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EXHIBIT 10.7
STOCK PLEDGE AGREEMENT, dated as of July 20, 1998, between TWEETER HOME
ENTERTAINMENT GROUP, INC., a Delaware corporation (the "Pledgor") and
BANKBOSTON, N.A., a national banking association, as Agent (the "Agent").
W I T N E S S E T H:
WHEREAS, the Pledgor is the record and beneficial owner of the shares of
stock and other equity and beneficial interests described on Schedule I hereto
(the "Pledged Shares") issued by the corporations and trusts named therein; and
WHEREAS, the Pledgor, as guarantor, has entered into a Amended and
Restated Credit Agreement, dated as of July 20, 1998 (as at any time amended,
modified or supplemented, the "Credit Agreement") with New England Audio, Co.
Inc., a Massachusetts corporation ("New England Audio"), NEA Delaware, Inc., a
Delaware corporation ("NEA Delaware"), Tweeter Home Entertainment Group
Financing Company Trust, a Massachusetts business trust ("Tweeter Trust"), the
Agent and the other lenders parties thereto (the "Lenders"), pursuant to which
the Lenders have agreed to make Revolving Credit Advances (as defined in the
Credit Agreement) to New England Audio and NEA Delaware; and
WHEREAS, in connection with the granting of the credits under the Credit
Agreement and as security for all of the Lender Obligations of the Pledgor under
the Credit Agreement, the Agent is requiring that the Pledgor execute and
deliver this Stock Pledge Agreement and grant the security interest contemplated
hereby.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained and to induce the Lenders to grant the credits under the
Credit Agreement, it is agreed as follows:
Section 1. Definitions. Unless otherwise defined herein, terms defined in
the Credit Agreement are used herein as therein defined, and the following shall
have the following respective meanings (such meanings being equally applicable
to both the singular and plural form of the terms defined):
"Act" shall have the meaning assigned to such term in Section 8(d) hereof.
"Agreement" shall mean this Stock Pledge Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
"Pledged Collateral" shall have the meaning assigned to such term in
Section 2 hereof.
"Pledged Shares" shall have the meaning assigned to such term in the first
recital hereof.
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"Secured Obligations" shall have the meaning assigned to such term in
Section 3 hereof.
"Termination Date" shall mean the date on which all Lender Obligations
have been paid in full and the Lenders shall have no further commitments to or
for the account of the Pledgor or any of its Subsidiaries under any Lender
Agreement.
Section 2. Pledge. The Pledgor hereby pledges and grants to the Agent a
first priority security interest in all of the following (the "Pledged
Collateral"), except as otherwise provided in Section 7(b):
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all dividends, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;
(b) all additional shares of stock or other equity and beneficial
interests of any issuer of the Pledged Shares from time to time acquired by the
Pledgor in any manner (which shares shall be deemed to be part of the Pledged
Shares) and the certificates representing such shares, and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; and
(c) all shares of stock or other equity and beneficial interests
owned by the Pledgor of any Person other than the Real Estate Subsidiary, if
any, who, after the date of this Agreement, becomes, as a result of any
occurrence, a directly owned Subsidiary of the Pledgor (which shares shall be
deemed to be part of the Pledged Shares) and the certificates representing such
shares, and all dividends, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares.
Section 3. Security for Lender Obligations. This Agreement secures, and
the Pledged Collateral is security for, the prompt payment in full when due,
whether at stated maturity, by acceleration or otherwise, and performance of the
Lender Obligations, whether for principal, premium, interest, fees, costs and
expenses, and all obligations of the Pledgor now or hereafter existing under
this Agreement and under the Credit Agreement, and all other Indebtedness,
liabilities and obligations of the Pledgor to the Agent under any Lender
Agreement, whether now existing or hereafter incurred, whether arising under the
Credit Agreement or otherwise (collectively, the "Secured Obligations").
Section 4. Delivery of Pledged Collateral. All certificates representing
or evidencing the Pledged Shares shall be delivered to and held by or on behalf
of the Agent pursuant hereto and shall be accompanied by duly executed
instruments of transfer or
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assignment in blank, all in form and substance reasonably satisfactory to the
Agent. If any Event of Default shall occur and be continuing, subject to Section
7 hereof, the Agent shall have the right, at any time in its discretion and
without notice to the Pledgor, to transfer to or to register in the name of the
Agent or any of its nominees any or all of the Pledged Shares. In addition, also
subject to Section 7 hereof, the Agent shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged Shares
for certificates or instruments of smaller or larger denominations.
Section 5. Representations and Warranties. The Pledgor represents and
warrants to the Agent that:
(a) The Pledgor is, and at the time of delivery of the Pledged
Shares to the Agent pursuant to Section 4 hereof will be, the sole holder of
record and the sole beneficial owner of the Pledged Collateral free and clear of
any Lien thereon or affecting the title thereto except for the Lien created by
this Agreement.
(b) All of the Pledged Shares have been duly authorized and validly
issued and all of the Pledged Shares representing shares of stock of
corporations are fully paid and non-assessable.
(c) The Pledgor has the right and requisite corporate authority to
pledge, assign, transfer, deliver, deposit and set over the Pledged Collateral
to the Agent, as provided herein.
(d) None of the Pledged Shares has been issued or transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject.
(e) The authorized stock and other equity and beneficial interests
of each of the issuers listed on Schedule I hereto consists of the number of
shares of stock, with the number of shares issued and outstanding, that are
described on Schedule I hereto. As of the date hereof, there are no existing
options, warrants, calls or commitments of any character whatsoever relating to
any stock or other equity and beneficial interests of any of such issuers.
(f) No consent, approval, authorization or other order of any Person
and no consent, 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 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 Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Pledged Collateral pursuant to this
Agreement including any disposition thereof, except as may be required in
connection with such disposition by laws affecting the offering and sale of
securities generally.
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(g) The pledge, assignment and delivery of the Pledged Collateral
pursuant to this Agreement will create a valid first priority Lien on and a
first priority perfected security interest in the Pledged Collateral, and the
proceeds thereof, securing the payment of the Secured Obligations.
(h) This Agreement has been duly authorized, executed and delivered
by the Pledgor and constitutes a legal, valid and binding obligation of the
Pledgor enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally, and except as the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
(i) The Pledged Shares constitute one hundred percent (100%) of the
issued and outstanding shares of stock or other equity and beneficial interests
of the issuers thereof.
(j) The Subsidiaries listed on Schedule III hereto are the only
Subsidiaries of the Pledgor.
The representations and warranties set forth in this Section 5 shall
survive the execution and delivery of this Agreement.
Section 6. Covenants. The Pledgor covenants and agrees that until the
Termination Date:
(a) Without the prior written consent of the Agent, the Pledgor will
not sell, assign, transfer, pledge, xxxxx x Xxxx with respect to or otherwise
encumber any of its rights in or to the Pledged Collateral or any unpaid
dividends or other distributions or payments with respect thereto except as
otherwise permitted by the Credit Agreement.
(b) The Pledgor will, at its expense, promptly execute, acknowledge
and deliver all such instruments and take all such action as the Agent from time
to time may reasonably request in order to ensure to the Agent the benefits of
the Liens in and to the Pledged Collateral intended to be created by this
Agreement.
(c) The Pledgor will defend the title to the Pledged Collateral and
the Liens of the Agent thereon against the claim of any other Person and will
maintain and preserve such Liens until the Termination Date.
(d) The Pledgor will, upon obtaining any additional shares of any
Subsidiaries other than the Real Estate Subsidiary, if any, which shares are not
already Pledged Collateral, promptly (and in any event within three (3) Business
Days) deliver to the Agent a Pledge Amendment, duly executed by the Pledgor, in
substantially the form of Schedule II hereto (a "Pledge Amendment"), in respect
of the additional Pledged Shares which are to be pledged pursuant to this
Agreement. The Pledgor hereby authorizes the Agent to attach each such
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Pledge Amendment to this Agreement and agrees that all Pledged Shares listed on
any Pledge Amendment delivered to the Agent shall for all purposes hereunder be
considered Pledged Collateral.
Section 7. Pledgor's Rights. As long as no Default or Event of Default
shall have occurred and be continuing:
(a) The Pledgor shall have the right, from time to time, to vote and
give consents with respect to the Pledged Collateral or any part thereof for all
purposes not inconsistent with the provisions of this Agreement, the Credit
Agreement and any other Lender Agreement; provided, however, that no vote shall
be cast, and no consent shall be given or action taken, which would have the
effect of impairing the position or interest of the Agent in respect of the
Pledged Collateral or which would authorize or effect (except as and to the
extent expressly permitted by the Credit Agreement) (i) the dissolution or
liquidation, in whole or in part, of any of the Subsidiaries, (ii) the
consolidation or merger of any of the Subsidiaries with any other Person, (iii)
the sale, disposition or encumbrance of all or substantially all of the assets
of any of the Subsidiaries, (iv) any change in the authorized number of shares,
the stated capital or the authorized share capital of any of the Subsidiaries or
the issuance of any additional shares of its stock, or (v) the alteration of the
voting rights with respect to the stock of any of the Subsidiaries.
(b) (i) the Pledgor shall be entitled, from time to time, to collect
and receive for its own use all cash dividends paid in respect of the
Pledged Shares to the extent not in violation of the Credit Agreement
other than any and all (A) dividends paid or payable other than in cash in
respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Pledged
Collateral, (B) dividends and other distributions paid or payable in cash
in respect of any Pledged Collateral in connection with a partial or total
liquidation or dissolution and (C) cash paid, payable or otherwise
distributed in redemption of, or in exchange for, any Pledged Collateral;
provided, however, that until actually paid all rights to such dividends
shall remain subject to the Lien created by this Agreement; and
(ii) all dividends (other than such cash dividends as are
permitted to be paid to the Pledgor in accordance with clause (i) above)
and all other distributions in respect of any of the Pledged Shares,
whenever paid or made, shall be delivered to the Agent to hold as Pledged
Collateral and shall, if received by the Pledgor, be received in trust for
the benefit of the Agent, be segregated from the other property or funds
of the Pledgor, and be forthwith delivered to the Agent as Pledged
Collateral in the same form as so received (with any necessary
endorsement).
Section 8. Defaults and Remedies.
(a) Upon the occurrence and during the continuance of an Event of
Default (provided that such Event of Default is not waived in accordance with
the terms of the Credit
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Agreement), the Agent (personally or through an agent) is hereby authorized and
empowered, to transfer and register in its name or in the name of its nominee
the whole or any part of the Pledged Collateral, to exercise the voting rights
with respect thereto, to collect and receive all cash dividends and other
distributions made thereon, to sell in one or more sales after ten (10) days'
notice of the time and place of any public sale or of the time after which a
private sale is to take place (which notice the Pledgor agrees is commercially
reasonable), but without any previous notice or advertisement, the whole or any
part of the Pledged Collateral and to otherwise act and to exercise any and all
rights with respect to the Pledged Collateral as though the Agent was the
outright owner thereof, the Pledgor hereby irrevocably constituting and
appointing the Agent as the proxy and attorney-in-fact of the Pledgor, with full
power of substitution to do so; provided, however, that the Agent shall not have
any duty to exercise any such right or to preserve the same and shall not be
liable for any failure to do so or for any delay in doing so. Any sale shall be
made at a public or private sale at the Agent's place of business, or at any
public building in the City of Boston, Massachusetts or elsewhere to be named in
the notice of sale, either for cash or upon credit or for future delivery at
such price as the Agent may deem fair, and the Agent may be the purchaser of the
whole or any part of the Pledged Collateral so sold and hold the same thereafter
in its own right free from any claim of the Pledgor or any right of redemption.
Each sale shall be made to the highest bidder, but the Agent reserves the right
to reject any and all bids at such sale which, in its discretion, it shall
reasonably deem inadequate. Demands of performance, except as otherwise herein
specifically provided for, notices of sale, advertisements and the presence of
property at sale are hereby waived and any sale hereunder may be conducted by an
auctioneer or any officer or agent of the Agent.
(b) If, at the original time or times appointed for the sale of the
whole or any part of the Pledged Collateral, the highest bid, if there be but
one sale, shall be inadequate to discharge in full all the Secured Obligations,
or if the Pledged Collateral be offered for sale in lots, if at any of such
sales, the highest bid for the lot offered for sale would indicate to the Agent,
in its reasonable discretion, the unlikelihood of the proceeds of the sales of
the whole of the Pledged Collateral being sufficient to discharge all the
Secured Obligations, the Agent may, on one or more occasions and in its
reasonable discretion, postpone any of said sales by public announcement at the
time of sale or the time of previous postponement of sale, and no other notice
of such postponement or postponements of sale need be given, any other notice
being hereby waived; provided, however, that any sale or sales made after such
postponement shall be after ten (10) days' notice to the Pledgor.
(c) In the event of any sales hereunder, the Agent shall, after
deducting all reasonable costs or expenses of every kind (including reasonable
attorneys' fees and disbursements) for care, safekeeping, collection, sale,
delivery or otherwise, apply the residue of the proceeds of the sales to the
payment or reduction, either in whole or in part, of the Secured Obligations in
accordance with the agreements and instruments governing and evidencing the
Secured Obligations, returning the surplus, if any, to the Pledgor.
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(d) If, at any time when the Agent in its reasonable discretion
determines, following the occurrence and during the continuance, of an Event of
Default, that, in connection with any actual or contemplated exercise of its
rights (when permitted under this Section 8) to sell the whole or any part of
the Pledged Collateral hereunder, it is necessary or advisable to effect a
public registration of all or part of the Pledged Collateral pursuant to the
Securities Act of 1933, as amended (or any similar statute then in effect) (the
"Act"), the Pledgor shall, in an expeditious manner, cause each of its
Subsidiaries other than the Real Estate Subsidiary, if any, to:
(i) prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with respect to the
Pledged Collateral and use its best efforts to cause such registration
statement to become and remain effective;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Act with
respect to the sale or other disposition of the Pledged Collateral covered
by such registration statement whenever the Agent shall desire to sell or
otherwise dispose of the Pledged Collateral;
(iii) furnish to the Agent such numbers of copies of a
prospectus and a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as the Agent may
reasonably request in order to facilitate the public sale or other
disposition of the Pledged Collateral by the Agent;
(iv) use its best efforts to register or qualify the Pledged
Collateral covered by such registration statement under such other
securities or blue sky laws of such jurisdictions within the United States
as the Agent shall reasonably request, and do such other reasonable acts
and things as may be required of it to enable the Agent to consummate the
public sale or other disposition in such jurisdictions of the Pledged
Collateral by the Agent;
(v) use its best efforts to furnish, at the reasonable request
of the Agent, on the date that shares of the Pledged Collateral are
delivered to the underwriters for sale pursuant to such registration or,
if the security is not being sold through underwriters, on the date that
the registration statement with respect to such shares of the Pledged
Collateral becomes effective, (A) an opinion, dated such date, of the
outside counsel representing such registrant for the purposes of such
registration, addressed to the underwriters, if any, and in the event the
Pledged Collateral is not being sold through underwriters, then to the
Agent, stating that such registration statement has become effective under
the Act and that (1) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings
for that purpose have been instituted or are pending or threatened under
the Act, (2) the registration statement, the related prospectus, and each
amendment or
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supplement thereto, comply as to form in all material respects with the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder (except that such counsel need express no opinion as
to financial statements or other financial or statistical data contained
therein), (3) such counsel has no reason to believe that either the
registration statement or the prospectus, or any amendment or supplement
thereto, contains any untrue statement of a material fact or omits a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (4) the descriptions in the
registration statement or the prospectus, or any amendment or supplement
thereto, of all legal matters and contracts and other legal documents or
instruments are accurate in all material respects and fairly present the
information required to be shown and (5) such counsel does not know of any
legal or governmental proceedings, pending or threatened, required to be
described in the registration statement or prospectus, or any amendment or
supplement thereto, or to be filed as exhibits to the registration
statement which are not described and filed or incorporated by reference
as required; and (B) a letter, dated such date, from the independent
certified public accountants of such registrant, addressed to the
underwriters, if any, and in the event the Pledged Collateral is not being
sold through underwriters, then to the Agent, stating that they are
independent certified public accountants within the meaning of the Act and
that, in the opinion of such accountants, the financial statements and
other financial data of such registrant included in the registration
statement or the prospectus, or any amendment or supplement thereto,
comply as to form in all material respects with the applicable accounting
requirements of the Act. The opinion of counsel referred to above shall
additionally cover such other legal matters with respect to the
registration in respect of which such opinion is being given as the Agent
may reasonably request. The letter referred to above from the independent
certified public accountants shall additionally cover such other financial
matters (including information as to the period ending not more than five
(5) Business Days prior to the date of such letter) with respect to the
registration in respect of which such letter is being given as the Agent
may reasonably request; and
(vi) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and not later than 18
months after the effective date of the registration statement, make
available to the Agent an earnings statement (which need not be audited)
covering a period of at least 12 months beginning the first full month
after the effective date of such registration statement which earnings
statement shall satisfy the provisions of Rule 158 promulgated under the
Act.
(e) All expenses incurred in complying with Section 8(d) hereof,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the National Association of Securities Dealers,
Inc.), printing expenses, fees and disbursements of counsel for the registrant,
the reasonable fees and expenses of counsel for the Agent, expenses of the
independent certified public accountants (including any special audits incident
to or required by any such registration) and expenses of complying with the
securities or blue sky laws or any jurisdictions, shall be paid by the Pledgor.
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(f) If, at any time when the Agent shall determine to exercise its
rights to sell the whole or any part of the Pledged Collateral hereunder, such
Pledged Collateral or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Act, the Agent may, in its
discretion (subject only to applicable requirements of law), sell such Pledged
Collateral or part thereof by private sale in such manner and under such
circumstances as the Agent may deem necessary or advisable, but subject to the
other requirements of this Section 8, and shall not be required to effect such
registration or to cause the same to be effected. Without limiting the
generality of the foregoing, in any such event the Agent in its discretion (i)
may, in accordance with applicable securities laws, proceed to make such private
sale notwithstanding that a registration statement for the purpose of
registering such Pledged Collateral or part thereof could be or shall have been
filed under the Act (or similar statute), (ii) may approach and negotiate with a
single possible purchaser to effect such sale and (iii) may restrict such sale
to a purchaser who will represent and agree that such purchaser is purchasing
for its own account, for investment and not with a view to the distribution or
sale of such Pledged Collateral or part thereof. In addition to a private sale
as provided above in this Section 8, if any of the Pledged Collateral shall not
be freely distributable to the public without registration under the Act (or
similar statute) at the time of any proposed sale pursuant to this Section 8,
then the Agent shall not be required to effect such registration or cause the
same to be effected but, in its discretion (subject only to applicable
requirements of law), may require that any sale hereunder (including a sale at
auction) be conducted subject to restrictions (A) as to the financial
sophistication and ability of any Person permitted to bid or purchase at any
such sale, (B) as to the content of legends to be placed upon any certificates
representing the Pledged Collateral sold in such sale, including restrictions on
future transfer thereof, (C) as to the representations required to be made by
each Person bidding or purchasing at such sale relating to that Person's access
to financial information about the Pledgor and such Person's intentions as to
the holding of the Pledged Collateral so sold for investment, for its own
account, and not with a view of the distribution thereof and (D) as to such
other matters as the Agent may, in its discretion, deem necessary or appropriate
in order that such sale (notwithstanding any failure so to register) may be
effected in compliance with the Uniform Commercial Code and other laws affecting
the enforcement of creditors' rights and the Act and all applicable state
securities laws.
(g) The Pledgor acknowledges that notwithstanding the legal
availability of a private sale or a sale subject to the restrictions described
above in paragraph (f), the Agent may, in its discretion, elect to register any
or all the Pledged Collateral under the Act (or any applicable state securities
law) in accordance with its rights hereunder. The Pledgor, however, recognizes
that the Agent may be unable to effect a public sale of any or all the Pledged
Collateral and may be compelled to resort to one or more private sales thereof.
The Pledgor also acknowledges any such private sale (conducted in a commercially
reasonable manner for private sales) 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 shall be
deemed to have been made in a commercially reasonable manner. The Agent shall be
under no obligation to delay a sale of any of the Pledged Collateral for the
period of time necessary to permit the registrant to register such securities
for public sale under the Act, or
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under applicable state securities laws, even if the Pledgor or issuer of the
Pledged Collateral would agree to do so.
(h) The Pledgor agrees that following the occurrence an Event of
Default, it will not at any time plead, claim or take the benefit of any
appraisal, valuation, stay, extension, moratorium or redemption law now or
hereafter in force in order to prevent or delay the enforcement of this
Agreement, or the absolute sale of the whole or any part of the Pledged
Collateral or the possession thereof by any purchaser at any sale hereunder in
accordance with the terms hereof, and the Pledgor waives the benefit of all such
laws to the extent it lawfully may do so. The Pledgor agrees that it will not
interfere with any right, power and remedy of the Agent provided for in this
Agreement or now or hereafter existing at law or in equity or by statute or
otherwise, or the exercise or beginning of the exercise by the Agent of any one
or more of such rights, powers, or remedies. No failure or delay on the part of
the Agent to exercise any such right, power or remedy and no notice or demand
which may be given to or made upon the Pledgor by the Agent with respect to any
such remedies shall operate as a waiver thereof, or limit or impair the Agent's
right to take any action or to exercise any power or remedy hereunder, without
notice or demand, or prejudice its rights as against the Pledgor in any respect.
(i) The Pledgor further agrees that a breach of any of the covenants
contained in this Section 8 will cause irreparable injury to the Agent, that the
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 Section 8
shall be specifically enforceable against the Pledgor.
(j) Without in any way limiting the provisions of this Section 8,
upon the occurrence and during the continuance of an Event of Default, the Agent
may exercise in addition to all other rights and remedies granted to it in this
Agreement and in the Credit Agreement, all rights and remedies of a secured
party under the Uniform Commercial Code.
Section 9. Application of Proceeds. Any cash held by the Agent as Pledged
Collateral and all cash proceeds received by the Agent in respect of any sale
of, liquidation of, or other realization upon all or any part of the Pledged
Collateral shall be applied by the Agent as follows:
(a) First, to the payment of the costs and expenses of such sale,
liquidation or other realization, including reasonable compensation to the Agent
and its agents and counsel, and all expenses, liabilities and advances made or
incurred by the Agent in connection therewith;
(b) Next, to the payment of the Secured Obligations; and
(c) Finally, after payment in full of all Secured Obligations, to
the payment to the Pledgor, or its successors or assigns, or to whomsoever may
be lawfully entitled to receive
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the same or as a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
Section 10. Waiver. No delay on the Agent's part in exercising any power
of sale, Lien, option or other right hereunder, and no notice or demand which
may be given to or made upon the Pledgor by the Agent with respect to any power
of sale, Lien, option or other right hereunder, shall constitute a waiver
thereof, or limit or impair the Agent's right to take any action or to exercise
any power of sale, Lien, option, or any other right hereunder, without notice or
demand, or prejudice the Agent's rights as against the Pledgor in any respect.
Section 11. Assignment. The Agent may assign, endorse or transfer any
instrument evidencing all or any part of the Secured Obligations as provided in,
and in accordance with, the Credit Agreement, and the holder of such instrument
shall be entitled to the benefits of this Agreement.
Section 12. Termination. Immediately following the Termination Date, the
Agent shall deliver to the Pledgor the Pledged Collateral subject to this
Agreement and all instruments of assignment executed in connection therewith,
free and clear of the Liens hereof, and any assignment required to be executed
by the Agent to effect such redelivery and, except as otherwise provided herein,
all of the Pledgor's obligations hereunder shall at such time terminate.
Section 13. Lien Absolute. All rights of the Agent hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Credit Agreement,
the Revolving Credit Notes, any other Lender Agreement or any other agreement or
instrument governing or evidencing any Secured Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, the Revolving Credit Notes, any other Lender Agreement or any other
agreement or instrument governing or evidencing any Secured Obligations;
(c) any exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Secured Obligations; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Pledgor.
Section 14. Release. The Pledgor consents and agrees that the Agent may at
any time, or from time to time, in its discretion (a) renew, extend or change
the time of payment,
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and/or the manner, place or terms of payment of all or any part of the Secured
Obligations and (b) exchange, release and/or surrender all or any of the Pledged
Collateral, or any part thereof, by whomsoever deposited, which is now or may
hereafter be held by the Agent in connection with all or any of the Secured
Obligations; all in such manner and upon such terms as the Agent may deem
proper, and without notice to or further assent from the Pledgor, it being
hereby agreed that the Pledgor shall be and remain bound upon this Agreement,
irrespective of the existence, value or condition of any of the Pledged
Collateral, and notwithstanding any such change, exchange, settlement,
compromise, surrender, release, renewal or extension, and notwithstanding also
that the Secured Obligations may, at any time exceed the aggregate principal
amount thereof set forth in the Credit Agreement, or any other agreement
governing any Secured Obligations. The Pledgor hereby waives notice of
acceptance of this Agreement, and also presentment, demand, protest and notice
of dishonor of any and all of the Secured Obligations, and promptness in
commencing suit against any party hereto or liable hereon, and in giving any
notice to or of making any claim or demand hereunder upon the Pledgor. No act or
omission of any kind on the Agent's part shall in any event affect or impair
this Agreement.
Section 15. Indemnification. The Pledgor agrees to indemnify the Agent and
its respective directors, officers, employees and agents and hold the Agent and
each such Person harmless from and against any and all losses, taxes,
liabilities, claims and damages, including reasonable attorneys' fees and
disbursements, and other expenses incurred or arising by reason of the taking or
the failure to take action by the Agent, in good faith, in respect of any
transaction effected under this Agreement, or in connection with the Lien
provided for herein, including, without limitation, any taxes payable in
connection with the delivery or registration of any of the Pledged Collateral as
provided herein (collectively "Indemnified Claims") or in connection with any
litigation, investigation or proceedings related to any of the foregoing.
Whether or not the transactions contemplated by this Agreement shall be
consummated, the Pledgor agrees to pay to the Agent all reasonable out-of-pocket
costs and expenses incurred in connection with this Agreement and all reasonable
fees, expenses and disbursements, and the reasonable fees of the Agent's agents
or representatives, incurred in connection with the execution and delivery of
this Agreement and the performance by the Agent of the provisions of this
Agreement and of any transactions effected in connection with this Agreement.
The obligations of the Pledgor under this Section 15 shall survive the
termination of this Agreement. The foregoing notwithstanding, the indemnity
provided for herein shall not apply to any Indemnified Claim of the Agent if a
court of competent jurisdiction determines that such Indemnified Claim is the
result of the gross negligence or willful misconduct of the Agent.
Section 16. Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
the Pledgor for liquidation or reorganization, should the Pledgor become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Pledgor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or
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returned, and in any such case, the Secured Obligations shall be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored
or returned.
Section 17. Miscellaneous.
(a) The Agent may execute any of its duties hereunder by or through
agents or employees and shall be entitled to advice of counsel concerning all
matters pertaining to its duties hereunder.
(b) The Pledgor agrees to promptly reimburse the Agent for actual
and reasonable out-of-pocket expenses, including, without limitation, reasonable
counsel fees, incurred by the Agent in connection with the administration and
enforcement of this Agreement.
(c) Neither the Agent nor any of its officers, directors, employees,
agents or counsel shall be liable for any action lawfully taken or omitted to be
taken by it or them hereunder or in connection herewith, except for its or their
own gross negligence or willful misconduct.
(d) This Agreement shall be binding upon the Pledgor and its
successors and assigns, and shall inure to the benefit of, and be enforceable
by, the Agent and its respective successors and assigns, and shall be governed
by, and construed and enforced in accordance with, the internal laws in effect
in the Commonwealth of Massachusetts without giving effect to principles of
choice of law, and none of the terms or provisions of this Agreement may be
waived, altered, modified or amended except in writing duly signed for and on
behalf of the Agent and the Pledgor.
(e) At any time and from time to time, upon written request of the
Agent, and at the sole expense of the Pledgor, the Pledgor shall promptly and
duly execute and deliver any and all such further instruments and documents and
take such further action as the Agent may reasonably deem desirable to obtain
the full benefits of this Agreement and of the rights and powers herein granted.
Section 18. Severability. If for any reason any provision or provisions
hereof are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or effect those portions of
this Agreement which are valid.
Section 19. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other party, or whenever any of the parties desires to give or
serve upon any other a communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and either shall be delivered in accordance with the
provisions of Section 14.1 of the Credit Agreement, addressed as follows:
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(a) If to the Agent, at:
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxx, Director
with a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx Xxxxxx, Xx., P.C.
(b) If to the Pledgor, at:
00 Xxxxxx Xxxx
Xxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Chief Financial Officer
with a copy to:
Goulston & Storrs, P.C.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxxx, Esq. or
Xxxxxx Xxxxx, Esq.
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
with receipt acknowledged, on the date of telecopy transmission or three (3)
Business Days after the same shall have been deposited in the United States
mail, postage prepaid. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to the
persons designated above to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
Section 20. Section Titles. The Section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
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Section 21. Counterparts. This Agreement may be executed in any number of
counterparts, which shall, collectively and separately, constitute one
agreement.
Section 22. Conflict of Terms. Except as otherwise explicitly provided in
this Agreement, if any provision contained in this Agreement is in conflict with
or inconsistent with any provision in the Credit Agreement, the provision
contained in the Credit Agreement shall govern and control, to the extent of
such conflict or inconsistency.
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Stock Pledge
Agreement to be duly executed as of the date first written above.
TWEETER HOME ENTERTAINMENT
GROUP, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------
Name:
Title:
The undersigned hereby join in the above Agreement for the sole purpose of
consenting to and being bound by the provisions of Sections 6, 7 and 8 thereof,
the undersigned hereby agreeing to cooperate fully and in good faith with the
Agent and the Pledgor in carrying out such provisions.
NEW ENGLAND AUDIO CO., INC. TWEETER HOME ENTERTAINMENT
GROUP FINANCING COMPANY
TRUST
By: /s/ XXXXXXX X. XXXXX By: /s/ XXXXXXX X. XXXXX
---------------------------- ----------------------------
Name: Trustee:
Title:
Accepted and Acknowledged by:
BANKBOSTON, N.A.
By: /s/ XXXXXXXXXXX X. XXXXX
----------------------------
Name:
Title: Director
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SCHEDULE I
to the Guarantor's Stock Pledge Agreement
Attached to and forming a part of that certain Guarantor's Stock Pledge
Agreement dated as of July 20, 1998 by Tweeter Home Entertainment Group, Inc. to
BankBoston, N.A.
Class of Certificate Number of
Issuer Stock No(s) Shares
------ ----- ----- ------
New England Audio Co.,
Inc. Common 35 100
Tweeter Home
Entertainment Group
Financing Company Beneficial
Trust Interests 1 100
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SCHEDULE II
to the Stock Pledge Agreement
PLEDGE AMENDMENT
This Pledge Amendment, dated _______, is delivered pursuant to Section
6(d) of the Stock Pledge Agreement referred to below. The undersigned hereby
agrees that this Pledge Amendment may be attached to that certain Stock Pledge
Agreement, dated as of July __, 1998 by the undersigned, as Pledgor, to
BankBoston, N.A., and that the Pledged Shares listed on this Pledge Amendment
shall be and become a part of the Pledged Collateral referred to in said Stock
Pledge Agreement and shall secure all Secured Obligations referred to in said
Stock Pledge Agreement.
TWEETER HOME ENTERTAINMENT
GROUP, INC.
By: ________________________________
Name:
Title:
Class of Certificate Number of
Issuer Stock No(s). Shares
------ -------- ----------- ---------
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SCHEDULE III
to the Stock Pledge Agreement
SUBSIDIARIES OF PLEDGOR
New England Audio Co., Inc.
Tweeter Home Entertainment Group
Financing Company Trust
