EXHIBIT 10.26
AMENDED AND RESTATED PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of June 27, 2002 (as
modified from time to time, this "PLEDGE AGREEMENT") made by The Aristotle
Corporation, a Delaware corporation (the "PLEDGOR"), in favor of BANK OF AMERICA
N.A. (together with any successor(s) thereto in such capacity, the "AGENT") for
the various financial institutions (individually a "LENDER" and collectively the
"LENDERS") which are or may from time to time become, parties to the Credit
Agreements referred below.
W I T N E S S E T H:
WHEREAS, the parties or their predecessors have entered into that certain
First Amendment to Amended and Restated Credit Agreement (Five Year) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (Five Year), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (FIVE YEAR)"), among Nasco
International, Inc., a Wisconsin corporation (the "PARENT"), the lenders parties
thereto and the Agent; and
WHEREAS, the parties or their predecessors have entered into that certain
Second Amendment to Amended and Restated Credit Agreement (364 Days) and
Consent, dated as of June 17, 2002 which amends the Amended and Restated Credit
Agreement (364 Days), dated as of May 29, 2001 (as amended, supplemented and
otherwise modified, the "CREDIT AGREEMENT (364 DAYS)" and together with the
Credit Agreement (Five Year), the "CREDIT AGREEMENTS"), among the Parent, the
lenders party thereto and the Agent; and
WHEREAS, the Parent and the Agent have entered into that certain Pledge
Agreement, dated as of March 31, 2000 (the "EXISTING PLEDGE AGREEMENT"), and the
parties hereto wish to amend and restate such Existing Pledge Agreement as set
forth in this Pledge Agreement; and
Whereas, the Parent has merged into the Pledgor; and
WHEREAS, it is a condition precedent to the extensions of credit under the
Credit Agreements that the Pledgor enter into this Pledge Agreement to, among
other things, grant to the Agent a continuing security interest in the
Collateral;
NOW, THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, in order to induce the Lenders to make Loans (including
the initial Loans) to the Pledgor from time to time pursuant to the Credit
Agreements and in order to amend and restate the Existing Pledge Agreement, the
Pledgor hereby agrees with the Agent, for its benefit and the ratable benefit of
each Lender Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"ADDITIONAL RIGHTS" means, with respect to the Pledgor, any membership
interest, other ownership interest, dividend or other distribution and any other
right or property which the Pledgor shall receive or shall become entitled to
receive for any reason whatsoever with respect to, in substitution for or in
exchange for any portion of the Membership Interest and any membership interest,
ownership interest or right to receive any membership interest, ownership
interest or dividend or distribution in which the Pledgor now has or hereafter
acquires any right, issued by any Pledged Membership Interest Company.
"AGENT" is defined in the PREAMBLE.
"COLLATERAL" is defined in SECTION 2.1.
"COLLATERAL DOCUMENTS" means the "Collateral Documents" defined in the
Credit Agreement (5 Year) and "Collateral Documents," as defined in the Credit
Agreement (364 Days).
"CREDIT AGREEMENT" is defined in the RECITALS.
"DEFAULT" means "Default" as defined in the Credit Agreement (5 Year) and
"Default" as defined in the Credit Agreement (364 Days).
"DISTRIBUTIONS" means all stock dividends, liquidating dividends, shares
of stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares (or other shares of
capital stock constituting Collateral) or any Pledged Membership Interests, but
shall not include Dividends.
"DIVIDENDS" means cash dividends and cash distributions with respect to
any Pledged Shares, any Pledged Membership Interests or other Pledged Property
made in the ordinary course of business and not a liquidating dividend.
"EVENT OF DEFAULT" means an "Event of Default" as defined in the Credit
Agreement (Five Year) and "Event of Default" as defined in the Credit Agreement
(364 Days).
"EXISTING CREDIT AGREEMENT" is defined in the PREAMBLE.
"EXISTING PLEDGE AGREEMENT" is defined in the PREAMBLE.
"LENDER" is defined in the PREAMBLE.
"LENDER PARTY" means, as the context may require, any Lender or the Agent
and each of their respective successors, transferees and assigns.
"LENDERS" is defined in the PREAMBLE.
