AMENDED AND RESTATED PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT (this "Pledge Agreement"),
dated as of June 13, 2002, is by and among the parties identified as "Pledgors"
on the signature pages hereto and such other parties as may become Pledgors
hereunder after the date hereof (individually a "Pledgor", and collectively the
"Pledgors") and BANK OF AMERICA, N.A., as collateral agent (in such capacity,
the "Collateral Agent") for the holders of the Secured Obligations referenced
below.
W I T N E S S E T H
WHEREAS, pursuant to the Existing Credit Agreement the banks party thereto
provided $60 million in credit facilities to the Borrower;
WHEREAS, pursuant to the Stock Pledge Agreement (the "Existing Pledge
Agreement") dated as of June 5, 1997 by the Borrower in favor of Bank of
America, N.A., as agent, the Borrower pledged the Capital Stock of certain of
its Subsidiaries to secure the credit facilities provided under the Existing
Credit Agreement;
WHEREAS, pursuant to that Credit Agreement (as amended, modified and
supplemented, the "Credit Agreement") dated as of the date hereof among the
Borrower, the Guarantors identified therein, the Lenders identified therein and
Bank of America, N.A., as Administrative Agent, the Lenders have agreed to amend
and restate the credit facilities provided under Existing Credit Agreement on
the terms set forth in the Credit Agreement to provide, among other things, an
increase in the size of the credit facilities to $325 million; and
WHEREAS, this Pledge Agreement is given in amendment to, restatement of
and substitution for the Existing Pledge Agreement.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
shall have the meanings provided in the Credit Agreement. In addition, the
following terms, which are defined in the UCC as in effect in the State of North
Carolina on the date hereof, are used herein as so defined: Accession, Financial
Asset, Proceeds and Security. As used herein:
"Event of Default" has the meaning provided in Section 8 hereof.
"Pledged Collateral" has the meaning provided in Section 2 hereof.
"Pledged Shares" has the meaning provided in Section 2 hereof.
"Secured Obligations" means, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders (including the Swingline
Lender and the Issuing Lender), the Administrative Agent and the
Collateral Agent, whenever arising, under the Credit Agreement or any of
the other Credit Documents (including, but not limited to, any interest
accruing after the occurrence of a Bankruptcy Event with respect to any
Credit Party, regardless of whether such interest is an allowed claim
under the Bankruptcy Code), whether now existing or hereafter arising, due
or to become due, direct or indirect, absolute or contingent, howsoever
evidenced, created, held or acquired, whether primary, secondary, direct,
contingent, or joint and several, as such obligations may be amended,
modified, increased, extended, renewed or replaced from time to time, (ii)
all of the
obligations owing by the Credit Parties to the Lenders or any affiliate of
a Lender, whenever arising, under any Hedging Agreement to the extent
permitted under the Credit Agreement, and (iii) all costs and expenses
incurred in connection with enforcement and collection of the Secured
Obligations, including reasonable attorneys' fees actually incurred but
excluding the allocated cost of internal counsel.
"UCC" means the Uniform Commercial Code.
2. Pledge and Grant of Security Interest. To secure the prompt payment
and performance in full when due, whether by lapse of time, acceleration,
mandatory prepayment or otherwise, of the Secured Obligations, each Pledgor
hereby grants, pledges and assigns to the Collateral Agent, for the benefit of
the holders of the Secured Obligations, a continuing security interest in, and a
right to set-off against, any and all right, title and interest of such Pledgor
in and to the following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the "Pledged Collateral"):
(a) Pledged Shares. (i) One hundred percent (100%) (or, if less,
the full amount owned by such Pledgor) of the issued and outstanding
Capital Stock owned by such Pledgor of each Domestic Subsidiary set forth
on Schedule 2(a) attached hereto and (ii) sixty-five percent (65%) (or, if
less, the full amount owned by such Pledgor) of the issued and outstanding
shares of Capital Stock entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) ("Voting Equity") and one hundred percent
(100%) (or, if less, the full amount owned by such Pledgor) of the issued
and outstanding Capital Stock not entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) ("Non-Voting Equity") owned by such
Pledgor of each Foreign Subsidiary set forth on Schedule 2(a) attached
hereto, in each case together with the certificates (or other agreements
or instruments), if any, representing such Capital Stock, and all options
and other rights, contractual or otherwise, with respect thereto
(collectively, together with the Capital Stock described in Section 2(b)
and 2(c) below, the "Pledged Shares"), including, but not limited to, the
following:
(A) all shares, securities, membership interests or other
equity interests representing a dividend on any of the Pledged
Shares, or representing a distribution or return of capital upon or
in respect of the Pledged Shares, or resulting from a stock split,
revision, reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the holder of,
or otherwise in respect of, the Pledged Shares; and
(B) without affecting the obligations of the Pledgors under
any provision prohibiting such action hereunder or under the Credit
Agreement, in the event of any consolidation or merger involving the
issuer of any Pledged Shares and in which such issuer is not the
surviving entity, all Capital Stock of the successor entity formed
by or resulting from such consolidation or merger.
