EXHIBIT 10.16
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement"), made as of the 25th day of
April, 1997, by XXXXXXX XXXXX, a resident of the State of New York
("Assignor"), to THE FIRST NATIONAL BANK OF BOSTON, a national banking
association ("FNBB"), as Agent for itself and the other Banks from time to time
party to the Credit Agreement (as hereafter defined) (FNBB, in its capacity as
Agent, is hereinafter referred to as "Lender").
W I T N E S S E T H:
WHEREAS, Assignor is the sole shareholder of Park Avenue Management
Corporation, a corporation formed under the laws of the State of Delaware (the
"Company"); and
WHEREAS, the Company is a member of 000 Xxxx Xxxxxx, XXX, a Delaware
limited liability company (the "Property Owner"); and
WHEREAS, pursuant to that certain Credit Agreement dated of even date
herewith among Park Avenue Financing Company, LLC and PAMC Co-Manager Inc.
(hereinafter referred to collectively as the "Borrower"), FNBB, the other
lenders that are a party thereto, Lender and certain other parties (as the same
may be varied, extended, supplemented, consolidated, amended, replaced,
renewed, modified or restated, the "Credit Agreement"), the Banks have agreed
to provide a loan to Borrower of $80,000,000.00 (the "Loan"), which Loan is
evidenced by those certain Notes made by Borrower to the order of the Banks in
the aggregate principal face amount of $80,000,000.00 (such Notes, and each
other note as may be issued under the Credit Agreement, as the same may be
varied, extended, supplemented, consolidated, amended, replaced, renewed,
modified or restated, is hereinafter referred to collectively as the "Note");
and
WHEREAS, Lender has required, as a condition to the making of the Loan to
Borrower, that Assignor execute this Agreement to secure the obligations of
Borrower under the Note, the Credit Agreement and certain other agreements; and
WHEREAS, the extension of the Loan by the Banks to the Borrower shall
inure to the direct interest and advantage of Assignor;
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00), and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby
covenant and agree as follows:
1. Definitions. Capitalized terms used herein that are not otherwise
defined herein shall have the meaning set forth in the Credit Agreement.
2. Grant of Security Interest. As security for the payment and
performance by Assignor of each and all of the duties, responsibilities and
obligations under this Agreement, and the duties, responsibilities and
obligations of Borrower under the Credit Agreement, the Note and any and all
agreements evidencing, securing or otherwise relating to the obligations
evidenced by the Note and the Credit Agreement (this Agreement, the Credit
Agreement, the Note and such other agreements, together with any and all
renewals, modifications, consolidations and extensions thereof, are hereinafter
referred to collectively as the "Loan Documents"; and said duties,
responsibilities and obligations of Assignor and Borrower are hereinafter
referred to collectively as the "Obligations"), Assignor does hereby transfer,
assign, pledge, convey and grant to Lender, and does hereby grant a security
interest to Lender in, all right, title and interest of Assignor in and to the
following:
(a) All right, title, interest, claims or rights of Assignor in and
to 1,000 shares of the stock of the Company, represented by Certificate No. 2,
together with any and all other securities, cash, stock certificates or other
property, warrants, option or right in respect of, in addition to or
substitution or exchange for such shares, or other property at any time and
from time to time receivable or otherwise distributed in respect of or in
exchange for all or any thereof; and
(b) All right, title and interest of Assignor, if any, in and to the
Cash Collateral Agreement or any account maintained or funds held pursuant
thereto; and
(c) Any and all dividends, profits, proceeds, accounts, income,
distributions, payments upon dissolution or liquidation of the Company or the
sale, financing or refinancing of any of the property or assets of the Company,
proceeds of a casualty or condemnation, return of capital, repayment of loans,
and payments of any kind or nature whatsoever, now or hereafter distributable
or payable by the Company or any shareholder of the Company (in such
shareholder's capacity as a shareholder) to Assignor, by reason of Assignor's
interest in the Company or otherwise, or now or hereafter distributable or
payable to Assignor from any other source by reason of Assignor being a
shareholder in the Company, or an account of any interest in or claim or rights
against the Company held by Assignor, or by reason of services performed by
Assignor for or on behalf of the Company or with respect to the assets of the
Company, and any and all proceeds from any transfer, assignment or pledge of
any interest of Assignor in, or claim or right against, the Company (regardless
of whether such transfer, assignment or pledge is permitted under the terms
hereof or the other Loan Documents), and all claims, choses in action or things
in action now or hereafter arising against the Company; and
(d) All accounts, contract rights and general intangibles now or
hereafter arising from any of the foregoing; and
(e) All notes or other documents or instruments now or hereafter
evidencing or securing any of the foregoing; and
(f) All right of Assignor to collect and enforce payments
distributable or payable by the Company or any shareholder of the Company to
Assignor pursuant to the terms of the articles of incorporation and bylaws of
the Company (collectively the "Organizational Agreements"); and
(g) All documents, writings, leases, books, files, records, computer
tapes, programs, ledger books and ledger pages arising from or used in
connection with any of the foregoing; and
(h) All renewals, extensions, additions, substitutions or
replacements of any of the foregoing; and
(i) All powers, options, rights, privileges and immunities
pertaining to any of the foregoing; and
(j) All proceeds of any of the foregoing and all cash, security or
other property distributed on account of any of the foregoing (including
without limitation, all stock rights, stock splits, subscription rights,
dividends, new certificates and new securities).
