Document:

Exhibit 10.8

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (this “Agreement”), dated as of April 30, 2012, among JTH HOLDING, INC., a Delaware corporation (the “Borrower”), JTH TAX, INC., a Delaware corporation (“JTH”), WEFILE INC., a Virginia corporation (“WeFile”), LTS SOFTWARE INC., a Virginia corporation (“LTS Software”), LTS PROPERTIES, LLC, a Virginia limited liability company (“LTS Properties”), JTH FINANCIAL, LLC, a Virginia limited liability company (“JTH Financial”), and each other Subsidiary of the Borrower hereafter becoming a party hereto (Borrower, JTH, WeFile, LTS Software, LTS Properties, JTH Financial and each other Subsidiary of the Borrower hereafter becoming a party hereto shall be collectively known as the “Grantors”, and individually as a “Grantor”), in favor of SUNTRUST BANK, a Georgia banking corporation, as the Administrative Agent (the “Administrative Agent”), on its behalf and on behalf of the other Secured Parties (as such term is defined in the Revolving Credit and Term Loan Agreement, dated as of the date hereof, by and among the Borrower, the Lenders, the Administrative Agent, and SunTrust Bank, as Issuing Bank and as Swingline Lender (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”)).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to establish a revolving credit facility on behalf of, and make term loans to, the Borrower; and

 

WHEREAS, it is a condition precedent to the obligations of the Administrative Agent, the Issuing Bank, the Swingline Lender and the Lenders under the Credit Agreement that the Grantors enter into this Agreement to secure all obligations of the Borrower under the Credit Agreement, secure the obligations of each Subsidiary of the Borrower under the Subsidiary Guaranty Agreement and all other Loan Documents to which each Grantor is a party, and to secure all Hedging Obligations owed by any Loan Party to any Specified Hedge Provider, and to secure all Treasury Management Obligations owed by any Loan Party to any Specified Treasury Management Provider, and the Grantors desire to satisfy such condition precedent.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.01         Definitions.  Capitalized terms defined in the Credit Agreement and not otherwise defined herein, when used in this Agreement shall have the respective meanings provided for in the Credit Agreement.  The following additional terms, when used in this Agreement, shall have the following meanings:

 

“Account Debtor” shall mean any person or entity that is obligated under an Account.

 

“Accounts” shall mean all “accounts” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights, and, in any event, shall mean and include, without limitation, (a) all accounts receivable, contract rights, book

 

 

debts, notes, drafts and other obligations or indebtedness owing to any Grantor arising from the sale or lease of goods or other property by any Grantor or the performance of services by any Grantor (including, without limitation, any such obligation which might be characterized as an account, contract right or general intangible under the UCC in effect in any jurisdiction), (b) all of each Grantor’s rights in, to and under all purchase and sales orders for goods, services or other property, and all of each Grantor’s rights to any goods, services or other property represented by any of the foregoing (including returned or repossessed goods and unpaid sellers’ rights of rescission, replevin, reclamation and rights to stoppage in transit), (c) all monies due to or to become due to any Grantor under all contracts for the sale, lease or exchange of goods or other property or the performance of services by any Grantor (whether or not yet earned by performance on the part of such Grantor), and (d) all collateral security and guarantees of any kind given to any Grantor with respect to any of the foregoing.

 

“Chattel Paper” shall mean all “chattel paper” (as defined in the UCC) owned or acquired by any Grantor or in which any Grantor has or acquires any rights.

 

“Collateral” shall mean, collectively, all of the following:

 

(i)            all Accounts;

 

(ii)           all Chattel Paper;

 

(iii)          all Deposit Accounts;

 

(iv)          all Documents;

 

(v)           all Equipment;

 

(vi)          all Fixtures;

 

(vii)         all General Intangibles;

 

(viii)        all Instruments;

 

(ix)          all Inventory;

 

(x)           all Investment Property;

 

(xi)          all Software;

 

(xii)         all money, cash or cash equivalents;

 

(xiii)        all other goods and personal property, whether tangible or intangible;

 

(xiv)        all Supporting Obligations and Letter-of-Credit Rights of any Grantor;

 

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(xv)         all books and records pertaining to any of the Collateral (including, without limitation, credit files, Software, computer programs, printouts and other computer materials and records but excluding customer lists); and

 

(xvi)        All products and Proceeds of all or any of the Collateral described in clauses (i) through (xv) hereof.

 

“Copyright License” shall mean any and all rights of any Grantor under any written agreement granting any right to use any Copyright or Copyright registration.

 

“Copyrights” shall mean all of the following now owned or hereafter acquired by any Grantor or in which any Grantor now has or hereafter acquires any rights: (a) all copyrights and general intangibles of like nature (whether registered or unregistered), all registrations and recordings thereof, and all applications in connection therewith, including all registrations, recordings and applications in the United States Copyright Office or in any similar office or agency of the United States, any state or territory thereof, or any other country or any political subdivision thereof, and (b) all reissues, extensions or renewals thereof.

 

“Deposit Accounts” shall mean all “deposit accounts” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights, or other receipts, of any Grantor covering, evidencing or representing rights or interest in such deposit accounts, other than escrow accounts maintained solely for the benefit of parties other than Loan Parties, the funds in which are not owned, nor are any contingent rights of ownership possessed, by such Grantor.

 

“Documents” shall mean all “documents” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights, or other receipts, of any Grantor covering, evidencing or representing goods.

 

“Equipment” shall mean all “equipment” (as defined in the UCC) now owned or hereafter acquired by any Grantor and wherever located, and, in any event, shall include without limitation all machinery, furniture, furnishings, processing equipment, conveyors, machine tools, engineering processing equipment, manufacturing equipment, materials handling equipment, trade fixtures, trucks, trailers, forklifts, vehicles, computers and other electronic data processing and other office equipment of any Grantor, and any and all additions, substitutions and replacements of any of the foregoing, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto, all fuel therefore and all manuals, drawings, instructions, warranties and rights with respect thereto.

 

“Event of Default” shall have the meaning set forth for such term in Section 7 hereof.

 

“General Intangibles” shall mean all “general intangibles” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights and, in any event, shall include all right, title and interest in or under all contracts, all customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor and reissues, extensions or renewals thereof, rights in Intellectual Property, interests in partnerships, joint ventures and other business associations, licenses, permits, copyrights, trade secrets, proprietary

 

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or confidential information, inventions (whether or not patented or patentable), technical information, procedures, designs, knowledge, know-how, software, data bases, data, skill, expertise, experience, processes, models, drawings, materials and records, goodwill (including the goodwill associated with any Trademark or Trademark License), all rights and claims in or under insurance policies (including insurance for fire, damage, loss and casualty, whether covering personal property, real property, tangible rights or intangible rights, all liability, life, key man and business interruption insurance, and all unearned premiums), uncertificated securities, choses in action, deposit, checking and other bank accounts, rights to receive tax refunds and other payments, rights of indemnification, all books and records, correspondence, credit files, invoices, tapes, cards, computer runs, domain names, prospect lists, customer lists and other papers and documents.

 

“Instruments” shall mean all “instruments” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights and, in any event, shall include all promissory notes, all certificates of deposit and all letters of credit evidencing, representing, arising from or existing in respect of, relating to, securing or otherwise supporting the payment of, any of the Accounts or other obligations owed to any Grantor.

 

“Intellectual Property” shall mean all of the following now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights: (a) all Patents, patent rights and patent applications, Copyrights and copyright applications, Trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights, applications for registration of trademarks, trade names and service marks, fictitious names registrations and trademark, trade name and service mark registrations, and all derivations thereof; and (b) Patent Licenses, Trademark Licenses, Copyright Licenses and other licenses to use any of the items described in the preceding clause (a), and any other similar items necessary to conduct or operate the business of each Grantor.

 

“Inventory” shall mean all “inventory” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights and, in any event, shall include all goods owned or held for sale or lease to any other Persons.

 

“Investment Property” shall mean all “investment property” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights and, in any event, shall include all “certificated securities”, “uncertificated securities”, “security entitlements”, “securities accounts”, “commodity contracts” and “commodity accounts” (as all such terms are defined in the UCC) of each Grantor.

 

“Letter-of-Credit Rights” shall mean “letter-of-credit rights” (as defined in the UCC), now owned or hereafter acquired by any Grantor, including rights to payment or performance under a letter of credit, whether or not any Grantor, as beneficiary, has demanded or is entitled to demand payment or performance.

 

“License” shall mean any Copyright License, Patent License, Trademark License or other license of rights or interests of each Grantor in Intellectual Property.

 

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“Patent License” shall mean any written agreement now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights granting any right with respect to any property, process or other invention on which a Patent is in existence.

 

“Patents” shall mean all of the following now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights: (a) all letters patent of the United States or any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or any other country, including 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 or Territory thereof, or any other country; and (b) all reissues, continuations, continuations-in-part and extensions thereof.

 

“Proceeds” shall mean all “proceeds” (as defined in the UCC) of, and all other profits, rentals or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition of, or realization upon, the Collateral, and, in any event, shall mean and include all claims against third parties for loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of any Collateral, and any condemnation or requisition payments with respect to any Collateral and the following types of property acquired with cash proceeds:  Accounts, Inventory, General Intangibles, Documents, Instruments and Equipment.

 

“Secured Obligations” shall mean (i) all Obligations of the Borrower, (ii) all obligations of each other Grantor under the Subsidiary Guaranty Agreement and all other Loan Documents to which such other Grantor is a party to (whether for principal, interest, fees, expenses, indemnity or reimbursement payments, or otherwise), (iii) all renewals, extensions, refinancings and modifications thereof, and (iv) all reasonable costs and expenses incurred by the Administrative Agent in connection with the exercise of its rights and remedies hereunder (including reasonable attorneys’ fees).

 

“Security Interests” shall mean the security interests granted to the Administrative Agent on its behalf and on behalf of the Secured Parties pursuant to Section 3, as well as all other security interests created or assigned as additional security for the Secured Obligations pursuant to the provisions of this Agreement.

 

“Software” shall mean all “software” (as defined in the UCC), now owned or hereafter acquired by any Grantor, including all computer programs and all supporting information provided in connection with a transaction related to any program.

 

“Supporting Obligations” means all “supporting obligations” (as defined in the UCC), including letters of credit and guaranties issued in support of Accounts, Chattel Paper, Documents, General Intangibles, Instruments, or Investment Property.

 

“Trademark License” shall mean any written agreement now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any such rights granting to any Grantor any right to use any Trademark.

 

“Trademarks” shall mean all of the following now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any such rights: (i) all trademarks, trade names,

 

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corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, other source or business identifiers, designs and general intangibles of like nature (whether registered or unregistered), now owned or existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, 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 reissues, extensions or renewals thereof and (iii) all goodwill associated with or symbolized by any of the foregoing.

 

“UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in the Commonwealth of Virginia; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the Security Interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than Virginia, “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.

 

“United States” or “U.S.” shall mean the United States of America, any of the fifty states thereof, and the District of Columbia.

 

SECTION 2.  Representations and Warranties.  Each Grantor represents and warrants to the Administrative Agent, for the benefit of the Secured Parties, as follows:

 

(a)           Such Grantor (i) has rights in and the power to transfer each item of the Collateral upon which it purports to grant a Security Interest hereunder free and clear of any Liens other than Liens expressly permitted under Section 7.2 of the Credit Agreement and (ii) has good and marketable title to the Collateral owned by such Grantor.

 

(b)           Other than financing statements, security agreements, or other similar or equivalent documents or instruments with respect to Liens expressly permitted under Section 7.2 of the Credit Agreement, no financing statement, mortgage, security agreement or similar or equivalent document or instrument evidencing a Lien on all or any part of the Collateral is on file or of record in any jurisdiction.  None of the Collateral is in the possession of a Person (other than any Grantor) asserting any claim thereto or security interest therein, except that the Administrative Agent or its designee may have possession of Collateral as contemplated hereby.

 

(c)           When the UCC financing statements in appropriate form are filed in the offices specified on Schedule I attached hereto, the Security Interests shall constitute valid and perfected security interests in the Collateral, prior to all other Liens and rights of others therein except for the Liens expressly permitted under Section 7.2 of the Credit Agreement, to the extent that a security interest therein may be perfected by filing pursuant to the UCC, assuming the proper filing and indexing thereof.

 

(d)           All Inventory and Equipment is insured in accordance with the requirements of this Agreement and the Credit Agreement.

 

(e)           None of the Collateral constitutes, or is the Proceeds of, “farm products” (as defined in the UCC).

 

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(f)            Schedule II correctly sets forth each Grantor’s state of organization, taxpayer identification number, organizational identification number and correct legal name indicated on the public record of such Grantor’s jurisdiction of organization which shows such Grantor to be organized.

 

(g)           The Perfection Certificates, which are attached hereto as Schedule III, correctly set forth (i) all names and tradenames that each Grantor has used within the last five (5) years and the names of all Persons that have merged into or been acquired by each Grantor, (ii) the chief executive offices of each Grantor over the last five (5) years, (iii) all other locations in which tangible assets of each Grantor have been located in the last five (5) years, (iv) the name of each bank at which each Grantor maintains Deposit Accounts, the state or other jurisdiction of location of each such bank, and the account numbers for each Deposit Account, (v) all letters of credit under which each Grantor is a beneficiary, (vi) all third parties with possession of any Inventory or Equipment of each Grantor and (vii) each Grantor’s mailing address.

 

(h)           With respect to the Accounts of the Grantors:  (i) to the extent an Account arises out of goods sold and/or services furnished, (A) the goods sold and/or services furnished giving rise to each Account, to the extent applicable, are not subject to any security interest or Lien except the security interest granted to the Administrative Agent herein and Liens expressly permitted by Section 7.2 of the Credit Agreement, (B) such Account arises out of a bona fide transaction for goods sold and delivered (or in the process of being delivered) by a Grantor or for services actually rendered by a Grantor; (ii) each Account and the papers and documents of the applicable Grantor relating thereto are genuine and in all material respects what they purport to be; (iii) the amount of each Account as shown on the applicable Grantor’s books and records, and on all invoices and statements which may be delivered to the Administrative Agent with respect thereto, is due and payable to the applicable Grantor and is not in any way contingent (except for contingent Accounts relating to the sale, lease or other disposition of all or substantially all of the assets of a line of business or division of a Grantor); (iv) no Account is subject to set-offs, counterclaims or disputes existing or asserted with respect to any Account that in the aggregate could reasonably be expected to have a Material Adverse Effect, and no Grantor has made any agreement with any Account Debtor for any deduction from any Account except for deductions made in the ordinary course of its business; (v) there has been no development or event in respect of the validity or enforcement of any Account or Accounts or the amount payable thereunder as shown on the applicable Grantor’s books and records and all invoices and statements delivered to the Administrative Agent with respect thereto, which individually or in the aggregate has had or could be reasonably expected to have a Material Adverse Effect; and (vi) the right to receive payment under each Account is assignable except where the Account Debtor with respect to such Account is the United States government or any State government or any agency, department or instrumentality thereof, to the extent the assignment of any such right to payment is prohibited or limited by applicable law, regulations, administrative guidelines or contract.

 

(i)            With respect to any Inventory, (i) such Inventory is located at one of the Grantor’s locations set forth on the Perfection Certificates, (ii) no Inventory is now, or shall at any time or times hereafter be stored at any other location without the Administrative Agent’s prior consent, and if the Administrative Agent gives such consent, which shall not be

 

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unreasonably withheld, such Grantor will concurrently therewith obtain, to the extent required by the Credit Agreement, bailee, landlord and mortgagee agreements, (iii) such Grantor has good title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the Lien granted to the Administrative Agent and except as permitted by Section 7.2 of the Credit Agreement, (iv) such Inventory is not subject to any material licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition, and (v) the completion of manufacture, sale or other disposition of such Inventory by the Administrative Agent following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such property is subject.

 

(j)            Such Grantor does not have any interest in, or title to, any Patent, Trademark or Copyright except as set forth in the Perfection Certificates.  This Agreement is effective to create a valid and continuing Lien on and, upon filing of (i) the Copyright Security Agreements (as hereinafter defined) with the United States Copyright Office and filing of the Patent Security Agreements (as hereinafter defined) and the Trademark Security Agreements (as hereinafter defined) with the United States Patent and Trademark Office and (ii) the appropriate financing statements in the requisite offices, perfected security interests in favor of the Administrative Agent in such Grantor’s Patents, Trademarks and Copyrights and such perfected security interests are enforceable as such as against any and all creditors of and purchasers from such Grantor.  Upon filing of the Copyright Security Agreements with the United States Copyright Office and filing of the Patent Security Agreements and the Trademark Security Agreements with the United States Patent and Trademark Office and the filing of appropriate financing statements listed on Schedule I hereto, all action necessary or desirable to protect and perfect the Administrative Agent’s Lien on such Grantor’s Patents, Trademarks or Copyrights shall have been duly taken.  Notwithstanding anything to the contrary contained in this Agreement, the Administrative Agent shall only require perfection of its security interests in, or other registration with respect to, any Patent, Trademark or Copyright registered, or eligible to be registered, with a country other than the United States or any political subdivision thereof, to the extent that Administrative Agent determines, in its sole discretion, that such Patent, Trademark or Copyright, and the registration thereof in such other country or political subdivision thereof, is material to the applicable Grantor’s business.

