exhibit (e)(6)
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DATED AS OF NOVEMBER 13, 2001
ALPNET, INC.
AND
ARCTIC INC.
SECURITY AND PLEDGE AGREEMENT
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TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS; INTERPRETATION...................................................... 1
1.01. Definitions...................................................................... 1
SECTION 2. OTHER TERMS ..................................................................... 2
SECTION 3. GRANT OF SECURITY AND PLEDGE..................................................... 2
SECTION 4. SECURITY FOR OBLIGATIONS......................................................... 3
SECTION 5. DELIVERY OF PLEDGED COLLATERAL................................................... 3
SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS........................................ 3
6.01. General and as to the Pledged Collateral......................................... 3
6.02. [Intentionally omitted] ......................................................... 5
6.03. As to the Pledged Collateral; Voting Rights; Dividends, etc...................... 5
SECTION 7. FURTHER ASSURANCES............................................................... 6
SECTION 8. INSURANCE........................................................................ 6
SECTION 9. TRANSFERS TO OTHERS; LIENS; ADDITIONAL SHARES.................................... 6
SECTION 10. SECURED PARTY APPOINTED ATTORNEY-IN-FACT......................................... 7
SECTION 11. SECURED PARTY MAY PERFORM........................................................ 7
SECTION 12. THE SECURED PARTY'S DUTIES....................................................... 7
SECTION 13. REMEDIES......................................................................... 7
13.01. Generally........................................................................ 8
13.02. As to the Pledged Collateral..................................................... 8
SECTION 14. INDEMNITY AND EXPENSES.......................................................... 10
SECTION 15. MISCELLANEOUS................................................................... 10
15.01. Security Interest Absolute...................................................... 10
15.02. Amendments; etc................................................................. 10
15.03. Successors and Assigns.......................................................... 10
15.04. Addresses for Notices........................................................... 11
15.05. Failure or Indulgence........................................................... 11
15.06. Survival........................................................................ 12
15.07. Continuing Security Interest; Termination....................................... 12
15.08. Set-Off......................................................................... 12
15.09. Governing Law................................................................... 12
15.10. Waiver of Jury Trial............................................................ 12
15.11. Venue; Service of Process....................................................... 13
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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15.12. Headings........................................................................ 13
15.13. Severability.................................................................... 13
15.14. Execution in Counterparts....................................................... 13
15.15. Acknowledgement of Grantor...................................................... 14
Schedules
Schedule 1 Locations of Chief Executive Office, Records, Trade Names, Etc.
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SECURITY AND PLEDGE AGREEMENT
SECURITY AND PLEDGE AGREEMENT (this "Agreement"), dated as of November 13,
2001, by and between ALPNET, Inc. as Grantor ("Grantor") and Arctic Inc., as
Secured Party (in such capacity, the "Secured Party").
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Secured Party and Grantor are entering into that certain Secured
Promissory Note dated on or about the date hereof (as amended, modified or
supplemented from time to time, the "Facility Agreement"); and
WHEREAS, unless otherwise defined herein, terms defined in the Facility
Agreement are used herein as therein defined; and
WHEREAS, the Secured Party will not enter into the Facility Agreement nor
advance funds thereunder unless the Grantor shall have granted a security
interest, pledge and lien on the property of the Grantor described herein and
the proceeds thereof; and
NOW, THEREFORE, in consideration of the premises and in order to induce the
parties to make the Advances, the Grantor hereby agree with the Secured Party as
follows:
SECTION 1. DEFINITIONS; INTERPRETATION
1.01. Definitions. As used in this Agreement, the following terms shall
have the meanings specified below:
"Capital Stock" means any and all shares, interest, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.
"Collateral" shall have the meaning ascribed thereto in Section 3.
"Obligations" shall mean (i) the due and punctual payment of principal and
interest in connection with the Facility Agreement, (ii) the due and punctual
payment of all fees and all other present and future, fixed or contingent,
monetary and other obligations of the Grantor to the Secured Party under the
Facility Agreement (including, without limitation, interest accruing at the then
applicable rate provided in the Facility Agreement), (iii) interest accruing at
the then applicable rate provided in the Facility Agreement after the filing of
any petition in bankruptcy or the commencement of any insolvency, reorganization
or like proceeding relating to the Grantor, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding, and (iv)
the material performance by Grantor of all covenants and agreements under the
Facility Agreement (including without limitation the obligations to transfer the
Canadian Shares and the ALPS Canada Sub Shares and Account Payable to Grantor in
accordance with the terms of the Facility Agreement).