(b) Additional Shares. (i) One hundred percent (100%) (or, if
less, the full amount owned by such Pledgor) of the issued and outstanding
Capital Stock owned by such Pledgor of any Person that hereafter becomes a
Domestic Subsidiary and (ii) sixty-five percent (65%) (or, if less, the
full amount owned by such Pledgor) of the Voting Equity and one hundred
percent (100%) (or, if less, the full amount owned by such Pledgor) of the
Non-Voting Equity owned by such Pledgor of any Person that hereafter
becomes a Foreign Subsidiary, including, without limitation, the
certificates (or other agreements or instruments) representing such
Capital Stock.
(c) Accessions and Proceeds. All Accessions and all Proceeds of
any and all of the foregoing.
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Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional Capital Stock to the Collateral Agent as collateral
security for the Secured Obligations. Upon delivery to the Collateral Agent,
such additional Capital Stock shall be deemed to be part of the Pledged
Collateral of such Pledgor and shall be subject to the terms of this Pledge
Agreement whether or not Schedule 2(a) is amended to refer to such additional
Capital Stock.
3. Security for Secured Obligations. The security interest created
hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the Secured Obligations.
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees that:
(a) Each Pledgor shall deliver to the Collateral Agent (i)
simultaneously with or prior to the execution and delivery of this Pledge
Agreement, all certificates representing the Pledged Shares of such
Pledgor and (ii) promptly upon the receipt thereof by or on behalf of a
Pledgor, all other certificates and instruments constituting Pledged
Collateral of a Pledgor. Prior to delivery to the Collateral Agent, all
such certificates and instruments constituting Pledged Collateral of a
Pledgor shall be held in trust by such Pledgor for the benefit of the
Collateral Agent pursuant hereto. All such certificates shall be delivered
in suitable form for transfer by delivery or shall be accompanied by duly
executed instruments of transfer or assignment in blank, substantially in
the form provided in Schedule 4(a) attached hereto.
(b) Additional Securities. If such Pledgor shall receive by virtue
of its being or having been the owner of any Pledged Collateral, any (i)
certificate, including without limitation, any certificate representing a
dividend or distribution in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets,
combination of shares or other equity interests, stock splits, spin-off or
split-off, promissory notes or other instruments; (ii) option or right,
whether as an addition to, substitution for, or an exchange for, any
Pledged Collateral or otherwise; (iii) dividends payable in securities; or
(iv) distributions of securities in connection with a partial or total
liquidation, dissolution or reduction of capital, capital surplus or
paid-in surplus, then such Pledgor shall receive such certificate,
instrument, option, right or distribution in trust for the benefit of the
Collateral Agent, shall segregate it from such Pledgor's other property
and shall deliver it forthwith to the Collateral Agent in the exact form
received together with any necessary endorsement and/or appropriate stock
power duly executed in blank, substantially in the form provided in
Schedule 4(a), to be held by the Collateral Agent as Pledged Collateral
and as further collateral security for the Secured Obligations.
(c) Financing Statements. Each Pledgor shall execute and deliver
to the Collateral Agent such UCC or other applicable financing statements
as may be reasonably requested by the Collateral Agent in order to perfect
and protect the security interest created hereby in the Pledged Collateral
of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Collateral Agent, for the benefit of the holders of the Secured
Obligations, that so long as any of the Secured Obligations remains outstanding
and until all of the commitments relating thereto have been terminated:
(a) Authorization of Pledged Shares. The Pledged Shares are duly
authorized and validly issued, are fully paid and nonassessable and are
not subject to the preemptive rights of any Person.
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(b) Title. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal and
beneficial owner of such Pledged Collateral free and clear of any Lien,
other than Permitted Liens. There exists no "adverse claim" within the
meaning of Section 8-102 of the UCC with respect to the Pledged Shares of
such Pledgor.
(c) Exercising of Rights. The exercise by the Collateral Agent of
its rights and remedies hereunder will not violate any law or governmental
regulation or any material contractual restriction binding on or affecting
a Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or action by,
and no notice or filing with any Governmental Authority or with the issuer
of any Pledged Stock is required either (i) for the pledge made by a
Pledgor or for the granting of the security interest by a Pledgor pursuant
to this Pledge Agreement (except as have been already obtained) or (ii)
for the exercise by the Collateral Agent or the holders of the Secured
Obligations of their rights and remedies hereunder (except as may be
required by laws affecting the offering and sale of securities).
(e) Security Interest/Priority. This Pledge Agreement creates a
valid security interest in favor of the Collateral Agent for the benefit
of the holders of the Secured Obligations, in the Pledged Collateral. The
taking of possession by the Collateral Agent of the certificates
representing the Pledged Shares and all other certificates and instruments
constituting Pledged Collateral will perfect and establish the first
priority of the Collateral Agent's security interest in the Pledged Shares
and, when properly perfected by filing or registration, in all other
Pledged Collateral represented by such Pledged Shares and instruments
securing the Secured Obligations. Except as set forth in this Section
5(e), no action is necessary to perfect or otherwise protect such security
interest.
(f) Partnership and Membership Interests. Except as previously
disclosed to the Collateral Agent, none of the Pledged Shares consisting
of partnership or limited liability company interests (i) is dealt in or
traded on a securities exchange or in a securities market, (ii) by its
terms expressly provides that it is a security governed by Article 8 of
the UCC, (iii) is an investment company security, (iv) is held in a
securities account or (v) constitutes a Security or a Financial Asset.
(g) No Other Interests. No Pledgor owns any Capital Stock in any
Subsidiary other than as set forth on Schedule 2(a) attached hereto.
6. Covenants. Each Pledgor hereby covenants, that so long as any of the
Secured Obligations remains outstanding and until all of the commitments
relating thereto have been terminated, such Pledgor shall:
(a) Books and Records. ▇▇▇▇ its books and records (and shall cause
the issuer of the Pledged Shares of such Pledgor to ▇▇▇▇ its books and
records) to reflect the security interest granted to the Collateral Agent,
for the benefit of the holders of the Secured Obligations, pursuant to
this Pledge Agreement.
(b) Defense of Title. Warrant and defend title to and ownership of
the Pledged Collateral of such Pledgor at its own expense against the
claims and demands of all other parties claiming an interest therein, keep
the Pledged Collateral free from all Liens, except for Permitted Liens,
and not sell, exchange, transfer, assign, lease or otherwise dispose of
Pledged Collateral of such Pledgor or any interest therein, except as
permitted under the Credit Agreement and the other Credit Documents.
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(c) Further Assurances. Promptly execute and deliver at its
expense all further instruments and documents and take all further action
that may be necessary and desirable or that the Collateral Agent may
reasonably request in order to (i) perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor
(including, without limitation, any and all action necessary to satisfy
the Collateral Agent that the Collateral Agent has obtained a first
priority perfected security interest in all Pledged Collateral); (ii)
enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder in respect of the Pledged Collateral of such Pledgor;
and (iii) otherwise effect the purposes of this Pledge Agreement,
including, without limitation and if requested by the Collateral Agent,
delivering to the Collateral Agent irrevocable proxies in respect of the
Pledged Collateral of such Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any restriction
with respect to any of the Pledged Collateral of such Pledgor other than
pursuant hereto or as may be permitted under the Credit Agreement.
(e) Compliance with Securities Laws. File all reports and other
information now or hereafter required to be filed by such Pledgor with the
United States Securities and Exchange Commission and any other state,
federal or foreign agency in connection with the ownership of the Pledged
Collateral of such Pledgor.
