EXHIBIT 10.3
AMENDED AND RESTATED STOCK PLEDGE AGREEMENT
THIS AMENDED AND RESTATED STOCK PLEDGE AGREEMENT (this "PLEDGE AGREEMENT")
is entered into as of April 2, 2004 among INFOCROSSING, INC., a Delaware
corporation (the "BORROWER"), AMQUEST, INC., a Georgia corporation (the
"GUARANTOR"; and together with the Borrower, each individually a "PLEDGOR", and
collectively the "PLEDGORS") and CAPITALSOURCE FINANCE LLC, in its capacity as
agent (in such capacity, the "AGENT") for the lenders from time to time party to
the Term Loan Agreement described below (the "LENDERS").
RECITALS
WHEREAS, pursuant to that certain Amended and Restated Term Loan Agreement,
dated as of the date hereof (as amended, modified, extended, renewed or replaced
and in effect from time to time, the "TERM LOAN AGREEMENT"), among the Borrower,
the Lenders and the Agent, the Lenders have agreed to make and hold Loans upon
the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Term Loan
Agreement that the Pledgors shall have executed and delivered this Pledge
Agreement to the Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Term Loan
Agreement, and "SECURED OBLIGATIONS" shall have the meaning set forth in the
Security Agreement.
2. Pledge and Grant of Security Interest. To secure the prompt payment and
performance in full when due, whether by lapse of time or otherwise, of the
Secured Obligations, each Pledgor hereby grants, pledges and assigns to the
Agent, for the ratable benefit of the Lenders, and grants to the Agent, for the
ratable benefit of the Lenders, a continuing first priority security interest in
and Lien on any and all right, title and interest of such Pledgor in and to the
following, whether now owned or existing or owned, acquired, or arising
hereafter (collectively, the "PLEDGED COLLATERAL"):
(a) Pledged Shares. (i) 100% (or, if less, the full amount owned by such
Pledgor) of the issued and outstanding shares of Capital Stock owned by such
Pledgor of each Domestic Subsidiary set forth on Schedule 2(a) attached hereto,
and (ii) 65% of the issued and outstanding shares of each class of Capital Stock
(or, if less, the full amount owned by such Pledgor) of each Foreign Subsidiary
set forth on Schedule 2(a) attached hereto, in each case together with the
certificates (or other agreements or instruments), if any, representing such
shares, and all options and other rights, contractual or otherwise, with respect
thereto (collectively, together with the shares of Capital Stock described in
Sections 2(b) and 2(c) below, the "PLEDGED SHARES"), including, but not limited
to, the following:
(y) all Capital Stock representing a dividend on any of the Pledged
Shares, or representing a distribution or return of capital upon or in
respect of the Pledged Shares, or resulting from a stock split, revision,
reclassification or other exchange therefor, and any subscriptions,
warrants, rights or options issued to the holder of, or otherwise in
respect of, the Pledged Shares; and
(z) without affecting the obligations of the Pledgors under any
provision prohibiting such action hereunder or under the Term Loan
Agreement, in the event of any consolidation or merger involving the issuer
of any Pledged Shares and in which such issuer is not the surviving
corporation, all shares of each class of the Capital Stock of the successor
corporation formed by or resulting from such consolidation or merger.
(b) Additional Shares. 100% (or, if less, the full amount owned by such
Pledgor) of the issued and outstanding shares of Capital Stock owned by such
Pledgor of any Person which hereafter becomes a Domestic Subsidiary and 65% (or,
if less, the full amount owned by such Pledgor) of the Capital Stock owned by
such Pledgor of any Person which hereafter becomes a direct Foreign Subsidiary,
including, without limitation, the certificates, if any, representing such
shares.
(c) Proceeds. All proceeds and products of the foregoing, however and
whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby specifically
understood and agreed that a Pledgor may from time to time hereafter deliver
additional shares of Capital Stock to the Agent as collateral security for the
Secured Obligations. Upon delivery to the Agent, such additional shares of
Capital Stock shall be deemed to be part of the Pledged Collateral of such
Pledgor and shall be subject to the terms of this Pledge Agreement whether or
not Schedule 2(a) is amended to refer to such additional shares.
3. Security for Secured Obligations. The security interest created hereby
in the Pledged Collateral of each Pledgor constitutes continuing collateral
security for all of the Secured Obligations, now existing or hereafter arising
pursuant to the Loan Documents, owing from the Borrower or any other Loan Party
to any Lender or the Agent, howsoever evidenced, created, incurred or acquired,
whether primary, secondary, direct, contingent, or joint and several, including,
without limitation, liabilities incurred in connection with collecting and
enforcing the foregoing.