"Pledged Collateral" shall mean (i) all of the issued and outstanding
shares of Capital Stock of Automated Language Processing Systems Ltd ("ALPS
Canada") together with any other shares, stock certificates, options or rights
of any nature whatsoever in respect of the Capital Stock of ALPS Canada that may
be issued or granted, or held by, the Grantor while this Agreement is in effect,
(ii) 1,455,050 shares of Second Preferred stock of ALPNET Canada Inc, a Quebec
corporation which is a subsidiary of Grantor and ALPS Canada ("ALPS Canada Sub")
represented by certificate no. SP-2, together with any other shares, stock
certificates, options or rights of any nature whatsoever in respect of the
Capital Stock of ALPS Canada Sub that may be issued or granted, or held by, the
Grantor while this Agreement is in effect, (iii) all other property which may be
delivered to and held by the Secured Party in respect of the Capital Stock of
ALPS Canada and/or ALPS Canada Sub pursuant to the terms hereof, (iv) all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed, in respect of, in exchange for or upon the
conversion of the securities referred to in clauses (i), (ii) and (iii) above;
and (v) all rights and privileges of the Grantor, as applicable, with respect to
the securities and other property referred to in clauses (i), (ii), (iii) and
(iv) above.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of Utah, provided that to the extent that by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the security interest in any Collateral or the availability of any remedy is
governed by the Uniform Commercial Code as in effect on or after the date hereof
in any other jurisdiction, "UCC" means the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection or effect of perfection or non-perfection or availability of
such remedy.
SECTION 2. OTHER TERMS. Capitalized terms used herein but not otherwise
defined herein shall have the meanings ascribed thereto in the Facility
Agreement.
SECTION 3. GRANT OF SECURITY AND PLEDGE. The Grantor hereby transfers,
grants, bargains, sells, conveys, hypothecates, assigns, pledges and sets over
to the Secured Party for its benefit and hereby grants to the Secured Party for
its benefit, a perfected pledge and continuing security interest in all of the
Grantor's right, title and interest in and to the following whether now owned or
existing or hereafter acquired or arising and regardless of where located:
(a) all Pledged Collateral;
(b) any account payable balance owed or owing to the Grantor by ALPS
Canada, Grantor's wholly-owned Canadian subsidiary, from time to time;
(c) all books, records, ledger cards and other property at any time
evidencing or relating to any of the foregoing; and
(d) all proceeds and products of any of the foregoing, in any form,
including, without limitation, any claims against third parties for loss or
damage to or destruction of any or all of the foregoing and to the extent not
otherwise included, all (i) payments under insurance (whether or not the Secured
Party is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing and (ii) cash (Clause 3(a) through (d) together, the "Collateral").
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SECTION 4. SECURITY FOR OBLIGATIONS. This Agreement and the other Security
Documents secure the payment and performance of all Obligations of the Grantor.
SECTION 5. DELIVERY OF PLEDGED COLLATERAL. On the date hereof, the Grantor
shall deliver all original certificates or instruments representing or
evidencing the Pledged Collateral to be held by the Secured Party pursuant
hereto and shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Secured
Party. All Pledged Collateral that are certificated securities shall be in
bearer form or, if in registered form, shall be endorsed to the Secured Party or
in blank. Promptly upon the accrual, offer or issue of any stocks, shares,
warrants or other securities in respect of or derived from the Pledged
Collateral, the Grantor shall notify the Secured Party of that occurrence and
procure the delivery to the Secured Party of (a) all certificates or instruments
representing or evidencing such items and (b) duly executed instruments of
transfer or assignment in blank in respect thereof, all in form and substance
satisfactory to the Secured Party. Upon the occurrence and during the
continuance of any Event of Default, the Secured Party shall have the right, at
any time in its discretion, to transfer to or to register in the name of the
Secured Party or any of its nominees any or all of the Pledged Collateral.
SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Grantor
represents, warrants and covenants as follows:
6.01. General and as to the Pledged Collateral
(a) This Agreement has been duly authorized, executed and delivered by the
Grantor and is the legally valid and binding obligation of the Grantor,
enforceable against it in accordance with its terms, except as enforcement may
be limited by (x) bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally, (y) general principles
of equity (whether asserted at law or in equity) and (z) any implied covenant of
good faith and fair dealing.
