SECURITY AND PLEDGE AGREEMENT
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EXHIBIT 10.64
This is a Pledge Agreement made as of the 23/rd /day of August, 1999
between XXXXXX XXXXXXXXX, an individual residing at Xxx Xxxxx Xxxx, Xxxxxx,
Xxxxxxxxxxxxx ("Pledgor") and LIFELINE SYSTEMS, INC., a Massachusetts
corporation with its principal office at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxxx ("Pledgee").
1. Pledge of Collateral. Pledgor hereby grants Pledgee a security
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interest in the shares of Lifeline Systems, Inc. Common Stock ("Shares")
identified in Exhibit A, annexed hereto, which Pledgor has delivered to Pledgee,
as well as such other instruments, documents, stock certificates, money and
goods as may come into Pledgee's possession from time to time, whether through
delivery by Pledgor or otherwise (the "Collateral").
2. Obligations Secured. The security interest in the Collateral granted
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hereby secures payment and performance of all debts, loans and liabilities of
Pledgor to Pledgee arising out of a promissory note from Pledgor to Pledgee of
even date herewith in the principal amount of Three Hundred Thousand ($300,000)
Dollars (the "Note"), together with all interests, fees, charges and expenses
with respect to such debt, loan or liability (the "Obligations").
3. Pledgee's Rights and Duties with Respect to the Collateral. Pledgee's
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only duty with respect to the Collateral shall be to exercise reasonable care to
secure the safe custody thereof. Pledgee shall have the right but not the
obligation to (a) demand, xxx for, receive and collect all money or money
damages payable on account of any Collateral, (b) protect, preserve or assert
any other rights of Pledgor or take any other action with respect to the
Collateral, (c) pay any taxes, liens, assessments, insurance premiums or other
charges pertaining to Collateral. Any expenses incurred by Pledgee under the
preceding sentence shall be paid by Pledgor upon demand, become part of the
Obligations secured by the Collateral and bear interest at the rate provided in
the Note until paid. Pledgee shall be relieved of all responsibility for the
Collateral upon surrendering it to Pledgor.
4. Pledgor's Warranties and Indemnity. Pledgor represents, warrants and
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covenants (a) that he is and will be the lawful owner of the Collateral, (b)
that the Collateral is and will remain free and clear of all liens, encumbrances
and security interests other than the security interest granted by Pledgor
hereunder, and (c) that Pledgor has the sole right and lawful authority to
pledge the Collateral and otherwise to comply with the provisions hereof. In the
event that any adverse claim is asserted in respect of the Collateral or any
portion thereof, except such as may result from an act of Pledgee not authorized
hereunder, Pledgor promises and agrees to indemnify Pledgee and hold Pledgee
harmless from and against any losses, liabilities, damages,
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expenses, costs and reasonable counsel fees incurred by Pledgee in exercising
any right, power or remedy of Pledgee hereunder or defending, protecting or
enforcing the security interests created hereunder. Any such loss, liability or
expense so incurred shall be paid by Pledgor upon demand, become part of the
Obligations secured by the Collateral and bear interest at the rate provided in
the Note until paid.
5. Voting of Collateral. While Pledgor is not in default hereunder,
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Pledgor may vote shares pledged as Collateral.
6. Dividends and Other Distributions. While Pledgor is not in default
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hereunder, Pledgor may receive cash dividends and other cash distributions
payable with respect to Collateral. Pledgor shall cause all non-cash dividends
and distributions with respect to Collateral to be distributed directly to
Pledgee, to be held by Pledgee as additional Collateral, and if any such
distribution is made to Pledgor he shall receive such distribution in trust for
Pledgee and shall immediately transfer it to Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
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occurrence of any of the following events:
(a) If Pledgor is not paying his debts as they become due, becomes
insolvent, files or has filed against him a petition under any chapter of the
United States Bankruptcy Code, 11 U.S.C. (S) 101 et seq. (or any similar
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petition under any insolvency law of any jurisdiction), proposes any
liquidation, composition or financial reorganization with his creditors, makes
an assignment or trust mortgage for the benefit of creditors, or if a receiver,
trustee, custodian or similar agent is appointed or takes possession with
respect to any property or business of Pledgor;
(b) If Pledgor dies;
(c) If any lien, encumbrance or adverse claim of any nature whatsoever is
asserted with respect to any Collateral;
(d) If any warranty of Pledgor hereunder is or shall become false;
(e) If Pledgor fails to fulfill any obligation hereunder;
(f) If Pledgor fails to pay or perform any of the Obligations when such
payment of performance is due.
