EXHIBIT 10(U)
PLEDGE AGREEMENT, effective July 14, 1998 (the "Pledge Agreement"), made by
and between [Name of Maker] (the "Pledgor") and SANDATA, INC., a Delaware
corporation (the "Pledgee").
WHEREAS, Pledgor has as of this day exercised [a] certain [Warrant/Option] dated
[______________] pursuant to which, among other things, Pledgor is acquiring
[number] of shares of Common Stock of Pledgee (the "Shares").
NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is
hereby acknowledged, Pledgor hereby represents and warrants to and covenants and
agrees with Pledgee as follows:
1. Defined Terms. Unless otherwise defined herein, the following terms shall
have the following meanings:
"Code" means the Uniform Commercial Code from time to time in effect in the
State of New York.
"Collateral" means the Pledged Stock (as hereinafter defined) and all Proceeds.
"Lien" or "Liens" means liens, pledges, security interests, charges, claims,
restrictions, subscriptions, options, rights, calls, commitments, hypothecations
and encumbrances of any nature whatsoever.
"Obligations" means any and all indebtedness, obligations, liabilities,
guarantees of any kind, and whether direct or indirect, acquired outright,
conditionally, absolute or contingent, joint or several, secured or unsecured,
due or not due, contractual or tortious, liquidated or unliquidated, arising by
operation of law or otherwise, whether or not of a nature presently contemplated
by the parties or subsequently agreed to by them arising under the Note.
"Pledged Stock" means the Shares, together with any and all shares, stock
certificates, options or rights of any nature whatsoever that may be issued or
granted to the Pledgor with regard thereto, in substitution or replacement
thereof, as a conversion thereof, in exchange therefor or otherwise in respect
thereof.
"Proceeds" means all "proceeds" as such term is defined in Section 9-306(1) of
the Code on the date hereof and, in any event, shall include, without
limitation, all dividends or other income from the Pledged Stock, collections
thereon and distributions with respect thereto.
2. Pledge; Grant of Security Interest. The Pledgor hereby delivers to the
Pledgee the Pledged Stock and hereby grants to the Pledgee a valid and binding
first security interest in the Collateral as collateral security for the
Obligations.
3. Stock Powers. Concurrently with the delivery to the Pledgee of the
certificate or certificates representing the Pledged Stock, the Pledgor is
delivering to the Pledgee an undated stock power covering such certificate or
certificates, duly executed in blank by the Pledgor.
4. Representations and Warranties. The Pledgor represents and warrants to the
Pledgee as follows:
(a) The Pledgor is the record and beneficial owner of the Pledged Stock and has
good title thereto, free and clear of any and all Liens, except the Lien created
by this Pledge Agreement.
(b) All such shares of the Pledged Stock have been duly and validly authorized
and issued and are fully paid and nonassessable and held of record and
beneficially solely by the Pledgor.
(c) There are no subscriptions, options, warrants, rights or calls or other
commitments or agreements to which Pledgor is a party or by which it is bound,
calling for the issuance, transfer, sale or other disposition of any Shares and
there are no outstanding securities of Pledgee owed by Pledgor convertible into
or exchanged for, actually or contingently, the Shares.
(d) Upon delivery to the Pledgee of the stock certificate or certificates
evidencing such shares of Pledged Stock, the Lien granted pursuant to this
Pledge Agreement will constitute a valid, perfected first priority Lien on the
Collateral, enforceable as such against all creditors of the Pledgor and any
persons purporting to purchase any Collateral from the Pledgor.
(e) The execution and delivery by Pledgor of this Pledge Agreement and the
performance of the Pledgor's obligations hereunder: (i) are within the Pledgor's
powers; (ii) are not in contravention of the terms of any indenture, agreement
or undertaking to which the Pledgor is a party or by which the Pledgor or any of
its assets or property is bound or affected; (iii) do not require the consent,
approval or authorization of or declaration, registration or filing with any
governmental body or any nongovernmental person; (iv) do not contravene any
contractual or governmental restriction binding upon the Pledgor; and (v) will
not, except as contemplated herein, result in the imposition of any additional
Liens upon any of the Collateral under any existing indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which the
Pledgor is a party or by which it or any of the Collateral may be bound or
affected.
(f) This Pledge Agreement has been duly executed and delivered by the Pledgor
and constitutes the legal, valid and binding obligation of the Pledgor
enforceable in accordance with its terms.
5. Covenants. The Pledgor covenants and agrees with the Pledgee that, from and
after the date of this Pledge Agreement and until the Obligations are satisfied
in full:
(a) If the Pledgor shall, as a result of its ownership of the Pledged Stock,
become entitled to receive or shall receive any stock certificate (including,
without limitation, any certificate representing a stock dividend or a
distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization),
option, right or other security, asset or property, whether in addition to, in
substitution of, as a conversion of, or in exchange for any shares of the
Pledged Stock, or otherwise in respect thereof (including, without limitation,
in connection with any merger, consolidation or similar event relating to
Pledgee), the Pledgor shall accept the same as the agent of the Pledgee, hold
the same in trust for the Pledgee and deliver the same forthwith to the Pledgee
in the exact form received, duly endorsed by the Pledgor to the Pledgee, if
required, together with an undated stock power covering such certificate duly
executed in blank by the Pledgor to be held by the Pledgee, subject to the terms
hereof, as additional Collateral security for the Obligations. Any sums paid or
property distributed upon or in respect of the Pledged Stock upon any total or
partial liquidation or dissolution of Pledgee shall be paid over or delivered to
the Pledgee forthwith to be held by it hereunder as additional Collateral
security for the Obligations, and in case any distribution shall be made on or
in respect of the Pledged Stock or any sums shall be paid or property shall be
distributed upon or with respect to the Pledged Stock pursuant to the
recapitalization or reclassification of the capital of Pledgee or pursuant to
the reorganization thereof, the sums so paid or property so distributed shall be
delivered to the Pledgee forthwith to be held by it hereunder as additional
Collateral security for the Obligations. If any sums or property so paid or
distributed in respect of the Pledged Stock shall be received by the Pledgor,
the Pledgor shall, until such money or property is paid or delivered to the
Pledgee, hold such money or property as agent of, and in trust for, the Pledgee,
segregated from other funds of the Pledgor, as additional Collateral security
for the Obligations.
(b) Without the prior written consent of the Pledgee, the Pledgor will not (i)
sell, assign, transfer, exchange, or otherwise dispose of, or grant any option
or right with respect to, the Collateral, or (ii) create, incur or permit to
exist any Lien with respect to any of the Collateral, or any interest therein,
except for the lien provided for by this Pledge Agreement. The Pledgor will
defend the right, title and interest of the Pledgee in and to the Collateral
against the claims and demands of all persons whomsoever.
(c) At any time and from time to time, upon the written request of the Pledgee,
and at the sole expense of the Pledgor, the Pledgor will promptly and duly
execute and deliver such further instruments and documents and take such further
actions as the Pledgee may reasonably request for the purposes of obtaining or
preserving the full benefits of this Pledge Agreement and of the rights and
powers herein granted. If any amount payable under or in connection with any of
the Collateral shall be or become evidenced by any promissory note, other
instrument or chattel paper, such note, instrument or chattel paper shall be
immediately delivered to the Pledgee, duly endorsed in a manner satisfactory to
the Pledgee, to be held as Collateral pursuant to this Pledge Agreement.
(d) The Pledgor agrees to pay, and to save the Pledgee harmless from, any and
all liabilities with respect to, or resulting from any delay in paying, any and
all stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Pledge Agreement.
6. Events of Default. The Obligations shall become immediately due and payable
at the option of Pledgee upon the occurrence of an event defined as an "Event of
Default" under the Note (an "Event of Default").
7. Cash Dividends; Voting Rights. Unless an Event of Default or an event which,
with the lapse of time or the giving of notice or both, would constitute an
Event of Default, shall have occurred, the Pledgor shall be permitted to receive
all cash dividends paid in the normal course of business of Pledgee and in
respect of the Pledged Stock (provided that such dividends are consistent with
past practice of which Pledgor acknowledges it is familiar with) and to exercise
all voting and corporate rights with respect to the Pledged Stock; provided,
however, that (a) any and all cash dividends or distributions paid that are not
in the normal course of business of Pledgee or are not consistent with past
practice shall be delivered to the Pledgee forthwith as additional Collateral
security for the Obligations and, until so delivered, shall be held by the
Pledgor as agent of, and in trust for, the Pledgee, segregated from other funds
of the Pledgor, as additional Collateral security; and (b) no vote shall be cast
or corporate right exercised or other action taken which, in the Pledgee's sole
judgment, would impair the Collateral or its salability or which would be
inconsistent with or result in any violation of any provision of the Note, this
Pledge Agreement or any other document made, delivered or given in connection
therewith or herewith.
8. Rights of the Pledgee.
(a) If an Event of Default or an event which, with the lapse of time or the
giving of notice or both, would constitute an Event of Default, shall occur, (i)
the Pledgee shall have the right to receive any and all cash dividends and
distributions paid in respect of the Pledged Stock and make application thereof
to the Obligations in such order as the Pledgee may determine, and (ii) all
shares of the Pledged Stock shall be registered in the name of the Pledgee or
its nominee, and the Pledgee or its nominee may thereafter exercise (A) all
voting, corporate and other rights pertaining to such shares of the Pledged
Stock at any meeting of shareholders of Pledgee or otherwise and (B) any and all
rights of conversion, exchange, subscription and any other rights, privileges or
options pertaining to such shares of the Pledged Stock as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of Pledgee, or upon the exercise by the Pledgor or the Pledgee of any
right, privilege or option pertaining to such shares of the Pledged Stock, and
in connection therewith, the right to deposit and deliver any and all of the
Pledged Stock with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine), all
without liability except to account for property actually received by it and
except for its willful misconduct engaged in with the intent of materially and
adversely affecting the Pledgor's obligations under this Pledge Agreement, but
the Pledgee shall have no duty to the Pledgor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing, and, except with respect to such willful misconduct by the
Pledgee, the Pledgor hereby unconditionally releases the Pledgee and its
affiliates and representatives from any and all liability for any action or
omission in connection with this Pledge Agreement or the Collateral.
(b) The rights of the Pledgee hereunder shall not be conditioned or contingent
upon the pursuit by the Pledgee of any right or remedy against the Pledgor, any
other person which may be or become liable in respect of all or any part of the
Obligations or against any collateral security therefor, guarantee therefor or
right of offset with respect thereto. Neither the Pledgee nor any of its
affiliates or representatives shall be liable for any failure to demand, collect
or realize upon all or any part of the Collateral or for any delay in doing so,
nor shall the Pledgee be under any obligation to sell or otherwise dispose of
any Collateral upon the request of the Pledgor or any other person or to take
any other action whatsoever with regard to the Collateral or any part thereof.