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees that:
(a) Each Pledgor shall deliver to the Agent (i) simultaneously with or
prior to the execution and delivery of this Pledge Agreement, all certificates
representing the Pledged Shares of such Pledgor and (ii) promptly upon the
receipt thereof by or on behalf of a Pledgor, all other certificates and
instruments constituting Pledged Collateral of a Pledgor. Prior to delivery to
the Agent, all such certificates and instruments constituting Pledged Collateral
of a Pledgor shall be held in trust by such Pledgor for the benefit of the Agent
pursuant hereto. All such certificates shall be delivered in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, substantially in the form provided in Schedule
4(a) attached hereto, accompanied by an irrevocable proxy coupled with an
interest duly executed by such Pledgor in form and substance satisfactory to
Agent.
(b) Additional Securities. If such Pledgor shall receive by virtue of its
being or having been the owner of any Pledged Collateral, any (i) certificate
evidencing Capital Stock, including without limitation, any certificate
representing a dividend or distribution in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale of assets,
combination of shares, stock splits, spin-off or split-off, promissory notes or
other instrument; (ii) option or right, whether as an addition to, substitution
for, or an exchange for, any Pledged Collateral or otherwise; (iii) dividends
payable in securities; or (iv) distributions of securities in connection with a
partial or total liquidation, dissolution or reduction of capital, capital
surplus or paid-in surplus, then such Pledgor shall receive such certificate,
instrument, option, right, or distribution in trust for the benefit of the
Agent, shall segregate it from such Pledgor's other property and shall deliver
it forthwith to the Agent in the exact form received together with any necessary
endorsement and/or appropriate transfer power duly executed in blank,
substantially in the form provided in Schedule 4(a), accompanied by an
irrevocable proxy coupled with an interest duly executed by such Pledgor in form
and substance satisfactory to Agent, to be held by the Agent as Pledged
Collateral and as further collateral security for the Secured Obligations.
(c) Financing Statements. For so long as this Pledge Agreement is in effect
and until this Pledge Agreement is terminated in accordance with Section 15(a)
hereof, each Pledgor authorizes the Agent to prepare and file such UCC or other
applicable financing statements as may be reasonably requested by the Agent in
order to perfect and protect the security interest created hereby in the Pledged
Collateral of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Agent, for the ratable benefit of the Lenders, as follows:
(a) Authorization of Pledged Shares. The Pledged Shares are duly authorized
and validly issued, are fully paid and nonassessable and are not subject to the
preemptive rights of any Person. All other shares of Capital Stock constituting
Pledged Collateral will be duly authorized and validly issued, fully paid and
nonassessable and not subject to the preemptive rights of any Person.
(b) Title. Each Pledgor has good and indefeasible title to the Pledged
Collateral of such Pledgor and will at all times be the legal and beneficial
owner of such Pledged Collateral free and clear of any Lien, other than Liens
permitted by Section 6.3 of the Term Loan Agreement. There exists no "adverse
claim" within the meaning of Section 8-302 of the Uniform Commercial Code as in
effect in the State of New York (the "UCC") as of the date hereof with respect
to the Pledged Shares of such Pledgor.
(c) Exercising of Rights. As of the Closing Date, the exercise by the Agent
of its rights and remedies hereunder will not violate any law or governmental
regulation of the United States or any state (assuming that the Agent's exercise
of remedies complies with laws affecting the offering and sale of securities) or
any material contractual restriction binding on or affecting a Pledgor or any of
its property.
(d) Pledgor's Authority. The execution, delivery and performance by each
Pledgor of this Pledge Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate actions on the part of such Pledgor and pursuant to all necessary
consents required therefor except as set forth in the Term Loan Agreement. This
Pledge Agreement has been duly executed and delivered by each Pledgor and
constitutes the legal, valid and binding obligation of such Pledgor, enforceable
against such Pledgor in accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other similar
law affecting the enforceability of creditors' rights generally and to the
effect of general principles of equity which may limit the availability of
equitable remedies (whether in a proceeding at law or in equity). No
authorization, approval or action by, and no notice or filing with any
Governmental Authority or with the issuer of any Pledged Shares or with any
other Person is required either (i) for the pledge made by a Pledgor or for the
granting of the security interest by a Pledgor pursuant to this Pledge Agreement
or (ii) for the exercise by the Agent or the Lenders of their rights and
remedies hereunder (except as may be required by laws affecting the offering and
sale of securities).
(e) Security Interest/Priority. This Pledge Agreement creates a valid
security interest in favor of the Agent for the ratable benefit of the Lenders
in the Pledged Collateral. The taking possession by the Agent of the
certificates representing the Pledged Shares and all other certificates and
instruments constituting Pledged Collateral will perfect and establish the first
priority of the Agent's security interest in the Pledged Shares and, when
properly perfected by filing or registration, in all other Pledged Collateral
represented by such Pledged Shares and instruments securing the Secured
Obligations (except with respect to any Pledged Collateral, including any
Pledged Shares, subject to a Lien permitted by Section 6.3(l) of the Term Loan
Agreement after the Closing Date) to the extent such security interest can be
perfected by filing under the UCC. Except as set forth in this Section 5(e), no
action is necessary to perfect or otherwise protect such security interest to
the extent such security interest can be perfected by filing under the UCC.