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"LOAN DOCUMENTS" means "Loan Documents" as defined in the Credit Agreement
(Five Year) and "Loan Documents" as defined in the Credit Agreement (364 Days).
"MEMBERSHIP INTERESTS" means, with respect to the Pledgor, the Pledgor's
entire membership interest in each Pledged Membership Interest Company
including, without limitation, all of the Pledgor's rights in and to all
profits, proceeds and distributions of every kind and nature whatsoever due to
the Pledgor.
"NOTES" mean "Notes" as defined in the Credit Agreement (Five Year) and
"Notes" as defined in the Credit Agreement (364 Days).
"OBLIGATIONS" means "Obligations" as defined in the Credit Agreement (Five
Year) and "Obligations" as defined in the Credit Agreement (364 Days).
"PLEDGE AGREEMENT" is defined in the PREAMBLE.
"PLEDGED MEMBERSHIP INTEREST COMPANY" means each Person identified in ITEM
A of ATTACHMENT 1 hereto as the issuer of the Pledged Membership Interests
identified opposite the name of such Person.
"PLEDGED MEMBERSHIP INTERESTS" means all Membership Interests of any
Pledged Membership Interest Company.
"PLEDGED NOTE ISSUER" means each Person identified in ITEM C of ATTACHMENT
1 hereto as the issuer of the Pledged Note identified opposite the name of such
Person.
"PLEDGED NOTES" means all promissory notes of any Pledged Note Issuer in
the form or substantially the form of EXHIBIT A hereto which are delivered by
the Pledgor to the Agent as Pledged Property hereunder, as such promissory
notes, in accordance with SECTION 4.5, are amended, modified or supplemented
from time to time and together with any promissory note of any Pledged Note
Issuer taken in extension or renewal thereof or substitution therefor.
"PLEDGED PROPERTY" means all Pledged Shares, all Pledged Membership
Interests, all Pledged Notes, all Additional Rights, all other pledged shares of
capital stock or promissory notes, all other securities, all assignments of any
amounts due or to become due, and all other instruments which are now being
delivered by the Pledgor to the Agent or may from time to time hereafter be
delivered by the Pledgor to the Agent for the purpose of pledge under this
Pledge Agreement or any other Loan Document, and all proceeds of any of the
foregoing.
"PLEDGED SHARE ISSUER" means each Person identified in ITEM B of
ATTACHMENT 1 hereto as the issuer of the Pledged Shares identified opposite the
name of such Person.
"PLEDGED SHARES" means all shares of capital stock of any Pledged Share
Issuer.
"PLEDGOR" is defined in the PREAMBLE.
"SECURED OBLIGATIONS" is defined in SECTION 2.2.
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"UCC" means the Uniform Commercial Code as in effect in the State of
Illinois.
SECTION 1.2. UCC DEFINITIONS. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the UCC are
used in this Pledge Agreement, including its preamble and recitals, with such
meanings.
ARTICLE II
PLEDGE
SECTION 2.1. CONFIRMATION AND GRANT OF SECURITY INTEREST AND PLEDGE. The
Pledgor hereby pledges, hypothecates, assigns, charges, mortgages, delivers, and
transfers to the Agent, for its benefit and the ratable benefit of the Lender
Parties, and hereby grants to the Agent, for its benefit and the ratable benefit
of the Lender Parties, a continuing pledge and security interest in and to, all
of the following property (the "COLLATERAL"):
(a) all Membership Interests identified in ITEM A of ATTACHMENT 1
hereto;
(b) all Additional Rights;
(c) all issued and outstanding shares of capital stock of each
Pledged Share Issuer identified in ITEM B of ATTACHMENT 1 hereto;
(d) all other Pledged Shares issued from time to time;
(e) all promissory notes of each Pledged Note Issuer identified in
ITEM C of ATTACHMENT 1 hereto;
(f) all other Pledged Notes issued from time to time;
(g) all other Pledged Property, whether now or hereafter delivered
to the Agent in connection with this Pledge Agreement;
(h) all Dividends, Distributions, interest, and other payments and
rights with respect to any Pledged Property; and
(i) all proceeds of any and all of the foregoing.