9. Remedies. If an Event of Default has occurred, the Pledgee may exercise, in
addition to all other rights and remedies granted in the Note, this Pledge
Agreement and in any other instrument or agreement securing, evidencing or
relating thereto or to the Obligations, all rights and remedies of a secured
party under the Code. Without limiting the generality of the foregoing, the
Pledgee, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon the Pledgor, Pledgee or any other person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give an
option or options to purchase or otherwise dispose of and deliver the Collateral
or any part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, in the over-the-counter market, at
any exchange, broker's board or office of the Pledgee or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Pledgee shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Collateral so sold, absolutely free
from any right or claim of whatsoever kind (including, without limitation, any
right or equity of redemption in the Pledgor, which right or equity is hereby
waived and released). The Pledgee shall apply any Proceeds from time to time
held by him and the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred in respect thereof or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Pledgee hereunder, including, without limitation, reasonable
attorneys' fees and disbursements of counsel to the Pledgee, to the payment in
whole or in part of the Obligations, in such order as the Pledgee may elect and
only after such application and after the payment by the Pledgee of any other
amount required by any provision of law, including, without limitation, Section
9-504 (1)(c) of the Code, need the Pledgee account for the surplus, if any, to
the Pledgor. To the extent permitted by applicable law, the Pledgor waives all
claims, damages and demands it may acquire against the Pledgee arising out of
the lawful exercise by it of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least ten (10) days before
such sale or other disposition. The Pledgor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of Collateral are
insufficient to pay the Obligations and any and all costs and expenses of every
kind incurred by the Pledgee with respect to the collection of such deficiency,
including, without limitation, all fees and disbursements of any attorneys
employed by the Pledgee.
10. Public Sales; Private Sales.
(a) If the Pledgee shall determine to exercise its right to sell any of all of
the Pledged Stock pursuant to paragraph 9 hereof, the Pledgor will cause Pledgee
to execute and deliver all such instruments and documents, and do or cause to be
done all such other acts, as may be, in the opinion of the Pledgee, necessary or
advisable to effect and settle such sale.
(b) The Pledgor recognizes that the Pledgee may be unable to effect a public
sale of any or all the Pledged Stock by reason of certain restrictions contained
in the Securities Act of 1933, as amended (the "Securities Act"), and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. The Pledgor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Pledgee shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit Pledgee to register such securities
for public sale under the Securities Act, or under applicable state securities
laws, even if Pledgee would agree to do so.
(c) The Pledgor further agrees to use its best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Stock pursuant to this paragraph 10 valid and binding and
in compliance with any and all other applicable requirements of law. The Pledgor
further agrees that a breach of any of the covenants contained in this paragraph
10 will cause irreparable injury to the Pledgee, that the Pledgee has no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this paragraph 10 shall be specifically
enforceable against the Pledgor, and the Pledgor hereby waives and agrees not to
assert any defenses against an action for specific performance of such
covenants.
11. Amendments, etc. with Respect to the Obligations. The Pledgor shall remain
obligated hereunder and the Collateral shall remain subject to the lien granted
hereby, notwithstanding that, without any reservation of rights against the
Pledgor, and without notice to or further assent by the Pledgor, any demand for
payment of any of the Obligations made by the Pledgee may be rescinded by the
Pledgee, and any of the Obligations continued, and the Obligations, or the
liability of Pledgor or any other person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered, or released by
the Pledgee, the Note, this Pledge Agreement and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Pledgee may deem advisable from time to
time, and any guarantee, right of offset or other collateral security at any
time held by the Pledgee for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released. The Pledgee shall not have any
obligation to protect, secure, perfect or insure any other Lien at any time held
by it as security for the Obligations or any property subject thereto. The
Pledgor waives any and all notice of the creation, renewal, extension or accrual
of any of the Obligations and notice of or proof of reliance by the Pledgee upon
this Pledge Agreement; the Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred in reliance upon this Pledge
Agreement; and all dealings between the Pledgee and the Pledgor shall likewise
be conclusively presumed to have been had or consummated in reliance upon this
Pledge Agreement. The Pledgor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Pledgee or the
Pledgor with respect to the Obligations.
12. Limitation on Duties Regarding Collateral. The Pledgee's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Code or otherwise, shall be to
deal with it in the same manner as the Pledgee deals with similar securities and
property for its own account. Neither the Pledgee nor his agents shall be liable
for failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of any Pledgor or otherwise.
13. Powers Coupled with an Interest. All authorizations and agencies herein
contained with respect to the Collateral are irrevocable and powers coupled with
an interest.
14. Severability; Redelivery of Released Collateral.
(a) If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Pledgee in order to carry out the intentions
of the parties hereto as nearly as may be possible; and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
(b) In the event that the Collateral or any portion thereof is released to the
Pledgor and any payments or proceeds of any security for the Obligations, or any
part thereof, are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then the Pledgor shall redeliver the Collateral to the Pledgee
and, until so redelivered, shall hold the Collateral as agent of, and in trust
for, the Pledgee.
15. No Waiver; Cumulative Remedies. The Pledgee shall not by any act (except by
a written instrument pursuant to paragraph 16 hereof) be deemed to have waived
any right or remedy hereunder or to have acquiesced in any default of any
obligation under the Note, this Pledge Agreement, or any other document made,
delivered or given in connection therewith or herewith, or in any breach of any
of the terms and conditions hereof or thereof. No failure to exercise, nor any
delay in exercising, on the part of the Pledgee, any right, power or privilege
hereunder shall operate as a waiver hereof or thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Pledgee of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Pledgee would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
16. Waivers and Amendments. None of the terms or provisions of this Pledge
Agreement may be amended, supplemented or otherwise modified except by a written
instrument executed by the Pledgor and the Pledgee, provided that any provision
of this Pledge Agreement may be waived by the Pledgee in a letter or agreement
executed by the Pledgee. This Pledge Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of the
Pledgee and its respective successors and assigns, and, in the event of an
assignment of all or any of the Obligations, the rights hereunder, to the extent
applicable to the indebtedness so assigned, may be transferred with such
indebtedness.
17. Entire Agreement. This Pledge Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof. The representations,
warranties, covenants and agreements set forth in this Pledge Agreement and in
the exhibits delivered pursuant hereto constitute all the representations,
warranties, covenants and agreements of the parties and upon which the parties
have relied, shall not be deemed waived or otherwise affected by any
investigation made by any party hereto and, except as may be specifically
provided herein, no change, modification, amendment, addition or termination of
this Pledge Agreement or any part thereof shall be valid unless in writing and
signed by or on behalf of the party to be charged therewith.
18. Notices. Any and all notices or other communications or deliveries required
or permitted to be given or made pursuant to any of the provisions of this
Pledge Agreement shall be deemed to have been duly given or made for all
purposes when hand delivered or sent by certified or registered mail, return
receipt requested and postage prepaid, overnight mail or courier, as follows:
If to Pledgor, at:
If to Pledgee, at:
Sandata, Inc.
00 Xxxxxx Xxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
or at such other address as either party or person shall designate by notice to
the other parties in accordance with the provisions hereof.
19. Choice of Law. This Pledge Agreement shall be governed by, and interpreted
and construed in accordance with, the laws of the State of New York, excluding
choice of law principles thereof.
20. Successors and Assigns. This Pledge Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns;
provided, however, that the Pledgor may not assign any of its rights or delegate
any of its duties under this Agreement without the prior written consent of the
Pledgee.
21. Headings. The headings or captions in this Agreement are for convenience and
reference only and do not in any way modify, interpret or construe the intent of
the parties or affect any of the provisions of this Agreement.
22. Submission to Jurisdiction; Waivers.
(a) The Pledgor hereby irrevocably and unconditionally:
(i) consents and submits for itself and its property in any action or proceeding
relating to this Pledge Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the jurisdiction of the federal and state courts
located within the State of New York;
(ii) consents that any such action or proceeding may be brought in such courts,
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Pledgor at its
address set forth above or at such other address of which the Pledgee shall have
been notified in writing; and
(iv) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction.
(b) The Pledgor irrevocably and unconditionally waives any and all rights to a
jury trial in connection with any action or proceeding between the Pledgor (or
its affiliates), on the one hand, and the Pledgee (or its affiliates), on the
other hand, arising under or by reason of this Pledge Agreement or for the
recognition and enforcement of any judgment in respect thereof.
IN WITNESS WHEREOF, the undersigned have caused this Pledge Agreement to be duly
executed and delivered as of the date first above written.
SANDATA, INC.
By: /s/ Xxxx X. Xxxxxxx, President
/s/ Pledgor
