Pledge and Security Agreement - Taleo Corp. and Goldman Sachs Specialty Lending Group LP
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (this "SECURITY AGREEMENT") is executed
as of April 25, 2005, by TALEO CORPORATION, a Delaware corporation ("PLEDGOR"),
whose address is 575 Market Street, 8th Floor; San Francisco, CA 94105, and
GOLDMAN SACHS SPECIALTY LENDING GROUP, L.P., as Collateral Agent for the Lenders
described below ("COLLATERAL AGENT"), whose address is 600 Las Colinas
Boulevard, Suite 400, Irving, Texas 75039.
RECITALS:
A. WHEREAS, Pledgor, RECRUITFORCE.COM, INC., as guarantor, the Lenders
party thereto from time to time, and Collateral Agent have entered into a Credit
and Guaranty Agreement dated as of April 25, 2005 (as amended, modified,
supplemented, or restated from time to time, the "CREDIT AGREEMENT").
B. WHEREAS, this Security Agreement is integral to the transactions
contemplated by the Credit Documents, and the execution and delivery hereof are
conditions precedent to any Lender's obligations to extend credit under the
Credit Documents.
C. WHEREAS, the Collateral Agent was appointed as Collateral Agent under
the Credit Agreement, for the benefit of Lenders.
ACCORDINGLY, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Collateral Agent hereby agree as follows:
1. REFERENCE TO CREDIT AGREEMENT. The terms, conditions, and provisions of
the Credit Agreement are incorporated herein by reference, the same as if set
forth herein verbatim, which terms, conditions, and provisions shall continue to
be in full force and effect hereunder until the Obligations are paid and
performed in full. This Pledge and Security Agreement is one of the "Collateral
Documents" referred to in the Credit Agreement.
2. CERTAIN DEFINITIONS. Unless otherwise defined herein, or the context
hereof otherwise requires, each term defined in either of the Credit Agreement
or in the UCC is used in this Security Agreement with the same meaning; provided
that, if the definition given to such term in the Credit Agreement conflicts
with the definition given to such term in the UCC, the Credit Agreement
definition shall control to the extent legally allowable; and if any definition
given to such term in Chapter 9 of the UCC conflicts with the definition given
to such term in any other chapter of the UCC, the Chapter 9 definition shall
prevail. As used herein, the following terms have the meanings indicated:
"ADDITIONAL PROPRIETARY RIGHTS" has the meaning set forth in SECTION 4
hereof.
"COLLATERAL" has the meaning set forth in SECTION 4 hereof.
"COLLATERAL NOTES" has the meaning set forth in SECTION 4 hereof.
"COLLATERAL NOTE SECURITY" has the meaning set forth in SECTION 4 hereof.
"COLLATERAL OBLIGOR" means any Person obligated with respect to any of the
Collateral, whether as an account debtor, obligor on an instrument, issuer of
securities, or otherwise.
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"CONTROL AGREEMENT" means, with respect to any Collateral consisting of
investment property, Deposit Accounts, electronic chattel paper, and
letter-of-credit rights, an agreement evidencing that Collateral Agent has
"control" (as defined in the UCC) of such Collateral.
"COPYRIGHTS" has the meaning set forth in SECTION 4 hereof.
"DEPOSIT ACCOUNTS" has the meaning set forth in SECTION 4 hereof.
"FOREIGN SUBSIDIARY" means each Subsidiary of Pledgor that is organized or
incorporated under the Law of any jurisdiction other than the jurisdiction of
the United States or a state thereof, and that is in existence on the Closing
date.
"GOVERNMENT AUTHORITY" means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, any other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank),
or solely for purposes of SECTION 3, any central bank.
"INTELLECTUAL PROPERTY" has the meaning set forth in SECTION 4 hereof.
"LAW" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Government Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"OBLIGATIONS" means, collectively, (a) the "Obligations" as defined in the
Credit Agreement, and (b) all indebtedness, liabilities, and obligations of
Pledgor arising under this Security Agreement or any Guaranty assuring payment
of the Obligations; it being the intention and contemplation of Pledgor and
Collateral Agent that Pledgor may guarantee (or otherwise become directly or
contingently obligated with respect to) the obligations of others to Collateral
Agent, that from time to time overdrafts of Pledgor's accounts with Collateral
Agent may occur, and that Collateral Agent may from time to time acquire from
others obligations of Pledgor to such others, and that payment and repayment of
all of the foregoing are intended to and shall be part of the Obligations
secured hereby. The Obligations shall include, without limitation, future, as
well as existing, advances, indebtedness, liabilities, and obligations owed by
Pledgor to Collateral Agent arising under the Credit Documents or otherwise.
"PARTNERSHIPS" shall mean (a) those partnerships and limited liability
companies, if any, listed on EXHIBIT B-1 attached hereto and incorporated herein
by reference, as such partnerships or limited liability companies exist or may
hereinafter be restated, amended, or restructured, (b) any partnership, joint
venture, or limited liability company in which Pledgor shall, at any time,
become a limited or general partner, venturer, or member, or (c) any
partnership, joint venture, or corporation formed as a result of the
restructure, reorganization, or amendment of the Partnerships.
"PARTNERSHIP AGREEMENTS" shall mean (a) those agreements, if any, listed
on EXHIBIT B-1 attached hereto and incorporated herein by reference (together
with any modifications, amendments, or restatements thereof), and (b)
partnership agreements, joint venture agreements, or organizational agreements
for any of the partnerships, joint ventures, or limited liability companies
described in CLAUSE
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(b) of the definition of "Partnerships" above (together with any modifications,
amendments or restatements thereof), and "PARTNERSHIP AGREEMENT" means any one
of the Partnership Agreements.
"PARTNERSHIP INTERESTS" shall mean all of Pledgor's right, title, and
interest now or hereafter accruing under the Partnership Agreements with respect
to all distributions, allocations, proceeds, fees, preferences, payments, or
other benefits, which Pledgor now is or may hereafter become entitled to receive
with respect to such interests in the Partnerships and with respect to the
repayment of all loans now or hereafter made by Pledgor to the Partnerships.
"PATENTS" has the meaning set forth in SECTION 4 hereof.
"PLEDGED SECURITIES" means, collectively, the Pledged Shares and any other
Collateral constituting securities.
"PLEDGED SHARES" has the meaning set forth in SECTION 4 hereof.
"SECURITY INTEREST" means the security interest granted and the pledge
made under SECTION 3 hereof.
"TAXES" means, for any Person, taxes, assessments, duties, levies,
imposts, deductions, charges, or withholdings, or other governmental charges or
levies, imposed upon such Person, its income, or any of its properties,
franchises, or assets.
"TRADEMARKS" has the meaning set forth in SECTION 4 hereof.
"UCC" means the Uniform Commercial Code, including each such provision as
it may subsequently be renumbered, as enacted in the State of Texas or other
applicable jurisdiction, as amended at the time in question.
3. SECURITY INTEREST. In order to secure the full and complete payment and
performance of the Obligations when due, Pledgor hereby grants to Collateral
Agent a Security Interest in all of Pledgor's rights, titles, and interests in
and to the Collateral and pledges the Collateral to Collateral Agent, all upon
and subject to the terms and conditions of this Security Agreement. Such
Security Interest is granted and pledge is made as security only and shall not
subject Collateral Agent to, or transfer or in any way affect or modify, any
obligation of Pledgor with respect to any of the Collateral or any transaction
involving or giving rise thereto. If the grant or pledge of any specific item of
the Collateral is expressly prohibited by any contract, then the Security
Interest created hereby nonetheless remains effective to the extent allowed by
the UCC or other applicable Law, but is otherwise limited by that prohibition.
4. COLLATERAL. As used herein, the term "COLLATERAL" means the following
items and types of property, wherever located, now owned or in the future
existing or acquired by Pledgor, and all proceeds and products thereof, and any
substitutes or replacements therefor:
(a) All personal property and fixture property of every kind and
nature including, without limitation, all accounts, chattel paper (whether
tangible or electronic), goods (including inventory, equipment, and any
accessions thereto), software, instruments, investment property,
documents, deposit accounts, money, commercial tort claims, letters of
credit or letter-of-credit rights, supporting obligations, Tax refunds,
and general intangibles (including payment intangibles);
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(b) All rights, titles, and interests of Pledgor in and to all
outstanding stock, equity, or other investment securities owned directly
by Pledgor, including without limitation, all such stock, equity, or other
investment securities set forth on EXHIBIT B-1 (the "PLEDGED SHARES");
(c) All rights, titles, and interests of Pledgor in and to all
promissory notes and other instruments payable to Pledgor, including,
without limitation, all inter-company notes from Subsidiaries and those
set forth on EXHIBIT B-1 ("COLLATERAL NOTES") and all rights, titles,
interests, and Liens Pledgor may have, be, or become entitled to under all
present and future loan agreements, security agreements, pledge
agreements, deeds of trust, mortgages, guarantees, or other documents
assuring or securing payment of or otherwise evidencing the Collateral
Notes, including, without limitation, those set forth on EXHIBIT B-1
("COLLATERAL NOTE SECURITY");
(d) The Partnership Interests and all rights of Pledgor with respect
thereto, including, without limitation, all Partnership Interests, if any,
set forth on EXHIBIT B-1 and all of Pledgor's distribution rights, income
rights, liquidation interest, accounts, contract rights, general
intangibles, notes, instruments, drafts, and documents relating to the
Partnership Interests;
(e) (i) All copyrights (whether statutory or common law, registered
or unregistered), works protectable by copyright, copyright registrations,
copyright licenses, and copyright applications of Pledgor, including,
without limitation, all of Pledgor's right, title, and interest in and to
all copyrights registered in the United States Copyright Office or
anywhere else in the world and also including, without limitation, the
copyrights set forth on EXHIBIT B-2; (ii) all renewals, extensions, and
modifications thereof; (iii) all income, licenses, royalties, damages,
profits, and payments relating to or payable under any of the foregoing;
(iv) the right to sue for past, present, or future infringements of any of
the foregoing; and (v) all other rights and benefits relating to any of
the foregoing throughout the world; in each case, whether now owned or
hereafter acquired by Pledgor ("COPYRIGHTS");
(f) (i) All patents, patent applications, patent licenses, and
patentable inventions of Pledgor, including, without limitation,
registrations, recordings, and applications thereof in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any state thereof or any other country or any political
subdivision thereof, including, without limitation, those set forth on
EXHIBIT B-2, and all of the inventions and improvements described and
claimed therein; (ii) all continuations, divisions, renewals, extensions,
modifications, substitutions, reexaminations, continuations-in-part, or
reissues of any of the foregoing; (iii) all income, royalties, profits,
damages, awards, and payments relating to or payable under any of the
foregoing; (iv) the right to sue for past, present, and future
infringements of any of the foregoing; and (v) all other rights and
benefits relating to any of the foregoing throughout the world; in each
case, whether now owned or hereafter acquired by Pledgor ("PATENTS");
(g) (i) All trademarks, trade dress, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, certification marks, collective marks, logos, other
business identifiers, all registrations, recordings, and applications
thereof, including, without limitation, registrations, recordings, and
applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any state thereof or any
other country or any political subdivision thereof, including, without
limitation, those set forth on EXHIBIT B-2; (ii) all licenses to any of
the foregoing; (iii) all reissues, extensions, and renewals of any of the
foregoing; (iv) all income, royalties, damages, and payments now or
hereafter relating to or payable under any of the foregoing, including,
without limitation, damages or payments for past or future infringements
of any of the foregoing; (v) the right to sue for past, present, and
future infringements of any of the foregoing; (vi) all rights
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corresponding to any of the foregoing throughout the world; and (vii) all
goodwill associated with and symbolized by any of the foregoing, in each
case, whether now owned or hereafter acquired by Pledgor ("TRADEMARKS");
(h) (i) All trade secrets, maskwork rights, database rights and
other intellectual property rights however described, all registrations,
recordings, and applications thereof, including, without limitation,
registrations, recordings, and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United
States, any state thereof or any other country or any political
subdivision thereof; (ii) all licenses to any of the foregoing; (iii) all
reissues, extensions, and renewals of any of the foregoing; (iv) all
income, royalties, damages, and payments now or hereafter relating to or
payable under any of the foregoing, including, without limitation, damages
or payments for past or future infringements of any of the foregoing; and
(v) the right to sue for past, present, and future infringements of any of
the foregoing ("ADDITIONAL PROPRIETARY RIGHTS", and collectively with the
Copyrights, Patents and the Trademarks, the "INTELLECTUAL PROPERTY");
(i) (a) All of Pledgor's rights, titles, and interests in, to, and
under the Material Contracts including, without limitation, all rights of
Pledgor to receive moneys due and to become due under or pursuant to the
Material Contracts, (b) all rights of Pledgor to receive proceeds of any
insurance, indemnity, warranty, or guaranty with respect to the Material
Contracts, (c) all claims of Pledgor for damages arising out of or for
breach of or default under the Material Contracts, and (d) all rights of
Pledgor to compel performance and otherwise exercise all rights and
remedies under the Material Contracts;
(j) All present and future automobiles, trucks, truck tractors,
trailers, semi-trailers, or other motor vehicles or rolling stock, now
owned or hereafter acquired by such Pledgor (collectively, the
"VEHICLES");
(k) Any and all material deposit accounts, bank accounts, investment
accounts, or securities accounts, now owned or hereafter acquired or
opened by Pledgor, including, without limitation, any such accounts set
forth on EXHIBIT B-1, and any account which is a replacement or substitute
for any of such accounts, together with all monies, instruments,
certificates, checks, drafts, wire transfer receipts, and other property
deposited therein and all balances therein (the "DEPOSIT ACCOUNTS");
(l) (i) Account represented by account number 1885036799 maintained
by Goldman Sachs Trust, acting directly or through its transfer agent
Goldman Sachs & Co. (together with successors and assigns, "ISSUER") in
the name of Collateral Agent, for the benefit of Pledgor, as a collateral
account of Collateral Agent for Pledgor, and all successor and replacement
accounts, regardless of the numbers of such accounts or the offices at
which such accounts are maintained or by the affiliate of Issuer
maintaining such account, and any account held at any clearing broker for
any such account (collectively, the "ACCOUNTS") and all rights of Pledgor
against the Issuer or any clearing broker in connection with the Accounts,
and (ii) all investment property, security entitlements, financial assets,
certificated securities, uncertificated securities, money, deposit
accounts, instruments, general intangibles and all other investments or
property of any sort now or hereafter held or maintained in, or credited
to, the Accounts or delivered to Collateral Agent or to Issuer for the
benefit of or as a collateral account for Collateral Agent, including
without limitation, any beneficial interests in Issuer, mutual fund
shares, financial assets, securities or investment property;
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(m) All present and future distributions, income, increases,
profits, combinations, reclassifications, improvements, and products of,
accessions, attachments, and other additions to, tools, parts, and
equipment used in connection with, and substitutes and replacements for,
all or part of the Collateral described above;
(n) All present and future accounts, contract rights, general
intangibles, chattel paper, documents, instruments, cash and noncash
proceeds, and other rights arising from or by virtue of, or from the
voluntary or involuntary sale or other disposition of, or collections with
respect to, or insurance proceeds payable with respect to, or proceeds
payable by virtue of warranty or other claims against the manufacturer of,
or claims against any other Person with respect to, all or any part of the
Collateral heretofore described in this clause or otherwise; and
(o) All present and future security for the payment to Pledgor of
any of the Collateral described above and goods which gave or will give
rise to any such Collateral or are evidenced, identified, or represented
therein or thereby.