SECTION 2.2. SECURITY FOR OBLIGATIONS. This Pledge Agreement secures the
payment in full of all Obligations now or hereafter existing under the Credit
Agreements, the Notes, the Collateral Documents and each other Loan Document
(including this Pledge Agreement) to which the Pledgor is or may become a party,
whether for principal, interest, costs, fees, expenses or otherwise.
SECTION 2.3. DELIVERY OF PLEDGED PROPERTY. All certificates or instruments
representing or evidencing any Collateral, including all Pledged Shares, all
Pledged Membership Interests and all Pledged Notes, shall be delivered to and
held by or on behalf of (and, in the case of the Pledged Notes, endorsed to the
order of) the Agent pursuant hereto, shall be in suitable
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form for transfer by delivery, and shall be accompanied by all necessary
instruments of transfer or assignment, duly executed in blank, and all other
necessary and appropriate action and approvals shall have been taken or received
to grant to the Agent a first priority fully perfected security interest in such
Collateral.
SECTION 2.4. DIVIDENDS ON PLEDGED SHARES, PLEDGED MEMBERSHIP INTERESTS AND
PAYMENTS ON PLEDGED NOTES. In the event that any Dividend is to be paid on any
Pledged Share, any Pledged Membership Interest or any payment of principal or
interest is to be made on any Pledged Note at a time when (x) no Default of the
nature referred to in Section 8.1.9 of either Credit Agreement has occurred and
is continuing, and no (y) Event of Default has occurred and is continuing, such
Dividend or payment may be paid directly to and retained by the Pledgor. If any
such Default or Event of Default has occurred and is continuing, then any such
Dividend or payment shall be paid directly to the Agent (and if for any reason
the Pledgor shall receive such Dividend or payment in such circumstances, the
Pledgor shall hold the same segregated and in trust for the Agent until paid to
the Agent in accordance with SECTION 4.4 hereof).
SECTION 2.5. CONTINUING SECURITY INTEREST; TRANSFER OF NOTE. This Pledge
Agreement shall create a continuing security interest in the Collateral and
shall
(a) remain in full force and effect until payment in full of all
Obligations,
(b) be binding upon the Pledgor and its successors, transferees
and assigns, and
(c) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Agent and each other Lender Party.
Without limiting the foregoing CLAUSE (C), any Lender may assign or otherwise
transfer (in whole or in part) any Note or Loan held by it to any other Person
or entity, and such other Person or entity shall thereupon become vested with
all the rights and benefits in respect thereof granted to such Lender under any
Loan Document (including this Pledge Agreement) or otherwise, subject, however,
to any contrary provisions in such assignment or transfer, and to the provisions
of Section 10.11 and Article IX of each Credit Agreement. Upon the final payment
in full of all Obligations, the security interest granted herein shall terminate
and all rights to the Collateral shall revert to the Pledgor. Upon any such
termination, the Agent will, at the Pledgor's sole expense, deliver to the
Pledgor, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all
Pledged Shares, all Pledged Membership Interests, and all Pledged Notes,
together with all other Collateral held by the Agent hereunder, and execute and
deliver to the Pledgor such documents as the Pledgor shall reasonably request to
evidence such termination.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. WARRANTIES, ETC. The Pledgor represents and warrants unto
each Lender Party, as at the date of each pledge and delivery hereunder
(including each pledge and delivery of Pledged Shares, Pledged Membership
Interests and each pledge and delivery of a Pledged Note) by the Pledgor to the
Agent of any Collateral, as set forth in this Article.
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SECTION 3.1.1. OWNERSHIP, NO LIENS, ETC. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) such Collateral, free and clear of all
liens, security interests, options, or other charges or encumbrances, except any
lien or security interest granted pursuant hereto in favor of the Agent.
SECTION 3.1.2. VALID SECURITY INTEREST. The delivery of such Collateral to
the Agent is effective to create a valid, perfected, first priority security
interest in such Collateral and all proceeds thereof, securing the Obligations.
No filing or other action will be necessary to perfect or protect such security
interest.
SECTION 3.1.3. AS TO PLEDGED SHARES AND PLEDGED MEMBERSHIP INTERESTS. In
the case of any Pledged Membership Interests constituting such Collateral, all
of such Pledged Membership Interests are duly authorized and validly issued,
fully paid, and non-assessable, and constitute all of the Membership Interests
of each Pledged Membership Interest Company.