All of the foregoing described in this paragraph 2 are hereinafter referred to
collectively as the "Collateral". The items described in (a), above, are
sometimes hereinafter referred to as the "Stock Collateral"; and the items
described in (b) - (j), above, are sometimes hereinafter referred to
collectively as the "Distributions."
3. Obligations Secured. This Agreement secures the payment and
performance by Assignor and Borrower of the Obligations.
4. Collection of Distributions.
(a) It is acknowledged and agreed by the parties hereto that Lender
shall have sole and exclusive possession of the Distributions and that this
Agreement constitutes a present, absolute and current assignment of all the
Distributions and is effective upon the execution and delivery hereof.
Payments under or with respect to the Distributions shall be made as follows:
(i) Assignor shall have no right to receive payments made under
or with respect to the Distributions, and all such payments shall be
delivered directly by the Company to Lender.
(ii) If Assignor shall receive any payments made under or with
respect to the Distributions, Assignor shall hold all such payments
in trust for Lender, will not co-mingle such payments with other
funds of Assignor, and will immediately pay and deliver in kind, all
such payments directly to Lender for application by Lender in
satisfaction of the Obligations in such order as set forth in the
Credit Agreement.
(iii) Assignor hereby agrees for the benefit of
the Company that all payments actually received by Lender shall be
deemed payments to Assignor by the Company. Lender shall apply any
and all such payments actually received by Lender in satisfaction of
the Obligations in such order as set forth in the Credit Agreement.
Lender shall return to Assignor that portion of any payments actually
received by Lender from the Company which Lender determines, in the
exercise of its sole and absolute discretion but in good faith, is
not needed to repay the Obligations.
(iv) In furtherance of the foregoing, Assignor does hereby
notify and direct the Company and its directors, officers and
shareholders that all payments under or with respect to the
Distributions shall be made directly to Lender at the address of
Lender set forth in the Cash Collateral Agreement.
Notwithstanding anything in this Paragraph 4 to the contrary, so long as no
Event of Default has occurred, Assignor shall have a license (revocable upon
the occurrence of an Event of Default) to receive such amounts as are
distributable to Assignor from amounts distributed to Borrower pursuant to the
terms of the Cash Collateral Agreement; it being understood and agreed that
such license shall not extend to other amounts payable or distributable to
Assignor, including, without limitation, any amounts arising from the sale,
transfer, assignment, conveyance, option or other disposition of, or any
mortgage, hypothecation, encumbrance, financing or refinancing of, any interest
of Assignor in the Company, any of the assets or properties of the Company or
any assets or properties of any other Person in which the Company directly or
indirectly owns an interest (regardless of whether such event is permitted
under the terms of the Loan Documents).
(b) Assignor shall cause the Company promptly to distribute all net
proceeds of the sale, transfer, conveyance, option, assignment or other
disposition of, or any mortgage, hypothecation, encumbrance, financing or
refinancing of, any of its assets or properties, and any and all other
Distributions distributable or payable by the Company or any shareholder
thereof under the terms of the Organizational Agreements.
(c) Assignor hereby irrevocably designates and appoints Lender its
true and lawful attorney-in-fact, which appointment is coupled with an
interest, either in the name of Lender, or in the name of Assignor, at
Assignor's sole cost and expense, and regardless of whether Lender becomes a
shareholder in the Company or not, to take any or all of the following actions:
(i) to ask, demand, xxx for, attach, levy, settle, compromise,
collect, compound, recover, receive and give receipt and acquittances
for any and all Collateral and to take any and all actions as Lender
may deem necessary or desirable in order to realize upon the
Collateral, or any portion thereof, including, without limitation,
making any statements and doing and taking any actions on behalf of
Assignor which are otherwise required of Assignor under the terms of
any agreement as conditions precedent to the payment of the
Distributions, and the right and power to receive, endorse, assign
and deliver, in the name of Assignor, any checks, notes, drafts,
instruments or other evidences of payment received in payment of or
on account of all or any portion of the Collateral, and Assignor
hereby waives presentment, demand, protest and notice of demand,
protest and non-payment of any instrument so endorsed; and
(ii) to institute one or more actions against the
Company or any shareholder thereof in connection with the collection
of the Distributions, to prosecute to judgment, settle or dismiss any
such actions, and to make any compromise or settlement deemed
desirable, in Lender's sole and absolute discretion, with respect to
such Distributions, to extend the time of payment, arrange for
payment in installments or otherwise modify the terms of the
Organizational Agreements with respect to the Distributions or
release the Company or any shareholder thereof from their respective
obligations to pay any Distribution, without incurring responsibility
to, or affecting any liability of, Assignor under the Organizational
Agreements;
it being specifically understood and agreed, however, that Lender shall not be
obligated in any manner whatsoever to give any notices of default (except as
may be specifically required herein) or to exercise any such power or authority
or be in any way responsible for the preservation, maintenance, collection of
or realizing upon the Collateral, or any portion thereof, or any of Assignor's
rights therein. The foregoing appointment is irrevocable and continuing and
any such rights, powers and privileges shall be exclusive in Lender, its
successors and assigns until this Agreement terminates as provided in Xxxxxxxxx
00, xxxxx.
