Exhibit 10.13
PLEDGE AGREEMENT
This instrument is executed as of the 7th day of August, 2000 by and
between The J. Xxxx Group, Inc., with an address of 0 Xxxxxxxxxxxx Xxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 ("Pledgor") and Citizens Bank of Massachusetts with its
principal offices located at 00 Xxxxx Xxxxxx, Xxxxxx, XX 02108("Pledgee").
W I T N E S S E T H:
WHEREAS, Pledgee is the holder of all of the issued and outstanding
shares of capital stock of Pledgee's wholly owned subsidiaries, J. Xxxx Direct,
Inc., The Birch Pond Group, Inc., and QT Services Group, Inc., each a
Massachusetts corporation (each, a Subsidiary, and collectively, the
"Subsidiaries"); and
WHEREAS, Pledgor and Pledgee are entering into a certain Fourth Amended
and Restated Loan Agreement of even date (the "Loan Agreement"); and
WHEREAS, Pledgee requires pursuant to the Loan Agreement that Pledgor
execute and deliver to Pledgee this Pledge Agreement.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties hereto hereby agree:
Section 1. PLEDGE OF STOCK. The Pledgor hereby pledges, assigns, grants
a security interest in, and delivers to the Pledgee all shares of capital stock
of each of the Subsidiaries described in EXHIBIT "A" hereto, to be held by the
Pledgee subject to the terms and conditions hereinafter set forth; the
certificates for which shares, accompanied by stock powers or other appropriate
instruments of assignment thereof duly executed in blank by the Pledgor, are
being delivered to the Pledgee herewith.
Section 2. DEFINITIONS.
(a) The term "Stock" as used herein includes the shares of
stock of each of the Subsidiaries described in EXHIBIT "A" attached
hereto, and any additional shares of stock of any corporation or
company at the time pledged with the Pledgee hereunder, including all
shares of stock subsequently issued by any Subsidiary.
(b) The term "Obligations" as used herein means all
indebtedness, obligations and liabilities of Pledgor, to the Pledgee,
whether now existing or hereafter arising, direct or indirect, absolute
or contingent, due or to become due, matured or unmatured, liquidated
or unliquidated, whether monetary or non-monetary, whether arising by
contract, operation of law or otherwise, including without limitation,
indebtedness arising pursuant to the Loan Agreement, as such
indebtedness and/or the Loan Agreement may be modified, extended,
renewed, amended, substituted or changed from time to time.
(c) The term "Collateral" as used herein means the property at
any time, whether now or hereafter, pledged to the Pledgee hereunder
(whether described herein or not) and all income therefrom, increases
therein and proceeds thereof.
(d) The term "Event of Default" as used herein shall mean any
Event of Default pursuant to the Loan Agreement, as such Loan Agreement
may be modified, extended, renewed, amended, substituted or changed
from time to time.
Section 3. SECURITY FOR OBLIGATIONS. This Agreement and the pledge of
the Collateral hereunder is made with the Pledgee as security for the
Obligations.
Section 4. LIQUIDATION, RECAPITALIZATION, ETC. Any sums paid upon or
with respect to any of the Stock upon the liquidation or dissolution of any
issuer thereof shall be paid over to the Pledgee to be held by it as security
for the Obligations; and in case any distribution of capital shall be made on or
in respect of any of the Stock or any property shall be distributed upon or with
respect to any of the Stock pursuant to the recapitalization or reclassification
of the capital of the issuer thereof or pursuant to the reorganization thereof,
the property so distributed shall be delivered to the Pledgee to be held by it
as security for the Obligations. All sums of money and property paid or
distributed in respect of the Stock upon such a liquidation, dissolution,
recapitalization or reclassification which are received by the Pledgor shall,
until paid or delivered to the Pledgee, be held in trust for the Pledgee as
security for the Obligations. The payment of a dividend, other than in cash,
shall be deemed to be recapitalization.
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Section 5. AGREEMENT TO DELIVER SUBSEQUENTLY ISSUED STOCK. Pledgor
agrees to deliver forthwith to Pledgee all shares of capital stock of each
Subsidiary which shares are issued subsequent to the execution of this Agreement
together with all such stock powers or other appropriate instruments of
assignment duly executed in blank by the Pledgor.
Section 6. WARRANTY OF TITLE. The Pledgor warrants: (a) that Pledgor
has title to the Stock described in Section 1 hereof; (b) the Stock is subject
to no pledge, lien, security interest, charge, option, restrictions or other
encumbrances created by the Pledgor except the security interest created by this
Agreement; and (c) the Pledgor has power, authority and legal right to pledge
all of such Stock pursuant to this Agreement.
Section 7. DIVIDENDS, VOTING, ETC., PRIOR TO MATURITY. So long as
no Event of Default has occurred, the Pledgor shall be entitled to vote the
Stock and to give consents, waivers and ratifications in respect of the
Stock, provided that no vote shall be cast, or consent, waiver or
ratification given or action taken which would be inconsistent with or
violate any provisions of any agreement evidencing or securing the
Obligations or of this Agreement, and provided further, that following an
Event of Default the Pledgee may cause the Stock to be transferred into its
own name as collateral security. All such rights of the Pledgor to vote and
give consents, waivers and ratifications with respect to the Stock shall, at
Pledgee's option, as evidenced by Pledgee's notifying Pledgor of such
election, cease in case an Event of Default shall have occurred.
Section 8. REMEDIES. If an Event of Default shall have occurred, the
Pledgee shall thereafter have the following rights and remedies (to the extent
permitted by applicable law) in addition to the rights and remedies of a secured
party under the Uniform Commercial Code of Massachusetts, all such rights and
remedies being cumulative, not exclusive, and enforceable alternatively,
successively or concurrently, at such time or times as the Pledgee deems
expedient:
(a) if the Pledgee so elects and gives notice of such election
to the Pledgor, the Pledgee may vote any or all shares of the Stock
(whether or not the same shall have been transferred into its name or
the name of its nominee or nominees) and give all consents, waivers and
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ratifications in respect of the Stock and otherwise act with respect
thereto as though it were the outright owner thereof (the Pledgor
hereby irrevocably constituting and appointing the Pledgee the proxy
and attorney-in-fact of the Pledgor, with full power of substitution,
to do so);
(b) the Pledgee may demand, xxx for, collect or make any
compromise or settlement the Pledgee deems suitable in respect of any
Collateral held by it hereunder;
(c) the Pledgee may sell, resell, assign and deliver, or
otherwise dispose of any or all of the Collateral, for cash and/or
credit and upon such terms at such place or places and at such time or
times and to such persons, firms, companies or corporations as the
Pledgee thinks expedient, all without demand for performance by the
Pledgor or any notice or advertisement whatsoever except such as may be
required by law; and
(d) the Pledgee may cause all or any part of the Stock held by
it to be transferred into its name or the name of its nominee or
nominees, if it has not already done so.
(e) the Pledgee may cause all resignations of officers and
directors of the issuer of the Stock which have been deposited with it
to be accepted and may take all necessary action to fill the vacancies
thereby arising.
The Pledgee may enforce its rights hereunder without any other notice
and without compliance with any other condition precedent now or hereafter
imposed by statute, rule of law or otherwise (all of which are hereby expressly
waived by the Pledgor, to the fullest extent permitted by law). Pledgee
acknowledges that ten (10) days' notice of any public sale or of that date on or
after which a private sale may be effected is reasonable notice. The Pledgee may
buy any part or all of the Collateral at any public sale and if any part or all
of the Collateral is of a type customarily sold in a recognized market or is of
the type which is the subject of widely-distributed standard price quotations,
the Pledgee may buy at private sale and may make payments thereof by any means.
The Pledgee may apply the cash proceeds actually received from any sale or other
disposition to the reasonable expenses of retaking, holding, preparing for sale,
selling and the like, to reasonable attorneys' fees, and all legal expenses,
travel and other expenses which may be incurred by the Pledgee in attempting to
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collect the Obligations or to enforce this Agreement or in the prosecution or
defense of any action or proceeding related to the subject matter of this
Agreement; and then to the Obligations, and any surplus shall be paid to the
Pledgor.
Section 9. MARSHALLING. The Pledgee shall not be required to marshal
any present or future security for (including but not limited to this Agreement
and the Collateral pledged hereunder), or guaranties of, the Obligations or any
of them, or to resort to such security or guaranties in any particular order;
and all of its rights hereunder and in respect of such security and guaranties
shall be cumulative and in addition to all other rights, however existing or
arising. To the extent that it lawfully may, the Pledgor hereby agrees that it
will not invoke any law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of the Pledgee's rights under this
Agreement or under any other instrument evidencing any of the Obligations or
under which any of the Obligations is outstanding or by which any of the
Obligations is secured or guaranteed, and to the extent that it lawfully may the
Pledgor hereby irrevocably waives the benefits of all such laws.
Section 10. PLEDGOR'S OBLIGATIONS NOT AFFECTED. The obligations of the
Pledgor hereunder shall remain in full force and effect without regard to, and
shall not be impaired by (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of the Pledgor;
(b) any exercise or nonexercise, or any waiver, by the Pledgee of any right
remedy, power or the Obligations or privilege under or in respect of any of any
security thereof (including this Agreement); (c) any amendment to or
modification of any instrument (other than this Agreement) securing any of the
Obligations; or (d) the taking of additional security for, or any guaranty of,
any of the Obligations or the release or discharge or termination of any
security or guaranty for any of the Obligations; whether or not the Pledgor
shall have notice or knowledge of any of the foregoing.
Section 11. TRANSFER ETC., BY PLEDGOR. Without the prior written
consent of the Pledgee, the Pledgor will not sell, assign, transfer or otherwise
dispose of, grant any option with respect to, or pledge or grant any security
interest in or otherwise encumber any of the Collateral or any interest therein,
except for the pledge thereof provided for in this Agreement.
Section 12. FURTHER ASSURANCES. Pledgor will, from time to time,
execute and deliver to Pledgee all such other and further
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instruments and documents and take or cause to be taken all such other and
further action as Pledgee may reasonably request in order to effect and confirm
more securely in Pledgee all rights contemplated in this Agreement.
Section 13. PLEDGEE'S EXONERATION. Under no circumstances shall the
Pledgee be deemed to assume any responsibility for or obligation or duty with
respect to any part or all of the Collateral of any nature or kind, other than
the physical custody thereof, or any matter or proceedings arising out of or
relating thereto, other than to exercise reasonable care in the physical custody
of the Collateral. The Pledgee shall not be required to take any action of any
kind to collect, preserve or protect its or the Pledgor's rights in the
Collateral or against other parties thereto, other than to exercise reasonable
care in the physical custody of the Collateral. The Pledgee's prior recourse to
any part or all of the Collateral shall not constitute a condition of any
demand, suit or proceeding for payment or collection of the Obligations.
Section 14. NO WAIVER, ETC. No act, failure or delay by the Pledgee
shall constitute a waiver of its rights and remedies hereunder or otherwise. No
single or partial waiver by the Pledgee of any default or right or remedy which
it may have shall operate as a waiver of any other default, right or remedy or
of the same default, right or remedy on a future occasion. The Pledgor hereby
waives presentment, notice of dishonor and protest of all instruments, included
in or evidencing any of the Obligations or the Collateral, and any and all other
notices and demands whatsoever (except as expressly provided herein).
Section 15. NOTICE, ETC. All communications herein provided shall be in
writing and shall be sufficient if sent by United States mail, registered or
certified, postage prepaid, delivered by messenger, so-called overnight courier,
telex or telefax, addressed as follows:
If to the Pledgor: The J. Xxxx Group, Inc.
0 Xxxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attn: Chief Financial Officer
Fax: 000-000-0000
with a copy to: Xxxxx, Xxxx & Xxxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Fax: 000-000-0000
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If to the Pledgee: Citizens Bank of Massachusetts
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxx, Xx. V.P.
Fax: 000-000-0000
with a copy to: Xxxxxxxx Xxxxxxxx Xxxxxxxxx
& Manello
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
Fax: 000-000-0000
or to such other address as the party to receive any such communication or
notice may have designated by written notice to the other party.
Any notice given pursuant to this Section shall be effective when
received.
Section 16. TERMINATION. This Agreement shall continue in full force
and effect until the payment and performance in full of the Obligations and the
payment and performance by the Pledgor of all of Pledgor's covenants and
agreements hereunder, whereupon this Agreement shall terminate and the Pledgor
shall be entitled to the return of such Collateral in the possession or control
of the Pledgee as has not theretofore been disposed of pursuant to the
provisions hereof, together with any moneys and other property at the time held
by the Pledgee hereunder.
Section 17. MISCELLANEOUS PROVISIONS. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated except by a written
instrument expressly referring to this Agreement and to the provisions so
modified or limited, and executed by the party to be charged. The execution and
delivery of this Agreement and pledging of the Stock described in Section 1
hereof are within the Pledgor's power, such execution and delivery and the
pledging of such Stock do not contravene any law or any rule or regulation
thereunder or any judgment, decree or order of any tribunal or of any agreement
or instrument to which the Pledgor is a party or by which Pledgor or any of its
property is bound or constitute a default thereunder. This Agreement and all
obligations of the Pledgor shall be binding upon the heirs, executors,
successors and assigns of the Pledgor, and shall, together with the rights and
remedies of the Pledgee hereunder, inure to the benefit of the Pledgee, its
successors and assigns. This Agreement and the obligations of the Pledgor
hereunder shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts.
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The descriptive section headings have been inserted for convenience of reference
only and do not define or limit the provisions hereof. If any term of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity of
all other terms hereof shall be in no way affected thereby, and this Agreement
shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein. The Pledgor acknowledges
receipt of a copy of this Agreement. To the extent permitted by applicable law,
the Pledgor and the Pledgee each hereby waive trial by jury in any proceeding
brought for the interpretation or enforcement of this Agreement or for a
determination of the rights of the parties hereunder. Terms used herein without
definition, but which are defined in the Uniform Commercial Code of
Massachusetts, shall, unless the context otherwise indicates or requires, have
the meanings ascribed to them in said Uniform Commercial Code.
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be duly executed as of the date first above written.
WITNESS: THE J. XXXX GROUP,INC.
/s/Xxxxxx Xxxxxx By: /s/Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Corporate Controller
WITNESS: CITIZENS BANK OF MASSACHUSETTS
/s/Xxxx Xxxxxxxx By: /s/Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Senior Vice President
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EXHIBIT A
100 shares of the common stock, of J. Xxxx Direct, Inc. represented by stock
certificate No. 1.
100 shares of the common stock of The Birch Pond Group, Inc. represented by
stock certificate No. 1.
100 shares of the common stock of QT Services Group, Inc. represented by
stock certificate No. 1.
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