Exhibit 10.4
STOCK PLEDGE AGREEMENT
SOS STAFFING SERVICES, INC.
TO
STATE STREET BANK AND TRUST COMPANY,
AS COLLATERAL AGENT
DATED AS OF JULY 30, 2001
TABLE OF CONTENTS
1. PLEDGE OF STOCK, ETC..................................................3
1.1. PLEDGE OF STOCK............................................3
1.2. ADDITIONAL STOCK...........................................3
1.3. PLEDGE OF CASH COLLATERAL ACCOUNT..........................3
2. DEFINITIONS...........................................................3
3. SECURITY FOR OBLIGATIONS..............................................4
4. LIQUIDATION, RECAPITALIZATION, ETC....................................4
4.1. DISTRIBUTIONS PAID TO COLLATERAL AGENT.....................4
4.2. CASH COLLATERAL ACCOUNT....................................5
4.3. COMPANY'S RIGHTS TO CASH COLLATERAL, ETC...................5
5. WARRANTY OF TITLE; AUTHORITY..........................................6
6. DIVIDENDS, VOTING, ETC., PRIOR TO MATURITY............................6
7. REMEDIES..............................................................6
7.1. IN GENERAL.................................................7
7.2. SALE OF STOCK COLLATERAL...................................8
7.3. REGISTRATION OF STOCK......................................8
7.4. PRIVATE SALES..............................................9
7.5. COMPANY'S AGREEMENTS, ETC..................................10
8. MARSHALLING...........................................................10
9. COMPANY'S OBLIGATIONS NOT AFFECTED....................................11
10. TRANSFER, ETC., BY COMPANY...........................................11
11. FURTHER ASSURANCES...................................................11
12. COLLATERAL AGENT'S EXONERATION.......................................11
13. NO WAIVER, ETC.......................................................12
14. NOTICE, ETC..........................................................12
15. TERMINATION..........................................................12
16. OVERDUE AMOUNTS......................................................12
17. GOVERNING LAW; CONSENT TO JURISDICTION...............................12
18. WAIVER OF JURY TRIAL.................................................13
19. MISCELLANEOUS........................................................13
STOCK PLEDGE AGREEMENT
This STOCK PLEDGE AGREEMENT (as may be amended, restated, supplemented or
otherwise modified from time to time, this "AGREEMENT") is made as of July 30,
2001, by and between SOS STAFFING SERVICES, INC., a Utah corporation (together
with its successors and assigns, the "COMPANY"), and STATE STREET BANK AND TRUST
COMPANY, as collateral agent (in such capacity, together with its successors and
assigns acting in such capacity pursuant to the Intercreditor Agreement (defined
below), the "COLLATERAL AGENT") for the benefit of (a) XXXXX FARGO BANK,
NATIONAL ASSOCIATION ("XXXXX FARGO"), as administration agent under the Bank
Credit Agreement (defined below) (in such capacity, together with its successors
and assigns in such capacity, the "BANK AGENT"), (b) the financial institutions
which from time to time are a party to the Bank Credit Agreement as lenders
thereunder (including Xxxxx Fargo as a lender under the Bank Credit Agreement,
together with the successors and assigns of all such parties, the "BANKS") and
(c) each of XXXXXXX NATIONAL LIFE INSURANCE COMPANY, GREAT WEST LIFE & ANNUITY
INSURANCE COMPANY, FARM BUREAU LIFE INSURANCE COMPANY OF MICHIGAN, FARM BUREAU
MUTUAL INSURANCE COMPANY OF MICHIGAN, THE CANADA LIFE ASSURANCE COMPANY, CANADA
LIFE INSURANCE COMPANY OF AMERICA, and CANADA LIFE INSURANCE COMPANY OF NEW YORK
(collectively, together with their successors and assigns, and future holders
from time to time of the Notes (defined below), the "NOTEHOLDERS" and,
collectively with the Banks, the "SECURED PARTIES"). All capitalized terms used
herein have the respective meanings ascribed thereto in the Recitals and in
Section 2.
R E C I T A L S
WHEREAS, the Company, the Bank Agent and the Banks have entered into the
Amended and Restated Credit Agreement, dated as of July 27, 1998, among the
Company and the Banks (as amended and as further amended, restated, refinanced,
supplemented or otherwise modified from time to time, the "BANK CREDIT
AGREEMENT");
WHEREAS, pursuant to those separate Note Purchase Agreements, each dated as
of September 1, 1998 (as amended and as further amended, restated, refinanced,
supplemented or otherwise modified from time to time, the "NOTE PURCHASE
AGREEMENTS"), the Company issued to the "Purchasers" (as defined therein)
$5,000,000 of its Senior Notes, Series A, due September 1, 2003 and $30,000,000
of its Senior Notes, Series B, due September 1, 2008 (collectively, as amended
and as further amended, restated, refinanced or otherwise modified from time to
time, the "NOTES");
WHEREAS, all obligations of the Company under the Bank Credit Agreement and
all obligations of the Company under the Notes and the Note Purchase Agreements
have been guaranteed by certain Subsidiaries and may be guaranteed from time to
time by certain other Subsidiaries as provided in the Financing Agreements (such
guarantors referred to as the "GUARANTORS" and such guaranties referred to as
the "GUARANTIES");
WHEREAS, pursuant to that certain Intercreditor Agreement, dated as of the
date hereof, among the Bank Agent, the Noteholders, and the Collateral Agent,
and acknowledged and agreed to by the Company and its Subsidiaries (as amended,
restated, supplemented or otherwise modified from time to time, the
"INTERCREDITOR AGREEMENT"), the Secured Parties appointed the Collateral Agent
to act on behalf of all Secured Parties regarding the Stock Collateral and
certain other matters, all as more fully provided therein, and, among other
things, further defined the rights, duties, authority and responsibilities of
the Collateral Agent and the relationship among the Secured Parties regarding
their PARI PASSU interests in the Stock Collateral (as hereinafter defined);
WHEREAS, pursuant to that Security Agreement, dated as of the date hereof,
among the Obligors and the Collateral Agent (as amended, restated, supplemented
or otherwise modified from time to time, the "SECURITY AGREEMENT"), the Obligors
granted security interests in favor of the Collateral Agent, for the benefit of
the Secured Parties, all as more fully provided therein;
WHEREAS, the Company is the direct legal and beneficial owner of all of the
issued and outstanding shares of each class of the capital stock of each of the
corporations described on ANNEX A (the "SUBSIDIARIES");
WHEREAS, it is a condition under the Bank Credit Agreement and the Note
Purchase Agreements and certain of the other Financing Agreements that the
Company execute and deliver to the Collateral Agent this Agreement; and
WHEREAS, the Company wishes to grant pledges and security interests in
favor of the Collateral Agent as herein provided;
NOW, THEREFORE, in consideration of the premises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. PLEDGE OF STOCK, ETC.
1.1. PLEDGE OF STOCK. The Company hereby pledges, assigns, grants
a security interest in, and delivers to the Collateral Agent all of
the shares of capital stock of the Subsidiaries of every class, as
more fully described on ANNEX A hereto, to be held by the Collateral
Agent subject to the terms and conditions hereinafter set forth. The
certificates for such shares, accompanied by stock powers or other
appropriate instruments of assignment thereof duly executed in blank
by the Company, have been delivered to the Collateral Agent.
1.2. ADDITIONAL STOCK. In case the Company shall acquire any
additional shares of the capital stock of any Subsidiary or
corporation which is the successor of any Subsidiary, or any
securities exchangeable for or convertible into shares of such capital
stock of any class of any Subsidiary, by purchase, stock dividend,
stock split or otherwise, then such shares or other securities shall
be subject to the pledge, assignment and security interest granted to
the Collateral Agent under this Agreement and the Company shall
deliver to the Collateral Agent forthwith any certificates therefor,
accompanied by stock powers or other appropriate instruments of
assignment duly executed in blank by the Company. The Company agrees
that the Collateral Agent may from time to time attach as ANNEX A
hereto an updated list of the shares of capital stock or securities at
the time pledged with the Collateral Agent hereunder.