(x) Notwithstanding anything herein to the contrary, Assignor hereby
authorizes and directs the Company and the directors, officers and shareholders
thereof to pay all Distributions from or relating to any sale, transfer,
assignment, conveyance, option or other disposition of, or any pledge,
mortgage, encumbrance, financing or refinancing of any of the Collateral or the
Mortgaged Property directly to Lender (regardless of whether such event is
permitted under the terms of the Loan Documents), and all such Distributions
received by Assignor shall be promptly delivered to Lender, in the same form as
received, with the addition only of such endorsements and assignments as may be
necessary to transfer title to Lender, and pending such delivery, all such
Distributions shall be held in trust for Lender. Lender shall apply any such
payments actually received by Lender in satisfaction of the Obligations in such
order as set forth in the Credit Agreement.
5. Warranties and Covenants. Assignor does hereby warrant and represent
to, and covenant and agree with, Lender as follows:
(a) All duties, obligations and responsibilities required to be
performed by Assignor as of the date hereof under the Organizational Agreements
have been performed, and no default or condition which with the passage of time
or the giving of notice, or both, would constitute a default exists under the
Organizational Agreements.
(b) A true, correct and complete copy of the Organizational
Agreements, together with all amendments thereto, is attached hereto as
Exhibit "A". The Organizational Agreements are in full force and effect.
Except for the Loan Documents and the Mortgage Loan Documents, neither the
Company nor any of its directors, officers or shareholders is a party to or is
bound by any indenture, contract or other agreement which purports to prohibit,
restrict, limit or control the transfer or pledge of the Collateral, the
exercise of voting rights with respect to the Company or the management of the
Company.
(c) Assignor is and, except in the event of a Permitted Transfer,
shall remain the sole, lawful, beneficial and record owner of the Stock
Collateral and the Distributions, free and clear of all liens, restrictions,
claims, pledges, encumbrances, charges, claims of third parties and rights of
set-off or recoupment whatsoever (other than those in favor of Lender
hereunder), and Assignor has the full and complete right, power and authority
to create a security interest in the Collateral in favor of Lender, in
accordance with the terms and provisions of this Agreement. All of the Stock
Collateral has been duly authorized and validly issued, and is fully paid and
non-assessable. Assignor is not and will not become a party to or otherwise be
bound by any agreement, other than the Loan Documents and the Mortgage Loan
Documents, which restricts in any manner the rights of any present or future
holder of any of the Stock Collateral with respect thereto.
(d) Assignor owns all of the issued and outstanding shares of the
Company, there are no other classes of stock issued with respect to the
Company, and no other Person owns any legal, equitable or beneficial interest
in the Company.
(e) Upon the delivery to Lender of the certificates representing the
Stock Collateral, this Agreement creates a valid and binding first priority
security interest in the Collateral securing the payment and performance of the
Obligations and the performance by Assignor of its obligations hereunder and by
Borrower of its obligations under the Loan Documents, and upon the filing of
UCC Financing Statements with the Secretary of State's Office of the State of
New York and the Office of the Register of the City of New York, New York
County all filings and other actions necessary to perfect and protect such
security interests shall have been duly made and taken. Neither Assignor nor
the Company have performed or will perform any acts which might prevent Lender
from enforcing any of the terms and conditions of this Agreement or which would
limit Lender in any such enforcement.
(f) All original notes and other documents or instruments
evidencing, constituting, guaranteeing or securing any of the Distributions or
any right to receive the Distributions have been endorsed to and delivered to
Lender.
(g) For the purposes of Article 9-401 of the New York Uniform
Commercial Code, the residence of Assignor is located in New York County, New
York. In order to perfect the pledge and security interests granted herein
against Assignor, U.C.C. Financing Statements must be filed with the Secretary
of State's Office of the State of New York and the Office of the Register of
the City of New York, New York County.
6. General Covenants. Assignor covenants and agrees that, so long as
this Agreement is continuing:
(a) Except for a Permitted Transfer, Assignor shall not, without the
prior written consent of Lender, which consent may be withheld by Lender in its
sole and absolute discretion, directly, indirectly or by operation of law,
sell, transfer, assign, dispose of, pledge, convey, option, mortgage,
hypothecate or encumber any of the Collateral.
(b) Assignor shall at all times defend the Collateral against all
claims and demands of all persons at any time claiming any interest in the
Collateral adverse to Lender's interest in the Collateral as granted hereunder.
(c) So long as this Agreement remains in effect, Assignor shall not
modify, amend, cancel, release, surrender, terminate or permit the
modification, amendment, cancellation, release, surrender or termination of,
the Organizational Agreements, or dissolve, liquidate or permit the
dissolution, liquidation or expiration of the Company or the Organizational
Agreements, without in each instance the prior written consent of Lender, which
consent may be withheld by Lender in its sole and absolute discretion;
provided, however, that Lender shall not unreasonably withhold its consent to
any modification or amendment of the Organizational Agreements which does not
affect or have an impact on the management of the Company, any voting rights,
the rights to receive Distributions, any provisions of the Organizational
Agreements concerning actions that the Company is either authorized to do or
that are ultra xxxxx, or otherwise materially affect the Company, the
Collateral or the rights and benefits afforded to Lender pursuant to this
Agreement, or that are required by the Rating Agency pursuant to the Mortgage
(provided that with respect to any changes that are requested by the Rating
Agency, Assignor shall execute and deliver to Lender such agreements or
amendments to the Loan Documents as Lender may reasonably require) (such
modifications or amendments described in the foregoing proviso are hereinafter
referred to as the "Minor Amendments").
