BORROWER STOCKHOLDERS PLEDGE AGREEMENT
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This BORROWER STOCKHOLDERS PLEDGE AGREEMENT, dated as of September 6,
2002 (together with all amendments, if any, from time to time hereto, this
"AGREEMENT"), is made by and among EACH OF THE PLEDGORS SIGNATORY HERETO AND
EACH ADDITIONAL PARTY THAT BECOMES A PLEDGOR HERETO PURSUANT TO SECTION 21
HEREOF (together with their respective successors and assigns, collectively,
"PLEDGORS" and each individually, "PLEDGOR"), and GENERAL ELECTRIC CAPITAL
CORPORATION, in its capacity as Agent ("AGENT") for itself and the lenders from
time to time party to the Credit Agreement referred to below ("LENDERS").
W I T N E S S E T H:
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WHEREAS, pursuant to that certain Credit Agreement, dated as of the
date hereof, by and among AlbaHealth, LLC, a Delaware limited liability company
("BORROWER"), the other Credit Parties signatory thereto, General Electric
Capital Corporation, for itself, as Lender, and as Agent for Lenders, and the
other Lenders signatory thereto from time to time (including all annexes,
exhibits and schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the "CREDIT AGREEMENT"), the Lenders have
agreed to make the Loans and to incur the Letter of Credit Obligations on behalf
of the Borrower;
WHEREAS, Pledgors are the respective record and beneficial owners of
the Pledged Shares listed in Part A of SCHEDULE I hereto and the respective
owners of the Pledged Indebtedness listed in Part B of SCHEDULE I;
WHEREAS, Pledgors collectively own all of the Stock of Borrower and
will directly or indirectly benefit from the credit facilities made available to
Borrower under the Credit Agreement; and
WHEREAS, in order to induce Agent and Lenders to enter into the Credit
Agreement and the other Loan Documents and to induce Agent and Lenders to make
the Loans and to incur the Letter of Credit Obligations as provided for in the
Credit Agreement, Pledgors have agreed to pledge the Pledged Collateral to Agent
in accordance herewith.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained and to induce Lenders to make the Loans and to incur
the Letter of Credit Obligations under the Credit Agreement, it is agreed
as follows:
1. DEFINITIONS. Unless otherwise defined herein, terms defined in
the Credit Agreement or in ANNEX A thereto are used herein (including the
recitals hereof) as therein defined, and the following shall have the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):
"ACT" means the Securities Act of 1933, as amended from time to time,
and any successor statute thereto.
"BANKRUPTCY CODE" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, as amended from
time to time, and any successor statute thereto.
"OPERATING AGREEMENT" means each limited liability company agreement,
operating agreement or similar agreement identified on Part A of SCHEDULE I
hereto relating to Pledged Shares consisting of a membership interest in a
limited liability company, in each case, as amended, supplemented or otherwise
modified from time to time.
"PLEDGED COLLATERAL" has the meaning assigned to such term in SECTION 2
hereof.
"PLEDGED ENTITY" means an issuer of Pledged Shares or Pledged
Indebtedness.
"PLEDGED INDEBTEDNESS" means, with respect to any Pledgor or Pledgors,
the Indebtedness of any Credit Party or any of its Subsidiaries evidenced by
promissory notes and instruments listed on Part B of SCHEDULE I hereto.
"PLEDGED SHARES" means, with respect to any Pledgor or Pledgors, those
shares of Stock held by such Pledgor or Pledgors listed on Part A of SCHEDULE I
hereto.
"SECURED OBLIGATIONS" has the meaning assigned to such term in SECTION
3 hereof.
2. PLEDGE. Each Pledgor hereby pledges to Agent, and grants to Agent
for itself and the benefit of the Lenders, a first priority security interest in
(subject to SECTION 7) all of the following (collectively, the "PLEDGED
COLLATERAL"):
(a) such Pledgor's Pledged Shares and the certificates
representing such Pledged Shares, and all dividends, distributions, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed and to the extent applicable,
allocations of profit and losses in respect of or in exchange for any or
all of such Pledged Shares;
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(b) any additional shares of Stock, or other right, title or
interest in, the equity of any Credit Party from time to time acquired by
such Pledgor in any manner (which shares shall be deemed to be part of such
Pledgor's Pledged Shares), and any certificates representing such Stock,
and all dividends, distributions, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Stock;
(c) such Pledgor's Pledged Indebtedness and the promissory notes
or instruments evidencing such Pledged Indebtedness, and all interest,
cash, instruments and other property and assets from time to time received,
receivable or otherwise distributed in respect of such Pledged
Indebtedness; and
(d) all additional Indebtedness arising after the date hereof
and owing to such Pledgor by any Credit Party (which Indebtedness shall be
deemed to be part of such Pledgor's Pledged Indebtedness) evidenced by
promissory notes or other instruments, together with such promissory notes
and instruments, and all interest, cash, instruments and other property and
assets from time to time received, receivable or otherwise distributed in
respect of such Pledged Indebtedness.
3. SECURITY FOR OBLIGATIONS; DELIVERY OF PLEDGED COLLATERAL.
(a) This Agreement secures, and the Pledged Collateral is
security for, the prompt payment in full when due, whether at stated
maturity, by acceleration or otherwise, and performance of all Obligations
of any kind under or in connection with the Credit Agreement and the other
Loan Documents and all obligations of Pledgors now or hereafter existing
under this Agreement including, without limitation, all fees, costs and
expenses whether in connection with collection actions hereunder or
otherwise (collectively, the "SECURED OBLIGATIONS").
(b) All certificates and all promissory notes and instruments
evidencing the Pledged Collateral shall be delivered to and held by or on
behalf of Agent, for itself and the benefit of Lenders, pursuant hereto.
All Pledged Shares evidenced by certificates shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to Agent and all promissory notes or
other instruments evidencing the Pledged Indebtedness shall be endorsed by
the applicable Pledgor, in form and substance reasonably satisfactory to
Agent. Each Pledgor has caused each such Pledged Entity to record on its
books and records the pledge created by it hereby and to execute and
deliver the Acknowledgment and Consent in the form of SCHEDULE II hereto.
