EXHIBIT 10.13
SECURITY AND PLEDGE AGREEMENT
THIS AGREEMENT made as of September 18, 1997, by and between TELETRAC,
INC., a Delaware corporation (the "DEBTOR"), and FLEET NATIONAL BANK, as agent
(in such capacity, together with its successors and assigns in such capacity,
the "AGENT") for the benefit of the financial institutions and other Persons
which are or which become Lenders under, and as defined in, the Credit Agreement
referred to below and any Affiliates of such Lenders with whom the Debtor shall
maintain any Rate Hedging Obligations (collectively with the Lenders, the
"SECURED PARTIES").
RECITALS
A. The Debtor, the Lenders, the Agent, as Documentation Agent for the
Lenders, and Banque Paribas, as Administrative Agent for the Lenders (in such
capacity, the "ADMINISTRATIVE AGENT"), are entering into a Credit Agreement of
even date herewith (as the same may be amended, restated, renewed, replaced,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT")
pursuant to which the Lenders are extending credit to the Debtor. In addition,
the Debtor, from time to time, may be obligated to one or more of the Lenders or
any Affiliates of such Lenders in respect of Rate Hedging Obligations.
Capitalized terms used herein without definition have the meanings assigned to
them in the Credit Agreement.
B. It is a condition to such Secured Parties' willingness to enter into
the Credit Agreement and provide to the Debtor the financing contemplated
thereby and to extend credit to the Debtor that would constitute Rate Hedging
Obligations that the Debtor shall have granted to the Secured Parties and the
Agent, for the benefit of the Secured Parties, the liens and security interests
contemplated hereby. The Debtor wishes hereby to grant such liens and security
interests.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each of the parties hereto, the
parties hereby agree as follows:
SECTION 1. THE SECURITY INTERESTS.
(a) In order to secure (i) the performance of all obligations of the
Debtor under the Credit Agreement; (ii) the due and punctual payment of the
Notes, as defined in the Credit Agreement and issued pursuant thereto, to any of
the Lenders, including, without limitation, all interest payable on the Notes at
the interest rates provided therein and in the Credit Agreement, regardless of
the extent allowed as a claim in any proceeding in respect of the bankruptcy,
reorganization or insolvency of the Debtor (a "REORGANIZATION"); (iii) the due
and punctual payment of the Debtor's notes or instruments as may hereafter from
time to time be issued in addition to, in place of or in amendment of the Notes
under the Credit Agreement, including, without limitation, all interest payable
on such notes or instruments at the interest rates provided therein, regardless
of the extent allowed as a claim in any Reorganization; (iv) the payment and
performance of all
indebtedness, liabilities and obligations of the Debtor under the other Security
Documents contemplated by the Credit Agreement; (v) the payment and performance
of all obligations, indebtedness and liabilities of the Debtor's affiliates to
any of the Agent or the Lenders under the other Security Documents; (vi) the
performance of all of the obligations of the Debtor to the Agent, the
Administrative Agent and the Secured Parties contained herein or in any of the
other Loan Documents, including without limitation all Rate Hedging Obligations
entered into with any of the Secured Parties; and (vii) the payment of all other
future advances and other obligations of the Debtor to any of the Secured
Parties, including without limitation any future loans and advances made to the
Debtor by any of the Secured Parties prior to, during or following any
Reorganization, and any and all other indebtedness, liabilities and obligations
of the Debtor to any of the Secured Parties, the Administrative Agent or the
Agent of every kind and description, direct, indirect or contingent, now or
hereafter existing, due or to become due (all of the foregoing hereinafter
called the "OBLIGATIONS"), the Debtor hereby grants to the Agent and each of the
Secured Parties a continuing security interest in, and a collateral assignment
and pledge of, the following described fixtures and personal property
(hereinafter collectively called the "COLLATERAL"), in each case to the extent,
and only to the extent, it is lawful to grant a security interest in such
property:
All fixtures and all tangible and intangible personal property of the
Debtor, whether now owned or hereafter acquired by the Debtor, or in which
the Debtor may now have or hereafter acquire an interest, including without
limitation, the following property: (A) all properties and assets of every
type used or useful in connection with the ownership, construction, design,
procurement, installation and/or operation of location, fleet management
and/or related two-way messaging systems and businesses and any and all
other communication businesses (collectively, the "COMMUNICATION
BUSINESSES"); (B) all equipment (including, without limitation, all
machinery, motor vehicles, tools, furniture, towers, transmitters, vehicle
location units and other radio transceivers, messaging units, antennas,
receivers, distribution systems and components thereof (including without
limitation hardware, cables, fiber optic cables, switches, CODECs,
amplifiers and associated devices), integrated base station units and all
other equipment relating to the operation of Communications Businesses),
inventory (including, without limitation, all merchandise, raw materials,
work in process, finished goods, and supplies) and goods, whether now owned
or hereafter acquired by the Debtor, or in which the Debtor may now have or
hereafter acquire an interest; (C) all accounts, accounts receivable, other
receivables including, without limitation, intercompany receivables,
contract rights, chattel paper, leases and general intangibles, including,
without limitation, (i) all limited partnership interests, partnership
interests and limited liability company member interests now or hereafter
held by or issued to the Debtor, (ii) all existing and future rights of the
Debtor to any refund of any tax assessed against or paid by the Debtor,
loss carryback tax refunds, insurance premium refunds, unearned premiums,
insurance proceeds, choses in action, goodwill, going concern value,
trademarks, service marks, tradenames, patents, blueprints, designs,
product lines, and research and development, and all Debtor's rights as a
tenant under any and all Leases, (iii) all computer data and the concepts
and ideas on which such data is based, all developmental ideas and concepts
and papers, plans, schematics, drawings, blueprints,
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sketches and documents, all data bases and all customer lists; (iv) all of
the Debtor's rights under all present and future authorizations, permits,