In the case of any Pledged Shares constituting such Collateral, all of
such Pledged Shares are duly authorized and validly issued, fully paid, and
non-assessable, and constitute all of the issued and outstanding shares of
capital stock of each Pledged Share Issuer.
SECTION 3.1.4. AS TO PLEDGED NOTES. In the case of each Pledged Note, all
of such Pledged Notes have been duly authorized, executed, endorsed, issued and
delivered, and are the legal, valid and binding obligation of the issuers
thereof, and are not in default.
SECTION 3.1.5. AUTHORIZATION, APPROVAL, ETC. No authorization, approval,
or other action by, and no notice to or filing with, any governmental authority,
regulatory body or any other Person is required either
(a) for the pledge by the Pledgor of any Collateral pursuant to
this Pledge Agreement or for the execution, delivery, and performance of
this Pledge Agreement by the Pledgor, or
(b) for the exercise by the Agent of the voting or other rights
provided for in this Pledge Agreement, or, except with respect to any
Pledged Shares or any Pledged Membership Interests, as may be required in
connection with a disposition of such Pledged Shares or Pledged Membership
Interests by laws affecting the offering and sale of securities and
membership interests in limited liability companies generally, the
remedies in respect of the Collateral pursuant to this Pledge Agreement.
SECTION 3.1.6. COMPLIANCE WITH LAWS. The Pledgor is in compliance with the
requirements of all applicable laws, rules, regulations and orders of every
governmental authority, the non-compliance with which might materially adversely
affect the business, properties, assets, operations, condition (financial or
otherwise) or prospects of the Pledgor or the value of the Collateral or the
worth of the Collateral as collateral security.
SECTION 3.1.7. NOT SECURITIES. The Collateral hereunder is not a
"Security" under Article 8 of the UCC.
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ARTICLE IV
COVENANTS
SECTION 4.1. PROTECT COLLATERAL; FURTHER ASSURANCES, ETC. The Pledgor will
not sell, assign, transfer, pledge or encumber in any other manner the
Collateral (except in favor of the Agent hereunder). The Pledgor will warrant
and defend the right and title herein granted unto the Agent in and to the
Collateral (and all right, title and interest represented by the Collateral)
against the claims and demands of all Persons whomsoever. The Pledgor agrees
that at any time, and from time to time, at the expense of the Pledgor, the
Pledgor will promptly execute and deliver all further instruments, and take all
further action, that may be necessary or desirable, or that the Agent may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
SECTION 4.2. STOCK POWERS, ETC. The Pledgor agrees that all Pledged Shares
(and all other shares of capital stock constituting Collateral) and any
applicable Pledged Membership Interests delivered by the Pledgor pursuant to
this Pledge Agreement will be accompanied by duly executed undated blank stock
powers, or other equivalent instruments of transfer acceptable to the Agent. The
Pledgor will, from time to time upon the request of the Agent, promptly deliver
to the Agent such stock powers, instruments, and similar documents, satisfactory
in form and substance to the Agent, with respect to the Collateral as the Agent
may reasonably request and will, from time to time upon the request of the Agent
after the occurrence of any Event of Default, promptly transfer any Pledged
Shares (or other shares of common stock constituting Collateral) or any Pledged
Membership Interests into the name of any nominee designated by the Agent.
SECTION 4.3. CONTINUOUS PLEDGE. Subject to SECTION 2.4, the Pledgor will,
at all times, keep pledged to the Agent pursuant hereto all Pledged Shares (and
all other shares of capital stock constituting Collateral), all Pledged
Membership Interests, all Dividends and Distributions with respect thereto, all
Pledged Notes, all interest, principal and other proceeds received by the Agent
with respect to the Pledged Notes, and all other Collateral and other
securities, instruments, proceeds, and rights from time to time received by or
distributable to the Pledgor in respect of any Collateral, and will not permit
any Pledged Share Issuer to issue any capital stock which shall not have been
immediately duly pledged hereunder on a first perfected basis or permit any
Pledged Membership Interest Company to issue any Membership Interests which
shall not have been immediately duly pledged hereunder on a first perfected
basis.