 

SECTION 3.  The Security Interests.  In order to secure the full and punctual payment and performance of the Secured Obligations in accordance with the terms of the Credit Agreement, each Grantor hereby pledges, assigns, hypothecates, sets over and conveys to the Administrative Agent on its behalf and on behalf of the Secured Parties and grants to the Administrative Agent on its behalf and on behalf of the Secured Parties a continuing security interest in and to, all of its rights in and to all Collateral now or hereafter owned or acquired by such Grantor or in which such Grantor now has or hereafter has or acquires any rights, and wherever located.  The Security Interests are granted as security only and shall not subject the Administrative Agent or any Secured Party to, or transfer to the Administrative Agent or any Secured Party, or in any way affect or modify, any obligation or liability of the Grantor with respect to any Collateral or any transaction in connection therewith.

 

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SECTION 4.  Further Assurances; Covenants.

 

(a)           General.

 

(i)            No Grantor shall change the location of its chief executive office or principal place of business unless it shall have given the Administrative Agent thirty (30) days’ prior notice thereof, as well as executed and delivered to the Administrative Agent all financing statements and financing statement amendments which the Administrative Agent may request in connection therewith.  No Grantor shall change the locations, or establish new locations, where it keeps or holds any of the Collateral or any records relating thereto from the applicable locations described in the Perfection Certificates attached hereto as Schedule III unless such Grantor shall have given the Administrative Agent thirty (30) days’ prior notice of such change of location. The foregoing covenant shall not apply to any Collateral (including trucks) perfected by recordation of the Administrative Agent’s Lien on the appropriate certificate of title.

 

(ii)           No Grantor shall change its name, organizational identification number, identity or jurisdiction or form of organization in any manner unless it shall have given the Administrative Agent thirty (30) days’ prior written notice thereof, and executed and delivered to the Administrative Agent all financing statements and financing statement amendments which the Administrative Agent may reasonably request in connection therewith.  No Grantor shall merge or consolidate into, or transfer any of the Collateral to, any other Person other than another Grantor, other than as permitted by this Agreement and the Credit Agreement.

 

(iii)          Each Grantor hereby authorizes the Administrative Agent, its counsel or its representative, at any time and from time to time, to file financing statements and amendments that describe the collateral covered by such financing statements as “all assets of the Grantor”, “all personal property of the Grantor” or words of similar effect, in such jurisdictions as are necessary or desirable in order to perfect the security interests granted by such Grantor under this Agreement.  Each Grantor will, from time to time, at its expense, execute, deliver, file and record any statement, assignment, instrument, document, agreement or other paper and take any other action (including, without limitation, any filings with the United States Patent and Trademark Office, Copyright or Patent filings and any filings of financing or continuation statements under the UCC) that from time to time may be necessary, or that the Administrative Agent may request, in order to create, preserve, upgrade in rank (to the extent required hereby), perfect, confirm or validate the Security Interests or to enable the Administrative Agent to obtain the full benefits of this Agreement, or to enable the Administrative Agent to exercise and enforce any of its rights, powers and remedies hereunder with respect to any of its Collateral.  Each Grantor hereby authorizes the Administrative Agent to execute and file financing statements, financing

 

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statement amendments or continuation statements on behalf of such Grantor.  Each Grantor agrees that a carbon, photographic, photostatic or other reproduction of this Agreement or of a financing statement is sufficient as a financing statement.  Grantors shall pay the costs of, or incidental to, any recording or filing of any financing statements, financing statement amendments or continuation statements necessary in the sole discretion of the Administrative Agent, to perfect the Administrative Agent and Secured Parties’ security interest in the Collateral.

 

(iv)          Except as set forth in the Perfection Certificates attached hereto as Schedule III, no Grantor shall permit any of its tangible assets, including without limitation, its Inventory and Equipment, to be in the possession of any other Person unless pursuant to an agreement in form and substance satisfactory to the Administrative Agent and (A) such Person has acknowledged that (1) it holds possession of such Inventory, Equipment and other tangible assets, as the case may be, for the Administrative Agent’s benefit, subject to the Administrative Agent’s instructions, and (2) such Person does not have a Lien in such Inventory, Equipment or other tangible assets, (B) such Person agrees not to hold such Inventory, Equipment or other tangible assets on behalf of any other Person and (C) such Person agrees that, after the occurrence and during the continuance of an Event of Default and upon request by the Administrative Agent it will issue and deliver to the Administrative Agent warehouse receipts, bills of lading or any similar documents relating to such Collateral in the Administrative Agent’s name and in form and substance acceptable to the Administrative Agent.

 

(v)           No Grantor shall (A) sell, transfer, lease, exchange, assign or otherwise dispose of, or grant any option, warrant or other right with respect to, any of its Collateral other than sales of assets permitted under Section 7.6  of the Credit Agreement; or (B) create, incur or suffer to exist any Lien with respect to any Collateral, except for the Liens expressly permitted under Section 7.2 of the Credit Agreement.

 

(vi)          Each Grantor will, promptly upon request, provide to the Administrative Agent all information and evidence it may reasonably request concerning the Collateral, to enable the Administrative Agent to enforce the provisions of this Agreement.

 

(vii)         Each Grantor shall take all actions necessary or reasonably requested by the Administrative Agent in order to maintain the perfected status of the Security Interests.

 

(viii)        Except as permitted by Section 8.9A-509(d)(2) of the UCC, no Grantor shall file any amendment to or termination of a financing statement naming any Grantor as debtor and the Administrative Agent as secured party, or any correction statement with respect thereto, in any jurisdiction until such time as the Secured Obligations have been satisfied and the Administrative Agent has authorized such filing.

 

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(ix)          Each Grantor shall take all steps necessary to grant the Administrative Agent control of all electronic chattel paper in accordance with the UCC and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.

 

(b)           Accounts, Etc.

 

(i)            Each Grantor shall use all commercially reasonable efforts consistent with prudent business practice to cause to be collected from its Account Debtors, as and when due, any and all amounts owing under or on account of each Account (including, without limitation, Accounts which are delinquent, such Accounts to be collected in accordance with lawful collection procedures) and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account.  The costs and expenses (including, without limitation, reasonable attorneys’ fees actually incurred) of collection of Accounts incurred by such Grantor or the Administrative Agent shall be borne by the Grantors.

 

(ii)           Upon the occurrence and during the continuance of any Event of Default, each Grantor shall, at the request and option of the Administrative Agent, notify Account Debtors and other Persons obligated on the Accounts or any of the Collateral of the security interest of Administrative Agent in any Account or other Collateral and that payment thereof is to be made directly to the Administrative Agent, and may itself, if an Event of Default shall have occurred and be continuing, without notice to or demand upon any Grantor, so notify Account Debtors and other Persons obligated on Collateral.  After the making of such a request or the giving of any such notification, each Grantor shall hold any proceeds of collection of the Accounts and such other Collateral received by such Grantor as trustee for the Administrative Agent without commingling the same with other funds of such Debtor and shall turn the same over to the Administrative Agent in the identical form received, together with any necessary endorsements or assignments.  The Administrative Agent shall apply the proceeds of collection of the Accounts and other Collateral received by the Administrative Agent to the Obligations in accordance with the provisions of the Credit Agreement, such proceeds to be immediately credited after final payment in cash or other immediately available funds of the items giving rise to them.  The costs and expenses (including, without limitation, reasonable attorneys’ fees actually incurred) of collection of Accounts incurred by such Grantor or the Administrative Agent shall be borne by the Grantors.

 

(iii)          Each Grantor will perform and comply in all material respects with all of its obligations in respect of Accounts, Instruments and General Intangibles.

 

(iv)          Anything herein to the contrary notwithstanding, each of the Grantors shall remain liable under each of its Accounts, contracts and agreements to observe and perform all the conditions and obligations to be observed and

 

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performed by it thereunder, all in accordance with the terms of any agreement giving rise to each such Account or the terms of such contract or agreement.  Neither the Administrative Agent nor any Secured Party shall have any obligation or liability under any Account (or any agreement giving rise thereto), contract or agreement by reason of or arising out of this Agreement or the receipt by the Administrative Agent or any Secured Party of any payment relating to such Account, contract or agreement pursuant hereto, nor shall the Administrative Agent or any Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Account (or any agreement giving rise thereto), contract or agreement, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

 

(v)           At any time and from time to time, the Administrative Agent shall have the right, but not the obligation, to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and the Grantors shall furnish all such assistance and information as the Administrative Agent may reasonably require in connection with such test verifications.  Upon the Administrative Agent’s request and at the expense of the Grantors, the Grantors shall cause their independent public accountants or others reasonably satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts; provided, however, that, so long as no Event of Default has occurred and is continuing, the Grantors shall only be required to pay for such reports once per fiscal year after the first request therefor by the Administrative Agent. The Administrative Agent in its own name or in the name of others may communicate with Account Debtors on the Accounts to verify with them to the Administrative Agent’s reasonable satisfaction the existence, amount and terms of any Accounts.

 

(c)           Equipment, Etc.  Each Grantor shall, (i) within ten (10) days after a written request by the Administrative Agent, in the case of Equipment now owned, and (ii) following a request by the Administrative Agent pursuant to subclause (i) above, within ten (10) days after acquiring any other Equipment, deliver to the Administrative Agent, any and all certificates of title, and applications therefor, if any, of such Equipment and shall cause the Administrative Agent to be named as lienholder on any such certificate of title and applications.  No Grantor shall permit any such items to become a fixture to real estate or an accession to other personal property unless such real estate or personal property is the subject of a fixture filing (as defined in the UCC) creating a first priority perfected Lien in favor of the Administrative Agent.

 

(d)           Patents, Trademarks, Etc.  Each Grantor shall notify the Administrative Agent within a reasonable time after the occurrence of each of the following (i) such Grantor’s acquisition after the date of this Agreement of any material Intellectual Property and (ii) a

 

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Responsible Officer of such Grantor obtaining knowledge, or reason to know, that any application or registration relating to any Intellectual Property owned by or licensed to such Grantor is reasonably likely to become abandoned or dedicated, or of any material adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Copyright Office, the United States Patent and Trademark Office or any court) regarding such Grantor’s ownership of any material Intellectual Property, its right to register the same, or to keep and maintain the same.  Each Grantor will, contemporaneously herewith, execute and deliver to the Administrative Agent the Patent Security Agreement, Trademark Security Agreement and Copyright Security Agreement in the forms of Exhibit A, Exhibit B and Exhibit C hereto, as necessary, and shall execute and deliver to the Administrative Agent any other document required to acknowledge or register or perfect the Administrative Agent’s interest in any part of the Intellectual Property.  Notwithstanding anything to the contrary contained in this Agreement, the Administrative Agent shall only require perfection of its security interests in, or other registration with respect to, any Patent, Trademark or Copyright registered, or eligible to be registered, with a country other than the United States or any political subdivision thereof, to the extent that Administrative Agent determines, in its sole discretion, that such Patent, Trademark or Copyright, and the registration thereof in such other country or political subdivision thereof, is material to the applicable Grantor’s business.

 

(e)           Deposit Accounts, Chattel Paper, Investment Property and Letters of Credit.

 

(i)            No Grantor shall open or maintain any Deposit Accounts other than those listed on the Perfection Certificates attached hereto as Schedule III and such other Deposit Accounts as such Grantor shall open and maintain with the consent of the Administrative Agent subject to control agreements, in form and substance satisfactory to the Administrative Agent in its sole discretion, executed by such Grantor, the bank at which the deposit account is located and the Administrative Agent.

 

(ii)           No Grantor shall become the beneficiary of any Letters of Credit, unless the issuer of the Letter of Credit has consented to the assignment of the proceeds of such Letter of Credit to the Administrative Agent which consent shall not be unreasonably withheld, such assignment to be in form and substance acceptable to the Administrative Agent.

 

(iii)          Each Grantor, at any time and from time to time, will (a) take such steps as the Administrative Agent may reasonably request from time to time for the Administrative Agent to obtain “control” of any Investment Property or electronic Chattel Paper, with any agreements establishing control to be in form and substance reasonably satisfactory to the Administrative Agent, and (b) otherwise to insure the continued perfection and priority of the Administrative Agent’s security interest in any of the Collateral and of the preservation of its rights therein.

 

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(f)            Commercial Tort Claims.  If any Grantor shall at any time acquire a “commercial tort claim” (as such term is defined in the UCC) with a claim for damages that could reasonably be expected to be in excess of Fifty Thousand Dollars ($50,000), such Grantor shall promptly notify the Administrative Agent thereof in a writing, providing a reasonable description and summary thereof, and shall execute a supplement to this Agreement granting a security interest in such commercial tort claim to the Administrative Agent.

 

(g)           Insurance.  Each Grantor shall have its Equipment and Inventory insured against loss or damage by fire, theft, burglary, pilferage, loss in transportation and such other hazards as the Administrative Agent shall reasonably specify, by reputable and financially viable insurers (having a rating of A or A-:  Class V or better by Best’s Key Rating Guide), in amounts satisfactory to the Administrative Agent and under policies containing loss payable clauses satisfactory to the Administrative Agent.  Any such insurance policies, or certificates or other evidence thereof satisfactory to the Administrative Agent, shall be deposited with the Administrative Agent.  Each Grantor agrees that the Administrative Agent, for the ratable benefit of the Secured Parties, shall have a security interest in such policies and the proceeds of such policies thereof, and if any loss shall occur during the continuation of an Event of Default, the proceeds relating to the loss or damage of the Equipment or Inventory may be applied to the payment of the Obligations or to the replacement or restoration of the Inventory or Equipment damaged or destroyed, as the Administrative Agent may elect or direct.  After the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right to file claims under any insurance policies, to receive receipt and give acquittance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect to the collection, compromise, or settlement of any claims under any of the insurance policies.

 

SECTION 5.  Reporting and Recordkeeping.  Each Grantor covenants and agrees with the Administrative Agent that from and after the date of this Agreement and until the Secured Obligations have been indefeasibly paid in full in cash:

 

(a)           Maintenance of Records Generally.  Each Grantor will keep and maintain at its own cost and expense records of its Collateral, complete in all material respects, including, without limitation, a record of all payments received and all credits granted with respect to the Collateral and all other dealings with its Collateral.  At the Administrative Agent’s request, during the continuation of an Event of Default, each Grantor will mark its books and records pertaining to its Collateral to evidence this Agreement and the Security Interests.  All Chattel Paper will be marked with the following legend:  “This writing and the obligations evidenced or secured hereby are subject to the security interest of SunTrust Bank, as Administrative Agent.”  For the Administrative Agent’s further security, each Grantor agrees that the Administrative Agent shall have a security interest in all of such Grantor’s books and records pertaining to its Collateral and, upon the occurrence and during the continuation of any Event of Default, such Grantor shall deliver and turn over full and complete copies of any such books and records to the Administrative Agent or to its representatives at any time on demand of the Administrative Agent.  Upon reasonable notice from the Administrative Agent, each Grantor shall permit any representative of the Administrative Agent, to inspect such books and records and will provide photocopies thereof to the Administrative Agent.

 

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(b)           Special Provisions Regarding Maintenance of Records and Reporting Re: Accounts, Inventory and Equipment;

 

(i)            Each Grantor shall keep complete and accurate records of its Accounts.  Upon the request of the Administrative Agent, and prior to an Event of Default no more frequently than one time per Fiscal Quarter and without limit after the occurrence and during the continuance of an Event of Default, such Grantor shall deliver to the Administrative Agent all documents, including, without limitation, repayment histories and present status reports, relating to its Accounts so scheduled and such other matters and information relating to the status of its then existing Accounts as the Administrative Agent shall reasonably request.

 

(ii)           In the event any amounts due and owing in excess of Five Hundred Thousand Dollars ($500,000) in the aggregate are in dispute between any Account Debtor and any Grantor, such Grantor shall provide the Administrative Agent with written notice thereof promptly after such Grantor’s learning thereof explaining in detail the reason for the dispute, all claims related thereto and the amount in controversy.

 

(iii)          Each Grantor shall maintain itemized records, accurate in all material respects, itemizing and describing the kind, type, quality, quantity, location and book value of its Inventory and Equipment and shall, upon request by the Administrative Agent, furnish the Administrative Agent with a current schedule containing the foregoing information.

 

(iv)          Each Grantor will promptly upon, but in no event later than five (5) Business Days after:

 

(A)  Such Grantor’s learning thereof, inform the Administrative Agent, in writing, of any delay in such Grantor’s performance of any of its obligations to any Account Debtor and of any assertion of any claims, offsets or counterclaims by any Account Debtor and of any allowances, credits or other monies granted by such Grantor to any Account Debtor, in each case involving amounts in excess of $500,000 in the aggregate for all Accounts of such Account Debtor; and

 

(B)   Such Grantor’s receipt or learning thereof, furnish to and inform the Administrative Agent of all material adverse information relating to the financial condition of any Account Debtor with respect to Accounts exceeding $50,000 in the aggregate; and

 

(v)           If any Account, arises out of a contract with the United States of America, or any department, agency, subdivision or instrumentality thereof, or of

 

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any state (or department, agency, subdivision or instrumentality thereof) where such state has a state assignment of claims act or other law comparable to the Federal Assignment of Claims Act, such Grantor will take any action required or requested by the Administrative Agent to give notice of the Administrative Agent’s security interest in such Accounts under the provisions of the Federal Assignment of Claims Act or any comparable law or act enacted by any state or local governmental authority; and

 

(vi)          Such Grantor at its expense will cause independent public accountants reasonably satisfactory to the Administrative Agent to prepare and deliver to the Administrative Agent promptly upon the Administrative Agent’s request made when any Event of Default exists, the following reports: (A) a reconciliation of all of its Accounts, (B) an aging of all of its Accounts, (C) trial balances, and (D) a test verification of such Accounts.

 

(c)           Further Identification of Collateral.  Each Grantor will if so requested by the Administrative Agent furnish to the Administrative Agent, as often as the Administrative Agent reasonably requests but in no event more frequently than once per calendar quarter and without limit after the occurrence and during the continuance of an Event of Default, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail.

 

(d)           Notices.  In addition to the notices required by Section 5(b) hereof, each Grantor will advise the Administrative Agent promptly, but in no event later than thirty (30) days after the occurrence thereof, in reasonable detail, (i) of any Lien or claim made or asserted against any of the Collateral that is not expressly permitted by the terms of the Credit Agreement, and (ii) of the occurrence of any other event which would have a material adverse effect on the aggregate value of the Collateral or on the validity, perfection or priority of the Security Interests.

 

SECTION 6.  General Authority.  Each Grantor hereby irrevocably appoints, so long as any Obligations remain outstanding, the Administrative Agent its true and lawful attorney, with full power of substitution, in the name of such Grantor, the Administrative Agent or otherwise, for the sole use and benefit of the Administrative Agent on its behalf and on behalf of the Secured Parties, but at such Grantor’s expense, to exercise, at any time (subject to the proviso below) all or any of the following powers:

 

(i)            to file the financing statements, financing statement amendments and continuation statements referred to in Section 4(a)(iii),

 

(ii)           to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due with respect to any Collateral or by virtue thereof,

 

(iii)          to settle, compromise, compound, prosecute or defend any action or proceeding with respect to any Collateral,

 

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(iv)          to sell, transfer, assign or otherwise deal in or with the Collateral or the proceeds or avails thereof, as fully and effectually as if the Administrative Agent were the absolute owner thereof, and

 

(v)           to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference to the Collateral;

 

provided, however, that the powers described in clauses (ii), (iii), (iv) and (v) above may be exercised by the Administrative Agent only if an Event of Default then exists.

 

SECTION 7.  Events of Default.  Each of the following specified events shall constitute an Event of Default under this Agreement:

 

(a)           The existence or occurrence of any “Event of Default” as provided under the terms of the Credit Agreement;

 

(b)           Any representation or warranty made by or on behalf of any Grantor under or pursuant to this Agreement shall have been false or misleading in any material respect when made; or

 

(c)           Any Grantor shall fail to observe or perform any covenant or agreement set forth in this Agreement other than those referenced in paragraphs (a) and (b) above, and if such failure is capable of being remedied, such failure shall remain unremedied for thirty (30) days after the earlier of (i) any Responsible Officer of any Grantor becomes aware of such failure, or (ii) notice thereof shall have been given to any Grantor by the Administrative Agent or any Secured Party.

 

SECTION 8.  Remedies upon Event of Default.

 

(a)           If any Event of Default has occurred and is continuing, the Administrative Agent may, without further notice, exercise all rights and remedies under this Agreement or any other Loan Document or that are available to a secured creditor under the UCC or that are otherwise available at law or in equity, at any time, in any order and in any combination, including to collect any and all Secured Obligations from the Grantors, and, in addition, the Administrative Agent may sell the Collateral or any part thereof at public or private sale, for cash, upon credit or for future delivery, and at such price or prices as the Administrative Agent may deem satisfactory.  The Administrative Agent shall give the Borrower not less than ten (10) days’ prior written notice of the time and place of any sale or other intended disposition of Collateral, except any Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.  Each Grantor agrees that any such notice constitutes “reasonable notification” within the meaning of Section 8.9A-611 of the UCC (to the extent such Section or any successor provision under the UCC is applicable).

 

(b)           The Administrative Agent may be the purchaser of any or all of the Collateral so sold at any public sale (or, if such Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations or if otherwise permitted under applicable law, at any private sale) and thereafter hold the same, absolutely, free from any right or claim of whatsoever kind.  Each Grantor agrees

 

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during an Event of Default to execute and deliver such documents and take such other action as the Administrative Agent deems necessary or advisable in order that any such sale may be made in compliance with law.  Upon any such sale the Administrative Agent shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold.  Each purchaser at any such sale shall hold the Collateral so sold to it absolutely, free from any claim or right of any kind, including any equity or right of redemption of the Grantors.  To the extent permitted by law, each Grantor hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter adopted.  The notice (if any) of such sale shall (1) in case of a public sale, state the time and place fixed for such sale, and (2) 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 the Administrative Agent may fix in the notice of such sale.  At any such sale Collateral may be sold in one (1) lot as an entirety or in separate parcels, as the Administrative Agent may determine.  The Administrative Agent shall not be obligated to make any such sale pursuant to any such notice.  The Administrative Agent may, without notice or publication (other than any notices required by this Section 8 or by applicable law), 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.  In case of any sale of all or any part of the Collateral on credit or for future delivery, such Collateral so sold may be retained by the Administrative Agent until the selling price is paid by the purchaser thereof, but the Administrative Agent shall not incur any liability in case of the failure of such purchaser to take up and pay for such Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice.  The Administrative 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 Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction.  The Grantors shall remain liable for any deficiency.

 

(c)           For the purpose of enforcing any and all rights and remedies under this Agreement, the Administrative Agent may (i) require any Grantor to, and each Grantor agrees that it will, at the joint and several expense of the Grantors, and upon the request of the Administrative Agent, forthwith assemble all or any part of its Collateral as directed by the Administrative Agent and make it available at a place designated by the Administrative Agent which is, in the Administrative Agent’s opinion, reasonably convenient to the Administrative Agent and such Grantor, whether at the premises of such Grantor or otherwise, (ii) to the extent permitted by applicable law, enter, with or without process of law and without breach of the peace, any premise where any such Collateral is or may be located and, without charge or liability to the Administrative Agent, seize and remove such Collateral from such premises, (iii) have access to and use such Grantor’s books and records, computers and software (subject to the terms of applicable licenses) relating to the Collateral, and (iv) prior to the disposition of any of the Collateral, store or transfer such Collateral without charge in or by means of any storage or transportation facility owned or leased by such Grantor, process, repair or recondition such Collateral or otherwise prepare it for disposition in any manner and to the extent the Administrative Agent deems appropriate and, in connection with such preparation and disposition, use without charge any trademark, trade name, copyright, patent or technical process used such Grantor.

 

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(d)           Without limiting the generality of the foregoing, if any Event of Default has occurred and is continuing:

 

(i)            the Administrative Agent may (without assuming any obligations or liability thereunder), at any time and from time to time, enforce (and shall have the exclusive right to enforce) against any licensee or sublicensee all rights and remedies of any Grantor in, to and under any Licenses and take or refrain from taking any action under any thereof, and each Grantor hereby releases the Administrative Agent from, and agrees to hold the Administrative Agent free and harmless from and against any claims arising out of, any lawful action so taken or omitted to be taken with respect thereto except  for the Administrative Agent’s gross negligence or willful misconduct as determined by a final and nonappealable decision of a court of competent jurisdiction; and

 

(ii)           upon request by the Administrative Agent, each Grantor agrees to execute and deliver to the Administrative Agent powers of attorney, in form and substance satisfactory to the Administrative Agent, for the implementation of any lease, assignment, license, sublicense, grant of option, sale or other disposition of any Intellectual Property, in each case subject to the terms of the applicable License.  In the event of any such disposition pursuant to this Section, each Grantor shall supply its know-how and expertise relating to the manufacture and sale of the products bearing Trademarks or the products or services made or rendered in connection with Patents or Copyrights, and its customer lists and other records relating to such Intellectual Property and to the distribution of said products, to the Administrative Agent.

 

SECTION 9.  Limitation on Duty of Administrative Agent in Respect of Collateral.  Beyond the duties of a secured party set forth in Sections 8.9A-207 through 8.9A-209 of the UCC, the Administrative Agent shall have no duty as to any Collateral of any Grantor in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto.  The Administrative Agent shall be deemed to have exercised reasonable care in the custody of the Collateral of the Grantors in its possession if such Collateral is accorded treatment substantially equal to that which it accords its own property, and the Administrative Agent shall not be liable or responsible for any loss or damage to any of the Grantors’ Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Administrative Agent in good faith.

 

SECTION 10.  Application of Proceeds. The proceeds of any sale of, or other realization upon, all or any part of the Collateral of the Grantors shall be applied by the Administrative Agent in the manner set forth in Section 8.2 of the Credit Agreement.

 

SECTION 11.  Concerning the Administrative Agent.  The provisions of Article 9 of the Credit Agreement shall inure to the benefit of the Administrative Agent in respect of this Agreement and shall be binding upon the parties to the Credit Agreement in such respect.  In furtherance and not in derogation of the rights, privileges and immunities of the Administrative Agent therein set forth:

 

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(a)           The Administrative Agent is authorized to take all such action as is provided to be taken by it as the Administrative Agent hereunder or otherwise permitted under the Credit Agreement and all other action reasonably incidental thereto.  As to any matters not expressly provided for herein or therein, the Administrative Agent may request instructions from the Secured Parties and shall act or refrain from acting in accordance with written instructions from the Required Lenders or, in the absence of such instructions, in accordance with its discretion.

 

(b)           The Administrative Agent shall not be responsible for the existence, genuineness or value of any of the Grantors’ Collateral or for the validity, perfection, priority or enforceability of the Security Interests, whether impaired by operation of law or by reason of any action or omission to act on its part.  The Administrative Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Agreement by the Grantors.

 

SECTION 12.  Appointment of Co-Administrative Agents.  At any time or times, in order to comply with any legal requirement in any jurisdiction, the Administrative Agent may appoint another bank or trust company or one (1) or more other Persons reasonably acceptable to the Required Lenders and, so long as no Event of Default has occurred or is continuing, the Borrower, either to act as co-agent or co-agents, jointly with the Administrative Agent, or to act as separate agent or agents on behalf of the Administrative Agent and the Secured Parties with such power and authority as may be necessary for the effectual operation of the provisions hereof and specified in the instrument of appointment (which may, in the discretion of the Administrative Agent, include provisions for the protection of such co-agent or separate agent similar to the provisions of Section 11 hereof).  Any such Co-Administrative Agent shall have no greater rights than the Administrative Agent under this Agreement.

 

SECTION 13.  Expenses.  In the event that any Grantor fails to comply with the provisions of the Credit Agreement, this Agreement or any other Loan Document, such that the value of any of its Collateral or the validity, perfection, rank or value of the Security Interests are thereby diminished or potentially diminished or put at risk, the Administrative Agent may, but shall not be required to, effect such compliance on behalf of such Grantor, and the Grantors shall jointly and severally reimburse the Administrative Agent for the reasonable and actual costs thereof on demand.  All insurance expenses and all expenses of protecting, storing, warehousing, appraising, insuring, handling, maintaining and shipping such Collateral, any and all excise, stamp, intangibles, transfer, property, sales, and use taxes imposed by any state, federal, or local authority or any other governmental authority on any of such Collateral, or in respect of periodic appraisals and inspections of such Collateral, or in respect of the sale or other disposition thereof, shall be borne and paid by the Grantors jointly and severally; and if the Grantors fail promptly to pay any portion thereof when due, the Administrative Agent may, at its option, but shall not be required to, pay the same and charge the Grantors’ accounts therefor, and the Grantors agree jointly and severally to reimburse the Administrative Agent therefor on demand.  All sums so paid or incurred by the Administrative Agent for any of the foregoing and any and all other sums for which the Grantors may become liable hereunder and all reasonable costs and expenses (including reasonable attorneys’ fees, legal expenses and court costs) incurred by the Administrative Agent in enforcing or protecting the Security Interests or any of its rights or remedies thereon shall be payable by the Grantors on demand and shall bear interest (after as

 

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well as before judgment) until paid at the default rate of interest set forth in the Credit Agreement and shall be additional Secured Obligations hereunder.

 

SECTION 14.  Termination of Security Interests; Release of Collateral.  Upon Payment in Full of all Obligations, the Security Interests shall terminate and all rights to the Collateral shall revert to the Grantors.  Upon any such termination of the Security Interests or release of such Collateral, the Administrative Agent will promptly upon the Grantor’s request and contemporaneously with any refinancing of the Obligations, at the expense of the Borrower, execute and deliver to the Borrower such documents as the Grantors shall reasonably request, but without recourse or warranty to the Administrative Agent, including but not limited to written authorization to file termination statements to evidence the termination of the Security Interests in such Collateral.

 

SECTION 15.  Notices.  All notices, requests and other communications to the Grantors or the Administrative Agent hereunder shall be delivered in the manner required by the Credit Agreement and shall be given to the Administrative Agent or any Grantor if addressed or delivered to them at, in the case of the Administrative Agent and the Borrower, its addresses and telecopier numbers specified in the Credit Agreement and in the case of any other Grantors, at their respective addresses and telecopier numbers provided in the Subsidiary Guaranty Agreement.  All such notices and communications shall be deemed to have been duly given at the times set forth in the Credit Agreement.

 

SECTION 16.  No Waiver; Remedies Cumulative.  No failure or delay on the part of the Administrative Agent in exercising any right or remedy hereunder, and no course of dealing between any Grantor on the one hand and the Administrative Agent or any holder of any Note on the other hand shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy hereunder or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right or remedy hereunder or thereunder.  The rights and remedies herein and in the other Loan Documents are cumulative and not exclusive of any rights or remedies which the Administrative Agent would otherwise have.  No notice to or demand on the Grantors not required hereunder in any case shall entitle any Grantor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent to any other or further action in any circumstances without notice or demand.

 

SECTION 17.  Successors and Assigns.  This Agreement is for the benefit of the Administrative Agent and the Lenders and their permitted successors and assigns, and in the event of an assignment of all or any of the Secured Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness.  This Agreement shall be binding on the Grantors and their successors and assigns; provided, however, that no Grantor may assign any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and the Lenders.

 

SECTION 18.  Amendments.  No amendment or waiver of any provision of this Agreement, nor consent to any departure by the Grantors herefrom, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent, and then

 

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such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

SECTION 19.  Governing Law; Waiver of Jury Trial.

 

(a)           THIS AGREEMENT AND THE RIGHTS AND SECURED OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE COMMONWEALTH OF VIRGINIA, EXCEPT TO THE EXTENT THAT PERFECTION (AND THE EFFECT OF PERFECTION AND NONPERFECTION) AND CERTAIN REMEDIES MAY BE GOVERNED BY THE LAWS OF ANY JURISDICTION OTHER THAN VIRGINIA.

 

(b)           THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMIT, FOR THEMSELVES AND THEIR PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA, NORFOLK DIVISION, AND ANY STATE COURT OF THE COMMONWEALTH OF VIRGINIA SITTING IN THE CITY OF VIRGINIA BEACH, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH VIRGINIA STATE COURT OR, TO THE EXTENT PERMITTED BY APPLICABLE LAW, SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE OTHER PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)           EACH PARTY TO THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING DESCRIBED IN PARAGRAPH (B) OF THIS SECTION AND BROUGHT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)           EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN THE CREDIT AGREEMENT.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN

 

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DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

(e)           EACH PARTY TO THIS AGREEMENT HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING AMONG THE PARTIES HERETO DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY TO THIS AGREEMENT (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT HAS NOT BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 20.  Severability.  In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable, in whole or in part, in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

SECTION 21.  Counterparts.  This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts (including by telecopy or by email, in pdf format), each of which when so executed and delivered shall be an original, but all of which shall together constitute one (1) and the same instruments.

 

SECTION 22.  Headings Descriptive.  The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

 

SECTION 23.  Additional Grantors.  Each Subsidiary of Borrower that is required to become a party to this Agreement pursuant to Section 5.11 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of a joinder agreement in the form of Exhibit D attached hereto.

 

[Signature Page Follows]

 

23

 

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and delivered by its respective duly authorized officers as of the day and year first above written.

 

	
 
    	
JTH   HOLDING, INC., a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Mark Baumgartner
    
	
 
    	
Name:
    	
Mark Baumgartner
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
JTH   TAX, INC., a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Mark Baumgartner
    
	
 
    	
Name:
    	
Mark Baumgartner
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
LTS   PROPERTIES, LLC, a Virginia limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
JTH   TAX, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/Mark   Baumgartner
    
	
 
    	
 
    	
 
    	
Mark Baumgartner
    
	
 
    	
 
    	
 
    	
Vice President and Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
LTS   SOFTWARE INC., a Virginia corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Mark Baumgartner
    
	
 
    	
Name:
    	
Mark Baumgartner
    
	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
WEFILE   INC., a Virginia corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Kathleen   Curry
    
	
 
    	
Name:
    	
Kathleen   Curry
    
	
 
    	
Title:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
JTH   FINANCIAL, LLC, a Virginia limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
JTH   HOLDING, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/Mark   Baumgartner
    
	
 
    	
 
    	
 
    	
Mark Baumgartner
    
	
 
    	
 
    	
 
    	
Vice President and Chief Financial Officer
    

 

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

 

SCHEDULE I

 

LIST OF UCC FILING OFFICES

 

	
Name of Grantor
    	
 
    	
State
    	
 
    	
Office(s)
    
	
JTH   Holding, Inc.
    	
