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Exhibit 10.23
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AMENDED AND RESTATED STOCK PLEDGE AGREEMENT
by and between
NEW AMERICAN HEALTHCARE CORPORATION,
as Borrower
and
TORONTO DOMINION (TEXAS), INC.,
as Agent
Dated as of January 30, 1998
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AMENDED AND RESTATED STOCK PLEDGE AGREEMENT
THIS AMENDED AND RESTATED STOCK PLEDGE AGREEMENT (this "Agreement")
dated as of January 30, 1998, is entered into by and between NEW AMERICAN
HEALTHCARE CORPORATION, a Tennessee corporation (the "Borrower"), and TORONTO
DOMINION (TEXAS), INC. (the "Agent"), for itself and as Agent on behalf of the
Issuing Bank and the Banks (all defined in the hereinafter defined Credit
Agreement), which amends and restates in its entirety that certain Stock Pledge
Agreement dated as September 30, 1996, by and between the above-named parties,
as amended.
W I T N E S S E T H :
WHEREAS, the Borrower, the Agent, the Issuing Bank and the Banks are
parties to that certain Amended and Restated Credit Agreement dated as of
January 30, 1998 (as amended, modified or supplemented from time to time, the
"Credit Agreement"); and
WHEREAS, it is a condition to the making of the Loans and the issuing
of the Letters of Credit (as said terms are defined in the Credit Agreement)
under the Credit Agreement that the Borrower shall have entered into this
Agreement pledging to the Agent, for itself and for the benefit of the Issuing
Bank and the Banks, the shares of capital stock (the "Stock") owned by the
Borrower in each of the corporations (the "Pledged Corporations") listed on
EXHIBIT A attached hereto, as the same may be supplemented from time to time
pursuant to SECTION 4 hereof, in order to secure the Obligations (as defined in
the Credit Agreement);
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used but not defined herein
shall have the meanings ascribed thereto in the Credit Agreement.
SECTION 2. WARRANTY. The Borrower hereby represents and warrants to the
Agent that (i) except for the security interest created hereby, the Borrower
owns the Stock listed on EXHIBIT A hereto, or will own the Stock to be listed on
addenda to said EXHIBIT A which may from time to time be prepared pursuant to
SECTION 4 hereof, free and clear of all Liens, (ii) such Stock is or will be, at
the time of the Borrower's acquisition thereof, duly authorized, validly issued,
fully paid and nonassessable, and (iii) the Borrower has or will have, at the
time of the Borrower's acquisition thereof, the unencumbered right to pledge
such Stock.
SECTION 3. SECURITY INTEREST. The Borrower hereby unconditionally
pledges, transfers, conveys, grants and assigns to the Agent a continuing
security interest in and security title to the Stock and all substitutions
therefor and replacements thereof, all proceeds and products thereof and all
rights relating thereto, including, without limitation, the
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certificates representing the Stock, all warrants, options, share appreciation
rights and other rights, contractual or otherwise, in respect thereof and all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in addition to, in
substitution of, on account of or in exchange for any or all of the Stock,
whether now owned or hereafter acquired by the Borrower. The Borrower has
delivered to and deposited with the Agent certificates representing the Stock
owned by it as of the Closing Date and undated stock powers endorsed in blank,
and will deliver such certificates and stock powers with respect to any Stock
acquired by the Borrower after the Closing Date, as security for the payment and
performance of all Obligations. It is the intention of the parties hereto that
record and beneficial ownership of the Stock, including, without limitation, all
voting, consensual and dividend rights, shall remain in the Borrower until the
occurrence of an Event of Default and until the Agent shall notify the Borrower
of the Agent's exercise of voting and consensual rights to the Stock pursuant to
SECTION 9 hereof.
SECTION 4. ADDITIONAL SHARES. In the event that, during the term of
this Agreement, the Borrower acquires additional stock in a corporation list on
EXHIBIT A attached hereto at the time of such acquisition or acquires stock in a
corporation not listed on said EXHIBIT A prior to such acquisition, such stock
shall be subject to the security interest hereby granted, and the Borrower
shall, concurrently with the acquisition of such stock, deliver to and deposit
with the Agent certificates representing such stock, together with undated stock
powers endorsed in blank, and such stock shall thereupon constitute additional
Stock to be held by the Agent under the terms of this Agreement.
In the event that, during the term of this Agreement:
(a) any stock dividend, stock split, reclassification,
readjustment or other change is declared or made in the capital
structure of any Pledged Corporation, or any new stock is issued by
such Pledged Corporation, certificates representing all such new,
substituted and additional shares or other such securities issued to
the Borrower shall be promptly delivered to the Agent, together with
undated stock powers endorsed in blank by the Borrower, and shall
thereupon constitute additional Stock to be held by the Agent under the
terms of this Agreement; and
(b) any subscriptions, warrants or any other rights or options
shall be issued in connection with the Stock, all new stock or other
securities acquired by the Borrower through such subscriptions,
warrants, rights or options, together with related powers appropriately
endorsed, shall be promptly delivered to the Agent and shall thereupon
constitute additional Stock to be held by the Agent under the terms of
this Agreement.
The Borrower shall deliver an addendum to the attached EXHIBIT A
reflecting the foregoing concurrently with the delivery of such additional Stock
and related powers. Any such corporation not previously listed on said EXHIBIT A
which shall be included in any such addendum shall thereupon constitute a
Pledged Corporation.
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SECTION 5. Event of Default. Upon the occurrence of an Event of
Default, and until such Event of Default is waived in writing in accordance with
the Credit Agreement:
(a) The Agent shall have, in addition to any other rights
given under this Agreement or by law, all of the rights and remedies
with respect to the Stock of a secured party under the Uniform
Commercial Code as in effect in the State of New York or any other
relevant jurisdiction, including, without limitation, such powers of
sale and other powers as may be conferred by applicable law. With
respect to the Stock or any part thereof which shall then be in or
shall thereafter come into the possession or custody of the Agent or
which the Agent shall otherwise have the ability to transfer under
applicable law, the Agent may, in its sole discretion, without notice
except as specified below, sell or cause the same to be sold at any
exchange or broker's board or at public or private sale, in one or more
sales or lots, at such price as the Agent may deem best, for cash or on
credit or for future delivery, without assumption of any credit risk,
and the purchaser of any or all of the Stock so sold shall thereafter
own the same, absolutely free from any claim, encumbrance or right of
any kind whatsoever. The Agent and each of the Banks and the Issuing
Bank may, in its own name or in the name of a designee or nominee, buy
the Stock at any public sale and, if permitted by applicable law, buy
the Stock at any private sale. The Borrower will pay to the Agent, in
accordance with the Credit Agreement, all expenses of, or incident to,
the enforcement of any of the provisions hereof. The Agent agrees to
distribute any proceeds of the sale of the Stock or any other
realization upon the Stock in accordance with the Credit Agreement, and
the Borrower shall remain liable for any deficiency following the sale
of the Stock or any other realization upon the Stock.
(b) Unless any of the Stock threatens to decline speedily in
value or is or becomes of a type sold on a recognized market, the Agent
will give the Borrower reasonable notice of the time and place of any
public sale thereof or of the time after which any private sale or
other intended disposition is to be made. Any sale of the Stock
conducted in conformity with reasonable commercial practices of banks,
commercial finance companies, insurance companies or other financial
institutions disposing of property similar to the Stock shall be deemed
to be commercially reasonable. Notwithstanding any provision to the
contrary contained herein, any requirements of reasonable notice shall
be met if such notice is received by the Borrower as provided in
SECTION 10 hereof at least ten (10) Banking Days before the time of the
sale or disposition. Any other requirement of notice, demand or
advertisement for sale is waived, to the extent permitted by law.
(c) If, at the original time or times appointed for the sale
of the whole or any part of the Stock, the highest bid, if there be but
one sale, shall be inadequate to discharge in full all the Obligations,
or if the Stock shall 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 discretion, the unlikelihood of the proceeds of the
sales of the whole of the Stock being sufficient to discharge all the
Obligations, or if applicable law would permit postponement or
postponements of sale for any other reason, then the Agent
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may, on one or more occasions and in its 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) Banking Days' notice to the
Borrower.
(d) The Borrower shall, upon the request of the Agent, execute
and deliver, and cause each Pledged Corporation and its respective
officers and directors to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things,
as may be necessary or, in the opinion of the Agent, the Borrower or
its or their counsel, advisable to register the applicable Stock under
the provisions of the Securities Act of 1933, as amended (the
"Securities Act"), and exercise its best efforts to cause the
registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to
the related prospectus which, in the opinion of the Agent, the Borrower
or its or their counsel are necessary or advisable, all in conformity
with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable
thereto.
The Borrower shall, upon the request of the Agent, use its
best efforts to qualify the Stock under state securities or "Blue Sky"
laws and to obtain all necessary governmental approvals for the sale of
the Stock, as requested by the Agent.
The Borrower shall, upon the request of the Agent, cause the
Pledged Corporations (or any of them) to make available to the holders
of their securities, as soon as practicable, earnings statements which
will satisfy the provisions of SECTION 11(A) of the Securities Act.
The Borrower shall, upon the request of the Agent, do or cause
to be done all such other acts and things as may be necessary to make
such sale of the Stock or any part thereof valid and binding and in
compliance with applicable law.
The Borrower will reimburse the Agent, in accordance with the
Credit Agreement, for all expenses incurred by the Agent in connection
with the foregoing.
(e) If the Agent determines that, prior to any public offering
of any securities constituting part of the Stock, such securities
should be registered under the Securities Act and/or registered or
qualified under any other federal or state law and such registration
and/or qualification is not practicable, then the Borrower agrees that
it will be commercially reasonable if a private sale is arranged so as
to avoid a public offering, even though the sales price established
and/or obtained at such private sale may be substantially less than
prices which could have been obtained for such security on any market
or exchange or in any other public sale. In so doing, the Agent may
restrict the bidders and prospective purchasers to those who are
qualified and will
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represent and agree that they are purchasing for investment only and
not for distribution, and the Agent may solicit offers to buy the
Stock, or any part of it, from a limited number of investors deemed by
the Agent, in its reasonable judgment, to be financially responsible
parties who might be interested in so purchasing the Stock. If the
Agent solicits such offers from not less than four (4) such investors,
then the acceptance by the Agent of the highest offer obtained
therefrom shall be deemed to be a commercially reasonable method of
disposing of such Stock. The Agent shall be under no obligation to
delay a sale of any of the Stock for the period of time necessary to
permit the registrant to register such securities for public sale under
the Securities Act or under applicable state securities laws even if
the Borrower or the issuer of the Stock would agree to do so.
(f) Any such sale pursuant to this subparagraph (e) (including
a sale at auction) may, in the Agent's discretion, be conducted subject
to restrictions (i) as to the financial sophistication and ability of
any Person permitted to bid or purchase at any such sale, (ii) as to
the content of legends to be placed upon any certificates representing
the Stock sold in such sale, including restrictions on future transfer
thereof, (iii) 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 pertinent Pledged
Corporation(s) and such Person's intentions as to the holding of the
Stock so sold for investment, for its own account, and not with a view
of the distribution thereof, and (iv) as to such other matters as the
Agent may 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 as in effect in the State
of New York or any other relevant jurisdiction, laws affecting the
enforcement of creditors' rights, the Securities Act and all applicable
state securities laws.
(g) The Borrower agrees that 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 Stock or the possession thereof by any
purchaser at any sale hereunder, and the Borrower waives the benefit of
all such laws, to the extent it lawfully may do so. 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 Borrower
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 exercise any power of remedy hereunder, without notice or demand, or
prejudice its rights as against the Borrower in any respect.
SECTION 6. ADDITIONAL RIGHTS OF SECURED PARTY. In addition to its
rights and privileges under this Agreement and the other Loan Documents, the
Agent shall have all the rights, powers and privileges of a secured party under
the Uniform Commercial Code as in effect in any applicable jurisdiction.
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SECTION 7. RETURN OF STOCK TO BORROWER. Upon satisfaction in full of
all the Obligations and the termination of the Commitment and the Letter of
Credit Commitment, the Agent shall return the Stock and all rights received by
the Agent as a result of its possessory interest in the Stock to the Borrower.
SECTION 8. BORROWER'S OBLIGATIONS ABSOLUTE. The obligations of the
Borrower under this Agreement shall be direct and immediate and not conditional
or contingent upon the pursuit of any remedies against any other Person or any
other security or Liens available to the Agent, the Issuing Bank or any Bank.
The Borrower hereby waives any right to require that an action be brought
against any other Person, or to require that resort be had to any other security
or to any balance in any deposit account or credit on the books of the Agent,
any of the Banks or the Issuing Bank in favor of any other Person prior to the
exercise of remedies hereunder, or to require action hereunder prior to resort
by the Agent to any other security or Collateral for the Obligations.
SECTION 9. VOTING RIGHTS.
(a) Upon the occurrence of an Event of Default, and until such
Event of Default is waived in writing in accordance with the Credit
Agreement, (i) the Agent may, upon ten (10) calendar days' prior notice
to the Borrower of the Agent's intention to do so, exercise all voting
rights and all other ownership or consensual rights with respect to the
Stock, but under no circumstances is the Agent obligated by the terms
of this Agreement to exercise such rights, and (ii) the Borrower hereby
appoints the Agent, which appointment shall be effective on the tenth
day following the giving of notice by the Agent as provided in the
foregoing clause (i), the Borrower's true and lawful attorney-in-fact
and irrevocable proxy to vote the Stock in any manner that the Agent
deems advisable for or against all matters submitted or which may be
submitted to a vote of shareholders. The power-of-attorney granted
hereby is coupled with an interest and shall be irrevocable.
(b) For so long as the Borrower shall have the right to vote
the Stock owned by it, the Borrower covenants and agrees that it will
not, without the prior written consent of the Agent, vote or take any
consensual action with respect to the Stock which would constitute an
Event of Default.
SECTION 10. NOTICES; CHOICE OF LAW. All notices and other
communications required or permitted hereunder shall be in writing and shall be
given in the manner and to the addresses set forth in the Credit Agreement.
SECTION 11. BINDING AGREEMENT; CHOICE OF LAW. This Agreement shall be
construed and interpreted in accordance with the internal laws of the State of
New York applicable to agreements made and to be performed wholly within the
State of New York without reference to the conflicts or choice of law principles
thereof. This Agreement, together with all documents referred to herein,
constitutes the entire agreement between the
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parties with respect to the matters addressed herein and may not be modified
except by a writing executed by the Agent and the Borrower.
SECTION 12. SEVERABILITY. If any paragraph or part thereof shall for
any reason be held or adjudged to be invalid, illegal or unenforceable by any
court of competent jurisdiction, such paragraph or part thereof so adjudicated
invalid, illegal or unenforceable shall be deemed separate, distinct and
independent, and the remainder of this Agreement shall remain in full force and
effect and shall not be affected by such holding or adjudication.
SECTION 13. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
SECTION 14. AGENT. Each reference herein to any right granted to,
benefit conferred upon or power exercisable by the "Agent" shall be a reference
to the Agent for itself and for the benefit of the Issuing Bank and the Banks,
and each action taken or right exercised hereunder shall be deemed to have been
so taken or exercised by the Agent for itself and for the benefit of and on
behalf of the Issuing Bank and the Banks.
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IN WITNESS WHEREOF, the undersigned parties hereto have executed this
Agreement by and through their duly authorized officers, as, of the day and year
first above written.
NEW AMERICAN HEALTHCARE CORPORATION
By:
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Its:
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TORONTO DOMINION (TEXAS), INC.
By:
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Its:
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THIS IS A SIGNATURE PAGE FOR THE AMENDED AND RESTATED STOCK PLEDGE
AGREEMENT BETWEEN NEW AMERICAN HEALTHCARE CORPORATION AND
TORONTO-DOMINION (TEXAS), INC., AS AGENT
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EXHIBIT A
PLEDGED CORPORATIONS
Stock
Class of Number of Percentage of Certificate
Name Stock Shares Class Owned Nos.
---- -------- --------- ------------- -----------
NAHC of Missouri, Inc. Common 1,000 100% 1
NAHC of Tennessee, Inc. Common 1,000 100% 1
NAHC of Texas, Inc. Common 1,600 100% 3
NAHC II of Texas, Inc. Common 1,000 100% 1
NAHC Financial, Inc. Common 1,000 100% 1
NAHC of Iowa, Inc. Common 1,000 100% 1
NAHC of Oregon, Inc. Common 1,000 100% 1
NAHC II of Oregon, Inc. Common 1,000 100% 1
NAHC of Washington, Inc. Common 1,000 100% 1
NAHC of Wyoming, Inc. Common 1,000 100% 1
NAHC Management Company Common 1,000 100% 1
