
located and remove the Collateral therefrom or render it inoperable,
and/or (ii) sell, lease, or otherwise dispose of the Collateral, or any
part thereof, in one or more parcels at public or private sale or sales,
at Secured Party's offices or elsewhere, for cash, on credit, or for
future delivery, and upon such other terms as Secured Party may deem
commercially reasonable or otherwise as may be permitted by law. Secured
Party shall have the right at any public sale or sales, and, to the extent
permitted by applicable law, at any private sale or sales, to bid (which
bid may be, in whole or in part, in the form of cancellation of
indebtedness) and become a purchaser of the Collateral or any part thereof
free of any right or equity of redemption on the part of each Debtor,
which right or equity of redemption is hereby expressly waived and
released by such Debtor. Upon the request of Secured Party, such Debtor
shall assemble the Collateral and make it available to Secured Party at
any place designated by Secured Party that is reasonably convenient to
such Debtor and Secured Party. Each Debtor agrees that Secured Party shall
not be obligated to give more than five (5) days prior written notice of
the time and place of any public sale or of the time after which any
private sale may take place and that such notice shall constitute
reasonable notice of such matters. Secured Party shall not be obligated to
make any sale of Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of Collateral may have been given. Secured
Party 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.
Each Debtor shall be liable for all reasonable expenses of retaking,
holding, preparing for sale, or the like, and all reasonable attorneys'
fees, legal expenses, and other costs and expenses incurred by Secured
Party in connection with the collection of the Obligations and the
enforcement of Secured Party's rights under this Agreement. Each Debtor
shall remain liable for any deficiency if the Proceeds of any sale or
other disposition of the Collateral applied to the Obligations are
insufficient to pay the Obligations in full. Secured Party may apply the
Collateral against the Obligations as provided in the Credit Agreement.
Each Debtor waives all rights of marshaling, valuation, and appraisal in
respect of the Collateral. Any cash held by Secured Party as Collateral
and all cash proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral may, in the discretion of Secured Party, be held by Secured
Party as collateral for, and then or at any time thereafter applied in
whole or in part by Secured Party against, the Obligations in the order
permitted by the Credit Agreement. Any surplus of such cash or cash
proceeds and interest accrued thereon, if any, held by Secured Party and
remaining after payment in full of all the Obligations shall be promptly
paid over to the Debtor or to whomsoever may be lawfully entitled to
receive such surplus; PROVIDED that Secured Party shall have no obligation
to invest or otherwise pay interest on any amounts held by it in
connection with or pursuant to this Agreement.
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 15
(b) Secured Party may cause any or all of the Collateral held by it
to be transferred into the name of Secured Party or the name or names of
Secured Party's nominee or nominees.
(c) Secured Party may exercise any and all rights and remedies of
any Debtor under or in respect of the Collateral, including, without
limitation, any and all rights of any Debtor to demand or otherwise
require payment of any amount under, or performance of any provision of,
any of the Collateral and any and all voting rights and corporate powers
in respect of the Collateral. Each Debtor shall execute and deliver (or
cause to be executed and delivered) to Secured Party all such proxies and
other instruments as Secured Party may reasonably request for the purpose
of enabling Secured Party to exercise the voting and other rights which it
is entitled to exercise pursuant to this CLAUSE (C) and to receive the
dividends, interest, and other distributions which it is entitled to
receive hereunder.
(d) Secured Party may collect or receive all money or property at
any time payable or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so.
(e) On any sale of the Collateral, Secured Party is hereby
authorized to comply with any limitation or restriction with which
compliance is necessary, in the opinion of Secured Party's counsel, in
order to avoid any violation of applicable law or in order to obtain any
required approval of the purchaser or purchasers by any applicable
Governmental Authority.
(f) For purposes of enabling Secured Party to exercise its rights
and remedies under this SECTION 6.1 and enabling Secured Party and its
successors and assigns to enjoy the full benefits of the Collateral in
each case as Secured Party shall be entitled to exercise its rights and
remedies under this SECTION 6.1, each Debtor hereby grants to Secured
Party an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to any Debtor) to use, assign, license, or
sublicense any of the Intellectual Property, including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and all computer programs used for the completion or
printout thereof and further including in such license such rights of
quality control and inspection as are reasonably necessary to prevent the
Trademarks included in such license from claims of invalidation. This
license shall also inure to the benefit of all successors, assigns, and
transferees of Secured Party.
Section 6.2. PRIVATE SALES. Each Debtor recognizes that Secured Party may
be unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the laws of any jurisdiction outside the
United States or in the Securities Act of 1933, as amended from time to time
(the "SECURITIES ACT") and applicable state securities laws, but may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire such
Collateral for their own account for investment and not with a view to the
distribution or resale thereof. Each Debtor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to the
seller than if such sale were a
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 16
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall, to the extent permitted by law, be deemed to have been made
in a commercially reasonable manner. Neither Secured Party nor the Lenders shall
be under any obligation to delay a sale of any of the Collateral for the period
of time necessary to permit the issuer of such securities to register such
securities under the laws of any jurisdiction outside the United States, under
the Securities Act, or under any applicable state securities laws, even if such
issuer would agree to do so. Each Debtor further agrees to do or cause to be
done, to the extent that such Debtor may do so under applicable law, all such
other reasonable acts and things as may be necessary to make such sales or
resales of any portion or all 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, all at such Debtor's expense.
ARTICLE VII
MISCELLANEOUS
Section 7.1. NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of
Secured Party to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
Section 7.2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of each Debtor and Secured Party and their respective
successors and assigns, except that no Debtor may assign any of its rights or
obligations under this Agreement without the prior written consent of Secured
Party, and Secured Party may not appoint a successor as Secured Party except in
accordance with the Credit Agreement.
