PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of September 15, 2000 among HEALTHCOMP
EVALUATION SERVICES CORPORATION, a Nevada corporation (the "Company")
AFTON, INC., a Tennessee corporation, and MEDICAL DRUG TESTING, INC., a
Pennsylvania corporation (the "Subsidiary Pledgors", together with the
Company, the "Pledgors" and each a "Pledgor") and DILIGENTI, INC., a
Delaware corporation (the "Lender").
WHEREAS, by a Loan and Investment Agreement dated August 31, 2000 (the
"Loan Agreement") the Lender has made a $3,750,000 bridge loan (the
"Bridge Loan") to the Pledgor;
WHEREAS, each of the Company and the Subsidiary Pledgors has entered
into this Pledge Agreement in order to secure the Company's liabilities
in respect of the Secured Obligations;
WHEREAS, references in this Pledge Agreement to any of the Loan
Documents will be deemed to include references to those agreements as
they may be amended, modified, varied or restated from time to time
(including, without limitation, by way of increase of the facilities
made available thereunder). Similarly, references in this Pledge
Agreement to Secured Obligations will be deemed to include any and all
obligations which the Pledgors may have under or in connection with the
Loan Documents as the same may be so varied, amended, modified or
restated from time to time;
NOW THEREFORE, for purposes of this Pledge Agreement, the following
definitions shall apply (capitalized terms used in this Pledge Agreement
but not defined herein shall have the meanings given to such terms in
the Loan Agreement). The meanings given to terms defined in this Pledge
Agreement shall be equally applicable to both the singular and plural
forms of such terms.
1.
"Secured Obligations" means (subject as otherwise expressly stated
herein) (i) all present and future obligations and liabilities (whether
actual or contingent) of the Pledgors to the Lender under the Loan
Documents; (ii) all reasonable costs, charges and expenses incurred by
the Lender in connection with the preparation and negotiation of the
Loan Documents; (iii) all costs, charges and expenses incurred by the
Lender in connection with the protection, preservation or enforcement of
its rights under any Loan Documents or any other document evidencing or
securing any such liabilities. When used with respect to the Pledgor
(for example, references to the Pledgor's Secured Obligations), such
term means all obligations and liabilities of the Pledgor described in
the preceding sentence.
2.
"Issuer" means each corporation, partnership, limited liability company
or other issuer, person or entity whose shares, ownership interests,
notes, instruments or other securities are from time to time included
in, or required under the Loan Documents to be included in, the
Collateral (as herein defined).
The principles of construction set forth in Clause 1.2 of the Loan
Agreement shall also apply with respect to this Pledge Agreement. When
the context requires, terms and provisions relating to the Collateral or
any part thereof, when used in relation to a Pledgor, shall refer to
that Pledgor's Collateral or the relevant part thereof. For the
avoidance of doubt, the parties agree that this Pledge Agreement is a
"Security Document" as such term is defined in the Loan Agreement.
The Loan Agreement provides for the Lender to make the Bridge Loan to
the Company subject to certain conditions, one of those conditions being
that the Pledgors shall have entered into this Pledge Agreement.
Accordingly, the Pledgors and the Lender hereby agree as follows:
Section 1. Pledge and Security Interest. For the benefit of the Lender,
each Pledgor hereby transfers, hypothecates, pledges, sets over and
delivers unto the Lender, and grants to the Lender a security interest
in, all right, title and interest such Pledgor now has or hereafter
acquires in (a) the shares of capital stock and other ownership
interests of the Issuers set forth on Schedule I and all shares of
capital stock, partnership interests, membership interests, other
ownership interests and other securities and instruments of the Issuers
(including without limitation options, warrants and subscription rights
with respect to any such ownership interests, and instruments evidencing
indebtedness of the Issuers) now owned or obtained in the future by such
Pledgor and the certificates representing or evidencing all such shares
or other interests or securities (the "Pledged Stock"), (b) all other
property which may be delivered to and held by the Lender pursuant to
the terms hereof, (c) all payments of principal or interest, dividends,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of, in exchange for or
upon the conversion of the securities, instruments, other ownership
interests and other items referred to in clause (a) or clause (b) above,
(d) except as provided in Section 5 below, all rights and privileges of
each Pledgor with respect to the securities and other property referred
to in clauses (a), (b) and (c) above, and (e) all proceeds of any of the
foregoing (the items referred to in clauses (a) through (e) being
collectively called the "Collateral"). Upon delivery to the Lender, (A)
any share certificates, notes or other securities or instruments now or
hereafter included in the Collateral (the "Pledged Securities") shall be
duly endorsed to the Lender or accompanied by stock powers duly executed
in blank or other instruments of transfer satisfactory to the Lender on
the basis that the Lender (or its nominee) shall be entitled to hold
such documents of title until the Secured Obligations have been
irrevocably or unconditionally discharged in full and by such other
instruments and documents as the Lender may reasonably request, and (B)
all other property comprising part of the Collateral shall be
accompanied by proper instruments of assignment duly executed by the
Pledgors and such other instruments or documents as the Lender may
reasonably request (including, without limitation, Uniform Commercial
Code Financing Statements). Each delivery of Pledged Securities shall
be accompanied by a schedule describing the securities theretofore and
then being pledged hereunder, which schedule shall be attached hereto as
Schedule I and made a part hereof. Each schedule so delivered, after
approval by the Lender, shall supersede any prior schedules so
delivered. In addition, all such Pledged Stock shall be accompanied by
irrevocable written proxies satisfactory under applicable corporate law
of the jurisdiction of incorporation of the Issuer of such Pledged
Stock. The Pledgor agrees promptly to deliver or cause to be delivered
to the Lender any and all Pledged Securities, and any and all
certificates or other instruments or documents representing the
Collateral, including without limitation all such items (whether now
owned or hereafter acquired) which are required to be pledged to the
Lender at any time hereafter pursuant to the Loan Agreement.
