STOCK PLEDGE AGREEMENT
between
Rehabilicare Inc., 0000 Xxx Xxxxxxx 0, Xxx Xxxxxxxx, XX 00000, a corporation
organised under the laws of the State of Minnesota, one of the United States of
America
(the "Pledgor")
and
U. S. Bank National Association, at X.X. Xxxx Xxxxx, Xxxxxxxxxxx, XX 00000, a
national banking association organised under the laws of the United States of
America
(the "Bank")
WHEREAS, the Bank undertook to grant the Pledgor loans in the amount of up to
US$20,000,000.00 (the "Loan") pursuant to a Credit Agreement dated as of July
14, 1999 ___ (as amended, modified, supplement or restated from time to time,
the "Loan Agreement;" capitalised terms not otherwise defined herein being
used herein as therein defined);
WHEREAS, the terms and conditions of the Loan Agreement provide that Pledgor
and certain of its direct and indirect Subsidiaries shall secure the Loan by
way of guarantees and a pledge of assets; and
WHEREAS, Pledgor has determined that the execution, delivery and performance
of this Agreement is in Pledgor's best business and pecuniary interest.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Pledgor hereby pledges and undertakes to deliver to the Bank One
Hundred per cent (100%) of the shares (the "Shares", as evidenced by
the share certificates nos. 1a to 1d and 2 to 9) in Compex SA, a
corporation organised under the laws of Switzerland (the "Swiss
Subsidiary"). All ancillary rights related thereto are also deemed to
have been pledged. The Shares shall be endorsed in blank.
The right of pledge shall always extend to the entire asset pledged,
even if its value was increased subsequently for whatever reason.
The proceeds from the realisation of collateral security shall remain
pledged to the Bank until such time as all such obligations have been
settled.
2. The Pledgor undertakes to convene as soon as possible a shareholder
meeting and to convert the Shares into bearer shares, the newly issued
bearer shares to be pledged to the Bank immediately upon their issuance
in accordance with the terms of this Stock Pledge Agreement.
Apart from the conversion of shares referred to in the preceding
paragraph, the Pledgor undertakes not to change the share capital or to
create authorised or conditional share capital of the Swiss Subsidiary
without the prior written approval of the Bank, such approval not to be
unreasonably withheld. Furthermore, the
Pledgor shall ensure that the Swiss Subsidiary refrains from issuing
any securities or rights exchangeable for or convertible into shares
of the Swiss Subsidiary or any options exercisable into such shares,
and that the Swiss Subsidiary shall enter any purchaser of the Shares
in case of their realisation in the stock register.
In case the Pledgor acquires any additional shares of the Swiss
Subsidiary or any securities or rights exchangeable for or convertible
into shares of the Swiss Subsidiary or any options exercisable into
such shares, by purchase or otherwise, then the Pledgor shall forthwith
pledge and deliver to the Bank all of such shares or securities or
rights, so that the pledged Shares always represent One Hundred per
cent (100%) of the capital and One Hundred per cent (100%) of the
voting power in the Swiss Subsidiary.
3. The Pledgor shall, at the time of the signing of this Stock Pledge
Agreement, sign a proxy in the form of Exhibit A hereto. The Bank
undertakes to use such proxy only in case the pledge created hereunder
can be realised following the occurrence of an Event of Default.
4. The pledge created by this Stock Pledge Agreement shall secure all
Obligations of Pledgor as set forth in the Loan Agreement and the
compensation of all costs and expenses incurred by or on behalf of the
Bank in connection with the perfection of the pledge over the assets
described herein and the realisation of said pledge.
5. The Pledgor shall take the necessary precautions and measures to
maintain the value of the collateral established hereunder and, after
the perfection of the pledge, shall advice the Bank on such necessary
precautions and measures if and when needed. Irrespective of whether or
not such advice has been received, the Bank shall be entitled, but not
obliged, to take, at the expense and risk of the Pledgor, such
precautions and measures as it deems necessary, such as the giving of
declarations in Switzerland and abroad which are necessary for the
creation of security interests as well as the maintenance and/or
realisation of the collateral.