Section 7.3. AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE PROVISIONS OF THIS
AGREEMENT MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT IN WRITING SIGNED BY
THE PARTIES HERETO.
Section 7.4. NOTICES. All notices and other communications provided for in
this Agreement shall be given or made in accordance with the Credit Agreement.
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 17
Section 7.5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA.
Section 7.6. HEADINGS. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 7.7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by Secured Party shall affect the
representations and warranties or the right of Secured Party to rely upon them.
Section 7.8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section 7.9. WAIVER OF BOND. In the event Secured Party seeks to take
possession of any or all of the Collateral by judicial process, each Debtor
hereby irrevocably waives any bonds and any surety or security relating thereto
that may be required by applicable law as an incident to such possession, and
waives any demand for possession prior to the commencement of any such suit or
action.
Section 7.10. SEVERABILITY. Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 7.11. TERMINATION. If all of the Obligations shall have been paid
and performed in full and all Commitments of Secured Party and the Lenders shall
have expired or terminated, Secured Party shall, upon the written request of any
Debtor, execute and deliver to the Debtors a proper instrument or instruments
acknowledging the release and termination of the security interests created by
this Agreement, and shall duly assign and deliver to the Debtor, as applicable,
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of Secured Party and has not previously
been sold or otherwise applied pursuant to this Agreement; notwithstanding
anything to the contrary contained in this Agreement, if the payment of any
amount of the Obligations is rescinded, voided or must otherwise be refunded by
Secured Party or any Lender upon the insolvency, bankruptcy or reorganization of
the Borrower or any other Loan Party or otherwise for any reason whatsoever,
then the security interests created by this Agreement will be automatically
reinstated and become automatically effective and in full force and effect, all
to the extent that and as though such payment so rescinded, voided or otherwise
refunded had never been made and such release and termination of such security
interest had never been given.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 18
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first written above.
DEBTORS:
FARRAGUT FINANCIAL CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
FIRST INVESTORS SERVICING CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
SECURED PARTY:
BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
By:__________________________________
Name:________________________________
Title:_______________________________
PLEDGE AND SECURITY AGREEMENT (Subsidiaries) - Page 19
SCHEDULE 1.1
TO
PLEDGE AND SECURITY AGREEMENT
PLEDGED SHARES
DESCRIPTION OF
EACH CLASS PERCENTAGE
CERTIFICATE AND SERIES PAR NUMBER OF OF SHARES
ISSUER NUMBER (IF APPLICABLE) VALUE PLEDGED SHARES ISSUED
None.
SCHEDULE 3.1
TO
PLEDGE AND SECURITY AGREEMENT
LOCATIONS
I. PRINCIPAL PLACE OF
BUSINESS ADDRESS LANDLORD/MORTGAGEE
Farragut Financial 000 Xxxxxx Xxxxx, Xxxxx 000 First Investors
Corporation Xxxxxxx, XX 00000 Financial Services
First Investors Servicing 000 Xxxxxxxxxx Xxxxx XXX/Xxxxxx Associates
Corporation Xxxxxxx
0xx Xxxxx
Xxxxxxx, XX
II. OTHER LOCATIONS None
SCHEDULE 3.2
TO
PLEDGE AND SECURITY AGREEMENT
DEPOSIT, COMMODITY, AND SECURITIES ACCOUNTS
ACCOUNT
NAME NUMBER TYPE DEPOSITORY
Farragut Financial Corp. 375-084-8043 Deposit Bank of America, N.A.
First Investors Servicing
Corp-Operating Account 375-135-9748 Deposit Bank of America, N.A.
SCHEDULE 3.3
TO
PLEDGE AND SECURITY AGREEMENT
TRADE AND OTHER NAMES; TAX IDENTIFICATION NUMBER
Trade and Other Names:
First Investors Servicing Corporation was formerly known as Auto
Lenders Acceptance Corporation
United States Income Tax
Identification Number:
Farragut Financial Corporation 00-0000000
First Investors Servicing Corporation 00-0000000
SCHEDULE 3.5
TO
PLEDGE AND SECURITY AGREEMENT
INTELLECTUAL PROPERTY
None
EXHIBIT A
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF AMENDMENT
This Amendment, dated _______________, _____, is delivered pursuant to
SECTION 4.8 of the Pledge and Security Agreement referred to below. The
undersigned hereby agrees that this Amendment may be attached to that certain
Pledge and Security Agreement, dated as of December 22, 2000, between the
undersigned and Bank of America, N.A., as Administrative Agent for the Lenders
referred to therein (the "PLEDGE AND SECURITY AGREEMENT"), and that the Capital
Stock, notes, or other securities or instruments listed on SCHEDULE 1 annexed
hereto shall be and become part of the Collateral referred to in the Pledge and
Security Agreement and shall secure payment and performance of all Obligations
as provided in the Pledge and Security Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings therefor provided in the Pledge and Security Agreement.
DEBTOR:
_____________________________________
By:__________________________________
Name:________________________________
Title:_______________________________
SECURED PARTY:
BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
By:__________________________________
Name:________________________________
Title:_______________________________
Schedule 1
to
Amendment to Pledge and Security Agreement
DESCRIPTION OF EACH PERCENTAGE
CERTIFICATE CLASS AND SERIES NUMBER OF OF SHARES
ISSUER NUMBER (IF APPLICABLE) PAR VALUE PLEDGED SHARES ISSUED