1.3. PLEDGE OF CASH COLLATERAL ACCOUNT. The Company also hereby
pledges, assigns, grants a security interest in, and delivers to the
Collateral Agent the Cash Collateral Account and all of the Cash
Collateral as such terms are hereinafter defined.
2. DEFINITIONS. The term "Obligations", as used herein, means all of the
indebtedness, obligations and liabilities of the Company and the Guarantors to
the Banks and the Noteholders, individually or collectively, whether direct or
indirect, joint or several, absolute or contingent, due or to become due, now
existing or hereafter arising under or in respect of the Bank Credit Agreement,
the Notes, the Note Purchase Agreements and the Guaranties, any promissory notes
or other instruments or agreements executed and delivered pursuant to any of the
foregoing or in connection therewith or this Agreement. All other capitalized
terms used herein without definition shall have the respective meanings provided
therefor in the Intercreditor Agreement. Terms used herein and not defined in
the Intercreditor Agreement or otherwise defined herein that are defined in the
Uniform Commercial Code as in effect in the State of New York (the "CODE") have
such defined meanings herein (with terms used in Article 9 controlling over
terms used in another Article), unless the context otherwise indicated or
requires, and the following terms shall have the following meanings:
CASH COLLATERAL. See ss.4.
CASH COLLATERAL ACCOUNT. See ss.4.
SECURITIES ACT. See ss.7.3.
STOCK. Includes the shares of stock described in ANNEX A attached hereto
and any additional shares of stock at the time pledged with the Collateral Agent
hereunder.
STOCK COLLATERAL. The property at any time pledged to the Collateral Agent
hereunder (whether described herein or not) and all income therefrom, increases
therein and proceeds thereof, including without limitation that included in Cash
Collateral. The term does not include any income, increases or proceeds received
by the Company to the extent expressly permitted by ss.6.
TIME DEPOSITS. See ss.4.
3. SECURITY FOR OBLIGATIONS. This Agreement and the security interest in
and pledge of the Stock Collateral hereunder are made with and granted to the
Collateral Agent as security for the payment and performance in full of all the
Obligations.
4. LIQUIDATION, RECAPITALIZATION, ETC.
4.1. DISTRIBUTIONS PAID TO COLLATERAL AGENT. Any sums or other
property paid or distributed upon or with respect to any of the Stock,
whether by dividend or redemption or upon the liquidation or
dissolution of the issuer thereof or otherwise, shall, except to the
limited extent provided in ss.6, be paid over and delivered to the
Collateral Agent to be held by the Collateral Agent as security for
the payment and performance in full of all of the Obligations. In
case, pursuant to the recapitalization or reclassification of the
capital of the issuer thereof or pursuant to the reorganization
thereof, any distribution of capital shall be made on or in respect of
any of the Stock or any property shall be distributed upon or with
respect to any of the Stock, the property so distributed shall be
delivered to the Collateral Agent to be held by it as security for the
Obligations. Except to the limited extent provided in ss.6, all sums
of money and property paid or distributed in respect of the Stock,
whether as a dividend or upon such a liquidation, dissolution,
recapitalization or reclassification or otherwise, that are received
by the Company shall, until paid or delivered to the Collateral Agent,
be held in trust for the Collateral Agent as security for the payment
and performance in full of all of the Obligations.
4.2. CASH COLLATERAL ACCOUNT. All sums of money that are
delivered to the Collateral Agent pursuant to this ss.4 shall be
deposited into an interest bearing account with the Collateral Agent
or, if the Collateral Agent is not the depositary bank, to an interest
bearing account in the name of the Collateral Agent as customer with a
depositary bank satisfactory to the Collateral Agent (any such
account, whether maintained with the Collateral Agent or in the
Collateral Agent's name as customer being herein referred to as the
"CASH COLLATERAL ACCOUNT"). Some or all of the funds from time to time
in the Cash Collateral Account may be invested in time deposits,
including, without limitation, certificates of deposit issued by the
Collateral Agent (such certificates of deposit or other time deposits
being hereinafter referred to, collectively, as "TIME DEPOSITS"), that
are satisfactory to the Collateral Agent after consultation with the
Company, PROVIDED, that, in each such case, arrangements satisfactory
to the Collateral Agent are made and are in place to perfect and to
ensure the first priority of the Collateral Agent's security interest
therein. Interest earned on the Cash Collateral Account and on the
Time Deposits, and the principal of the Time Deposits at maturity that
is not invested in new Time Deposits, shall be deposited in the Cash
Collateral Account. The Cash Collateral Account, all sums from time to
time standing to the credit of the Cash Collateral Account, any and
all Time Deposits, any and all instruments or other writings
evidencing Time Deposits and any and all proceeds or any thereof are
hereinafter referred to as the "Cash Collateral."