licenses and franchises (collectively the "FCC LICENSES") heretofore or
hereafter granted or assigned to the Debtor by the Federal Communications
Commission (the "FCC") or any other public or governmental agency or
regulatory body for the operation or ownership of the Communication
Businesses (excluding, however, any such FCC Licenses to the extent, and
only to the extent, it is unlawful to grant a security interest in the
same, but including, to the maximum extent permitted by law, all rights
incident or appurtenant to such FCC Licenses, including without limitation
the right to receive all proceeds derived or arising from or in connection
with the sale, assignment or transfer of such FCC Licenses), whether now
owned or hereafter acquired by the Debtor, or in which the Debtor may now
have or hereafter acquire an interest, (v) all of the Debtor's rights under
all construction contracts, public utility agreements, access agreements,
rights of way, transmitter site agreements, transmission capacity
agreements, distribution agreements and licenses, leases, permits,
authorizations and other agreements to which the Debtor is a party relating
to the Communications Businesses, whether now existing or hereafter arising
(excluding, however, any such contracts, agreements and leases, to the
extent and only to the extent, the granting of a security interest in such
agreement would violate the terms of such agreement and cause a default
thereunder), (vi) all management agreements and all other agreements for
the provision of management, engineering or similar services, agreements
with subscribers and other similar agreements to which the Debtor is a
party relating to the Communication Businesses (excluding, however, any
such contracts, agreements and leases, to the extent and only to the
extent, the granting of a security interest in such agreement would violate
the terms of such agreement and cause a default thereunder), (vii) all
other agreements relating to Communications Businesses, whether now owned
or hereafter acquired by the Debtor, or in which the Debtor may now have or
hereafter acquire an interest (excluding, however, any such agreements, to
the extent and only to the extent, the granting of a security interest in
such agreement would violate the terms of the agreement and cause a default
thereunder); and (viii) all right, title and interest, if any, under any
intercompany notes, obligations or agreements, whether now owned or
hereafter acquired by the Debtor, or in which the Debtor may now have or
hereafter acquire an interest; (D) all securities and other investment
property now or hereafter held by or issued to the Debtor, including,
without limitation, all shares of stock, warrants, options, notes,
investment contracts, partnership interests and member interests in limited
liability companies; (E) all instruments, documents of title, policies and
certificates of insurance, securities, bank deposits, deposit accounts,
checking accounts and cash now or hereafter owned by the Debtor, or in
which the Debtor may now have or hereafter acquire an interest; (F) all
accessions, additions or improvements to, all replacements, substitutions
and parts for, and all proceeds and products of, and all distributions and
dividends relating to, all of the foregoing, including proceeds of
insurance; and (G) all books, records, documents and other information
relating to all of the foregoing (on whatever medium recorded and including
without limitation computer programs, tapes, discs, punch cards, data
processing software and related property and property rights).
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(b) CUSTOMER RECEIVABLES. All Collateral consisting of accounts, contract
rights, chattel paper and general intangibles of the Debtor arising from the
sale, delivery or provision of goods and/or services are sometimes hereinafter
collectively called the "CUSTOMER RECEIVABLES".
(c) SECURITY INTERESTS. The security interests granted pursuant to this
SECTION 1 (the "SECURITY INTERESTS") are granted as security only and shall not
subject the Agent or any of the Secured Parties to, or transfer or in any way
affect or modify, any obligation or liability of the Debtor under any of the
Collateral or any transaction which gave rise thereto.
(d) COLLATERAL ACCOUNT.
(i) There is hereby established with the Agent a cash collateral
account (the "COLLATERAL ACCOUNT") in the name and under the control of the
Agent into which there shall be deposited from time to time the cash
proceeds of any of the Collateral and any other cash proceeds of insurance,
condemnation award or other compensation in respect of any casualty or
disposition affecting any property of the Debtor or any of its Subsidiaries
(whether received by the Agent or by the Debtor) required to be delivered
to the Agent pursuant hereto or the Credit Agreement and into which the
Debtor may from time to time deposit any additional amounts that the Debtor
wishes to pledge to the Agent for the benefit of the Secured Parties as
additional collateral security hereunder. The balance from time to time in
the Collateral Account shall constitute part of the Collateral hereunder
and shall not constitute payment of the Obligations until applied as
hereinafter provided.
(ii) The balance from time to time in the Collateral Account
shall be subject to withdrawal only as provided in this subparagraph (ii),
subparagraph (iv) below and in the Credit Agreement (including, without
limitation, SECTIONS 1.06 and 6.02 of the Credit Agreement). Unless an
Event of Default shall have occurred and shall be continuing, the Agent
shall (except as otherwise provided herein), remit the collected balance
outstanding to the credit of the Collateral Account to or upon the order of
the Debtor, as the Debtor shall from time to time instruct. Upon the
occurrence and during the continuance of an Event of Default, the Agent may
(and, if instructed by the Secured Parties as specified in the Credit
Agreement, shall) in its (or their) discretion apply or cause to be applied
(subject to collection) the balance from time to time outstanding to the
credit of the Collateral Account to the payment of the Obligations in the
manner specified in SECTION 13. Deposits in the Collateral Account that
constitute any proceeds of insurance, condemnation award or other
compensation in respect of any casualty or other event of the type referred
to in SECTION 1.06(B) of the Credit Agreement (a "CASUALTY EVENT"), or the
proceeds of any disposition of the type referred to in SECTION 1.06(D) of
the Credit Agreement, in each case affecting any property of the Debtor,
shall be subject to withdrawal and release only as provided in subsection
(iv) below and SECTIONS 1.06(B) and (D), resepctively, of the Credit
Agreement. Following the occurrence of any Default, the Agent shall have
no obligation to release any of such proceeds to the Debtor for restoration
or repair of damaged property.
