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Exhibit 10.117.2
STOCK PLEDGE AGREEMENT
By this Stock Pledge Agreement (this "Agreement"), dated as of April
21, 1997, ELK XXXXXXX INVESTMENTS, L.L.C., and BRITWILL INVESTMENTS COMPANY,
LTD. (collectively, "Lender"), and UNISON HEALTHCARE CORPORATION ("Borrower")
agree as follows:
RECITALS
A. Pursuant to a Promissory Note (the "Note"), of even date herewith
executed by Borrower for the benefit of Lender, Lender is lending $2,950,000 to
Borrower.
B. As security for the performance of Borrower's Obligations, Borrower has
agreed to pledge to Lender and to grant to Lender a security interest in the
Collateral.
AGREEMENT
Section 1. Definitions. As used herein, the terms listed in this Section
shall have the following meanings:
"Borrower" has the meaning set forth in the introductory paragraph
above.
"Common Stock" means the common stock of the Subsidiaries owned by
Pledgor.
"Collateral" means collectively the following shares of Common
Stock, which constitute 100% of the issued and outstanding Common Stock of each
of the following Subsidiaries, except as otherwise indicated, all of which is
owned by Borrower: _____ shares of Quest Pharmacies, Inc., which constitutes 75%
of the issued and outstanding Common Stock of such corporation; _____ shares of
Safford Care, Inc.; _____ shares of Rehab West, Inc., conducting business in
Arizona as Therapy West, Inc.; _____ shares of Cornerstone Care, Inc.; _____
shares of Arkansas, Inc.; _____ shares of Xxxxxxx Xxxxx, Inc.; _____ shares of
Memphis Clinical Laboratory, Inc.; _____ shares of Sunbelt Therapy Management
Services, Inc., an Arizona corporation (the holding company for Decatur Sports
Fit & Wellness Center, Inc., Therapy Health Systems, Inc., Xxxxxxxxx &
Associates Rehabilitation, Inc. and Sunbelt Therapy Management Services, Inc.,
an Alabama corporation); and _____ shares of American
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Professional Holding, Inc. (the holding company for Ampro Medical Services, Inc.
and Gamma Laboratories, Inc.).
"Market Value" means (i) if the Common Stock is traded on a
nationally recognized market on the Sale Date, the greater of the low per share
trading price for the Common Stock or the actual per share sales price of the
Collateral on the Sale Date, or (ii) if the Common Stock is not traded on a
nationally recognized market on the Sale Date, the actual per share sales price
of the Collateral on the Sale Date.
"Obligations" means all of the representations, warranties,
performances and obligations of Borrower and/or any Subsidiaries under the Note
or any other documents executed in connection with the $2,950,000 loan and all
other amounts and performances owing from the Borrower and any Affiliates of the
Borrower to the Lender or any Affiliates of the Lender, including without
limitation the following:
(a) Repayment of eight promissory notes maturing on October 31, 1997
(four each currently held in two separate escrow accounts) payable by
Borrower to Xxxxx Xxxxxxx or certain of his relatives, with the aggregate
principal amount of all eight notes totalling approximately $1,145,967.
(b) Repayment of Borrower's equity adjustment obligations owing with
respect to its acquisition of certain facilities. The obligations total
approximately $1,028,188 to Xx. Xxxxxxx and $131,626 each to four of Xx.
Xxxxxxx'x family members. Xx. Xxxxxxx and Borrower anticipate that the
obligations soon will be evidenced by promissory notes from Borrower to
Xx. Xxxxxxx and certain of his relatives, respectively, for the amounts
listed in the preceding sentence.
(c) Repayment of the obligations owing to Xxxxx Xxxxxxxxx, as Agent
for the former shareholders of BritWill HealthCare Company, pursuant to a
Contingent Payment Agreement, dated as of April 16, 1996, with an
effective date of August 10, 1995, and all documents related thereto.
(d) Repayment of any sums paid by Xxxxx Xxxxxxxxx or Xxxxx Xxxxxxx
pursuant to their respective guarantees of certain obligations of the
Borrower and/or its Affiliates at any time prior to repayment in full of
items (a) through (c) above.
"Sale Date" means the date of sale, transfer or retention of the
Collateral by Lender after an Event of Default.
"Subsidiaries" means each of the subsidiaries or affiliates of
Borrower that will sell its receivables to Borrower, which are as follows: Quest
Pharmacies, Inc., Safford Card, Inc., RehabWest, Inc., Cornerstone Care, Inc.,
Arkansas, Inc., Xxxxxxx Xxxxx, Inc., Memphis Clinical Laboratory, Inc., Decatur
Sports Fit & Wellness Center, Inc., Therapy Health Systems,
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Inc., Xxxxxxxxx & Associates Rehabilitation, Inc., Sunbelt Therapy Management
Services, Inc., Ampro Medical Services, Inc., and Gamma Laboratories, Inc.