8. Pledgee's Rights Upon Default. Upon the occurrence of any default as
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defined in the preceding section, Pledgee may, if Pledgee so elects in its sole
option, subject at times to compliance with the securities law and regulations
of the United States:
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(a) at any time and from time to time sell, assign and deliver the whole or
any part of the Collateral at a sale through a broker in a public market where
securities of the type constituting such Collateral are usually traded, without
any advertisement, presentment, demand for performance, protest, nature of
protest, notice of dishonor or any other notice;
(b) at any time and from time to time sell, assign and deliver all or any
part of the Collateral, or any interest therein, at any other public or private
sale, for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or prices and
on such terms as Pledgee in its absolute discretion may determine, provided that
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(i) at least ten days' notice of the time and place of any such sale shall be
given to Pledgor, and (ii) in the case of any private sale, such notice shall
also contain the terms of the proposed sale and Pledgee shall sell the
Collateral proposed to be sold to any purchaser procured by Pledgor who is
ready, willing and able to purchase, and who prior to the time of such sale
tenders the purchase price of, such Collateral on terms more favorable to
Pledgee than the terms contained in such notice;
(c) exercise the right to vote, the right to receive cash dividends and
other distributions, and all other rights with respect to the Collateral as
though Pledgee were the absolute owner thereof, whether or not such rights were
retained by Pledgor as against Pledgee before default; and
(d) exercise all other rights available to a secured party under the
Uniform Commercial Code and other applicable law.
9. Application of Sale Proceeds. In the event of a sale of Collateral,
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the proceeds shall first be applied to the payment of the expenses of the sale,
including brokers' commissions, counsel fees, any taxes or other charges imposed
by law upon the Collateral or the transfer thereof and all other charges paid or
incurred by Pledgee pertaining to the sale; and, second, to satisfy outstanding
Obligations, in the order in which Pledgee elects in its sole discretion; and,
third, the surplus (if any) shall be paid to Pledgor.
10. Notices. All notices made or required to be made hereunder shall be
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sent by United States first class or certified or registered mail, with postage
prepaid, or delivered by hand to Pledgee or to Pledgor at the addresses first
above written. Notice by mail shall be deemed to have been made on the date
when the notice is deposited in the mail.
11. Heirs, Successors, Etc.. This Pledge Agreement and all of its terms
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and provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto. If
this Pledge Agreement is executed by more than one Pledgor, then (a)
"Obligations" shall include the Obligations of either
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or both of the Pledgors, (b) Pledgors shall be in default if any of the events
described in Section 7 above takes place with respect to either Pledgor, (c) any
notice required of Pledgee shall be given to both Pledgors and (d) all Pledgors'
covenants, warranties and representations hereunder shall be joint and several.
12. Pledgee's Forbearance. Any forbearance, failure or delay by Pledgee in
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exercising any right, power or remedy hereunder shall not be deemed a waiver of
such right, power or remedy. Any single or partial exercise of any right, power
or remedy of Pledgee shall continue in full force and effect until such right,
power or remedy is specifically waived in writing by Pledgee.
EXECUTED under seal at Framingham, Massachusetts, as of the date first
above written.
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
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Exhibit A to Security and Pledge Agreement
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16,552 Shares of Lifeline Systems, Inc. Common Stock
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