6. Should the Pledgor fail to meet its Obligations secured by the pledge
created hereby, the Bank shall be entitled, at its discretion, to
realise the pledged items by enforced sale or in the open market, and,
with respect to the sale in the open market, without regard to the
formalities provided for in the Swiss Federal Act on Debt Collection
Proceedings and Bankruptcy or the respective legal provisions
applicable at the place outside Switzerland where realisation takes
place, provided that if any notification of intended realisation is
required by application law, such notification shall be deemed
reasonably and properly given if given in accordance with the notice
provisions of the Loan Agreement at least ten (10) days before such
realisation.
7. If more that one item has been pledged, these items shall serve jointly
and severally as collateral. In the absence of any written agreements
to the contrary, the Bank shall determine the order in which any
collateral (assets pledged, guarantees etc.) is realised or used. The
Bank may reduce or waive collateral without the consent of the Pledgor.
The Pledgor herewith expressly waives the defence that the Bank must
realise the collateral before it institutes attachment or bankruptcy
proceedings against it.
8. The Bank agrees to release a portion of the Shares in accordance with
Section 11.13 of the Loan Agreement.
9. All communications of the Bank to the Pledgor are deemed to have been
made with legal effect if dispatched in accordance with the notice
provisions of the Loan Agreement.
10. This Stock Pledge Agreement shall be governed by and construed in
accordance with the laws of Switzerland.
11. The Pledgor irrevocably agrees that for the exclusive benefit of the
Bank any proceedings by the Bank arising out of or in connection with
this Stock Pledge Agreement may be brought by the Bank in any competent
COURT OF THE STATE OF MINNESOTA OR ANY FEDERAL COURT OF THE UNITED
STATES OF AMERICA SITTING THEREIN. The Pledgor irrevocably (a) submits
to the non-exclusive jurisdiction of such courts and (b) waives any
right it may have to the trial by jury of such proceedings in any such
court.
12. The Pledgor irrevocably waives any objection which it might now or
hereafter have to the courts referred to in Clause 11 being nominated
as the forum to hear and determine any proceeding which may arise out
of or in connection with this Stock Pledge Agreement and agrees not to
claim that any such court is not a convenient or a appropriate forum.
13. The submission to the jurisdiction of the courts referred to in Clause
11 shall not (and shall not be construed so as to) limited the right of
the Bank to take proceedings against the Pledgor in any other court of
competent jurisdiction nor shall the taking of proceedings in any one
or more jurisdictions preclude the taking of proceedings in any other
jurisdiction (whether concurrently or not) if an to the extent
permitted by applicable law.
14. The Pledgor consents generally in respect of any proceedings arising
out of or in connection with this Stock Pledge Agreement including to
the giving of any relief or the issue of any process in connection with
such proceedings, including, without limitation, the making,
enforcement or execution against any property or assets whatsoever
(irrespective of its use or intended use) of any order or judgement
which may be made or given in such proceedings.
15. To the extent that the Pledgor may in any jurisdiction claim for itself
or its assets immunity from suit, execution, attachment (whether in aid
of execution, before judgement or otherwise) or other legal process and
to the extent that in any such jurisdiction there may be attributed to
itself or its assets such immunity (whether or not claimed), the
Pledgor hereby irrevocably agrees not to claim and hereby irrevocably
waives such immunity to the full extent permitted by the laws of such
jurisdiction.
Executed and delivered at Geneva, Switzerland, as of July__, 1999.
Rehabilicare Inc.
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By:
Its:
Executed and delivered at Minneapolis, Minnesota USA, as of July__, 1999.
U. S. Bank National Association
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By: Xxxxxxx X. Xxxxxxx
Its: Vice President
Exhibit A
GENERAL PROXY FOR THE REPRESENTATION OF SHARES
The undersigned (the "Pledgor") has pledged One Hundred per cent (100%) of
its shares (the "Shares") of Compex SA, a corporation organised under the
laws of Switzerland (the "Swiss Subsidiary") to U. S. Bank National
Association (the "Bank").
Pursuant to Articles 689b, et seq. of the Swiss Code of Obligations, the
Pledgor hereby authorises the Bank to exercise the voting and all other
membership rights pertaining to the Shares at general shareholders' meeting
of the Swiss Subsidiary and to delegate this authority as it sees fit.
This Proxy will remain valid even in the event of the undersigned's legal
incompetence or bankruptcy.
Executed and delivered at Geneva, Switzerland, as of July__, 1999.
Rehabilicare Inc.
---------------------
By:
Its:
