Common use of AS TO PLEDGED STOCK Clause in Contracts

AS TO PLEDGED STOCK. (a) The Borrower Parties covenant and agree that, from and after the date of this Agreement until this Agreement is terminated and the security interests created hereby are released and subject to the Subordination Agreement: (i) If a Borrower Party shall, as a result of its ownership of the Pledged Stock or otherwise, become entitled to receive or shall receive any capital stock (including, without limitation, any stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights, whether in addition to, in substitution of, as a conversion of, or in exchange for any shares of the Pledged Stock, or otherwise in respect thereof, the pertinent Borrower Party shall accept certificates representing the same as the agent of the Lender, hold the same in trust for the Lender and deliver the same forthwith to the Lender in the exact form received duly endorsed by the pertinent Borrower Party to the Lender, together with an undated stock power covering such certificate duly executed in blank by the pertinent Borrower Party to be held by the Lender, subject to the terms hereof, as additional Collateral. Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer shall be paid over to the Lender to be held by it hereunder as additional Collateral, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall be delivered to the Lender to be held by it hereunder as additional Collateral. If any sums of money or property so paid or distributed in respect of the Pledged Stock shall be received by a Borrower Party, it shall, until such money or property is paid or delivered to the Lender, hold such money or property in trust for the Lender, segregated from other funds of such Borrower Party, as additional Collateral. (ii) Without the prior written consent of the Lender, the Borrower Parties will not vote to enable, or take any other action to permit, any Issuer to issue any capital stock or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any capital stock or other equity securities of any nature of any Issuer. (b) Unless an Event of Default shall have occurred and is continuing and the Lender shall have given notice to the Borrower Parties of the Lender's intent to exercise its rights pursuant to this Section 2.06(b), the Borrower Parties shall be permitted to receive all cash dividends paid in the normal course of business of the Issuers and consistent with past practice in respect of the Pledged Stock and, except as set forth in Section 2.06(a)(ii), to exercise all voting and corporate rights with respect to the Pledged Stock; PROVIDED, HOWEVER, that no vote shall be cast or corporate right exercised or other action taken which would impair the Collateral or which would be inconsistent with or result in any violation of any provision of the Loan Documents. If an Event of Default shall occur and is continuing and the Lender has given notice to the Borrower Parties of its intent to exercise its rights pursuant to this Section 2.06(b), and subject, pursuant to the terms and conditions of the Subordination Agreement, to the prior rights of Chase: (i) the Lender shall have the right to receive any and all cash dividends or other payments paid in respect of the Pledged Stock and apply all or any part thereof against the Obligations or any part thereof and (ii) any or all shares of the Pledged Stock shall be registered in the name of the Lender or its nominee, and the Lender or its nominee may thereafter exercise (A) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of any Issuer or otherwise and (B) any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by any Borrower Party or the Lender of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Lender may determine), all without liability except to account for property actually received by it, but the Lender shall have no duty to the Borrower Parties to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. (c) The Borrower Parties hereby acknowledge and agree that the Lender may exercise its right to sell any or all of the Pledged Stock pursuant to Section 2.06(b) hereof in one or more private sales thereof to a restricted group of purchasers which 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. The Borrower Parties further acknowledge and agree that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Lender shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if such Issuer would agree to do so. The Borrower Parties agree to use their best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section 2.06(c) valid and binding and in compliance with any and all other Applicable Law. (d) The Borrower Parties further agree that a breach of any of the covenants contained in this Section 2.06 will cause irreparable injury to the Lender, that the Lender have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 2.06 shall be specifically enforceable against the Borrower Parties, and the Borrower Parties hereby waive and agree 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. (e) The Borrower Parties hereby authorize and instruct each Issuer of any Pledged Stock pledged by the Borrower Parties hereunder to (i) comply with any instruction received by it from the Lender in writing that (A) states that an Event of Default has occurred and is continuing and (B) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from the Borrower Parties, and the Borrower Parties agree that each Issuer shall be fully protected in so complying, and (ii) upon an Event of Default, unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Stock directly to the Lender. Concurrently with the delivery of any Pledged Stock hereunder, the Issuer of such Pledged Stock shall deliver to the Lender an Acknowledgement and Consent, in the form attached hereto as Annex A, certifying, among other things, that it will be bound by the terms of this Agreement and will comply with such terms insofar as such terms are applicable to it.