(f) No Other Shares. As of the Closing Date, no Pledgor owns any shares of
Capital Stock other than as set forth on Schedule 2(a) attached hereto.
(g) Partnership and Limited Liability Company Interests. Except as
disclosed to the Agent as of the Closing Date, none of the Pledged Shares
consisting of partnership or limited liability company interests (i) is dealt in
or traded on a securities exchange or in a securities market, (ii) by its terms
expressly provides that it is a security governed by Article 8 of the UCC, (iii)
is an investment company security, (iv) is held in a securities account or (v)
constitutes a "security" or a "financial asset" as such terms are defined in
Article 8 of the UCC.
(h) No Conflicts. The execution, delivery and performance by each Pledgor
of this Pledge Agreement and the consummation of the pledge contemplated hereby
and the granting and creation of the security interest and Liens contemplated
hereby do not and will not (1) conflict with or violate any provision of any
applicable law, statute, rule, regulation, ordinance, license or tariff or any
judgment, decree or order of any court or other Governmental Authority binding
on or applicable to any Pledgor or any of their respective properties or assets;
(2) conflict with, result in a breach of, constitute a default of or an event of
default under, or an event, fact, condition or circumstance which, with notice
or passage of time, or both, would constitute or result in a conflict, breach,
default or event of default under, require any consent not obtained under, or
result in or require the acceleration of any indebtedness pursuant to, any
indenture, agreement or other instrument to which any Pledgor is a party or by
which it or any of their properties or assets are bound or subject except as set
forth in the Term Loan Agreement; (3) if applicable, conflict with or violate
any provision of the certificate of incorporation or by-laws of any Pledgor or
any agreement by and between any Pledgor and its shareholders or equity owners
or among any such shareholders or equity owners; or (4) result in the creation
or imposition of any Lien of any nature whatsoever upon any of the properties or
assets of any Pledgor (except as contemplated herein).
(i) [Reserved].
(j) Litigation and Compliance; Other Agreements. There is no action, suit,
proceeding or investigation pending or, to each Pledgor's knowledge, threatened,
before or by any court, arbitrator or Governmental Authority (1) against or
affecting the Pledged Collateral, such Pledgor, this Pledge Agreement or the
transactions contemplated by this Pledge Agreement, or (2) that questions or
could reasonably be expected to prevent the validity of this Pledge Agreement or
the right or ability of such Pledgor to execute or deliver this Pledge Agreement
or to consummate the transactions contemplated by this Pledge Agreement or to
create or grant the Liens and security interests contemplated by this Pledge
Agreement. No Pledgor nor any entity whose securities constitute part of the
Pledged Collateral is (i) a party to any judgment, order or decree or any
agreement, document or instrument, or subject to any restriction, which would
materially adversely affect its ability to execute and deliver, or perform
under, this Pledge Agreement, or (ii) in default in the performance, observance
or fulfillment of any obligation, covenant or condition contained in any
agreement, document or instrument to which it is a party or to which any of its
properties or assets are subject, which default, if not remedied within any
applicable grace or cure period, could reasonably be expected to have or be a
Material Adverse Effect, nor is there any event, fact, condition or circumstance
which, with notice or passage of time or both, would constitute or result in a
conflict, breach, default or event of default under, any of the foregoing which,
if not remedied within any applicable grace or cure period could reasonably be
expected to have or be a Material Adverse Effect.
(k) Full Disclosure. No statement of fact made by or on behalf of any
Pledgor in this Pledge Agreement contains any untrue statement of a material
fact or omits to state any material fact necessary to make statements contained
therein or herein not misleading. There is no fact presently known to any
Pledgor which has not been disclosed to the Lenders in writing which has had or,
as far as such Pledgor can reasonably foresee, could reasonably be expected to
have a Material Adverse Effect.
6. Covenants. Each Pledgor hereby covenants, that so long as any Loans are
outstanding or any other amount is due and owing to any Lender or the Agent
under the Term Loan Agreement or under any other Loan Document, such Pledgor
shall:
(a) Books and Records. Mark its books and records (and shall cause the
issuer of the Pledged Shares of such Pledgor to mark its books and records) to
reflect the security interest granted to the Agent, for the ratable benefit of
the Lenders, pursuant to this Pledge Agreement.
(b) Defense of Title. Warrant and defend title to and ownership of the
Pledged Collateral of such Pledgor at its own expense against the claims and
demands of all other parties claiming an interest therein, keep the Pledged
Collateral free from all Liens, except for Liens permitted by Section 6.3 of the
Term Loan Agreement, and not sell, exchange, transfer, assign, lease or
otherwise dispose of Pledged Collateral of such Pledgor or any interest therein,
except as permitted under the Term Loan Agreement and the other Loan Documents.
