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EXHIBIT
10.69
GUARANTY AND PLEDGE AGREEMENT
dated as of December 15, 2006
among
LECG, LLC
and
THE OTHER PARTIES HERETO,
as Grantors,
and
LASALLE BANK NATIONAL ASSOCIATION,
as the Administrative Agent
GUARANTY AND PLEDGE
AGREEMENT
THIS GUARANTY AND PLEDGE AGREEMENT dated as of December 15, 2006
(this " Agreement ") is entered into among LECG, LLC (the "
Company ") and each other Person signatory hereto as a
Grantor (together with any other Person that becomes a party hereto
as provided herein, the " Grantors ") in favor of LASALLE
BANK NATIONAL ASSOCIATION, as the Administrative Agent for all the
Lenders party to the Credit Agreement (as hereafter defined).
The Lenders have severally agreed to extend credit to the
Company pursuant to the Credit Agreement. The Company is
affiliated with each other Grantor. The proceeds of credit
extended under the Credit Agreement will be used in part to enable
the Company and the Parent (as defined below) to make valuable
transfers to each other and the other Grantors in connection with
the operation of their respective businesses. The Company and
the other Grantors are engaged in interrelated businesses, and each
Grantor will derive substantial direct and indirect benefit from
extensions of credit under the Credit Agreement. It is a
condition precedent to each Lender’s obligation to extend
credit under the Credit Agreement that the Grantors shall have
executed and delivered this Agreement to the Administrative Agent
for the ratable benefit of all the Lenders.
In consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to extend credit thereunder,
each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
SECTION 1 DEFINITIONS .
1.1
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
1.2
When used herein the following terms shall have the following
meanings:
Agreement has the meaning set forth in the preamble
hereto.
Collateral means (a) all of the Pledged Notes, now owned
or at any time hereafter acquired by any Grantor or in which any
Grantor now has or at any time in the future may acquire any right,
title or interest, (b) all books and records pertaining to any of
the foregoing, (c) all Proceeds and products of any of the
foregoing, and (d) all collateral security and guaranties given by
any Person with respect to any of the foregoing. Where the
context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such
Grantor’s Collateral or the relevant part thereof.
Company Obligations means all Obligations of the
Company.
Guarantor Obligations means, collectively, with respect
to each Guarantor, all Obligations of such Guarantor.
Guarantors means the collective
reference to each Grantor other than the Company, if any.
Intercompany Note means any promissory note evidencing
loans made by any Grantor to any other Grantor.
Paid in Full means (a) the payment in full in cash and
performance of all Secured Obligations, (b) the termination of all
Commitments and (c) either (i) the cancellation and return to the
Administrative Agent of all Letters of Credit or (ii) the cash
collateralization of all Letters of Credit in accordance with the
Credit Agreement.
Parent means LECG Corporation, a Delaware
corporation.
Pledged Notes means all promissory notes listed on
Schedule 1 , as amended from time to time, and all other
Intercompany Notes at any time issued to any Grantor.
Proceeds means all "proceeds" as such term is defined in
Section 9-102(a)(64) of the UCC and, in any event, shall include
all income from the Pledged Notes, collections thereon or
distributions or payments with respect thereto.
Secured Obligations means, collectively, the Company
Obligations and Guarantor Obligations.
UCC means the Uniform Commercial Code as in effect on the
date hereof and from time to time in the State of Illinois,
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 or the availability of any
remedy hereunder is governed by the Uniform Commercial Code as in
effect on or after the date hereof in any other jurisdiction, "UCC"
means 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 or
availability of such remedy.
SECTION 2 GUARANTY .
2.1
Guaranty . (a) Each of the Guarantors hereby, jointly
and severally, unconditionally and irrevocably, as a primary
obligor and not only a surety, guaranties to the Administrative
Agent, for the ratable benefit of the Lenders and their respective
successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Company when due (whether
at the stated maturity, by acceleration or otherwise) of the
Company Obligations.
(b)
Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Loan Documents shall in no event exceed the
amount which can be guarantied by such Guarantor under applicable
federal and state laws relating to the insolvency of debtors (after
giving effect to the right of contribution established in
Section 2.2 ).
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(c)
Each Guarantor agrees that the Secured Obligations may at any time
and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guaranty contained in
this Section 2 or affecting the rights and remedies of the
Administrative Agent or any Lender hereunder.
(d)
The guaranty contained in this Section 2 shall remain in
full force and effect until all of the Secured Obligations shall
have been Paid in Full.