4.3. COMPANY'S RIGHTS TO CASH COLLATERAL, ETC. Except as
otherwise expressly provided in ss.15, the Company shall have no right
to withdraw sums from the Cash Collateral Account, to receive any of
the Cash Collateral or to require the Collateral Agent to part with
the Collateral Agent's possession of any instruments or other writings
evidencing any Time Deposits.
5. WARRANTY OF TITLE; AUTHORITY. The Company hereby represents and warrants
that: (a) the Company has good and marketable title to, and is the sole record
and beneficial owner of, the Stock described in ss.1, subject to no pledges,
liens, security interests, charges, options, restrictions or other encumbrances
except the pledge and security interest created by this Agreement, (b) all of
the Stock described in ss.1 is validly issued, fully paid and non-assessable,
(c) the Company has full power, authority and legal right to execute, deliver
and perform its obligations under this Agreement and to pledge and grant a
security interest in all of the Stock Collateral pursuant to this Agreement, and
the execution, delivery and performance hereof and the pledge of and granting of
a security interest in the Stock Collateral hereunder have been duly authorized
by all necessary corporate or other action and do not contravene any law, rule
or regulation or any provision of the Company's charter documents or by-laws or
of any judgment, decree or order of any tribunal or of any agreement or
instrument to which the Company is a party or by which it or any of its property
is bound or affected or constitute a default thereunder, and (d) the information
set forth in ANNEX A hereto relating to the Stock is true, correct and complete
in all respects. The Company covenants that it will defend the rights of the
Collateral Agent and security interest of the Collateral Agent in such Stock
against the claims and demands of all other persons whomsoever. The Company
further covenants that it will have the like title to and right to pledge and
grant a security interest in the Stock Collateral hereafter pledged or in which
a security interest is granted to the Collateral Agent hereunder and will
likewise defend the rights, pledge and security interest thereof and therein of
the Collateral Agent.
6. DIVIDENDS, VOTING, ETC., PRIOR TO MATURITY. So long as no Default or
Event of Default shall have occurred and be continuing, the Company shall be
entitled to receive all cash dividends paid in respect of the Stock, to vote the
Stock and to give consents, waivers and ratifications in respect of the Stock;
PROVIDED, HOWEVER, that no vote shall be cast or consent, waiver or ratification
given by the Company if the effect thereof would impair any of the Stock
Collateral or be inconsistent with or result in any violation of any of the
provisions of the Financing Agreements. All such rights of the Company to
receive cash dividends shall cease in case a Default or an Event of Default
shall have occurred and be continuing. All such rights of the Company to vote
and give consents, waivers and ratifications with respect to the Stock shall, at
the Collateral Agent's option, as evidenced by the Collateral Agent's notifying
the Company of such election, cease in case a Default or an Event of Default
shall have occurred and be continuing.