(c) Further Assurances. Promptly execute and deliver at its expense all
further instruments and documents and take all further action that may be
reasonably necessary and desirable or that the Agent may reasonably request in
order to (i) perfect and protect the security interest created hereby in the
Pledged Collateral of such Pledgor (including without limitation any and all
action necessary to satisfy the Agent that the Agent has obtained a first
priority perfected security interest in any Capital Stock); (ii) enable the
Agent to exercise and enforce its rights and remedies hereunder in respect of
the Pledged Collateral of such Pledgor; and (iii) otherwise effect the purposes
of this Pledge Agreement (including, without limitation and if requested by the
Agent, delivering to the Agent irrevocable proxies in respect of the Pledged
Collateral of such Pledgor upon the occurrence and during the continuance of an
Event of Default). Without limiting the foregoing, upon the exercise by Secured
Party or any Lender or any of its or their Affiliates or agents of any right or
remedy which requires any consent, approval or registration with, or consent,
qualification or authorization by, any Person, each Pledgor shall execute and
deliver, or cause the execution and delivery of, all applications, certificates,
instruments and other documents that Agent or any Lender or its or their
Affiliates or agents may be required to obtain for such consent, approval,
registration, qualification or authorization. Each Pledgor hereby appoints
Agent, for the ratable benefit of the Lenders, as its attorney-in-fact (without
requiring Agent to act as such), with full power of substitution, which
appointment as attorney-in-fact is irrevocable and coupled with an interest,
effective upon the occurrence and during the continuance of and Event of
Default, to take all such actions, whether in the name of Agent, for the ratable
benefit of the Lenders, or such Pledgor, as Agent in its discretion may consider
necessary or desirable with respect to the foregoing (to the extent such Pledgor
fails to so execute and/or file any of the foregoing within two (2) Business
Days of Agent's request or the time when such Pledgor is otherwise obligated to
do so). Each Pledgor will pay all costs associated with respect to the
foregoing, including without limitation, the cost of filing any of the foregoing
in all public offices or other locations wherever Agent deems filing to be
necessary or desirable. Each Pledgor shall deliver to Agent any and all
documentary tax stamps and other documents necessary to cause Agent, for the
ratable benefit of the Lenders, to have a good, valid and perfected continuing
first priority pledge of and Lien on the Pledged Collateral of such Pledgor
(free and clear of any other Liens), including, without limitation, any
necessary notations in the books or other records of such Pledgor. If such
Pledgor fails to timely do so, Agent shall have the right (but not the
obligation) to pay any taxes relating to the Pledged Collateral of such Pledgor
and any costs to preserve the Pledged Collateral of such Pledgor, which payments
shall be part of the Secured Obligations. No injury to, or loss or destruction
of any of, the Pledged Collateral or any Material Adverse Effect shall relieve
any Pledgor of any of the Secured Obligations.
(d) Amendments. Not, except as provided herein or as may be permitted under
the Term Loan Agreement, make or consent to any amendment or other modification
or waiver with respect to any of the Pledged Collateral of such Pledgor or enter
into any agreement or allow to exist any restriction with respect to any of the
Pledged Collateral of such Pledgor.
(e) Compliance with Securities Laws. File all reports and other information
now or hereafter required to be filed by such Pledgor with the United States
Securities and Exchange Commission and any other state, federal or foreign
agency in connection with the ownership of the Pledged Collateral of such
Pledgor.
(f) Issuance or Acquisition of Capital Stock. Not without giving prior
written notice to the Agent and executing and delivering, or causing to be
executed and delivered within ten (10) days, to the Agent such agreements,
documents and instruments as the Agent may reasonably require, issue or acquire
any Capital Stock consisting of an interest in a partnership or a limited
liability company that (i) is dealt in or traded on a securities exchange or in
a securities market, (ii) by its terms expressly provides that it is a security
governed by Article 8 of the UCC, (iii) is an investment company security, (iv)
is held in a securities account or (v) constitutes a "security" or a "financial
asset" as such terms are defined in Article 8 of the UCC.
7. Advances by Lenders. On failure of any Pledgor to perform any of the
covenants and agreements contained herein, after notice by Agent, the Agent may,
at its sole option and in its sole discretion, perform the same and in so doing
may expend such sums as the Agent may reasonably deem advisable in the
performance thereof, including, without limitation, the payment of any insurance
premiums, the payment of any taxes, a payment to obtain a release of a Lien or
potential Lien, expenditures made in defending against any adverse claim and all
other expenditures which the Agent or the Lenders may make for the protection of
the security hereof or which may be compelled to make by operation of law. All
such sums and amounts so expended shall be repayable by the Pledgors on a joint
and several basis promptly upon timely notice thereof and demand therefor, shall
constitute additional Secured Obligations and shall bear interest from the date
said amounts are expended at the default rate specified in Section 2.4 of the
Term Loan Agreement. No such performance of any covenant or agreement by the
Agent or the Lenders on behalf of any Pledgor, and no such advance or
expenditure therefor, shall relieve the Pledgors of any default under the terms
of this Pledge Agreement or the other Loan Documents, provided that if such
default shall no longer be continuing as a result of the performance of any
covenant or agreement by the Agent or the Lenders, or an advance or expenditure
therefor, upon reimbursement by any Obligor (as defined in the Security
Agreement) of the Agent or the Lender, as applicable, for any sums expended
therefor, such default shall be cured. The Lenders may make any payment hereby
authorized in accordance with any bill, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such bill, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by a Pledgor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP provided that the Agent has given written
notice to the applicable Obligor of its intent to pay such sums.