(f) Issuance or Acquisition of Capital Stock. Not, without
executing and delivering, or causing to be executed and delivered, to the
Collateral Agent such agreements, documents and instruments as the
Collateral Agent may require, issue or acquire any Capital Stock
consisting of an interest in a partnership or a limited liability company
that (i) is dealt in or traded on a securities exchange or in a securities
market, (ii) by its terms expressly provides that it is a security
governed by Article 8 of the UCC, (iii) is an investment company security,
(iv) is held in a securities account or (v) constitutes a Security or a
Financial Asset.
7. Advances by Holders of the Secured Obligations. On failure of any
Pledgor to perform any of the covenants and agreements contained herein, the
Collateral Agent may, at its sole option and in its sole discretion, perform the
same and in so doing may expend such sums as the Collateral Agent may reasonably
deem advisable in the performance thereof, including, without limitation, the
payment of any insurance premiums, the payment of any taxes, a payment to obtain
a release of a Lien or potential Lien, expenditures made in defending against
any adverse claim and all other expenditures that the Collateral Agent or the
holders of the Secured Obligations may make for the protection of the security
hereof or may be compelled to make by operation of law. All such sums and
amounts so expended shall be repayable by the Pledgors on a joint and several
basis promptly upon timely notice thereof and demand therefor, shall constitute
additional Secured Obligations and shall bear interest from the date said
amounts are expended at the default rate specified in Section 3.1 of the Credit
Agreement for Revolving Loans that are Base Rate Loans. No such performance of
any covenant or agreement by the Collateral Agent or the holders of the Secured
Obligations on behalf of any Pledgor, and no such advance or expenditure
therefor, shall relieve the Pledgors of any default under the terms of this
Pledge Agreement, the other Credit Documents or any other documents relating to
the Secured Obligations. The holders of the Secured Obligations may make any
payment hereby authorized in accordance with any ▇▇▇▇, statement or estimate
procured from the appropriate public office or holder of the claim to be
discharged without inquiry into the accuracy of such ▇▇▇▇, statement or estimate
or into the validity of any tax assessment, sale, forfeiture, tax lien, title or
claim except to the extent such payment is being contested in good faith by a
Pledgor in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
8. Events of Default. The occurrence of an event that would constitute
an Event of Default under the Credit Agreement shall be an Event of Default
hereunder (an "Event of Default").
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9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and
during the continuation thereof, the Collateral Agent and the holders of the
Secured Obligations shall have, in addition to the rights and remedies provided
herein, in the Credit Documents, in any other documents relating to the Secured
Obligations, or by law (including, without limitation, levy of attachment and
garnishment), the rights and remedies of a secured party under the UCC of the
jurisdiction applicable to the affected Pledged Collateral.
(b) Sale of Pledged Collateral. Upon the occurrence of an Event of
Default and during the continuation thereof, without limiting the generality of
this Section 9 and without notice, the Collateral Agent may, in its sole
discretion, sell or otherwise dispose of or realize upon the Pledged Collateral,
or any part thereof, in one or more parcels, at public or private sale, at any
exchange or broker's board or elsewhere, at such price or prices and on such
other terms as the Collateral Agent may deem commercially reasonable, for cash,
credit or for future delivery or otherwise in accordance with applicable law. To
the extent permitted by law, any holder of the Secured Obligations may in such
event, bid for the purchase of such securities. Each Pledgor agrees that, to the
extent notice of sale shall be required by law and has not been waived by such
Pledgor, any requirement of reasonable notice shall be met if notice, specifying
the place of any public sale or the time after which any private sale is to be
made, is personally served on or mailed, postage prepaid, to such Pledgor, in
accordance with the notice provisions of Section 11.1 of the Credit Agreement at
least ten days before the time of such sale. The Collateral Agent shall not be
obligated to make any sale of Pledged Collateral of such Pledgor regardless of
notice of sale having been given. The Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
(c) Private Sale. Upon the occurrence of an Event of Default and during
the continuation thereof, the Pledgors recognize that the Collateral Agent may
deem it impracticable to effect a public sale of all or any part of the Pledged
Shares or any of the securities constituting Pledged Collateral and that the
Collateral Agent may, therefore, determine to make one or more private sales of
any such Pledged Collateral to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such Pledged Collateral for
their own account, for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges that any such private sale may be at
prices and on terms less favorable to the seller than the prices and other terms
that might have been obtained at a public sale and, notwithstanding the
foregoing, agrees that such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Collateral Agent shall have no
obligation to delay sale of any such Pledged Collateral for the period of time
necessary to permit the issuer of such Pledged Collateral to register such
Pledged Collateral for public sale under the Securities Act. Each Pledgor
further acknowledges and agrees that any offer to sell such Pledged Collateral
that has been (i) publicly advertised on a bona fide basis in a newspaper or
other publication of general circulation in the financial community of New York,
New York (to the extent that such offer may be advertised without prior
registration under the Securities Act), or (ii) made privately in the manner
described above shall be deemed to involve a "public sale" under the UCC,
notwithstanding that such sale may not constitute a "public offering" under the
Securities Act, and the Collateral Agent may, in such event, bid for the
purchase of such Pledged Collateral.