7. REMEDIES.
7.1. IN GENERAL. If a Default or an Event of Default shall have
occurred and be continuing, the Collateral Agent shall thereafter have
the following rights and remedies (to the extent permitted by
applicable law) in addition to the rights and remedies of a secured
party under the Code, all such rights and remedies being cumulative,
not exclusive, and enforceable alternatively, successively or
concurrently, at such time or times as the Collateral Agent deems
expedient:
(a) if the Collateral Agent so elects and gives notice of
such election to the Company, the Collateral Agent may vote any
or all shares of the Stock (whether or not the same shall have
been transferred into its name or the name of its nominee or
nominees) for any lawful purpose, including, without limitation,
if the Collateral Agent so elects, for the liquidation of the
assets of the issuer thereof, and give all consents, waivers and
ratifications in respect of the Stock and otherwise act with
respect thereto as though it were the outright owner thereof (the
Company hereby irrevocably constituting and appointing the
Collateral Agent the proxy and attorney-in-fact of the Company,
with full power of substitution, to do so);
(b) the Collateral Agent may demand, xxx for, collect or
make any compromise or settlement the Collateral Agent deems
suitable in respect of any Stock Collateral;
(c) the Collateral Agent may sell, resell, assign and
deliver, or otherwise dispose of any or all of the Stock
Collateral, for cash or credit or both and upon such terms at
such place or places, at such time or times and to such entities
or other persons as the Collateral Agent thinks expedient, all
without demand for performance by the Company or any notice or
advertisement whatsoever except as expressly provided herein or
as may otherwise be required by law;
(d) the Collateral Agent may cause all or any part of the
Stock held by it to be transferred into its name or the name of
its nominee or nominees; and
(e) the Collateral Agent may set off or otherwise apply or
credit against the Obligations any and all sums deposited with it
or held by it, including without limitation, any sums standing to
the credit of the Cash Collateral Account and any Time Deposits
issued by the Collateral Agent.
7.2. SALE OF STOCK COLLATERAL. In the event of any sale or other
disposition of the Stock Collateral as provided in clause (c) of
ss.7.1 and to the extent that any notice thereof is required to be
given by law, the Collateral Agent shall give to the Company at least
five (5) Business Days' prior authenticated notice of the time and
place of any public sale or other disposition of the Stock Collateral
or of the time after which any private sale or any other intended
disposition is to be made. The Company hereby acknowledges that five
(5) Business Days' prior authenticated notice of such sale or other
disposition or sales or other dispositions shall be reasonable notice.
The Collateral Agent may enforce its rights hereunder without any
other notice and without compliance with any other condition precedent
now or hereunder imposed by statute, rule of law or otherwise (all of
which are hereby expressly waived by the Company, to the fullest
extent permitted by law). The Collateral Agent may buy or otherwise
acquire any part or all of the Stock Collateral at any public sale or
other disposition and if any part or all of the Stock Collateral is of
a type customarily sold or otherwise disposed of in a recognized
market or is of the type which is the subject of widely-distributed
standard price quotations, the Collateral Agent may buy or otherwise
acquire at private sale or other disposition and may make payments
thereof by any means. The Collateral Agent may apply the cash proceeds
actually received from any sale or other disposition to the reasonable
expenses of retaking, holding, preparing for sale, selling and the
like, to reasonable attorneys' fees, travel and all other expenses
which may be incurred by the Collateral Agent in attempting to collect
the Obligations or to enforce this Agreement or in the prosecution or
defense of any action or proceeding related to the subject matter of
this Agreement, and then to the Obligations in such order or
preference as is provided in the Intercreditor Agreement. Only after
such applications, and after payment by the Collateral Agent of any
amount required by ss.9-608(a)(1)(C) or ss.9-615(a)(3) of the Code,
need the Collateral Agent account to the Company for any surplus.
7.3. REGISTRATION OF STOCK. If the Collateral Agent shall
determine to exercise its right to sell or otherwise dispose of any or
all of the Stock pursuant to this ss.7, and if in the opinion of
counsel for the Collateral Agent it is necessary, or if in the
reasonable opinion of the Collateral Agent it is advisable, to have
the Stock, or that portion thereof to be sold, registered under the
provisions of the Securities Act of 1933, as amended (the "SECURITIES
ACT"), the Company agrees to use its best efforts to cause the issuer
or issuers of the Stock contemplated to be sold, to execute and
deliver, and cause the directors and officers of such issuer to
execute and deliver, all at the Company's expense, all such
instruments and documents, and to do or cause to be done all such
other acts and things as may be necessary or, in the reasonable
opinion of the Collateral Agent, advisable to register such Stock
under the provisions of the Securities Act and to cause the
registration statement relating thereto to become effective and to
remain effective for a period of 9 months from the date such
registration statement became effective, and to make all amendments
thereto or to the related prospectus or both that, in the reasonable
opinion of the Collateral Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules
and regulations of the Securities and Exchange Commission applicable
thereto. The Company agrees to use its best efforts to cause such
issuer or issuers to comply with the provisions of the securities or
"Blue Sky" laws of any jurisdiction which the Collateral Agent shall
designate and to cause such issuer or issuers to make available to its
security holders, as soon as practicable, an earnings statement which
will satisfy the provisions of Section 11(a) of the Securities Act.