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(iii) Promptly following the occurrence of any Casualty Event
affecting any property of the Debtor (whether or not such property is
Collateral hereunder) resulting in losses aggregating $500,000 or more, the
Debtor shall give prompt notice thereof to the Agent and, to the extent any
proceeds of insurance, condemnation award or other compensation received as
a result of such casualty are to be paid to the Agent, shall cause such
proceeds to be paid to the Agent for deposit into the Collateral Account,
as additional collateral security for the payment of the Obligations. To
the extent the Agent shall receive proceeds of any such Casualty Event
resulting in a loss of less than $500,000, the Agent will, so long as no
Default shall have occurred, remit such proceeds to the Debtor, PROVIDED,
THAT, the provisions of SECTION 6.02(B) of the Credit Agreement shall have
been satisfied.
(iv) With respect to any proceeds that are required to be paid
into the Collateral Account pursuant to subparagraphs (ii) and (iii) above,
the Agent may, at its option, if no Default has occurred, elect to apply
any proceeds of insurance, condemnation award or other compensation
received as a result of such Casualty Event either: (i) to the restoration
and repair of the property affected by such Casualty Event (the "DAMAGED
PROPERTY"); or (ii) to the prepayment of the Loans in the manner and to the
extent specified in SECTION 1.06(B) of the Credit Agreement. In all other
cases, if no Default has occurred, the Debtor may, at its option, to be
exercised by delivery of notice to the Agent within one hundred eighty
(180) days of the respective Casualty Event, elect to apply any proceeds of
insurance, condemnation award or other compensation received as a result of
such Casualty Event either: (i) to the restoration and repair of the
Damaged Property; or (ii) to the prepayment of the Loans in the manner and
to the extent specified in SECTION 1.06(B) of the Credit Agreement.
Failure of the Debtor to make such an election within one hundred eighty
(180) days after the date of any such Casualty Event shall constitute an
election to so apply such proceeds to the prepayment of the Loans as
aforesaid.
(v) If the Debtor or Agent elects to so restore and repair the
Damaged Property, any such proceeds (and any earnings thereon) held in the
Collateral Account shall be applied to the restoration and repair of the
Damaged Property and advanced by the Agent in periodic installments upon
compliance by the Debtor with such reasonable conditions to disbursement as
may be imposed by the Agent, including, but not limited to, reasonable
retention amounts and receipt of lien releases and joint checks payable to
the Debtor and any contractors, subcontractors and materialmen to whom
payment is owed in connection with any restoration, repair and replacement
of the Damaged Property.
(vi) Following the occurrence and the continuance of any
Default, the Agent shall have no obligation to release any of such proceeds
to the Debtor for restoration or repair of Damaged Property. All insurance
proceeds remaining after the payment for restoration and repair of Damaged
Property pursuant to this Section may, at the option of the Agent, be
applied to the prepayment of the Loans in the manner and extent specified
in SECTION
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1.06(B) of the Credit Agreement or (if consented to by the Secured Parties)
released to the Debtor.
(vii) Subject to the $500,000 exclusion set forth in subsection
(iii), the Agent shall be entitled at its option to participate in any
compromise, adjustment or settlement in connection with any claims for
damage or destruction under any policy or policies of insurance, and the
Debtor shall within five (5) Business Days after request therefor reimburse
the Agent for all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and disbursements) incurred by the Agent in connection with
such participation. The Debtor shall not make any compromise, adjustment
or settlement in connection with any such claim without the approval of the
Agent.
SECTION 2. DELIVERY OF PLEDGED SECURITIES AND CHATTEL PAPER.
All securities now or hereafter owned or held by the Debtor, including
without limitation, all shares of stock, warrants, options, notes, investment
contracts, partnership interests in limited or general partnerships and member
interests in limited liability companies, shall be promptly delivered to the
Agent, by the Debtor pursuant hereto (which securities, together with all other
securities and shares of stock which may hereafter be delivered to the Agent
pursuant to the terms hereof, are hereinafter called the "PLEDGED SECURITIES"),
shall be in suitable form for transfer by delivery, in the case of certificated
securities, or shall be accompanied by duly executed instruments of transfer or
assignments in blank, and accompanied in each case by any required transfer tax
stamps, all in form and substance satisfactory to the Agent. In the case of
uncertificated securities, the Debtor shall give written instructions to the
issuer thereof to register the pledge hereunder in the books and records
maintained by such issuer and such issuer, by signing a Confirmation of Issuer
in form satisfactory to the Agent, shall confirm that it has so registered said
pledge. EXHIBIT A attached hereto and made a part hereof sets forth a complete
description of all securities owned or held by the Debtor on the date hereof.
The Agent and the Secured Parties may at any time or from time to time, at
their sole discretion, require the Debtor to cause any chattel paper included in
the Customer Receivables to be delivered to the Agent or any agent or
representative designated by it for the purpose of causing a legend referring to
the Security Interests to be placed on such chattel paper and upon any ledgers
or other records concerning the Customer Receivables.