 
    	
Delaware
    	
 
    	
Delaware   Secretary of State
    
	
JTH   Tax, Inc.
    	
 
    	
Delaware
    	
 
    	
Delaware   Secretary of State
    
	
LTS   Properties, LLC
    	
 
    	
Virginia
    	
 
    	
Virginia   State Corporation Commission
    
	
LTS   Software Inc.
    	
 
    	
Virginia
    	
 
    	
Virginia   State Corporation Commission
    
	
WeFile   Inc.
    	
 
    	
Virginia
    	
 
    	
Virginia   State Corporation Commission
    
	
JTH   Financial, LLC
    	
 
    	
Virginia
    	
 
    	
Virginia   State Corporation Commission
    

 

 

SCHEDULE II

 

	
Grantor’s Exact
   Legal Name 
    	
 
    	
State of
   Incorporation
    	
 
    	
Taxpayer
   ID Number
    	
 
    	
Organizational
   ID Number
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
JTH Holding, Inc.
    	
 
    	
Delaware
    	
 
    	
27-3561876
    	
 
    	
4876039
    	
 
    
	
JTH Tax, Inc
    	
 
    	
Delaware
    	
 
    	
54-1828391
    	
 
    	
2675402
    	
 
    
	
LTS Properties, LLC
    	
 
    	
Virginia
    	
 
    	
47-0886778
    	
 
    	
S191260-1
    	
 
    
	
LTS Software Inc.
    	
 
    	
Virginia
    	
 
    	
20-5069088
    	
 
    	
0668565-5
    	
 
    
	
WeFile Inc.
    	
 
    	
Virginia
    	
 
    	
45-0546450
    	
 
    	
0583413-0
    	
 
    
	
JTH Financial, LLC
    	
 
    	
Virginia
    	
 
    	
47-0886778
    	
 
    	
S301907-7
    	
 
    

 

 

SCHEDULE III

 

PERFECTION CERTIFICATE

 

[                              ] (the “Grantor”), hereby certifies, with reference to a certain Security Agreement, dated as of April 30, 2012 (terms defined in such Security Agreement having the same meanings herein as specified therein), from the Grantor (among others) in favor of SunTrust Bank, as Administrative Agent, as follows:

 

1.             Other Names, Etc.  The following is a list of all other names (including trade names or similar appellations) used by the Grantor, or any other business or organization to which the Grantor became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise, now or at any time during the past five years.

 

2.             Chief Executive Offices.

 

(a)                                  The following is the mailing address of the Grantor:

 

(b)                                 If different from its mailing address, the Grantor’s place of business or, if more than one (1), its chief executive office is located at the following address:

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(c)                                  The following are the other chief executive offices of the Grantor over the last five years:

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

3.             Other Current Locations.

 

(a)                                  The following are all other locations in the United States of America in which the Grantor maintains any books or records relating to any of the Collateral consisting of accounts, instruments, chattel paper, general intangibles or mobile goods;

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

(b)                                 The following are all other places of business of the Grantor in the United States of America:

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(c)                                  The following are all other locations in the United States of America where any of the Collateral consisting of inventory or equipment is located:

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(d)                                 The following are the names and addresses of all persons or entities other than the Grantor, such as lessees, consignees, warehousemen or purchasers of chattel paper, which have possession or are intended to have possession of any of the Collateral consisting of instruments, chattel paper, inventory or equipment:

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

4.             Prior Locations.  Set forth below are all other locations in which tangible assets of the Grantor have been located in the last five years

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

6.             Letters of Credit.  Set forth below are all letters of credit under which the Grantor is a beneficiary.

 

	
Issuer
    	
 
    	
Amount
    	
 
    	
Expiry
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

7.             Intellectual Property.  Attached hereto as Schedule 7 is a complete list of all United States and foreign patents, copyrights, trademarks, trade names and service marks registered or for which applications are pending in the name of the Grantor.

 

8.             Securities; Instruments.  Attached hereto as Schedule 8 is a complete list of all stocks, bonds, debentures, notes and other securities and investment property owned by the Grantor.

 

 

9.             Bank Accounts.  The following is a complete list of all bank accounts (including securities and commodities accounts) maintained by the Grantor other than bank accounts maintained with the Administrative Agent:

 

	
Depository Bank
    	
 
    	
Bank Address
    	
 
    	
Type of Account
    	
 
    	
Acct. No.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

IN WITNESS WHEREOF, the Grantor certifies that the foregoing is true and correct as of April 30, 2012.

 

	
 
    	
[                        ], a   [                            ]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

EXHIBIT A

to Security Agreement

 

PATENT SECURITY AGREEMENT

 

This PATENT SECURITY AGREEMENT (this “Agreement”), dated as of                       , is made between                                       , a                                          (the “Grantor”), and SUNTRUST BANK, a Georgia banking corporation, as the Administrative Agent (the “Administrative Agent”), on its behalf and on behalf of the other banks and lending institutions (the “Lenders”) from time to time party to the Revolving Credit and Term Loan Agreement, dated as of April 30, 2012, by and among JTH Holding, Inc., a Delaware corporation, the Lenders, the Administrative Agent, and SunTrust Bank, as Issuing Bank and as Swingline Lender (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”).

 

W  I  T  N  E  S  S  E  T  H :

 

WHEREAS, in connection with the Credit Agreement, the Grantor has executed and delivered a Security Agreement, dated as of April 30, 2012 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “Security Agreement”);

 

WHEREAS, pursuant to Section 4(d) of the Security Agreement, the Grantor is required to execute and deliver this Agreement and to grant to the Administrative Agent a continuing security interest in all of the Patent Collateral (as defined below) to secure all Obligations; and

 

WHEREAS, the Grantor has duly authorized the execution, delivery and performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor agrees, for the benefit of the Administrative Agent and each Secured Party, as follows:

 

SECTION 1.  Definitions.  Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings provided (or incorporated by reference) in the Security Agreement.

 

SECTION 2.  Grant of Security Interest.  For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, to secure all of the Obligations, the Grantor does hereby mortgage, pledge and hypothecate to the Administrative Agent, and grant to the Administrative Agent a security interest in, for its benefit and the benefit of each Secured Party, all of the following property (the “Patent Collateral”), whether now owned or hereafter acquired or existing by it:

 

(a)           all letters patent and applications for letters patent throughout the world, including all patent applications in preparation for filing anywhere in the world and including each patent and patent application referred to in Item A of Schedule I attached hereto;

 

1

 

(b)           all reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the items described in clause (a);

 

(c)           all patent licenses, including each patent license referred to in Item B of Schedule I attached hereto; and

 

(d)           all proceeds of, and rights associated with, the foregoing (including license royalties and proceeds of infringement suits), the right to sue third parties for past, present or future infringements of any patent or patent application, including any patent or patent application referred to in Item A of Schedule I attached hereto, and for breach or enforcement of any patent license, including any patent license referred to in Item B of Schedule I attached hereto, and all rights corresponding thereto throughout the world.

 

SECTION 3.  Security Agreement.  This Agreement has been executed and delivered by the Grantor for the purpose of registering the security interest of the Administrative Agent in the Patent Collateral with the United States Patent and Trademark Office and corresponding offices in other countries of the world (subject to Sections 2 and 4(d) of the Security Agreement), .  The security interest granted hereby has been granted as a supplement to, and not in limitation of, the security interest granted to the Administrative Agent for its benefit and the benefit of each Secured Party under the Security Agreement.  The Security Agreement (and all rights and remedies of the Administrative Agent and each Secured Party thereunder) shall remain in full force and effect in accordance with its terms subject to Section 4 hereof.

 

SECTION 4.  Release of Security Interest.  Upon (i) the sale, transfer or other disposition of any Patent Collateral in accordance with the Credit Agreement or (ii) Payment In Full of all Obligations, the Administrative Agent shall promptly upon the Grantor’s request and contemporaneously with any refinancing of the Obligations, at the Grantor’s expense, execute and deliver to the Grantor all instruments and other documents as may be necessary or proper to release the lien on and security interest in the Patent Collateral which has been granted hereunder.

 

SECTION 5.  Acknowledgment.  The Grantor does hereby further acknowledge and affirm that the rights and remedies of the Administrative Agent with respect to the security interest in the Patent Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which (including the remedies provided for therein) are incorporated by reference herein as if fully set forth herein.

 

SECTION 6.  Loan Document, etc.  This Agreement is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

 

SECTION 7.  Counterparts.  This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original (whether such counterpart is originally executed or an electronic copy of an original) and all of which shall constitute together but one and the same agreement.

 

2

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.

 

 

	
 
    	
[NAME   OF GRANTOR]
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SUNTRUST   BANK,
    
	
 
    	
as Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Title:
    

 

3

 

SCHEDULE I

to Patent Security Agreement

 

Item A.  Patents

 

Issued Patents

 

	
*Country
    	
 
    	
Patent No.
    	
 
    	
Issue Date
    	
 
    	
Inventor(s)
    	
 
    	
Title
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Pending Patent Applications

 

	
*Country
    	
 
    	
Serial No.
    	
 
    	
Filing Date
    	
 
    	
Inventor(s)
    	
 
    	
Title
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Patent Applications in Preparation

 

	
*Country
    	
 
    	
Docket No.
    	
 
    	
Expected
   Filing Date
    	
 
    	
Inventor(s)
    	
 
    	
Title
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Item B.  Patent Licenses

 

	
*Country or
   Territory
    	
 
    	
Licensor
    	
 
    	
Licensee
    	
 
    	
Effective
   Date
    	
 
    	
Expiration
   Date
    	
 
    	
Subject
   Matter
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*              List items related to the United States first for ease of recordation.  List items related to other countries next, grouped by country and in alphabetical order by country name.

 

4

 

EXHIBIT B

to Security Agreement

 

TRADEMARK SECURITY AGREEMENT

 

This TRADEMARK SECURITY AGREEMENT (this “Agreement”), dated as of                       , is made between                                       , a                                          (the “Grantor”), and SUNTRUST BANK, a Georgia banking corporation, as the Administrative Agent (the “Administrative Agent”), on its behalf and on behalf of the other banks and lending institutions (the “Lenders”) from time to time party to the Revolving Credit and Term Loan Agreement, dated as of April 30, 2012, by and among JTH Holding, Inc., a Delaware corporation, the Lenders, the Administrative Agent, and SunTrust Bank, as Issuing Bank and as Swingline Lender (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”).

 

W I T N E S S E T H :

 

WHEREAS, in connection with the Credit Agreement, the Grantor has executed and delivered a Security Agreement, dated as of April 30, 2012 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “Security Agreement”);

 

WHEREAS, pursuant to Section 4(d) of the Security Agreement, the Grantor is required to execute and deliver this Agreement and to grant to the Administrative Agent a continuing security interest in all of the Trademark Collateral (as defined below) to secure all Obligations; and

 

WHEREAS, the Grantor has duly authorized the execution, delivery and performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor agrees, for the benefit of the Administrative Agent each Secured Party, as follows:

 

SECTION 1.  Definitions.  Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings provided (or incorporated by reference) in the Security Agreement.

 

SECTION 2.  Grant of Security Interest.  For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, to secure all of the Obligations, the Grantor does hereby mortgage, pledge and hypothecate to the Administrative Agent, and grant to the Administrative Agent a security interest in, for its benefit and the benefit of each Secured Party, all of the following property (the “Trademark Collateral”), whether now owned or hereafter acquired or existing by it:

 

(a)           all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, certification marks, collective marks, logos, other source of business identifiers, designs and general intangibles of a like nature (all of the foregoing items in this clause (a) being collectively called a “Trademark”), now existing anywhere in the world or hereafter adopted or

 

1

 

acquired, whether currently in use or not, all registrations and recordings thereof and all applications in connection therewith, whether pending or in preparation for filing, including registrations, recordings and applications in the United States Patent and Trademark Office or in any office or agency of the United States of America or any State thereof or any foreign country, including those referred to in Item A of Schedule I attached hereto;

 

(b)           all Trademark licenses, including each Trademark license referred to in Item B of Schedule I attached hereto;

 

(c)           all reissues, extensions or renewals of any of the items described in clause (a) and (b);

 

(d)           all of the goodwill of the business connected with the use of, and symbolized by the items described in, clauses (a) and (b); and

 

(e)           all proceeds of, and rights associated with, the foregoing, including any claim by the Grantor against third parties for past, present or future infringement or dilution of any Trademark, Trademark registration or Trademark license, including any Trademark, Trademark registration or Trademark license referred to in Item A and Item B of Schedule I attached hereto, or for any injury to the goodwill associated with the use of any such Trademark or for breach or enforcement of any Trademark license.

 

SECTION 3.  Security Agreement.  This Agreement has been executed and delivered by the Grantor for the purpose of registering the security interest of the Administrative Agent in the Trademark Collateral with the United States Patent and Trademark Office and corresponding offices in other countries of the world (subject to Sections 2 and 4(d) of the Security Agreement).  The security interest granted hereby has been granted as a supplement to, and not in limitation of, the security interest granted to the Administrative Agent for its benefit and the benefit of each Secured Party under the Security Agreement.  The Security Agreement (and all rights and remedies of the Administrative Agent and each Secured Party thereunder) shall remain in full force and effect in accordance with its terms subject to Section 4 hereof.

 

SECTION 4.  Release of Security Interest.  Upon (i) the sale, transfer or other disposition of any Trademark Collateral in accordance with the Credit Agreement or (ii) Payment In Full of all Obligations, the Administrative Agent shall promptly upon the Grantor’s request and contemporaneously with any refinancing of the Obligations, at the Grantor’s expense, execute and deliver to the Grantor all instruments and other documents as may be necessary or proper to release the lien on and security interest in the Trademark Collateral which has been granted hereunder.

 

SECTION 5.  Acknowledgment.  The Grantor does hereby further acknowledge and affirm that the rights and remedies of the Administrative Agent with respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which (including the remedies provided for therein) are incorporated by reference herein as if fully set forth herein.

 

2

 

SECTION 6.  Loan Document, etc.  This Agreement is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

 

SECTION 7.  Counterparts.  This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original (whether such counterpart is originally executed or an electronic copy of an original) and all of which shall constitute together but one and the same agreement.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.

 

 

	
 
    	
[NAME   OF GRANTOR]
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SUNTRUST   BANK
    
	
 
    	
as Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Title:
    

 

3

 

SCHEDULE I

to Trademark Security Agreement

 

Item A.  Trademarks

 

Registered Trademarks

 

	
*Country
    	
 
    	
Trademark
    	
 
    	
Registration No.
    	
 
    	
Registration Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Pending Trademark Applications

 

	
*Country
    	
 
    	
Trademark
    	
 
    	
Serial No.
    	
 
    	
Filing Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Trademark Applications in Preparation

 

	
*Country
    	
 
    	
Trademark
    	
 
    	
Docket No.
    	
 
    	
Expected
   Filing Date
    	
 
    	
Products/
   Services
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Item B.  Trademark Licenses

 

	
*Country or
   Territory
    	
 
    	
Trademark
    	
 
    	
Licensor
    	
 
    	
Licensee
    	
 
    	
Effective
   Date
    	
 
    	
Expiration
   Date
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*              List items related to the United States first for ease of recordation.  List items related to other countries next, grouped by country and in alphabetical order by country name.

 

4

 

EXHIBIT C

to Security Agreement

 

COPYRIGHT SECURITY AGREEMENT

 

This COPYRIGHT SECURITY AGREEMENT (this “Agreement”), dated as of                       , is made between                                       , a                                          (the “Grantor”), and SUNTRUST BANK, a Georgia banking corporation, as the Administrative Agent (the “Administrative Agent”), on its behalf and on behalf of the other banks and lending institutions (the “Lenders”) from time to time party to the Revolving Credit and Term Loan Agreement, dated as of April 30, 2012, by and among JTH Holding, Inc., a Delaware corporation the Lenders, the Administrative Agent, and SunTrust Bank, as Issuing Bank and as Swingline Lender (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”).

 

W I T N E S S E T H :

 

WHEREAS, in connection with the Credit Agreement, the Grantor has executed and delivered a Security Agreement, dated as of April 30, 2012 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “Security Agreement”);

 

WHEREAS, pursuant to Section 4(d) of the Security Agreement, the Grantor is required to execute and deliver this Agreement and to grant to the Administrative Agent a continuing security interest in all of the Copyright Collateral (as defined below) to secure all Obligations; and

 

WHEREAS, the Grantor has duly authorized the execution, delivery and performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor agrees, for the benefit of the Administrative Agent and each Secured Party, as follows:

 

SECTION 1.  Definitions.  Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings provided (or incorporated by reference) in the Security Agreement.