8. Events of Default. The occurrence of an event which under the Term Loan
Agreement would constitute a Default or Event of Default shall be a Default or
Event of Default, as the case may be, hereunder.
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and during
the continuation thereof, the Agent and the Lenders shall have, in respect of
the Pledged Collateral of any Pledgor, in addition to the rights and remedies
provided herein, in the Loan Documents or by law, the rights and remedies of a
secured party under the UCC or any other applicable law.
(b) Sale of Pledged Collateral. Upon the occurrence of an Event of Default
and during the continuation thereof, without limiting the generality of this
Section and without notice, the Agent may, in its sole and absolute discretion,
sell or otherwise dispose of or realize upon the Pledged Collateral, or any part
thereof, in one or more parcels, at public or private sale, at any exchange or
broker's board or elsewhere, at such price or prices and on such other terms as
the Agent may deem commercially reasonable, for cash, credit or for future
delivery or otherwise, in each case in accordance with applicable law. To the
extent permitted by law, any Lender may in such event, bid for the purchase of
such securities. Each Pledgor agrees that, to the extent notice of sale shall be
required by law and has not been waived by such Pledgor, any requirement of
reasonable notice shall be met if notice, specifying the place of any public
sale or the time after which any private sale is to be made, is personally
served on or mailed, postage prepaid, to such Pledgor, in accordance with the
notice provisions of Section 9.2 of the Term Loan Agreement at least ten (10)
days before the time of such sale. The Agent shall not be obligated to make any
sale of Pledged Collateral of such Pledgor 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.
(c) Private Sale. Upon the occurrence of an Event of Default and during the
continuation thereof, the Pledgors recognize that the Agent may deem it
impracticable to effect a public sale of all or any part of the Pledged Shares
or any of the securities constituting Pledged Collateral and that the Agent may,
therefore, determine to make one or more private sales of any such securities to
a restricted group of purchasers who will be obligated to agree, among other
things, to acquire such securities for their own account, for investment and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sale may be at prices and on terms less favorable to the
seller than the prices and other terms which might have been obtained at a
public sale and, notwithstanding the foregoing, agrees that such private sale
shall be deemed to have been made in a commercially reasonable manner and that
the Agent shall have no obligation to delay sale of any such securities for the
period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act of 1933. Each Pledgor
further acknowledges and agrees that any offer to sell such securities which has
been (i) publicly advertised on a bona fide basis in a newspaper or other
publication of general circulation in the financial community of New York, New
York (to the extent that such offer may be advertised without prior registration
under the Securities Act of 1933), or (ii) made privately in the manner
described above, shall be deemed to involve a "public sale" under the UCC,
notwithstanding that such sale may not constitute a "public offering" under the
Securities Act of 1933, and the Agent may, in such event, bid for the purchase
of such securities.
(d) Retention of Pledged Collateral. In addition to the rights and remedies
hereunder, upon the occurrence and during the continuance of an Event of
Default, the Agent may, after providing the notices required by Section 9-621 of
the UCC or otherwise complying with the requirements of applicable law of the
relevant jurisdiction, retain all or any portion of the Pledged Collateral in
satisfaction of the Secured Obligations. Unless and until the Agent shall have
provided such notices, however, the Agent shall not be deemed to have retained
any Pledged Collateral in satisfaction of any Secured Obligations for any
reason.
(e) Deficiency. In the event that the proceeds of any sale, collection or
realization are insufficient to pay all amounts to which the Agent or the
Lenders are legally entitled, the Pledgors shall be jointly and severally liable
for the deficiency, together with interest thereon at the default rate specified
in Section 2.4 of the Term Loan Agreement, together with the costs of collection
and the reasonable fees of any attorneys employed by the Agent to collect such
deficiency. Any surplus remaining after the full payment and satisfaction of the
Secured Obligations shall be returned to the Pledgors or to whomsoever a court
of competent jurisdiction shall determine to be entitled thereto.
(f) Right of Agent to Appoint Receiver. Without limiting and in addition to
any other rights, options and remedies Agent and Lenders have hereunder or under
the Loan Documents, the UCC, at law or in equity, upon the occurrence and
continuation of an Event of Default to the extent permitted by law, Agent and
Lenders shall have the right to apply for and have a receiver appointed by a
court of competent jurisdiction in any action taken by Agent and Lenders to
enforce their rights and remedies in order to manage, protect and preserve the
Pledged Collateral and continue the operation of the businesses of the Pledgors
and their Subsidiaries and to collect all revenues and profits thereof and apply
the same to the payment of all expenses and other charges of such receivership
including the compensation of the receiver and to the payments as aforesaid
until a sale or other disposition of such Pledged Collateral shall be finally
made and consummated.
10. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of attorney contained
herein, each Pledgor hereby designates and appoints the Agent, on behalf of the
Lenders, and each of its designees or agents as attorney-in-fact of such
Pledgor, irrevocably and with full power of substitution, with authority to take
any or all of the following actions upon the occurrence and during the
continuance of an Event of Default whether in the name of the Agent, any Lender
or any Pledgor, as Agent may consider necessary or desirable for the purpose of
exercising such actions:
(i) to demand, collect, settle, compromise, adjust and give discharges
and releases concerning the Pledged Collateral of such Pledgor, all as the
Agent may reasonably determine;
(ii) to commence and prosecute any actions at any court for the
purposes of collecting any of the Pledged Collateral of such Pledgor and
enforcing any other right in respect thereof;
(iii) to pay or discharge taxes, liens, security interests, or other
encumbrances levied or placed on or threatened against the Pledged
Collateral of such Pledgor;
(iv) to direct any parties liable for any payment under any of the
Pledged Collateral to make payment of any and all monies due and to become
due thereunder directly to the Agent or as the Agent shall direct;
(v) to receive payment of and receipt for any and all monies, claims,
and other amounts due and to become due at any time in respect of or
arising out of any Pledged Collateral of such Pledgor;
(vi) to sign and endorse any drafts, assignments, proxies, transfer
powers, verifications, notices and other documents relating to the Pledged
Collateral of such Pledgor;
(vii) to settle, compromise or adjust any suit, action or proceeding
described above and, in connection therewith, to give such discharges or
releases as the Agent may deem reasonably appropriate;
(viii) execute and deliver all assignments, conveyances, statements,
financing statements, renewal financing statements, pledge agreements,
affidavits, notices and other agreements, instruments and documents that
the Agent may determine necessary in order to perfect and maintain the
security interests and liens granted in this Pledge Agreement and in order
to fully consummate all of the transactions contemplated herein;
(ix) to exchange any of the Pledged Collateral of such Pledgor or
other property upon any merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof and, in
connection therewith, deposit any of the Pledged Collateral of such Pledgor
with any committee, depository, transfer agent, registrar or other
designated agency upon such terms as the Agent may determine;
(x) to vote for a shareholder resolution, or to sign an instrument in
writing, sanctioning the transfer of any or all of the Pledged Shares of
such Pledgor into the name of the Agent or one or more of the Lenders or
into the name of any transferee to whom the Pledged Shares of such Pledgor
or any part thereof may be sold pursuant to Section 10 hereof; and
(xi) to do and perform all such other acts and things as the Agent may
reasonably deem to be necessary, proper or convenient in connection with
the Pledged Collateral of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as this Pledge Agreement is in effect and until this
Pledge Agreement is terminated in accordance with Section 15(a) hereof. The
Agent shall be under no duty to exercise or withhold the exercise of any of the
rights, powers, privileges and options expressly or implicitly granted to the
Agent in this Pledge Agreement, and shall not be liable for any failure to do so
or any delay in doing so. The Agent shall not be liable for any act or omission
or for any error of judgment or any mistake of fact or law in its individual
capacity or its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct. This power of attorney is
conferred on the Agent solely to protect, preserve and realize upon its security
interest in Pledged Collateral.
(b) Performance by the Agent of Pledgor's Obligations. If any Pledgor fails
to perform any agreement or obligation contained herein, after notice by Agent
to Pledgor, the Agent itself may perform, or cause performance of, such
agreement or obligation, and the expenses of the Agent incurred in connection
therewith shall be payable by the Pledgors on a joint and several basis pursuant
to Section 13 hereof.
(c) Assignment by the Agent. The Agent may from time to time assign the
Secured Obligations and any portion thereof and/or the Pledged Collateral and
any portion thereof, and the assignee shall be entitled to all of the rights and
remedies of the Agent under this Pledge Agreement in relation thereto.
(d) The Agent's Duty of Care in Respect of the Pledged Collateral. The
Agent's sole duty with respect to the safe custody of the Pledged Collateral,
while being held by the Agent hereunder, under Section 9-207 of the UCC (as
defined in the Security Agreement), shall be substantially equal to that which
the Agent accords its own property. Other than this duty, the Agent shall have
no duty or liability to preserve rights pertaining thereto, it being understood
and agreed that the Pledgors shall be responsible for the preservation of all
rights in the Pledged Collateral of such Pledgor, and the Agent shall be
relieved of all responsibility for Pledged Collateral upon surrendering it or
tendering the surrender of it to the Pledgors. It is understood and agreed that
the Agent shall not have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Pledged Collateral, whether or not the Agent has or is
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Pledged Collateral.