(b) Grantor is duly organized and validly existing and in good standing
under the laws of the State of Utah. The exact legal name of Grantor is ALPNET,
Inc. The Grantor covenants with the Secured Party as follows: (i) without
providing at least thirty (30) days prior written notice to the Secured Party,
the Grantor will not change its name, its place of business or, if more than
one, chief executive office, or its mailing address or organizational
identification number if it has one, (ii) if the Grantor does not have an
organizational identification number and later obtains one, the Grantor will
forthwith notify the Secured Party of such organizational identification number,
and (iii) the Grantor will not change its type of organization, jurisdiction of
organization or other legal structure.
(c) Grantor (i) has the power and authority to own its property and assets
and to transact the business in which it is engaged and to do all things
necessary or appropriate in respect of its business and (ii) is duly qualified
and is authorized to do business and is in good standing in each jurisdiction
where the ownership, leasing or operation of its property or the conduct of its
business requires such qualification.
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(d) The chief places of business and chief executive offices of the Grantor
and the offices where the Grantor keeps its records are located at the places
specified on Schedule 1 hereto. All trade names under which the Grantor has
conducted business or performed services are listed on Schedule 1 hereto.
(e) The Grantor owns the Collateral free and clear of any lien, security
interest, charge or encumbrance except for the security interest created by this
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Secured Party
relating to this Agreement.
(f) Except as expressly permitted by the Facility Agreement, Grantor shall
not assign (by operation of law or otherwise), sell, lease, transfer, pledge or
grant a security interest in or otherwise dispose of or abandon, nor will
Grantor suffer or permit any of the same to occur with respect to, any Pledged
Collateral, and the inclusion of "proceeds" of the Pledged Collateral under the
security interest granted herein shall not be deemed a consent by the Secured
Party or any beneficiary to any sale or other disposition of any Pledged
Collateral.
(g) Grantor represents that it is not in violation of any law, material
agreement or constitutive document in connection with the execution, delivery
and performance of this Agreement.
(h) The Pledged Collateral has been duly authorized and validly issued and
is fully paid and non-assessable.
(i) The security interests granted pursuant to this Agreement upon
completion of the filings, applications for the notation of the liens created
hereunder on certificates of title covering any of the Collateral and the taking
of possession by the Secured Party (which, in the case of all filings and other
documents, have been delivered to the Secured Party in completed and duly
executed form) will constitute valid, perfected, first priority security
interests in all of the Collateral in favor of the Secured Party as collateral
security (for all of the Obligations, enforceable in accordance with the terms
hereof against all creditors of Grantor and, except as otherwise provided under
applicable law, any persons purporting to purchase any Collateral from Grantor)
and are prior to all other encumbrances on the Collateral in existence on the
date hereof.
(j) Grantor hereby authorizes the Secured Party (or any person or entity
appointed or designated by the Secured Party) to take all actions at the expense
of the Grantor (including, without limitation, the filing of any UCC financing
statements or amendments thereto, applications for the notation of the liens
created hereunder on certificates of title covering any of the Collateral and
any other documents or instruments) in connection with the grant, attachment and
perfection of the pledge and security interest created hereby.
(k) Grantor is the sole holder of record and the legal and beneficial owner
of the Pledged Collateral free and clear of any lien, security interest, option
or other charge or encumbrance, except for the security interest created by this
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of the Pledged Collateral
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is on file in any recording office, except such as may have been filed in favor
of the Secured Party relating to this Agreement.
(l) Except for filings or other actions contemplated hereby, no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required either (i) for the grant
by the Grantor of the security interests granted hereby or for the execution,
delivery or performance of this Agreement by the Grantor or (ii) for the
perfection of the security interests or the exercise by the Secured Party of its
rights and remedies hereunder.
6.02. [Intentionally omitted]
6.03. As to the Pledged Collateral; Voting Rights; Dividends, etc.
(a) Prior to the occurrence of an Event of Default the Grantor shall
exercise all voting rights in relation to the Pledged Collateral; provided that
Grantor shall not exercise such voting rights in any manner, or otherwise permit
or agree to any (a) variation of the rights attaching to or conferred by any of
the Pledged Collateral or (b) increase in the issued share capital of any
company whose Pledged Collateral are charged pursuant to this Agreement; and
further provided that the Secured Party shall execute and deliver (or cause to
be executed and delivered) to the Grantor (as applicable) all such proxies and
other instruments as the Grantor (as applicable) may reasonably request for the
purpose of enabling Grantor to exercise the voting and other rights which it is
entitled to exercise under this Section 6.03(a).