 

SECTION 2.  Grant of Security Interest.  For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, to secure all of the Obligations, the Grantor does hereby mortgage, pledge and hypothecate to the Administrative Agent, and grant to the Administrative Agent a security interest in, for its benefit and the benefit of each Secured Party, all of the following property (the “Copyright Collateral”), whether now owned or hereafter acquired or existing by it, being all copyrights (including all copyrights for semi-conductor chip product mask works) of the Grantor, whether statutory or common law, registered or unregistered, now or hereafter in force throughout the world including all of the Grantor’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 the copyrights referred to in Item A of Schedule I attached hereto, and all applications for registration thereof, whether pending or in preparation, all copyright licenses, including each copyright license referred to in Item B of Schedule I

 

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attached hereto, the right to sue for past, present and future infringements of any thereof, all rights corresponding thereto throughout the world, all extensions and renewals of any thereof and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

 

SECTION 3.  Security Agreement.  This Agreement has been executed and delivered by the Grantor for the purpose of registering the security interest of the Administrative Agent in the Copyright Collateral with the United States Copyright Office and corresponding offices in other countries of the world (subject to Sections 2 and 4(d) of the Security Agreement).  The security interest granted hereby has been granted as a supplement to, and not in limitation of, the security interest granted to the Administrative Agent for its benefit and the benefit of each Secured Party under the Security Agreement.  The Security Agreement (and all rights and remedies of the Administrative Agent and each Secured Party thereunder) shall remain in full force and effect in accordance with its terms subject to Section 4.

 

SECTION 4.  Release of Security Interest.  Upon (i) the sale, transfer or other disposition of any Copyright Collateral in accordance with the Credit Agreement or (ii) Payment In Full of all Obligations, the Administrative Agent shall promptly upon the Grantor’s request and contemporaneously with any refinancing of the Obligations, at the Grantor’s expense, execute and deliver to the Grantor all instruments and other documents as may be necessary or proper to release the lien on and security interest in the Copyright Collateral which has been granted hereunder.

 

SECTION 5.  Acknowledgment.  The Grantor does hereby further acknowledge and affirm that the rights and remedies of the Administrative Agent with respect to the security interest in the Copyright Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which (including the remedies provided for therein) are incorporated by reference herein as if fully set forth herein.

 

SECTION 6.  Loan Document, etc.  This Agreement is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

 

SECTION 7.  Counterparts.  This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original (whether such counterpart is originally executed or an electronic copy of an original) and all of which shall constitute together but one and the same agreement.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.

 

 

	
 
    	
[NAME   OF GRANTOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SUNTRUST   BANK
    
	
 
    	
as Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Title:
    

 

7

 

EXHIBIT D

to Security Agreement

 

SUPPLEMENT TO SECURITY AGREEMENT - ADDITIONAL GRANTOR

 

THIS SUPPLEMENT TO SECURITY AGREEMENT - ADDITIONAL GRANTOR (this “Supplement”), dated as of                                , 201  , is executed by [NAME - IN ALL CAPS], a [State] [Entity] (the “New Grantor”), in favor of SUNTRUST BANK, a Georgia banking corporation, as Administrative Agent (the “Administrative Agent”), on its behalf and on behalf of the other banks and lending institutions (the “Lenders”) from time to time party to the Revolving Credit and Term Loan Agreement, dated as of April 30, 2012, by and among Borrower, the Lenders, the Administrative Agent, and SunTrust Bank, as Issuing Bank and as Swingline Lender (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”).  Terms used herein but not defined herein shall have the meaning defined for those terms in the Security Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, Borrower and certain Subsidiaries of Borrower (the “Grantors”) are parties to that certain Security Agreement, dated as of April 30, 2012, by and among the Grantors in favor the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”), pursuant to which the Grantors have granted a security interest in and to the Collateral to the Administrative Agent, for itself and the benefit of the Secured Parties;

 

WHEREAS, the Lenders have agreed to make Loans and the Issuing Bank has agreed to issue Letters of Credit to the Borrower on the terms and conditions contained therein;

 

WHEREAS, it is a condition precedent to the continued extension of the Loans and the continued issuance of Letters of Credit under the Credit Agreement that the New Grantor grant to Administrative Agent a security interest in all of its Collateral, and the New Grantor wishes to fulfill said condition precedent;

 

NOW, THEREFORE, in consideration of the premises and in order to ensure the compliance with the Credit Agreement, the New Grantor hereby agrees as follows:

 

SECTION 1.  Security Interest.  As security for the payment and performance of the Secured Obligations, the New Grantor hereby pledges, assigns, hypothecates, sets over and conveys to the Administrative Agent on its behalf and on behalf of the Secured Parties and grants to the Administrative Agent on its behalf and on behalf of the Secured Parties a continuing security interest in and to, all of its rights in and to all Collateral now or hereafter owned or acquired by such Grantor or in which such Grantor now has or hereafter has or acquires any rights, and wherever located.  The Security Interests are granted as security only and shall not subject the Administrative Agent or any Secured Party to, or transfer to the Administrative Agent

 

 

or any Secured Party, or in any way affect or modify, any obligation or liability of the Grantor with respect to any Collateral or any transaction in connection therewith.

 

SECTION 2.  Joinder.  In accordance with Section 23 of the Security Agreement, the New Grantor by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Grantor hereby (i) agrees to all the terms and provisions of the Security Agreement applicable to it as Grantor thereunder and (ii) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof.  After giving effect to Sections 4 and 8 of this Supplement, each reference to a Grantor in the Security Agreement shall be deemed to include the New Grantor.  The Security Agreement is hereby incorporated herein by reference.

 

SECTION 3.  Representations and Warranties.  The New Grantor represents and warrants to the Administrative Agent and the Secured Parties that this Supplement has been duly authorized, executed and delivered by it and that each of this Supplement and the Security Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

 

SECTION 4.  Binding Effect.  This Supplement shall become effective when it shall have been executed by the New Grantor and acknowledged and agreed to by the Administrative Agent and thereafter shall be binding upon the New Grantor and shall inure to the benefit of the Administrative Agent and the Secured Parties.  Upon the effectiveness of this Supplement, this Supplement shall be deemed to be a part of and shall be subject to all the terms and conditions of the Security Agreement.  The New Grantor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders.

 

SECTION 5.  Governing Law.  THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE COMMONWEALTH OF VIRGINIA.

 

SECTION 6.  Execution in Counterparts.  This Supplement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

SECTION 7. Notices to New Grantor.  All communications and notices hereunder shall be in writing and given as provided in Section 15 of the Security Agreement.  All communications and notices hereunder to the New Grantor shall be given to it at the address set forth under its signature below, with a copy to the Borrower.

 

SECTION 8.  Schedules.  For the purposes of Section 2(c) of the Security Agreement, Schedule I, attached hereto and incorporated herein by reference, lists the UCC filing office for each New Grantor; for the purposes of Section 2(f) of the Security Agreement, Schedule II, attached hereto and incorporated herein by reference, correctly sets forth the information required to be listed pursuant to such section for each New Grantor; and for the purposes of Section 2(g) of the Security Agreement, the Perfection Certificate attached hereto as

 

 

Schedule III correctly sets forth the information required to be identified thereon for each New Grantor.

 

[SIGNATURES TO FOLLOW NEXT PAGE]

 

 

IN WITNESS WHEREOF, the New Grantor has duly executed this Supplement to the Security Agreement as of the day and year first above written.

 

 

	
 
    	
[NAME   OF NEW GRANTOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
Address:
    

 

 

Acknowledged and Agreed to:

 

 

SUNTRUST BANK

as Administrative Agent

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Schedule I

 

List of UCC Filing Offices

 

	
Name of Grantor
    	
 
    	
State
    	
 
    	
Office(s)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Schedule II

 

Organizational Information

 

	
Grantor’s Exact
   Legal Name 
    	
 
    	
State of
   Incorporation
    	
 
    	
Taxpayer
   ID Number
    	
 
    	
Organizational
   ID Number
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Schedule III

 

Form of Perfection Certificate

 

PERFECTION CERTIFICATE

 

, a                                  (the “Grantor”), hereby certifies, with reference to a certain Security Agreement, dated as of April 30, 2012 (terms defined in such Security Agreement having the same meanings herein as specified therein), from the Grantor in favor of SunTrust Bank, as Administrative Agent, as follows:

 

1.             Other Names, Etc.  The following is a list of all other names (including trade names or similar appellations) used by the Grantor, or any other business or organization to which the Grantor became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise, now or at any time during the past five years.

 

2.             Chief Executive Offices.

 

(a)           The following is the mailing address of the Grantor:

 

(b)           If different from its mailing address, the Grantor’s place of business or, if more than one (1), its chief executive office is located at the following address:

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(c)           The following are the other chief executive offices of the Grantor over the last five years:

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

3.             Other Current Locations.

 

(a)           The following are all other locations in the United States of America in which the Grantor maintains any books or records relating to any of the Collateral consisting of accounts, instruments, chattel paper, general intangibles or mobile goods;

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

(b)           The following are all other places of business of the Grantor in the United States of America:

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(c)           The following are all other locations in the United States of America where any of the Collateral consisting of inventory or equipment is located:

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(d)           The following are the names and addresses of all persons or entities other than the Grantor, such as lessees, consignees, warehousemen or purchasers of chattel paper, which have possession or are intended to have possession of any of the Collateral consisting of instruments, chattel paper, inventory or equipment:

 

	
Address
    	
 
    	
County
    	
 
    	
State
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

4.             Letters of Credit.  Set forth below are all letters of credit under which the Grantor is a beneficiary.

 

	
Issuer
    	
 
    	
Amount
    	
 
    	
Expiry
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

5.             Intellectual Property.  Attached hereto as Schedule 7 is a complete list of all United States and foreign patents, copyrights, trademarks, trade names and service marks registered or for which applications are pending in the name of the Grantor.

 

6.             Securities; Instruments.  Attached hereto as Schedule 8 is a complete list of all stocks, bonds, debentures, notes and other securities and investment property owned by the Grantor.

 

7.             Bank Accounts.  The following is a complete list of all bank accounts (including securities and commodities accounts) maintained by the Grantor other than bank accounts maintained with the Administrative Agent:

 

 

	
Depository Bank
    	
 
    	
Bank Address
    	
 
    	
Type of Account
    	
 
    	
Acct. No.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

 

IN WITNESS WHEREOF, the Grantor certifies that the foregoing is true and correct in all material respects as of                       , 201  .

 

 

	
 
    	
[                                                                          ]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:Exhibit 10.9

 

PLEDGE AGREEMENT

 

THIS  PLEDGE AGREEMENT (this “Pledge Agreement”), dated as of April 30, 2012, among JTH HOLDING, INC., a Delaware corporation (the “Borrower”), the Domestic Subsidiaries of the Borrower signatory hereto and each other Domestic Subsidiary of a Borrower hereafter a party hereto (each a “Subsidiary Pledgor” and collectively the “Subsidiaries Pledgors”; Borrower, each Subsidiary Pledgor and each other Subsidiary hereafter becoming a party hereto shall be collectively known as the “Pledgors”, and individually as “Pledgor”), in favor of SUNTRUST BANK, a Georgia banking corporation, as Administrative Agent (the “Administrative Agent”), on its behalf and on behalf of the Secured Parties (as such term is defined in the Revolving Credit and Term Loan Agreement, dated as of the date hereof, by and among the Borrower, the Administrative Agent, the Lenders, and SunTrust Bank , as Issuing Bank and Swingline Lender (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”)).

 

W  I  T  N  E  S  S  E  T  H:

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to establish a revolving credit facility on behalf of, and make term loans to, the Borrower;

 

WHEREAS, it is a condition precedent to the obligations of the Administrative Agent, the Issuing Bank, the Swingline Lender, and the Lenders under the Credit Agreement that each Pledgor grant to Administrative Agent a security interest in all of its Pledged Collateral (as defined below), to secure all obligations of the Borrower under the Credit Agreement, secure the obligations of each Domestic Subsidiary of the Borrower under the Subsidiary Guaranty Agreement and all other Loan Documents to which each Pledgor is a party, to secure all Hedging Obligations owed by any Loan Party to any Specified Hedge Provider, and to secure all Treasury Management Obligations owed by any Loan Party to any Specified Treasury Management Provider, and each Pledgor wishes to fulfill said condition precedent;

 

WHEREAS, the Pledgors are the record and beneficial owners of all of the issued and outstanding shares of common stock listed on Part A of Schedule I attached hereto (the “Pledged Shares”) and are the record and beneficial owners of all membership interests listed on Part B of Schedule I attached hereto (the “Pledged Membership Interests”), such Pledged Shares and Pledged Membership Interests being all of the Capital Stock of the Pledgors’ Domestic Subsidiaries and 65% of the voting Capital Stock and 100% of the non-voting Capital Stock of the Pledgors’ Foreign Subsidiaries (it being understood that Pledged Shares and Pledged Membership Interests include all such Capital Stock of any Pledgor, whether or not listed on Schedule I), but excluding the Capital Stock of Liberty Tax Holding Corporation, a corporation organized and existing under the laws of Canada, and Liberty Tax Service, Inc., a corporation organized and existing under the laws of Canada; and

 

 

WHEREAS, the Pledgors are the record and beneficial owners of the promissory notes and instruments described on Schedule II attached hereto (the “Pledged Notes”).

 

NOW, THEREFORE, in order to induce Lenders to extend the Loans and the Issuing Bank to issue Letters of Credit and to make the financial accommodations as provided for in the Credit Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.     Defined Terms.                    All capitalized terms used but not otherwise defined herein have the meanings given to them in the Credit Agreement.

 

2.     Pledge.           Each Pledgor hereby pledges to the Administrative Agent, for its benefit and the benefit of the Secured Parties and grants to the Administrative Agent, for its benefit and the benefit of the Secured Parties, a first priority security interest in all of such Pledgor’s right, title and interest in, to and under the following property, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Pledgor (collectively, the “Pledged Collateral”):

 

(a)           The Pledged Shares and the certificates representing the Pledged Shares, and, except as expressly provided for in Section 8 hereof, all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares;

 

(b)           Any stock or other securities acquired by any Pledgor or such Pledgor’s designees with respect to, incident to or in lieu of the Pledged Shares or with respect to, incident to or in lieu of the Pledged Collateral (x) due to any dividend, stock-split, stock dividend or distribution on dissolution, or partial or total liquidation, or for any other reason, (y) in connection with a reduction of capital, capital surplus or paid-in-surplus or (z) in connection with any spin-off, split-off, reclassification, readjustment, merger, consolidation, sale of assets, combination of shares or any other plan of distribution affecting of the those companies listed on Schedule I;

 

(c)           Any subscription or other rights or options issued in connection with the Pledged Shares, and, if exercised by any Pledgor, all new shares or other securities so acquired by such Pledgor, which shall promptly be assigned and delivered to the Administrative Agent and held under the terms of this Pledge Agreement in the same manner as the Pledged Shares originally pledged hereunder;

 

(d)           Any and all proceeds, monies, income and benefits arising from or by virtue of, and all dividends and distributions (cash or otherwise) payable or distributable with respect to, all or any of the Pledged Shares or other securities and rights and interests described in this Section 2, except as expressly provided for in Section 8 hereof;

 

(e)           The Pledged Membership Interests, if any, and any certificates at any time representing the Pledged Membership Interests, it being understood that the Pledged Membership Interests are, as of the date hereof, uncertificated, and all cash, securities, dividends,

 

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rights, and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Membership Interests;

 

(f)            All of such Pledgor’s assignable right, title and interest as a member in each limited liability company listed on Part B of Schedule I (the “LLCs”), whether now owned or hereafter acquired, including all of such Pledgor’s right, title and interest in, to and under the limited liability company agreements described on Part B of Schedule I (as such agreements have heretofore been and may hereafter be amended, restated, supplemented or otherwise modified from time to time, collectively, the “LLC Agreements”) to which it is a party (including the right to vote with respect to and to manage and administer the business of such LLCs, exercisable upon the occurrence and during the continuance of an Event of Default as provided in Section 10 hereof; to the extent, however, that voting and management rights with respect to membership interests in LLCs not wholly-owned by a Pledgor are assignable under applicable law), together with all other rights, interests, claims and other property of such Pledgor in any manner arising out of or relating to its membership interest in the LLCs, whatever their respective kind or character, whether they are tangible or intangible property, and wheresoever they may exist or be located, and further including, without limitation, (1) all rights of such Pledgor to receive distributions of any kind, in cash or otherwise, due or to become due under or pursuant to each such LLC Agreement or otherwise in respect of such LLCs, (2) all rights of such Pledgor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect to each such LLCs, (3) all claims of such Pledgor for damages arising out of, or for the breach of, or for a default under, each such LLC Agreement, (4) any certificated security or uncertificated security evidencing any of the foregoing issued by such LLCs to such Pledgor, (5) any interest of such Pledgor in the entries on the books of any financial intermediary pertaining to such Pledgor’s interest as a member in the LLCs and (6) to the extent not included in the foregoing, all proceeds of any and all of the foregoing; provided, however, that notwithstanding anything herein to the contrary;

 

(i)                    Each Pledgor shall remain liable under the LLC Agreements to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Pledge Agreement had not been executed;

 

(ii)                   The exercise by the Administrative Agent of any of its rights hereunder shall not release any Pledgor from any of its duties or obligations under the LLC Agreements (other than to the extent a Pledgor is precluded from performing such duties solely as a result of the Administrative Agent’s having exercised such rights or remedies);

 

(iii)                  Administrative Agent shall not have any obligation or liability under the LLC Agreements by reason of this Pledge Agreement, nor shall the Administrative Agent be obligated to perform any of the obligations or duties of the Pledgors thereunder, to make any payment, to make any inquiry as to the nature or sufficiency of any payment received by the Pledgors or the sufficiency of any performance by any party under any such LLC Agreement, or to take any action to collect or enforce any claim for payment assigned hereunder; and

 

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(iv)                  Without limiting the generality of the foregoing, neither the grant of the security interest in the Pledged Collateral in favor of the Administrative Agent as provided herein nor the exercise by the Administrative Agent of any of its rights hereunder nor any action by the Administrative Agent in connection with a foreclosure on the Pledged Collateral shall be deemed to constitute the Administrative Agent or any other Secured Party a member of any limited liability company;

 

(g)           The Pledged Notes and the instruments and other documents representing the Pledged Notes, and all interest, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for the Pledged Notes; and

 

(h)           All additional promissory notes from time to time acquired by such Pledgor in any manner and the instruments and other documents representing such promissory notes and all interest, cash, instruments and other property, or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such promissory notes.