Notwithstanding anything to the contrary contained in this Security Agreement or
the Credit Agreement, the term "Collateral" shall not include, and Collateral
Agent shall have no rights with respect to, (i) more than 66% of the outstanding
equity of any Foreign Subsidiary directly held by Pledgor, and any shares held
by Collateral Agent in excess of 66% shall be held in trust for the benefit of
Pledgor, (ii) any outstanding equity of any Foreign Subsidiary owned by another
Foreign Subsidiary, (iii) any tangible asset financed as a Capital Lease or by
purchase money Indebtedness (including, in each case, any Indebtedness acquired
in connection with a Permitted Acquisition) to the extent the terms of such
financing prohibit the grant of a security interest hereunder provided, any such
Indebtedness is secured only to such asset acquired, and provided further, such
Indebtedness is permitted under the Credit Agreement, and Collateral Agent
agrees to execute and deliver to Pledgor all documents needed to effect the
foregoing and (iv) Deposit Account Numbers 53650036-0365 and 323-187218 held at
JPMorgan Chase Bank, N.A., except with respect to any proceeds of other
Collateral which may be deposited in such deposit accounts.
The description of the Collateral contained in this SECTION 4 shall not be
deemed to permit any action prohibited by this Security Agreement or by the
terms incorporated in this Security Agreement. Furthermore, notwithstanding any
contrary provision, Pledgor agrees that, if, but for the application of this
paragraph, granting a Security Interest in the Collateral would constitute a
fraudulent conveyance under 11 U.S.C. Section 548 or a fraudulent conveyance or
transfer under any state fraudulent conveyance, fraudulent transfer, or similar
Laws in effect from time to time (each a "FRAUDULENT CONVEYANCE"), then the
Security Interest remains enforceable to the maximum extent possible without
causing such Security Interest to be a fraudulent conveyance, and this Security
Agreement is automatically amended to carry out the intent of this paragraph.
5. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants to
Collateral Agent that:
(a) Credit Agreement. Certain representations and warranties in the
Credit Agreement are applicable to it or its assets or operations, and
each such representation and warranty is true and correct as of the date
made.
(b) Binding Obligations/ Perfection. This Security Agreement creates
a legal, valid, and binding Lien in and to the Collateral in favor of
Collateral Agent and enforceable against Pledgor. Subject to the following
sentence, once UCC-1 financing statements have been properly filed in the
jurisdictions described on EXHIBIT A hereto, the Security Interest in the
Collateral
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described in such financing statements will be fully perfected to the
extent a security interest in such Collateral may be perfected by the
filing of a UCC-1 financing statement and the Security Interest will
constitute a first-priority Lien on such Collateral, subject only to
Permitted Liens. With respect to Collateral consisting of investment
property (other than Pledged Securities covered by SECTION 5(j)), Deposit
Accounts, electronic chattel paper, letter-of-credit rights, and
instruments, upon the delivery of such Collateral to Collateral Agent or
delivery of an executed Control Agreement with respect to such Collateral,
the Security Interest in that Collateral will be fully perfected to the
extent a security interest in such Collateral may be perfected by such
delivery or such Control Agreement, as applicable, and the Security
Interest will constitute a first-priority Lien on such Collateral, subject
only to Permitted Liens. None of the Collateral currently is in the
possession of any other Person, nor does any other Person have control
over any of the Collateral. Without limiting the foregoing, Collateral
Agent has a perfected, first-priority security interest and lien in the
Copyrights and all other Intellectual Property. Other than the Financing
Statements and Control Agreements with respect to this Security Agreement,
there are no other financing statements or control agreements covering any
Collateral, other than those evidencing Permitted Liens. The creation of
the Security Interest does not require the consent of any Person that has
not been obtained.
(c) Pledgor Information. Pledgor's exact legal name, mailing
address, jurisdiction of organization, type of entity, and state issued
organizational identification number are as set forth on EXHIBIT A hereto,
except as subsequently set forth in any notice delivered to Collateral
Agent pursuant to SECTION 6(e) of this Security Agreement.
(d) Location/ Fixtures. (i) Pledgor's place of business and chief
executive office is where Pledgor is entitled to receive notices
hereunder; the present and foreseeable location of Pledgor's books and
records concerning any of the Collateral that is accounts is as set forth
on EXHIBIT A hereto, and the location of all other Collateral, including,
without limitation, Pledgor's inventory and equipment is as set forth on
EXHIBIT A hereto; and, except as noted on EXHIBIT A hereto, all such
books, records, and Collateral are in Pledgor's possession, and (ii) none
of the Collateral is or shall become fixtures.
(e) Governmental Authority. No Authorization, approval, or other
action by, and no notice to or filing with, any Governmental Authority is
required either (i) for the pledge by Pledgor of the Collateral pursuant
to this Security Agreement or for the execution, delivery, or performance
of this Security Agreement by Pledgor, or (ii) for the exercise by
Collateral Agent of the voting or other rights provided for in this
Security Agreement or the remedies in respect of the Collateral pursuant
to this Security Agreement (except as may be required in connection with
the disposition of the Pledged Securities by Law affecting the offering
and sale of securities generally).
(f) Maintenance of Collateral. All tangible Collateral which is
useful in and necessary to Pledgor's business is in good repair and
condition, ordinary wear and tear excepted, and none thereof is a fixture.
(g) Liens. Pledgor owns all presently existing Collateral, and will
acquire all hereafter-acquired Collateral, free and clear of all Liens,
except Permitted Liens.
(h) Collateral. EXHIBIT B-1 accurately lists all Collateral Notes,
Collateral Note Security, Pledged Shares, Partnership Interests,
commercial tort claims, Material Contracts, and Deposit Accounts in which
Pledgor has any rights, titles, or interest (but such failure of such
description to be accurate or complete shall not impair the Security
Interest in such Collateral).
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(i) Instruments, Chattel Paper, Collateral Notes, and Collateral
Note Security. All instruments and chattel paper, including, without
limitation, the Collateral Notes, have been delivered to Collateral Agent,
together with corresponding endorsements duly executed by Pledgor in favor
of Collateral Agent, and such endorsements have been duly and validly
executed and are binding and enforceable against Pledgor in accordance
with their terms. Each Collateral Note and the documents evidencing the
Collateral Note Security are in full force and effect; there have been no
renewals or extensions of, or amendments, modifications, or supplements
to, any thereof about which the Collateral Agent has not been advised in
writing; and no "default" has occurred and is continuing under any such
Collateral Note or documents evidencing the Collateral Note Security,
except as disclosed on EXHIBIT C hereto. Pledgor has good title to the
Collateral Notes and Collateral Note Security, and such Collateral Notes
and Collateral Note Security are free from any claim for credit,
deduction, or allowance of a Collateral Obligor and free from any defense,
condition, dispute, setoff, or counterclaim, and there is no extension or
indulgence with respect thereto. Pledgor's claims under the Collateral
Note of any Guarantor are subordinated to the obligations of such
Guarantor under the Guaranty of such Guarantor, as provided in Section
8(m).
(j) Pledged Securities; Pledged Shares. All Collateral that is
Pledged Shares is duly authorized, validly issued, fully paid, and
non-assessable, and the transfer thereof is not subject to any
restrictions, other than restrictions imposed by applicable securities and
corporate Law. Pledgor has good title to the Pledged Securities, free and
clear of all Liens and encumbrances thereon (except for the Security
Interest created hereby), and has delivered to Collateral Agent (i) all
stock certificates, or other instruments or documents representing or
evidencing the Pledged Securities, together with corresponding assignment
or transfer powers duly executed in blank by Pledgor, and such powers have
been duly and validly executed and are binding and enforceable against
Pledgor in accordance with their terms or (ii) to the extent such Pledged
Securities are uncertificated, an executed Control Agreement with respect
to such Pledged Securities. The pledge of the Pledged Securities in
accordance with the terms hereof creates a valid first priority security
interest in the Pledged Securities securing payment of the Obligations.
(k) Accounts. All Collateral that is accounts, contract rights,
chattel paper, instruments, payment intangibles, or general intangibles is
free from any claim for credit, deduction, or allowance of a Collateral
Obligor and free from any defense, condition, dispute, setoff, or
counterclaim, and there is no extension or indulgence with respect
thereto, except for such defenses, conditions, disputes, setoffs or
counterclaims that arise in the ordinary course of Pledgor's software
business, and do not, in the aggregate, create a Material Adverse Effect.
(l) Material Contracts. All Material Contracts to which Pledgor is a
party are set forth on SCHEDULE 4.16 to the Credit Agreement. Each
Material Contract is in full force and effect; there have been no
amendments, modifications, or supplements to any Material Contract of
which Collateral Agent has not been advised in writing; and no default or
breach which could reasonably be expected to result in a Material Adverse
Effect has occurred and is continuing under any Material Contract, except
as disclosed on EXHIBIT C hereto.
(m) Deposit Accounts. With respect to the Deposit Accounts, (i)
Pledgor maintains each Deposit Account with the banks listed on EXHIBIT
B-1 hereto, (ii) Pledgor shall cause each such bank to acknowledge to
Collateral Agent that Collateral Agent shall have "control" (as defined in
the UCC) over such Deposit Account, and (iii) Pledgor has the legal right
to pledge to Collateral Agent the funds deposited and to be deposited in
each such Deposit Account.
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(n) Intellectual Property.
(i) All of the Intellectual Property is valid and enforceable.
All issued Patents, Patent applications, registered Trademarks,
Trademark applications, registered Copyrights, and Copyright
applications of Pledgor are identified on EXHIBIT B-2 hereto, and
all of the information contained on EXHIBIT B-2 is true, correct,
and complete.
(ii) Pledgor is the sole and exclusive owner of the entire and
unencumbered right, title, and interest in and to the Intellectual
Property free and clear of any Liens, including, without limitation,
any pledges, assignments, licenses, user agreements, and covenants
not to sue, other than Permitted Liens or licenses permitted by
SECTION 8(c).