(d) Assignor shall perform all of its duties, responsibilities and
obligations under the Organizational Agreements to the extent it has authority
to do so hereunder and with respect to the Collateral, and shall diligently and
in good faith protect the value of the Collateral. Except with respect to a
Permitted Transfer, Assignor shall not, without the prior written consent of
Lender, which consent may be withheld by Lender in its sole and absolute
discretion, take any action which could result in the sale, reduction,
dilution, cancellation, diminution or conversion of any interest of Assignor in
the Company, or omit to take any action necessary to prevent any such sale,
reduction, dilution, cancellation, diminution or conversion, or otherwise take
any action or omit to take any action that would or could, in the exercise of
Lender's judgment, jeopardize or diminish the security afforded to Lender by
the Collateral. Without limiting the foregoing, Assignor shall not consent to
or permit to occur the admission of any new shareholder in the Company or the
issuance of any additional shares or classes of stock or, directly or
indirectly, any other equity interest in the Company.
(e) Assignor shall pay all taxes and other charges against the
Collateral, shall not use the Collateral illegally, and shall not suffer to
exist any loss, theft, damage or destruction of the Collateral and shall suffer
to exist no levy, seizure or attachment of the Collateral.
(f) Assignor, at the request of Lender, shall take such actions as
Lender reasonably may require to enforce the terms of the Organizational
Agreements or any other contract, agreement or instrument included in, giving
rise to, creating, establishing, evidencing or relating to the Collateral or to
collect or enforce any claim for payment or other right or privilege assigned
to Lender hereunder.
(g) Assignor authorizes Lender, at the expense of Assignor, to
execute and file any financing statement or statements reasonably deemed
necessary by Lender to perfect its security interest in any of the Collateral.
Any such financing statement may be signed by Lender alone. Assignor will sign
and deliver any financing statements and other documents, and perform such
other acts as Lender reasonably may deem necessary or desirable from time to
time to establish and maintain in favor of Lender, valid and perfected security
interests in the Collateral, free of all other liens, encumbrances, security
interests and claims other than as permitted by the terms of this Agreement.
Assignor shall also furnish to Lender such evidence as it reasonably may
require to confirm the value of the Collateral, and shall do anything else
Lender may reasonably require from time to time to establish a valid security
interest in and to further protect and perfect its security interest in the
Collateral.
(h) Except for those items of the Collateral that are delivered to
Lender as provided herein, the Collateral, and all records of Assignor relative
to the Collateral, are and will be kept at the office of Assignor located in
New York County, New York. Assignor shall give Lender not fewer than thirty
(30) days prior written notice of any proposed change in the Company's name and
any proposed change in the location of the Collateral or of such records, and
Assignor will not, without the prior written consent of Lender, move the
Collateral or such records to a location outside of New York County, New York
or keep duplicate records with respect to the Collateral at any address outside
such county. Nothing contained in this subparagraph shall be construed so as
to prevent Assignor from keeping material abstracted from the books and records
described herein at any of its offices as necessity or convenience dictates.
Assignor shall permit the Lender or any representative designated by the
Lender, at Assignor's expense, to examine the books of account of Assignor (and
to make copies thereof and extracts therefrom) and to discuss the affairs,
finances and accounts of Assignor, and to be advised as to the same by, its
officers and directors, all at such reasonable times and intervals as the
Lender may reasonably request. The Lender shall use good faith efforts to
coordinate such visits and inspections so as to minimize the interference with
and disruption to Assignor's normal business operations.
(i) Without limiting any other terms of the Loan Documents
prohibiting or restricting the ability of the Company to incur Indebtedness, if
any amounts are due from the Company to Assignor and the obligations to repay
such amount is to be evidenced by a separate document or instrument, then as
evidence of such obligations, Assignor shall cause the Company to issue
Assignor, as the evidence of any obligations of the Company to pay
Distributions to Assignor in the future, a promissory note bearing the legend
attached hereto as Exhibit "B" and which note shall provide that all payments
due under such promissory note are to be paid directly to Lender as required by
and applied as provided in the Loan Documents until the Obligations are paid in
full or this Agreement is otherwise terminated as provided herein. No other
evidence of such obligations shall be executed by the Company to Assignor.
(j) Assignor shall promptly deliver to Lender any note or other
document or instrument entered into after the date hereof which evidences,
constitutes, guarantees or secures any of the Distributions or any right to
receive a Distribution, which notes or other documents and instruments shall be
accompanied by such endorsements or assignments as Lender may require to
transfer title to Lender.
(k) Assignor will provide to Lender such documents and reports
respecting the Collateral in such form and detail as Lender reasonably may
request from time to time.
(l) Anything herein to the contrary notwithstanding, (i) Assignor
shall remain liable under the Organizational Agreements and all other
contracts, agreements and instruments included in, giving rise to, creating,
establishing, evidencing or relating to the Collateral to the extent set forth
therein to perform all of its duties and obligations (including, without
limitation, the making of any contributions to the capital of the Company or
the payment of any other sum to or on behalf of the Company) to the same extent
as if this Agreement had not been executed, (ii) the exercise by Lender of any
of its rights hereunder shall not release Assignor from any of its duties or
obligations under the Organizational Agreements or any such contracts,
agreements and instruments (other than those duties or obligations first
arising after Lender or its nominee acquires title to the Collateral following
a foreclosure), and (iii) Lender shall not have any obligation or liability
under the Organizational Agreements or any such contract, agreement or
instrument by reason of this Agreement, nor shall Lender be obligated to
perform any of the obligations or duties of Assignor thereunder or to take any
action to collect or enforce any claim for payment or other right or privilege
assigned to Lender hereunder.