(b) The Secured Party may, upon the occurrence of an Event of Default, at
its discretion (in the name of Grantor or otherwise and without any further
consent or authority from Grantor):
(i) exercise (or refrain from exercising) any voting rights in respect
of the Pledged Collateral;
(ii) have the sole right to receive and retain as Pledged Collateral
any and all dividends paid in respect of the Pledged Collateral;
(iii) transfer the Pledged Collateral into the name of such nominee(s)
of the Secured Party as it shall require; and
(iv) exercise (or refrain from exercising) the powers and rights
conferred on or exercisable by the legal or beneficial owner of the Pledged
Collateral, including the right, in relation to any company whose shares or
other securities are included in the Pledged Collateral, to concur or
participate in:
(A) the reconstruction, amalgamation, sale or other disposal of
such company or any of its assets or undertaking (including the
exchange, conversion or reissue of any shares or securities as a
consequence thereof),
(B) the release, modification or variation of any rights or
liabilities attaching to such shares or securities, and
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(C) the exercise, renunciation or assignment of any right to
subscribe for any shares or securities in each case in such manner and
on such terms as the Secured Party may think fit, and the proceeds of
any such action shall form part of the Pledged Collateral.
SECTION 7. FURTHER ASSURANCES.
(a) The Grantor agrees that from time to time, at the expense of the
Grantor, it will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary, or that the
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Secured Party to exercise and enforce any of its rights and remedies hereunder
with respect to any Collateral.
(b) Grantor hereby authorizes the Secured Party to file, in any
jurisdiction which the Secured Party deems reasonably necessary and appropriate,
this Security and Pledge Agreement and/or one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral without the signature of such Grantor where permitted by law.
(c) Grantor will furnish to the Secured Party from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Secured Party may reasonably
request, all in reasonable detail.
SECTION 8. INSURANCE. Upon the occurrence and during the continuance of
any Event of Default, all insurance payments in respect of the Collateral shall
be held, applied and paid to the Secured Party as specified herein.
SECTION 9. TRANSFERS TO OTHERS; LIENS; ADDITIONAL SHARES.
(a) Grantor shall not:
(i) Sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except for dispositions otherwise
expressly permitted by the Facility Agreement.
(ii) Create or suffer to exist any lien, pledge, security interest or
other charge or encumbrance upon or with respect to any of the Collateral
to secure any obligation of any person or entity, except for the security
interest created by this Agreement.
(b) The Grantor agrees that it will (i) cause ALPS Canada and ALPS Canada
Sub not to issue any stock or other securities in addition to or substitution
for the Pledged Collateral (ii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all additional shares of
stock or other securities of ALPS Canada and ALPS Canada Sub and (iii) cause
ALPS Canada and ALPS Canada Sub not to transfer any of its assets other than in
the
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ordinary course of business consistent in type and amount with ALPS Canada's and
ALPS Canada Sub's past practice.
SECTION 10. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Grantor hereby
irrevocably appoints the Secured Party as Grantor's attorney-in-fact (which
appointment shall be irrevocable and deemed coupled with an interest), with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time in the Secured Party's discretion, only upon and
during the occurrence and continuation of an Event of Default, to take any
action and to execute any instrument which the Secured Party may deem necessary
or advisable to accomplish the purposes of this Agreement, including, without
limitation:
(a) to obtain and adjust insurance required to be paid to the Secured Party
pursuant to this Agreement,
(b) to ask, demand, collect, ▇▇▇ for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral,
(c) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above,
(d) to receive, endorse and collect all instruments made payable to the
Grantor representing any dividend or other distribution in respect of the
Pledged Collateral or any part thereof and to give full discharge or the same,
and
(e) to file any claims or take any action or institute any proceedings
which the Secured Party may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Secured Party
with respect to any of the Collateral.
SECTION 11. SECURED PARTY MAY PERFORM. If Grantor fails to perform any
agreement contained herein, the Secured Party may (but shall not be obligated
to), after 3 days written notice and the continued failure of Grantor to
perform, itself perform, or cause performance of, such agreement, and the
expenses of the Secured Party incurred in connection therewith shall be payable
by the Grantor.