(iii) To Pledgor's knowledge, no third party is infringing, or
in Pledgor's reasonable business judgment, may be infringing, any of
Pledgor's rights under the Intellectual Property.
(iv) Pledgor has performed and will continue to perform all
acts and has paid and will continue to pay all required fees and
Taxes to maintain each and every item of the Intellectual Property
in full force and effect throughout the world, as applicable unless
in Pledgor's reasonable business judgment it is in the best interest
of Pledgor not to maintain certain Intellectual Property that is no
longer used or useful in Pledgor's business.
(v) Each of the Patents and Trademarks identified on EXHIBIT
B-2 hereto has been properly registered with the United States
Patent and Trademark Office and in corresponding offices throughout
the world (where appropriate) and each of the Copyrights identified
on EXHIBIT B-2 hereto has been properly registered with the United
States Copyright Office and in corresponding offices throughout the
world (where appropriate).
(vi) To Pledgor's knowledge, no claims with respect to the
Intellectual Property have been asserted and are pending (i) to the
effect that the sale, licensing, pledge, or use of any of the
products or services of Pledgor's business infringes any other
party's valid patent, copyright, trademark, service mark, trade
secret, or other intellectual property right, (ii) against the use
by Pledgor of any Intellectual Property used in the Pledgor's
business as currently conducted, or (iii) challenging the ownership
or use by Pledgor of any of the Intellectual Property that Pledgor
purports to own or use, nor, to Pledgor's knowledge, is there a
valid basis for such a claim described in this SECTION 5(o)(vi)
except as disclosed to Collateral Agent by Pledgor pursuant to
SECTION 4.11 of the Credit Agreement and except such other claims
that may be asserted after the Closing Date and that do not
adversely affect Pledgor's right and ability to conduct its business
or otherwise would reasonably be expected to result in a Material
Adverse Effect.
(vii) Except as identified on EXHIBIT B-2 hereto, Pledgor has
filed no copyright applications in the United States Copyright
Office or in any other jurisdiction.
(viii) EXHIBIT B-3 hereto contains a list of all licenses to
third party intellectual property rights, including, without
limitation, all third party software, necessary for the conduct of
the Pledgor's business.
PLEDGE AND SECURITY AGREEMENT D-
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(ix) The source code for all software used or useful in
Pledgor's business contains sufficient in-line and other
documentation so as to enable a programmer reasonably skilled in the
programming language in which such application is written to
maintain and enhance the application without undue effort.
The foregoing representations and warranties will be true and correct in all
respects with respect to: 1) any additional Collateral or additional specific
descriptions of certain Collateral delivered to Collateral Agent in the future
by Pledgor; and 2) for purposes of SECTION 5(n) only, the Intellectual Property
("Subsidiary Intellectual Property") of each of Pledgor's Subsidiaries, and for
purposes of the definition of "Subsidiary Intellectual Property" the term
"Intellectual Property", and all defined terms used within such definition,
shall include intellectual property, rights, and assets of or owned by any such
Subsidiary. The failure of any of these representations or warranties or any
description of Collateral therein to be accurate or complete shall not impair
the Security Interest in any such Collateral.
6. COVENANTS. So long as Collateral Agent is committed to extend credit to
Pledgor under the Credit Agreement and thereafter until the Obligations (other
than inchoate indemnity obligations) are paid and performed in full, Pledgor
covenants and agrees with Collateral Agent that Pledgor will:
(a) Credit Agreement. (i) Comply with, perform, and be bound by all
covenants and agreements in the Credit Agreement that are applicable to
it, its assets, or its operations, each of which is hereby ratified and
confirmed (INCLUDING, WITHOUT LIMITATION, THE INDEMNIFICATION AND RELATED
PROVISIONS IN SECTION 10.3 OF THE CREDIT AGREEMENT); AND (ii) CONSENT TO
AND APPROVE THE VENUE, SERVICE OF PROCESS, AND WAIVER OF JURY TRIAL
PROVISIONS OF SECTION 10.16 OF THE CREDIT AGREEMENT.
(b) Information/Record of Collateral. Maintain, at the place where
Pledgor is entitled to receive notices under the Credit Documents, a
current record of where all Collateral is located, permit representatives
of Collateral Agent at any time (but not more than three (3) times during
a twelve (12) month period, prior to the occurrence of an Event of
Default) during normal business hours to inspect and make abstracts from
such records, and furnish to Collateral Agent, at such intervals as
Collateral Agent may request, such documents, lists, descriptions,
certificates, and other information as may be necessary or proper to keep
Collateral Agent informed with respect to the identity, location, status,
condition, and value of the Collateral. In addition, from time to time at
the request of Collateral Agent deliver to Collateral Agent such
information regarding Pledgor as Collateral Agent may reasonably request.
(c) Exhibits. Promptly provide notice to Collateral Agent if any
information therein shall become inaccurate or incomplete. Notwithstanding
any other provision herein, Pledgor's failure to describe any Collateral
required to be listed on any annex hereto shall not impair Collateral
Agent's Security Interest in the Collateral.
(d) Perform Obligations. Fully perform all of Pledgor's duties under
and in connection with each transaction to which the Collateral, or any
part thereof, relates. Furthermore, notwithstanding anything to the
contrary contained herein, (i) Pledgor shall remain liable under the
contracts, agreements, documents, and instruments included in the
Collateral to the extent set forth therein to perform all of its duties
and obligations thereunder to the same extent as if this Security
Agreement had not been executed, (ii) the exercise by Collateral Agent of
any of its rights or remedies hereunder shall not release Pledgor from any
of its duties or obligations under the contracts, agreements, documents,
and instruments included in the
PLEDGE AND SECURITY AGREEMENT D-
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Collateral, and (iii) Collateral Agent shall not have any indebtedness,
liability, or obligation under any of the contracts, agreements,
documents, and instruments included in the Collateral by reason of this
Security Agreement, and Collateral Agent shall not be obligated to perform
any of the obligations or duties of Pledgor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
(e) Notices. (i) Except as may be otherwise expressly permitted
under the terms of the Credit Agreement, promptly notify Collateral Agent
of (A) any material change (which shall include, without limitation, any
change that adversely affects the validity, perfection or priority of
Collateral Agent's security interests) in any fact or circumstances
represented or warranted by Pledgor with respect to any of the Collateral
or Obligations, (B) any claim, action, or proceeding affecting title to
all or any of the Collateral or the Security Interest and, at the request
of Collateral Agent, appear in and defend, at Pledgor's expense, any such
action or proceeding, (C) any material change in the nature of the
Collateral, (D) any material damage to or loss of Collateral, and (E) the
occurrence of any other event or condition (including, without limitation,
matters as to Lien priority) that could have a material adverse effect on
the Collateral (taken as a whole) or the Security Interest created
hereunder; and (ii) give Collateral Agent thirty (30) days written notice
before any proposed (A) relocation of its principal place of business or
chief executive office, (B) change of its name, identity, or corporate
structure, (C) relocation of the place where its books and records
concerning its accounts are kept, (D) relocation of any Collateral (other
than delivery of inventory in the ordinary course of business to third
party contractors for processing and sales of inventory in the ordinary
course of business or transactions otherwise permitted by the Credit
Agreement) to a location not described on the attached EXHIBIT A, as
supplemented by any notices of relocation provided in accordance with this
Section, and (E) change of its jurisdiction of organization or
organizational identification number, as applicable. Prior to making any
of the changes contemplated in clause (ii) preceding, Pledgor shall
execute and deliver all such additional documents and perform all
additional acts as Collateral Agent, in its sole discretion, may request
in order to continue or maintain the existence and priority of the
Security Interests in all of the Collateral.
(f) Collateral in Trust. Hold in trust (and not commingle with other
assets of Pledgor) for Collateral Agent all Collateral that is chattel
paper, instruments, Collateral Notes, Pledged Securities, or documents at
any time received by Pledgor, and promptly deliver same to Collateral
Agent, unless Collateral Agent at its option (which may be evidenced only
by a writing signed by Collateral Agent stating that Collateral Agent
elects to permit Pledgor to so retain) permits Pledgor to retain the same,
but any chattel paper, instruments, Collateral Notes, Pledged Securities,
or documents so retained shall be marked to state that they are pledged to
Collateral Agent; each such instrument shall be endorsed to the order of
Collateral Agent (but the failure of same to be so marked or endorsed
shall not impair the Security Interest thereon).
(g) Control. Execute all documents and take any action reasonably
required by Collateral Agent in order for Collateral Agent to obtain
"control" (as defined in the UCC) with respect to Collateral consisting of
Deposit Accounts, investment property, uncertificated Pledged Securities,
and letter-of-credit rights. If Pledgor at any time holds or acquires an
interest in any electronic chattel paper or any "transferable record," as
that term is defined in the federal Electronic Signatures in Global and
National Commerce Act, or in the Uniform Electronic Transactions Act as in
effect in any relevant jurisdiction, promptly notify Collateral Agent
thereof and, at the request of Collateral Agent, take such action as
Collateral Agent may reasonably request to vest in Collateral Agent
control under the UCC of such electronic chattel paper or control under
the federal Electronic Signatures in Global and National Commerce Act or,
as the
PLEDGE AND SECURITY AGREEMENT D-
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case may be, the Uniform Electronic Transactions Act, as so in effect in
such jurisdiction, of such transferable record.
(h) Further Assurances. At Pledgor's expense and Collateral Agent's
request, before or after a Default or Event of Default, (i) file or cause
to be filed such applications and take such other actions as Collateral
Agent may request to obtain the consent or approval of any Governmental
Authority to Collateral Agent's rights hereunder, including, without
limitation, the right to sell all the Collateral upon a Default or Event
of Default without additional consent or approval from such Governmental
Authority (and, because Pledgor agrees that Collateral Agent's remedies at
law for failure of Pledgor to comply with this provision would be
inadequate and that such failure would not be adequately compensable in
damages, Pledgor agrees that its covenants in this provision may be
specifically enforced); (ii) from time to time promptly execute and
deliver to Collateral Agent all such other certificates, supplemental
documents, and financing statements, and do all other acts or things as
Collateral Agent may reasonably request in order to more fully create,
evidence, perfect, continue, and preserve the priority of the Security
Interest and to carry out the provisions of this Security Agreement;
without limiting the foregoing, such additional documents and actions may
include those required more fully to evidence, record, and perfect
Collateral Agent's pledge and security interests in the stock of Foreign
Subsidiaries; and (iii) pay all filing fees in connection with any
financing, continuation, or termination statement or other instrument with
respect to the Security Interests.
(i) Encumbrances. Not create, permit, or suffer to exist, and shall
defend the Collateral against, any Lien or other encumbrance on the
Collateral, and shall defend Pledgor's rights in the Collateral and
Collateral Agent's Security Interest in, the Collateral against the claims
and demands of all Persons except those holding or claiming Permitted
Liens. Unless otherwise specifically permitted under this Security
Agreement or the Credit Agreement, Pledgor shall do nothing to impair the
rights of Collateral Agent in the Collateral.
(j) Estoppel and Other Agreements and Matters. Upon the reasonable
request of Collateral Agent, either (i) use commercially reasonable
efforts to cause the landlord or lessor for each location where any of its
inventory or equipment is maintained to execute and deliver to Collateral
Agent an estoppel and subordination agreement in such form as may be
reasonably acceptable to Collateral Agent and its counsel, or (ii) deliver
to Collateral Agent a legal opinion or other evidence (in each case that
is reasonably satisfactory to Collateral Agent and it counsel) that
neither the applicable lease nor the Law of the jurisdiction in which that
location is situated provide for contractual, common law, or statutory
landlord's Liens that is senior to or pari passu with the Security
Interest.
(k) Fixtures. Not permit any Collateral to be or become a fixture.
(l) Certificates of Title. Upon the request of Collateral Agent, if
certificates of title are issued or outstanding with respect to any of the
Vehicles or other Collateral, cause the Security Interest to be properly
noted thereon.
(m) Warehouse Receipts Non-Negotiable. If any warehouse receipt or
receipt in the nature of a warehouse receipt is issued in respect of any
of the Collateral, agree that such warehouse receipt or receipt in the
nature thereof shall not be "negotiable" (as such term is used in Section
7-104 of the UCC) unless such warehouse receipt or receipt in the nature
thereof is delivered to Collateral Agent.
PLEDGE AND SECURITY AGREEMENT D-
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(n) Impairment of Collateral. Not use any of the Collateral, or
permit the same to be used, for any unlawful purpose, in any manner that
is reasonably likely to adversely impair the value or usefulness of the
Collateral, or in any manner inconsistent with the provisions or
requirements of any policy of insurance thereon.
