Assignment of Warrant Agreement among Xxxx Xxxxx
Page 16 of 35
and Americare Management, Inc.
Exhibit 10.8
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement (hereinafter referred in this
document as the Agreement) is made and entered into as of May 2,
2002 by Americare Management, Inc., a Delaware corporation, with
its principal place of business located at 000 Xxxx Xxxxxxxx
Xxxx, Xxxxxxxxxx, Xxxxx (hereinafter referred to as the Pledgor),
in favor of Xxxx Xxxxx, of6717 Castle Rock, Xxxx Xxxxx, Xxxxx
00000, Texas (hereinafter referred to as the Pledgee).
WITNESSETH:
WHEREAS, the Pledgor purchased the Warrant for stock shares
in the Corporation pursuant to a Warrant Assignment Agreement
dated on or about the date hereof between the Pledgor and the
Pledgee (hereinafter referred to as the Purchase Agreement), upon
the terms and subject to the conditions set forth therein.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings given to such terms in the Purchase
Agreement; and
WHEREAS, the Pledgee required, as a condition to closing the
transactions contemplated by the Purchase Agreement, that the
Pledgor, execute and deliver this Agreement in order to secure
the payment and performance of the Notes.
AGREEMENT
NOW THEREFORE, in consideration of the premises and in order
to induce the Pledgee to close the transactions contemplated by
the Purchase Agreement, the Pledgor hereby agrees with the
Pledgee as follows:
1. PLEDGE. The Pledgor hereby pledges to the Pledgee, and
grants to the Pledgee a continuing security interest in the
following (such collateral is hereinafter referred to
collectively as the Pledged Collateral):
a. the Warrant, and all products and proceeds of any of
the Warrant specifically including, without limitation, all stock
shares obtained by the exercise of the Warrant, all dividends,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange
for any or all of the Warrant; and
b. all additional shares of stock of, or equity interest
in the Corporation from time to time acquired by the Pledgor in
any manner, and the certificates representing such additional
shares of stock in the Corporation (any such additional shares
shall constitute part of the Pledged Collateral under and as
defined in this Agreement), and all products and proceeds of any
such additional shares of stock in the Corporation (such stock
shares are hereinafter referred to as the Pledged Shares,
including, without limitation, all dividends, cash, instruments,
subscriptions, warrants and any other rights and options and
other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all
of such additional Pledged Shares.
2. SECURITY FOR OBLIGATIONS. This Agreement secures:
a. the prompt and complete payment when due of the Notes;
b. the performance by The Phoenix Group Corporation of its
employment agreement with Xxxx Xxxxx; and,
c. the performance of all duties or obligations of the
Pledgor now or hereafter existing under this Agreement and the
Purchase Agreement (the liabilities, duties or and obligations
described in the preceding clauses (a), (b) and (c) being
referred to herein as the Liabilities).
3. DELIVERY OF WARRANT & PLEDGED SHARES. All certificates or
instruments representing or evidencing the Warrant and Pledged
Shares, including all stock shares obtained by the exercise of
the Warrant, shall be delivered to and held by an escrow agent
(hereinafter referred to as the Escrow Agent), who is selected by
mutual agreement of the Pledgor and Pledgee. The certificates or
instruments shall be in suitable form for transfer by delivery by
the Escrow Agent, or shall be accompanied by duly executed
instruments of transfer or assignment in blank. The parties and
the Escrow Agent shall execute an Escrow Agreement on the date of
this Agreement that shall provide, among other terms and
conditions, that (1) the Escrow Agent shall only deliver the
Pledged Collateral to Pledgee upon written notice from the
Pledgee that a default under the Promissory Note has occurred and
is continuing past applicable grace periods and a written
acknowledgment from the Pledgor that such default has occurred
and (2) the Escrow Agent shall only deliver the Pledged
Collateral to the Pledgor upon written notice from the Pledgor
and the Pledgor presents the Notes marked "paid in full" or
equivalent termination language. A form of the escrow agreement
to be entered into is attached hereto as Exhibit A and
incorporated by reference herein for all purposes.
4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants as follows:
a. Upon the delivery to the Escrow Agent of the Warrant
and Pledged Shares, the pledge of the Pledged Collateral pursuant
to this Agreement creates a valid and perfected first priority
security interest in the Pledged Collateral securing the payment
of the Liabilities for the benefit of the Pledgee, provided the
Pledged Collateral is held in the possession of the Escrow Agent.
b. No authorization, approval, or other action by, and no
notice to or filing with, any governmental authority or
regulatory body is required either: (i) for the pledge by the
Pledgor of the Pledged Collateral pursuant to this Agreement or
for the execution, delivery or performance of this Agreement by
the Pledgor or (ii) for the exercise by the Pledgee of any of the
rights provided for in this Agreement or the remedies in respect
of the Pledged Collateral pursuant to this Agreement (except as
may be required in connection with such disposition by laws
affecting the offering and sale of securities); however, Pledgor
shall execute a UCC 1 financing statement covering the Pledged
Collateral in favor of Pledgee at the request of Pledgee.
c. At the Closing of the transactions contemplated by the
Purchase Agreement, the Pledgor will have full power and
authority to enter into this Agreement and will have the right
(without the requirement of any consents from any person or
entity) to vote, pledge and grant a security interest in the
Warrant and Pledged Shares as provided by this Agreement.
d. This Agreement has been duly authorized, executed and
delivered by the Pledgor and constitutes a legal, valid and
binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms, except as such
enforceability may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally or general
principles of equity.
e. The capitalization of the Company, as of the date
hereof, will be as set forth in the Purchase Agreement by the
Pledgee and listed in Schedule I hereto.
5. FURTHER ASSURANCES. The Pledgor agrees that it will execute
and deliver, or cause to be executed and delivered, such
assignments, instruments and documents, that may be reasonably
necessary, in order to perfect any security interest granted or
purported to be granted hereby or to enable the Pledgee to
exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral and to carry out the provisions
and purposes hereof.
6. VOTING RIGHTS; DIVIDENDS; ETC.
a. So long as no Event of Default shall have occurred and
be continuing, the Pledgor shall be entitled to exercise any and
all voting and other rights pertaining to the Warrant and Pledged
Shares or any part thereof for any purpose not inconsistent with
the terms of this Agreement or the Purchase Agreement; provided,
however, that the Pledgor shall not exercise or shall refrain
from exercising any such right if such action would have a
material adverse effect on the value of the Pledged Collateral or
any part thereof or be inconsistent with or violate any
provisions of this Agreement or the Purchase Agreement.
b. So long as no Event of Default shall have occurred and
be continuing, the Pledgor shall be entitled to receive all cash
dividends paid from time to time in respect of the Warrant and
Pledged Shares.
c. The Pledgee shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purpose
of enabling the Pledgor to exercise the voting and other rights
which it is entitled to exercise pursuant to Section 6(a) above.
d. All dividends or other distributions which are received
by the Pledgor contrary to the provisions of this Section 6 shall
be received in trust for the benefit of the Pledgee, shall be
segregated from other funds of the Pledgor and shall be forthwith
paid over to the Pledgee as Pledged Collateral in the same form
as so received (with any necessary endorsement).
e. Upon the occurrence and during the continuance of an
Event of Default, (i) all voting and other rights of the Pledgor
to exercise the rights which it would otherwise be entitled to
exercise pursuant to Section 6(a) shall cease, and all such
rights shall thereupon become vested in the Pledgee (only upon
receipt of the Warrant and Pledged Shares from the Escrow Agent),
which shall thereupon have the sole right to exercise such rights
in accordance with Section 10 hereof and (ii) all cash dividends
or other distributions payable in respect of the Warrant and
Pledged Shares shall be paid to the Pledgee and Pledgor's right
to receive such cash payments pursuant to Sections 6(b) and 6(c)
hereof shall immediately cease, and Pledgor shall no further
right or ability to exercise the Warrant.
7. TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES.
a. The Pledgor agrees that it will not without the prior
written consent of the Pledgee: (i) sell or otherwise dispose
of, or grant any option, warrants, debenture, or other agreement
convertible into stock shares of any of the Warrant or Pledged
Collateral, (ii) create or permit to exist any lien or
encumbrance upon or with respect to any of the Pledged
Collateral, except for the security interest granted under this
Agreement or as otherwise permitted under the terms of the
Purchase Agreement, or (iii) enter into any agreement or
understanding that purports to or may restrict or inhibit the
Pledgee' rights or remedies hereunder, including, without
limitation, the Pledgee' right to sell or otherwise dispose of
the Pledged Collateral.
b. The Pledgor agrees that it will pledge and deliver to
the Pledgee hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock of
the Company of which Pledgor may become the beneficial owner
after the date hereof.
8. PLEDGEE APPOINTED ATTORNEY-IN-FACT. Effective upon the
occurrence of an Event of Default and delivery of the Pledged
Collateral to the Pledgee by the Escrow Agent, the Pledgor hereby
appoints the Pledgee the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name
of the Pledgor or otherwise, from time to time to take any action
and to execute any instrument which are necessary or advisable by
Pledgee' legal counsel to further perfect and protect the
security interest granted hereby, including, without limitation,
to receive, endorse and collect all instruments made payable to
the Pledgor representing any dividend or other distribution in
respect of the Pledged Collateral or any part thereof and to give
full discharge for the same.
9. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and
powers granted to the Pledgee hereunder are being granted in
order to preserve and protect the Pledgee's security interest in
and to the Pledged Collateral granted hereby and, except for the
use of reasonable care in the custody of any Pledge Collateral in
its possession, shall not be interpreted to, and shall not,
impose any duties on the Pledgee in connection therewith. The
Pledgee shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Pledgee accords its own
property, it being understood that the Pledgee shall not have any
responsibility for: (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not
the Pledgee have or are deemed to have knowledge of such matters
or (ii) taking any necessary steps to preserve rights against any
parties with respect to any Pledged Collateral.
10. SUBSEQUENT CHANGES AFFECTING COLLATERAL. The Pledgor
represents to the Pledgee that the Pledgor has made its own
arrangements for keeping informed of changes or potential changes
affecting the Pledged Collateral (including, but not limited to,
rights to convert, warrants, rights to subscribe, payment of
dividends, reorganization or other exchanges, tender offers and
voting rights), and the Pledgor agrees that the Pledgee shall
have no responsibility or liability for informing the Pledgor of
any such changes or potential changes or for taking any action or
omitting to take any action with respect thereto. The Pledgor
covenants that it will not, without the prior written consent of
the Pledgee, sell or otherwise dispose of, or grant any option,
warrant, debenture, or other agreement convertible into the
Common Stock with respect to, or enter into any shareholder,
voting trust or other agreement with respect to any of the
Pledged Collateral or create or permit to exist any lien or
encumbrance upon or with respect to any of the Pledged
Collateral.
11. REMEDIES UPON DEFAULT. If a default has occurred under the
Notes and continues past applicable grace periods, then the
Pledgee shall have all of the rights and remedies with respect to
the Pledged Collateral of a secured party under the Uniform
Commercial Code (the "Code") in effect in the State of Texas at
that time and the Pledgee, after receipt of the Pledged
Collateral from the Escrow Agent, may request that the Pledgor
register or cause to be registered the Pledged Collateral or any
part thereof on the corporate books of the Company into the name
of the Pledgee or the Pledgee's nominee(s), indicating that such
Pledged Collateral is subject to the security interest hereunder.
In addition, upon receipt of the Pledged Collateral from the
Escrow Agent, all rights of the Pledgor to exercise the rights
which it would otherwise be entitled to exercise shall cease, and
all such rights shall thereupon become vested in the Pledgee.
Pledgee acknowledges and agrees that in the event that a default
occurs under the Notes and the Pledgee become entitled to the
Pledged Collateral from the Escrow Agent that such Pledged
Collateral represents the sole recourse against the Pledgor and
that upon receipt of the Pledged Collateral that all obligations
under the Notes will be fully satisfied.
12. MISCELLANEOUS PROVISIONS.
a. Notices. Any written notice, consent or other
communication provided for in this Agreement shall be delivered
personally (effective upon delivery), via facsimile (effective
upon confirmation of transmission), via overnight courier
(effective the next business day after dispatch if instructed to
deliver on next business day) or via U.S. Mail (effective 3 days
after mailing, postage prepaid, first class) to each party at its
address(as) and/or facsimile number(s) set forth in the Purchase
Agreement, or to such other address as either party shall specify
to the other in writing from time to time.
b. Headings. The headings in this Agreement are for
purposes of reference only and shall not affect the meaning or
construction of any provision of this Agreement.
c. Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid
or unenforceable in whole or in part in any jurisdiction, then
such invalidity or unenforceability shall affect in that
jurisdiction only such clause or provision, or part thereof, and
shall not in any manner affect such clause or provision in any
other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
d. Amendments, Waivers and Consents. Any amendment or
waiver of any provision of this Agreement and any consent to any
departure by the Pledgor from any provision of this Agreement
shall be effective only if contained in a writing signed by the
Pledgor and the Pledgee.
e. Interpretation of Agreement. All terms not defined
herein or in the Purchase Agreement shall have the meaning set
forth in the applicable Uniform Commercial Code, except where the
context otherwise requires. To the extent a term or provision of
this Agreement conflicts with the Purchase Agreement or Notes and
is not dealt with herein with more specificity, the Purchase
Agreement and Notes shall control with respect to the subject
matter of such term or provision. Acceptance of or acquiescence
in a course of performance rendered under this Agreement shall
not be relevant to determine the meaning of this Agreement even
though the accepting or acquiescing party had knowledge of the
nature of the performance and opportunity for objection.
f. Continuing Security Interest. This Agreement shall (i)
create a continuing security interest in the Pledged Collateral
and shall remain in full force and effect until payment in full
of the Notes, (ii) be binding upon the Pledgor, its successors
and assigns, and (iii) inure, together with the rights and
remedies of the Pledgee hereunder, to the benefit of the Pledgee
and their executors, heirs and permitted assigns.
g. Survival of Provisions. All representations,
warranties and covenants of the Pledgor contained herein shall
survive the execution and delivery of this Agreement, and shall
terminate only upon the full and final payment and performance by
the Pledgor of the obligations secured hereby and termination of
the Notes.
h. Waivers. The Pledgor waives presentment and demand for
payment of any of the Liabilities, protest and notice of dishonor
or default with respect to any of the Liabilities, and all other
notices to which the Pledgor might otherwise be entitled, except
as otherwise expressly provided herein in the Purchase Agreement
or the Notes.
i. Authority. The parties shall have and be entitled to
exercise all powers hereunder which are specifically granted by
the terms hereof, together with such powers as are reasonably
incident thereto. The Pledgee may perform any of its duties
hereunder or in connection with the Pledged Collateral by or
through agents or employees and shall be entitled to retain
counsel and to act in reliance upon the advice of counsel
concerning all such matters. Neither the party nor any director,
officer, employee, attorney or agent of the parties shall be
liable to the other for any action taken or omitted to be taken
by it or them hereunder, except for its or their own gross
negligence or willful misconduct, nor shall the parties be
responsible for the validity, effectiveness or sufficiency hereof
or of any document or security furnished pursuant hereto. The
parties and their respective directors, officers, employees,
attorneys and agents shall be entitled to rely on any
communication, instrument or document reasonably believed by it
or them to be genuine and correct and to have been signed or sent
by the proper person or persons.
j. Release; Termination of Agreement. This Agreement
shall terminate upon the full and final payment and performance
of all the sums owed under the Notes. At such time, as may be
requested by Pledgor, the Pledgee shall, execute and deliver such
instruments and documents to the Pledgor as Pledgor may
reasonably request to evidence such termination.
k. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on
separate counterparts, each of which, when so executed and
delivered, shall be deemed an original but all of which shall
together constitute one and the same agreement.
l. Assignment Neither party may assign its rights and
obligations hereunder without the prior written consent of the
other party. Any assignment in violation of this Section 13.13
shall be null and void.
m. Governing Law; Choice of Forum; Service of Process;
Jury Trial Waiver. The validity, interpretation and enforcement
of this Agreement and any dispute arising out of the relationship
between Pledgor and Pledgee, whether in contract, tort, and
equity or otherwise, shall be governed by the internal laws of
the State of Texas (without giving effect to principles of
conflicts of law). This Agreement is performable in Dallas
County, Texas. Pledgor hereby irrevocably consents and submits
to the non-exclusive jurisdiction of the courts of Dallas County
in the State of Texas or, if it has or can acquire jurisdiction
in the U.S. District Court for the Northern District of Texas and
waives any objection based on venue or forum non conveniens with
respect to any action instituted therein arising under this
Agreement or any of the other Financing Agreements or in any way
connected with or related or incidental to the dealings of
Pledgor and Pledgee in respect of this Agreement or any of the
other Financing Agreements or the transactions related hereto or
thereto, in each case whether now existing or hereafter arising
and whether in contract, tort, equity or otherwise, and agrees
that any dispute arising out of the relationship between Pledgor
or Borrower and Pledgee or the conduct of any such persons in
connection with this Agreement, the other Financing Agreements or
otherwise shall be heard only in the courts described above
(except that Pledgee shall have the right to bring any action or
proceeding against Pledgor or his property in the courts of any
other jurisdiction which Pledgee deems necessary or appropriate
in order to realize on any collateral at any time granted by
Borrower or Pledgor to Pledgee or to otherwise enforce its rights
against Pledgor or his property).
n. Pledgor hereby waives personal service of any and all
process upon Pledgor and consents that all such service of
process may be made by certified mail (return receipt requested)
directed to his address set forth on the signature page hereof
and service so made shall be deemed to be completed five (5) days
after the same shall have been so deposited in the U.S. mails,
or, at Pledgee's option, by service upon Pledgor in any other
manner provided under the rules of any such courts. Within
thirty (30) days after such service, Pledgor shall appear in
answer to such process, failing which Pledgor shall be deemed in
default and judgment may be entered by Pledgee against Pledgor
for the amount of the claim and other relief requested.
o. PLEDGOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS
AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
PLEDGOR AND PLEDGEE IN RESPECT OF THIS AGREEMENT OR ANY OF THE
OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING,
AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. PLEDGOR
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY
AND THAT PLEDGOR OR PLEDGEE MAY FILE AN ORIGINAL COUNTERPART OF A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF PLEDGOR AND PLEDGEE HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
p. Pledgee shall not have any liability to Pledgor
(whether in tort, contract, equity or otherwise) for losses
suffered by Pledgor in connection with, arising out of, or in any
way related to the transactions or relationships contemplated by
this Agreement, or any act, omission or event occurring in
connection herewith, unless it is determined by a final and non-
appealable judgment or court order binding on Pledgee that the
losses were the result of acts or omissions constituting gross
negligence or willful misconduct on the part of the Pledgee
and/or any of its officers, directors, attorneys or agents. In
any such litigation, Pledgee shall be entitled to the benefit of
the rebuttable presumption that they acted in good faith and with
the exercise of ordinary care in the performance by them of the
terms of the Purchase Agreement and the Notes.
q. DELAYS; PARTIAL EXERCISE OF REMEDIES. No delay or
omission of the Pledgee to exercise any right or remedy
hereunder, whether before or after the happening of any Event of
Default, shall impair any such right or shall operate as a waiver
thereof or as a waiver of any such Event of Default. No single
or partial exercise by the Pledgee of any right or remedy shall
preclude any other or further exercise thereof, or preclude any
other right or remedy.
IN WITNESS WHEREOF, the Pledgor and the Pledgee have each caused
this Agreement to be duly executed and delivered as of the date
first above written.
PLEDGOR:
Americare Management, Inc.
/s/ Xxxxxx X. Xxxx
____________________________________
BY: Xxxxxx X. Xxxx
TITLE: Chairman
PLEDGEE:
/s/ Xxxx Xxxxx
____________________________________
Xxxx Xxxxx