SECTION 12. THE SECURED PARTY'S DUTIES. The powers conferred on the
Secured Party hereunder are solely to protect its interest in the Collateral and
shall not impose any duty upon it to exercise any such powers. Except for the
safe custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Secured Party shall have no duty as to
any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral,
including, without limitation, ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Pledged Collateral, whether or not the Secured Party has or is deemed to
have knowledge of such matters.
SECTION 13. REMEDIES. If any Event of Default shall have occurred and be
continuing:
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13.01. Generally.
(a) The Secured Party may exercise in respect of all the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party on default under the UCC
and other applicable law and also may (i) require Grantor to, and Grantor hereby
agrees that it will at its expense and upon request of the Secured Party
forthwith, assemble all of the Collateral as directed by the Secured Party and
make it available to the Secured Party at a place to be designated by the
Secured Party which is reasonably convenient to both parties and (ii) upon
notice, sell the Collateral thereof in one or more parcels at public or private
sale, at any of the Secured Party's offices or elsewhere, for cash, on credit or
for future delivery, and at such price or prices and upon such other terms as
the Secured Party may deem commercially reasonable. Grantor agrees that, 10
days' notice to the Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Secured Party shall not be obligated to sale the Collateral
regardless of notice of sale having been given. The Secured Party 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.
(b) The Secured Party may (without assuming any obligations or liability
thereunder), at any time, enforce (and shall have the exclusive right to
enforce) against any licensee or sublicensee all rights and remedies of the
Grantor in, to and under any one or more license agreements with respect to the
Collateral, and take or refrain from taking any action under any thereof, and
the Grantor hereby releases the Secured Party from, and agrees to hold the
Secured Party free and harmless from and against any claims arising out of, any
action taken or omitted to be taken with respect to any such license agreement.
(c) All cash proceeds received by the Secured Party in respect of sale of,
collection from, or other realization upon all of the Collateral shall be
applied against the Obligations in such order as the Secured Party shall elect.
Any surplus of such cash or cash proceeds held by the Secured Party and
remaining after payment in full of all the Obligations shall be paid over to the
Grantor or to whomsoever may be lawfully entitled to receive such surplus.
13.02. As to the Pledged Collateral.
(a) If the Pledged Collateral is sold by the Secured Party upon credit or
for future delivery, the Secured Party shall not be liable for the failure of
the purchaser to purchase or pay for the same and, in the event of any such
failure, the Secured Party may resell such Pledged Collateral. In no event shall
Grantor be credited with any part of the proceeds of sale of any Pledged
Collateral until cash payment therefor has actually been received by the Secured
Party.
(b) The Secured Party may purchase the Pledged Collateral at any public
sale and, if any Pledged Collateral is of a type customarily sold in a
recognized market or is of the type that is the subject of widely distributed
standard price quotations, the Secured Party may purchase such Pledged
Collateral at private sale, free from any right of redemption, which is hereby
waived and released to the extent permitted by applicable law, and in each case
may
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make payment therefor by any means, including, without limitation, by release or
discharge of the Obligations in lieu of cash payment.
(c) No demand, advertisement or notice, all of which are hereby expressly
waived, shall be required in connection with any sale or other disposition of
the Pledged Collateral that threatens to decline speedily in value or that is of
a type customarily sold on a recognized market; otherwise the Secured Party
shall give the applicable Grantor 10 days' prior notice of the time and place of
any public sale and of the time after which any private sale or other
disposition is to be made, which notice Grantor agrees is reasonable.
(d) The Secured Party shall not be obligated to sale the Pledged
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale may have been given. The 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.