Each Pledgor hereby authorizes Agent to attach each Pledge Amendment to
this Agreement and agrees that all Pledged Shares and Pledged Indebtedness
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listed on any Pledge Amendment delivered to Agent shall for all purposes
hereunder be considered Pledged Collateral.
4. INSTRUCTIONS TO PLEDGED ENTITY. Each Pledgor hereby authorizes
and instructs each Pledged Entity listed on Part A of SCHEDULE I hereto to
comply with any instruction received by it from Agent without any further order
or further consent or instructions from Pledgor and Pledgor agrees that each
Pledged Entity shall be fully protected in so complying.
5. REPRESENTATIONS AND WARRANTIES. Each Pledgor represents and
warrants, with respect to itself, to Agent that:
(a) Such Pledgor is, and at the time of its pledge of any
Pledged Collateral hereunder will be, the sole holder of record and the
sole beneficial owner of such Pledged Collateral free and clear of any Lien
thereon or affecting the title thereto;
(b) All of the Pledged Shares pledged by such Pledgor are
presently owned by such Pledgor and are presently represented by the
certificates as listed on Part A of SCHEDULE I hereto. As of the date
hereof, other than as set forth in the Limited Liability Agreement of the
Borrower, there are no existing options, warrants, calls, purchase rights
or commitments of any character whatsoever relating to the Pledged Shares
to which such Pledgor is a party other than the Put Option Agreement and
the Limited Liability Company Agreement;
(c) No consent, approval, authorization or other order or other
action by, and no notice to or filing with, any Governmental Authority or
any other Person is required for the exercise by Agent of the voting or
other rights provided for in this Agreement or the remedies in respect of
such Pledgor's Pledged Collateral pursuant to this Agreement, except as may
be required in connection with such disposition by laws affecting the
offering and sale of securities generally;
(d) The pledge, assignment and delivery of such Pledgor's
Pledged Collateral pursuant to this Agreement will create a valid first
priority Lien on and a first priority perfected security interest in favor
of the Agent for the benefit of Agent and Lenders in such Pledged
Collateral and the proceeds thereof, securing the payment of the Secured
Obligations, subject to no other Lien;
(e) The execution, delivery and performance by such Pledgor of
this Agreement and the creation of all Liens provided for herein: (a) are
within such Person's corporate or organizational power; (b) have been duly
authorized by all necessary corporate, limited liability company or limited
partnership action; (c) do not contravene any provision of such Person's
charter, bylaws or partnership or operating agreement as applicable; (d) do
not violate any law or
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regulation, or any order or decree of any court or Governmental Authority
applicable to such Pledgor; (e) do not conflict with or result in the
breach or termination of, constitute a default under or accelerate or
permit the acceleration of any performance required by, any material
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which such Person is a party or by which such Person or any of its property
is bound; (f) do not result in the creation or imposition of any Lien upon
any of the property of such Person other than those in favor of Agent, on
behalf of itself and Lenders, pursuant to the Loan Documents; and (g) do
not require the consent or approval of any Governmental Authority or any
other Person other than those which have been obtained. This Agreement has
been duly executed and delivered by such Pledgor and constitutes a legal,
valid and binding obligation of such Pledgor enforceable against it in
accordance with its terms;
(f) Except as set forth in Part B of SCHEDULE I with respect to
such Pledgor, there does not exist any Indebtedness owing to such Pledgor
by any Credit Party evidenced by promissory notes or other instruments.
(g) Such Pledgor is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company
Act of 1940. No Pledgor is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, or any other federal or
state statute that restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder;
(h) Except as set forth in Section 3.14 of the Credit Agreement,
to such Pledgor's knowledge, no broker or finder brought about the
obtaining, making or closing of the Loans or the Related Transactions, and
neither Pledgor nor an Affiliate thereof has any obligation to any Person
in respect of any finder's or brokerage fees in connection therewith;
(i) No action, claim, lawsuit, demand, investigation or
proceeding is now pending or, to the knowledge of such Pledgor, threatened
against such Pledgor, before any Governmental Authority or before any
arbitrator or panel of arbitrators that challenges such Pledgor's right or
power to enter into or perform any of its obligations under this Agreement
or the validity or enforceability of any Related Transaction Document to
which it is a party or any action taken thereunder; and
(j) Such Pledgor's Pledged Indebtedness is not subordinated in
right of payment to other Indebtedness (except for the Secured Obligations)
or subject to the terms of an indenture.
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The representations and warranties set forth in this SECTION 5 shall survive the
execution and delivery of this Agreement.
6. COVENANTS. Each Pledgor covenants and agrees that until the
Termination Date:
(a) Without the prior written consent of Agent, such Pledgor
will not sell, assign, transfer, pledge, or otherwise encumber any of its
rights in or to the Pledged Collateral, or any unpaid dividends, interest
or other distributions or payments with respect to the Pledged Collateral
or ▇▇▇▇▇ ▇ ▇▇▇▇ in the Pledged Collateral, unless, in each case, otherwise
expressly permitted by this Agreement;
(b) Such Pledgor will, at its expense, (i) promptly execute,
acknowledge and deliver all such instruments and take all such actions as
Agent from time to time may reasonably request in order to ensure to Agent
and Lenders the benefits of the Liens in and to the Pledged Collateral
pledged by it and intended to be created by this Agreement, including the
filing of any necessary Code financing statements, which may be filed by
Agent with or (to the extent permitted by law) without the signature of
such Pledgor, and (ii) will cooperate with Agent, at such Pledgor's
expense, in obtaining all necessary approvals and making all necessary
filings under federal, state, local or foreign law in connection with such
Liens or any sale or transfer of the Pledged Collateral;
(c) Such Pledgor has and will defend the title to the Pledged
Collateral pledged by it and the Liens of Agent in such Pledged Collateral
against the claim of any Person claiming by or through such Pledgor and
will maintain and preserve such Liens;
(d) Such Pledgor will, upon obtaining ownership of any
additional Stock or promissory notes or instruments of any Credit Party or
any of their other Subsidiaries, which Stock, notes or instruments are not
already Pledged Collateral, promptly (and in any event within five (5)
Business Days) deliver to Agent a Pledge Amendment, duly executed by such
Pledgor, in substantially the form of EXHIBIT A attached hereto (a "PLEDGE
AMENDMENT") in respect of any such additional Stock, notes or instruments,
pursuant to which such Pledgor shall pledge to Agent all of such additional
Stock, notes and instruments. Such Pledgor hereby authorizes Agent to
attach each Pledge Amendment to this Agreement and agrees that all Pledged
Shares and Pledged Indebtedness listed on any Pledge Amendment delivered to
Agent shall for all purposes hereunder be considered Pledged Collateral;
and such Pledgor shall not consent to any amendments to the Pledged
Entity's certificate of incorporation, by-laws, operating agreements or
other organizational or governing documents (to the extent it can control
such action) without the prior written consent of Agent which consent shall
not be unreasonably withheld if such amendments are not in any
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manner inconsistent with the terms hereof or adverse to the interests of
the Lenders and so long as such amendments could not reasonably be expected
to cause a Material Adverse Effect;
(e) Each Pledgor shall comply with all federal, state, local and
foreign laws and regulations applicable to it except to the extent that
such non-compliance would not reasonably be expected to have a material
adverse impact on such Pledgor and its ability to perform under this
Agreement or any other Loan Document;
(f) Such Pledgor shall not (a) change its name as it appears in
official filings in the state of its organization (b) change the type of
entity that it is, (c) change its organization identification number, if
any, issued by its state of incorporation or other organization, or (d)
change its state of organization, in each case without prior written notice
to Agent;
The covenants set forth in this SECTION 6 shall survive the execution
and delivery of this Agreement.
7. PLEDGORS' RIGHTS. As long as no Default or Event of Default shall
have occurred and be continuing and until written notice shall be given to
Pledgors in accordance with SECTION 8(A) hereof:
(a) Pledgors shall have the right, from time to time, to vote
and give consents with respect to the Pledged Collateral, or any part
thereof for all purposes not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document; PROVIDED,
HOWEVER, that no vote shall be cast, and no consent shall be given or
action taken, which would have the effect of impairing the position or
interest of Agent in respect of the Pledged Collateral or which would
authorize, effect or consent to (unless and to the extent expressly
permitted by the Credit Agreement):
(i) the dissolution or liquidation, in whole or in part,
of a Pledged Entity;
1 (ii) the consolidation or merger of a Pledged Entity with
any other Person;
(iii) the sale, disposition or encumbrance of all or
substantially all of the assets of a Pledged Entity, except for Liens in
favor of Agent;
(iv) any change in the authorized number of shares, the
stated capital or the authorized share capital of a Pledged Entity or the
issuance of any additional shares of such Pledged Entity's Stock or the
issuance of any other
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interests convertible into or granting the right to purchase or receive any
additional shares of stock; or
(v) the alteration of the voting rights with respect to
the Stock of a Pledged Entity;
(b)
(i) Pledgors shall be entitled, from time to time, to
collect and receive for its own use all cash dividends, other distributions
and interest paid in respect of the Pledged Collateral to the extent not in
violation of the Credit Agreement or any other Loan Document other than any
and all: (A) dividends, other distributions and interest paid or payable
other than in cash in respect of any Pledged Collateral, and instruments
and other property received, receivable or otherwise distributed in respect
of, or in exchange for, any Pledged Collateral; (B) dividends and other
distributions paid or payable in cash in respect of any Pledged Shares in
connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in capital
of a Pledged Entity; and (C) cash paid, payable or otherwise distributed,
in respect of principal of, or in redemption of, or in exchange for, any
Pledged Collateral which is not expressly permitted by the Credit
Agreement; PROVIDED, that, whether or not an Event of Default shall have
occurred and be continuing, Pledgors shall be entitled to collect and
receive all distributions permitted under Section 6.14(f) of the Credit
Agreement unless and until Agent exercises its right to transfer the
Pledged Collateral pursuant to Section 8 hereof; and PROVIDED, FURTHER,
that until actually paid all rights to such distributions shall remain
subject to the Lien created by this Agreement and that upon payment of such
distribution in accordance with the Credit Agreement, such payment shall be
free of the Lien of this Agreement and shall not constitute part of the
Pledged Collateral unless such payment is required to be returned to the
Borrower in connection with any insolvency proceeding; and
(ii) all dividends, other distributions and interest
(other than such cash dividends, other distributions and interest as are
permitted to be paid to Pledgors in accordance with clause (i) above) in
respect of any of the Pledged Shares or Pledged Indebtedness, whenever paid
or made, shall be delivered to Agent to hold as Pledged Collateral and
shall, if received by any Pledgor, be received in trust for the benefit of
Agent, be segregated from the other property or funds of such Pledgor, and
be forthwith delivered to Agent as Pledged Collateral in the same form as
so received (with any necessary endorsement).
8. DEFAULTS AND REMEDIES; PROXY.
(a) Upon the occurrence of an Event of Default and during the
continuation of such Event of Default, and concurrently with written notice
to the
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applicable Pledgor, Agent (personally or through an agent) is hereby
authorized and empowered to transfer and register in its name or in the
name of its nominee the whole or any part of the Pledged Collateral, to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger
denominations, to exercise the voting and all other rights as a holder with
respect thereto, to collect and receive all cash dividends, interest,
principal and other distributions made thereon (other than distributions
made in compliance with the first proviso of SECTION 7(B)(I) above), to
sell in one or more sales after ten (10) days' notice of the time and place
of any public sale or of the time at which a private sale is to take place
(which notice Pledgors agree is commercially reasonable) the whole or any
part of the Pledged Collateral and to otherwise act with respect to the
Pledged Collateral as though Agent was the outright owner thereof. Any sale
shall be made at a public or private sale at Agent's place of business, or
at any place to be named in the notice of sale, either for cash or upon
credit or for future delivery at such price as Agent may deem fair, and
Agent may be the purchaser of the whole or any part of the Pledged
Collateral so sold and hold the same thereafter in its own right free from
any claim of Pledgors or any right of redemption. Each sale shall be made
to the highest bidder, but Agent reserves the right to reject any and all
bids at such sale which, in its discretion, it shall deem inadequate.
Demands of performance, except as otherwise herein specifically provided
for, notices of sale, advertisements and the presence of property at sale
are hereby waived and any sale hereunder may be conducted by an auctioneer
or any officer or agent of Agent. EACH PLEDGOR HEREBY IRREVOCABLY
CONSTITUTES AND APPOINTS AGENT AS THE PROXY AND ATTORNEY-IN-FACT OF SUCH
PLEDGOR WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE
THE PLEDGED SHARES FOLLOWING THE OCCURRENCE AND DURING THE CONTINUANCE OF
AN EVENT OF DEFAULT, WITH FULL POWER OF SUBSTITUTION TO DO SO. THE
APPOINTMENT OF AGENT AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN
INTEREST AND SHALL BE IRREVOCABLE UNTIL THE TERMINATION DATE. IN ADDITION
TO THE RIGHT TO VOTE THE PLEDGED SHARES, THE APPOINTMENT OF AGENT AS PROXY
AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS,
POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED SHARES
WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF
SHAREHOLDERS OR MEMBERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS OR
MEMBERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE,
AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY
TRANSFER OF ANY PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER THEREOF)
BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED SHARES OR ANY OFFICER OR
AGENT THEREOF), UPON
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THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT.
NOTWITHSTANDING THE FOREGOING, AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE
ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY
FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO.
(b) If, at the original time or times appointed for the sale of
the whole or any part of the Pledged Collateral, the highest bid, if there
be but one sale, shall be inadequate to discharge in full all the Secured
Obligations, or if the Pledged Collateral be offered for sale in lots, if
at any of such sales, the highest bid for the lot offered for sale would
indicate to Agent, in its discretion, that the proceeds of the sales of the
whole of the Pledged Collateral would be unlikely to be sufficient to
discharge all the Secured Obligations, Agent may, on one or more occasions
and in its discretion, postpone any of said sales by public announcement at
the time of sale or the time of previous postponement of sale, and no other
notice of such postponement or postponements of sale need be given, any
other notice being hereby waived; PROVIDED, HOWEVER, that any sale or sales
made after such postponement shall be after ten (10) days' notice to
Pledgors.
(c) If, at any time when Agent in its sole discretion
determines, following the occurrence and during the continuance of an Event
of Default or a violation of the Agreement, that, in connection with any
actual or contemplated exercise of its rights (when permitted under this
SECTION 8) to sell the whole or any part of the Pledged Collateral
hereunder, it is necessary or advisable to effect a public registration of
all or part of the Pledged Collateral pursuant to the Act, each Pledgor
shall, use good faith and commercially reasonable efforts to, in an
expeditious manner, cause the Pledged Entities listed on Part A and Part B
of SCHEDULE I to, at the expense of such Pledge Entities;
(i) Prepare and file with the Securities and Exchange
Commission (the "COMMISSION") a registration statement with respect to the
Pledged Collateral and in good faith use commercially reasonable efforts to
cause such registration statement to become and remain effective;
(ii) Prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Act with
respect to the sale or other disposition of the Pledged Collateral covered
by such registration statement whenever Agent shall desire to sell or
otherwise dispose of the Pledged Collateral;
(iii) Furnish to Agent such numbers of copies of a
prospectus and a preliminary prospectus, in conformity with the
requirements of
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the Act, and such other documents as Agent may request in order to
facilitate the public sale or other disposition of the Pledged Collateral
by Agent;
(iv) Use commercially reasonable efforts to register or
qualify the Pledged Collateral covered by such registration statement under
such other securities or blue sky laws of such jurisdictions within the
United States and Puerto Rico as Agent shall request, and do such other
reasonable acts and things as may be required of it to enable Agent to
consummate the public sale or other disposition in such jurisdictions of
the Pledged Collateral by Agent;
(v) Furnish, at the request of Agent, on the date that
the Pledged Collateral is delivered to the underwriters for sale pursuant
to such registration or, if the security is not being sold through
underwriters, on the date that the registration statement with respect to
such Pledged Collateral becomes effective, (A) an opinion, dated such date,
of the independent counsel representing such registrant for the purposes of
such registration, addressed to the underwriters, if any, and in the event
the Pledged Collateral are not being sold through underwriters, then to
Agent, in customary form and covering matters of the type customarily
covered in such legal opinions; and (B) a comfort letter, dated such date,
from the independent certified public accountants of such registrant,
addressed to the underwriters, if any, and in the event the Pledged
Collateral are not being sold through underwriters, then to Agent, in a
customary form and covering matters of the type customarily covered by such
comfort letters and as the underwriters or Agent shall reasonably request.
The opinion of counsel referred to above shall additionally cover such
other legal matters with respect to the registration in respect of which
such opinion is being given as Agent may reasonably request. The letter
referred to above from the independent certified public accountants shall
additionally cover such other financial matters (including information as
to the period ending not more than five (5) Business Days prior to the date
of such letter) with respect to the registration in respect of which such
letter is being given as Agent may reasonably request; and
(vi) Otherwise use commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission, and
make available to its security holders, as soon as reasonably practicable
but not later than 18 months after the effective date of the registration
statement, an earnings statement covering the period of at least 12 months
beginning with the first full month after the effective date of such
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Act.
(d) All expenses incurred in complying with SECTION 8(C) hereof,
including, without limitation, all registration and filing fees (including
all expenses incident to filing with the National Association of Securities
Dealers, Inc.), printing expenses, fees and disbursements of counsel for
the registrant, the
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fees and expenses of counsel for Agent or any Pledgor, expenses of the
independent certified public accountants (including any special audits
incident to or required by any such registration) and expenses of complying
with the securities or blue sky laws or any jurisdictions, shall be paid by
the applicable Pledged Entities. Anything in SECTION 8.3(C) or 23
notwithstanding, (i) no Pledgor shall be obligated to incur any cost or
expense (or to take any action which causes it to incur any cost or
expense) without prior reimbursement therefor from the applicable Pledged
Entity and (ii) no Pledgor shall be obligated to incur any liability
(contingent or otherwise) without indemnification (and collateral therefor)
reasonably acceptable to such Pledgor.