SECTION 3. FILING; FURTHER ASSURANCES.
The Debtor will, at its expense, execute, deliver, file and record (in such
manner and form as the Agent may require), or permit the Agent to file and
record, any financing statements, any carbon, photographic or other reproduction
of a financing statement or this Agreement (which shall be sufficient as a
financing statement hereunder), any specific assignments or other paper that may
be reasonably necessary or desirable, or that the Agent may reasonably request,
in order to create, preserve, perfect or validate any Security Interest or to
enable the Agent to exercise and enforce its rights and the rights of the
Secured Parties hereunder with respect to
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any of the Collateral. The Debtor hereby appoints the Agent, which appointment
is irrevocable and coupled with an interest, as the Debtor's attorney-in-fact
solely as to this SECTION 3 to execute and file in the name and on behalf of the
Debtor such additional financing statements as the Agent may reasonably request.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF DEBTOR.
The Debtor hereby represents and warrants to the Agent and the Secured
Parties that (a) the Debtor is, or to the extent that certain of the Collateral
is to be acquired after the date hereof, will be, the sole legal and beneficial
owner of the Collateral free from any lien, security interest, encumbrance or
restrictions on transfer except as permitted hereunder or under the Credit
Agreement or under any other Loan Document; (b) except as specified in and
permitted by the Credit Agreement, no financing statement covering the
Collateral is on file in any public office, other than the financing statements
filed pursuant to this Agreement; (c) all additional information,
representations and warranties contained in EXHIBIT B hereto as to the Debtor
and made a part hereof are true, accurate and complete on the date hereof; (d)
there are no restrictions upon the voting rights of any of the Pledged
Securities and the Debtor has the right to vote, pledge, grant a security
interest in and otherwise transfer the Pledged Securities owned by it free of
any encumbrances (other than applicable restrictions imposed by any Federal,
state or local authorities, or Federal or state securities laws or regulations);
and (e) the Pledged Securities are duly and validly issued, fully paid and
nonassessable, and each certificate or instrument evidencing the Pledged
Securities is issued in the name of the Debtor as described on EXHIBIT A.
SECTION 5. COVENANTS OF DEBTOR.
The Debtor hereby covenants and agrees with the Agent and the Secured
Parties that the Debtor (a) shall take such action as reasonably necessary to
protect the Collateral against all claims and demands of all persons at any time
claiming any interest therein senior to that of the Agent and the Secured
Parties; (b) shall provide the Agent with prompt written notice of (i) any
change in the Debtor's principal office or the office where the Debtor maintains
its books and records pertaining to the Customer Receivables, and (ii) the
movement or location of any Collateral to or at any address other than as set
forth in EXHIBIT B with respect to the Debtor; (c) shall promptly pay any and
all taxes, assessments and governmental charges upon the Collateral prior to the
date penalties are attached thereto, except to the extent permitted under the
Credit Agreement; (d) shall immediately notify the Agent of any event causing a
substantial loss or diminution in the value of all or any material part of the
Collateral and the amount or an estimate of the amount of such loss or
diminution, except as otherwise permitted by the Credit Agreement; (e) shall
have and maintain insurance at all times in accordance with the provisions of
the Credit Agreement; (f) except in accordance with the Credit Agreement, shall
not sell or offer to sell or otherwise assign, transfer or dispose of the
Collateral or any interest therein, without the written consent of the Agent;
(g) shall keep the Collateral free from any adverse lien, security interest or
encumbrance other than liens, security interests or encumbrances contemplated
hereby and permitted under the Credit Agreement; (h) shall keep the Collateral
in
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good order and repair, reasonable wear and tear excepted, and shall not waste,
destroy or dispose of the Collateral or any part thereof, except as otherwise
permitted by the Credit Agreement; and (i) shall not use the Collateral in
violation of any statute or ordinance, the violation of which could have a
Material Adverse Effect.
SECTION 6. RECORDS RELATING TO COLLATERAL.
The Debtor will keep its records concerning the Collateral, including the
Customer Receivables and all chattel paper included in the Customer Receivables,
at its office or one or more of the other locations designated in EXHIBIT B or
at such other place or places of business of which the Agent shall have been
notified in writing upon no less than thirty (30) days in advance. The Debtor
will hold and preserve such records and chattel paper and will permit
representatives of the Agent and the Secured Parties at any time during normal
business hours to examine and inspect the Collateral and to make abstracts from
such records and chattel paper in accordance with the terms of the Credit
Agreement, and will furnish to the Agent and the Secured Parties such
information and reports regarding the Collateral as the Agent and the Secured
Parties may from time to time reasonably request; PROVIDED, HOWEVER, that no
notice shall be required of the Agent if an Event of Default has occurred.
SECTION 7. RECORD OWNERSHIP OF PLEDGED SECURITIES.
Upon the occurrence of an Event of Default (as defined in SECTION 11) that
is continuing and subject to SECTION 17 and the requirements of applicable law,
the Agent may cause, upon written notification to the Debtor, any or all of the
Pledged Securities to be transferred of record into the Agent's name. The
Debtor shall promptly give to the Agent copies of any notices or other
communications received by the Debtor with respect to Pledged Securities
registered in its name.
SECTION 8. RIGHT TO RECEIVE DISTRIBUTIONS ON PLEDGED SECURITIES.