(e) If at any time when the Secured Party shall determine to exercise its
right to sell all of the Pledged Collateral pursuant to this Section 13, such
Pledged Collateral or the part thereof to be sold shall not be effectively
registered under the Securities Act of 1933, as amended, and as from time to
time in effect, and the rules and regulations thereunder (the "Securities Act"),
the Secured Party is hereby expressly authorized to sell such Pledged Collateral
by private sale in such manner and under such circumstances as the Secured Party
may deem necessary or advisable in order that such sale may legally be effected
without such registration. Without limiting the generality of the foregoing, in
any such event the Secured Party, in compliance with applicable securities laws,
(i) may proceed to make such private sale notwithstanding that a registration
statement for the purpose of registering such Pledged Collateral or such part
thereof shall have been filed under such Securities Act so long as doing so
would not violate applicable securities laws, (ii) may approach and negotiate
with a restricted number of potential purchasers to effect such sale and (iii)
may restrict such sale to purchasers as to their number, nature of business and
investment intention including without limitation to purchasers each of whom
will represent and agree to the satisfaction of the Secured Party that such
purchaser is purchasing for its own account, for investment, and not with a view
to the distribution or sale of such Collateral, or part thereof, it being
understood that the Secured Party may cause or require Grantor, and Grantor
hereby agrees upon the written request of the Secured Party, to cause (A) a
legend or legends to be placed on the certificates to be delivered to such
purchasers to the effect that the Pledged Collateral represented thereby have
not been registered under the Securities Act and setting forth or referring to
restrictions on the transferability of such securities; and (B) the issuance of
stop transfer instructions to the issuer of such Pledged Collateral's transfer
agent, if any, with respect to the Pledged Collateral, or, if such issuer
transfers its own securities, a notation in the appropriate records of such
issuer. In the event of any such sale, Grantor does hereby consent and agree
that the Secured Party shall incur no responsibility or liability for selling
the Pledged Collateral at a price which the Secured Party may deem reasonable
under the circumstances, notwithstanding the possibility that a substantially
higher price might be realized if the sale were public and deferred until after
registration as aforesaid. The Secured Party shall have no obligation to delay
sale of any such securities for the period of time necessary to permit the
issuer of such securities, even if such
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issuer would agree, to register such securities for public sale under the
Securities Act. Grantor agrees that private sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable
manner.
(f) The remedies provided herein in favor of the Secured Party shall not
be deemed exclusive, but shall be cumulative, and shall be in addition to all
other remedies in favor of the Secured Party existing at law or in equity.
SECTION 14. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify the Secured Party from and against any and
all claims, losses and liabilities growing out of or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities directly arising from the Secured Party's own
gross negligence or willful misconduct.
(b) The Grantor will upon demand pay to the Secured Party the amount of
any and all reasonable expenses, including the reasonable fees and disbursements
of its counsel and of any experts and agents, which the Secured Party may incur
in connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Secured Party hereunder or (iv) the failure by the
Grantor to perform or observe any of the provisions hereof.
(c) The Grantor agrees that the Secured Party does not assume, and shall
have no responsibility for, the payment of any sums due or to become due under
any agreement or contract included in the Collateral or the performance of any
obligations to be performed under or with respect to any such agreement or
contract by the Grantor, and except as the same may have resulted from the gross
negligence or willful misconduct of the Secured Party, the Grantor hereby agrees
to indemnify and hold the Secured Party harmless with respect to any and all
claims by any person relating thereto.
SECTION 15. MISCELLANEOUS.
15.01. Security Interest Absolute. All rights of the Secured Party and
security interests hereunder, and all obligations of the Grantor hereunder,
shall be absolute and unconditional, irrespective of any circumstance which
might constitute a defense available to, or a discharge of, any guarantor or
other obligor in respect of the Obligations.
15.02. Amendments; etc. No amendment or waiver of any provision of this
Agreement, nor any consent to any departure by the Grantor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
party against whom enforcement is sought, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
15.03. Successors and Assigns. This Agreement is for the benefit of the
Secured Party and its successors and assigns, and in the event of an assignment
by the Secured Party of all or any of the Obligations, the rights hereunder, to
the extent applicable to the Obligations so assigned, may be transferred with
such Obligations. Grantor may not assign its obligations under
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this Agreement to any person without the prior written consent of the Secured
Party, any such purported assignment without such prior written consent being
null and void. Subject to the foregoing, this Agreement shall be binding on
Grantor and its successors and permitted assigns.
15.04. Addresses for Notices. All notices and other communications provided
for hereunder shall be in writing and shall be delivered:
If to the Secured Party to
Arctic Inc.
C/o CT Corporation Systems
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With a required copy to:
Dechert
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
If to Grantor:
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a required copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
Gateway Tower East Suite 900
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
15.05. Failure or Indulgence. No failure or delay on the part of the
Secured Party in the exercise of any power, right or privilege hereunder shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or any
other right, power or privilege. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
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15.06. Survival. All representations and warranties of Grantor contained in
this Agreement shall survive the making, execution and delivery of this
Agreement
15.07. Continuing Security Interest; Termination. This Agreement shall
create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until the indefeasible payment in full in cash of the
Obligations and termination of the Commitments, (ii) be binding upon Grantor,
its successors and permitted assigns and (iii) inure, together with the rights
and remedies of the Secured Party hereunder, to the benefit of the Secured Party
and its respective successors, transferees and assigns. Upon the indefeasible
payment in full in cash of the Obligations, the security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the Grantor
subject to any existing liens, security interests or encumbrances on such
Collateral. Upon any such termination, the Secured Party will, at the Grantor's
expense, execute and deliver to the Grantor such documents as the Grantor shall
reasonably request to evidence such termination.