7.4. PRIVATE SALES. The Company recognizes that the Collateral
Agent may be unable to effect a public sale or other disposition of
the Stock by reason of certain prohibitions contained in the
Securities Act, federal banking laws, and other applicable laws, but
may be compelled to resort to one or more private sales thereof to a
restricted group of purchasers. The Company agrees that any such
private sales may be at prices and other terms less favorable to the
seller than if sold at public sales and that such private sales shall
not by reason thereof be deemed not to have been made in a
commercially reasonable manner. The Collateral Agent shall be under no
obligation to delay a sale of any of the Stock for the period of time
necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act, or such other
federal banking or other applicable laws, even if the issuer would
agree to do so. Subject to the foregoing, the Collateral Agent agrees
that any sale of the Stock shall be made in a commercially reasonable
manner, and the Company agrees to use its best efforts to cause the
issuer or issuers of the Stock contemplated to be sold, to execute and
deliver, and cause the directors and officers of such issuer to
execute and deliver, all at the Company's expense, all such
instruments and documents, and to do or cause to be done all such
other acts and things as may be necessary or, in the reasonable
opinion of the Collateral Agent, advisable to exempt such Stock from
registration under the provisions of the Securities Act, and to make
all amendments to such instruments and documents which, in the opinion
of the Collateral Agent, are necessary or advisable, all in conformity
with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable
thereto. The Company further agrees to use its best efforts to cause
such issuer or issuers to comply with the provisions of the securities
or "Blue Sky" laws of any jurisdiction which the Collateral Agent
shall designate and, if required, to cause such issuer or issuers to
make available to its security holders, as soon as practicable, an
earnings statement (which need not be audited) which will satisfy the
provisions of Section 11(a) of the Securities Act.
7.5. COMPANY'S AGREEMENTS, ETC. The Company further agrees to do
or cause to be done all such other acts and things as may be
reasonably necessary to make any sales of any portion or all of the
Stock pursuant to this ss.7 valid and binding and in compliance with
any and all applicable laws (including, without limitation, the
Securities Act, the Securities Exchange Act of 1934, as amended, the
rules and regulations of the Securities and Exchange Commission
applicable thereto and all applicable state securities or "Blue Sky"
laws), regulations, orders, writs, injunctions, decrees or awards of
any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sale or sales,
all at the Company's expense. The Company further agrees that a breach
of any of the covenants contained in this ss.7 will cause irreparable
injury to the Collateral Agent, that the Collateral Agent has no
adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this
ss.7 shall be specifically enforceable against the Company by the
Collateral Agent and the Company hereby waives and agrees not to
assert any defenses against an action for specific performance of such
covenants.
8. MARSHALLING. The Collateral Agent shall not be required to marshal any
present or future security for (including but not limited to this Agreement and
the Stock Collateral), or other assurances of payment of, the Obligations or any
of them, or to resort to such security or other assurances of payment in any
particular order. All of the Collateral Agent's rights hereunder and in respect
of such security and other assurances of payment shall be cumulative and in
addition to all other rights, however existing or arising. To the extent that it
lawfully may, the Company hereby agrees that it will not invoke any law relating
to the marshalling of collateral that might cause delay in or impede the
enforcement of the Collateral Agent's rights under this Agreement or under any
other instrument evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and to the extent that it lawfully may the
Company hereby irrevocably waives the benefits of all such laws.