(e)
No payment made by the Company, any of the Guarantors, any other
guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Company, any of the
Guarantors, any other guarantor or any other Person by virtue of
any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in
payment of the Secured Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than
any payment made by such Guarantor in respect of the Secured
Obligations or any payment received or collected from such
Guarantor in respect of the Secured Obligations), remain liable for
the Secured Obligations up to the maximum liability of such
Guarantor hereunder until the Secured Obligations are Paid in
Full.
2.2
Right of Contribution . Each Guarantor hereby agrees
that to the extent that a Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Guarantor
shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder which has not paid its proportionate
share of such payment. Each Guarantor’s right of
contribution shall be subject to the terms and conditions of
Section 2.3 . The provisions of this Section
2.2 shall in no respect limit the obligations and liabilities
of any Guarantor to the Administrative Agent and the Lenders, and
each Guarantor shall remain liable to the Administrative Agent and
the Lenders for the full amount guarantied by such Guarantor
hereunder.
2.3
No Subrogation . Notwithstanding any payment made by
any Guarantor hereunder or any set-off or application of funds of
any Guarantor by the Administrative Agent or any Lender, no
Guarantor shall be entitled to be subrogated to any of the rights
of the Administrative Agent or any Lender against the Company or
any other Guarantor or any collateral security or guaranty or right
of offset held by the Administrative Agent or any Lender for the
payment of the Secured Obligations, nor shall any Guarantor seek or
be entitled to seek any contribution or reimbursement from the
Company or any other Guarantor in respect of payments made by such
Guarantor hereunder, until all of the Secured Obligations are Paid
in Full, no Letter of Credit shall be outstanding and the
Commitments are terminated. If any amount shall be paid to
any Guarantor on account of such subrogation rights at any time
when all of the Secured Obligations shall not have been Paid in
Full, such amount shall be held by such Guarantor in trust for the
Administrative Agent and the Lenders, segregated from other funds
of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact
form received by such Guarantor (duly indorsed by such Guarantor to
the Administrative Agent, if required), to be applied against the
Secured Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine.
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2.4
Amendments, etc. with respect to the Secured Obligations
. Each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor,
any demand for payment of any of the Secured Obligations made by
the Administrative Agent or any Lender may be rescinded by the
Administrative Agent or such Lender and any of the Secured
Obligations continued, and the Secured Obligations, or the
liability of any other Person upon or for any part thereof, or any
collateral security or guaranty therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Administrative Agent or any
Lender, and the Credit Agreement and the other Loan Documents and
any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or
in part, as the Administrative Agent (or the Required Lenders or
all the Lenders, as the case may be) may deem advisable from time
to time. Neither the Administrative Agent nor any Lender
shall have any obligation to protect, secure, perfect or insure any
Lien at any time held by it as security for the Secured Obligations
or for the guaranty contained in this Section 2 or any
property subject thereto.
The Administrative Agent or any Lender may, from time to time,
at its sole discretion and without notice to any Guarantor (or any
of them), take any or all of the following actions: (a)
retain or obtain a security interest in any property to secure any
of the Secured Obligations or any obligation hereunder, (b) retain
or obtain the primary or secondary obligation of any obligor or
obligors, in addition to the undersigned, with respect to any of
the Secured Obligations, (c) extend or renew any of the Secured
Obligations for one or more periods (whether or not longer than the
original period), alter or exchange any of the Secured Obligations,
or release or compromise any obligation of any of the undersigned
hereunder or any obligation of any nature of any other obligor with
respect to any of the Secured Obligations, (d) release any guaranty
or right of offset or its security interest in, or surrender,
release or permit any substitution or exchange for, all or any part
of any property securing any of the Secured Obligations or any
obligation hereunder, or extend or renew for one or more periods
(whether or not longer than the original period) or release,
compromise, alter or exchange any obligations of any nature of any
obligor with respect to any such property, and (e) resort to the
undersigned (or any of them) for payment of any of the Secured
Obligations when due, whether or not the Administrative Agent or
such Lender shall have resorted to any property securing any of the
Secured Obligations or any obligation hereunder or shall have
proceeded against any other of the undersigned or any other obligor
primarily or secondarily obligated with respect to any of the
Secured Obligations.
2.5
Waivers . Each Guarantor waives any and all notice of
the creation, renewal, extension or accrual of any of the Secured
Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guaranty contained in
this Section 2 or acceptance of the guaranty contained in
this Section 2 ; the Secured Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon
the guaranty contained in this Section 2 , and all dealings
between the Company and any of the Guarantors, on the one hand, and
the Administrative Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guaranty contained in this
Section 2 . Each Guarantor waives
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(a) diligence, presentment, protest, demand for
payment and notice of default, dishonor or nonpayment and all other
notices whatsoever to or upon the Company or any of the Guarantors
with respect to the Secured Obligations, (b) notice of the
existence or creation or non-payment of all or any of the Secured
Obligations and (c) all diligence in collection or protection of or
realization upon any Secured Obligations or any security for or
guaranty of any Secured Obligations.