 

3.     Security For Secured Obligations.          This Pledge Agreement and the Pledged Collateral secure the prompt payment, in full when due, whether at stated maturity, by acceleration or otherwise, and performance of (i) with respect to the Borrower, all Obligations of Borrower under the Credit Agreement and the other Loan Documents (whether for principal, interest, fees, expenses, indemnity or reimbursement payments, or otherwise, as provided in the Credit Agreement or such other Loan Documents) and all other Obligations of the Borrower, (ii) with respect to the Subsidiary Pledgors, all obligations of each such Subsidiary Pledgor under the Subsidiary Guaranty Agreement and all other Loan Documents to which such Pledgor is a party to (whether for principal, interest, fees, expenses, indemnity or reimbursement payments, or otherwise, as provided in the Credit Agreement or such other Loan Documents) and all other Obligations of the Subsidiary Pledgors, (iii) all renewals, extensions, refinancings and modifications thereof, and (iv) all interest, charges, expenses, fees, reasonable attorneys’ fees and other sums required to be paid by any Pledgor under the Credit Agreement, under this Pledge Agreement or under any of the other Loan Documents (collectively, the “Secured Obligations”).

 

4.     Delivery Of Pledged Collateral.               All certificates, promissory notes and instruments representing or evidencing the Pledged Collateral shall be delivered to and held by or on behalf of the Administrative Agent pursuant hereto, except for promissory notes (i) receivable in connection with a sale of Area Development Rights, Franchise Rights, or customer lists, permitted pursuant to Section 7.6(c) of the Credit Agreement, or (ii) evidencing investments made in connection with an acquisition of Area Development Rights or Franchise Rights, permitted pursuant to under Section 7.4(j) of the Credit Agreement (collectively, the “Franchise Notes”), which shall be delivered to the Administrative Agent, upon the occurrence and during the continuance of an Event of Default.  All certificated Pledged Shares and certificated Pledged Membership Interests shall be accompanied by duly executed, undated instruments of transfer or assignment endorsed in blank, all in form and substance reasonably satisfactory to the Administrative Agent and, upon the occurrence and during the continuance of an Event of

 

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Default, if the Administrative Agent so requests, with signatures guaranteed by a member of a registered national securities exchange or the National Association of Securities Dealers, Inc. or by a commercial bank or trust company having an office or correspondent in the United States.  All Pledged Notes shall be endorsed by the applicable Pledgor.  Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right, at any time in its discretion and without notice to any Pledgor, to transfer to or to register in the name of the Administrative Agent or any of its nominees any or all of the Pledged Shares or Pledged Membership Interests.  In addition, upon the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the right at any time to exchange certificates or instruments representing or evidencing Pledged Shares or Pledged Membership Interests for certificates or instruments of smaller or larger denominations.

 

5.     Representations and Warranties.            Each Pledgor represents and warrants to the Secured Parties as follows:

 

(a)           Each Pledgor is, and at the time of delivery of the Pledged Shares and Pledged Membership Interests to the Administrative Agent pursuant to Section 4 hereof will be, the sole holder of record and the sole beneficial owner of the Pledged Collateral pledged by such Pledgor, free and clear of any Lien thereon or affecting the title thereto except for Permitted Encumbrances.

 

(b)           All of the Pledged Shares and Pledged Membership Interests have been duly authorized, validly issued and are fully paid and non-assessable and all documentary, stamp, or other taxes or fees owing in connection with the issuance, transfer and/or pledge thereof hereunder have been paid and will be hereafter paid by each Pledgor as same becomes due and payable.

 

(c)           No dispute, counterclaim or defense exists with respect to all or any part of the Pledged Collateral, as to which there is a reasonable possibility of an adverse determination that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

(d)           Each Pledgor has the requisite corporate authority to pledge, assign, transfer, deliver, deposit and set over its Pledged Collateral to the Administrative Agent as provided herein.

 

(e)           There are no restrictions, other than applicable laws and regulations affecting the offering and sales of securities generally, upon the transfer, hypothecation or pledge of any of the Pledged Collateral.

 

(f)            None of the Pledged Shares or Pledged Membership Interests have been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject.

 

(g)           Part A of Schedule I hereto lists the authorized shares of common stock, the par value thereof and the number of issued and outstanding shares of common stock of each

 

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issuer of Pledged Shares.  As of the date hereof, (i) no subscription, warrant, option or other rights to purchase or acquire any shares of any class of capital stock of any issuer of Pledged Shares is authorized and outstanding, and (ii) there is no commitment by any issuer of Pledged Shares to issue any such shares, warrants, options or other such rights or securities.

 

(h)           Part B of Schedule I hereto lists all of the issued and outstanding membership interests of each issuer of Pledged Membership Interests.  As of the date hereof, (i) no subscription, warrant, option or other rights to purchase or acquire any membership interests of any issuer of Pledged Membership Interests is authorized and outstanding, and (ii) there is no commitment by any issuer of Pledged Membership Interests to issue any such warrants, options or other such rights or securities.

 

(i)            The pledge by each Pledgor of its Pledged Collateral is not in contravention of any law or of any agreement to which such Pledgor is party or by which such Pledgor is otherwise bound, and no consent, approval, authorization or other order of, or other action by, any Person or notice to or filing with, any Person is required (x) for the pledge by such Pledgor of the Pledged Collateral pursuant to this Pledge Agreement or for the execution, delivery or performance of this Pledge Agreement by such Pledgor or (y) for the exercise by the Administrative Agent of the voting (upon the occurrence and continuance of an Event of Default as provided in Section 10 hereof) or other rights provided for in this Pledge Agreement (to the extent that voting and management rights with respect to membership interests in LLCs not wholly-owned by a Pledgor are assignable under applicable law), or the remedies in respect of the Pledged Collateral pursuant to this Pledge Agreement (except as may be required in connection with any disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally).

 

(j)            The pledge, assignment and delivery of the Pledged Collateral together with duly executed, undated instruments of transfer or assignment endorsed in blank pursuant to this Pledge Agreement will create a valid first priority Lien on and a first priority perfected security interest in the Pledged Collateral and the proceeds thereof, securing the payment of the Secured Obligations  and no filing or other action is necessary to perfect or protect such security interest, except that (i) the filing of a financing statement, the taking of possession or some other action may be required under Section 8.9A-315 of the Uniform Commercial Code as in effect in the Commonwealth of Virginia (the “UCC”) to perfect a security interest in certain proceeds of the Pledged Collateral that do not constitute Pledged Shares or other securities or instruments; (ii) the filing of a financing statement under Sections 8.9A-312 and 8.9A-314 of the UCC may be required to perfect a security interest in any Pledged Collateral that constitutes “investment property” (other than the Pledged Shares) with respect to which the Administrative Agent does not have “control” (as such terms are defined in the UCC); and (iii) the filing of a financing statement under Section 8.9A-312 of the UCC is permissible to perfect a security interest in the Franchise Notes, with respect to which the Administrative Agent does not have “control” or “possession” (as such terms are defined in the UCC).

 

(k)           All of the representations and warranties made by or on behalf of a Pledgor in the Credit Agreement and the other Loan Documents are true and correct in all

 

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material respects, are incorporated herein by this reference and deemed to be repeated herein by such Pledgor for purposes of this Pledge Agreement.

 

(l)            Each of the Pledged Notes purported to be pledged hereunder by such Pledgor is the legal, valid and binding obligation of the obligor thereof, enforceable in accordance with its terms (except to the extent of any disputes, counterclaims, or defenses that cannot reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect); each of the Pledged Notes has been duly authorized, authenticated or issued and delivered by the issuer thereof, and no such issuer is in default thereunder.  Except as disclosed on Schedule II hereto, none of the Pledged Notes are subordinated in right of payment to other indebtedness (except for the Secured Obligations) or subject to the terms of an indenture.

 

(m)          This Pledge Agreement has been duly authorized, executed and delivered by each Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable against such Pledgor in accordance with its terms.

 

The representations and warranties set forth in this Section 5 shall survive the execution and delivery of this Pledge Agreement.

 

6.     Covenants.                Each Pledgor covenants and agrees that from and after the date of this Pledge Agreement and until the payment and performance in full of all of the Secured Obligations of such Pledgor:

 

(a)           Except as permitted expressly by the Credit Agreement, such Pledgor shall not sell, assign, transfer, pledge or otherwise encumber any of its rights in or to its Pledged Collateral or any unpaid dividends or other distributions or payments with respect thereto except pursuant to this Pledge Agreement .

 

(b)           Except as permitted expressly by the Credit Agreement, such Pledgor will not cause or permit any issuer of Pledged Shares or Pledged Membership Interests to issue or grant any warrants, stock options of any nature or other instruments convertible into membership interests or shares of any class of capital stock or additional membership interests or shares of capital stock or sell or transfer any membership interests or treasury stock.

 

(c)           Such Pledgor will, at its own cost and expense, promptly execute, acknowledge and deliver all such instruments and take all such action as the Administrative Agent from time to time may reasonably request in order to perfect and protect the Lien granted or purported to be granted hereby or to enable the Administrative Agent to exercise and enforce its rights and remedies hereunder with respect to the Pledged Collateral.

 

(d)           Such Pledgor has and will, at its own cost and expense, defend the title to its Pledged Collateral and the Liens of the Administrative Agent thereon against the claim of any Person, except Liens permitted expressly by Section 7.2 of the Credit Agreement, and will maintain and preserve such Liens.

 

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(e)           Such Pledgor will pay all taxes, assessments and charges levied, assessed or imposed upon its Pledged Collateral before the same become delinquent or become Liens upon any of its Pledged Collateral, except where the same may be contested in good faith by appropriate proceedings and as to which adequate reserves have been provided.

 

7.     Adjustments and Distributions Concerning Pledged Collateral.      Should the Pledged Collateral, or any part thereof, ever be converted in any manner by any Pledgor into another type of property or any money or other proceeds ever be paid or delivered to any Pledgor as a result of such Pledgor’s rights in the Pledged Collateral, then in any such event (except as expressly provided in Section 8 hereof), all such property, money and other proceeds shall promptly be and become part of the Pledged Collateral, and each Pledgor covenants and agrees to forthwith pay and deliver all money so received to the Administrative Agent, for the benefit of the Secured Parties, as Pledged Collateral hereunder in accordance with the provisions of the Credit Agreement; and, if the Administrative Agent deems it necessary and so requests, to properly endorse, assign or transfer any and all such other proceeds to the Administrative Agent and to deliver to the Administrative Agent any and all such other proceeds which require perfection by possession under the UCC.  With respect to any of such property of a kind requiring an additional security agreement, financing statement or other writing to perfect a security interest therein in favor of the Administrative Agent, each Pledgor will forthwith execute and deliver to the Administrative Agent, or cause to be executed and delivered to the Administrative Agent, whatever the Administrative Agent shall reasonably deem necessary or proper for such purposes.

 

8.     Pledgors’ Rights; Termination Of Rights.

 

(a)           As long as no Event of Default shall have occurred and be continuing:

 

(i)            Each Pledgor shall have the right, from time to time, to vote and give consents with respect to its Pledged Collateral or any part thereof for all purposes permitted by the Credit Agreement or any other Loan Documents; provided, that, without limitation of the foregoing, no vote shall be cast, and no consent shall be given or action taken by any Pledgor without the prior written consent of the Administrative Agent that would authorize or effect (except if and to the extent expressly permitted by the Credit Agreement): (A) the dissolution or liquidation, in whole or in part, of any issuer of the Pledged Collateral, (B) the consolidation or merger of any issuer of the Pledged Collateral with any other Person (other than any Pledgor), (C) the sale, disposition or encumbrance of any portion of the assets of any issuer of the Pledged Collateral or any business or division thereof, except as permitted expressly by the Credit Agreement, (D) any change in the authorized number of shares or membership interests, the stated capital or the authorized shares or member interest capital of any issuer of the Pledged Collateral or the issuance of any additional shares of capital stock or membership interests thereof, except as permitted expressly by the Credit Agreement, or (E) the alteration of the voting rights with respect to the capital stock or membership interests of any issuer of the Pledged Collateral, except as permitted expressly by the Credit Agreement;

 

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(ii)           Each Pledgor shall be entitled, from time to time, to collect and receive for its own use all dividends, distributions and other amounts paid in respect of its Pledged Collateral to the extent not in violation of the Credit Agreement other than any and all:  (A) dividends 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 of its Pledged Collateral, (B) dividends and other distributions paid or payable in cash in respect of any of its Pledged Collateral in connection with a partial or total liquidation, dissolution or a reduction in capital, capital surplus or paid in capital, and (C) cash paid, payable or otherwise distributed in redemption of, or in exchange for, any of its Pledged Collateral; provided, that until actually paid all rights to such dividends shall remain subject to the Lien created by this Pledge Agreement.

 

(b)           All dividends (other than such cash dividends as are permitted to be paid to the Pledgors in accordance with Section 8(a)(ii) above) and all other distributions in respect of any of the Pledged Shares, Pledged Membership Interests or Pledged Notes, whenever paid or made, shall be delivered to the Administrative Agent to hold as Pledged Collateral and shall, if received by any Pledgor, be received in trust for the benefit of the Administrative Agent, be segregated from the other property or funds of such Pledgor, and be forthwith delivered promptly to the Administrative Agent as Pledged Collateral of such Pledgor in the same form as so received (with any necessary endorsement or assignment).

 

(c)           Upon the occurrence of an Event of Default and during the continuation thereof, all of Pledgors’ rights to exercise voting and other consensual rights pursuant to Section 8(a)(i) hereof and all of Pledgors’ rights to receive any cash dividends and distributions pursuant to Section 8(a)(ii) hereof shall cease and all such rights shall thereupon become vested in the Administrative Agent, for the benefit of the Secured Parties, who shall have the sole and exclusive right to exercise the voting and other consensual rights which the Pledgors would otherwise be authorized to exercise pursuant to Section 8(a)(i) hereof (to the extent that voting and management rights with respect to membership interests in LLCs not wholly-owned by a Pledgor are assignable under applicable law), and to receive and retain the dividends and distributions which the Pledgors would otherwise be authorized to receive and retain pursuant to Section 8(a)(ii) hereof.  Upon the occurrence of an Event of Default and during the continuation thereof, each Pledgor shall pay over to the Administrative Agent, for the benefit of the Secured Parties, any dividends received by such Pledgor with respect to its Pledged Collateral and any and all money and other property paid over to or received by the Administrative Agent shall be retained by the Administrative Agent, for the benefit of the Secured Parties, as Pledged Collateral hereunder and shall be applied in accordance with the terms of the Credit Agreement.

 

9.     Default.  The Pledgors shall be in default under this Pledge Agreement upon the happening of any of the following events or conditions (hereinafter referred to as an “Event of Default”):

 

(i)            The occurrence of an Event of Default as defined in the Credit Agreement;

 

(ii)           Except for Liens permitted expressly by Section 7.2 of the Credit Agreement, the filing of any financing statement with regard to the Pledged Collateral, other than

 

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relating to or permitted by this Pledge Agreement, or the attachment of any additional Lien or security interest to any portion of the Pledged Collateral, for the benefit of any Person other than the Administrative Agent; and

 

(iii)          Failure of any Pledgor to observe any of its respective covenants set forth in this Pledge Agreement, and if such failure is capable of being remedied, such failure shall remain unremedied for thirty (30) days.