(o) Collateral Notes and Collateral Note Security. Without the prior
written consent of Collateral Agent not (i) modify or substitute, or
permit the modification or substitution of, any Collateral Note or any
document evidencing the Collateral Note Security or (ii) release any
Collateral Note Security unless specifically required by the terms
thereof.
(p) Securities. Except as permitted by the Credit Agreement, not
sell, exchange, or otherwise dispose of, or grant any option, warrant, or
other right with respect to, any of the Pledged Securities; to the extent
any issuer of any Pledged Securities is controlled by Pledgor and/or its
Affiliates, not permit such issuer to issue any additional shares of stock
or other securities in addition to or in substitution for the Pledged
Securities, except issuances to Pledgor on terms acceptable to Collateral
Agent; pledge hereunder, immediately upon Pledgor's acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each Subsidiary of Pledgor; and take any action necessary,
required, or requested by Collateral Agent to allow Collateral Agent to
fully enforce its Security Interest in the Pledged Securities, including,
without limitation, the filing of any claims with any court, liquidator,
trustee, custodian, receiver, or other like person or party.
(q) Partnerships and Partnership Interests. (i) Promptly perform,
observe, and otherwise comply with each and every covenant, agreement,
requirement, and condition set forth in the contracts and agreements
creating or relating to any Partnership; (ii) do or cause to be done all
things necessary or appropriate to keep the Partnerships in full force and
effect and the rights of Pledgor and Collateral Agent thereunder
unimpaired; (iii) except as expressly permitted by the Credit Agreement,
not consent to any Partnership selling, leasing, or disposing of
substantially all of its assets in a single transaction or a series of
transactions; (iv) notify Collateral Agent of the occurrence of any
default or breach or default or breach under any contract or agreement
creating or relating to the Partnerships; (v) not consent to the
amendment, modification, surrender, impairment, forfeiture, cancellation,
dissolution, or termination of any Partnership, or material contract
relating thereto; (vi) except as permitted by the Credit Agreement, not
transfer, sell, or assign any of the Partnership Interests or any part
thereof; (vii) to the extent any Partnership is controlled by Pledgor
and/or its Affiliates, cause such Partnership to refrain from granting any
Partnership Interests in addition to or in substitution for the
Partnership Interests granted by the Partnerships, except to Pledgor;
(viii) pledge hereunder, immediately upon Pledgor's acquisition (directly
or indirectly) thereof, any and all additional Partnership Interests of
any Partnership granted to Pledgor; and any and all additional shares of
stock or other securities of each; (ix) deliver to Collateral Agent a
fully-executed Acknowledgment of Pledge, substantially in the form of
EXHIBIT D, for each Partnership Interest; and (x) take any action
necessary, required, or requested by Collateral Agent to allow Collateral
Agent to fully enforce its Security Interest in the Partnership Interests,
including, without limitation, the filing of any claims with any court,
liquidator, trustee, custodian, receiver, or other like person or party.
(r) Material Contracts. (i) Promptly perform, observe, and otherwise
comply with each and every covenant, agreement, requirement, and condition
set forth in the Material Contracts; (ii) do or cause to be done all
things necessary or appropriate to keep the Material Contracts in full
force and effect and the rights of Pledgor and Collateral Agent thereunder
unimpaired; (iii) notify Collateral Agent of the occurrence of any default
or breach or default or breach under any Material Contract; and (iv)
without the prior written consent of Collateral
PLEDGE AND SECURITY AGREEMENT D-
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<PAGE>
Agent, not consent to the amendment, modification, surrender, impairment,
forfeiture, cancellation, dissolution, or termination of any Material
Contract, which could adversely affect the rights or interests of Pledgor
or Collateral Agent.
(s) Depository Bank. With respect to any Deposit Accounts, (i)
maintain the Deposit Accounts at the banks (a "DEPOSITORY BANK") described
on EXHIBIT B-1 or such additional depository banks as have complied with
ITEM (iv) hereof; (ii) obtain a control agreement with each depository
bank granting Collateral Agent "control" (as defined in the UCC) over such
Deposit Account; (iii) deliver to Collateral Agent all certificates or
instruments, if any, now or hereafter representing or evidencing the
Deposit Accounts, accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably satisfactory to
Collateral Agent; and (iv) notify Collateral Agent prior to establishing
any additional Deposit Accounts and, at the request of Collateral Agent,
obtain from such depository bank an executed letter substantially in the
form of Exhibit J to the Credit Agreement and deliver the same to
Collateral Agent.
(t) Marking of Chattel Paper. At the request of Collateral Agent,
not create any chattel paper without placing a legend on the chattel paper
acceptable to Collateral Agent indicating that Collateral Agent has a
security interest in the chattel paper.
(u) Modification of Accounts. In accordance with prudent business
practices, endeavor to collect or cause to be collected from each account
Pledgor under its accounts, as and when due, any and all amounts owing
under such accounts. Except in the ordinary course of business consistent
with prudent business practices and industry standards, without the prior
written consent of Collateral Agent, Pledgor shall not (i) grant any
extension of time for any payment with respect to any of the accounts,
(ii) compromise, compound, or settle any of the accounts for less than the
full amount thereof, (iii) release, in whole or in part, any Person liable
for payment of any of the accounts, (iv) allow any credit or discount for
payment with respect to any account other than trade discounts granted in
the ordinary course of business, or (v) release any Lien or guaranty
securing any account.
(v) Intellectual Property.
(i) Except to the extent not required in Pledgor's reasonable
business judgment, prosecute diligently all applications in respect
of Intellectual Property, now or hereafter pending;
(ii) Except to the extent not required in Pledgor's reasonable
business judgment, make federal applications on all of its
unpatented but patentable inventions and all of its registrable but
unregistered Copyrights and Trademarks; provided that Pledgor shall
provide Collateral Agent with at least fifteen (15) Business Days
written notice prior to filing any such application, including with
such notice all information necessary for Collateral Agent to
prepare appropriate documents to file along with such application in
order to record the Security Interest, and Pledgor shall file, along
with such application, all documents required by Collateral Agent to
record the Security Interest;
(iii) Preserve and maintain all of its material rights in
Intellectual Property and protect the material Intellectual Property
(which for this purpose shall include Intellectual Property actually
used in Pledgor's business) from infringement, unfair competition,
cancellation, or dilution by all appropriate action necessary in
Pledgor's reasonable business judgment, including, without
limitation, (A) the commencement and
PLEDGE AND SECURITY AGREEMENT D-
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<PAGE>
prosecution of legal proceedings to recover damages for infringement
and to defend and preserve its rights in the Intellectual Property
and (B) requiring each employee, agent, and independent contractor
who develops, programs, or creates, or assists the development,
programming, or creation of, programs, code, software, Copyrights,
inventions, Patents, or other Intellectual Property, to execute and
deliver on a timely basis an agreement that assigns to Pledgor, and
acknowledges Pledgor's ownership of, all such programs, code,
software, Copyrights, inventions, Patents, or other Intellectual
Property;
(iv) Not abandon any of the Intellectual Property necessary to
the conduct of its business in the exercise of Pledgor's reasonable
business judgment;
(v) Except as permitted under the Credit Agreement, (A)
without the prior written consent of Collateral Agent, not sell or
assign any of its interest in any of the Intellectual Property; (B)
not grant any license or sublicense with respect to any of the
Intellectual Property other than (x) as permitted by SECTION 8(c)
hereof, and (y) non-exclusive licenses to Pledgor's software,
granted in the ordinary course of business and consistent with
Pledgor's current business practices; and (C) maintain the quality
of any and all products and services with respect to which the
Intellectual Property is used;
(vi) Give Collateral Agent prompt written notice if Pledgor
shall obtain rights to or become entitled to the benefit of any
Intellectual Property not identified on EXHIBIT B-2 hereto;
(vii) If a Default or Event of Default exists, use its
reasonable efforts to obtain any consents, waivers, or agreements
necessary to enable Collateral Agent to exercise its rights and
remedies with respect to the Intellectual Property;
(viii) Use its commercially reasonable efforts to negotiate
licenses, both with its third party providers and Pledgor's
customers, that enable the assignment of such licenses in the Event
of Default to Collateral Agent and any subsequent assignee;
(ix) Ensure that the source code for the Pledgor's software
contains sufficient in-line and other documentation so as to enable
a programmer reasonably skilled in the programming language in which
such application is written to maintain and enhance the application
without undue effort;
(x) So long as Collateral Agent is committed to extend credit
to Pledgor under the Credit Agreement and thereafter until the
Obligations are paid and performed in full, Collateral Agent shall
deposit, with an escrow agent reasonably acceptable to Collateral
Agent, the source code to the Pledgor's software, including, without
limitation, all related documentation and other materials necessary
for Collateral Agent to exercise its rights under this Agreement.
The original deposit shall occur within ten (10) days of the Closing
Date and upon each major release of such application, but no less
frequently than once per calendar quarter. Subject to SECTION 7(g),
the source code shall be released to Collateral Agent upon
Collateral Agent giving written notice to the escrow agent that an
Event of Default has occurred;
(xi) At all times maintain in full force and effect, comply
with, and cause each of its Subsidiaries to comply with, a valid and
effective assignment and transfer agreement between Pledgor and each
such subsidiary, pursuant to which such subsidiary has validly
transferred and assigned to Pledgor, and shall continue to transfer
and assign
PLEDGE AND SECURITY AGREEMENT D-
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<PAGE>
to Pledgor, all Copyrights, software, and other Intellectual
Property that previously has been developed, owned or acquired, or
hereafter shall be developed, owned or acquired, by such subsidiary
(including Intellectual Property developed for such subsidiary by
its employees, independent contractors, sub-contractors, and
agents); and, without limiting the foregoing, at all times maintain
in full force and effect an agreement containing substantially
similar terms with respect to assignment and ownership of
Intellectual Property as those contained in that certain
Intercompany License and Acknowledgement Agreement dated as of
January 1, 2002, between Taleo (Canada) Inc., a Quebec Corporation
and Pledgor; and
(xii) Cause each of its Subsidiaries to comply with each of
the foregoing covenants in clauses (i), (ii), (iii), (iv), and (v),
as if all references to "Intellectual Property" referred instead to
"Subsidiary Intellectual Property" and all references to "Pledgor"
instead referred to such Subsidiary.
7. DEFAULT; REMEDIES. If an Event of Default exists, Collateral Agent may,
at its election (but subject to the terms and conditions of the Credit
Agreement), exercise any and all rights available to a secured party under the
UCC, in addition to any and all other rights afforded by the Credit Documents,
at law, in equity, or otherwise, including, without limitation, (a) requiring
Pledgor to assemble all or part of the Collateral and make it available to
Collateral Agent at a place to be designated by Collateral Agent which is
reasonably convenient to Pledgor and Collateral Agent, (b) surrendering any
policies of insurance on all or part of the Collateral and receiving and
applying the unearned premiums as a credit on the Obligations, (c) applying by
appropriate judicial proceedings for appointment of a receiver for all or part
of the Collateral (and Pledgor hereby consents to any such appointment), and (d)
applying to the Obligations any cash held by Collateral Agent under this
Security Agreement, including, without limitation, any cash in the Cash
Collateral Account (defined in SECTION 8(h)).
During the existence of an Event of Default:
(a) Notice. Reasonable notification of the time and place of any
public sale of the Collateral, or reasonable notification of the time
after which any private sale or other intended disposition of the
Collateral is to be made, shall be sent to Pledgor and to any other Person
entitled to notice under the UCC; provided that, if any of the Collateral
threatens to decline speedily in value or is of the type customarily sold
on a recognized market, Collateral Agent may sell or otherwise dispose of
the Collateral without notification, advertisement, or other notice of any
kind. It is agreed that notice sent or given not less than ten (10)
Business Days prior to the taking of the action to which the notice
relates is reasonable notification and notice for the purposes of this
subparagraph.
(b) Condition of Collateral; Warranties. Collateral Agent has no
obligation to clean-up or otherwise prepare the Collateral for sale.
Collateral Agent may sell the Collateral without giving any warranties as
to the Collateral. Collateral Agent may specifically disclaim any
warranties of title or the like. This procedure will not be considered
adversely to affect the commercial reasonableness of any sale of the
Collateral.
(c) Compliance with Other Laws. Collateral Agent may comply with any
applicable state or federal Law in connection with a disposition of the
Collateral and compliance will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.
PLEDGE AND SECURITY AGREEMENT D-
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<PAGE>
(d) Sales of Pledged Securities.