SECTION 4.4. VOTING RIGHTS; DIVIDENDS, ETC. The Pledgor agrees:
(a) after any Default of the nature referred to in Section 8.1.9 of either
Credit Agreement or an Event of Default shall have occurred and be
continuing, promptly upon receipt thereof by the Pledgor and without any
request therefor by the Agent, to deliver (properly endorsed where
required hereby or requested by the Agent) to the Agent all Dividends,
Distributions, all interest, all principal, all other cash payments, and
all proceeds of the Collateral, all of which shall be held by the Agent as
additional Collateral for use in accordance with SECTION 6.3; and
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(b) after any Event of Default shall have occurred and be continuing and
the Agent has notified the Pledgor of the Agent's intention to exercise
its voting power under this CLAUSE (B) of SECTION 4.4
(i) the Agent may exercise (to the exclusion of the Pledgor)
the voting power and all other incidental rights of ownership with
respect to any Pledged Shares (or other shares of capital stock
constituting Collateral) or Pledged Membership Interests and the
Pledgor hereby grants the Agent an irrevocable proxy, exercisable
under such circumstances, to vote the Pledged Shares or the Pledged
Membership Interests and such other Collateral; and
(ii) promptly to deliver to the Agent such additional proxies
and other documents as may be necessary to allow the Agent to
exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments and proceeds
which may at any time and from time to time be held by the Pledgor but which the
Pledgor is then obligated to deliver to the Agent, shall, until delivery to the
Agent, be held by the Pledgor separate and apart from its other property in
trust for the Agent. The Agent agrees that unless an Event of Default shall have
occurred and be continuing and the Agent shall have given the notice referred to
in CLAUSE (B) of SECTION 4.4, the Pledgor shall have the exclusive voting power
with respect to any shares of capital stock or membership interests (including
any of the Pledged Shares or Pledged Membership Interests) constituting
Collateral and the Agent shall, upon the written request of the Pledgor,
promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by the Pledgor which are necessary to allow the Pledgor to
exercise voting power with respect to any such share of capital stock or
membership interest (including any of the Pledged Shares or Pledged Membership
Interests) constituting Collateral; PROVIDED, HOWEVER, that no vote shall be
cast, or consent, waiver or ratification given, or action taken by the Pledgor
that would impair any Collateral or be inconsistent with or violate any
provision of the Credit Agreement or any other Loan Document (including this
Pledge Agreement).
SECTION 4.5. ADDITIONAL UNDERTAKINGS. The Pledgor will not, without the
prior written consent of the Agent:
(a) enter into any agreement amending, supplementing, or waiving
any provision of any Pledged Note (including any underlying instrument
pursuant to which such Pledged Note is issued) or compromising or
releasing or extending the time for payment of any obligation of the maker
thereof;
(b) take or omit to take any action the taking or the omission of
which would result in any impairment or alteration of any obligation of
the maker of any Pledged Note or other instrument constituting Collateral;
or
(c) make any demand under any Pledged Note at any time when a
Default of the nature referred to in Section 8.1.9 of either Credit
Agreement, or any Event of Default, has occurred and is continuing; or
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(d) take any action which would cause the Collateral to be treated
as a "Security" under Article 8 of the UCC.
ARTICLE V
THE AGENT
SECTION 5.1. AGENT APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, to take any action
and to execute any instrument which the Agent may deem necessary or advisable to
accomplish the purposes of this Pledge Agreement, including without limitation:
(a) to ask, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(b) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper, in connection with CLAUSE (A)
above; and
(c) to file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Agent with respect to any of the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. AGENT MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by the Pledgor pursuant to SECTION 6.4.
SECTION 5.3. AGENT HAS NO DUTY. The powers conferred on the Agent
hereunder are solely to protect its interest (on behalf of the Lender Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral or responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Property, whether or not the Agent has or
is deemed to have knowledge of such matters, or (b) taking any necessary steps
to preserve rights against prior parties or any other rights pertaining to any
Collateral.
SECTION 5.4. REASONABLE CARE. The Agent is required to exercise reasonable
care in the custody and preservation of any of the Collateral in its possession;
PROVIDED, HOWEVER, the Agent shall be deemed to have exercised reasonable care
in the custody and preservation of any of the Collateral, if it takes such
action for that purpose as the Pledgor reasonably requests in writing at times
other than upon the occurrence and during the continuance of any Event of
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Default, but failure of the Agent to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. CERTAIN REMEDIES. If any Event of Default shall have occurred
and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the UCC (whether or not the UCC applies to the affected Collateral)
and also may, without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any of the Agent's offices or elsewhere, for cash, on credit or
for future delivery, and upon such other terms as the Agent may deem
commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' prior notice to the
Pledgor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.