(e) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Default or Event of Default shall have occurred and
be continuing, to the extent permitted by law, each Pledgor may exercise
any and all voting and other consensual rights pertaining to the Pledged
Collateral of such Pledgor or any part thereof for any purpose not
inconsistent with the terms of this Pledge Agreement or the Term Loan
Agreement; and
(ii) Upon the occurrence and during the continuance of a Default or
Event of Default, all rights of a Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant
to paragraph (i) of this Section shall cease immediately and without notice
to any Pledgor or action by or on behalf of Agent or any other Person and
all such rights shall thereupon become vested solely and exclusively in the
Agent for the ratable benefit of the Lenders automatically without any
action by any Person which shall then have the sole right to exercise such
voting and other consensual rights.
(f) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Default or Event of Default shall have occurred and
be continuing and subject to Section 4(b) hereof, each Pledgor may receive
and retain any and all dividends (other than dividends constituting Pledged
Collateral which are addressed above) or interest paid in respect of the
Pledged Collateral to the extent they are allowed under the Term Loan
Agreement.
(ii) Upon the occurrence and during the continuance of a Default or
Event of Default:
(A) all rights of a Pledgor to receive the dividends and interest
payments which it would otherwise be authorized to receive and retain
pursuant to paragraph (i) of this Section shall cease immediately
without any notice to such Pledgor or action by or on behalf of Agent
or any other Person and all such rights shall thereupon be vested
solely and exclusively in the Agent which shall then have the sole
right to receive and hold as Pledged Collateral such dividends and
interest payments; and
(B) all dividends and interest payments which are received by a
Pledgor contrary to the provisions of paragraph (A) of this Section
shall be received in trust for the benefit of the Agent, shall be
segregated from other property or funds of such Pledgor, and shall be
forthwith paid over to the Agent as Pledged Collateral in the exact
form received, to be held by the Agent as Pledged Collateral and as
further collateral security for the Secured Obligations.
(g) Release of Pledged Collateral. The Agent may release any of the Pledged
Collateral from this Pledge Agreement or may substitute any of the Pledged
Collateral for other Pledged Collateral without altering, varying or diminishing
in any way the force, effect, lien, pledge or security interest of this Pledge
Agreement as to any Pledged Collateral not expressly released or substituted,
and this Pledge Agreement shall continue as a first priority lien on all Pledged
Collateral not expressly released or substituted.
11. Rights of Required Lenders. All rights of the Agent hereunder, if not
exercised by the Agent, may be exercised by the Required Lenders.
12. Application of Proceeds. Upon the acceleration of the Secured
Obligations pursuant to Section 7 of the Term Loan Agreement, any payments in
respect of the Secured Obligations and any proceeds of any Pledged Collateral,
when received by the Agent or any of the Lenders in cash or its equivalent, will
be applied in the order set forth in Section 7 of the Term Loan Agreement, and
each Pledgor irrevocably waives the right to direct the application of such
payments and proceeds and acknowledges and agrees that the Agent shall have the
continuing and exclusive right to apply and reapply any and all such payments
and proceeds in the Agent's sole discretion, notwithstanding any entry to the
contrary upon any of its books and records.
13. Costs of Counsel. At all times hereafter, the Pledgors agree to
promptly pay upon demand any and all reasonable costs and expenses of the Agent
or the Lenders, (a) as required under Section 9.5 of the Term Loan Agreement and
(b) subject to the limitations on the fees of counsel to the Agent and the
Lenders set forth in Section 9.5 of the Term Loan Agreement, as reasonably
necessary to protect the Pledged Collateral or to exercise any rights or
remedies under this Pledge Agreement or with respect to any Pledged Collateral,
including the costs and expenses of the Agent's counsel and of any experts or
agents that the Agent may incur in connection with (i) the administration of
this Pledge Agreement, (ii) the custody, preservation, sale or collection of, or
realization upon, any Pledged Collateral, and (iii) the failure of a Pledgor to
perform or observe any covenant or agreement hereunder. All of the foregoing
costs and expenses shall constitute Secured Obligations and Secured Obligations
hereunder.
14. Indemnity. Without limitation of its indemnification obligations under
the other Loan Documents, each Pledgor jointly and severally agrees to indemnify
the Agent, each Lender, and each of their Affiliates and their respective
members, partners, directors, officers, employees, agents and advisors of the
Agent, each Lender and each of their Affiliates (each such Person being called
an "INDEMNITEE") against, and hold each Indemnitee harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, fees and disbursements of counsel and in-house documentation
and diligence fees and legal expenses (subject to any applicable limitation on
the fees of counsel to the Agent and the Lenders set forth in Section 9.5 of the
Term Loan Agreement)) which may be imposed on, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of, the
execution, delivery or performance of this Pledge Agreement or any claim,
litigation, investigation or proceeding relating hereto or to the Pledged
Collateral, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
15. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in every respect
and shall remain in full force and effect until the Secured Obligations have
been paid in full (other than any contingent indemnification obligations set
forth in the Loan Documents). Upon such payment in full, this Pledge Agreement
shall be automatically terminated and the Agent and the Lenders shall, upon the
request and at the expense of the Pledgors, forthwith release all of its liens
and security interests hereunder and shall execute and deliver all UCC
termination statements and/or other documents reasonably requested by the
Obligors evidencing such termination.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in whole
or in part, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by the Agent or any Lender as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar law, all as
though such payment had not been made; provided that in the event payment of all
or any part of the Secured Obligations is rescinded or must be restored or
returned, all reasonable costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Agent or any Lender in
defending and enforcing such reinstatement shall be deemed to be included as a
part of the Secured Obligations.