(m) If Assignor shall at any time be entitled to receive or shall
receive any cash, stock certificate or other property, option or right, upon,
in respect of, as an addition to, or in substitution or exchange for any of the
Collateral, whether for value paid by Assignor or otherwise, Assignor agrees
that the same shall be deemed to be Collateral and shall be delivered directly
to Lender in each case accompanied by proper instruments of assignment duly
executed by Assignor in such a form as reasonably may be required by Lender, to
be held by Lender subject to the terms hereof, as further security for the
Obligations (except as otherwise provided herein with respect to the
application of the foregoing to the Obligations). If Assignor receives any of
the foregoing directly, Assignor agrees to hold such cash or other property in
trust for the benefit of Lender, and to surrender such cash or other property
to Lender immediately.
(n) Contemporaneously with the execution of this Agreement, Assignor
has delivered to Lender resignation letters (the "Resignation Letters") from
each director and officer of the Company that provide that such director or
officer shall resign its position as a director or officer of the Company at
the option of the Lender upon the occurrence of an Event of Default. Assignor
shall cause each other director and officer of the Company that may be elected
after the date hereof to deliver to the Lender within ten (10) days of such
election a Resignation Letter satisfactory to the Lender.
7. Events of Default. An Event of Default shall exist hereunder upon
the occurrence of any of the following:
(a) Any warranty, representation or statement made by or on behalf
of Assignor in this Agreement proves untrue or misleading in any material
respect and such warranty, representation or statement is not cured within the
cure period permitted in Section 7.18 of the Credit Agreement; or
(b) Assignor shall fail to duly and fully comply with any covenant,
condition or agreement in Paragraph 6(a), 6(c), 6(d), 6(e), 6(i), 6(j) or 6(m)
of this Agreement; or
(c) Assignor shall fail to duly and fully comply with any other
covenant, condition or agreement of this Assignment (other than those specified
above in this Paragraph 7) and the same is not cured within thirty (30) days
following receipt of written notice of such default; or
(d) The occurrence of an Event of Default under any of the Loan
Documents.
Notwithstanding anything contained in Paragraph 7(b) above to the contrary,
(i) no Event of Default shall exist hereunder upon the failure of Assignor to
obtain the prior consent of the Lender to a Minor Amendment pursuant to
Paragraph 6(c) unless Assignor fails to cure such default within five (5) days
following receipt of written notice of such default, (ii) no Event of Default
shall exist hereunder upon the failure of Assignor to perform all of its
duties, responsibilities and obligations under the Organizational Agreements as
provided in Paragraph 6(d) unless Assignor fails to cure such default within
five (5) days following receipt of written notice of such default, and (iii) no
Event of Default shall exist upon the failure of Assignor to pay any taxes
against the Collateral involving individually or in the aggregate an amount not
to exceed $500,000.00 unless Assignor fails to cure such default within five
(5) days following receipt of written notice of such default (but in any event
prior to the commencement of any proceeding to foreclose any lien that may
attach as security therefor), or in the event of any levy or attachment of any
of the Collateral for a claim individually or in the aggregate of less than
$500,000.00 unless Assignor fails to cure such default within the earlier to
occur of (A) five (5) days following receipt of written notice of such default
from Lender or (B) five (5) days following the date of such levy or attachment.
8. Remedies.
(a) Upon the occurrence of any Event of Default, Lender may take any
action deemed by Lender to be necessary or appropriate to the enforcement of
the rights and remedies of Lender under this Agreement and the Loan Documents,
including, without limitation, the exercise of its rights and remedies with
respect to any or all of the Stock Collateral. The remedies of Lender shall
include, without limitation, all rights and remedies specified in the Loan
Documents and this Agreement, all remedies of Lender under applicable general
or statutory law, and the remedies of a secured party under the Uniform
Commercial Code as enacted in the State of New York, regardless of whether the
Uniform Commercial Code has been enacted or enacted in that form in any other
jurisdiction in which such right or remedy is asserted. Any notice required by
law, including, but not limited to, notice of the intended disposition of all
or any portion of the Collateral, shall be reasonably and properly given in the
manner prescribed for the giving of notice herein, and, in the case of any
notice of disposition, if given at least ten (10) calendar days prior to such
disposition. Lender may require Assignor to assemble the Collateral and make
it available to Lender at any place to be designated by Lender which is
reasonably convenient to both parties. It is expressly understood and agreed
that Lender shall be entitled to dispose of the Collateral at any public or
private sale, and that Lender shall be entitled to bid and purchase at any such
sale. In the event that Lender is the successful bidder at any public or
private sale of any note or other document or instrument evidencing Assignor's
right to receive a Distribution, Lender shall be entitled to credit the amount
bid by Lender against the obligations evidenced by such note, document or
instrument rather than the obligations evidenced by the Note. To the extent
the Collateral consist of marketable securities, Lender shall not be obligated
to sell such securities for the highest price obtainable, but shall sell them
at the market price available on the date of sale. Lender shall not be
obligated to make any sale of the Collateral if it shall determine not to do so
regardless of the fact that notice of sale of the Collateral may have been
given. Lender may, without notice or publication, adjourn any public sale from
time to time by announcement at the time and place fixed for sale, and such
sale may, without further notice, be made at the time and place to which the
same was so adjourned. Each such purchaser at any such sale shall hold the
Collateral sold absolutely free from claim or right on the part of Assignor.