(e) If, at any time when Agent shall determine to exercise its
right to sell the whole or any part of the Pledged Collateral hereunder,
such Pledged Collateral or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under the Act, Agent may, in
its discretion (subject only to applicable requirements of law), sell such
Pledged Collateral or part thereof by private sale in such manner and under
such circumstances as Agent may deem necessary or advisable, but subject to
the other requirements of this SECTION 8, and shall not be required to
effect such registration or to cause the same to be effected. Without
limiting the generality of the foregoing, in any such event, Agent in its
discretion (x) may, in accordance with applicable securities laws, proceed
to make such private sale notwithstanding that a registration statement for
the purpose of registering such Pledged Collateral or part thereof could be
or shall have been filed under said Act (or similar statute), (y) may
approach and negotiate with a single possible purchaser to effect such
sale, and (z) may restrict such sale to a purchaser who is an accredited
investor under the Act and who will represent and agree that such purchaser
is purchasing for its own account, for investment and not with a view to
the distribution or sale of such Pledged Collateral or any part thereof. In
addition to a private sale as provided above in this SECTION 8, if any of
the Pledged Collateral shall not be freely distributable to the public
without registration under the Act (or similar statute) at the time of any
proposed sale pursuant to this SECTION 8, then Agent shall not be required
to effect such registration or cause the same to be effected but, in its
discretion (subject only to applicable requirements of law), may require
that any sale hereunder (including a sale at auction) be conducted subject
to restrictions:
(i) as to the financial sophistication and ability of any
Person permitted to bid or purchase at any such sale;
(ii) as to the content of legends to be placed upon any
certificates representing the Pledged Collateral sold in such sale,
including restrictions on future transfer thereof;
12
(iii) as to the representations required to be made by each
Person bidding or purchasing at such sale relating to that Person's access
to financial information about any Pledgor and such Person's intentions as
to the holding of the Pledged Collateral so sold for investment for its own
account and not with a view to the distribution thereof; and
(iv) as to such other matters as Agent may, in its
discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance
with the Bankruptcy Code and other laws affecting the enforcement of
creditors' rights and the Act and all applicable state securities laws.
(f) Pledgors recognize that Agent may be unable to effect a
public sale of any or all the Pledged Collateral and may be compelled to
resort to one or more private sales thereof in accordance with clause (e)
above. Pledgors also acknowledge that any such private sale may result in
prices and other terms less favorable to the seller than if such sale were
a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by virtue of such sale being private. Agent
shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit the Pledged Entity to
register such securities for public sale under the Act, or under applicable
state securities laws, even if the applicable Pledgor and the Pledged
Entity would agree to do so.
(g) Each Pledgor agrees to the maximum extent permitted by
applicable law that following the occurrence and during the continuance of
an Event of Default it will not at any time plead, claim or take the
benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay the
enforcement of this Agreement, or the absolute sale of the whole or any
part of the Pledged Collateral or the possession thereof by any purchaser
at any sale hereunder, and each Pledgor waives the benefit of all such laws
to the extent it lawfully may do so. Each Pledgor agrees that it will not
interfere with any right, power and remedy of Agent provided for in this
Agreement or now or hereafter existing at law or in equity or by statute or
otherwise, or the exercise or beginning of the exercise by Agent of any one
or more of such rights, powers or remedies. No failure or delay on the part
of Agent to exercise any such right, power or remedy and no notice or
demand which may be given to or made upon any Pledgor by Agent with respect
to any such remedies shall operate as a waiver thereof, or limit or impair
Agent's right to take any action or to exercise any power or remedy
hereunder, without notice or demand, or prejudice its rights as against any
Pledgor in any respect.
13
(h) Each Pledgor further agrees that a breach of any of the
covenants contained in this Agreement will cause irreparable injury to
Agent, that Agent shall have no adequate remedy at law in respect of such
breach and, as a consequence, agrees that each and every covenant contained
in this Agreement shall be specifically enforceable against such Pledgor,
and each Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that the Secured Obligations are not then due and payable in
accordance with the agreements and instruments governing and evidencing
such obligations.
9. WAIVER. No delay on Agent's part in exercising any power of sale,
Lien, option or other right hereunder, and no notice or demand which may be
given to or made upon any Pledgor by Agent with respect to any power of sale,
Lien, option or other right hereunder, shall constitute a waiver thereof, or
limit or impair Agent's right to take any action or to exercise any power of
sale, Lien, option, or any other right hereunder, without notice or demand, or
prejudice Agent's rights as against any Pledgor in any respect.
10. ASSIGNMENT. Agent may assign, indorse or transfer any instrument
evidencing all or any part of the Secured Obligations as provided in, and in
accordance with, the Credit Agreement, and the holder of such instrument shall
be entitled to the benefits of this Agreement.
11. TERMINATION. Immediately following the Termination Date, Agent
shall deliver to each Pledgor the Pledged Collateral pledged by such Pledgor at
the time subject to this Agreement and all instruments of assignment executed in
connection therewith, free and clear of the Liens hereof and, except as
otherwise provided herein, all of Pledgors' obligations hereunder shall at such
time terminate.
12. LIEN ABSOLUTE. All rights of Agent hereunder, and all obligations
of Pledgors hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any part of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
(c) any exchange, release or non-perfection of any other
Collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
14
(d) the insolvency of any Credit Party or Pledgor; or
(e) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Pledgor.
13. RELEASE. Each Pledgor, in its capacity as Pledgor, consents and
agrees that Agent may at any time, or from time to time, in its discretion:
(a) renew, extend or change the time of payment, and/or the
manner, place or terms of payment of all or any part of the Secured
Obligations; and
(b) exchange, release and/or surrender all or any of the
Collateral (including the Pledged Collateral), or any part thereof, by
whomsoever deposited, which is now or may hereafter be held by Agent in
connection with all or any of the Secured Obligations; all in such manner
and upon such terms as Agent may deem proper, and without notice to or
further assent from Pledgors, it being hereby agreed that Pledgors shall be
and remain bound upon this Agreement, irrespective of the value or
condition of any of the Collateral, and notwithstanding any such change,
exchange, settlement, compromise, surrender, release, renewal or extension,
and notwithstanding also that the Secured Obligations may, at any time,
exceed the aggregate principal amount thereof set forth in the Credit
Agreement, or any other agreement governing any Secured Obligations.