(i) Pledgor agrees that, because of the Securities Act of
1933, as amended, or the rules and regulations promulgated
thereunder (collectively, the "SECURITIES ACT"), or any other Law,
and for other reasons, there may be legal or practical restrictions
or limitations affecting Collateral Agent in any attempts to dispose
of certain portions of the Pledged Securities and for the
enforcement of its rights. For these reasons, Collateral Agent is
hereby authorized by Pledgor, but not obligated, upon the occurrence
and during the continuation of an Event of Default, to sell all or
any part of the Pledged Securities at private sale, subject to
investment letter or in any other manner which will not require the
Pledged Securities, or any part thereof, to be registered in
accordance with the Securities Act or any other Law, at a reasonable
price at such private sale or other distribution in the manner
mentioned above. Pledgor understands that Collateral Agent may in
its discretion approach a limited number of potential purchasers and
that a sale under such circumstances may yield a lower price for the
Pledged Securities, or any part thereof, than would otherwise be
obtainable if such Collateral were either afforded to a larger
number or potential purchasers, registered under the Securities Act,
or sold in the open market. Pledgor agrees that any such private
sale made under this SECTION 7(d) shall be deemed to have been made
in a commercially reasonable manner, and that Collateral Agent has
no obligation to delay the sale of any Pledged Securities to permit
the issuer thereof to register it for public sale under any
applicable federal or state securities Law.
(ii) Collateral Agent is authorized, in connection with any
such sale, (A) to restrict the prospective bidders on or purchasers
of any of the Pledged Securities to a limited number of
sophisticated investors who will represent and agree that they are
purchasing for their own account for investment and not with a view
to the distribution or sale of any of such Pledged Securities, and
(B) to impose such other limitations or conditions in connection
with any such sale as Collateral Agent reasonably deems necessary in
order to comply with applicable Law. Pledgor covenants and agrees
that it will execute and deliver such documents and take such other
action as Collateral Agent reasonably deems necessary in order that
any such sale may be made in compliance with applicable Law. Upon
any such sale Collateral Agent shall have the right to deliver,
assign, and transfer to the purchaser thereof the Pledged Securities
so sold. Each purchaser at any such sale shall hold the Pledged
Securities so sold absolutely free from any claim or right of
Pledgor of whatsoever kind, including any equity or right of
redemption of Pledgor. Pledgor, to the extent permitted by
applicable Law, hereby specifically waives all rights of redemption,
stay, or appraisal which it has or may have under any Law now
existing or hereafter enacted.
(iii) Pledgor agrees that ten (10) days' written notice from
Collateral Agent to Pledgor of Collateral Agent's intention to make
any such public or private sale or sale at a broker's board or on a
securities exchange shall constitute reasonable notice under the
UCC. Such notice shall (A) in case of a public sale, state the time
and place fixed for such sale, (B) in case of sale at a broker's
board or on a securities exchange, state the board or exchange at
which such a sale is to be made and the day on which the Pledged
Securities, or the portion thereof so being sold, will first be
offered to sale at such board or exchange, and (C) in the case of a
private sale, state the day after which such sale may be
consummated. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as
Collateral Agent may fix in the notice of such sale. At any such
sale, the Pledged Securities may be sold in one lot as an entirety
or in separate parcels, as Collateral Agent may reasonably
determine. Collateral
PLEDGE AND SECURITY AGREEMENT D-
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<PAGE>
Agent shall not be obligated to make any such sale pursuant to any
such notice. Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned
from time to time by announcement at the time and place fixed for
the sale, and such sale may be made at any time or place to which
the same may be so adjourned.
(iv) In case of any sale of all or any part of the Pledged
Securities on credit or for future delivery, the Pledged Securities
so sold may be retained by Collateral Agent until the selling price
is paid by the purchaser thereof, but Collateral Agent shall not
incur any liability in case of the failure of such purchaser to take
up and pay for the Pledged Securities so sold and in case of any
such failure, such Pledged Securities may again be sold upon like
notice. Collateral Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or
in equity to foreclose the Security Interests and sell the Pledged
Securities, or any portion thereof, under a judgment or decree of a
court or courts of competent jurisdiction.
(v) Without limiting the foregoing, or imposing upon
Collateral Agent any obligations or duties not required by
applicable Law, Pledgor acknowledges and agrees that, in foreclosing
upon any of the Pledged Securities, or exercising any other rights
or remedies provided Collateral Agent hereunder or under applicable
Law, Collateral Agent may, but shall not be required to, (A) qualify
or restrict prospective purchasers of the Pledged Securities by
requiring evidence of sophistication or creditworthiness, and
requiring the execution and delivery of confidentiality agreements
or other documents and agreements as a condition to such prospective
purchasers' receipt of information regarding the Pledged Securities
or participation in any public or private foreclosure sale process,
(B) provide to prospective purchasers business and financial
information regarding Pledgor or the Companies available in the
files of Collateral Agent at the time of commencing the foreclosure
process, without the requirement that Collateral Agent obtain, or
seek to obtain, any updated business or financial information or
verify, or certify to prospective purchasers, the accuracy of any
such business or financial information, or (C) offer for sale and
sell the Pledged Securities with, or without, first employing an
appraiser, investment banker, or broker with respect to the
evaluation of the Pledged Securities, the solicitation of purchasers
for Pledged Securities, or the manner of sale of Pledged Securities.
(e) Application of Proceeds. Collateral Agent shall apply the
proceeds of any sale or other disposition of the Collateral under this
SECTION 7 in the following order: first, to the payment of all expenses
incurred in retaking, holding, and preparing any of the Collateral for
sale(s) or other disposition, in arranging for such sale(s) or other
disposition, and in actually selling or disposing of the same (all of
which are part of the Obligations); second, toward repayment of amounts
expended by Collateral Agent under SECTION 8; and third, toward payment of
the balance of the Obligations in the order and manner as Collateral Agent
determines in its sole discretion. Any surplus remaining shall be
delivered to Pledgor or as a court of competent jurisdiction may direct.
If the proceeds are insufficient to pay the Obligations in full, then
Pledgor shall remain liable for any deficiency.
(f) Sales on Credit. If Collateral Agent sells any of the Collateral
upon credit, Pledgor will be credited only with payments actually made by
the purchaser, received by the Collateral Agent, and applied to the
indebtedness of the purchaser. In the event the purchaser fails to pay for
the Collateral, Collateral Agent may resell the Collateral and Pledgor
shall be credited with the proceeds of the sale.
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(g) Source Code Escrow Arrangements. Collateral Agent shall not send
a notice exercising any rights under any escrow agreements pursuant to
which Pledgor's software or other technology is being held in escrow
unless such notice is sent in connection with a foreclosure (including
preparation for an intended foreclosure, even if such foreclosure does not
ultimately occur) by Collateral Agent on all or part of the Collateral
after an Event of Default has occurred and is continuing. After any
release from escrow and subject to Collateral Agent's rights under this
Agreement, Collateral Agent shall use such software or other technology
solely in connection with (i) the preservation of, foreclosure on, or
transfer of title in, such software or other technology or in the
continuation of Pledgor's business; and (ii) the exercise of the rights
granted under SECTION 8(c). In the event Collateral Agent exercises any
rights under any escrow agreements pursuant to which Pledgor's software or
other technology is being held in escrow while in preparation for an
intended foreclosure, Collateral Agent shall redeposit any materials
released from escrow within thirty (30) days after the abandonment of any
intended foreclosure, and shall not retain any copy of any such materials.
8. OTHER RIGHTS OF LENDER.
(a) Performance. If Pledgor fails to keep the Collateral in good
repair, working order, and condition, as required by the Credit Documents,
or fails to pay when due all Taxes on any of the Collateral in the manner
required by the Credit Documents, or fails to preserve the priority of the
Security Interest in any of the Collateral, or fails to keep the
Collateral insured as required by the Credit Documents, or otherwise fails
to perform any of its obligations under the Credit Documents with respect
to the Collateral, then Collateral Agent may, at its option, but without
being required to do so, make such repairs, pay such Taxes, prosecute or
defend any suits in relation to the Collateral, or insure and keep insured
the Collateral in any amount deemed appropriate by Collateral Agent, or
take all other action which Pledgor is required, but has failed or
refused, to take under the Credit Documents. Any sum which may be expended
or paid by Collateral Agent under this subparagraph (including, without
limitation, court costs and reasonable attorneys' fees) shall bear
interest from the dates of expenditure or payment at the Default Rate
until paid and, together with such interest, shall be payable by Pledgor
to Collateral Agent upon demand and shall be part of the Obligations.
(b) Collection. If an Event of Default exists and upon notice from
Collateral Agent, each Collateral Obligor with respect to any payments on
any of the Collateral (including, without limitation, dividends and other
Distributions with respect to the Pledged Securities and Partnership
Interests, payments on Collateral Notes, insurance proceeds payable by
reason of loss or damage to any of the Collateral, or payments or
distributions with respect to Deposit Accounts) is hereby authorized and
directed by Pledgor to make payment directly to Collateral Agent,
regardless of whether Pledgor was previously making collections thereon.
Until such notice is given, Pledgor is authorized to retain and expend all
payments made on Collateral. If an Event of Default exists, Collateral
Agent shall have the right in its own name or in the name of Pledgor to
compromise or extend time of payment with respect to all or any portion of
the Collateral for such amounts and upon such terms as Collateral Agent
may determine; to demand, collect, receive, receipt for, sue for,
compound, and give acquittances for any and all amounts due or to become
due with respect to Collateral; to take control of cash and other proceeds
of any Collateral; to endorse the name of Pledgor on any notes,
acceptances, checks, drafts, money orders, or other evidences of payment
on Collateral that may come into the possession of Collateral Agent; to
sign the name of Pledgor on any invoice or bill of lading relating to any
Collateral, on any drafts against Collateral Obligors or other Persons
making payment with respect to Collateral, on assignments and
verifications of accounts or other Collateral and on
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notices to Collateral Obligors making payment with respect to Collateral;
to send requests for verification of obligations to any Collateral
Obligor; and to do all other acts and things necessary to carry out the
intent of this Security Agreement. If an Event of Default exists and any
Collateral Obligor fails or refuses to make payment on any Collateral when
due, Collateral Agent is authorized, in its sole discretion, either in its
own name or in the name of Pledgor, to take such action as Collateral
Agent shall deem appropriate for the collection of any amounts owed with
respect to Collateral or upon which a delinquency exists. Regardless of
any other provision hereof, however, Collateral Agent shall never be
liable for its failure to collect, or for its failure to exercise
diligence in the collection of, any amounts owed with respect to
Collateral, nor shall it be under any duty whatsoever to anyone except
Pledgor to account for funds that it shall actually receive hereunder.
Without limiting the generality of the foregoing, Collateral Agent shall
have no responsibility for ascertaining any maturities, calls,
conversions, exchanges, offers, tenders, or similar matters relating to
any Collateral, or for informing Pledgor with respect to any of such
matters (irrespective of whether Collateral Agent actually has, or may be
deemed to have, knowledge thereof). The receipt of Collateral Agent to any
Collateral Obligor shall be a full and complete release, discharge, and
acquittance to such Collateral Obligor, to the extent of any amount so
paid to Collateral Agent.
(c) Intellectual Property. For purposes of enabling Collateral Agent
to exercise its rights and remedies under this Security Agreement and
enabling Collateral Agent and its successors and assigns to enjoy the full
benefits of the Collateral, Pledgor hereby grants to Collateral Agent an
irrevocable, nonexclusive license (exercisable without payment of royalty
or other compensation to Pledgor) to make, have made, use, sell, import,
reproduce, distribute, create derivative works, perform and display and
otherwise exploit the Intellectual Property, and the right to license, or
sublicense any of the foregoing rights provided that Collateral Agent
agrees not to exercise this license until an Event of Default occurs and
is continuing. Pledgor shall provide Collateral Agent with reasonable
access to all media in which any of the Intellectual Property may be
recorded or stored and all computer programs used for the completion or
printout thereof. This license shall also inure to the benefit of all
successors, assigns, and transferees of Collateral Agent. Upon the
occurrence and during the continuance of an Event of Default, Collateral
Agent may require that Pledgor assign all of its right, title, and
interest in and to the Intellectual Property or any part thereof to
Collateral Agent or such other Person as Collateral Agent may designate
pursuant to documents satisfactory to Collateral Agent. Notwithstanding
anything to the contrary in this Agreement, Collateral Agent shall not
exercise any rights under this SECTION 8(c) except in connection with a
foreclosure (including preparation for an intended foreclosure, even if
such foreclosure does not ultimately occur) by Collateral Agent on all or
part of the Collateral after an Event of Default has occurred and is
continuing.