In the event that any consent, approval or authorization of any governmental
agency or commission will be necessary to effectuate any such sale or sales,
Assignor shall execute all such applications or other instruments as Lender may
deem reasonably necessary to obtain such consent, approval or authorization.
Lender may notify any account debtor or obligor with respect to the Collateral
to make payment directly to Lender, and may demand, collect, receipt for,
settle, compromise, adjust, xxx for, foreclose or realize upon the Collateral
as Lender may determine whether or not the Obligations or the Collateral are
due, and for the purpose of realizing Lender's rights therein, Lender may
receive, open and dispose of mail addressed to Assignor and endorse notes,
checks, drafts, money orders, documents of title or other evidences of payment,
shipment or storage of any form of Collateral on behalf and in the name of
Assignor, as its attorney-in-fact. In addition, Assignor hereby irrevocably
designates and appoints Lender its true and lawful attorney-in-fact either in
the name of Lender or Assignor to (i) sign Assignor's name on any Collateral,
drafts against account debtors, assignments, any proof of claim in any
bankruptcy or other insolvency proceeding involving any account debtor, any
notice of lien, claim of lien or assignment or satisfaction of lien, or on any
financing statement or continuation statement under the Uniform Commercial
Code; (ii) send verifications of accounts receivable to any account debtor; and
(iii) in connection with a transfer of the Collateral as described above sign
in Assignor's name any documents necessary to transfer title to the Collateral
to Lender or any third party. All acts of said power of attorney are hereby
ratified and approved and Lender shall not be liable for any mistake of law or
fact made in connection therewith. This power of attorney is coupled with an
interest and shall be irrevocable so long as any amounts remain unpaid on any
of the Obligations. Upon the occurrence of an Event of Default, the Lender may
cause the Resignation Letters to be effective. All remedies of Lender shall be
cumulative to the full extent provided by law, all without liability except to
account for property actually received, but the Lender shall have no duty to
exercise such rights and shall not be responsible for any failure to do so or
delay in so doing. Pursuit by Lender of certain judicial or other remedies
shall not xxxxx nor bar other remedies with respect to the Obligations or to
other portions of the Collateral. Lender may exercise its rights to the
Collateral without resorting or regard to other collateral or sources of
security or reimbursement for the Obligations.
(b) If Assignor fails to perform any agreement or covenant contained
in this Agreement beyond any applicable period for notice and cure, Lender may
itself perform, or cause to be performed, any agreement or covenant of Assignor
contained in this Agreement which Assignor shall fail to perform, and the cost
of such performance, together with any expenses, including reasonable
attorneys' fees actually incurred (including attorneys' fees incurred in any
appeal) by Lender in connection therewith, shall be payable by Assignor upon
demand and shall constitute a part of the Obligations and shall bear interest
at the rate for overdue amounts as set forth in the Credit Agreement.
(c) Whether or not an Event of Default has occurred and whether or
not Lender is the absolute owner of the Collateral, Lender may take such action
as Lender may deem necessary to protect the Collateral or its security interest
therein, Lender being hereby authorized to pay, purchase, contest and
compromise any encumbrance, charge or lien which in the judgment of Lender
appears to be prior or superior to its security interest, and in exercising any
such powers and authority to pay reasonably necessary expenses, employ counsel
and pay reasonable attorney's fees. Any such advances made or expenses
incurred by Lender shall be deemed advanced under the Loan Documents, shall
increase the indebtedness evidenced and secured thereby, shall be payable upon
demand and shall bear interest at the rate for overdue payments set forth in
the Credit Agreement.
(d) Any stock or securities held by Lender as Collateral hereunder
may, at any time, and at the option of Lender, be registered in the name of
Lender or its nominee, endorsed or assigned in blank or in the name of any
nominee and Lender may deliver any or all of the Stock Collateral to the issuer
or issuers thereof for the purpose of making denominational exchanges or
registrations or transfer or for such other purposes in furtherance of this
Agreement as Lender may deem desirable. Until the occurrence of an Event of
Default, Assignor shall retain the right to vote any of the Stock Collateral,
in a manner not inconsistent with the terms of this Agreement and the other
Loan Documents, and Lender hereby grants to Assignor its proxy to enable
Assignor to so vote any of the Stock Collateral (except that Assignor shall not
have any right to exercise any such power if the exercise thereof would violate
or result in a violation of any of the terms of this Agreement or any of the
other Loan Documents). At any time after the occurrence and during the
continuance of any Event of Default, Lender or its nominee shall, without
notice or demand, automatically have the sole and exclusive right to give all
consents, waivers and ratifications in respect of the Collateral and exercise
all voting, corporate or other rights at any meeting with the shareholders of
the issuer of the Stock Collateral (and the right to call such meetings) (and
to give written consents in lieu of voting thereon), and exercise any and all
rights of conversion, exchange, subscription or any of the rights, privileges
or options pertaining to the Stock Collateral and otherwise act with respect
thereto and thereunder as if it were the absolute owner thereof (all of such
rights of the Assignor ceasing to exist and terminating upon the occurrence of
an Event of Default) including, without limitation, the right to exchange, at
its discretion, any and all of the Stock Collateral upon the merger,
consolidation, reorganization, recapitalization or the readjustment of the
issuer thereof, all without liability except to account for property actually
received and in such manner as Lender shall determine in its sole and absolute
discretion, but Lender shall have no duty to exercise any of the aforesaid
rights, privileges or options and shall not be responsible for the failure to
do so or delay in so doing. The exercise by Lender of any of its rights and
remedies under this paragraph shall not be deemed a disposition of collateral
under Article 9 of the UCC nor an acceptance by Lender of any of the Collateral
in satisfaction of the Obligations.