(d) Retention of Pledged Collateral. To the extent permitted under
applicable law, in addition to the rights and remedies hereunder, upon the
occurrence of an Event of Default, the Collateral Agent may, after providing the
notices required by Sections 9-620 and 9-621 of the UCC or otherwise complying
with the requirements of applicable law of the relevant jurisdiction, accept or
retain all or any portion of the Pledged Collateral in satisfaction of the
Secured Obligations. Unless and until the
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Collateral Agent shall have provided such notices, however, the Collateral Agent
shall not be deemed to have accepted or retained any Pledged Collateral in
satisfaction of any Secured Obligations for any reason.
(e) Deficiency. In the event that the proceeds of any sale, collection
or realization are insufficient to pay all amounts to which the Collateral Agent
or the holders of the Secured Obligations are legally entitled, the Pledgors
shall be jointly and severally liable for the deficiency, together with interest
thereon at the default rate specified in Section 3.1 of the Credit Agreement for
Revolving Loans that are Base Rate Loans, together with the costs of collection
and reasonable attorneys' fees actually incurred (excluding the allocated cost
of internal counsel). Any surplus remaining after the full payment and
satisfaction of the Secured Obligations shall be returned to the Pledgors or to
whomsoever a court of competent jurisdiction shall determine to be entitled
thereto.
10. Rights of the Collateral Agent.
(a) Power of Attorney. In addition to other powers of attorney contained
herein, each Pledgor hereby designates and appoints the Collateral Agent, on
behalf of the holders of the Secured Obligations, and each of its designees or
agents, as attorney-in-fact of such Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following actions upon
the occurrence and during the continuation of an Event of Default:
(i) to demand, collect, settle, compromise and adjust, and give
discharges and releases concerning the Pledged Collateral, all as the
Collateral Agent may reasonably deem appropriate;
(ii) to commence and prosecute any actions at any court for the
purposes of collecting any of the Pledged Collateral and enforcing any
other right in respect thereof;
(iii) to defend, settle or compromise any action brought and, in
connection therewith, give such discharge or release as the Collateral
Agent may reasonably deem appropriate;
(iv) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Pledged
Collateral;
(v) to direct any parties liable for any payment in connection
with any of the Pledged Collateral to make payment of any and all monies
due and to become due thereunder directly to the Collateral Agent or as
the Collateral Agent shall direct;
(vi) to receive payment of and receipt for any and all monies,
claims, and other amounts due and to become due at any time in respect of
or arising out of any Pledged Collateral;
(vii) to sign and endorse any drafts, assignments, proxies, stock
powers, verifications, notices and other documents relating to the Pledged
Collateral;
(viii) to execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements, security
and pledge agreements, affidavits, notices and other agreements,
instruments and documents that the Collateral Agent may reasonably deem
appropriate in order to perfect and maintain the security interests and
liens granted in this Pledge Agreement and in order to fully consummate
all of the transactions contemplated therein;
(ix) to exchange any of the Pledged Collateral or other property
upon any merger, consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof and, in
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connection therewith, deposit any of the Pledged Collateral with any
committee, depository, transfer agent, registrar or other designated
agency upon such terms as the Collateral Agent may reasonably deem
appropriate;
(x) to vote for a shareholder resolution, or to sign an
instrument in writing, sanctioning the transfer of any or all of the
Pledged Collateral into the name of the Collateral Agent or one or more of
the holders of the Secured Obligations or into the name of any transferee
to whom the Pledged Collateral or any part thereof may be sold pursuant to
Section 9 hereof; and
(xi) to do and perform all such other acts and things as the
Collateral Agent may reasonably deem appropriate or convenient in
connection with the Pledged Collateral.