(d) Record Ownership of Securities. If an Event of Default exists,
Collateral Agent at any time may have any Collateral that is Pledged
Securities and that is in the possession of Collateral Agent, or its
nominee or nominees, registered in its name, or in the name of its nominee
or nominees, as Collateral Agent; and, as to any Collateral that is
Pledged Securities so registered, Collateral Agent shall execute and
deliver (or cause to be executed and delivered) to Pledgor all such
proxies, powers of attorney, dividend coupons or orders, and other
documents as Pledgor may reasonably request for the purpose of enabling
Pledgor to exercise the voting rights and powers which it is entitled to
exercise under this Security Agreement or to receive the dividends and
other Distributions and payments in respect of such Collateral that is
Pledged Securities or proceeds thereof which it is authorized to receive
and retain under this Security Agreement.
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(e) Voting of Securities. As long as no Event of Default exists,
Pledgor is entitled to exercise all voting rights pertaining to any
Pledged Securities and Partnership Interests; provided, however, that no
vote shall be cast or consent, waiver, or ratification given or action
taken without the prior written consent of Collateral Agent which would
(x) be inconsistent with or violate any provision of this Security
Agreement or any other Loan Document or (y) amend, modify, or waive any
term, provision or condition of the certificate of incorporation, bylaws,
certificate of formation, or other charter document, or other agreement
relating to, evidencing, providing for the issuance of, or securing any
Collateral in any manner which would adversely affect Collateral Agent or
the value of Collateral; and provided further that Pledgor shall give
Collateral Agent at least five Business Days' prior written notice in the
form of an officers' certificate of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any voting or
other consensual rights pertaining to the Collateral or any part thereof
which could reasonably be expected to have a material adverse effect on
the value of the Collateral or any part thereof. If an Event of Default
exists and if Collateral Agent elects to exercise such right, the right to
vote any Pledged Securities shall be vested exclusively in Collateral
Agent. To this end, Pledgor hereby irrevocably constitutes and appoints
Collateral Agent the proxy and attorney-in-fact of Pledgor, with full
power of substitution, to vote, and to act with respect to, any and all
Collateral that is Pledged Securities standing in the name of Pledgor or
with respect to which Pledgor is entitled to vote and act, subject to the
understanding that such proxy may not be exercised unless an Event of
Default exists. The proxy herein granted is coupled with an interest, is
irrevocable, and shall continue so long as Collateral Agent is obligated
to extend credit under the Credit Agreement and thereafter until the
Obligations are paid and performed in full.
(f) Certain Proceeds. Notwithstanding any contrary provision herein,
any and all
(i) dividends, interest, or other Distributions paid or
payable other than in cash in respect of, and instruments and other
property received, receivable, or otherwise distributed in respect
of, or in exchange for, any Collateral;
(ii) dividends, interest, or other Distributions hereafter
paid or payable in cash in respect of any Collateral in connection
with a partial or total liquidation or dissolution, or in connection
with a reduction of capital, capital surplus, or paid-in-surplus;
(iii) cash paid, payable, or otherwise distributed in
redemption of, or in exchange for, any Collateral; and
(iv) dividends, interest, or other Distributions paid or
payable in violation of the Credit Documents,
shall be part of the Collateral hereunder, and shall, if received by
Pledgor, be held in trust for the benefit of Collateral Agent, and shall
forthwith be delivered to Collateral Agent (accompanied by proper
instruments of assignment and/or stock and/or bond powers executed by
Pledgor in accordance with Collateral Agent's instructions) to be held
subject to the terms of this Security Agreement. Any cash proceeds of
Collateral which come into the possession of Collateral Agent on and after
the occurrence of an Event of Default (including, without limitation,
insurance proceeds) may, at Collateral Agent's option, be applied in whole
or in part to the Obligations (to the extent then due), be released in
whole or in part to or on the written instructions of Pledgor for any
general or specific purpose, or be retained in whole or in part by
Collateral Agent as additional Collateral. Any cash Collateral in the
possession of Collateral Agent may be invested
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by Collateral Agent in certificates of deposit issued by Collateral Agent
(if Collateral Agent issues such certificates) or by any state or national
bank having combined capital and surplus greater than $100,000,000 with a
rating from Moody's and S&P of P-1 and A-1+, respectively, or in
securities issued or guaranteed by the United States of America or any
agency thereof. Collateral Agent shall never be obligated to make any such
investment and shall never have any liability to Pledgor for any loss
which may result therefrom. All interest and other amounts earned from any
investment of Collateral may be dealt with by Collateral Agent in the same
manner as other cash Collateral. The provisions of this SECTION 8(f) are
applicable whether or not a Default or Event of Default exists.
(g) Use and Operation of Collateral. Should any Collateral come into
the possession of Collateral Agent, during the existence of an Event of
Default Collateral Agent may use or operate such Collateral for the
purpose of preserving it or its value pursuant to the order of a court of
appropriate jurisdiction or in accordance with any other rights held by
Collateral Agent in respect of such Collateral. Pledgor covenants to
promptly reimburse and pay to Collateral Agent, at Collateral Agent's
request, the amount of all reasonable expenses (including, without
limitation, the cost of any insurance and payment of Taxes or other
charges) incurred by Collateral Agent in connection with its custody and
preservation of Collateral, and all such expenses, costs, Taxes, and other
charges shall bear interest at the Default Rate until repaid and, together
with such interest, shall be payable by Pledgor to Collateral Agent upon
demand and shall become part of the Obligations. However, the risk of
accidental loss or damage to, or diminution in value of, Collateral is on
Pledgor, and Collateral Agent shall have no liability whatever for failure
to obtain or maintain insurance, nor to determine whether any insurance
ever in force is adequate as to amount or as to the risks insured. With
respect to Collateral that is in the possession of Collateral Agent,
Collateral Agent shall have no duty to fix or preserve rights against
prior parties to such Collateral and shall never be liable for any failure
to use diligence to collect any amount payable in respect of such
Collateral, but shall be liable only to account to Pledgor for what it may
actually collect or receive thereon.
(h) Cash Collateral Account. If an Event of Default exists, then
Collateral Agent shall have, and Pledgor hereby grants to Collateral
Agent, the right and authority to transfer all funds on deposit in the
Deposit Accounts to a CASH COLLATERAL ACCOUNT (herein so called)
maintained with a depository institution acceptable to Collateral Agent
and subject to the exclusive direction, domain, and control of Collateral
Agent, and no disbursements or withdrawals shall be permitted to be made
by Pledgor from such Cash Collateral Account. Such Cash Collateral Account
shall be subject to the Security Interest and Liens in favor of Collateral
Agent herein created, and Pledgor hereby grants a security interest to
Collateral Agent in and to, such Cash Collateral Account and all checks,
drafts, and other items ever received by Pledgor for deposit therein.
Furthermore, if an Event of Default exists, then Collateral Agent shall
have the right, at any time in its discretion without notice to Pledgor,
(i) to transfer to or to register in the name of Collateral Agent or any
nominee any certificates of deposit or deposit instruments constituting
Deposit Accounts and shall have the right to exchange such certificates or
instruments representing Deposit Accounts for certificates or instruments
of smaller or larger denominations and (ii) to take and apply against the
Obligations any and all funds then or thereafter on deposit in the Cash
Collateral Account or otherwise constituting Deposit Accounts.
(i) Power of Attorney. Pledgor hereby irrevocably constitutes and
appoints Collateral Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the name of Pledgor or in its own name,
to take while an Event of Default exists, any and all action and to
execute any and all documents and instruments which Collateral Agent at
any time and from time to time deems
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necessary or desirable to accomplish the purposes of this Security
Agreement and, without limiting the generality of the foregoing, Pledgor
hereby gives Collateral Agent the power and right on behalf of Pledgor and
in its own name to do any of the following while an Event of Default
exists, without notice to or the consent of Pledgor:
(i) to transfer any and all funds on deposit in the Deposit
Accounts to the Cash Collateral Account as set forth in herein;
(ii) to receive, endorse, and collect any drafts or other
instruments or documents in connection with CLAUSE (b) above and
this CLAUSE (i);
(iii) to use the Intellectual Property or to grant or issue
any exclusive or non-exclusive license under the Intellectual
Property to anyone else, and to perform any act necessary for the
Collateral Agent to assign, pledge, convey, or otherwise transfer
title in or dispose of the Intellectual Property to any other
Person;
(iv) to demand, sue for, collect, or receive, in the name of
Pledgor or in its own name, any money or property at any time
payable or receivable on account of or in exchange for any of the
Collateral and, in connection therewith, endorse checks, notes,
drafts, acceptances, money orders, documents of title or any other
instruments for the payment of money under the Collateral or any
policy of insurance;
(v) to pay or discharge taxes, Liens, or other encumbrances
levied or placed on or threatened against the Collateral;
(vi) to notify post office authorities to change the address
for delivery of Pledgor to an address designated by Collateral Agent
and to receive, open, and dispose of mail addressed to Pledgor; and
(vii) (A) to direct account debtors and any other parties
liable for any payment under any of the Collateral to make payment
of any and all monies due and to become due thereunder directly to
Collateral Agent or as Collateral Agent shall direct; (B) 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 Collateral; (C) to sign and endorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, proxies, stock powers,
verifications, and notices in connection with accounts and other
documents relating to the Collateral; (D) to commence and prosecute
any suit, action, or proceeding at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof
and to enforce any other right in respect of any Collateral; (E) to
defend any suit, action, or proceeding brought against Pledgor with
respect to any Collateral; (F) to settle, compromise, or adjust any
suit, action, or proceeding described above and, in connection
therewith, to give such discharges or releases as Collateral Agent
may deem appropriate; (G) to exchange any of the Collateral for
other property upon any merger, consolidation, reorganization,
recapitalization, or other readjustment of the issuer thereof and,
in connection therewith, deposit any of the Collateral with any
committee, depositary, transfer agent, registrar, or other
designated agency upon such terms as Collateral Agent may determine;
(H) to add or release any guarantor, indorser, surety, or other
party to any of the Collateral; (I) to renew, extend, or otherwise
change the terms and conditions of any of the Collateral; (J) to
endorse Pledgor's name on all applications, documents, papers, and
instruments necessary or desirable in order for Collateral Agent to
use or
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maintain any of the Intellectual Property; (K) to make, settle,
compromise or adjust any claims under or pertaining to any of the
Collateral (including claims under any policy of insurance); (L) to
execute on behalf of Pledgor any financing statements or
continuation statements with respect to the Security Interests
created hereby, and to do any and all acts and things to protect and
preserve the Collateral, including, without limitation, the
protection and prosecution of all rights included in the Collateral;
and (M) to sell, transfer, pledge, convey, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Collateral Agent were the absolute owner
thereof for all purposes, and to do, at Collateral Agent's option
and Pledgor's expense, at any time, or from time to time, all acts
and things which Collateral Agent deems necessary to protect,
preserve, maintain, or realize upon the Collateral and Collateral
Agent's security interest therein.
In addition, whether or not an Event of Default exists, Pledgor
hereby irrevocably constitutes and appoints Collateral Agent and any
officer or agent thereof, with full power of substitution, as its
true and lawful attorney in fact with full irrevocable power and
authority in name of Pledgor or in its own name, to file and record
in the United States Copyright Office, the Canadian Copyright
Office, and any other or similar office or registry of any
Governmental Authority or jurisdiction, all notices, security
agreements, and other documents as Collateral Agent may deem
appropriate, for the purpose of creating, evidencing or perfecting
Collateral Agent's security interests and Liens in the Copyrights,
or any of them.
This power of attorney is a power coupled with an interest and shall be
irrevocable. Collateral 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 Collateral Agent in this
Security Agreement, and shall not be liable for any failure to do so or
any delay in doing so. Neither Collateral Agent nor any Person designated
by Collateral Agent shall be liable for any act or omission or for any
error of judgment or any mistake of fact or law. This power of attorney is
conferred on Collateral Agent solely to protect, preserve, maintain, and
realize upon its Security Interest in the Collateral. Collateral Agent
shall not be responsible for any decline in the value of the Collateral
and shall not be required to take any steps to preserve rights against
prior parties or to protect, preserve, or maintain any Lien given to
secure the Collateral.
(j) Purchase Money Collateral. To the extent that Collateral Agent
has advanced or will advance funds to or for the account of Pledgor to
enable Pledgor to purchase or otherwise acquire rights in Collateral,
Collateral Agent, at its option, may pay such funds (i) directly to the
Person from whom Pledgor will make such purchase or acquire such rights,
or (ii) to Pledgor, in which case Pledgor covenants to promptly pay the
same to such Person, and forthwith furnish to Collateral Agent evidence
satisfactory to Collateral Agent that such payment has been made from the
funds so provided.
(k) Subrogation. If any of the Obligations are given in renewal or
extension or applied toward the payment of indebtedness secured by any
Lien, then Collateral Agent shall be, and is hereby, subrogated to all of
the rights, titles, interests, and Liens securing the indebtedness so
renewed, extended, or paid.