Section 2. Pledge of Collateral. In consideration of the loan evidenced by
the Note, and as security for performance of the Obligations, Borrower hereby
delivers to Lender, and grants to Lender a security interest in, the Collateral,
with stock powers duly executed by Borrower, with medallion signature
guarantees, in blank for all original share certificates representing all issued
and outstanding Common Stock of each Subsidiary that is owned by Borrower. Upon
request of Lender, Borrower agrees to endorse and deposit any additional
certificates for shares of Common Stock constituting proceeds or products of the
Collateral, to be held by Lender in a manner identical to the Collateral pledged
in this Agreement. Further, Borrower agrees at any time, or from time to time
hereafter, to execute such financing statements and other instruments and
perform such acts as Lender may reasonably request to establish and maintain a
valid, perfected security interest in the Collateral.
Section 3. Obligations Secured. The security interest created by this
Agreement shall secure the performance of the Obligations. Even if the Note is
paid in full, this Agreement shall continue in full force and effect until all
of the other Obligations have been satisfied.
Section 4. Covenants and Restrictions. As of the date hereof and at all
times while this Agreement is in effect, Borrower covenants and agrees as
follows:
4.1. Borrower is the legal and beneficial owner of the Collateral,
and is conveying the Collateral to Lender free and clear of all liens,
security interests and encumbrances. Borrower waives for the benefit of
Lender any restrictions on transfer of the Collateral contained in any
agreements by or among any of them. Aside from agreements subject to the
preceding sentence, no restrictions on transfer of the Collateral exist,
except such restrictions on transfer as may be required by laws affecting
the transfer of securities generally.
4.2. This pledge of the Collateral creates a valid and perfected
first priority security interest in the Collateral.
4.3. No authorization, approval, or other action by any party, and
no notice to or filing with any governmental authority or regulatory body,
is required for the (i) consummation of this pledge and Borrower's
performance of this Agreement, or (ii) exercise by Lender of its rights
and remedies pursuant to this Agreement (except as may be required by laws
affecting the offering and sale of securities generally).
4.4. Borrower will not sell, transfer, convey, assign or otherwise
dispose of, or grant a security interest in or option with respect to, any
Collateral at any time while any of the Obligations are outstanding.
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Section 5. Default. Any "Event of Default" under the Loan and Security
Agreement of even date herewith executed in connection with the $2,950,000 loan
shall be an "Event of Default" hereunder.
Section 6. Rights of Lender on Default.
6.1. Upon the occurrence of an Event of Default, Lender shall have
all the rights and remedies granted a secured party under the Arizona Uniform
Commercial Code or under the Note or this Agreement, including, without
limitation, the right to do or perform any or all of the following:
6.1.1. To declare the unpaid balance of the Note immediately
due and payable and exercise any other remedies for default set forth
herein.
6.1.2. If the Common Stock is publicly traded on a nationally
recognized market, to proceed in accordance with Arizona law with respect
to retention of all or part of the Collateral, valued at Market Value, in
partial or full satisfaction of the Note.
6.1.3. To dispose of the Collateral for Market Value by public
or private sale in accordance with Arizona law. Borrower recognizes that
Lender may be unable or may determine that it is undesirable to effect a
public sale of any or all of the Collateral, but may elect to resort to
one or more private sales thereof to a restricted group of purchasers who
will be required to agree, among other things, to acquire any such
securities for their own account for investment and not with a view to the
distribution or resale thereof. Borrower acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to
the seller than if such sale were a public sale, and, notwithstanding such
circumstances, agrees that any such private sale subject to such
conditions and otherwise made in accordance in all material respects with
applicable law will be deemed to have been made in a commercially
reasonable manner. Lender will be under no obligation to delay a sale of
any of the Collateral for the period of time necessary to permit an issuer
of any of the Collateral to register the public sale of such securities
under the Securities Act of 1933, as amended, or other applicable
securities laws. Borrower further agrees to do or cause to be done all
such other acts and things as may be necessary to make such private sale
or sales of any portion or all of the Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all governmental authorities
having jurisdiction over any such sale or sales, all at Borrower's
expense.
6.1.4. Without regard to the adequacy of the foregoing, to
proceed directly against any guarantor or any other obligor of the Note,
or to exercise any other remedy available at law or in equity.