2.6
Payments . Each Guarantor hereby guaranties that
payments hereunder will be paid to the Administrative Agent without
set-off or counterclaim in the applicable Agreed Currency at the
office of the Administrative Agent specified in the Credit
Agreement.
SECTION 3 GRANT OF SECURITY INTEREST .
Each Grantor hereby assigns and transfers to the Administrative
Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Lenders and (to the extent provided herein)
their Affiliates, a continuing security interest in all of its
Collateral, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Company Obligations or the
Guarantor Obligations, as the case may be.
SECTION 4 REPRESENTATIONS AND WARRANTIES .
To induce the Administrative Agent and the Lenders to enter into
the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Company thereunder, each
Grantor jointly and severally hereby represents and warrants to the
Administrative Agent and each Lender that:
4.1
Title; No Other Liens . The Grantors own each item of
the Collateral free and clear of any and all Liens or claims of
others. No financing statement or other public notice with
respect to all or any part of the Collateral is on file or of
record in any public office, except filings for which termination
statements have been delivered to the Administrative Agent.
4.2
Perfected First Priority Liens . The security
interests granted pursuant to this Agreement (a) upon delivery of
the Pledged Notes to the Administrative Agent, together with note
powers executed in blank, will constitute valid perfected security
interests in all of the Collateral in favor of the Administrative
Agent, for the ratable benefit of the Lenders, as collateral
security for each Grantor’s Obligations, enforceable in
accordance with the terms hereof against all creditors of each
Grantor and any Persons purporting to purchase any Collateral from
each Grantor and (b) are prior to all other Liens on the Collateral
in existence on the date hereof except for Permitted Liens for
which priority is accorded under applicable law. The actions
specified in clause (a) constitute all of the actions necessary to
perfect all security interests granted hereunder.
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4.3
Pledged Notes .
(a)
Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in
accordance with its terms (subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing).
(b)
Schedule 1 , as supplemented from time to time by the
Grantors, each of which supplements shall operate as an amendment
to this Agreement when provided to the Administrative Agent, lists
all of the Pledged Notes owned by each Grantor. Each Grantor
is the record and beneficial owner of, and has good and marketable
title to, the Pledged Notes pledged by it hereunder, free of any
and all Liens or options in favor of, or claims of, any other
Person.
SECTION 5 COVENANTS .
Each Grantor covenants and agrees with the Administrative Agent
and the Lenders that, from and after the date of this Agreement
until the Secured Obligations shall have been Paid in Full:
5.1
Such Grantor shall maintain the security interest created by this
Agreement as a perfected security interest having the priority
described in Section 4.2 and shall defend such security
interest against the claims and demands of all Persons
whomsoever.
5.2
At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such
Grantor will promptly and duly execute and deliver, and have
recorded, such further instruments and documents and take such
further actions as the Administrative Agent may reasonably request
for the purpose of obtaining or preserving the full benefits of
this Agreement and of the rights and powers herein granted.
SECTION 6 REMEDIAL PROVISIONS .
6.1
Pledged Notes .
(a)
Unless an Event of Default shall have occurred and be continuing
and the Administrative Agent shall have given notice to the
relevant Grantor of the Administrative Agent’s intent to
exercise its corresponding rights pursuant to Section 6.1(b)
, each Grantor shall be permitted to receive all payments made in
respect of the Pledged Notes.
(b)
If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise
such rights to the relevant Grantor or Grantors, (i) the
Administrative Agent shall have the right to receive any and all
distributions, payments or other Proceeds paid in respect of the
Pledged Notes and make application thereof to the Obligations in
such order as the Administrative Agent may determine, and (ii) any
or all of the Pledged Notes shall be registered in the name of the
Administrative Agent or its nominee,
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and the Administrative Agent or its nominee may
thereafter exercise any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining
to such Pledged Notes as if it were the absolute owner thereof
(including the right to exchange at its discretion any and all of
the Pledged Notes upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or
other structure of any Issuer, or upon the exercise by any Grantor
or the Administrative Agent of any right, privilege or option
pertaining to such Pledged Notes, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Notes with
any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the
Administrative Agent may determine), all without liability except
to account for property actually received by it, but the
Administrative Agent shall have
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