9. COMPANY'S OBLIGATIONS NOT AFFECTED. The obligations of the Company
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by (a) any exercise or nonexercise, or any waiver, by the Collateral
Agent of any right, remedy, power or privilege under or in respect of any of the
Obligations or any security thereof (including this Agreement); (b) any
amendment to or modification of the Bank Credit AGREEMENT, the Notes and the
Note Purchase Agreements; (c) any amendment to or modification of any of the
other Financing Agreements; or (d) the taking of additional security for, or any
other assurances of payment of, any of the Obligations or the release or
discharge or termination of any security or other assurances of payment or
performance for any of the Obligations; whether or not the Company shall have
notice or knowledge of any of the foregoing, the Company hereby generally
waiving all suretyship defenses to the extent applicable.
10. TRANSFER, ETC., BY COMPANY. Without the prior written consent of the
Collateral Agent, the Company will not sell, assign, transfer or otherwise
dispose of, grant any option with respect to, or pledge or grant any security
interest in or otherwise encumber or restrict any of the Stock Collateral or any
interest therein, except for the pledge thereof and security interest therein
provided for in this Agreement.
11. FURTHER ASSURANCES. The Company will do all such acts, and will furnish
to the Collateral Agent all such financing statements, certificates, legal
opinions and other documents and will obtain all such governmental consents and
corporate approvals and will do or cause to be done all such other things as the
Collateral Agent may reasonably request from time to time in order to give full
effect to this Agreement and to secure the rights of the Collateral Agent
hereunder, all without any cost or expense to the Collateral Agent. The Company
hereby irrevocably authorizes the Collateral Agent at any time and from time to
time to file in any filing office in any Uniform Commercial Code jurisdiction
any initial financing statements and amendments thereto that (a) indicate the
Collateral as the Stock Collateral or words of similar effect, or as being of
equal or lesser scope or in greater detail, and (b) contain any other
information required by part 5 of Article 9 of the Uniform Commercial Code of
the jurisdiction of the filing office for the sufficiency or filing office
acceptance of any financing statement or amendment, including whether the
Company is an organization, the type of organization and any organization
identification number issued to the Company. The Company agrees to furnish any
such information to the Collateral Agent promptly upon request.
12. COLLATERAL AGENT'S EXONERATION. Under no circumstances shall the
Collateral Agent be deemed to assume any responsibility for or obligation or
duty with respect to any part or all of the Stock Collateral of any nature or
kind or any matter or proceedings arising out of or relating thereto, other than
(a) to exercise reasonable care in the physical custody of the Stock Collateral
and (b) after a Default or an Event of Default shall have occurred and be
continuing to act in a commercially reasonable manner. The Collateral Agent
shall not be required to take any action of any kind to collect, preserve or
protect its or the Company's rights in the Stock Collateral or against other
parties thereto. The Collateral Agent's prior recourse to any part or all of the
Stock Collateral shall not constitute a condition of any demand, suit or
proceeding for payment or collection of any of the Obligations.
13. NO WAIVER, ETC. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a written instrument
expressly referring to this Agreement and to the provisions so modified or
limited, and executed by the Collateral Agent and the Company. No act, failure
or delay by the Collateral Agent shall constitute a waiver of its rights and
remedies hereunder or otherwise. No single or partial waiver by the Collateral
Agent of any default or right or remedy that it may have shall operate as a
waiver of any other default, right or remedy or of the same default, right or
remedy on a future occasion. The Company hereby waives presentment, notice of
dishonor and protest of all instruments, included in or evidencing any of the
Obligations or the Stock Collateral, and any and all other notices and demands
whatsoever (except as expressly provided herein or in the Credit Agreement).
14. NOTICE, ETC. All notices, requests and other communications hereunder
shall be made in the manner set forth in the Intercreditor Agreement.
15. TERMINATION. Upon final payment and performance in full of the
Obligations, this Agreement shall terminate and the Collateral Agent shall, at
the Company's request and expense, return such Stock Collateral in the
possession or control of the Collateral Agent as has not theretofore been
disposed of pursuant to the provisions hereof, together with any moneys and
other property at the time held by the Collateral Agent hereunder.
16. OVERDUE AMOUNTS. Upon notice and a failure to pay within three (3)
Business Days after such notice, and until paid, all amounts due and payable by
the Company hereunder shall be a debt secured by the Stock Collateral and shall
bear, whether before or after judgment, interest at the Default Rate.
17. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT IS INTENDED TO
TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Company agrees that any
suit for the enforcement of this Agreement may be brought in the courts of the
State of New York or any federal court sitting therein and consents to the
non-exclusive jurisdiction of such court and to service of process in any such
suit being made upon the Company by mail at the address specified below its name
on the signature page hereto. The Company hereby waives any objection that it
may now or hereafter have to the venue of any such suit or any such court or
that such suit is brought in an inconvenient court.
18. WAIVER OF JURY TRIAL. THE COMPANY WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY
SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the Company waives any
right which it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Company (a)
certifies that neither the Collateral Agent nor any representative, agent or
attorney of the Collateral Agent has represented, expressly or otherwise, that
the Collateral Agent would not, in the event of litigation, seek to enforce the
foregoing waivers and (b) acknowledges that, in entering into the Financing
Agreements, the Collateral Agent is relying upon, among other things, the
waivers and certifications contained in this ss.18.
19. MISCELLANEOUS. The headings of each section of this Agreement are for
convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
Company and its respective successors and assigns, and shall inure to the
benefit of the Collateral Agent and its respective successors and assigns. If
any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall be in no way
affected thereby, and this Agreement shall be construed and be enforceable as if
such invalid, illegal or unenforceable term had not been included herein. The
Company acknowledges receipt of a copy of this Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the Company and the
Collateral Agent have caused this Agreement to be executed as of the date first
above written.
SOS STAFFING SERVICES, INC.
By: /s/ XxXxx X. Xxxxxx
----------------------------------
Name: XxXxx X. Xxxxxx
Title: Chairman, President and
Chief Executive Officer
STATE STREET BANK AND TRUST COMPANY,
AS COLLATERAL AGENT
By:
---------------------------------
Name:
Title:
The undersigned Subsidiaries hereby join in the above Agreement for the
sole purpose of consenting to and being bound by the provisions of ss.ss.4.1, 6
and 7 thereof, the undersigned hereby agreeing to cooperate fully and in good
faith with the Collateral Agent and the Company in carrying out such provisions.
INTELIANT CORPORATION
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
SERVCOM STAFF MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
SOS COLLECTION SERVICES, INC.
By: /s/ Xxxx Xxxxxxxx
----------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
DEVON & DEVON PERSONNEL SERVICES, INC.
By: /s/ XxXxx X. Xxxxxx
----------------------------------
Name: XxXxx X. Xxxxxx
Title: President
ANNEX A TO PLEDGE AGREEMENT
None of the issuers has any authorized, issued or outstanding shares of its
capital stock of any class or any commitments to issue any shares of its capital
stock of any class or any securities convertible into or exchangeable for any
shares of its capital stock of any class except as otherwise stated in this
ANNEX A.
------------------ ---------------- ----------- -------------- -------------- -------------- --------------
Number of Number of Number of Par or
Record Class of Authorized Issued Outstanding Liquidation
ISSUER OWNER SHARES SHARES SHARES SHARES VALUE
------------------ ---------------- ----------- -------------- -------------- -------------- --------------
Inteliant SOS Staffing Common 50,000,000 30,000,000 30,000,000 $0.001/share
Corporation (DE) Services, Inc. Shares Par Value
------------------ ---------------- ----------- -------------- -------------- -------------- --------------
Inteliant SOS Staffing Preferred 10,000,000 None None $0.01/share
Corporation (DE) Services, Inc. Shares Par Value
------------------ ---------------- ----------- -------------- -------------- -------------- --------------
ServCom Staff SOS Staffing Common 10,000 1,000 1,000 $0.01/share
Management, Inc. Services, Inc. Shares Par Value
(UT)
------------------ ---------------- ----------- -------------- -------------- -------------- --------------
SOS Collection SOS Staffing Common 10,000 1,000 1,000 No Par Value
Services, Services, Inc. Shares
Inc.(AZ)
------------------ ---------------- ----------- -------------- -------------- -------------- --------------
Devon & Devon SOS Staffing Common 25,000 2,153 2,153 No Par Value
Personnel Services, Inc. Shares
Services, Inc.
(CA)
------------------ ---------------- ----------- -------------- -------------- -------------- --------------