(a) Unless and until an Event of Default has occurred and is continuing,
and the Agent, at the Secured Parties' direction, shall have notified the Debtor
in writing of its election to exercise the Agent's rights under Subsection (b)
below, the Debtor shall be entitled, from time to time, to receive for its own
use any and all dividends, interest and other payments and distributions made
upon or with respect to the Pledged Securities (subject to any restrictions
thereon set forth in the Credit Agreement or any other Loan Document referred to
therein), except:
(i) stock dividends,
(ii) dividends payable in securities, member interests or other
property (except cash dividends or distributions),
(iii) dividends or distributions on dissolution or on partial or
total liquidation or in connection with a reduction of capital, capital
surplus or paid-in surplus, and
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(iv) other securities issued with respect to or in lieu of the
Pledged Securities (whether upon conversion of any convertible securities
included therein or through stock split, spin-off, split-off,
reclassification, merger, consolidation, sale of assets, combination of
shares or otherwise).
All of the foregoing, together with all new, substituted or additional shares of
capital stock, warrants, options, notes or other rights, or other securities
issued in addition to or in respect of all or any of the Pledged Securities
shall be delivered to the Agent hereunder as required by SECTION 2, to be held
as Collateral pursuant to the terms hereof in the same manner as the Pledged
Securities delivered to the Agent on the date hereof. The Debtor shall have the
right to receive and retain all dividends, distributions, principal, interest
and other payments made upon or with respect to the Pledged Securities, except
those which the Agent is specifically authorized to receive as provided above,
and the Agent, at the Secured Parties' direction, shall take all such action as
may be necessary or appropriate to give effect to such right. From time to time
upon receiving a written request from the Debtor accompanied by a certificate
signed by the Debtor stating that no Event of Default has occurred and is
continuing, the Agent shall deliver to the Debtor suitable assignments and
orders for the payment to the Debtor or upon its order of all dividends,
distributions, principal, interest and other payments to which the Debtor is
entitled as aforesaid, upon or with respect to any Pledged Securities which are
registered or standing in the name of the Agent. Nothing in this SECTION 8
shall be deemed to permit any issuance of debt or equity securities, exercise of
rights, distributions, payments or other actions not otherwise expressly
permitted by the Credit Agreement.
(b) Notwithstanding any provision herein to the contrary, if any Event of
Default shall have occurred and be continuing, upon the giving of written notice
referred to in subsection (a) above, then and whether or not any holder of the
Obligations exercises any available option to declare such Obligations due and
payable or seeks or pursues any other relief or remedy available to such holder
under this Agreement or any instrument or agreement evidencing or securing any
Obligations, all dividends, distributions or interest or principal payments, as
the case may be, on the Pledged Securities shall be paid directly to the Agent
on behalf of the Secured Parties, and retained by it as part of the Pledged
Securities, subject to the terms of this Agreement, and, if the Agent shall so
request in writing, each Debtor agrees to execute and deliver to the Agent
appropriate additional distributions and other orders and documents to that end.
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SECTION 9. RIGHT TO VOTE PLEDGED SECURITIES.
(a) Subject to SECTION 17 and applicable law, unless and until an Event of
Default has occurred and is continuing and the Agent shall have notified the
Debtor in writing of its election to exercise the Agent's rights under
Subsection (b) below, the Debtor shall have the right, from time to time, to
vote and to give consents, ratifications and waivers with respect to the Pledged
Securities and to exercise conversion rights with respect to any convertible
securities included therein (provided, however, that no vote shall be cast, and
no consent shall be given or shareholder action taken, which would have the
effect of impairing the position or interest of the Agent and the Secured
Parties with respect to the Pledged Securities or which would authorize or
effect any action then prohibited by the Credit Agreement or any other Loan
Document referred to therein). Subject to SECTION 17 and applicable law, the
Agent shall, upon receiving a written request from the Debtor, deliver to the
Debtor or as specified in such request such proxies, powers of attorney,
consents, ratifications and waivers in respect of any Pledged Securities which
are registered in the Agent's name, and make such arrangements with respect to
the conversion of convertible securities as shall be specified in the Debtor's
request.
(b) Notwithstanding any provision herein to the contrary, other than
SECTION 17, if any Event of Default shall have occurred and be continuing, upon
written notice to the Debtor of such election, then and whether or not any
holder of the Obligations exercises any available option to declare such
Obligations due and payable or seeks or pursues any other relief or remedy
available to such holder under this Agreement or any instrument or agreement
evidencing or securing any Obligations, the Agent, or its nominee, shall
forthwith, without further act on the part of any person, have the sole and
exclusive right, subject to SECTION 17 and (to the extent permitted by law) to
exercise all voting and other powers of ownership pertaining to the Pledged
Securities and shall exercise such powers in such manner as the Agent, at the
Secured Parties' direction, shall determine to be necessary, appropriate or
advisable. The Debtor hereby agrees to execute and deliver to the Agent such
additional powers, authorizations, proxies, dividends and such other documents
as the Agent may reasonably request to secure to the Agent the rights, powers
and authorities intended to be conferred upon the Agent by this subsection (b).
SECTION 10. GENERAL AUTHORITY.