15.08. Set-Off.
(a) Grantor hereby irrevocably authorizes the Secured Party at any time
and from time to time without notice to Grantor, any such notice being expressly
waived by Grantor, to set-off and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in any currency or
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Secured Party to or for the credit or the account of
Grantor in such amounts as the Secured Party may elect, against and on account
of the obligations and liabilities of Grantor to the Secured Party hereunder and
claims of every nature and description of the Secured Party against Grantor, in
any currency, whether arising hereunder, under the Facility Agreement, or the
Facility Agreement, as the Secured Party may elect, whether or not the Secured
Party has made any demand for payment and although such obligations, liabilities
and claims may be contingent or unmatured.
(b) The Secured Party shall notify Grantor promptly of any such set-off
and the application made by the Secured Party of the proceeds thereof, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.
(c) The rights of the Secured Party under this sub-section are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which the Secured Party may have.
15.09. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah without regard to conflict of law
principles.
15.10. Waiver of Jury Trial. EACH OF THE SECURED PARTY AND GRANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE FACILITY
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
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15.11. Venue; Service of Process. Grantor hereby irrevocably submits to the
jurisdiction of the state courts of the State of Utah in Salt Lake County and to
the jurisdiction of the United States District Court for the District of Utah
sitting in Salt Lake County, for the purposes of any suit, action or other
proceeding arising out of or based upon this Agreement, the subject matter
hereof, the Facility Agreement and the subject matter thereof. Grantor to the
extent permitted by applicable law (A) hereby waives, and agrees not to assert,
by way of motion, as a defense, or otherwise, in any such suit, action or other
proceeding brought in the above-named courts, any claim that it is not subject
personally to the jurisdiction of such courts, that its property is exempt or
immune from attachment or execution, that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this agreement, the subject matter hereof, any
other document or the subject matter thereof (as applicable) may not be enforced
in or by such court and (B) hereby waives the right to assert in any such
action, suit or proceeding any offsets or counterclaims except counterclaims
that are compulsory or otherwise arise from the same subject matter. Grantor
hereby consents to service of process by mail at the address to which notices
are to be given to it pursuant to this Agreement. Grantor agrees that its
submission to jurisdiction and consent to service of process by mail is made for
the express benefit of the Secured Party. Final judgment against Grantor in any
such action, suit or proceeding shall be conclusive, and may be enforced in any
other jurisdiction (x) by suit, action or proceeding on the judgment, a
certified or true copy of which shall be conclusive evidence of the fact and of
the amount of indebtedness or liability of the Grantor therein described or (y)
in any other manner provided by or pursuant to the laws of such other
jurisdiction, provided, however, that the Secured Party may at its option bring
suit, or institute other judicial proceedings against a Grantor or any of its
assets in any state or Federal court of the United States or of any country or
place where the Grantor or such assets may be found.
15.12. Headings. Section and sub-section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
15.13. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibitions or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
15.14. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same instrument. Delivery of
an executed signature page of this Agreement by facsimile shall be as effective
as delivery of a manually executed counterpart of this Agreement.
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15.15. Acknowledgement of Grantor. Grantor acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement;
(b) the Secured Party has no fiduciary relationship with or duty to
Grantor arising out of or in connection with this Agreement and the relationship
between the Grantor, on the one hand, and the Secured Party, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor;
(c) it has received a copy of this Agreement; and
(d) no joint ventures created hereby or otherwise exists by virtue of the
transactions contemplated hereby between the Grantor and the Secured Party.
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IN WITNESS WHEREOF, the parties hereto have caused this Security and Pledge
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
GRANTOR:
ALPNET, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President of Finance and
Chief Financial Officer
SECURED PARTY:
ARCTIC, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
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Schedule 1 - Locations of Chief Executive Office, Records, Trade Names, Etc.
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Suite 100
Salt Lake City, Utah 84124-3543
USA
Alpnet UK Limited
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Alpnet Holdings CV
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ALPNET, Inc. currently uses no other trade names.