 

10.  Remedies Upon An Event Of Default.

 

(a)           Upon the occurrence of an Event of Default and during the continuation thereof, the Administrative Agent may exercise all rights of a secured party under the UCC (whether or not the UCC applies to the affected collateral).  In addition, the Administrative Agent is hereby authorized and empowered to transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, exercise the voting rights with respect thereto (to the extent that such voting rights with respect to membership interests in LLCs not wholly-owned by a Pledgor are assignable under applicable law), collect and receive all cash dividends and other distributions made thereon, sell in one or more sales after five (5) days’ notice of the time and place of any public sale or of the time after which a private sale is to take place (which notice each Pledgor agrees is commercially reasonable), but without any previous notice or advertisement, the whole or any part of the Pledged Collateral and otherwise act with respect to the Pledged Collateral as though the Administrative Agent was the legal and record owner thereof.  Each Pledgor hereby irrevocably constitutes and appoints the Administrative Agent, for the benefit of the Secured Parties, as the proxy and attorney-in-fact of such Pledgor with respect to the Pledged Collateral, with full power of substitution to exercise any of the rights provided in the preceding sentence; provided, that the Administrative Agent shall not have any duty to exercise any such right or to preserve the same and shall not be liable for any failure to do so or for any delay in doing so.  Any sale shall be made at a public or private sale at the Administrative Agent’s offices or elsewhere to be named in the notice of sale, either for cash or upon credit or for future delivery at such price as the Administrative Agent may deem fair, and any Secured Party may be the purchaser of the whole or any part of the Pledged Collateral so sold and hold the same thereafter in its own right free from any claim of any Pledgor or any right of redemption, which each Pledgor hereby waives to the extent permitted by applicable law.  Each sale shall be made to the highest bidder, but the Administrative Agent reserves the right to reject any and all bids at such sale which, in its discretion, it shall deem inadequate.  Demands of performance, except as otherwise herein specifically provided for, notices of sale, advertisements and the presence of property at sale are hereby waived and any sale hereunder may be conducted by an auctioneer or any officer or agent of the Administrative Agent.

 

(b)           If, at the original time or times appointed for the sale of the whole or any part of the Pledged Collateral, the highest bid, if there be but one sale, shall be inadequate to discharge in full all the Secured Obligations, or if the Pledged Collateral be offered for sale in lots, if at any of such sales, the highest bid for the lot offered for sale would indicate to the Administrative Agent, in its discretion, the unlikelihood of the proceeds of the sales of the whole of the Pledged Collateral being sufficient to discharge all the Secured Obligations, the

 

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Administrative Agent may, on one or more occasions and in its discretion, postpone any of said sales by public announcement at the time of sale or the time of previous postponement of sale, and no other notice of such postponement or postponements of sale need be given, any other notice being hereby waived; provided, that any sale or sales made after such postponement shall be after five (5) days’ notice from the Administrative Agent to any such Pledgor.

 

(c)           If, at any time that the Administrative Agent shall determine to exercise its rights to sell the whole or any part of the Pledged Collateral hereunder, such Pledged Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act of 1933, as amended (the “Act”), the Administrative Agent may, in its discretion (subject only to applicable requirements of law), sell such Pledged Collateral or part thereof by private sale in such manner and under such circumstances as the Administrative Agent may deem necessary or advisable, but subject to the other requirements of this Section 9, and shall not be required to effect such registration or to cause the same to be effected.  Without limiting the generality of the foregoing, in any such event the Administrative Agent in its discretion (i) may, in accordance with applicable securities laws, proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Pledged Collateral or part thereof could be or shall have been filed under said Act (or similar statute), (ii) may approach and negotiate with a single possible purchaser to effect such sale, (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment and not with a view to the distribution or sale of such Pledged Collateral or part thereof, and (iv) may place all or any part of the Pledged Collateral with an investment banking firm for private placement, which firm shall be entitled to purchase all or any part of the Pledged Collateral for its own account.  If any of the Pledged Collateral shall not be freely distributable to the public without registration under the Act (or similar statute), then the Administrative Agent shall not be required to effect such registration or cause the same to be effected but, in its discretion (subject to applicable requirements of law), may require that any sale hereunder (including a sale at auction) be conducted subject to restrictions (i) as to the financial sophistication and ability of any Person permitted to bid or purchase at any such sale, (ii) as to the content of legends to be placed upon any certificates representing the Pledged Collateral sold in such sale, including restrictions on future transfer thereof, (iii) as to the representations required to be made by each Person bidding or purchasing at such sale relating to that Person’s access to financial information about any Pledgor or any of its subsidiaries so sold and such Person’s intentions as to the holding of the Pledged Collateral so sold for investment, for its own account, and not with a view to the distribution thereof, and (iv) as to such other matters as the Administrative Agent may, in its discretion, deem necessary or appropriate in order that such sale (notwithstanding any failure so to register) may be effected in compliance with the UCC and other laws affecting the enforcement of creditors’ rights and the Act and all applicable state securities laws.

 

(d)           Each Pledgor acknowledges that, notwithstanding the legal availability of a private sale or a sale subject to the restrictions described above in paragraph (c), the Administrative Agent may, in its discretion, elect to register any or all the Pledged Collateral under the Act (or any applicable state securities law).  Each Pledgor, however, recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof.  Each Pledgor

 

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also acknowledges that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner.  The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit the registrant to register such securities for public sale under the Act, or under applicable state securities laws, even if each Pledgor would agree to do so.

 

(e)           Any cash held by the Administrative Agent as Pledged Collateral and all cash proceeds received by the Administrative Agent in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Collateral may, in the discretion of the Administrative Agent, be held by the Administrative Agent as collateral for, and/or then or at any time thereafter be applied (after payment of any amounts payable to the Administrative Agent pursuant to Section 12 hereof) in whole or in part by the Administrative Agent for the benefit of the Secured Parties in their individual and various agency capacities and any other holder of any Secured Obligations against, all or any part of the Secured Obligations in accordance with the terms hereof.  Any surplus of such cash or cash proceeds held by the Administrative Agent and remaining after payment in full of all the Secured Obligations shall be paid over to the Pledgors or to whomsoever may be lawfully entitled to receive such surplus.

 

(f)            Each Pledgor agrees that following the occurrence and during the continuation of an Event of Default it will not at any time plead, claim or take the benefit of any appraisal, valuation, stay, extension, moratorium or redemption law now or hereafter in force in order to prevent or delay the enforcement of this Pledge Agreement, or the absolute sale of the whole or any part of the Pledged Collateral or the possession thereof by any purchaser at any sale hereunder, and each Pledgor waives the benefit of all such laws to the extent it lawfully may do so.  Each Pledgor agrees that it will not interfere with any right, power and remedy of the Administrative Agent provided for in this Pledge Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Administrative Agent of any one or more of such rights, powers, or remedies.  No failure or delay on the part of the Administrative Agent to exercise any such right, power or remedy and no notice or demand which may be given to or made upon any Pledgor by the Administrative Agent with respect to any such remedies shall operate as a waiver thereof, or limit or impair the Administrative Agent’s right to take any action or to exercise any power or remedy hereunder, without notice or demand, or prejudice its rights as against any Pledgor in any respect.  Except for gross negligence or willful misconduct, each Pledgor waives all claims, damages and demands against the Administrative Agent arising out of the repossession, retention or sale of the Pledged Collateral.

 

11.  Power Of Attorney.  Each Pledgor appoints the Administrative Agent, or any other Person whom the Administrative Agent may designate, as each Pledgor’s true and lawful attorney-in-fact, with, upon the occurrence of an Event of Default, power to endorse each Pledgor’s name on any checks, notes, acceptances, money orders, drafts or other form of payment or security representing a portion of the Pledged Collateral that may come into the Administrative Agent’s possession and to do all things necessary to carry out the terms of this Pledge Agreement.  Each Pledgor ratifies and approves all such acts of such attorney-in-fact.

 

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Except gross negligence or willful misconduct, neither the Administrative Agent nor any other Person designated by the Administrative Agent as attorney-in-fact hereunder will be liable for any acts or omissions, nor for any errors of judgment or mistakes of fact or law.  This power, coupled with an interest, is irrevocable until the payment in full of all Secured Obligations of each Pledgor.

 

12.  Administrative Agent’s Right To Take Action.    In the event that any Pledgor fails or refuses promptly to perform any of its obligations set forth herein, including, without limitation, its obligation pursuant to Section 6(e) hereof to pay taxes, assessments and other charges levied, assessed or imposed on the Pledged Collateral, or otherwise fails or refuses to pay any amount necessary for the preservation and protection of the Pledged Collateral, the Administrative Agent shall have the right, without obligation, by notice to the Pledgors, to do all things it deems necessary or advisable to discharge the same (including, without limitation, to pay any such taxes, assessments, charges or other sums, together with interest and penalties thereon) and any sums paid by the Administrative Agent, or the cost thereof, including, without limitation, reasonable attorneys’ fees, shall be reimbursed by the Pledgors, to the Administrative Agent on demand and, until so reimbursed, shall bear interest at the highest rate chargeable under Section 2.14(c) of the Credit Agreement.

 

13.  Expenses.  The Pledgors shall, jointly and severally, pay (i) all reasonable costs, expenses, taxes and fees incurred by the Administrative Agent in connection with the negotiation, preparation, execution and delivery of this Pledge Agreement and all certificates, opinions and other documents relating to these transactions, including, without limitation, the reasonable disbursements and professional fees of Hunton & Williams, LLP, counsel to the Administrative Agent, in all cases whether or not the transaction contemplated hereby shall be consummated, subject to the limitations on the fees of the Lead Arrangers set forth expressly in Section 10.3 of the Credit Agreement; (ii) all reasonable costs, expenses, taxes and fees incurred by the Administrative Agent in connection with the perfection, registration, maintenance, administration, custody and preservation of the Pledged Collateral, including, without limitation, with respect to any and all stamp, intangible or other taxes that may be payable or determined in the future to be payable in connection with this Pledge Agreement and all other documents executed or delivered in connection herewith, and relating to releases and consents; and (iii) all costs, expenses, taxes and fees incurred by any of the Secured Parties in connection with or after the occurrence of any Event of Default, including, without limitation, in connection with (a) the negotiation, preparation, execution and delivery of any waiver, amendment or consent by the Secured Parties, (b) the negotiation of any restructuring or workout transaction, and the preparation, execution and delivery of any documents prepared in connection therewith, and (c) enforcement or foreclosure with respect to this Pledge Agreement, in all such cases such costs, expenses, taxes and fees shall include, without limitation, the reasonable disbursements and reasonable professional fees actually incurred of counsel to any Secured Party.  To the extent that any such fees and expenses are subject to value added taxes, such taxes will be paid by the Pledgors.  To the extent reimbursement is sought pursuant to this Section 13 or any other document executed pursuant hereto, the Secured Parties shall submit to the Pledgors a statement of expenses to be paid by the Pledgors.  Such expenses shall be due and payable within thirty (30) days of the date of the original statement to the extent that such Secured Party is entitled to such reimbursement.

 

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14.  Indemnity.  The Pledgors, jointly and severally, will indemnify and hold harmless each of the Secured Parties and each of their respective employees, representatives, officers and directors from and against any and all claims, liabilities, investigations, losses, damages, actions, and demands by any party against the Secured Parties or any of them resulting from any breach or alleged breach by any Pledgor of any representation or warranty made hereunder, or otherwise arising out of this Pledge Agreement, unless, with respect to any of the above, any of the Secured Parties are finally judicially determined to have acted or failed to act with gross negligence or willful misconduct.  This Section 14 shall survive termination of this Pledge Agreement.

 

15.  Limitation On the Administrative Agent’s Duty In Respect Of Pledged Collateral. The Administrative Agent shall comply with Sections 8.9A-207 through 8.9A-209 of the UCC with respect to the Pledged Collateral in its possession or under its control. The powers conferred on the Administrative Agent hereunder are solely to protect its interest in the Pledged Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Pledged Collateral in its possession and the accounting for moneys actually received by it hereunder, the Administrative Agent shall have no duty as to any Pledged Collateral or any income thereon, as to ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Pledged Collateral, whether or not the Administrative Agent, or any other Secured Party has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against any parties or any other rights pertaining to any Pledged Collateral.  The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of any Pledged Collateral in its possession if such Pledged Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own property.

 

16.  Security Interest Absolute.  All rights of the Administrative Agent and security interests hereunder, and all obligations of each Pledgor hereunder, shall be absolute and unconditional irrespective of:

 

(a)                   any lack of validity or enforceability of the Loan Documents;

 

(b)                   any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Loan Documents including, without limitation, any increase in the Secured Obligations resulting from the extension of additional credit to any Pledgor or any of its Subsidiaries or otherwise;

 

(c)                   any taking, exchange, release or non-perfection of any other collateral, or any taking, release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Secured Obligations;

 

(d)                   any manner of application of collateral, or proceeds thereof, to all or any of the Secured Obligations, or any manner of sale or other disposition of any collateral for all or any part of the Secured Obligations or any other assets of any Pledgor or any of its Subsidiaries;

 

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(e)                   any change, restructuring or termination of the corporate structure or existence of any Pledgor or any of its Subsidiaries; or

 

(f)                    any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Pledgor or a third party pledgor.

 

17.  Reinstatement.  This Pledge Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Pledgor for liquidation or reorganization, should any Pledgor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of any Pledgor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made.  In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

 

18.  Successors And Assigns.  This Pledge Agreement and all obligations of each Pledgor hereunder shall be binding upon the successors and assigns of such Pledgor (including any debtor-in-possession on behalf of such Pledgor) and shall, together with the rights and remedies of the Administrative Agent, for the benefit of the Secured Parties, hereunder, inure to the benefit of the Administrative Agent, the other Secured Parties, all future holders of any instrument evidencing any of the Secured Obligations and their respective successors and assigns.  No sales of participations, other sales, assignments, transfers or other dispositions of any agreement governing or instrument evidencing the Secured Obligations or any portion thereof or interest therein shall in any manner affect the Lien granted to the Administrative Agent, for the benefit of the Secured Parties, hereunder.  No Pledgor may assign, sell, hypothecate or otherwise transfer any interest in or obligation under this Pledge Agreement.

 

19.  Waivers; Amendment.

 

(a)           No failure or delay by any Secured Party of any kind in exercising any power, right or remedy hereunder and no course of dealing between any Pledgor on the one hand and the Administrative Agent or the holder of any Note on the other hand shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy hereunder or under any other Loan Document, or any abandonment or discontinuance of steps to enforce such a power, right or remedy, preclude any other or further exercise thereof or the exercise of any other power, right or remedy.  The rights of the Secured Parties hereunder and of the Lenders under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Pledge Agreement or consent to any departure by any Pledgor therefrom shall in any event be effective unless the same shall be permitted by subsection (b) below, and then such waiver and consent shall be effective only in the specific instance and for the purpose for which given.  No notice or

 

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demand on any Pledgor in any case shall entitle such Pledgor to any other or further notice in similar or other circumstances.

 

(b)           Neither this Pledge Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the Pledgors with respect to which such waiver, amendment or modification relates and the Administrative Agent, with the prior written consent of the Required Lenders (except as otherwise permitted expressly in the Credit Agreement).

 

20.  Severability.  Any provision of this Pledge Agreement held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

21.  Notices.  All notices, requests and other communications to the Pledgors or Administrative Agent hereunder shall be delivered in the manner required by the Credit Agreement and shall be sufficiently given to Administrative Agent or any Pledgor if addressed or delivered to them at, in the case of the Administrative Agent and Borrower, its addresses and telecopier numbers specified in the Credit Agreement and in the case of any other Pledgor, at their respective addresses and telecopier numbers provided in the Subsidiary Guaranty Agreement.  All such notices and communications shall be deemed to have been duly given at the times set forth in the Credit Agreement.

 

22.  Counterparts; Integration.  This Pledge Agreement may be executed by one or more of the parties to this Pledge Agreement on any number of separate counterparts (including by telecopy or by email, in pdf format), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Pledge Agreement constitutes the entire agreement among the parties hereto regarding the subject matters hereof and supersedes all prior agreements and understandings, oral or written, regarding such subject matter.

 

23.  Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)           This Pledge Agreement shall be construed in accordance with and be governed by the law of the Commonwealth of Virginia.

 

(b)           Each party to this Pledge Agreement hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the United States courts located within the  Eastern District of Virginia, and of any state court of the Commonwealth of Virginia located in the City of Virginia Beach and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Pledge Agreement or any other Loan Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Virginia state court or, to the extent permitted by applicable law, such Federal court. Each of the parties hereto agrees that a final judgment in any such action or

 

16

 

proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Pledge Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Pledge Agreement against the other party or its properties in the courts of any jurisdiction.

 

(c)           Each party to this Pledge Agreement irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in paragraph (b) of this Section and brought in any court referred to in paragraph (b) of this Section.  Each party hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d)           Each party to this Pledge Agreement irrevocably consents to the service of process in the manner provided for notices in Section 10.1 of the Credit Agreement.  Nothing in this Pledge Agreement will affect the right of the Administrative Agent or any Lender to serve process in any other manner permitted by law.

 

24.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

25.  Benefit of Secured Parties.  All Liens granted or contemplated hereby shall be for the benefit of the Secured Parties, and all proceeds or payments realized from Pledged Collateral in accordance herewith shall be applied to the Secured Obligations in accordance with Section 8.2 of the Credit Agreement.

 

26.  Termination of this Pledge Agreement.  No termination or cancellation (regardless of cause or procedure) of the Credit Agreement shall in any way affect or impair the powers, obligations, duties, rights and liabilities of the parties hereto in any way with respect to (i) any transaction or event occurring prior to such termination or cancellation, (ii) the Pledged Collateral, or (iii) any Pledgor’s undertakings, agreements, covenants, warranties and representations contained in this Pledge Agreement and all such undertakings, agreements, covenants, warranties and representations shall survive such termination or cancellation until the payment and performance, in full, of all Secured Obligations of the Pledgors and the termination of all commitments to lend or issue letters of credit under the Credit Agreement.  Subject to Section 17 hereof, this Pledge Agreement and the security interests granted hereunder shall terminate upon Payment In Full of the Obligations.  Upon such termination, Administrative

 

17

 

Agent shall return all Pledged Collateral in its possession to the respective Pledgors and will, at the sole cost and expense of the Pledgors, execute such documents, without recourse or warranty, as Pledgors deem reasonably necessary to release any interests held by Administrative Agent or the Secured Parties in the Pledged Collateral.  Notwithstanding any other provision of this Agreement to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Hedging Transactions and Treasury Management Obligations unless the Administrative Agent has received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Specified Hedge Provider or Specified Treasury Management Provider, as the case may be.