Pledgors hereby waive notice of acceptance of this Agreement, and also
presentment, demand, protest and notice of dishonor of any and all of the
Secured Obligations, and promptness in commencing suit against any party
hereto or liable hereon, and in giving any notice to or of making any claim
or demand hereunder upon Pledgors. No act or omission of any kind on
Agent's part shall in any event affect or impair this Agreement.
14. REINSTATEMENT. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Credit Party, any Pledgor or any Pledged Entity for liquidation or
reorganization, should any Credit Party, any Pledgor or any Pledged Entity
become insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any Credit
Party, any Pledgor's or any Pledged Entity's assets, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a "voidable
preference", "fraudulent conveyance", or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Secured Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
15
15. MISCELLANEOUS.
(a) Agent may execute any of its duties hereunder by or through
agents or employees and shall be entitled to advice of counsel concerning
all matters pertaining to its duties hereunder.
(b) Each Pledgor, severally and not jointly, agrees to promptly
reimburse Agent for actual out-of-pocket expenses, including, without
limitation, reasonable counsel fees, incurred by Agent in connection with
the enforcement of this Agreement against such Pledgor.
(c) Neither Agent nor any Lender or any of its respective
officers, directors, employees, agents or counsel shall be liable for any
action lawfully taken or omitted to be taken by it or them hereunder or in
connection herewith, except for its or their own gross negligence or
willful misconduct as finally determined by a court of competent
jurisdiction.
(d) THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE
BENEFIT OF EACH PLEDGOR AND AGENT AND THEIR RESPECTIVE SUCCESSORS AND
ASSIGNS (INCLUDING IN THE CASE OF ANY PLEDGOR A DEBTOR-IN-POSSESSION ON
BEHALF OF SUCH PLEDGOR). NO PLEDGOR MAY ASSIGN, SELL, HYPOTHECATE OR
OTHERWISE TRANSFER ANY INTEREST IN OR OBLIGATION UNDER THIS AGREEMENT
WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF AGENT. NO SALES OF
PARTICIPATIONS, OTHER SALES, ASSIGNMENTS, TRANSFERS OR OTHER DISPOSITIONS
OF ANY AGREEMENT GOVERNING OR INSTRUMENT EVIDENCING THE SECURED OBLIGATIONS
OR ANY PORTION THEREIN OR INTEREST THEREON SHALL IN ANY MANNER IMPAIR THE
LIEN GRANTED TO AGENT FOR ITS AND LENDERS BENEFIT HEREUNDER.
(e) THIS AGREEMENT, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH
PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN PLEDGORS,
AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OF THE OTHER
16
LOAN DOCUMENTS; PROVIDED, THAT AGENT, LENDERS AND THE PLEDGORS ACKNOWLEDGE
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇; PROVIDED FURTHER, THAT NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT
OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT. EACH PARTY HERETO
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY
WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO
THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY
SUCH COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS
SET FORTH IN ANNEX A HERETO AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR 3 DAYS
AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
(f) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE
THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND
ANY PLEDGOR ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
17
(g) Agent's or any Lender's failure, at any time or times, to
require strict performance by the Pledgors of any provision of this
Agreement shall not waive, affect or diminish any right of Agent thereafter
to demand strict compliance and performance herewith or therewith. None of
the undertakings, agreements, warranties, covenants and representations of
any Pledgor contained in this Agreement by any Pledgor shall be deemed to
have been suspended or waived by Agent, unless such waiver or suspension is
by an instrument in writing signed by an officer of or other authorized
employee of Agent, and directed to Borrower specifying such suspension or
waiver.
16. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in a manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement. This Agreement is to be
read, construed and applied together with the Credit Agreement and the other
Loan Documents which, taken together, set forth the complete understanding and
agreement of Agent, Lenders and Pledgors with respect to the matters referred to
herein and therein.
17. NOTICES. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to or served upon any of the parties by any other party, or whenever any
of the parties desires to give or serve upon another any such communication with
respect to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be addressed to
the party to be notified at the address set forth in ANNEX A attached hereto.
18. SECTION TITLES. The Section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
19. COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
20. BENEFIT OF LENDERS. All security interests granted or
contemplated hereby shall be for the benefit of Agent and the other Lenders, and
all proceeds or payments realized from the Pledged Collateral in accordance
herewith shall be applied to the Obligations in accordance with the terms of the
Credit Agreement.
21. ADDITIONAL PLEDGORS. The initial Pledgors hereunder shall be the
parties signatories hereto on the date hereof. From time to time subsequent to
the date hereof, additional Persons may become parties hereto, as additional
Pledgors (each, an "ADDITIONAL PLEDGOR"), by executing a counterpart of this
Agreement substantially in the
18
form of EXHIBIT B attached hereto. Upon delivery of any such counterpart to
Agent, notice of which is hereby waived by the Pledgors, each Additional Pledgor
shall be a Pledgor and shall be as fully a party hereto as if such Additional
Pledgor were an original signatory hereto. Each Pledgor expressly agrees that
its obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Pledgor hereunder nor by any election of Agent
not to cause any Subsidiary of any Pledgor to become an Additional Pledgor
hereunder. This Agreement shall be fully effective as to any Pledgor that is or
becomes a party hereto regardless of whether any other Person becomes or fails
to become or ceases to be a Pledgor hereunder.
22. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
23. FURTHER ASSURANCES. Each Pledgor executing this Agreement agrees
that it shall, at such Pledgor's expense and upon request of Agent, duly execute
and deliver, or cause to be duly executed and delivered, to Agent such further
instruments and do and cause to be done such further acts as may be necessary or
proper in the reasonable opinion of Agent to carry out more effectively the
provisions and purposes of this Agreement.