Subject to SECTION 17 and to the extent permitted under FCC rules,
regulations and policies, and other Federal, state or local authorities,
including, without limitation, Federal and state securities laws, the Debtor
hereby appoints the Agent as the Debtor's lawful attorney, with full power of
substitution, in the name of the Debtor, for the sole use and benefit of the
Agent on behalf of the Secured Parties, but at the Debtor's expense, to
exercise, all or any of the following powers with respect to all or any of the
Collateral during the existence of any Event of Default:
(i) to demand, ▇▇▇ for, collect, receive and give acquittance for any
and all monies due or to become due;
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(ii) to receive, take, endorse, assign and deliver all checks, notes,
drafts, documents and other negotiable and non-negotiable instruments and
chattel paper taken or received by the Agent;
(iii) to settle, compromise, initiate, prosecute or defend any action
or proceeding with respect thereto;
(iv) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof or the related goods securing the
Customer Receivables, as fully and effectually as if the Agent on behalf of
the Secured Parties was the absolute owner thereof;
(v) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
(vi) to discharge any taxes, liens, security interests or other
encumbrances at any time placed thereon; and
(vii) to the extent permitted by law, including without limitation,
FCC, state and local rules, regulations and policies and Federal and state
securities laws, to execute any document or form, in the name of the
Debtor, which may be necessary or desirable in connection with any sale of
the Pledged Securities by the Agent, including without limitation Form 144
(or any successor form) promulgated by the Securities and Exchange
Commission; provided that the Agent shall give the Debtor not less than
twenty (20) days' prior written notice of the time and place of any sale or
other intended disposition of any of the Collateral. Such appointment as
attorney is irrevocable and coupled with an interest.
SECTION 11. EVENTS OF DEFAULT.
The Debtor shall be in default under this Agreement upon the occurrence of
any "Event of Default" under and as defined in the Credit Agreement (hereinafter
referred to as an "EVENT OF DEFAULT").
SECTION 12. REMEDIES UPON EVENT OF DEFAULT.
(a) Subject to SECTION 17, if an Event of Default shall occur and be
continuing, the Agent, on behalf of the Secured Parties, may exercise all the
rights and remedies of a secured party under the Uniform Commercial Code.
Without limitation of the foregoing, unless the Obligations shall have been paid
in full in cash, the Agent, at the Secured Parties' direction, may, in the
Secured Parties' sole discretion, without further demand, advertisement or
notice, except as expressly provided for in subsection (i) of this Section,
apply the cash, if any, then held by it as Collateral hereunder, for the
purposes and in the manner provided in SECTION 13, and if there shall be no such
cash or the cash so applied shall be insufficient to make payment in full of all
payments provided in SECTION 13,
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(i) Subject to SECTION 17 and applicable law, including, without
limitation, Federal and state securities laws, sell the Collateral, or any
part or component thereof, in one or more sales, at a public or private
sale, conducted by any officer or agent of the Agent, at a place of
business of the Agent or elsewhere, for cash, upon credit or future
delivery, and at such price or prices as the Agent shall determine, and the
Agent or any Secured Party may be the purchaser of any or all of the
Collateral so sold. Upon any such sale, the Agent shall have the right,
subject to SECTION 17, to deliver, assign and transfer to the purchaser
thereof the Collateral so sold. Each purchaser (including the Agent or any
Secured Party) at any such sale shall hold the Collateral so sold,
absolutely free from any claim or right of whatsoever kind, including,
without limitation, any equity or right of redemption of the Debtor which
the Debtor, to the extent it may lawfully do so, hereby specifically
waives. The Agent shall give the Debtor at least ten (10) days' written
notice of any such public or private sale. The Agent shall not be
obligated to make any sale pursuant to any such notice. The Agent may,
without notice or publication, adjourn any public or private sale from time
to time by announcement at the time and place fixed for such sale, or any
adjournment thereof, and any such sale may be made at any time or place to
which the same may be so adjourned without further notice or publication.
In case of any sale of all or any part of the Collateral for credit or for
future delivery, the Collateral so sold may be retained by the Agent until
the selling price is paid by the purchaser thereof, but the Agent shall not
incur any liability in case of the failure of such purchaser to pay for the
Collateral so sold, and in case of any such failure, such Collateral may
again be sold under and pursuant to the provisions hereof; or
(ii) Proceed by a suit or suits at law or in equity to foreclose upon
this Agreement and, subject to SECTION 17 and any other applicable laws,
including, without limitation, Federal and state securities laws, sell the
Collateral, or any portion or component thereof, under a judgment or decree
of a court or courts of competent jurisdiction.
(b) If at any time when the Agent, at the Secured Parties' direction,
shall determine to exercise its right to sell all or any part of the Pledged
Securities pursuant to subsection (a)(i) of this Section, such Pledged
Securities or the part thereof to be sold shall not, for any reason whatsoever,
be effectively registered under the Securities Act of 1933, as from time to time
in effect (the "SECURITIES ACT") or the securities laws of any state, the Agent,
at the Secured Parties' direction, in their sole and absolute discretion, is
hereby expressly authorized to sell such Pledged Securities or such part thereof
by private sale in such manner and under such circumstances as the Agent and the
Secured Parties may deem commercially reasonable in order that such sale may
legally be effected without such registration. The Agent and the Secured
Parties shall sell all or any part of the Pledged Securities at a price which
they deem commercially reasonable under the circumstances.
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(c) Subject to SECTION 17 and applicable law, the Agent as attorney-in-
fact pursuant to SECTION 10 may, in the name and stead of the Debtor, make and
execute all conveyances, assignments and transfers of any Collateral sold in
accordance with this Agreement. The Debtor shall, if so reasonably requested by
the Agent, ratify and confirm any sale or sales by executing and delivering to
the Agent, or to such purchaser or purchasers, all such instruments as may, in
the reasonable judgment of the Agent, be advisable for such purpose.
(d) The receipt by the Agent of the purchase money paid at any such sale
made by it shall be a sufficient discharge therefor to any purchaser (other than
the Agent) of the Collateral, or any portion thereof, sold as aforesaid; and no
such purchaser (or his or its representatives or assigns) (other than the
Agent), after paying such purchase money and receiving such receipt, shall be
bound to see to the application of such purchase money or any part thereof or in
any manner whatsoever be answerable for any loss, misapplication or
nonapplication of any such purchase money, or any part thereof, or be bound to
inquire as to the authorization, necessity, expediency or regularity of any such
sale.