9. Duties of Lender. The powers conferred on Lender hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Lender's duty with reference to the
Collateral shall be solely to use slight care in the custody and preservation
of the Collateral, which shall not include any steps necessary to preserve
rights against prior parties. Lender shall have no responsibility or liability
for the collection of any Collateral or by reason of any invalidity, lack of
value or uncollectability of any of the payments received by it.
10. Indemnification.
(a) It is specifically understood and agreed that this Agreement
shall not operate to place any responsibility or obligation whatsoever upon
Lender, or cause Lender to be, or to be deemed to be, a shareholder in the
Company and that in accepting this Agreement, Lender neither assumes nor agrees
to perform at any time whatsoever any obligation or duty of Assignor relating
to the Collateral or under the Organizational Agreements or any other mortgage,
indenture, contract, agreement or instrument to which the Company is a party or
to which it is subject, all of which obligations and duties shall be and remain
with and upon Assignor (provided, however, that Assignor shall not be liable
for the performance of any liabilities or duties under the Organizational
Agreements which may result from written amendments thereof made by Lender
after the occurrence of an Event of Default).
(b) Assignor agrees to indemnify, defend and hold Lender harmless
from and against any and all claims, expenses, losses and liabilities growing
out of or resulting from this Agreement (including, without limitation,
enforcement of this Agreement) or acts taken or omitted by Lender hereunder or
in connection herewith, except claims, expenses, losses or liabilities
resulting from Lender's gross negligence or wilful misconduct.
(c) Assignor upon demand shall pay to Lender the amount of any and
all reasonable expenses, including, without limitation, the reasonable fees and
disbursements of counsel actually incurred (including those incurred in any
appeal), and of any experts and agents, which Lender may incur in connection
with (i) the administration of this Agreement, (ii) the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Lender hereunder, or (iv) the failure by
Assignor to perform or observe any of the provisions hereof beyond any
applicable period for notice and cure.
11. Security Interest Absolute. All rights of Lender, and the security
interests hereunder, and all of the obligations secured hereby, shall be
absolute and unconditional, irrespective of:
(a) Any lack of validity or enforceability of the Loan Documents or
any other agreement or instrument relating thereto;
(b) Any change in the time (including the extension of the maturity
date of the Note), manner or place of payment of, or in any other term of, all
or any of the Obligations or any other amendment or waiver of or any consent to
any departure from the Loan Documents;
(c) Any exchange, release or nonperfection of any other collateral
for the Obligations, or any release or amendment or waiver of or consent to
departure from any of the Loan Documents with respect to all or any part of the
Obligations; or
(d) Any other circumstance (other than payment of the Obligations in
full) that might otherwise constitute a defense available to, or a discharge
of, Assignor or any third party for the Obligations or any part thereof.
12. Amendments and Waivers. No amendment or waiver of any provision of
this Agreement nor consent to any departure therefrom shall in any event be
effective unless the same shall be in writing and signed by Lender, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. No delay or omission of Lender to
exercise any right, power or remedy accruing upon any Event of Default shall
exhaust or impair any such right, power or remedy or shall be construed to be a
waiver of any such Event of Default, or acquiescence therein; and every right,
power and remedy given by this Agreement to Lender may be exercised from time
to time and as often as may be deemed expedient by Lender. Failure on the part
of Lender to complain of any act or failure to act which constitutes an Event
of Default, irrespective of how long such failure continues, shall not
constitute a waiver by Lender of Lender's rights hereunder or impair any
rights, powers or remedies consequent on any Event of Default. Assignor hereby
waives to the extent permitted by law all rights which Assignor has or may have
under and by virtue of the Uniform Commercial Code as enacted in the State of
New York, and any federal, state, county or municipal statute, regulation,
ordinance, Constitution or charter, now or hereafter existing, similar in
effect thereto providing any right of Assignor to notice and to a judicial
hearing prior to seizure by Lender of any of the Collateral. Assignor hereby
waives and renounces for itself, its heirs, successors and assigns, all rights
to the benefits of any statute of limitations and any moratorium,
reinstatement, marshaling, forbearance, valuation, stay, extension, homestead,
redemption and appraisement now provided or which may hereafter be provided by
the Constitution and laws of the United States and of any state thereof, both
as to itself and in and to all of its property, real and personal, against the
enforcement of this Agreement and the collection of any of the Obligations.
13. Continuing Security Interest; Transfer of Note; Release of
Collateral. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full in immediately available funds of the Obligations, (b) be binding upon
Assignor and its permitted successors and assigns, and (c) inure, together with
the rights and remedies of Lender hereunder, to the benefit of Lender and the
Banks and their respective successors, transferees and assigns. Upon the
payment in full in immediately available funds of the Obligations, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Assignor. Upon any such termination, Lender will, at Assignor's
expense, execute and deliver to Assignor such documents as Assignor shall
reasonably request to evidence such termination.