This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Secured Obligations shall remain
outstanding and until all of the commitments relating thereto shall have been
terminated. The Collateral Agent shall be under no duty to exercise or withhold
the exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Collateral Agent in this Pledge Agreement, and shall
not be liable for any failure to do so or any delay in doing so. The Collateral
Agent shall not be liable for any act or omission or for any error of judgment
or any mistake of fact or law in its individual capacity or its capacity as
attorney-in-fact except acts or omissions resulting from its gross negligence or
willful misconduct. This power of attorney is conferred on the Collateral Agent
solely to protect, preserve and realize upon its security interest in the
Pledged Collateral.
(b) Performance by the Collateral Agent of Obligations. If any Pledgor
fails to perform any agreement or obligation contained herein, the Collateral
Agent itself may perform, or cause performance of, such agreement or obligation,
and the expenses of the Collateral Agent incurred in connection therewith shall
be payable by the Pledgors on a joint and several basis pursuant to Section 26
hereof.
(c) The Collateral Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Pledged Collateral while being
held by the Collateral Agent hereunder, the Collateral Agent shall have no duty
or liability to preserve rights pertaining thereto, it being understood and
agreed that the Pledgors shall be responsible for preservation of all rights in
the Pledged Collateral, and the Collateral Agent shall be relieved of all
responsibility for the Pledged Collateral upon surrendering it or tendering the
surrender of it to the Pledgors. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property,
which shall be no less than the treatment employed by a reasonable and prudent
agent in the industry, it being understood that the Collateral Agent shall not
have responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against any parties with respect to any of the Pledged Collateral.
(d) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred and be
continuing, to the extent permitted by law, each Pledgor may exercise any
and all voting and other consensual rights pertaining to the Pledged
Collateral of such Pledgor or any part thereof for any purpose not
inconsistent with the terms of this Pledge Agreement or the Credit
Agreement; and
(ii) Upon the occurrence and during the continuance of an Event of
Default, all rights of a Pledgor to exercise the voting and other
consensual rights that it would otherwise be
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entitled to exercise pursuant to paragraph (i) of this subsection shall
cease and all such rights shall thereupon become vested in the Collateral
Agent, which shall then have the sole right to exercise such voting and
other consensual rights.
(e) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred and be
continuing and subject to Section 4(b) hereof, each Pledgor may receive
and retain any and all dividends (other than stock dividends and other
dividends constituting Pledged Collateral addressed hereinabove) or
interest paid in respect of the Pledged Collateral to the extent they are
allowed under the Credit Agreement.
(ii) Upon the occurrence and during the continuance of an Event of
Default:
(A) all rights of a Pledgor to receive the dividends and
interest payments that it would otherwise be authorized to receive
and retain pursuant to paragraph (i) of this subsection shall cease
and all such rights shall thereupon be vested in the Collateral
Agent, which shall then have the sole right to receive and hold as
Pledged Collateral such dividends and interest payments; and
(B) all dividends and interest payments that are received by
a Pledgor contrary to the provisions of paragraph (A) of this
subsection shall be received in trust for the benefit of the
Collateral Agent, shall be segregated from other property or funds
of such Pledgor, and shall be forthwith paid over to the Collateral
Agent as Pledged Collateral in the exact form received, to be held
by the Collateral Agent as Pledged Collateral and as further
collateral security for the Secured Obligations.
(f) Release of Pledged Collateral. The Collateral Agent may release any
of the Pledged Collateral from this Pledge Agreement or may substitute any of
the Pledged Collateral for other Pledged Collateral without altering, varying or
diminishing in any way the force, effect, lien, pledge or security interest of
this Pledge Agreement as to any Pledged Collateral not expressly released or
substituted, and this Pledge Agreement shall continue as a first priority lien
on all Pledged Collateral not expressly released or substituted.
