BORROWER PLEDGE AGREEMENT
AGREEMENT, made this 31st day of December, 1996, by and between:
THE CARE GROUP, INC., a Delaware corporation, having an office at Xxx
Xxxxxx Xxxx, Xxxx Xxxxxxx, Xxx Xxxx 00000 (the "PLEDGOR"); and
KEY BANK OF NEW YORK, a New York banking corporation, having an office
at 0000 Xxxxx Xxxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "BANK");
W I T N E S S E T H:
WHEREAS:
A. The Pledgor has entered into a certain Loan Agreement of even date
herewith (hereinafter, as it may from time to time be amended or supplemented,
referred to as the "LOAN AGREEMENT") with the Bank pursuant to which the Bank
has agreed to lend to the Pledgor up to the aggregate principal amount set
forth therein, upon and subject to the terms and conditions of the Loan
Agreement;
B. In order to induce the Bank to execute and deliver the Loan
Agreement, the Pledgor has agreed to pledge all of the issued and outstanding
shares of capital stock of the Subsidiaries owned by it as collateral security
for the payment of all of its Indebtedness arising under the Loan Agreement and
the promissory note executed and delivered by the Pledgor to the Bank in
connection therewith (hereinafter referred to, together with any and all
amendments, modifications, substitutions and/or replacements thereof and
thereto, as the "NOTE");
C. It is a condition precedent to the obligations of the Bank
under the Loan Agreement that the Pledgor shall execute and deliver this Pledge
Agreement; and
D. All capitalized terms used herein that are defined in the
Loan Agreement and that are not otherwise defined herein shall have the
respective meanings ascribed thereto therein, unless the context otherwise
requires;
NOW, THEREFORE, in consideration of the foregoing the Pledgor hereby
agrees with the Bank as follows:
1. The term "PLEDGED STOCK" as used herein shall mean and include all
of the issued and outstanding shares, whether now owned or hereafter acquired
by the Pledgor, of the capital stock of each of its Subsidiaries, including,
without limitation all of the issued and outstanding stock of the Subsidiaries
listed on Schedule A hereto, and, also, any shares, stock certificates, options
or rights issued by any of the Subsidiaries as an addition to, in substitution
of, or in exchange for any such shares, and any and all proceeds thereof, now
or hereafter owned or acquired by the Pledgor.
2. (a) As collateral security for the due payment and performance
of all Indebtedness of the Pledgor to the Bank, whether now existing or
hereafter arising, including, without limitation, all indebtedness, liabilities
and obligations under, arising out of, or in any way connected with the Loan
Agreement, the Note, and all instruments, agreements and documents executed,
issued and delivered pursuant thereto, whether now existing or hereafter
arising (all of the foregoing Indebtedness, liabilities and obligations are
hereinafter called the "OBLIGATIONS"), the Pledgor hereby pledges, assigns,
hypothecates, delivers and sets over to the Bank, all the Pledged Stock, and
hereby grants to the Bank, a first security interest in all such Pledged Stock
and in any and all proceeds thereof and substitutions therefor.
(b) If the Pledgor shall become entitled to receive or shall
receive any stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital), option or rights, whether
as an addition to, in substitution of, or in exchange for any shares of the
Pledged Stock, or otherwise, the Pledgor shall accept any such instruments as
the Bank's agent, shall hold them in trust for the Bank, and shall deliver them
forthwith to the Bank in the exact form received, with the Pledgor's
endorsement when necessary and/or appropriate stock powers duly executed in
blank, to be held by the Bank, subject to the terms hereof, as further
collateral security for the Obligations.
(c) Any or all shares of the Pledged Stock held by the Bank
hereunder may, at the option of the Bank or its nominee, be registered in the
name of the Bank or its nominee. The Bank or its nominee may thereafter,
without notice, and after the occurrence and during the continuance of an Event
of Default, exercise all voting and corporate rights at any meeting of any
corporation issuing any of the shares included in the Pledged Stock and
exercise any and all rights of conversion, exchange, subscription or any other
rights, privileges or options pertaining to any shares of the Pledged Stock as
if it were the absolute owner thereof, including, without limitation, the right
to receive dividends payable thereon, and the right to exchange, at its
discretion, any and all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other readjustment of any corporation
issuing any of such shares or upon the exercise by any such issuer of any
right, privilege or option pertaining to any shares of the Pledged Stock, and
in connection therewith, to deposit and deliver any and all of the Pledged
Stock with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine, all
without liability except to account for property actually received by it, but
the Bank shall have no duty to exercise any of the aforesaid rights, privileges
or options and shall not be responsible for any failure to do so or delay in so
doing.
(d) In the event of the occurrence and continuance of an
Event of Default, the Bank shall have the right to require that all cash
dividends payable with respect to any part of the Pledged Stock be paid to the
Bank to be held by the Bank as additional security hereunder and be promptly
applied to the payment of the Obligations.
(e) In the event of the occurrence and continuance of an
Event of Default, the Bank without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon the Pledgor or any other Person
(all and each of which demands, advertisements and/or notices are, to the
extent permitted by law, hereby expressly waived), may forthwith collect,
receive, appropriate and realize upon the Pledged Stock, or any part thereof,
and/or may forthwith sell, assign, give an option or options to purchase,
contract to sell or otherwise dispose of and deliver said Pledged Stock, or any
part thereof, in one or more parcels at public or private sale or sales, at any
exchange, broker's board or at any of the Bank's offices or elsewhere at such
prices and on such terms (including, without limitation, a requirement that any
purchaser of all or any part of the Pledged Stock shall be required to purchase
the shares constituting the Pledged Stock for investment and without any
intention to make a distribution thereof) as it may deem best and in a
commercially reasonably manner, for cash or on credit or for future delivery
without assumption of any credit risk, with the right to the Bank or any
purchaser upon any such sale or sales, whether public or private, to purchase
the whole or any part of the Pledged Stock so sold, free of any right or equity
of redemption in the Pledgor, which right or equity is hereby expressly waived
and released.
(f) The proceeds of any collection, recovery, receipt,
appropriation, realization or sale as aforesaid, shall be applied as follows:
First, to the reasonable costs and expenses of ever kind
incurred in connection therewith or incidental to the care, safekeeping or
otherwise of any and all of the Pledged Stock or in any way relating to the
rights of the Bank hereunder, including reasonable attorneys' fees and legal
expenses;
Second, to the satisfaction of the Obligations;
Third, to the payment of any other amounts required by
applicable law (including, without limitation, Section 9-504(1)(c) of the
Uniform Commercial Code); and
Fourth, to the Pledgor to the extent of the surplus
proceeds, if any.
(g) The Bank need not give more than five days' notice of
the time and place of any public sale or of the time after which a private
sale may take place and such notice shall be deemed to be reasonable
notification of such matters.
(h) In the event that the proceeds of any collection,
recovery, receipt, appropriation, realization, or sale as aforesaid are
insufficient to pay all amounts to which the Bank is legally entitled, the
Pledgor will be liable for the deficiency, together with interest thereon, at
the Event of Default rate prescribed in the Note, and the reasonable fees of
any attorneys employed by the Bank to collect such deficiency, pursuant to the
Loan Agreement.
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3. The Pledgor represents and warrants that:
(a) The Pledged Stock owned by the Pledgor is owned directly
and beneficially and of record by the Pledgor in the respective amounts set
forth on Schedule A hereto;
(b) The shares of the Pledged Stock constitute one hundred
(100%) percent of all of the issued and outstanding shares of capital stock of
each Subsidiary;
(c) All of the shares of the Pledged Stock have been duly
and validly issued, are fully paid and non-assessable and are owned by the
Pledgor free and clear of any pledge, mortgage, hypothecation, lien, charge,
encumbrance or any security interest in such shares or the proceeds thereof
except for the security interest granted to the Bank hereunder; and
(d) Upon delivery of the Pledged Stock to the Bank or an
agent for the Bank, this Pledge Agreement creates and grants a valid first
lien on and perfected security interest in the shares of the Pledged Stock and
the proceeds thereof, subject to no prior security interest, lien, charge or
encumbrance or to any agreement purporting to grant to any third party a
security interest in the property or assets of the Pledgor that would include
the Pledged Stock.
4. (a) The Pledgor hereby covenants that so long as the
Obligations shall be outstanding and unpaid, in whole or in part, the Pledgor
will not:
(i) sell, convey or otherwise dispose of any
shares of the Pledged Stock owned or any interest therein, nor will the Pledgor
create, incur or permit to exist any pledge, mortgage, lien, charge,
encumbrance or any security interest whatsoever with respect to any of such
Pledged Stock or the proceeds thereof other than that created hereby; or
(ii) consent to or approve the issuance of any
additional shares of any class of the issuer of the Pledged Stock.
(b) The Pledgor warrants and will defend the Bank's right,
title, special property and security interest in and to the Pledged Stock
against the claims of any Person, firm, corporation or other entity.
5. The Pledgor recognizes that the Bank may be unable to effect a
public sale of all or a part of the Pledged Stock, and may be compelled to
resort to one or more private sales to a restricted group of purchasers who
will be obligated 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. The Pledgor acknowledges that any such private sales may be at
places and on terms less favorable to the seller than if sold at public sales
and agrees that such private sales shall be deemed to have been made in a
commercially reasonable manner, and that the Bank has no obligation to delay
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.
6. The Pledgor shall at any time and from time to time upon the
written request of the Bank, execute and deliver such further documents and do
such further acts and things as the Bank may reasonably request in order to
effect the purposes of this Pledge Agreement, including, without limitation,
delivering to the Bank on the date hereof or at any time hereafter irrevocable
proxies in respect of the Pledged Stock in the form of Exhibit A hereto.
7. (a) Beyond the exercise of reasonable care to assure the safe
custody of the Pledged Stock while held hereunder, the Bank shall have no duty
or liability to preserve rights pertaining thereto, and shall be relieved of
all responsibility for the Pledged Stock upon surrendering it to the Pledgor or
in accordance with the Pledgor's instructions.
(b) No course of dealing between the Pledgor and the Bank,
nor any failure to exercise, nor any delay in exercising, on the part of the
Bank, any right, power or privilege hereunder or under the Loan Agreement or
the Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
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(c) The rights and remedies herein provided, and provided in
the Loan Agreement and the Note and in all other agreements, instruments and
documents delivered pursuant to the Loan Agreement, are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law
including, without limitation, the rights and remedies of a secured party under
the Uniform Commercial Code.
(d) The provisions of this Pledge Agreement are severable,
and if any clause or provision shall be held invalid or unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction and
shall not in any manner affect such clause or provision in any other juris-
diction, or any other clause or provision in this Pledge Agreement in any
jurisdiction.
8. All notices and other communications to the Pledgor pursuant to
this Pledge Agreement shall be in writing, either by letter (delivered by hand
or sent by registered or certified mail, return receipt requested) or telegram,
addressed to the Pledgor at its address set forth in the heading of hereto of
this Pledge Agreement, and shall be deemed to have been given when deposited in
the mails, postage prepaid, or in the case of telegraphic notice, when
delivered to the telegraph company, addressed as aforesaid.
9. This Pledge Agreement shall inure to the benefit of, and be
binding upon, the successors and assigns of the parties hereto.
10. THIS PLEDGE AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS RULES PERTAINING
TO CONFLICTS OF LAWS.
11. Upon payment in full of all of Obligations, this Pledge Agreement
shall terminate and the Bank shall release and return the stock certificates
representing the Pledged Stock to the Pledgor.
IN WITNESS WHEREOF, the parties have caused these presents to be duly
executed and delivered the day and year first above written.
THE CARE GROUP, INC.
By__________________________
Title
KEY BANK OF NEW YORK
By__________________________
Title
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