(l) Indemnification. Pledgor hereby assumes all liability for the
Collateral, for the Security Interest, and for any use, possession,
maintenance, and management of, all or any of the Collateral, including,
without limitation, any Taxes arising as a result of, or in connection
with, the transactions contemplated herein, and agrees to assume liability
for, and to indemnify and
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hold Collateral Agent harmless from and against, any and all claims,
causes of action, or liability, for injuries to or deaths of Persons and
damage to property, howsoever arising from or incident to such use,
possession, maintenance, and management, whether such Persons be agents or
employees of Pledgor or of third parties, or such damage be to property of
Pledgor or of others. Pledgor agrees to indemnify, save, and hold
Collateral Agent harmless from and against, and covenants to defend
Collateral Agent against, any and all losses, damages, claims, costs,
penalties, liabilities, and expenses (collectively, "CLAIMS"), including,
without limitation, court costs and attorneys' fees, AND ANY OF THE
FOREGOING ARISING FROM THE NEGLIGENCE OF COLLATERAL AGENT, OR ANY OF ITS
OFFICERS, EMPLOYEES, AGENTS, ADVISORS, EMPLOYEES, OR REPRESENTATIVES,
howsoever arising or incurred because of, incident to, or with respect to
Collateral or any use, possession, maintenance, or management thereof;
provided, however, that the indemnity set forth in this SECTION 8(l) will
not apply to Claims caused by the gross negligence or willful misconduct
of Collateral Agent.
(m) Subordination. Pledgor hereby fully subordinates all claims that
it now or hereafter may have under the Collateral Notes executed by any
Guarantor, to the prior payment in full of Lenders' claims against such
Guarantor under such Guarantor's Guaranty, and agrees that Lenders shall
be entitled to payment in full of their claims against such Guarantor,
before Pledgor is entitled to demand, sue for, collect , or receive any
payments of or on account of such Collateral Notes.
9. MISCELLANEOUS.
(a) Continuing Security Interest. This Security Agreement creates a
continuing security interest in the Collateral and shall (i) remain in
full force and effect so long as Collateral Agent is obligated to extend
credit under the Credit Agreement and thereafter until the Obligations
(other than inchoate indemnity obligations) are paid and performed in
full; and (ii) inure to the benefit of and be enforceable by Collateral
Agent and its successors, transferees, and assigns. Without limiting the
generality of the foregoing CLAUSE (ii), Collateral Agent may assign or
otherwise transfer any of their respective rights under this Security
Agreement to any other Person in accordance with the terms and provisions
of the Credit Agreement, and to the extent of such assignment or transfer
such Person shall thereupon become vested with all the rights and benefits
in respect thereof granted herein or otherwise to Collateral Agent. Upon
payment in full of the Obligations (other than inchoate indemnity
obligations) and the termination of the commitment of Collateral Agent to
extend credit under the Credit Documents, Pledgor shall be entitled to the
prompt return, at its expense, of such of the Collateral as shall not have
been sold or otherwise applied pursuant to the terms hereof.
Upon any sale or other transfer by Pledgor of any Collateral that is
expressly permitted under the Credit Agreement to any Person that is not a
Credit Party, or upon the effectiveness of any written consent by
Collateral Agent to the release of the security interest granted hereby in
any Collateral, the security interest in such Collateral shall be
automatically released.
In connection with any termination or release pursuant to this
Section 9(a), Collateral Agent shall execute and deliver to Pledgor, at
Pledgor's expense, all documents needed to evidence such termination or
release.
(b) Actions Not Releases. The Security Interest and Pledgor's
obligations and Collateral Agent's rights hereunder shall not be released,
diminished, impaired, or adversely affected by the occurrence of any one
or more of the following events: (i) the taking or accepting of any other
security or assurance for any or all of the Obligations; (ii) any release,
surrender,
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exchange, subordination, or loss of any security or assurance at any time
existing in connection with any or all of the Obligations; (iii) the
modification of, amendment to, or waiver of compliance with any terms of
any of the other Credit Documents without the notification or consent of
Pledgor, (the right to such notification or consent being herein
specifically waived by Pledgor) except as required therein; (iv) the
insolvency, bankruptcy, or lack of corporate or trust power of any party
at any time liable for the payment of any or all of the Obligations,
whether now existing or hereafter occurring; (v) any renewal, extension,
or rearrangement of the payment of any or all of the Obligations, either
with or without notice to or consent of Pledgor, or any adjustment,
indulgence, forbearance, or compromise that may be granted or given by
Collateral Agent to Pledgor; (vi) any neglect, delay, omission, failure,
or refusal of Collateral Agent to take or prosecute any action in
connection with any other agreement, document, guaranty, or instrument
evidencing, securing, or assuring the payment of all or any of the
Obligations; (vii) any failure of Collateral Agent to notify Pledgor of
any renewal, extension, or assignment of the Obligations or any part
thereof, or the release of any Collateral or other security, or of any
other action taken or refrained from being taken by Collateral Agent
against Pledgor or any new agreement between or among Collateral Agent and
Pledgor, it being understood that except as expressly provided herein,
Collateral Agent shall not be required to give Pledgor any notice of any
kind under any circumstances whatsoever with respect to or in connection
with the Obligations, including, without limitation, notice of acceptance
of this Security Agreement or any Collateral ever delivered to or for the
account of Collateral Agent hereunder; (viii) the illegality, invalidity,
or unenforceability of all or any part of the Obligations against any
party obligated with respect thereto by reason of the fact that the
Obligations, or the interest paid or payable with respect thereto, exceeds
the amount permitted by applicable Law, the act of creating the
Obligations, or any part thereof, is ultra vires, or the officers,
partners, or trustees creating same acted in excess of their authority, or
for any other reason; or (ix) if any payment by any party obligated with
respect thereto is held to constitute a preference under applicable Law or
for any other reason Collateral Agent is required to refund such payment
or pay the amount thereof to someone else.
(c) Waivers. Except to the extent expressly otherwise provided
herein or in other Credit Documents and to the fullest extent permitted by
applicable Law, Pledgor waives (i) any right to require Collateral Agent
to proceed against any other Person, to exhaust its rights in Collateral,
or to pursue any other right which Collateral Agent may have; (ii) with
respect to the Obligations, presentment and demand for payment, protest,
notice of protest and nonpayment, and notice of the intention to
accelerate; and (iii) all rights of marshaling in respect of any and all
of the Collateral.
(d) Financing Statement; Authorization. Collateral Agent shall be
entitled at any time to file this Security Agreement or a carbon,
photographic, or other reproduction of this Security Agreement, as a
financing statement, but the failure of Collateral Agent to do so shall
not impair the validity or enforceability of this Security Agreement.
Pledgor hereby irrevocably authorizes Collateral Agent at any time and
from time to time to file in any UCC jurisdiction any initial financing
statements and amendments thereto (without the requirement for Pledgor's
signature thereon) that (i) indicate the Collateral (A) as all assets of
Pledgor or words of similar effect, regardless of whether any particular
asset comprised in the Collateral falls within the scope of Article 9 of
the UCC of the state or such jurisdiction or whether such assets are
included in the Collateral hereunder, or (B) as being of an equal or
lesser scope or with greater detail, and (ii) contain any other
information required by Article 9 of the UCC of the state or such
jurisdiction for the sufficiency or filing office acceptance of any
financing statement or amendment, including whether the Pledgor is an
organization, the type of organization, and any organization
PLEDGE AND SECURITY AGREEMENT D-
26
<PAGE>
identification number issued to Pledgor. Pledgor agrees to furnish any
such information to Collateral Agent promptly upon request.
(e) Amendments. This Security Agreement may be amended only by an
instrument in writing executed jointly by Pledgor and Collateral Agent,
and supplemented only by documents delivered or to be delivered in
accordance with the express terms hereof.
(f) Multiple Counterparts. This Security Agreement has been executed
in a number of identical counterparts, each of which shall be deemed an
original for all purposes and all of which constitute, collectively, one
agreement; but, in making proof of this Security Agreement, it shall not
be necessary to produce or account for more than one such counterpart.
(g) Parties Bound; Assignment. This Security Agreement shall be
binding on Pledgor and Pledgor's heirs, legal representatives, successors,
and assigns and shall inure to the benefit of Collateral Agent and
Collateral Agent's successors and assigns; provided that Pledgor may not,
without the prior written consent of Collateral Agent, assign any rights,
duties, or obligations hereunder.
(H) GOVERNING LAW. THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE, EXCEPT TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION GOVERN THE
CREATION, PERFECTION, VALIDITY, OR ENFORCEMENT OF LIENS UNDER THIS
SECURITY AGREEMENT, AND THE APPLICABLE FEDERAL LAWS OF THE UNITED STATES
OF AMERICA, SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND
INTERPRETATION OF THIS SECURITY AGREEMENT AND ALL OF THE OTHER CREDIT
DOCUMENTS.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.
PLEDGE AND SECURITY AGREEMENT D-
27
<PAGE>
EXECUTED as of the date first stated in this Pledge and Security Agreement.
PLEDGOR:
TALEO CORPORATION
By: /s/ Jean Lavigueur
_______________________________________
Name: Jean Lavigueur
__________________________________
Title: Chief Financial Officer
_________________________________
COLLATERAL AGENT:
GOLDMAN SACHS SPECIALTY LENDING GROUP, L.P.
By: /s/ Todd B. Foust
_______________________________________
Name: Todd B. Foust
__________________________________
Title: Vice President
_________________________________
PLEDGE AND SECURITY AGREEMENT
SIGNATURE PAGE
<PAGE>
PLEDGE AND SECURITY AGREEMENT
SIGNATURE PAGE
<PAGE>
EXHIBIT A
PLEDGOR INFORMATION AND LOCATION OF COLLATERAL
A. Exact Legal Name of Pledgor: Taleo Corporation
B. Mailing Address of Pledgor: 575 Market Street, 8th Floor, San Francisco CA
94105
C. Type of Entity: Corporation
D. Jurisdiction of Organization: Delaware
E. State Issued Organizational Identification Number: 3042240
F. Location of Books and Records: 575 Market Street, 8th Floor, San Francisco
CA 94105 1010 Northern Boulevard, Suite
328, Great Neck, NY 11021 330
St-Vallier East, Suite 400, Quebec,
QC G1K 9C5
G. Location of Collateral: 575 Market Street, 8th Floor, San Francisco CA
94105 90 Washington Valley Road, Bedminster NJ
07921 1010 Northern Boulevard, Suite 328,
Great Neck, NY 11021 One Energy Center, 40
Shuman Boulevard, Naperville IL 60563 Hosting
Facility operated by Internap Network Services
Corporation Hosting Facility operated by IBM
H. Location of Real Property: None
I. Jurisdiction(s) for Filing Financing Statements: Delaware
30
<PAGE>
EXHIBIT B-1
COLLATERAL DESCRIPTIONS
A. Collateral Notes and Collateral Note Security
1. Note made by Taleo (Europe) B.V., for One Million, Four Hundred Sixty
Thousand, Two Hundred and Ninety-Two Euros (Euro(Euro) 1,460,292).
2. Note made by Taleo (France) SAS, for One Million, Three Hundred
Twenty-Eight Thousand, Three Hundred and Fifty-Seven Euros ((Euro(Euro)
1,328,357).
3. Note made by Recruitsoft (Asia Pacific) Pte Ltd., for One Million, Seven
Hundred Thirty Four Thousand, Two Hundred and Ninety Singapore Dollars
(SGD$ 1,734,290).
4. Note made by Taleo (Australia) Pty Ltd., for Nine Hundred and Sixty One
Thousand, Nine Hundred and Ninety Australian dollars (AUD$ 961,990).
5. Note made by Taleo (UK) Ltd., for Twelve Thousand and Seventy-One United
Kingdom Pounds (GBP(Pound) 12,701).
6. Note made by Taleo (Canada) Inc., for Twelve Million, One Hundred Seventy
Five Thousand, Six Hundred and Twenty Four Canadian Dollars (CDA$
12,175,624).
B. Pledged Shares not to exceed 66% of the outstanding equity for existing
Foreign Subsidiaries
1. One thousand (1,000) Common Shares, of Butterfly Acquisition Corporation.
2. 66/100ths Ordinary Shares of Taleo (Australia) Pty Limited.
3. Six Hundred and Sixty (660) Class A Common Shares of 9090-5415 Quebec
Inc., (formerly Viasite Inc.).
C. Partnership Interests
None.
D. Commercial Tort Claims
None.