SECTION 13. APPLICATION OF COLLATERAL AND PROCEEDS.
The proceeds of any sale of, or other realization upon, all or any part of
the Collateral shall be applied in the following order of priority: (a) first,
to pay the expenses of such sale or other realization, including reasonable
attorneys' fees, and all reasonable expenses, liabilities and advances incurred
or made by the Agent or any of the Secured Parties in connection therewith, and
any other unreimbursed expenses for which the Agent or any of the Secured
Parties are to be reimbursed pursuant to SECTION 14; (b) second, to the payment
of the Obligations in such order of priority as the Secured Parties, in their
sole discretion, shall determine; and (c) finally, to pay to the Debtor, or its
successors and assigns, or as a court of competent jurisdiction may direct, any
surplus then remaining from such proceeds.
SECTION 14. EXPENSES; AGENT'S LIEN.
The Debtor will forthwith upon demand pay to the Agent: (a) the amount the
Agent or any of the Secured Parties have paid (i) in respect of taxes arising by
reason of the Security Interests (including, without limitation, any applicable
transfer, intangible, recordation and personal property taxes but excluding
taxes in respect of the Agent's and the Secured Parties' income and profits) or
(ii) in order to free any of the Collateral from any lien thereon, and (b) the
amount of any and all reasonable costs and expenses (including, without
limitation, the reasonable fees and disbursements of its counsel and of any
agents not regularly in its employ) which the Agent or any of the Secured
Parties may incur in connection with (i) the preparation and interpretation of
this Agreement and any amendments hereto or modifications hereof, (ii) the
collection, sale or other disposition of any of the Collateral, (iii) the
exercise by the Agent or any of the Secured Parties of any of the powers
conferred upon any of them hereunder, (iv) any Event of Default on the Debtor's
part hereunder or (v) any Reorganization.
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SECTION 15. SURVIVAL OF OBLIGATIONS; TERMINATION OF SECURITY INTERESTS;
RELEASE OF COLLATERAL.
This Agreement and the warranties, representations, agreements and
covenants contained herein and in any certificates or instruments delivered
pursuant hereto shall survive the making of the Loans (as defined in the Credit
Agreement) and the execution and delivery of the Notes, regardless of any
investigation made by the Agent or the Secured Parties or any person on behalf
of the Agent or the Secured Parties, and shall continue for so long as any of
the Obligations shall remain outstanding or any of the Secured Parties shall
have any obligation to advance funds to the Debtor. Upon the repayment and
performance in full of all the Obligations and the expiration or termination of
any obligations of any of the Secured Parties to advance funds to the Debtor,
the Security Interests shall terminate and all rights to the Collateral, except
as set forth below, shall revert to the Debtor. Upon such termination of the
Security Interests or release of Collateral, the Agent will, at the Debtor's
expense to the extent permitted by law, promptly execute and deliver to the
Debtor such documents as reasonably necessary or as the Debtor shall reasonably
request to evidence the termination of the Security Interests or the release of
such Collateral, as the case may be.
SECTION 16. NOTICES.
All notices, requests, demands and other communications provided for
hereunder shall be in writing in the manner set forth in the Credit Agreement.
SECTION 17. FCC APPROVALS AND MUNICIPAL APPROVALS.
The Agent's and the Secured Parties' rights under this Agreement are
subject to all applicable rules and regulations of the FCC. Notwithstanding
anything to the contrary contained herein, neither the Agent nor any of the
Secured Parties will take any action pursuant to this Agreement which would
constitute or result in any assignment of any FCC license or any change of
control of the Debtor or any FCC license, or any government license, permit or
franchise, whether DE JURE or DE FACTO, if such assignment of license, permit or
franchise or of control would require the prior approval of the FCC under the
Communications Act of 1934, as amended (including the written rules and
regulations promulgated by the FCC). The Debtor agrees to take any action which
the Agent may reasonably request in order to obtain and enjoy to the fullest
possible extent the rights and benefits granted to the Agent and the Secured
Parties by this Agreement and each other agreement, instrument and document
delivered to the Agent and the Secured Parties in connection herewith or in any
document evidencing or securing the Collateral, including specifically, at the
Debtor's own cost and expense, the use of its best efforts to assist in
obtaining approval of the FCC or any other agency or government for any action
or transaction contemplated by, and consistent with the terms of, this Agreement
which is then required by law, and specifically, without limitation, upon
request, to prepare, sign and file (or cause to be filed) with the FCC's or any
other agency or government the assignor's or transferor's portion of any
application or applications for consent to the assignment of any license, permit
or franchise or change of control necessary or appropriate under the FCC's or
any agency or government's rules
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or regulations for approval of (a) the assignment of any FCC license or transfer
of control thereof, (b) any sale or sales of property constituting the
Collateral by any of the Secured Parties or the Agent on their behalf, or (c)
any assumption by any of the Secured Parties or the Agent on their behalf of
voting rights or management rights in property constituting the Collateral
effected in accordance with the terms of this Agreement. Furthermore,
notwithstanding anything to the contrary contained in this Agreement, the Agent
and the Secured Parties agree that (aa) voting rights in the Pledged Securities
shall remain with the Debtor even upon an Event of Default unless all required
prior approvals of the FCC to the transfer of such voting rights shall have been
obtained, (bb) upon an Event of Default, and only if so permitted by this
Agreement, the Agent or the Secured Parties may dispose of the Pledged
Securities, but only by private or public sale or other means acceptable to the
FCC, and (cc) prior to the exercise of stockholder rights by a purchaser at such
sale, all necessary FCC consents with respect to such sale shall be timely
obtained.