24. ADVICE OF COUNSEL. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of SECTION 15(E) and (F), with its counsel.
25. NATURE OF OBLIGATIONS; PRO RATA TREATMENT. (a) The
representations, covenants and undertakings of the Pledgors are several and not
joint; in no event shall any Pledgor be liable for any misrepresentation by, or
breach of any covenant or undertaking of, any other Pledgor. The Pledgors are
entering into this Agreement in order to provide additional collateral with
respect to the Secured Obligations (solely in the form and to the extent of
their respective Pledged Collateral), in no event shall any Pledgor be
personally liable to the Agent or any other holder of Secured Obligations for
the repayment of any portion of the Secured Obligations. No Pledgor makes any
representation or warranty as to the value of any of its Pledged Collateral.
(b) Agent agrees that, in taking any action against Pledged
Collateral (including without limitation, foreclosing against any such
collateral or releasing any such collateral from the Lien of this
Agreement) Agent shall not give preference to General Electric Capital
Corporation, as a Pledgor. The Pledgors hereby agree that in the event any
Pledged Collateral is sold or otherwise used to satisfy any Secured
Obligations, upon the termination of this Agreement and the return of any
remaining Pledged Collateral and regardless of the original
19
Pledgor of such Pledged Collateral, the Pledgors shall share all remaining
Pledged Collateral among themselves on the following terms and in the
following order of priority; first, to the Pledgors who pledged any Pledged
Indebtedness, cash (or, after the distribution of all cash, the fair market
value of non-cash Pledged Collateral) shall be distributed to such Pledgors
pro rata based upon the aggregate principal amount of (and accrued interest
on) Indebtedness pledged by such Pledgors (net of any payments received by
such Pledgors) until such Pledgors receive payment in full with respect to
such Pledged Indebtedness and second, to the Pledgors who pledged any
Pledged Shares (or other equity interest in Borrower), cash (or, after the
distribution of all cash, the fair market value of all remaining non-cash
Pledged Collateral) shall be distributed to such Pledgors pro rata based
upon their respective Percentage Interests (as such term is defined in the
Limited Liability Company Agreement of Borrower) immediately prior to any
such sale or use by the Agent
[SIGNATURE PAGE FOLLOWS]
20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
PLEDGORS:
ALBA-WALDENSIAN, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name:
Title:
ENCOMPASS GROUP, L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as a Pledgor
By: /s/
-------------------------------------
Name:
Title:
AGENT:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By: /s/
-------------------------------------
Name:
Its: Duly Authorized Signatory
SCHEDULE I
----------
PART A
------
PLEDGED SHARES
CORPORATIONS:
----------------------- ------------------------ ----------- ----------------- ----------- -----------------
Class % of
of Stock Cert. Number of Outstanding
Pledgor Pledged Entity Stock No.(s) Shares Shares
------- -------------- ----- ------ ------ ------
----------------------- ------------------------ ----------- ----------------- ----------- -----------------
----------------------- ------------------------ ----------- ----------------- ----------- -----------------
----------------------- ------------------------ ----------- ----------------- ----------- -----------------
----------------------- ------------------------ ----------- ----------------- ----------- -----------------
----------------------- ------------------------ ----------- ----------------- ----------- -----------------
----------------------- ------------------------ ----------- ----------------- ----------- -----------------
----------------------- ------------------------ ----------- ----------------- ----------- -----------------
----------------------- ------------------------ ----------- ----------------- ----------- -----------------
----------------------- ------------------------ ----------- ----------------- ----------- -----------------
.
----------------------- ------------------------ ----------- ----------------- ----------- -----------------
LIMITED LIABILITY COMPANIES:
PLEDGED SHARES-MEMBERSHIP INTERESTS:
----------------- ------------- -------------------------------- ---------- ------------- -----------------
Description of Pledged
Limited Liability Number % of
Pledged Company and Operating Cert. of Outstanding
Pledgor Entity Agreement No.(s) Interests Interests
----------------- ------------- -------------------------------- ---------- ------------- -----------------
Alba-Waldensian, AlbaHealth, Membership Interest of 1 48,325 48.325%
Inc., a LLC AlbaHealth, LLC, a Delaware
Delaware limited liability company
corporation governed by the Limited
Liability Company Agreement of
AlbaHealth, LLC, dated as of
September 6, 2002, by and
among AlbaHealth, LLC,
Alba-Waldensian, Inc. and
Encompass Group, L.L.C. and GE
Stockholder
----------------- ------------- -------------------------------- ---------- ------------- -----------------
----------------- ------------- -------------------------------- ---------- ------------- -----------------
Description of Pledged
Limited Liability Number % of
Pledged Company and Operating Cert. of Outstanding
Pledgor Entity Agreement No.(s) Interests Interests
----------------- ------------- -------------------------------- ---------- ------------- -----------------
Encompass AlbaHealth, Same as above. 2 48,325 48.325%
Group, L.L.C., LLC
a Delaware
limited
liability
company
----------------- ------------- -------------------------------- ---------- ------------- -----------------
GE Stockholder AlbaHealth, Same as above. 3 3,350 3.35%
LLC
----------------- ------------- -------------------------------- ---------- ------------- -----------------
PART B
------
PLEDGED INDEBTEDNESS
Alba-Waldensian, Inc.
---------------------
None.
Encompass Group LLC
None.