E. Material Contracts:
See Schedule 4.16 to the Credit Agreement
F. Deposit Accounts (including name of bank, address, and account number)
JP Morgan Chase Bank N.A., 395 N. Service Road, Melville NY 11747, 904-949214
JP Morgan Chase Bank N.A., 395 N. Service Road, Melville NY 11747, 957044151
Goldman Sachs Trust, through Goldman Sachs & Co., 4900 Sears Tower, 51st Floor,
Chicago, IL 60606, 1885036799
<PAGE>
EXHIBIT B-2
A. Registered Copyrights and Copyright Applications
Recruitsoft, Inc. Symbol Canada / Copyright Registration No.
1011350
B. Issued Patents and Patent Applications
None.
C. Registered Trademarks and Trademark Applications
COUNTRY/SERIAL
OWNER TRADEMARK NUMBER/REGISTRATION NUMBER
----- --------- --------------------------
Recruitsoft, Inc. Recruiter WebTop United States / 76044,909
Recruitsoft, Inc. Recruitsoft United States / 75724,581 /
2,513,172
Recruitsoft, Inc. Symbol Canada / Trademark Application
Recruitsoft, Inc. Symbol United States / Trademark
Application 76506,400
Recruitsoft, Inc. RECRUITSOFT European Union / Application No.
003309291 / TM80536EU00
Recruitsoft, Inc. RECRUITSOFT Australia
<PAGE>
EXHIBIT B-3
LICENSES
TALEO CORPORATION - THIRD-PARTY SOFTWARE INVENTORY
PREPARED APRIL 19, 2005
TALEO ENTERPRISE SOLUTION
Operating Systems
Components Description Licensing
------------------------ ---------------------------- -------------------
Red Hat Linux Enterprise Operating System License
HP-UX Operating System License
Sun Solaris Operating System License
Operating Systems Components
Components Description Licensing
------------------------ ---------------------------- -------------------
OpenSSH Secure Shell Access Open Source
Syslog-NG System Logging Tool Open Source
CIS Security Security Tool Open Source
Net-SNMP Network Management Tool Open Source
NTP Client Network Time Protocol Open Source
RSA Secure ID Access Management License
Zenworks Linux Management Package Management License
Postfix Email Server Open Source
Taleo Web Servers
Components Description Licensing
------------------------ ---------------------------- -------------------
Apache Web Server Open Source
Taleo Application Servers
Components Description Licensing
------------------------ ---------------------------- -------------------
Sun JDK Sun Java Virtual Machine Open Source
Apache Jserv Application Server Open Source
WhereOn Earth Geozip Location Tool License
WinterTree Spelling Server License
Taleo Database Servers
Components Description Licensing
------------------------ ---------------------------- -------------------
Polyserve Clustering Software License
Oracle Enterprise Manager Database Management License
Oracle Enterprise Edition Database Server License
Stellent "Outside In" PDF File Filter License
Taleo Reporting Servers
Components Description Licensing
------------------------ ---------------------------- -------------------
Business Objects Reporting Server License
WebIntelligence Reporting Software License
Tomcat Servlet/JSP Engine Open Source
<PAGE>
EXHIBIT B-3
LICENSES - CONTINUED
Taleo Autonomy Servers
Components Description Licensing
---------------------------- --------------------------------- ---------------
Autonomy Conceptual Search Engine License
Tomcat Servlet/JSP Engine Open Source
Resume Mirror Server Parsing Engine License
Taleo Integration Servers
Components Description Licensing
---------------------------- --------------------------------- ---------------
WebMethods B2B Integration application License
Squid Proxy Server Open Source
ProFTPd FTP Server Open Source
Ftp-GW FTP Proxy Open Source
WebMethods Proxy B2B Integration proxy License
Taleo Monitoring Servers
Components Description Licensing
---------------------------- --------------------------------- ---------------
HP Openview Operations Monitoring Tool License
HP Network Node Manager Monitoring Tool License
Cacti Monitoring Tool Open Source
Nagios Monitoring Tool Open Source
Nessus Monitoring Tool Open Source
HP Insight Manager Monitoring Tool License
Taleo Backup Servers
Components Description Licensing
---------------------------- --------------------------------- ---------------
Veritas NetBackup Backup Management License
Taleo Anti-Virus Servers
Components Description Licensing
---------------------------- --------------------------------- ---------------
McAfee Webshield Anti-Virus Software License
Taleo DNS Servers
Components Description Licensing
---------------------------- --------------------------------- ---------------
Bind DNS Server Open Source
Taleo Appliance
Components Description Licensing
---------------------------- --------------------------------- ---------------
IOS Cisco Management Tool License
Sonic Wall Crypto Devices License
F5 Big-Ip Load Balancers License
<PAGE>
EXHIBIT B-3
LICENSES - CONTINUED
Taleo Storage Management
Components Description Licensing
---------------------------- --------------------------------- ---------------
Hitachi Storage Navigator Storage Management License
Damp Storage Management License
Sommet Storage Management License
HP Command View Storage Management License
HP Array Control Unit Storage Management License
Htachi Hi-Track Storage Management License
Hitachi Graph-Track Storage Management License
Veritas Foundation Suite Storage Management License
Taleo Performance Servers
Components Description Licensing
---------------------------- --------------------------------- ---------------
Loadrunner Performance Monitoring Tool License
Taleo Development
Components Description Licensing
---------------------------- --------------------------------- ---------------
Mercury LoadRunner Load Testing Tool License in process
YourKit Memory Profiler Memory Leak Detection License
JProfiler Code Optimization Under evaluation
Oracle TopLink Mapping Workbench Data Entity Mapping Development License
Eclipse SDK Java Code Development Open Source
Checkstyle Code Review Tool Open Source
Xdoclet Code Generation Tool Open Source
JBoss-IDE Code Generation Tool Open Source
JBoss Application Server Open Source
JAD Decompiler Open Source
Apache Jmeter Load Testing Tool Open Source
Apache Ant Script Building Tool Open Source
XML-Spy License XML Editor License
MediaWiki Collaboration Software Open Source
Borland StarTeam Source Code Management
<PAGE>
EXHIBIT B-3
LICENSES - CONTINUED
TALEO CORPORATION - THIRD-PARTY SOFTWARE INVENTORY
PREPARED APRIL 19, 2005
TALEO CONTINGENT SOLUTION
Contingent Development Environments
Components Description Licensing
---------------------------- ---------------------- --------------
Windows XP OS License
Adobe Acrobat Document creation ?
Adobe Reader Document reader Free
Ultra Edit Text file editor License
Ad-aware SE personal Spyware removal Free
Trend Micro Office Scan Virus protection License
Test Track Pro Bug tracker License
XML Spy 5 XML file editor License
Eclipse Java IDE Open source
MySQL Database Open source
Star Team Source code archival License
MS Office suite License
Putty SSH telnet Free
Copernic Desktop Search Indexing Free
FlashFXP FTP client Trial
MSN Messenger Instant messaging Free
Yahoo Messenger Instant messaging Free
Real VNC Remote desktop Free
Apache Ant Automation Open source
Jakarta Jmeter Profiler Open source
Jboss Application Server Open source
Apache Web Server Web Server Open source
Oracle 9i Database License
<PAGE>
EXHIBIT B-3
LICENSES - CONTINUED
Contingent QA and Release Management
Components Description Licensing
-------------------------------- ------------------------------ -----------------
MAC OS Operating System License
Cisco VPN 4.0.3 Remote connection License
VSClient 5.1 Remote connection License
FSecure SSH Client 5.1 Remote connection License
Microsoft Office 2003 Office suite License
MS Office Visio Charting software License
MS Project Project software License
MSN Messenger 6.2 Instant Messaging Free
WebEX Web Meeting software License
Adobe Acrobat Reader 6.02 Document reader Free
Mozilla Firefox Web Browser Free
Netscape Web Browser Free
Internet Explorer Web Browser Free
Lotus Notes 5.0.11 Development environment License
Team Studio 2.10 Source code archival License
Oracle Client 9.2 Database License
TOAD Professional 7.6 SQL access License
StarTeam 5.3 Source code archival License
Java SDK 1.4.2_05 Java library Open Source
IBM Websphere Studio Application
Developer 4.03 Development environment License
Eclipse 3.0 Development environment Open Source
JBoss 4.0 Application Server Open Source
Apache Web Server Open Source
Testtrack Defect tracking License
Webmethods Developer Development environment License
Testlog V1.7 QA testcases License
SnagIt Screenshots License
Remote Desktop Connection Remote desktop License
Ad Aware 6.0 Popup blocker License
Loadrunner Performance Monitoring Tool License
UltraEdit-32 Data File editor License
IBM XDE Tester Automated Functional Test Tool License
CruiseControl Continuous Integration Open Source
Datapool Editor Data Provision Taleo Developed
<PAGE>
EXHIBIT B-3
LICENSES - CONTINUED
Contingent Production & ASP
Components Description Licensing
------------------------------------------ ---------------------------------- ------------
Crystal Decisions' Crystal Reports 9 Report Development License
Edify Integrated Voice Recognition (IVR) License
XML Convert 1.0
Oracle's LSX Domino-Oracle Connector Domino Oracle connectivity Freeware
Domino Designer 5.0.11 Domino Development License
Macromedia Dreamweaver UI Design and Development License
Computer Associates' Erwin 3.5.2 Database Modeling License
Mercury Interactive's LoadRunner, Load Testing License
WinRunner
Teamstudio's Ciao! For Domino/Lotus Domino Source Control License
Notes, Edition 15a
Microsoft Visual C++ - Visual Studio C++ Software Development License
.NET 2003 Version
Java KavaChart Applet Library Web Integrated Charts Shareware
Sun Solaris Operating System License
Red Hat's Linux 7.0 Operating System License
Microsoft Windows 2000 Server Operating System License
Lotus Domino Domino App Server License
Lotus Notes Notes Server License
Oracle 8i (8.1.6) Database License
Microsoft SQL*Server 2000 Database License
Candle IntelliWatch for Domino
CiscoWorks
Quest Software's Quest Instance for Oracle
Oracle Enterprise & Capacity managers
Cisco IDS
File compare Utility Comparing files and directories Free
Roxio CD Burner License
Instance Monitor Monitoring of Oracle Databases License
<PAGE>
EXHIBIT C
DEFAULTS OR DEFAULTS UNDER ANY COLLATERAL NOTE, DOCUMENTS EVIDENCING
THE COLLATERAL NOTE SECURITY, PARTNERSHIP AGREEMENTS, OR MATERIAL
CONTRACTS
None.
<PAGE>
EXHIBIT D
ACKNOWLEDGMENT OF PLEDGE
PARTNERSHIP: _______________ INTEREST OWNER:_____________________
BY THIS ACKNOWLEDGMENT OF PLEDGE, dated as of ______________________ ,
2005, (the "PARTNERSHIP") hereby acknowledges the pledge in favor of Goldman
Sachs Specialty Lending, L.P. ("PLEDGEE"), as Collateral Agent under that
certain Pledge and Security Agreement dated as of _____________, 2005 (as
amended, modified, supplemented, or restated from time to time, the "SECURITY
AGREEMENT"), against, and a security interest in favor of Pledgee in, all of
_____________`s (the "INTEREST OWNER") rights in connection with any partnership
interest in the Partnership now and hereafter owned by the Interest Owner
("PARTNERSHIP INTEREST").
A. Pledge Records. The Partnership has identified Pledgee's interest in
all of the Interest Owner's right, title, and interest in and to all of the
Interest Owner's Partnership Interest as subject to a pledge and security
interest in favor of Pledgee in the Partnership Records.
B. Partnership Distributions, Accounts, and Correspondence. The
Partnership hereby acknowledges that (i) all proceeds, distributions, and other
amounts payable to the Interest Owner, including, without limitation, upon the
termination, liquidation, and dissolution of the Partnership shall be paid and
remitted to the Pledgee upon demand, (ii) all funds in deposit accounts shall be
held for the benefit of Pledgee, and (iii) all future correspondence,
accountings of distributions, and tax returns of the Partnership shall be
provided to the Pledgee. The Partnership acknowledges and accepts such direction
and hereby agrees that it shall, upon the written demand by Collateral Agent,
pay directly to Collateral Agent at such address any and all distributions,
income, and cash flow arising from the Partnership Interests whether payable in
cash, property or otherwise, subject to and in accordance with the terms and
conditions of the Partnership. The Pledgee may from time to time notify the
Partnership of any change of address to which such amounts are to be paid.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE TO FOLLOW.
<PAGE>
EXECUTED as of the date first stated in this Acknowledgment of Pledge.
By: ________________________________
Name: __________________________
Title:__________________________
[PARTNERSHIP]
By: _______________________________,
as General Partner
By: ____________________________
Name: ______________________
Title: _____________________
ACKNOWLEDGEMENT OF PLEDGE
SIGNATURE PAGE