SECTION 18. RIGHT OF SET-OFF.
In furtherance and not in limitation of any provisions herein contained,
the Debtor hereby agrees that any and all deposits or other sums at any time
claimed by or due from the Agent or any of the Secured Parties to the Debtor
shall at all times constitute security for the Obligations and, upon the
occurrence of an Event of Default, the Agent and each of the Secured Parties may
exercise any right of set-off against such deposits or other sums as may accrue
or exist under applicable law, whether or not the Obligations are otherwise
fully secured.
SECTION 19. MISCELLANEOUS.
(a) No failure on the part of the Agent or the Secured Parties to
exercise, and no delay in exercising, and no course of dealing with respect to,
any right, power or remedy under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise by the Agent or any of the
Secured Parties of any right, power or remedy under this Agreement preclude any
other right, power or remedy. The remedies in this Agreement are cumulative and
are not exclusive of any other remedies provided by law. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
but only by a statement in writing signed by the party against which enforcement
of the change, waiver, discharge or termination is sought.
(B) THIS AGREEMENT SHALL BE DEEMED EXECUTED AS A SEALED INSTRUMENT
AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK AS A CONTRACT TO BE EXECUTED AND PERFORMED WITHIN THE STATE OF NEW
YORK.
(C) This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
Agreement.
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SECTION 20. PAYMENT OF EXPENSES.
In the event this Agreement shall be enforced by suit or otherwise, the
Debtor will reimburse the Agent and the holder or holders of the Obligations,
upon demand, for all reasonable expenses incurred in connection therewith,
including, without limitation, reasonable attorneys' fees (including without
limitation all such costs, charges and expenses incurred by the Agent or any of
the Secured Parties in connection with any Reorganization).
SECTION 21. SEVERABILITY.
If any provision hereof is invalid or unenforceable in any jurisdiction,
the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Agent.
SECTION 22. INCONSISTENCIES.
Any inconsistencies between the provisions of this Agreement and the
Credit Agreement shall be governed by reference to the provisions of the Credit
Agreement.
SECTION 23. CONSENT TO JURISDICTION.
THE DEBTOR, TO THE EXTENT THAT IT MAY LAWFULLY DO SO, HEREBY CONSENTS TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AS WELL AS TO THE
JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR
THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF ANY OF ITS
OBLIGATIONS ARISING HEREUNDER OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED
HEREBY, AND EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE,
INCLUDING, WITHOUT LIMITATION, THE INCONVENIENCE OF SUCH FORUM, IN ANY OF SUCH
COURTS. IN ADDITION, TO THE EXTENT THAT IT MAY LAWFULLY DO SO, THE DEBTOR
CONSENTS TO THE SERVICE OF PROCESS BY PERSONAL SERVICE OR U.S. CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO THE DEBTOR AT THE
ADDRESS PROVIDED HEREIN. TO THE EXTENT THE DEBTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE DEBTOR
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT.
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SECTION 24. WAIVER OF JURY TRIAL.
THE DEBTOR HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER AGREEMENTS
EXECUTED IN CONNECTION HEREWITH.
SECTION 25. AGENCY.
The parties hereto, and any person not a party hereto for whose benefit the
Agent holds the Collateral hereunder, acknowledge that the Agent has been
requested to act as agent for the Secured Parties hereunder pursuant to the
terms of the Credit Agreement, and that the Agent, to the extent it may so act
hereunder, shall exercise all of the rights and remedies hereunder on behalf of,
and as agent for the benefit of, the Secured Parties and each of them. Without
limiting the generality of the foregoing, the Agent is authorized to execute and
deliver, from time to time, on behalf of the Secured Parties, any and all
amendments and modifications to this Agreement and any and all waivers to any
conditions herein or any Event of Default hereunder.
*THE NEXT PAGE IS THE SIGNATURE PAGE*
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
by their duly authorized representatives all as of the day and year first above
written.
DEBTOR:
TELETRAC, INC.
By:__________________________________
▇▇▇▇ ▇▇▇▇, Vice President of
Finance and Corporate Development
AGENT:
FLEET NATIONAL BANK
By:__________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
Media & Communications Group
EXHIBIT A
PLEDGED SECURITIES ON DATE HEREOF
SECURITIES NO. OF
SHARES
Class A Common Stock , par value $.01, of Teletrac, Inc. 1,000
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EXHIBIT B
TELETRAC, INC.
ADDITIONAL REPRESENTATIONS AND WARRANTIES
1. The exact name of the Debtor is Teletrac, Inc.
2. The Debtor does business in California, Ohio and Pennsylvania as
Teletrac Location.
3. The Debtor is not qualified to do business in any jurisdiction other
than:
1. Delaware 13. New Jersey
2. Kansas 14. New York
3. Illinois 15. Pennsylvania
4. Texas 16. Virginia
5. California 17. Wisconsin
6. Florida 18. Arizona
7. Michigan 19. Indiana
8. Connecticut 20. Minnesota
9. District of Columbia 21. Missouri
10. Georgia 22. Ohio
11. Maryland 23. Oregon
12. Massachusetts 14. Washington
4. The Debtor's chief executive office and principal place of business is
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
5. All of the Debtor's personal property is located at the following
addresses:
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