11. Rights of Required Lenders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the
Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Pledged Collateral, when received by the
Collateral Agent or any of the holders of the Secured Obligations in cash or its
equivalent, will be applied in reduction of the Secured Obligations in the order
set forth in the Credit Agreement or other document relating to the Secured
Obligations, and each Pledgor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Collateral Agent shall have the continuing and exclusive right to apply and
reapply any and all such payments and proceeds in the manner set forth in this
Section 12, notwithstanding any entry to the contrary upon any of its books and
records.
13. Costs of Counsel. At all times hereafter, whether or not upon the
occurrence of an Event of Default, the Pledgors agree to promptly pay upon
demand any and all reasonable costs and expenses (including, without limitation,
attorneys' fees actually incurred but excluding the allocated costs of internal
counsel) of the Collateral Agent and the holders of the Secured Obligations (a)
as required under Section 11.5 of the Credit Agreement and (b) as necessary to
protect the Pledged Collateral or to exercise
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any rights or remedies under this Pledge Agreement or with respect to any of the
Pledged Collateral. All of the foregoing costs and expenses shall constitute
Secured Obligations hereunder.
14. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in every
respect and shall remain in full force and effect so long as any of the Secured
Obligations remains outstanding and until all of the commitments relating
thereto have been terminated (other than any obligations with respect to the
indemnities and the representations and warranties set forth in the Credit
Documents). Upon such payment and termination, this Pledge Agreement shall be
automatically terminated and the Collateral Agent and the holders of the Secured
Obligations shall forthwith release all of its liens and security interests
hereunder and shall, upon the request and at the expense of the Pledgors,
execute and deliver all UCC termination statements and/or other documents
reasonably requested by the Pledgors evidencing such termination.
Notwithstanding the foregoing, all releases and indemnities provided hereunder
shall survive termination of this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in whole
or in part, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by the Collateral Agent or any holder of the Secured
Obligations as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had not been
made; provided that in the event payment of all or any part of the Secured
Obligations is rescinded or must be restored or returned, all reasonable costs
and expenses (including, without limitation, attorneys' fees actually incurred
(excluding the allocated cost of internal counsel) and disbursements) incurred
by the Collateral Agent or any holder of the Secured Obligations in defending
and enforcing such reinstatement shall be deemed to be included as a part of the
Secured Obligations.
15. Amendments and Waivers. This Pledge Agreement and the provisions
hereof may not be amended, waived, modified, changed, discharged or terminated
except as set forth in Section 11.6 of the Credit Agreement.
16. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns, and shall inure, together with the rights
and remedies of the Collateral Agent and the holders of the Secured Obligations
hereunder, to the benefit of the Collateral Agent and the holders of the Secured
Obligations and their successors and permitted assigns; provided, however, that
none of the Pledgors may assign its rights or delegate its duties hereunder
without the prior written consent of the requisite Lenders under the Credit
Agreement. To the fullest extent permitted by law, each Pledgor hereby releases
the Collateral Agent and each holder of the Secured Obligations, and their
respective successors and assigns, from any liability for any act or omission
relating to this Pledge Agreement or the Collateral, except for any liability
arising from the gross negligence or willful misconduct of the Collateral Agent
or such holder, or their respective officers, employees or agents.
17. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be given as provided in Section 11.1 of the Credit
Agreement.
18. Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
10
19. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
20. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. Any legal action or proceeding with respect
to this Pledge Agreement may be brought in the state or federal courts located
in Nashville, Tennessee or Charlotte, North Carolina, and, by execution and
delivery of this Pledge Agreement, each Pledgor hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of such courts. Nothing herein shall affect the right of the
Collateral Agent to commence legal proceedings or to otherwise proceed against
any Pledgor in any other jurisdiction.
(b) Each Pledgor hereby irrevocably waives any objection that it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Pledge Agreement brought
in the courts referred to in subsection (a) hereof and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.
21. Waiver of Jury Trial. EACH PARTY TO THIS PLEDGE AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS PLEDGE AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
22. Severability. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
23. Entirety. This Pledge Agreement, the other Credit Documents and the
other documents relating to the Secured Obligations represent the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Credit Documents, any other documents relating to
the Secured Obligations, or the transactions contemplated herein and therein.
24. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement, the
other Credit Documents and the other documents relating to the Secured
Obligations, the delivery of the Notes and the extension of credit thereunder or
in connection therewith.
