EXHIBIT 4.5
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT is made and effective as of
September 29, 1994 by EACH PARTY LISTED on Schedule 1 hereto (each, a "Pledgor";
collectively, the "Pledgors") in favor of PHP HEALTHCARE CORPORATION, a Delaware
corporation ("PHP").
R E C I T A L S
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WHEREAS, SHAMROCK INVESTMENTS, a California general partnership
("Shamrock") has entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement") and has made and delivered to PHP a promissory note (the "Stock
Purchase Note"), each dated as of the date hereof; and
WHEREAS, as further security for the payment and performance of the
obligations of Shamrock under the Stock Purchase Agreement and the Stock
Purchase Note, and in order to induce PHP to engage in the transactions
contemplated thereby, each Pledgor is executing and delivering this Agreement to
PHP; and
WHEREAS, each Pledgor has determined that it is his, her or its best
interest to execute this Pledge and Security Agreement inasmuch as each Pledgor
will derive substantial direct and indirect benefits from the execution and
performance of the Stock Purchase Agreement; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficient of which are hereby acknowledged, and in order to induce PHP to enter
into the Stock Purchase Agreement with Shamrock, each Pledgor agrees, for the
benefit of Shamrock, as follows:
ARTICLE I: PLEDGE
1.1. GRANT OF SECURITY INTEREST. Each Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to PHP and
hereby grants to PHP a continuing security interest in all of the following
property ("Collateral"):
(a) The issued and outstanding shares of capital stock of PHP owned
by such Pledgor and identified on Schedule 1 hereto; and
(b) All other Pledged Shares issued from time to time to such
Pledgor; and
(c) All other Pledged Property (including, without limitation, all
options
and warrants for Pledged Shares, as identified on Schedule 1
hereto) owned by such Pledgor, whether nor or hereafter delivered
to PHP in connection with this Pledge and Security Agreement; and
(d) All Dividends, Distributions and other payments and rights with
respect to any Pledged Property received or receivable by such
Pledgor (subject, however, to Sections 1.4 and 3.4(a) hereof);
and
(e) All proceeds of any of the foregoing.
1.2. SECURITY FOR OBLIGATIONS. This Pledge and Security Agreement
secures the payment and performance in full of all obligations (monetary or
otherwise) of Shamrock under the Stock Purchase Agreement and Stock Purchase
Note, whether for principal, interest, costs, fees, expenses, or otherwise, and
all obligations (monetary or otherwise) of Shamrock and/or any Pledgor now or
hereafter existing under this Pledge and Security Agreement (all such
obligations of Shamrock and/or any Pledgor being referred to as the "Secured
Obligations").
1.3. DELIVERY OF PLEDGED PROPERTY. All certificates or instruments
representing or evidencing any Collateral, including all Pledged Shares, will be
delivered to and held by or on behalf of PHP pursuant hereto, must be in
suitable form for transfer by delivery, and must be accompanied by all necessary
instruments of transfer or assignment, duly executed in blank.
1.4. DIVIDENDS ON PLEDGED SHARES. So long as no Default has occurred
and is then continuing or is caused by the payment of such Dividend, any
Dividend paid on any Pledged Share may be paid directly to the respective
Pledgor; after the occurrence and during the continuance of a Default, all
Dividends distributed to shareholders must be paid directly to PHP and applied
against the Stock Purchase Note except for the amount of the respective
Pledgor's resulting federal, state and local income tax liability.
1.5. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. This Pledge
and Security Agreement creates a continuing security interest in the Collateral
and will remain in full force and effect until the payment and performance in
full of all Secured Obligations and the expiration of any period during which
any such payments may be subject to challenge or return as a preference or
otherwise. This Pledge and Security Agreement is binding upon each Pledgor, and
his, her or its successors, heirs, executors, personal representatives,
transferees and assigns, and, together with the rights and remedies of PHP
hereunder, inures to the benefit of PHP and its successors, transferees and
assigns. Without limiting the generality of the foregoing, PHP may assign or
otherwise transfer (in whole or in part) the Stock Purchase Note held by it to
any other Person or entity, and each other Person or entity will thereupon
become vested with all the rights and benefits in respect thereof granted to PHP
under the Stock Purchase Agreement, the Stock Purchase Note and this Pledge and
Security Agreement or otherwise, SUBJECT, HOWEVER, to any contrary provision in
such assignment or transfer. Upon the payment and performance in full of all
Secured Obligations and the expiration of any period during which any such
payments may be subject to
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challenge to return, the pledge and security interest granted herein will
terminate and all rights to the Collateral will revert to each Pledgor. Upon any
such termination, PHP, at each Pledgor's sole expense, will deliver to each
Pledgor, without any representation, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing the
Pledged Shares, together with all other Collateral held by PHP hereunder, and
will execute and deliver to each Pledgor such documents as such Pledgor may
reasonably request to evidence such termination and delivery.
1.6. SECURITY INTEREST ABSOLUTE. All rights of PHP and the security
interests granted to PHP hereunder, and all obligations of any Pledgor
hereunder, are absolute and unconditional, irrespective of:
(a) Any lack of validity or enforceability of the Stock Purchase
Note; or
(b) The failure of PHP or any holder of the Stock Purchase Note:
(i) To assert any claim or demand or to enforce any right or
remedy under the provisions of the Stock Purchase Note or
otherwise, or
(ii) To exercise any right or remedy against any other obligor
of, or collateral security, any obligations of Shamrock
owing to PHP; or
(c) Any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
extension, compromise or renewal of any Secured Obligation; or
(d) Any reduction, limitation, impairment or termination of any
Secured Obligation for any reason, including any claim of waiver,
release, surrender, alteration or compromise (and each Pledgor
hereby waives any right to or claim of any defense or set off,
counterclaim, recoupment or termination whatsoever by reason of
any invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligation); or
(e) Any amendment to, rescission, waiver, or other modification of,
or any consent to departure from, the Stock Purchase Note; or
(f) Any addition, exchange, release, surrender or nonperfection of
any collateral (including the Collateral), or any amendment to or
waiver or release of or addition to or consent to departure from
any guaranty, for any of the Secured Obligations; or
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(g) Any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Pledgor.
ARTICLE II: REPRESENTATIONS AND WARRANTIES
Each Pledgor, as of the date of each pledge and delivery hereunder
(including each pledge and delivery of Pledged Shares) by any such Pledgor to
PHP of any Collateral, hereby jointly and severally represents and warrants to
PHP as set forth in this Article.
2.1. LEGAL CAPACITY. Each Pledgor has the full power and legal
capacity to execute and deliver the Pledge and Security Agreement and perform
its obligations hereunder.
2.2. OWNERSHIP: NO LIENS. Each Pledgor is the legal and beneficial
owner of, and has good and marketable title to (and has full right and authority
to pledge and assign) such Collateral, free and clear of all liens, security
interests, options, or other charges or encumbrances, except any lien or
security interest granted pursuant hereto in favor of PHP.
2.3. VALID SECURITY INTEREST. The delivery of the Collateral to PHP
by each Pledgor is effective to create a valid, perfected, first priority
security interest in the Collateral and all proceeds thereof securing the
payment of the Secured Obligations. No filing and no approval or consent of any
Person will be necessary to perfect or protect such security interest.
2.4 NON-CONTRAVENTION. The execution, delivery and performance by
each Pledgor of this Pledge and Security Agreement do not:
(a) Contravene any contractual restriction the violation of which
individually or in the aggregate would have a Material Adverse
Effect; or
(b) Contravene any law or governmental regulation or court decree or
order binding on or affecting any Pledgor; or
(c) Result in, or require the creation or imposition of, any lien on
any of such Pledgor's property, other than the lien created
pursuant to this Pledge and Security Agreement.
2.5 VALIDITY. This Pledge and Security Agreement constitutes the
legal, valid and binding obligation of such Pledgor and is enforceable against
him, her or it in accordance with the terms hereof.
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ARTICLE III. COVENANTS
Each Pledgor, jointly and severally, hereby covenants and agrees that,
so long as this Pledge and Security Agreement remains effective, each Pledgor
will comply with the covenants set forth in this Article.
3.1. PROTECT COLLATERAL; FURTHER ASSURANCE. No Pledgor will sell,
assign, transfer, pledge, or encumber in any other manner the Collateral (except
in favor of PHP hereunder), except that any of the Pledged Shares hereunder
owned by an individual Pledgor may be transferred upon such individual's death
to his or her heirs, executor or personal representative PROVIDED THAT (a) such
Collateral at all times remains subject to the pledge and security interest
created hereby and, (b) such transferee (at such transferee's expense and prior
to the effectiveness of any such transfer) becomes a Pledgor hereunder and
executes such agreements and documents as PHP may reasonably request to ensure
the continuation of PHP's first priority interest in such Collateral. Shamrock
shall promptly notify PHP in writing of the death of any Pledgor. Each Pledgor
will warrant and defend the right and title herein granted to PHP in and to the
Collateral (and all right, title, and interest represented by the Collateral)
against the claims and demands of all persons whomsoever. Each Pledgor agrees
that at any time, and from time to time, at the expense of such Pledgor, such
Pledgor will promptly execute and deliver all further instruments, and will take
all further action, that may be reasonably necessary or desirable, or that PHP
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable PHP to exercise and
endorse its rights and remedies hereunder with respect to any Collateral.
3.2. STOCK POWERS. Each Pledgor agrees that all Pledged Shares (and
all other shares of stock constituting Collateral) delivered by such Pledgor
pursuant to this Pledge and Security Agreement, if requested by PHP, will be
endorsed in blank or accompanied by duly executed undated blank stock powers, or
other equivalent instruments of transfer acceptable to PHP. Each Pledgor, from
time to time upon the request of PHP, will promptly deliver to PHP such stock
powers, instruments, and similar documents (satisfactory in form and substance
to PHP) with respect to the Collateral as PHP may reasonably request and from
time to time upon the request of PHP after the occurrence of any Event of
Default, will promptly transfer any Pledged Shares or other shares of capital
stock constituting Collateral into the name of any nominee designated by PHP.
3.3. CONTINUOUS PLEDGE. Each Pledgor, at all times, will keep pledged
to PHP pursuant hereto all Pledged Shares and all other shares of capital stock
constituting Collateral, all Dividends (subject, however, to Section 1.4 hereof)
and Distributions with respect thereto, and all other Collateral and other
securities, instruments, proceeds, and rights from time to time received by or
distributable to Pledgor in respect to any Collateral.
3.4. VOTING RIGHTS; DISTRIBUTIONS. Until an Event of Default has
occurred and is continuing, each Pledgor may exercise all of its voting rights
in respect of its Collateral. Each Pledgor agrees:
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(a) Promptly upon receipt and without any request by PHP, to deliver
to PHP (properly endorsed where required hereby or requested by
PHP) all Distributions, all other non-Dividend cash payments, and
all proceeds of the Collateral, all of which will be held by PHP
as additional Collateral, provided that each Pledgor may retain
the amount of any such Distribution, payment or proceeds
representing his resulting federal, state and local income tax
liability; and
(b) After any Event of Default has occurred and is continuing and PHP
has notified Pledgor of PHP's intention to exercise its voting
power under this Section 3.4(b):
(i) PHP may exercise (to the exclusion of each Pledgor) the
voting power and all other incidental rights of ownership
with respect to any Pledged Shares or other shares of stock
constituting Collateral, and each Pledgor hereby grants PHP
an irrevocable proxy, exercisable under such circumstances,
to vote the Pledged Shares and such other Collateral; and
(ii) Promptly to deliver to PHP such additional proxies and other
documents as may be necessary to allow PHP to exercise such
voting power;
All Dividends, Distributions, cash payments, and proceeds that at any time and
from time to time may be delivered to any Pledgor but which such Pledgor is then
obligated to deliver to PHP, until delivery to PHP, must be held by such Pledgor
separate and apart from his, her or its other property in trust for PHP. PHP
agrees that unless an Event of Default has occurred and is continuing, each
Pledgor will have the exclusive voting power with respect to any shares of
capital stock (including any of the Pledged Shares) of such Pledgor constituting
Collateral and, upon the written request of such Pledgor, PHP will promptly
deliver such proxies and other documents, if any, as reasonably requested by
such Pledgor that are necessary to allow such Pledgor to exercise voting power
with respect to any such shares of capital stock (including any of the Pledged
Shares) of such Pledgor constituting Collateral; PROVIDED, HOWEVER, that no vote
may be cast, or consent, waiver, or ratification given, or action taken by any
Pledgor that would impair any Collateral or be inconsistent with or violate any
provision of any of the Stock Purchase Agreement, the Stock Purchase Note or
this Pledge and Security Agreement.
ARTICLE IV: PHP
4.1. PHP APPOINTED AS ATTORNEY-IN-FACT. Each Pledgor hereby
irrevocably appoints PHP as such Pledgor's attorney-in-fact, with full authority
in the place and stead of such Pledgor and in the name of Pledgor or otherwise,
from time to time in PHP's reasonable discretion, to take any action and to
execute any instrument which PHP may deem
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necessary or advisable to accomplish the purposes of this Pledge and Security
Agreement, including, without limitation:
(a) To ask, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral; and/or
(b) To perform any and all of the affirmative obligations and
covenants of such Pledgor hereunder.
Each Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section 4.1 is irrevocable and coupled with an interest
but will terminate upon the termination of this Agreement pursuant to Section
1.5 hereof.
4.2. PHP MAY PERFORM. If any Pledgor fails to perform any agreement
contained herein, PHP may itself perform, or cause the performance of, such
agreement, and the expenses of PHP incurred in connection therewith will be
payable pursuant to Section 5.6 hereof.
4.3. PHP HAS NO DUTY. The rights and powers conferred on PHP
hereunder are solely to protect its interest in the Collateral and do not impose
any duty on PHP to exercise any such rights or powers. Except for reasonable
care of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, PHP has no duty as to any Collateral or any
responsibility for taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
4.4. REASONABLE CARE. PHP is required to exercise reasonable care in
the custody and preservation of any of the Collateral in its possession;
PROVIDED, HOWEVER, PHP will be deemed to have exercised such reasonable care in
the custody and preservation of any of the Collateral, if it takes such action
for that purpose as each Pledgor reasonably requests in writing at times other
than upon the occurrence and during the continuance of any Event of Default, but
failure of PHP to comply with any such request at any time will not in itself be
deemed a failure to exercise reasonable care.
ARTICLE V: DEFAULTS AND REMEDIES
5.1. EVENTS OF DEFAULT. The occurrence of any of the following events
will constitute an Event of Default ("Event of Default") hereunder:
(a) STOCK PURCHASE AGREEMENT AND STOCK PURCHASE NOTE. If any default
occurs under the Stock Purchase Agreement or the Stock Purchase
Note.
(b) REPRESENTATIONS AND WARRANTIES. If any representation, warranty
or statement made in this Agreement, or in any schedule or
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exhibit hereto, by any Person (other than PHP) obligated
hereunder when made was or subsequently becomes false, misleading
or incorrect in any material respect.
(c) COVENANTS. If any Person (other than PHP) obligated hereunder
defaults in the performance of any agreement or covenant
contained herein, or in any document or agreement now or
hereafter executed or delivered in connection herewith, AND such
default remains uncured for a period of thirty (30) Business Days
after the earlier of the date that PHP notifies such Person
thereof or the date that such Person otherwise acquires
knowledge.
(d) SECURITY INTEREST. If the security interest or lien in any of
the Collateral hereunder at any time does not constitute a legal,
valid and enforceable first priority security interest or lien in
favor of PHP.
(e) INSOLVENCY. If any Person obligated hereunder becomes insolvent,
bankrupt or generally fails to pay his, her or its debts as such
debts as such debts become due.
5.2. CERTAIN REMEDIES. If any Event of Default occurs and is continuing:
(a) PHP may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise
available to it, all rights and remedies of a secured party on
default under the U.C.C. (whether or not the U.C.C. applies to
the affected Collateral).
(b) In addition, without notice except as specified below, PHP may
sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any of PHP's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms
as PHP may in good xxxxx xxxx commercially reasonable. Each
Pledgor agrees that, to the extent notice of sale is required by
applicable law, at least thirty (30) calendar days' prior notice
to such Pledgor of the time and place of any public sale or the
time after which any private sale is to be made will constitute
reasonable notification. PHP is not and will not be obligated to
make any sale of Collateral regardless of notice of sale having
been given. PHP may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and
without further notice, such sale may be made at the time and
place to which it was so adjourned.
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(c) PHP, in addition, may:
(i) Transfer all or part of the Collateral into the name of PHP
or its nominee, with or without disclosing that such
Collateral is subject to the Lien and security interest
hereunder; and
(ii) Notify the parties obligated on any of the Collateral to
make payment to PHP of any amount due or to become due in
connection therewith; and
(iii) Endorse any checks, drafts, or other writings in any
Pledgor's name to allow collection of the Collateral; and
(iv) Take control of any proceeds of the Collateral;
(v) Execute (in the name, place and stead of any Pledgor)
endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
5.3. COMPLIANCE WITH RESTRICTIONS. Each Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default has occurred and is
continuing, PHP is hereby authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law (including
compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that such prospective bidders and purchasers
have certain qualifications, and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Official Body. Each Pledgor further agrees that
such compliance will not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner, nor will PHP be liable or
accountable to any Pledgor for any discount allowed by the reason of the fact
that such Collateral is sold in compliance with any such limitation or
restriction.
5.4. APPLICATION OF PROCEEDS. All cash proceeds received by PHP in
respect of any sale of, collection from, or other realization upon, all or any
part of the Collateral, in the discretion of PHP, may be held by PHP as
additional collateral security for, or then or at any time thereafter may be
applied in whole or in part by PHP against, all or any part of the Secured
Obligations in such order as PHP may elect. Any surplus of such cash or cash
proceeds held by PHP and remaining after payment in full of all the Secured
Obligations will be paid over to the applicable Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.
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5.5. INDEMNITY AND EXPENSES.
(a) Each Pledgor hereby agrees to indemnify and hold harmless PHP
from and against any and all claims, losses, and liabilities
arising out of or resulting from this Pledge and Security
Agreement (including enforcement of this Pledge and Security
Agreement against such Pledgor) directly or indirectly caused by
or resulting from the actions or inactions of such Pledgor,
except for liabilities resulting from PHP's own willful
misconduct or fraud.
(b) Upon demand, each Pledgor (on a pro rata basis, based upon the
percentage of outstanding shares owned or to which such Pledgor
has the right to own) will pay to PHP the amounts of any and all
reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which
PHP may incur in connection with:
(i) The administration of this Pledge and Security Agreement,
and each of the other Loan Documents to which Pledgor is a
party; and/or
(ii) The custody, preservation, use, or operation of, or the sale
of, collection from, or other realization upon, any of the
Collateral; and/or
(iii) The exercise or enforcement of any of the rights of PHP
hereunder; and/or
(iv) The failure by such Pledgor to perform or observe any of the
provisions hereof.
ARTICLE VI: DEFINITIONS
6.1. CERTAIN TERMS. The following terms when used in this Pledge and
Security Agreement, including its preamble and recitals, have the following
meanings (such definitions to be equally applicable to the singular and plural
forms thereof):
(a) "COLLATERAL" is defined in Section 1.1 hereof.
(b) "DISTRIBUTION" means all stock dividends, liquidating dividends,
shares of stock resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock constituting Collateral, but shall not include Dividends.
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(c) "DIVIDEND" means cash dividends and cash distributions with
respect to any Pledged Shares or other Pledged Property made in the ordinary
course of business and not a liquidating dividend.
(d) "MATERIAL ADVERSE EFFECT" means relative to any occurrence of
whatever nature (including, without limitation, any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), a
material adverse change to, or, as the case may be, a materially adverse effect
on:
(1) The business, assets, revenues, financial condition, or
operations of any Pledgor or Shamrock; or
(2) The ability of Pledgor or Shamrock to perform any of its
payment obligations when due or to perform any other
material obligations under this Pledge and Security
Agreement, the Stock Purchase Agreement or the Stock
Purchase Note.
(e) "PERSON" means any natural person, corporation, partnership,
firm, association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
(f) "PHP" means PHP Healthcare Corporation, a Delaware corporation,
and any successor thereof, or any assignee or transferee of PHP under the Stock
Purchase Agreement or the Stock Purchase Note.
(g) "PLEDGE AND SECURITY AGREEMENT" means this Stock Pledge and
Security Agreement, and all exhibits and schedules hereto, all as may be
amended, supplemented and otherwise modified from time to time.
(h) "PLEDGED PROPERTY" means all Pledged Shares and all other pledged
shares of capital stock, all other securities (including, without limitation,
all options and warrants for Pledged Shares), all assignments of any amounts due
or to become due, all other instruments which are now being delivered by any
Pledgor to PHP or may from time to time hereafter be delivered by a Pledgor to
PHP for the purpose of pledge under the Pledge and Security Agreement, and all
proceeds of any of the foregoing.
(i) "PLEDGED SHARES" means all shares of capital and/or voting stock
issued by PHP which are delivered by any Pledgor to PHP as Pledged Property
hereunder.
(j) "PLEDGOR" means each Person required hereunder to execute this
Pledge and Security Agreement, and any successor, heir, personal representative
or executor thereof.
(k) "SECURED OBLIGATIONS" is defined in Section 1.2 hereof.
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(l) "SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and as implemented by the Securities Exchange Commission.
(m) "SHAMROCK" means Shamrock Investments, a California general
partnership, or any successor therefor or any authorized assignee of Shamrock
under the Stock Purchase Agreement.
(n) "STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement,
and all exhibits and schedules hereto, all as may be amended, supplemented and
otherwise modified from time to time.
(o) "STOCK PURCHASE NOTE" means the promissory note, dated the date
hereof, executed by Shamrock pursuant to the Stock Purchase Agreement, as may be
amended, supplemented and otherwise modified from time to time.
(p) "U.C.C." means the Uniform Commercial Code as in effect in the
State of Virginia.
6.2. U.C.C. DEFINITION. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the U.C.C.
are used in this Pledge and Security Agreement, including its preamble and
recitals, with such meanings.
ARTICLE VII: MISCELLANEOUS PROVISIONS
7.1. AMENDMENTS. No amendment to or waiver of any provision of this
Pledge and Security Agreement nor any consent to any departure by any Pledgor
herefrom will in any event be effective unless the same is in writing and signed
by PHP and any Pledgor directly obligated by such amendment, and then any such
waiver or consent will be effective only in the specific instance and for the
specific purpose for which it is given.
7.2. PROTECTION OF COLLATERAL. PHP from time to time, at its option,
may perform any act which any Pledgor agrees hereunder to perform and which such
Pledgor fails to perform after being requested in writing so to perform (it
being understood that no such request need be given after the occurrence and
during the continuance of an Event of Default), and PHP from time to time may
take any other action which PHP reasonably deems necessary for the maintenance,
preservation or protection of any of the Collateral or of its security interest
therein.
7.3. ADDRESSES FOR NOTICES. All notices and other communications
provided to any party hereto shall be in writing and mailed, delivered or
transmitted to such party at its address or facsimile number set forth below its
signature hereto and as to any party, at such other address or facsimile number
as may be designated by such party in a written notice to each other party
complying as to delivery with the terms of this Section. Any notice, if mailed
and properly addressed with postage prepaid or, if properly addressed and sent
by prepaid courier service, will be deemed given when received; any notice, if
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transmitted by facsimile, will be deemed given when transmitted (upon receipt of
electronic confirmation of transmission).
7.4. HEADINGS. The various headings used in this Pledge and Security
Agreement are for convenience of reference only, and shall not affect the
meaning or interpretation of this Pledge and Security Agreement or any provision
hereof.
7.5. SEVERABILITY. Wherever possible, each provision of this Pledge
and Security Agreement is to be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Pledge and Security
Agreement is prohibited by or invalid under such law, such provision is to be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Pledge and Security Agreement.
7.6. GOVERNING LAW; ENTIRE AGREEMENT. This Pledge and Security
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Virginia, without giving effect of conflicts of laws
principles, except to the extent that the validity or perfection of the security
interest hereunder, or remedies hereunder, in respect of any particular
collateral are governed by the laws of a jurisdiction other than the State of
Virginia. This Pledge and Security Agreement, the Stock Purchase Agreement and
the Stock Purchase Note constitute the entire understanding among the parties
hereto with respect to the subject matter hereof and supersede any prior
agreements, written or oral, with respect thereto.
7.7. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS PLEDGE AND
SECURITY AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF PHP OR ANY PLEDGOR SHALL BE BROUGHT
AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF VIRGINIA OR IN THE
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY ALSO BE BROUGHT, AT PHP'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND OR WHERE
PLEDGOR IS OTHERWISE SUBJECT TO PERSONAL JURISDICTION. EACH PLEDGOR HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF VIRGINIA AND OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF VIRGINIA OR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. EACH PLEDGOR FURTHER IRREVOCABLY CONSENTS TO
THE SERVICES OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF VIRGINIA. EACH PLEDGOR HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
ANY PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT
TO ITSELF OR ITS PROPERTY, SUCH
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PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS SECURED
OBLIGATIONS UNDER THIS PLEDGE AND SECURITY AGREEMENT.
7.8. WAIVER OF JURY TRIAL. PHP AND EACH PLEDGOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS PLEDGE AND SECURITY AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF PHP OR
ANY PLEDGOR. EACH PLEDGOR ACKNOWLEDGES AND AGREES THAT HE, SHE OR IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY), THAT HE, SHE OR
IT HAS BEEN ADVISED BY LEGAL COUNSEL IN CONNECTION HEREWITH AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR PHP ENTERING INTO THE STOCK PURCHASE
AGREEMENT.
7.9. REINSTATEMENT. To the extent permitted by law, this Pledge and
Security Agreement shall continue to be effective or be reinstated if at any
time any amount received by PHP in respect of the Stock Purchase Agreement or
the Stock Purchase Note is rescinded or must otherwise be restored or returned
by PHP upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of Shamrock of any Pledgor or upon the appointment of any
receiver, intervenor, conservator, trustee or similar official for Shamrock or
any Pledgor or any substantial part of Shamrock or any Pledgor's assets, or
otherwise, all as though such payments had not been made.
7.10. WAIVER OF LIABILITY. EACH PLEDGOR (A) AGREES THAT PHP SHALL
HAVE NO LIABILITY TO PLEDGOR (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE)
FOR LOSSES SUFFERED BY ANY PLEDGOR IN CONNECTION WITH, ARISING OUT OF, OR IN ANY
WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED
BY THIS PLEDGE AND SECURITY AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING
IN CONNECTION THEREWITH, EXCEPT CLAIMS RESULTING FROM PHP'S WILLFUL MISCONDUCT
OR FRAUD, AND (B) WAIVES, RELEASES AND AGREES NOT TO XXX UPON ANY CLAIM AGAINST
PHP (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE), EXCEPT CLAIMS RESULTING
FROM PHP'S WILLFUL MISCONDUCT OR FRAUD. WHETHER OR NOT SUCH DAMAGES ARE RELATED
TO A CLAIM THAT IS SUBJECT TO THE WAIVER EFFECTED ABOVE AND WHETHER OR NOT SUCH
WAIVER IS EFFECTIVE, PHP SHALL HAVE NO LIABILITY WITH RESPECT TO, AND EACH
PLEDGOR HEREBY WAIVES, RELEASES AND AGREES NOT TO XXX UPON ANY CLAIM FOR, ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES SUFFERED BY ANY PLEDGOR IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS
CONTEMPLATED OR THE RELATIONSHIP ESTABLISHED BY THIS PLEDGE AND SECURITY
AGREEMENT, THE STOCK PURCHASE AGREEMENT OR THE STOCK PURCHASE NOTE, OR ANY ACT,
OMISSION OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH.
7.11. WAIVER OF NOTICE; WAIVER OF BOND. EACH PLEDGOR WAIVES ALL
RIGHTS OF NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY PHP OF ITS
RIGHTS FROM AND AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT TO REPOSSESS THE
COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE
COLLATERAL. EACH PLEDGOR WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF
PHP IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION
OF, REPLEVY, ATTACH OR LEVY UPON COLLATERAL OR OTHER
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SECURITY FOR THE SECURED OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER COURT
ORDER ENTERED IN FAVOR OF PHP, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION THIS PLEDGE AND
SECURITY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN ANY PLEDGOR AND
PHP.
7.12. WAIVER OF SUBROGATION. Each Pledgor hereby irrevocably
waives any claim or other rights which it may now have or hereafter acquire
against Shamrock or any other obligor that arise from the existence, payment,
performance or enforcement of Pledgor's obligations under this Pledge and
Security Agreement, the Stock Pledge and Security Agreement or the Stock
Purchase Note, including any right of subrogation, reimbursement, exoneration,
or indemnification, any right to participate in any claim or remedy of PHP
against Shamrock or any other obligor or any collateral which PHP now has or
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law, including the right to take or receive
from Shamrock or any other obligor, directly or indirectly, in cash or other
property or by set-off or in any manner, payment or security on account of such
claim or other rights. If any amount shall be paid to any Pledgor in violation
of the preceding sentence and the Secured Obligations shall not have been paid
in cash in full, such amount shall be deemed to have been paid to such Pledgor
for the benefit of, and held in trust for, PHP, and shall forthwith be paid to
PHP to be credited and applied upon the Secured Obligations, whether matured or
unmatured. Each Pledgor acknowledges that it will receive direct and indirect
benefits from the transactions contemplated by the Stock Purchase Agreement and
that the waiver set forth in this Section is knowingly made in contemplation of
such benefits.
7.13. COUNTERPARTS. This Pledge and Security Agreement may be
executed in any number of counterparts with the same effect as if all the
signatures on such counterparts appeared on one document; each such counterpart
will be deemed to be an original but all counterparts together will constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge and
Security Agreement to be duly executed and delivered as of the day and year
first above written.
WITNESS/ATTEST: SHAMROCK INVESTMENTS (PLEDGOR)
By: /s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------ --------------------------
Name: Xxxxxxx X. Xxxxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: General Partner Title: Managing General Partner
WITNESS: XXXXXXX X. XXXXXX (PLEDGOR)
By: /s/ Xxxxxxx X. Xxxxxxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------ ----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx Address: 0000 Xxxxxxx Xxxx Xxxx,
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
WITNESS: XXXXXXX X. XXXXXXXXX (PLEDGOR)
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------ ----------------------------------
Name: Xxxxxxx X. Xxxxxx Address: 0000 Xxxxxxx Xxxx Xxxx,
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
WITNESS/ATTEST: PHP HEALTHCARE CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxx
------------------------------ --------------------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxx X. Xxxxx
Title: Title: Senior Vice President
SCHEDULE I
PLEDGED SHARES
1. Fifty-Seven Thousand One Hundred Forty-Three (57,143) Shares of
Common Stock, $.01 par value, of PHP Healthcare Corporation registered in the
name of Xxxxxxx X. Xxxxxx.
2. Forty-Two Thousand Eight Hundred Fifty-Seven (42,857) Shares of
Common Stock, $.01 par value, of PHP Healthcare Corporation registered in the
name of Xxxxxxx X. Xxxxxxxxx.
3. One Hundred Thousand (100,000) Shares of Common Stock, $.01 par
value, of PHP Healthcare Corporation registered in the name of Shamrock
Investments.