16. Amendments; Waivers; Modifications; No Waiver of Defaults. This Pledge
Agreement and the provisions hereof may not be amended, waived, modified,
changed, discharged or terminated except as set forth in Section 9.1 of the Term
Loan Agreement.
17. Successors in Interest. This Pledge Agreement shall create a continuing
security interest in the Pledged Collateral and shall be binding upon each
Pledgor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders and their successors and permitted assigns; provided, however,
that none of the Pledgors may assign its rights or delegate its duties hereunder
without the prior written consent of each Lender or the Required Lenders, as
required by the Term Loan Agreement. To the fullest extent permitted by law,
each Pledgor hereby releases the Agent and each Lender, and its successors and
assigns, from any liability for any act or omission relating to this Pledge
Agreement or the Pledged Collateral, except for any liability arising from the
gross negligence or willful misconduct of the Agent, or such Lender, or its
officers, employees or agents.
18. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be in conformance with Section 9.2 of the Term Loan
Agreement.
19. Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
20. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
21. Governing Law; Submission to Jurisdiction; Venue. THIS PLEDGE
AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK. Each Pledgor hereby irrevocably and unconditionally: (i)
submits for itself and its property in any legal action or proceeding relating
to this Pledge Agreement and the other Loan Documents to which it is a party, or
for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof; (ii) consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same; (iii) agrees that service of process in
any such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to the Borrower at its address set forth in subsection 9.2 of
the Term Loan Agreement or at such other address of which the Agent shall have
been notified pursuant thereto; (iv) agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or shall
limit the right of Agent or any Lender to bring proceedings against a Pledgor in
the courts of any other jurisdiction having jurisdiction; (v) agrees that any
judicial proceedings against Agent or any Lender involving, directly or
indirectly, the Secured Obligations, any Loan Document or any related agreement
shall be brought only in courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and appellate
courts from any thereof; and (vi) waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary, punitive or
consequential damages.
22. Waiver of Jury Trial. EACH PLEDGOR, THE AGENT AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR
ANY COUNTERCLAIM THEREIN.
23. Severability. If any provision of any of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
24. Entirety. This Pledge Agreement and the other Loan Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Loan Documents or the transactions
contemplated herein and therein.
25. Survival. All representations and warranties of the Pledgors hereunder
shall survive the execution and delivery of this Pledge Agreement, and the other
Loan Documents, the delivery of the Notes and the making of the Loans.
26. Other Security. To the extent that any of the Secured Obligations are
now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Agent and the Lenders shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence and during the
continuation of any Event of Default, and the Agent and the Lenders have the
right, in their sole discretion, to determine which rights, security, liens,
security interests or remedies the Agent and the Lenders shall at any time
pursue, relinquish, subordinate, modify or take with respect thereto, without in
any way modifying or affecting any of them or any of the Agent's and the
Lenders' rights or the Secured Obligations under this Pledge Agreement or under
any other of the Loan Documents.
27. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several liability hereunder
in consideration of the financial accommodation to be provided by the Lenders
under the Term Loan Agreement, for the mutual benefit, directly and indirectly,
of each of the Pledgors and in consideration of the undertakings of each of the
Pledgors to accept joint and several liability for the obligations of each of
them.
(b) Each of the Pledgors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Pledgors with respect to the payment and
performance of all of the Secured Obligations arising under this Pledge
Agreement and the other Loan Documents, it being the intention of the parties
hereto that all the Secured Obligations shall be the joint and several
obligations of each of the Pledgors without preferences or distinction among
them.
(c) Notwithstanding any provision to the contrary contained herein, or in
any other of the Loan Documents the obligations of each Guarantor under the Term
Loan Agreement and the other Loan Documents shall be limited to an aggregate
amount equal to the largest amount that would not render such obligations
subject to avoidance under Section 548 of the Bankruptcy Code or any comparable
provisions of any applicable state law.
Stock Pledge Agreement
Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: INFOCROSSING, INC.
By: /s/ William J. McHale
------------------------------------
Name: William J. McHale
Title: Senior Vice President - Finance
GUARANTOR: AMQUEST, INC.
By: /s/ William J. McHale
------------------------------------
Name: William J. McHale
Title: Senior Vice President - Finance
Accepted and agreed to as of the
date first above written.
CAPITALSOURCE FINANCE LLC, as Agent
By: /s/ Joseph Turitz
--------------------------
Name: Joseph Turitz
Title: General Counsel