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25. Other Security. To the extent that any of the Secured Obligations
are now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Collateral Agent shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence of any Event of Default,
and the Collateral Agent shall have the right, in its sole discretion, to
determine which rights, security, liens, security interests or remedies the
Collateral Agent shall at any time pursue, relinquish, subordinate, modify or
take with respect thereto, without in any way modifying or affecting any of them
or the Secured Obligations or any of the rights of the Collateral Agent or the
holders of the Secured Obligations under this Pledge Agreement, under any of the
other Credit Documents or under any other document relating to the Secured
Obligations.
26. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by the
holders of the Secured Obligations, for the mutual benefit, directly and
indirectly, of each of the Pledgors and in consideration of the undertakings of
each of the Pledgors to accept joint and several liability for the obligations
of each of them.
(b) Each of the Pledgors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Pledgors with respect to the payment and
performance of all of the Secured Obligations arising under this Pledge
Agreement, the other Credit Documents and any other documents relating to the
Secured Obligations, it being the intention of the parties hereto that all the
Secured Obligations shall be the joint and several obligations of each of the
Pledgors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained herein, in
any other of the Credit Documents or in any other documents relating to the
Secured Obligations, the obligations of each Guarantor under the Credit
Agreement and the other Credit Documents shall be limited to an aggregate amount
equal to the largest amount that would not render such obligations subject to
avoidance under Section 548 of the Bankruptcy Code or any comparable provisions
of any applicable state law.
[remainder of page intentionally left blank]
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Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
PLEDGORS: ACCREDO HEALTH, INCORPORATED,
a Delaware corporation
By:_____________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Secretary
SOUTHERN HEALTH SYSTEMS, INC.,
a Tennessee corporation
NOVA FACTOR, INC.,
a Tennessee corporation
HEMOPHILIA HEALTH SERVICES, INC.,
a Tennessee corporation
PHARMACARE RESOURCES INC.,
a New York corporation
SUNRISE HEALTH MANAGEMENT, INC.,
a Georgia corporation
BIO PARTNERS IN CARE, INC.,
a Missouri corporation
GENTIVA HEALTH SERVICES (QUANTUM) CORP.,
a Delaware corporation
GENTIVA HEALTH SERVICES (INFUSION), INC.,
a Delaware corporation
GENTIVA HEALTH RESOURCES, INC. (NEW YORK),
a New York corporation
By:_____________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Secretary
of each of the foregoing Pledgors
[Signature pages continue]
Accepted and agreed to as of the date first above written.
BANK OF AMERICA, N.A.,
as Collateral Agent
By:________________________
Name:
Title:
SCHEDULES
Schedule 2(a) Pledged Stock
Schedule 4(a) Form of Stock Power
Schedule 2(a)
Pledged Stock
Class of Number of Certificate Percentage of
Pledgor Issuer Capital Stock Shares Number Capital Stock
Accredo Health, Incorporated Southern Health Systems, Inc. Common 10,000,000 3 100%
Southern Health Systems, Inc. Nova Factor, Inc. Common 100 1 100%
Accredo Health, Incoporated Hemophilia Health Services, Inc. Common 100 4 100%
Accredo Health, Incoporated Pharmacare Resources Inc. Common 20 4 100%
Hemophilia Health Services, Inc. Sunrise Health Management, Inc. Common 954,777 28 100%
Accredo Health, Incoporated Bio Partners In Care, Inc. Common 999,997 8 100%
Accredo Health, Incoporated Gentiva Health Services (Quantum) Corp. Common 1,000 5 100%
Accredo Health, Incoporated Gentiva Health Services (Infusion), Inc. Common 1,000 5 100%
Gentiva Health Services
(Quantum) Corp. Gentiva Health Resources, Inc. (New York) Common 100 2 100%
Schedule 4(a)
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of ____________________[ISSUER], a
____________ corporation:
No. of Shares Certificate No.
------------- ---------------
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
The effectiveness of a transfer pursuant to this stock power shall be subject to
any and all transfer restrictions referenced on the face of the certificates
evidencing such interest or in the certificate of incorporation or bylaws of the
subject corporation, to the extent they may from time to time exist.
[HOLDER]
By:__________________________
Name:
Title: