Exhibit 10.8
STOCK PLEDGE AGREEMENT
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This Stock Pledge Agreement ("Pledge Agreement") is made by
________________________________________________________________________________
("Pledgor") and delivered to CoreStates Bank, N.A. as agent (in such capacity,
"Agent") for the lenders (collectively, "Lenders") parties to that certain Loan
and Security Agreement (as it may from time to time be supplemented, restated,
superseded, amended or replaced, the "Loan Agreement") of even date herewith
among Phoenix Color Corp. and Alpha Systems, Inc. (collectively, "Borrowers"),
Agent, Fleet Bank of Massachusetts, N.A., as Co-Agent and the Lenders. This
Pledge Agreement is given and is intended to provide additional security for all
of Borrowers' Obligations (as defined in the Loan Agreement) to Lenders. All
capitalized terms not otherwise defined herein shall have the respective
meanings ascribed thereto in the Loan Agreement.
Pledgor, intending to be legally bound hereby, and for other good and
sufficient consideration, the receipt of which is hereby acknowledged, does
hereby assign, pledge, hypothecate, deliver and set over to Agent for the
ratable benefit of Lenders, its successors and assigns, the property described
in the Schedule of Collateral attached hereto and made part hereof, including
all additions, exchanges, replacements and substitutions therefor, dividends and
distributions with respect thereto, and the proceeds thereof, (collectively, the
"Collateral") and Pledgor hereby grants to Agent, for the ratable benefit of
Lenders, a continuing lien and security interest in the Collateral as collateral
security for the payment and performance of the Obligations.
(1) Pledgor hereby represents and warrants that:
(a) Except as pledged herein, Pledgor has not sold, assigned,
transferred, pledged or granted any option or security interest in or otherwise
hypothecated the Collateral in any manner whatsoever and the Collateral is
pledged herewith free and clear of any and all liens, security interests,
encumbrances, claims, pledges, restrictions, legends, and options;
(b) Pledgor has the full power and authority to execute, deliver,
and perform under this Pledge Agreement and to pledge the Collateral hereunder;
(c) This Pledge Agreement constitutes the valid and binding
obligation of Pledgor, enforceable in accordance with its terms, and the pledge
of the Collateral referred to herein is not in violation of and shall not create
any default under any agreement, undertaking or obligation of Pledgor;
(d) The Collateral has been duly and validly authorized and
issued by the issuer thereof and such Collateral is fully paid for and
non-assessable;
(e) Pledgor is pledging hereunder one hundred percent (100%) of
Pledgor's interest and ownership in all entities listed on the attached Schedule
of Collateral; and
(f) Pledgor is contemporaneously with the execution hereof,
delivering to Agent all certificates representing or evidencing the Collateral,
accompanied by duly executed instruments of transfer or assignments in blank, to
be held by Agent in accordance with the terms hereof.
(2) The pledge described herein shall continue in effect to secure all
Obligations from time to time incurred or arising unless and until the
outstanding principal balance of Term Loan A has been permanently and
indefeasibly reduced to the sum of Four Million Dollars ($4,000,000) and no
Default or Event of Default is, at that time, outstanding.
(3) If an Event of Default occurs under the Loan Agreement, then Agent
may, at its sole option, exercise from time to time with respect to the
Collateral any and/or all rights and remedies available to it hereunder, under
the Uniform Commercial Code, or otherwise available to it, at law or in equity,
including without limitation the right to dispose of the Collateral at public or
private sale(s) or other proceedings, and Pledgor agrees that, if permitted by
law, Agent or its nominee may become the purchaser at any such sale(s).
(4)(a) In addition to all other rights granted to Agent herein or
otherwise available at law or in equity, Agent shall have the following rights,
each of which may be exercised at Agent's sole discretion (but without any
obligation to do so), at any time following the occurrence of an Event of
Default under the Loan Agreement, without further consent of Pledgor: (i) to
transfer the whole or any part of the Collateral into the name of itself or its
nominee or to conduct a sale of the Collateral pursuant to the Uniform
Commercial Code as enacted in Pennsylvania or pursuant to any other applicable
law; (ii) to vote the Collateral; (iii) to notify the persons obligated on any
of the Collateral to make payment to Agent of any amounts due or to become due
thereon; and (iv) to release, surrender or exchange any of the Collateral at any
time, or to compromise any dispute with respect to the same. Agent may proceed
against the Collateral, or any other collateral securing the Obligations, in any
order, and against Pledgor and any other obligors (including, without
limitation, Borrowers), jointly and/or severally, in any order to satisfy the
Obligations. Pledgor waives and releases any right to require Agent to first
collect any of the Obligations secured hereby from any other collateral of
Pledgor
or any other party (including, without limitation, Borrowers) securing the
Obligations under any theory of marshalling of assets, or otherwise. All rights
and remedies of Agent are cumulative, not alternative.
(b) Pledgor hereby appoints Agent its attorney-in-fact, subject
to the terms hereof, to arrange, at Agent's option, (i) to, upon the occurrence
of an Event of Default, effectuate the transfer of the Collateral on the books
of the issuer thereof to the name of Agent or to the name of Agent's nominee,
designee or assignee, (ii) to endorse and collect checks payable to Pledgor
representing distributions or other payments on the Collateral, and (iii) to
carry out the terms and provisions hereof.
(5) The proceeds of any Collateral received by Agent at any time,
whether from the sale of Collateral or otherwise, may be applied to or on
account of the Obligations and in such order as Agent may elect. In addition,
Agent may, in its discretion, apply any such proceeds to or on account of the
payment of all Expenses which may be incurred by Agent (or any Lender).
(6) Pledgor recognizes that Agent may be unable to effect, or may
effect only after such delay which would adversely affect the value that might
be realized from the Collateral, a public sale of all or part of the Collateral
by reason of certain prohibitions contained in the Securities Act of 1933, as
amended, and may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such securities for their own account, for investment and not with a
view to the distribution or resale thereof. Pledgor agrees that any such
private sale may be at prices and on terms less favorable to Agent or the seller
than if sold at public sales, and therefore recognizes and confirms that such
private sales shall not be deemed to have been made in a commercially
unreasonable manner solely because they were made privately. Pledgor agrees
that Agent has no obligation to delay the sale of any such securities for the
period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act of 1933, as amended.
(7) In the event that any stock dividend, reclassification,
readjustment or other change is made or declared in the capital structure of, or
Pledgor acquires or in any other manner receives additional shares of stock in,
any corporation described in the attached Schedule of Collateral, if any, or any
option included within the Collateral is exercised, or both, all new,
substituted and additional shares, or other securities, issued by reason of any
such change or exercise shall be delivered to and held by Agent under the terms
hereof in the same manner as the Collateral originally pledged hereunder. No
cash dividends may be paid to
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or retained by Pledgor unless expressly permitted in writing by Agent.
(8) So long as no Event of Default has occurred and is continuing under
the Loan Agreement, and, until Agent notifies Pledgor in writing of the exercise
of its rights hereunder, Pledgor shall retain the sole right to vote the
Collateral and exercise all rights of ownership with respect to all corporate
questions for all purposes not inconsistent with the terms hereof.
(9) Agent shall have no obligation to take any steps to preserve,
protect or defend the rights of Pledgor or Agent in the Collateral against other
parties. Agent shall have no obligation to sell or otherwise deal with the
Collateral at any time for any reason, whether or not upon request of Pledgor,
and whether or not the value of the Collateral, in the opinion of Agent or
Pledgor, is more or less than the aggregate amount of the Obligations secured
hereby, and any such refusal or inaction by Agent shall not be deemed a breach
of any duty which Agent may have under law to preserve the Collateral. Unless
expressly set forth herein, no duty, obligation or responsibility of any kind is
intended to be delegated to or assumed by Agent at any time with respect to the
Collateral.
(10) To the extent Agent is required by law to give Pledgor prior notice
of any public or private sale, or other disposition of the Collateral, Pledgor
agrees that seven (7) days' prior written notice to Pledgor shall be a
commercially reasonable and sufficient notice of such sale or other intended
disposition. Pledgor further recognizes and agrees that if the Collateral, or a
portion thereof, threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Pledgor shall not be entitled to any
prior notice of sale or other intended disposition.
(11) Pledgor shall indemnify, defend and hold harmless Agent from and
against any and all claims, losses and liabilities resulting from any breach by
Pledgor of Pledgor's representations and covenants under this Pledge Agreement.
(12) Pledgor hereby waives notice of (a) acceptance of this Pledge
Agreement, (b) the existence and incurrence from time to time of any Obligations
under the Loan Agreement, (c) the existence of any Event of Default, the making
of demand, or the taking of any action by Agent under the Loan Agreement, and
(d) demand and default hereunder.
(13) Pledgor hereby consents and agrees that Agent may at any time or
from time to time in its sole discretion (a) extend or change the time of
payment and/or the manner, place or terms of payment of any and all Obligations,
(b) supplement, amend,
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restate, supersede, or replace the Loan Agreement or any other Loan Documents,
(c) renew, extend, modify, increase or decrease loans and extensions of credit
under the Loan Agreement, (d) modify the terms and conditions under which loans
and extensions of credit may be made under the Loan Agreement, (e) settle,
compromise or grant releases for any Obligations and/or any person or persons
liable for payment of any Obligations, (f) exchange, release, surrender, sell,
subordinate or compromise any collateral of any party now or hereafter securing
any of the Obligations and (g) apply any and all payments received from any
source by Agent at any time against the Obligations in any order as Agent may
determine; all of the foregoing in such manner and upon such terms as Agent may
determine and without notice to or further consent from Pledgor and without
impairing or modifying the terms and conditions of this Pledge Agreement which
shall remain in full force and effect.