The Agent shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given. The Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(b) The Agent may
(i) transfer all or any part of the Collateral into
the name of the Agent or its nominee, with or without disclosing
that such Collateral is subject to the lien and security interest
hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Agent of any amount due or to
become due thereunder,
(iii) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or any
part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any obligations of
any nature of any party with respect thereto,
(iv) endorse any checks, drafts or other writings in
the Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral,
and
(vi) execute (in the name, place and stead of the
Pledgor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or any of
the Collateral.
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SECTION 6.2. COMPLIANCE WITH RESTRICTIONS. The Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Agent is hereby authorized to comply with any limitation
or restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law (including
compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that such prospective bidders and purchasers
have certain qualifications, and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Pledgor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Agent be liable nor accountable to the Pledgor
for any discount allowed by the reason of the fact that such Collateral is sold
in compliance with any such limitation or restriction.
SECTION 6.3. APPLICATION OF PROCEEDS. All cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization upon, all
or any part of the Collateral may, in the discretion of the Agent, be held by
the Agent as additional collateral security for, or then or at any time
thereafter be applied (after payment of any amounts payable to the Agent
pursuant to Section 10.3 of each Credit Agreement and SECTION 6.4) in whole or
in part by the Agent against, all or any part of the Obligations in such order
as the Agent shall elect.
Any surplus of such cash or cash proceeds held by the Agent and remaining
after final payment in full of all the Obligations, and the termination of all
Commitments, shall be paid over to the Pledgor or to whomsoever may be lawfully
entitled to receive such surplus.
SECTION 6.4. INDEMNITY AND EXPENSES. The Pledgor hereby indemnifies and
holds harmless the Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Pledge Agreement (including
enforcement of this Pledge Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or wilful misconduct. Upon demand,
the Pledgor will pay to the Agent the amount of any and all reasonable expenses,
including the reasonable fees and disbursements of its counsel (including the
reasonable allocated cost of internal legal services and all disbursements of
internal counsel) and of any experts and agents, which the Agent may incur in
connection with:
(a) the administration of this Pledge Agreement, the Credit
Agreement and each other Loan Document;
(b) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the Collateral;
(c) the exercise or enforcement of any of the rights of the Agent
hereunder; or
(d) the failure by the Pledgor to perform or observe any of the
provisions hereof.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. LOAN DOCUMENT. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreements and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof (including as to the WAIVER OF ANY JURY TRIAL with
respect to any litigation relating to or arising out of any matter herein).
SECTION 7.2 CONTINUATION OF SECURITY INTEREST. This Pledge Agreement is
an amendment and restatement of the Existing Pledge Agreement and the security
interest granted thereunder shall be deemed continued hereunder.
SECTION 7.3. AMENDMENTS, ETC. No amendment to or waiver of any provision
of this Pledge Agreement nor consent to any departure by the Pledgor herefrom
shall in any event be effective unless the same shall be in writing and signed
by the Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it is given.
SECTION 7.4. SUBSIDIARIES. The parties agree that the entities listed on
ATTACHMENT I are "Subsidiaries" under the Credit Agreements.
SECTION 7.5. PROTECTION OF COLLATERAL. The Agent may from time to time, at
its option, perform any act which the Pledgor agrees hereunder to perform and
which the Pledgor shall fail to perform after being requested in writing so to
perform (it being understood that no such request need be given after the
occurrence and during the continuance of an Event of Default) and the Agent may
from time to time take any other action which the Agent reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.
SECTION 7.6. ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and, if to the Pledgor, mailed or telegraphed or delivered to it at the address
set forth below its signature hereto, if to the Agent, mailed or delivered to
it, addressed to it at the address of the Agent specified in the Credit
Agreement or, as to either party, at such other address as shall be designated
by such party in a written notice to each other party complying as to delivery
with the terms of this Section. All such notices and other communications shall,
when mailed or telegraphed, respectively, be effective when deposited in the
mails or delivered to the telegraph company, respectively, addressed as
aforesaid.
SECTION 7.7. SECTION CAPTIONS. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION 7.8. SEVERABILITY. Wherever possible each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Pledge Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Pledge Agreement.
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SECTION 7.9. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS PLEDGE AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF ILLINOIS, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK. THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE
ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
[SIGNATURES TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
THE ARISTOTLE CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-------------------
Title: President and Chief Operating Officer
Address: 00 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
President
Telecopier No.: 000-000-0000
Copy to:
The Aristotle Corporation
00 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier No.: 000-000-0000
Attention: Xxxx XxXxxxxx
Chief Financial Officer
Additional Copy to:
Nasco Division
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxxxxxx, Xxxxxxxxx
00000-0000
Attention: Xxxx X. Xxxxxxx
Telecopier No.: 000-000-0000
S-1
ACCEPTED:
BANK OF AMERICA N.A., as Agent
By: /s/ Xxxxx Xxxxxxxx
---------------------
Title: Vice President
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: 000-000-0000
Attention: Xxxxx Xxxxxxxx
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AMENDED AND RESTATED PLEDGE AGREEMENT
Attachment I - Pledged Interests
EXHIBIT A
to Pledge Agreement
PROMISSORY NOTE
$_____________ _____, 20__
FOR VALUE RECEIVED, the undersigned, ______________, a _______________
limited liability company (the "MAKER"), promises to pay to the order of The
Aristotle Corporation, a Delaware corporation (the "PAYEE"), on demand, the
principal sum of DOLLARS ($ ), or, if less, the aggregate outstanding principal
amount of all intercompany loans made by the Payee to the Maker.
The unpaid principal amount of this promissory note (this "NOTE") from
time to time outstanding shall bear interest at a rate of interest equal to the
rate of interest payable on the Loans outstanding under the Credit Agreement
hereinafter referred to, which the Maker represents to be a lawful and
commercially reasonable rate, payable on demand or on payment of the principal
amount outstanding under this Note, and all payments of principal of and
interest on this Note shall be payable in lawful currency of the United States
of America. All such payments shall be made by the Maker to the Payee and shall
be recorded on the grid attached hereto by the holder hereof (including the
Agent as pledgee). Upon notice from the Agent (hereinafter defined) that a
Default (as defined in the Credit Agreement hereinafter referred to) of the
nature referred to in Section 8.1.9 of either Credit Agreement or an Event of
Default (as defined in either Credit Agreement) has occurred and is continuing
under the Credit Agreement, the Maker shall make such payments, in same day
funds, to such other account as the Agent shall direct in such notice.
This Note is one of the Pledged Notes referred to in the Amended and
Restated Pledge Agreement, dated as of June 27, 2002 (together with all
amendments and other modifications, if any, from time to time hereafter made
thereto, the "PLEDGE AGREEMENT"), by the Payee in favor of Bank of America,
N.A., which has been executed and delivered pursuant to the Credit Agreements
referred to therein (the "CREDIT AGREEMENTS"). Upon the occurrence and
continuance of an Event of Default under either Credit Agreement, and notice
thereof by the Agent to the Maker, the Agent shall have all rights of the Payee
to collect and accelerate, and enforce all rights with respect to, the
indebtedness evidenced by this Note.
Reference is made to the Pledge Agreement for a description of the terms
under which this Note has been pledged to the Agent as security for the
Obligations (as defined in the Pledge Agreement) outstanding from time to time
under the Credit Agreements and each other Loan Document (as defined in the
Pledge Agreement).
In addition to, but not in limitation of, the foregoing, the Maker further
agrees to pay all expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder (including the Agent as pledgee) of this Note
endeavoring to collect any amounts payable hereunder which are not paid when
due, whether by acceleration or otherwise.
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THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF ILLINOIS.
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[Name of Maker]
By_____________________________
Title:
Pay to the order of Bank of America, N.A.,
as Agent
THE ARISTOTLE CORPORATION
By_____________________________
Title:
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GRID
Intercompany Loans made by The Aristotle Corporation to ________________ and
payments of principal of such Loans.
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Date Amount of Amount of Outstanding Notation
Intercompany Principal Principal Made By
Loans Payment Balance
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