 

27.  Additional Pledged Collateral.  In the event that the any Pledgor is required, under the terms of any Loan Document or otherwise, to pledge and hypothecate any Collateral after the Closing Date, such Pledgor shall pledge and hypothecate such Collateral, and be bound with respect to such Collateral by all of the terms and conditions hereof, by delivery to the Administrative Agent of an executed counterpart of a Supplement to Subsidiary Pledge Agreement in the form of Exhibit A attached hereto.

 

28.  Additional Pledgors.  Pursuant to Section 5.11 of the Credit Agreement, each Subsidiary that that is required to become a Subsidiary Loan Party after the date of the Credit Agreement is required to enter into this Agreement as a Pledgor upon becoming such a Subsidiary Loan Party.  Upon execution and delivery after the date hereof by the Administrative Agent and such Subsidiary of an instrument in the form of Exhibit B, such Subsidiary shall become a Pledgor hereunder with the same force and effect as if originally named as a Pledgor herein.  The execution and delivery of any instrument adding an additional Pledgor as a party to this Pledge Agreement shall not require the consent of any other Pledgor hereunder.  The rights and obligations of each Pledgor hereunder shall remain in full force and effect notwithstanding the addition of any new Pledgor as a party to this Pledge Agreement.

 

[Signature Pages Follow]

 

18

 

IN WITNESS WHEREOF, each Pledgor has caused this Pledge Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

 

	
 
    	
JTH   HOLDING, INC., a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Mark Baumgartner
    
	
 
    	
Name:
    	
Mark Baumgartner
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
JTH   TAX, INC., a Delaware corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Mark Baumgartner
    
	
 
    	
Name:
    	
Mark Baumgartner
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
LTS   PROPERTIES, LLC, a Virginia limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
JTH   TAX, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/Mark   Baumgartner
    
	
 
    	
 
    	
 
    	
Mark Baumgartner
    
	
 
    	
 
    	
 
    	
Vice President and Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
LTS   SOFTWARE INC., a Virginia corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Mark Baumgartner
    
	
 
    	
Name:
    	
Mark Baumgartner
    
	
 
    	
Title:
    	
Vice   President Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
WEFILE   INC., a Virginia corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Kathleen   Curry
    
	
 
    	
Name:
    	
Kathleen   Curry
    
	
 
    	
Title:
    	
President   and Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
JTH   FINANCIAL, LLC, a Virginia limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
JTH   HOLDING, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/Mark   Baumgartner
    
	
 
    	
 
    	
 
    	
Mark Baumgartner
    
	
 
    	
 
    	
 
    	
Vice President and Chief Financial Officer
    

 

[SIGNATURE PAGE TO PLEDGE AGREEMENT]

 

 

Acknowledged and Agreed to:

 

	
SUNTRUST   BANK,
    	
 
    
	
as   Administrative Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/David   Bennett
    	
 
    
	
Name:
    	
David   A. Bennett
    	
 
    
	
Title:
    	
Vice   President
    	
 
    

 

[SIGNATURE PAGE TO PLEDGE AGREEMENT]

 

 

Schedule I to

Pledge Agreement

 

Part A

 

	
Name of
   Corporation
    	
 
    	
Place of
   Incorporation
    	
 
    	
Percentage of
   Shares
    Issued and
   Outstanding
    	
 
    	
Par/No
   Par
    	
 
    	
Shares Issued
   and Outstanding
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
JTH Tax, Inc.
    	
 
    	
Delaware
    	
 
    	
100
    	
%
    	
$
    	
1.00
    	
 
    	
100
    	
 
    
	
LTS Software Inc.
    	
 
    	
Virginia
    	
 
    	
100
    	
%
    	
No   Par
    	
 
    	
100
    	
 
    
	
WeFile Inc.
    	
 
    	
Virginia
    	
 
    	
100
    	
%
    	
No   Par
    	
 
    	
100
    	
 
    

 

Part B

 

	
Name of LLC
    	
 
    	
Place of
   Organization
    	
 
    	
Percentage of
   Membership
   Interests
   Issued and
   Outstanding
    	
 
    	
Par/No
   Par
    	
 
    	
Membership
   Interests Issued and
   Outstanding
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
LTS Properties, LLC
    	
 
    	
Virginia
    	
 
    	
100
    	
%
    	
N/A
    	
 
    	
N/A
    	
 
    
	
JTH Financial, LLC
    	
 
    	
Virginia
    	
 
    	
100
    	
%
    	
N/A
    	
 
    	
N/A
    	
 
    

 

 

Schedule II to

Pledge Agreement

 

Pledged Notes

 

Revolving Promissory Note dated April 30, 2012, made by Liberty Tax Service, Inc., payable to the order of JTH Tax, Inc. in the principal amount of $35,000,000

 

 

EXHIBIT A

to

Pledge Agreement

 

SUPPLEMENT TO PLEDGE AGREEMENT - ADDITIONAL COLLATERAL

 

THIS SUPPLEMENT TO PLEDGE AGREEMENT - ADDITIONAL COLLATERAL (this “Supplement”), dated as of                                , 201   , is executed by [NAME -- IN ALL CAPS], a [State] [Entity] (the “Supplement Pledgor”), in favor of SUNTRUST BANK, a Georgia banking corporation, as Administrative Agent (the “Administrative Agent”), on its behalf and on behalf of the other banks and lending institutions (the “Lenders”) from time to time party to the Revolving Credit and Term Loan Agreement, dated as of April [    ], 2012, by and among the Borrower, the Lenders, the Administrative Agent, and SunTrust Bank, as Issuing Bank and Swingline Lender (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”).  Terms used herein but not defined herein shall have the meaning defined for those terms in the Pledge Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, Borrower, and certain Domestic Subsidiaries of the Borrower (the “Pledgors”) are parties to that certain Pledge Agreement, executed by the Pledgors in favor the Administrative Agent, dated as of April [    ], 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Pledge Agreement”), pursuant to which the Pledgors pledged stock, notes and membership interests  to the Administrative Agent, for itself and the benefit of the Secured Parties;

 

WHEREAS, the Lenders have agreed to make Loans and the Issuing Bank has agreed to issue Letters of Credit to the Borrower on the terms and conditions contained in the Credit Agreement;

 

WHEREAS, it is a condition precedent to the continued extension of the Loans and the continued issuance of Letters of Credit under the Credit Agreement that the Supplement Pledgor grant to Administrative Agent a security interest in all of its Additional Pledged Collateral (as defined below), and the Supplement Pledgor wishes to fulfill said condition precedent;

 

NOW, THEREFORE, in consideration of the premises and in order to ensure the compliance with the Credit Agreement, the Supplement Pledgor hereby agrees as follows:

 

SECTION 1.         Additional Pledge.  As security for the payment and performance of the Secured Obligations, the Supplement Pledgor hereby:

 

(a)       pledges, hypothecates, assigns, charges, mortgages, delivers, sets over, 

 

 

conveys and transfers to the Administrative Agent, for the benefit of the Secured Parties, and grants to the Administrative Agent, for the benefit of the Secured Parties, a security interest in all of the Supplemental Pledgor’s right, title and interest in and to:

 

(i)            the shares of capital stock more particularly described in Schedule I hereto and the certificates, if any, evidencing such shares (the “Additional Pledged Shares”) and all cash, instruments and other property from time to time received, receivable or otherwise distributed in exchange for any and all of such Additional Pledged Shares;

 

(ii)           the membership interests more particularly described in Schedule II hereto and the certificates, if any, evidencing such membership interests (the “Additional Pledged Membership Interests”) and all cash, instruments and other property from time to time received, receivable or otherwise distributed in exchange for any and all of such Additional Pledged Membership Interests;

 

(iii)          the promissory notes and instruments more particularly described on Schedule III hereto (the “Additional Pledged Notes”) and all interest, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for the Additional Pledged Notes; and

 

(iv)          all other Pledged Collateral (as defined in the Pledge Agreement) relating to the Additional Pledged Shares, the Additional Pledged Membership Interests and the Additional Pledged Notes (the items described in subsections (i), (ii), (iii) and (iv) above, collectively, the “Additional Pledged Collateral”); and

 

(b)       delivers to the Administrative Agent, for the benefit of the Secured Parties, all of the Supplement Pledgor’s right, title and interest in and to the certificates and instruments, if any, evidencing the Additional Pledged Collateral, accompanied by instruments of transfer or assignment, duly executed in blank.

 

SECTION 2.         Representations and Warranties.  The Supplement Pledgor hereby (a) represents and warrants that it is the legal and beneficial owner of the Additional Pledged Collateral, free and clear of any lien, security interest, option or other charge or encumbrance, except for the security interest created by the Pledge Agreement as supplemented by this Supplement; and (b)  restates each representation and warranty set forth in Section 5 of the Pledge Agreement, as supplemented by this Supplement, as of the date hereof with respect to the Additional Pledged Collateral.

 

SECTION 3.         Additional Pledged Collateral.  By execution and delivery of this Supplement, the Additional Pledged Collateral shall become a part of the Pledged Collateral referred to in the Pledge Agreement and shall secure the Secured Obligations as if such Additional Pledged Collateral were Pledged Collateral on the Closing Date, and shall be subject to all of the terms and conditions governing Pledged Collateral under the Pledge Agreement.  From and after the date hereof, Schedule I and Schedule II to the Pledge Agreement are hereby amended to add the Additional Pledged Collateral.

 

 

SECTION 4.         Binding Effect.  This Supplement shall become effective when it shall have been executed by the Supplement Pledgor and acknowledged and agreed to by the Administrative Agent and thereafter shall be binding upon the Supplement Pledgor and shall inure to the benefit of the Administrative Agent and the Secured Parties.  Upon the effectiveness of this Supplement, this Supplement shall be deemed to be a part of and shall be subject to all the terms and conditions of the Pledge Agreement.  The Supplement Pledgor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders.

 

SECTION 5.         Governing Law; Terms.  THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE COMMONWEALTH OF VIRGINIA.

 

SECTION 6.         Execution in Counterparts.  This Supplement may be executed in any number of counterparts (including by telecopy or by email, in pdf format), each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

IN WITNESS WHEREOF, the Supplement Pledgor has caused this Supplement to be duly executed and delivered by its duly authorized officer as of the date first above written.

 

 

	
 
    	
[NAME   OF SUPPLEMENT PLEDGOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Acknowledged and Agreed to:

 

 

SUNTRUST BANK

as Administrative Agent

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Schedule I

to

SUPPLEMENT TO PLEDGE AGREEMENT - ADDITIONAL COLLATERAL

 

 

Schedule II

to

SUPPLEMENT TO PLEDGE AGREEMENT - ADDITIONAL COLLATERAL

 

 

Schedule III

to

SUPPLEMENT TO PLEDGE AGREEMENT- ADDITIONAL COLLATERAL

 

 

EXHIBIT B

to

Pledge Agreement

 

SUPPLEMENT TO PLEDGE AGREEMENT - ADDITIONAL PLEDGOR

 

THIS SUPPLEMENT TO PLEDGE AGREEMENT - ADDITIONAL PLEDGOR (this “Supplement”), dated as of                                , 201   , is executed by [NAME - IN ALL CAPS], a [State] [Entity] (the “New Pledgor”), in favor of SUNTRUST BANK, a Georgia banking corporation, as Administrative Agent (the “Administrative Agent”), on its behalf and on behalf of the other banks and lending institutions (the “Lenders”) from time to time party to the Revolving Credit and Term Loan Agreement, dated as of April 30, 2012, by and among Borrower, the Lenders, the Administrative Agent, and SunTrust Bank, as Issuing Bank and Swingline Lender (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”).  Terms used herein but not defined herein shall have the meaning defined for those terms in the Pledge Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, Borrower, and certain Domestic Subsidiaries of Borrower (the “Pledgors”) are parties to that certain Pledge Agreement, dated as of April 30, 2012, by and among the Pledgors in favor the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Pledge Agreement”), pursuant to which the Pledgors have pledged stock, notes and membership interests  to the Administrative Agent, for itself and the benefit of the Secured Parties;

 

WHEREAS, the Lenders have agreed to make Loans and the Issuing Bank has agreed to issue Letters of Credit to the Borrower on the terms and conditions contained in the Credit Agreement;

 

WHEREAS, it is a condition precedent to the continued extension of the Loans and the continued issuance of Letters of Credit under the Credit Agreement that the New Pledgor grant to Administrative Agent a security interest in all of its Pledged Collateral (as defined below), and the New Pledgor wishes to fulfill said condition precedent;

 

NOW, THEREFORE, in consideration of the premises and in order to ensure the compliance with the Credit Agreement, the New Pledgor hereby agrees as follows:

 

SECTION 1.  Pledge.  As security for the payment and performance of the Secured Obligations, the New Pledgor hereby:

 

(a)       pledges, hypothecates, assigns, charges, mortgages, delivers, sets over, conveys and transfers to the Administrative Agent, for the benefit of the Secured Parties, and grants to the Administrative Agent, for the benefit of the Secured Parties, a security interest in all of New Pledgor’s right, title and interest in and to:

 

 

 (i)        the shares of capital stock more particularly described in Schedule I hereto and the certificates, if any, evidencing such shares (the “Pledged Shares”) and all cash, instruments and other property from time to time received, receivable or otherwise distributed in exchange for any and all of such Pledged Shares;

 

(ii)       the membership interests more particularly described in Schedule II hereto and the certificates, if any, evidencing such membership interests (the “Pledged Membership Interests”) and all cash, instruments and other property from time to time received, receivable or otherwise distributed in exchange for any and all of such Pledged Membership Interests;

 

 (iii)      the promissory notes and instruments more particularly described on Schedule III hereto (the “Pledged Notes”) and all interest, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for the Pledged Notes; and

 

 (iv)      all other collateral relating to the Pledged Shares, the Pledged Membership Interests and the Pledged Notes (the items described in subsections (i), (ii), (iii) and (iv) above, collectively, the “Pledged Collateral”); and

 

(b)           delivers to the Administrative Agent, for the benefit of the Secured Parties, all of New Pledgor’s right, title and interest in and to the certificates and instruments, if any, evidencing the Pledged Collateral, accompanied by instruments of transfer or assignment, duly executed in blank.

 

SECTION 2.  Joinder.  In accordance with Section 28 of the Pledge Agreement, the New Pledgor by its signature below becomes a Pledgor under the Pledge Agreement with the same force and effect as if originally named therein as a Pledgor and the New Pledgor hereby (i) agrees to all the terms and provisions of the Pledge Agreement applicable to it as Pledgor thereunder and (ii) represents and warrants that the representations and warranties made by it as a Pledgor thereunder are true and correct on and as of the date hereof.  Each reference to a Pledgor in the Pledge Agreement shall be deemed to include the New Pledgor.  The Pledge Agreement is hereby incorporated herein by reference.

 

SECTION 3.  Representations and Warranties.  The New Pledgor represents and warrants to the Administrative Agent and the Secured Parties that this Supplement has been duly authorized, executed and delivered by it and that each of this Supplement and the Pledge Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

 

SECTION 4.  Binding Effect.  This Supplement shall become effective when it shall have been executed by the New Pledgor and acknowledged and agreed to by the Administrative Agent and thereafter shall be binding upon the New Pledgor and shall inure to the benefit of the Administrative Agent and the Secured Parties.  Upon the effectiveness of this Supplement, this Supplement shall be deemed to be a part of and shall be subject to all the terms and conditions of the Pledge Agreement.  The New Pledgor shall not have the right to assign its 

 

 

rights hereunder or any interest herein without the prior written consent of the Lenders.

 

SECTION 5.  Governing Law.  THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE COMMONWEALTH OF VIRGINIA.

 

SECTION 6.  Execution in Counterparts.  This Supplement may be executed in any number of counterparts (including by telecopy or by email, in pdf format), each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

SECTION 7.  Notices to New Pledgor.  All communications and notices hereunder shall be in writing and given as provided in Section 21 of the Pledge Agreement.  All communications and notices hereunder to the New Pledgor shall be given to it at the address set forth under its signature below, with a copy to the Borrower.

 

IN WITNESS WHEREOF, the New Pledgor has duly executed this Supplement to the Pledge Agreement as of the day and year first above written.

 

	
 
    	
[NAME   OF NEW PLEDGOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
Address:
    

 

Acknowledged and Agreed to:

 

 

SUNTRUST BANK

as Administrative Agent

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Schedule I

to

SUPPLEMENT TO PLEDGE AGREEMENT - ADDITIONAL PLEDGOR

 

 

Schedule II

to

SUPPLEMENT TO PLEDGE AGREEMENT - ADDITIONAL PLEDGOR

 

 

Schedule III

to

SUPPLEMENT TO PLEDGE AGREEMENT - ADDITIONAL PLEDGOR

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