(14) This Pledge Agreement shall remain in full force and effect and
shall not be limited, impaired or otherwise affected in any way by reason of (a)
any delay in making demand on Borrowers or Pledgor for or delay in enforcing or
failure to enforce, performance or payment of Borrowers' or Pledgor's
obligations, or (b) any failure, neglect or omission on Agent's part to perfect
any lien upon, protect, exercise rights against, or realize on, any property of
Borrowers, Pledgor or any other party securing the Obligations.
(15) Pledgor covenants and agrees that Pledgor shall not, without the
prior written consent of Agent, sell, encumber or grant any lien, security
interest or option on or with respect to any of the Collateral.
(16) Pledgor hereby authorizes and instructs each issuer of the
Collateral to comply with any instruction received by it from Agent in writing
that (a) states that an Event of Default has occurred and (b) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from Pledgor, and Pledgor agrees that each such issuer shall be
fully protected in so complying.
(17) Pledgor acknowledges that the rights and responsi-bilities of Agent
under this Pledge Agreement with respect to any action taken by Agent or the
exercise or non-exercise by Agent of any option, voting right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
Pledge Agreement shall be governed, as between Agent and Lenders, by the Loan
Agreement and by such other agreements with respect thereto as may exist from
time to time among them; but, as between Agent and Pledgor, Agent shall be
conclusively presumed to be acting as agent for Lenders with full and valid
authority so to act or refrain from acting, and neither Pledgor nor any issuer
of Collateral shall be under any obligation, or
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entitlement, to make any inquiry respecting such authority. All references
herein to any rights or remedies of Agent, or to any obligations owing to Agent
hereunder, shall be deemed to refer to such rights and remedies as Agent may
exercise on behalf of itself and the Lenders for the ratable benefit of the
Lenders.
(18) Any failure of or delay by Agent to exercise any right or remedy
hereunder shall not be construed as a waiver of the right to exercise the same
or any other right or remedy at any other time.
(19) This Pledge Agreement constitutes the entire agreement between the
parties hereto regarding the subject matter hereof and may be modified only by a
written instrument signed by the party or parties against whom any change is
sought to be enforced.
(20) This Pledge Agreement is made in and shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania, and
the provisions hereof shall be deemed severable in the event of the invalidity
of any provision.
(21) All communications which Agent may provide to Pledgor herein shall
be sent to Pledgor at the respective addresses set forth below in the manner
provided in paragraph 10.8 of the Loan Agreement.
(22) This Pledge Agreement shall be binding upon and inure to the
benefit of the parties hereto (including Agent and Lenders), and their
respective successors and assigns.
(23) PLEDGOR AND AGENT EACH HEREBY WAIVES ANY AND ALL RIGHTS IT MIGHT
HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION ARISING WITH RESPECT TO
RIGHTS AND OBLIGATIONS OF THE PARTIES TO THIS PLEDGE AGREEMENT.
This Stock Pledge Agreement is executed this day of ,
1996.
Witness____________________
_________________________________ [SEAL]
Address:__________________________________
__________________________________
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SCHEDULE OF COLLATERAL
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The following Collateral is hereby pledged by Pledgor to Agent pursuant to
the Stock Pledge Agreement to which this Schedule is attached:
CLASS AMOUNT
ISSUER OWNER CERTIFICATE NO. OF STOCK OF SHARES
------ ----- --------------- -------- ---------
Phoenix
Color
Corp.
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STATE OF :
: Ss
:
COUNTY OF :
I HEREBY CERTIFY that, on this _______ day of _____________, 1996, before
me, the undersigned, a Notary Public in and or the State aforesaid, appeared
________________________, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the foregoing instrument for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal on the day and
year first above mentioned.
___________________________________
Notary Public
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Schedule to the Stock Pledge Agreement
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The foregoing Stock Pledge Agreement was executed by the following
stockholders:
Xxxxx Xx Xxxxx
Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx
Xxxxxx Xxxx
Xxxxx Xxxx
Xxxxxxx XxXxxxxxx
Xxxxxx Xxxxxx
Xxxx Xxxx
Xxxx Xxxxxxx
Xxxxxxxx Xxxxx
Dion Von der Lieth
Xxxxx Xxxx