14. Modifications, Etc. Assignor hereby consents and agrees that Lender
and the Banks may at any time and from time to time, without notice to or
further consent from Assignor, either with or without consideration, surrender
any property or other security of any kind or nature whatsoever held by it or
by any person, firm or corporation on its behalf or for its account, securing
the Obligations; substitute for any Collateral so held by it, other collateral
of like kind; agree to modification of the terms of the Loan Documents; extend
or renew the Loan Documents for any period; grant releases, compromises and
indulgences with respect to the Loan Documents for any period; grant releases,
compromises and indulgences with respect to the Loan Documents to any persons
or entities now or hereafter liable thereunder or hereunder; release any
guarantor, endorser or any other Person liable with respect to the Obligations;
or take or fail to take any action of any type whatsoever; and no such action
which Lender shall take or fail to take in connection with the Loan Documents,
or any of them, or any security for the payment of the Obligations or for the
performance of any obligations or undertakings of Assignor, nor any course of
dealing with Assignor or any other person, shall release Assignor's obligations
hereunder, affect this Agreement in any way or afford Assignor any recourse
against Lender.
15. Securities Act. In view of the position of Assignor in relation to
the Collateral, or because of other current or future circumstances, a question
may arise under the Securities Act of 1933, as amended, and all rules and
regulations issued pursuant thereto or any similar federal, state or local law,
rule, regulation or order (collectively the "Applicable Law") hereafter enacted
analogous in purpose or effect (such Act and any such similar law as from time
to time in effect being called the "Federal Securities Laws") with respect to
any disposition of the Collateral permitted hereunder. Assignor understands
that compliance with the Federal Securities Laws might very strictly limit the
course of conduct of Lender if Lender were to attempt to dispose of all or any
part of the Collateral in accordance with the terms hereof, and might also
limit the extent to which or the manner in which any subsequent transferee of
any Collateral could dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting the Lender in any attempt to dispose of
all or part of the Collateral in accordance with the terms hereof under
applicable Blue Sky or other state securities laws or similar Applicable Law
analogous in purpose or effect. Assignor recognizes that in light of the
foregoing restrictions and limitations Lender may, with respect to any sale of
the Collateral, limit the purchasers to those who will agree, among other
things, to acquire such Collateral for their own account, for investment, and
not with a view to the distribution or resale thereof. Assignor acknowledges
and agrees that in light of the foregoing restrictions and limitations, the
Lender in its sole and absolute discretion may, in accordance with Applicable
Law, (a) proceed to make such a sale whether or not a registration statement
for the purpose of registering such Collateral or part thereof shall have been
filed under the Federal Securities Laws and (b) approach and negotiate with a
single potential purchaser to effect such sale. Assignor acknowledges and
agrees that any such sale might result in prices and other terms less favorable
to the seller if such sale were a public sale without such restrictions. In
the event of any such sale, Lender shall incur no responsibility or liability
for selling all or any part of the Collateral in accordance with the terms
hereof at a price that Lender, in its sole and absolute discretion, may in good
xxxxx xxxx reasonable under the circumstances, notwithstanding the possibility
that a substantially higher price might have been realized if the sale were
deferred until after registration as aforesaid or if more than a single
purchaser were approached. The provisions of this paragraph will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Lender sells.
16. Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE OF NEW YORK.
17. Notices. Each notice, demand, election or request provided for or
permitted to be given pursuant to this Agreement shall be deemed to have been
properly given or served if given in the manner provided in the Guaranty.
18. No Unwritten Agreements. THE WRITTEN LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
19. Miscellaneous. Time is of the essence of this Agreement. Title or
captions of paragraphs hereof are for convenience only and neither limit nor
amplify the provisions hereof. If, for any circumstances whatsoever,
fulfillment of any provision of this Agreement shall involve transcending the
limit of validity presently prescribed by applicable law, the obligation to be
fulfilled shall be reduced to the limit of such validity; and if any clause or
provision herein operates or would prospectively operate to invalidate this
Agreement, in whole or in part, then such clause or provision only shall be
held for naught, as though not herein contained, and the remainder of this
Agreement shall remain operative and in full force and effect.
20. Non-Recourse Obligations. The liability and obligations of Assignor
to perform and observe the obligations contained in this Agreement shall be
subject to and limited by the terms of Section 32 of the Credit Agreement.
IN WITNESS WHEREOF, Assignor and Lender have executed this Agreement on
the date first above written.
LENDER:
THE FIRST NATIONAL BANK OF
BOSTON,
as Agent
By:/s/ Xxxx X. Xxxxxx
__________________________________________
Xxxx X. Xxxxxx, Managing Director
ASSIGNOR:
/s/ Xxxxxxx Xxxxx
__________________________________________
Xxxxxxx Xxxxx
EXHIBIT "A"
ORGANIZATIONAL AGREEMENTS
EXHIBIT "B"
PROMISSORY NOTE LEGEND
"THIS NOTE HAS BEEN PLEDGED BY XXXXXXX XXXXX ("ASSIGNOR") TO THE FIRST NATIONAL
BANK OF BOSTON, AS AGENT ("LENDER") PURSUANT TO A STOCK PLEDGE AGREEMENT DATED
AS OF APRIL ___, 1997 (THE "AGREEMENT"). ALL AMOUNTS PAYABLE TO ASSIGNOR
PURSUANT TO THIS NOTE SHALL BE PAID DIRECTLY TO LENDER AS REQUIRED BY THE
AGREEMENT."