General Electric Capital Corporation
------------------------------------
None
SCHEDULE II
-----------
ACKNOWLEDGMENT AND CONSENT
--------------------------
General Electric Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Account Manager
[Name of Pledged Entity] ("COMPANY") hereby (i) acknowledges receipt of a
fully executed copy of the Borrower Stockholders Pledge Agreement, dated as of
__________ ___, 2002 (the "AGREEMENT"; capitalized terms used herein without
definition have the meanings provided therein), made by [Name of Pledgor]
("PLEDGOR") and certain other pledgors in favor of General Electric Capital
Corporation, as Agent ("AGENT"); (ii) consents and agrees to the pledge by
Pledgor of the Pledged Collateral pursuant to the Agreement and to all of the
other terms and provisions of the Agreement; (iii) agrees to comply with all
instructions received by it from Agent without further consent by Pledgor; [(iv)
irrevocably waives any breach or default under the Limited Liability Company
Agreement as a result of the execution, delivery and performance by Pledgor and
Agent of the Agreement; (v) advises Pledgor and Agent that a pledge of the
Pledged Stock consisting of membership interests in limited liability companies
set forth on SCHEDULE I to the Agreement has been registered on the books of
Company and in the name of the Agent and agrees to so register any additional
Pledged Stock consisting of a membership interest in a limited liability
company; (vi) represents and warrants that, except for the pledge in favor of
Agent, there are no liens, restrictions or adverse claims to which the Pledged
Collateral is or may be subject as of the date hereof; (vii) except with the
prior written consent of Agent, agrees not to admit any new Members to Company
or any limited liability company to which Company is a Member;]1 and (viii)
[(iv)] consents and agrees to any transfer of the Pledged Collateral pursuant to
SECTION 8 of the Agreement.
IN WITNESS WHEREOF, a duly authorized officer of the undersigned has
executed and delivered this Acknowledgment and Consent as of this ___ day of
____, 200_
[NAME OF PLEDGED ENTITY]
By:___________________________
Name:
Title:
----------------------------
1 Insert clauses (iv) to (vii) only for Pledged Entities which are limited
liability companies.
EXHIBIT A
TO
BORROWER STOCKHOLDERS PLEDGE AGREEMENT
This Pledge Amendment, dated ________________, ___ is delivered pursuant to
SECTION 6(D) of the Borrower Stockholders Pledge Agreement referred to below.
All defined terms herein shall have the meanings ascribed thereto or
incorporated by reference in the Borrower Stockholders Pledge Agreement. The
undersigned hereby certifies that the representations and warranties in SECTION
5 of the Borrower Stockholders Pledge Agreement are and continue to be true and
correct, both as to the promissory notes, instruments, Stock pledged by it prior
to this Pledge Amendment and as to the promissory notes, instruments, Stock
pledged pursuant to this Pledge Amendment. The undersigned further agrees that
this Pledge Amendment may be attached to that certain Borrower Stockholders
Pledge Agreement, dated as of [___________ __], 2002, among the signatories
thereto, each as a Pledgor, and General Electric Capital Corporation, as Agent,
(the "BORROWER STOCKHOLDERS PLEDGE AGREEMENT") and that the Pledged Collateral
listed on this Pledge Amendment shall be and become a part of the Pledged
Collateral referred to in said Borrower Stockholders Pledge Agreement and shall
secure all Secured Obligations referred to in said Borrower Stockholders Pledge
Agreement. The undersigned acknowledges that any promissory notes, instruments,
Stock interests not included in the Pledged Collateral at the discretion of
Agent may not otherwise be pledged by the undersigned to any other Person or
otherwise used as security for any obligations other than the Secured
Obligations.
[NAME OF PLEDGOR]
By:
-----------------------------------
Name:
Title:
PLEDGED SHARES:
-------------------------------- -------------------------- ----------------- ------------------ ---------------------
Name and Class Certificate Number
Address of Pledgor Pledged Entity of Stock Number(s) of Shares
-------------------------------- -------------------------- ----------------- ------------------ ---------------------
-------------------------------- -------------------------- ----------------- ------------------ ---------------------
-------------------------------- -------------------------- ----------------- ------------------ ---------------------
-------------------------------- -------------------------- ----------------- ------------------ ---------------------
-------------------------------- -------------------------- ----------------- ------------------ ---------------------
PLEDGED SHARES: MEMBERSHIP INTERESTS:
-------------------------- --------------------- --------------- ---------- ------------- -----------------
Description
of Pledged
Limited
Liability
Company
and Number % of
Operating Cert. of Outstanding
Pledgor Pledged Entity Agreement No.(s) Interests Interests
-------------------------- --------------------- --------------- ---------- ------------- -----------------
-------------------------- --------------------- --------------- ---------- ------------- -----------------
-------------------------- --------------------- --------------- ---------- ------------- -----------------
PLEDGED INDEBTEDNESS
-------------------------------- -------------------------- ----------------- ------------------ ---------------------
INITIAL ISSUE DATE MATURITY INTEREST RATE
MAKER PRINCIPAL AMOUNT DATE
-------------------------------- -------------------------- ----------------- ------------------ ---------------------
-------------------------------- -------------------------- ----------------- ------------------ ---------------------
-------------------------------- -------------------------- ----------------- ------------------ ---------------------
EXHIBIT B
TO
BORROWER STOCKHOLDERS PLEDGE AGREEMENT
COUNTERPART TO BORROWER STOCKHOLDERS PLEDGE AGREEMENT
-----------------------------------------------------
This counterpart, dated _________, [200__], is delivered pursuant to
SECTION 21 of that certain Borrower Stockholders Pledge Agreement dated as of
[___________ __], 2002 (as from time to time amended, modified or supplemented,
the "BORROWER STOCKHOLDERS PLEDGE AGREEMENT"; the terms defined therein and not
otherwise defined herein being used as therein defined), among the signatories
thereto, as Pledgors, and General Electric Capital Corporation, as Agent. The
undersigned hereby agrees (i) that this counterpart may be attached to the
Borrower Stockholders Pledge Agreement, and (ii) that the undersigned will
comply with and be subject to, including representations and warranties, all the
terms and conditions of the Borrower Stockholders Pledge Agreement as if it were
an original signatory thereto.
[NAME OF ADDITIONAL PLEDGOR]
By:
---------------------------------------
Name:
Title:
ANNEX A
NOTICE ADDRESSES
----------------
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Account Manager
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
And
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General Electric Capital Corporation
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Attention: Corporate Counsel - Commercial Finance
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
(B) If to Encompass Group, L.L.C., at
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Winthrop & Weinstine, P.A.
3000 ▇▇▇▇ ▇▇▇▇▇▇▇▇ Plaza
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
(C) If to Alba-Waldensian, Inc., at
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Tefron Ltd.
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Israel
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, LLP
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Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
(D) If to General Electric Capital Corporation
in its capacity as Pledgor, at
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Account Manager
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