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6.1.5. Exercise all voting rights in the Collateral,
including, without limitation, the right to vote to remove any one or more
of the directors and officers of any issuer of Common Stock pledged as
Collateral, and to elect new directors and officers of such issues, who
thereafter will manage the affairs of such issuer.
6.2. Lender shall not be deemed to have waived any rights under this
Agreement or any other writing signed by Borrower unless such waiver be in
writing and signed by Lender. No delay or omission on the part of Lender shall
operate as a waiver of such right or any other right. A waiver by any party of a
breach of a provision of this Agreement shall not constitute a waiver or
prejudice the party's right otherwise to demand strict compliance with that
provision or any other provision. Election by Lender to pursue any remedy shall
not exclude pursuit of any other remedy, and an election to make expenditures or
take action to perform an obligation of Borrower under this Agreement after
failure of Borrower to perform shall not affect Lender's right to declare a
default and exercise its remedies under this Section 6.
6.3. All Lender's rights and remedies, whether evidenced in this
Agreement or by any other writing, shall be cumulative and may be exercised
singly or concurrently.
6.4. Lender is hereby irrevocably appointed attorney in fact of each
Borrower with full power of substitution to sell and to execute such assignments
and instruments in the name of each Borrower as may be expedient to consummate
the sale or transfer of such portion of the Collateral as is necessary to
satisfy the Obligations, in the manner provided herein in the event of an
occurrence of an Event of Default.
6.5. Lender shall not be liable or responsible for any failure or
delay in exercising any right or remedy because of any restriction on transfer
pursuant to applicable securities laws, and Borrower waives any claim arising by
virtue of any such restriction.
7. Notice. Any notice required or permitted to be given under this
Agreement or under the Uniform Commercial Code shall be deemed given on the date
such notice is personally delivered, one day after the date deposited with a
nationally recognized overnight courier service with instructions to deliver on
the following day, or three days after the date deposited in the United States
mail, with postage prepaid, certified with return receipt requested. Any notice
shall be delivered to the address of the party to whom notice is given as set
forth below or to such other address as either party may hereafter designate to
the other by written notice to the address set forth below:
If to Borrower 0000 Xxxxx Xxxxxx Xxxxxx Xxxxx #000
Xxxxxxxxxx, Xxxxxxx 00000
If to Lender: _____________________________
_____________________________
_____________________________
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and
_____________________________
_____________________________
_____________________________
8. Voting. Borrower shall be entitled to exercise all voting and consent
rights, if any, with respect to the Collateral until the occurrence of an Event
of Default. This pledge and grant of security interest is for security purposes
only.
9. Preservation of Collateral. Lender shall have no responsibility with
respect to the Collateral other than (i) to use reasonable care in the custody
and preservation thereof as though such Collateral were Lender's own, and (ii)
not to sell, transfer or convey any of the Collateral at any time prior to the
occurrence of an Event of Default. Lender shall (or shall allow Borrower to)
take reasonable, appropriate action in response to calls, conversions,
exchanges, maturities and other matters with respect to the Collateral. Upon
payment of the Note and performance of the Obligations, the Collateral shall be
returned to Borrower, and all rights and obligations hereunder shall terminate.
10. Successors and Assigns. Lender's rights hereunder shall inure to the
benefit of its successors, heirs and assigns.
11. Attorney Fees and Costs. Borrower agrees to pay all costs and
attorneys' fees incurred by Lender in the preparation and negotiation of this
Agreement and the Note, and the closing of the transaction reflected by those
documents. Borrower also agrees to pay all costs and reasonable attorneys' fees
incurred by Lender upon an Event of Default (or an event which with notice or
passage of time could mature into an Event of Default) if (i) there is no
litigation, or (ii) litigation is instituted and Lender is the prevailing party
in such litigation, including appeals, upon final judgment.
12. Time of Essence. Time of payment and performance is of the essence of
this Agreement.
13. Applicable Laws. This Agreement is governed by and shall be construed
in accordance with the substantive laws of the State of Arizona, without regard
to conflicts of laws principles. Borrower consents to be sued in, and otherwise
submit to the jurisdiction of, the courts of the State of Arizona with respect
to any dispute arising out of this Agreement.
14. Counterparts. This Agreement may be executed in counterparts.
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Dated as of the date and year first set forth above.
BORROWER:
UNISON HEALTHCARE CORPORATION
By:_________________________________
Its:________________________________
LENDER:
ELK XXXXXXX INVESTMENTS, L.L.C.
By:_________________________________
Its:________________________________
BRITWILL INVESTMENTS COMPANY, LTD.
By:_________________________________
Its:________________________________
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