STOCK PLEDGE AND SECURITY AGREEMENT
Exhibit
10.3
THIS
STOCK PLEDGE AND SECURITY AGREEMENT is made this ___ day of ______________,
2007, by BRANDPARTNERS GROUP, INC., a Delaware corporation with executive
offices at 00 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxxxxx 00000 (“BPG” or the
“Parent”), to TD BANKNORTH, N. A., a national banking association with a
business address of 0 Xxxxxxxx Xxxx Xxxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000 (the
“Bank”).
WITNESSETH:
WHEREAS,
pursuant to a Commercial Loan Agreement dated May 5, 2005 (as the same may
be
amended, restated or replaced, the “Loan Agreement”) by and among BPG and its
wholly-owned subsidiaries (collectively, the “Subsidiaries”), namely
BRANDPARTNERS RETAIL, INC., a New Hampshire corporation with executive offices
at 00 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxxxxx 00000 (BPR and with BPG
collectively, jointly, and severally, sometimes referred to as the “Borrowers”),
GRAFICO INCORPORATED, a Delaware corporation with executive offices at 00 Xxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxxxxxxx 00000, and BUILDING PARTNERS, INC. (“BPI”)
pursuant to that certain Joinder and Amendment of Commercial Loan Agreement
and
certain Loan Documents as defined in the Loan Agreement, Bank has extended
to
the Borrowers certain credit facilities (collectively, the “Loans”), including a
revolving line of credit loan in the principal amount of up to Five Million
Dollars ($5,000,000.00) (the “Revolving Line of Credit Loan”) and a term loan in
the principal amount of Two Million Dollars ($2,000,000.00) (the “Term
Loan”);
WHEREAS,
the Parent is the owner of all of the outstanding shares of the capital stock
of
BPI (collectively, the “Shares”);
WHEREAS,
the obligation of the Bank to continue making the Loans to the Borrowers is
subject to the condition, among others, that the Loans and all other obligations
of Borrowers under the Loan Agreement and the other Loan Documents shall be
secured by this pledge and collateral assignment by the Parent to the Bank
of
all of the capital stock of BPI, including, but not limited to, the Shares;
and
WHEREAS,
the Loans benefit the Parent directly and indirectly as the proceeds of the
Loans provide the Borrowers with working capital and term financing. Terms
not
otherwise defined herein shall have the meanings ascribed to them in the Loan
Agreement.
NOW,
THEREFORE, in order to induce the Bank to continue making the Loans to the
Borrower pursuant to and in accordance with the terms and conditions of the
Loan
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Parent, the Parent hereby
covenants and agrees as follows:
1.
Pledge
of Shares.
Parent
hereby pledges and collaterally assigns the Shares, and all Income and Proceeds
thereof (as hereinafter defined), to the Bank as collateral security for the
payment and performance of the Borrowers’ obligations under the Loan Agreement
and the Loan Documents, including, but not limited to, the repayment of the
Loans and all interest, charges, and fees with respect thereto and the
Borrowers’ obligations under any interest rate swap, cap, floor, or hedging
agreements. As used in this agreement, “Income” means all current and future
interest, dividends, distributions and other payments and benefits in whatever
form with respect to the Shares and “Proceeds” means all proceeds from the sale
or other disposition of the Shares.
2.
Delivery
of the Shares.
Parent
herewith delivers to the Bank all certificates evidencing the Shares and
separate assignments of all of the Shares (whether or not evidenced by
certificates) duly executed in blank, together with irrevocable proxies which
provide the Bank with full and complete voting power and authority respecting
the Shares exercisable however only upon the occurrence of an Event of Default
(hereinafter defined).
3.
Grant
of Security Interest.
The
Parent hereby grants to the Bank a security interest in the Shares delivered
herewith, and in all Income and Proceeds of the foregoing, to secure the payment
and performance of the Borrowers’ obligations to the Bank under the Loan
Agreement and the other Loan Documents, including but not limited to repayment
of the Loans and all interest, charges, and fees with respect thereto and the
Borrowers’ obligations under any interest rate swap, cap, floor, or hedging
agreements.
4.
Rights
Upon Event of Default.
Upon
the occurrence of an event of default under, or breach of any of the terms
and
conditions of, the Loan Agreement or any of the other Loan Documents (“Event of
Default”), the Bank shall then have all of the rights and remedies provided to
it under said agreements and instruments and, in addition, the right to (a)
exercise each and all the rights and privileges of a record holder of the
Shares, including without limitation, the right to sell, transfer, or otherwise
dispose of the Shares and to retain and/or to collect any and all Income and
Proceeds, and (b) exercise all rights of a secured party under the Uniform
Commercial Code as in effect in the State of New Hampshire upon the date hereof
and under other applicable law, including without limitation private sale of
the
Shares. All amounts received by the Bank through the exercise of its rights
as
aforesaid shall be applied to the extent required to satisfy the obligations
of
the Borrowers under the Loan Agreement and the other Loan Documents. Any amounts
remaining thereafter shall be paid over to Parent.
5.
Voting
Rights.
Until
the occurrence of an Event of Default, the Parent shall hold and maintain all
ownership rights associated with the Shares, including the right to vote said
Shares on any corporate question, subject to the restriction on issuance of
additional shares provided in Paragraph 6 below, provided that the Parent shall
not be entitled to any Income from the Shares.
6.
Prohibition
of Issuance of Additional Shares.
Until
the Obligations under the Loan Agreement are paid in full, Parent shall not
permit or vote for the issuance by BPI of any subscription warrants, options
or
other rights with respect to any of the Shares, or the issuance of any
additional shares of capital stock or other shares, whether in connection with
a
merger, consolidation, exchange, combination, reclassification, reorganization,
stock split, stock dividend, or otherwise.
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7.
Protection
of Shares.
Parent
shall pay all taxes, charges and assessments against the Shares and do all
acts
necessary and appropriate to preserve and maintain the value thereof. In the
event of the failure of the Parent to do so, Bank may make such payments and
take such actions on account thereof as it, in its sole discretion, deems
desirable. Parent shall reimburse Bank immediately on demand for each and all
such payments and any costs so incurred.
8.
Power
of Attorney.
Parent
hereby irrevocably appoints the Bank as Parent's attorney-in-fact, with full
power of substitution, to, upon the occurrence of an Event of Default (a) take
any and all actions in Parent's names and stead with respect to the Shares,
(b)
sell, transfer, assign, or otherwise dispose of the Shares, (c) demand, collect,
receive, receipt for, and recover all Income and Proceeds, and (d) execute
in
Parent's name and to deliver any necessary documents and instruments required
with respect to the Shares necessary for the exercise of the Bank's rights
hereunder.
9.
Representations
and Warranties of Parent.
Parent
represents and warrants that as of the date hereof:
(a)
Parent is the sole owner of the Shares and has the right, authority and capacity
to pledge, transfer, assign, and grant a security interest in and to all right,
title and interest in and to the Shares pursuant to this
assignment;
(b)
The
Shares are not subject to any right, security interest, lien, encumbrance or
adverse claim of any third party except the interest of the Bank arising under
this agreement;
(c)
This
agreement and consummation of the transactions set forth herein do not violate
or constitute a breach of any indenture, agreement or undertaking to which
Parent is a party or by which Parent is bound, or of any laws, statutes and
regulations of the United States or any state or political subdivision thereof
to which Parent may be subject;
(d)
Except for this agreement, there are no restrictions upon the transfer or
assignment of any of the Shares;
(e)
The
execution, delivery and performance hereof by Parent are not in contravention
of
any prior obligation of Parent or any obligation with respect to the Shares;
and
(f)
The
Shares constitute all of the issued and outstanding capital stock of
BPI.
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10.
Waivers.
Parent
assents to any extension, modification or waiver of any obligation of Borrowers.
No waiver or modification of any of the provisions hereof shall be binding
on
Bank unless in writing and signed by Bank and no waiver by Bank of any rights
it
may have hereunder shall be deemed a waiver of any other rights it may have.
All
rights and remedies of Bank shall be cumulative and may be exercised singly
or
concurrently.
11.
Costs.
Parent
shall pay all reasonable costs including, without limitation, reasonable
attorneys' fees, incurred by Bank in protecting, enforcing or releasing any
of
its rights hereunder.
12.
Additional
Documents.
Upon
the request of Bank, Parent will execute and deliver such further documents
and
take such further action as Bank may reasonably request in order to fully effect
the purposes of this agreement and to protect its rights hereunder. Upon
satisfaction of all of the Borrowers’ obligations to the Bank under the Loan
Agreement and the other Loan Documents, and the termination of this agreement,
the Bank shall deliver the Shares to the Parent.
13.
Termination.
This
agreement and the security interest in the Shares created hereby shall terminate
when all of the obligations secured hereby have been paid, performed, and
finally discharged in full. Upon such termination, Bank agrees to deliver to
Parent all certificates evidencing the Shares then held by the Bank pursuant
to
this agreement, together with all assignments and proxies with respect
thereto.
14.
Miscellaneous.
(a)
This
agreement shall be interpreted under and construed in accordance with the laws
of the State of New Hampshire.
(b)
Any
notice or other communications required or permitted hereunder shall be in
writing and shall be given as provided in the Loan Agreement.
(c)
This
agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
(d)
This
agreement shall be binding upon and inure to the benefit of the parties hereto,
their successors and permitted assigns, and may not be changed or modified
except by an instrument in writing signed by the party to be charged therewith.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties hereto have duly executed and delivered this
agreement as of the date first above written.
| PARENT: | ||
| BRANDPARTNERS GROUP, INC. | ||
| _________________________ | By: _______________________________ | |
| Witness | Signature/Title Duly Authorized | |
| BANKNORTH, N.A. | ||
| _____________________________ | By: _____________________________ | |
| Witness | Xxxx Xxxxxxx, | |
|
Senior
Vice President
|
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ACKNOWLEDGMENT
BY SUBSIDIARY
BPI
acknowledges the foregoing agreement and the assignment and pledge of the Shares
made therein by BRANDPARTNERS GROUP, INC. and BPI, for good and valuable
consideration, the receipt and sufficiency of which are acknowledged, covenants
and agrees that no additional shares of this capital stock, including without
limitation shares of stock, stock options and stock warrants, shall be issued
so
long as the foregoing agreement and the pledge of stock contained therein remain
in effect.
| BUILDING PARTNERS, INC | ||
| _________________________ | By: ______________________________ | |
|
Witness
|
Signature and Title/Duly Authorized | |
.
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