Section 2. Secured Obligations. The pledges and security interests
granted hereunder secure the payment, discharge and performance of all
the Secured Obligations.
Section 3. Representations, Warranties and Covenants. Except as
provided in the Loan Agreement, each Pledgor hereby represents, warrants
and covenants to and with the Lender that:
3. (a) The Pledgor has acquired the Pledged Stock pledged by it
hereunder for value and without notice of any adverse claim to the
Pledged Stock; the Pledged Stock includes all the outstanding capital
stock of the Issuer which is the issuer of such Pledged Stock; and all
the shares of the Pledged Stock have been duly authorized and validly
issued and are fully paid and nonassessable.
(b) Except for the security interest granted hereunder, the Pledgor (i)
is and will at all times continue to be the direct owner, beneficially
and of record, of the Pledged Securities pledged by it hereunder, (ii)
holds and will so hold the same free and clear of all Security
Interests and of all other rights or options in favor of, or claims of,
any other person, (iii) will make no assignment, pledge, hypothecation
or transfer of, or create any security interest in, the Collateral, (iv)
will cause all securities included within the Collateral to be
certificated securities, and (v) will cause any and all certificates,
instruments or other documents representing or evidencing Collateral to
be forthwith deposited with the Lender and pledged or assigned
hereunder.
4. (c) By virtue of the execution and delivery by the Pledgor of
this Pledge Agreement, when the Pledged Securities are delivered to the
Lender in accordance with this Pledge Agreement, the Lender will obtain
a valid, legal and perfected first priority lien upon and security
interest in such Pledged Securities as security for the repayment of the
Secured Obligations, free and clear of all Security Interests or other
adverse claims (other than the security interest created hereby).
5. (d) The pledge and security interest effected hereby is
effective to vest in the Lender the rights in the Collateral
contemplated herein.
6. (e) The Pledgor will cause the Issuer not to issue any stock or
other equity securities unless (i) such securities are issued in
accordance with the terms of the Loan Documents, (ii) the Pledgor gives
14 days written notice to the Lender prior to the issuance of such
securities; (iii) and such securities are concurrently pledged and
delivered to the Lender hereunder.
7. (f) The Pledgor will cause the Issuer to give the Lender 14
days written notice prior to any change in the Issuer's shareholders or
their capital contributions.
(g) This Pledge Agreement is the legal, valid and binding obligation of
the Pledgor and is enforceable against the Pledgor in accordance with
its terms.
(h) 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 any capital or any
certificate issued in connection with any reorganization), option or
rights in respect of capital stock of the Issuer, whether in addition
to, in substitution of, as a conversion of, or in exchange for, any
shares of the Pledged Stock, or otherwise in respect thereof, the
Pledgor shall accept the same as the agent of the Lender, hold the same
in trust for the Lender and deliver the same forthwith to the Lender in
the exact form received, duly indorsed by the Pledgor to the Lender and
accompanied by such stock powers and proxies as provided in Section 1
above, to be held by the Lender, subject to the terms hereof, as
additional Collateral for the Secured Obligations. Any sums paid upon
or in respect of the Pledged Securities upon the liquidation or
dissolution of the Issuer shall be paid over to the Lender to be held by
it hereunder as additional collateral security for the Secured
Obligations, and in case any distribution of capital shall be made on or
in respect of the Pledged Securities or any property shall be
distributed upon or with respect to the Pledged Securities pursuant to
the recapitalization or reclassification of the capital of the Issuer or
pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected security interest in
favor of the Lender, be delivered to the Lender to be held by it
hereunder as additional collateral security for the Secured Obligations.
If any sums of money or property so paid or distributed in respect of
the Pledged Securities shall be received by the Pledgor, the Pledgor
shall, until such money or property is paid or delivered to the Lender,
hold such money or property in trust for the Lender, segregated from
other funds of the Pledgor, as additional collateral security for the
Secured Obligations.
8. (i) The Pledgor will not (i) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the
Pledged Securities or proceeds thereof (except pursuant to a
transaction, if any, expressly permitted by the Loan Agreement), (ii)
create, incur or permit to exist any Security Interest or option in
favor of, or any claim of any person with respect to, any of the Pledged
Securities or proceeds thereof, or any interest therein, except for the
security interests created by this Pledge Agreement or (iii) enter into
any agreement or undertaking restricting the right of the Pledgor or the
Lender to sell, assign or transfer any of the Pledged Securities or
proceeds thereof.
(j) In the case of the Pledgor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Pledge Agreement
relating to the Pledged Securities issued by it, (ii) it will notify the
Lender promptly in writing of the occurrence of any of the events
described in Section 3(h) above with respect to the Pledged Securities
issued by it, and (iii) the terms of Section 5 hereof shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 5 with respect to the Pledged Securities issued by
it.
Section 4. Registration in Nominee Name; Denominations. Upon either (a)
the occurrence and during the continuance of an Event of Default or (b)
the reasonable good faith judgment of the Lender that the registration
of the Pledged Securities is necessary or desirable to maintain or
perfect the security interests created by this Pledge Agreement in the
Pledged Securities or to protect or exercise the rights or remedies of
the Lender hereunder, the Lender shall have the right (in its sole and
absolute discretion) to register the Pledged Securities in its own name
or the name of its nominee. Each Pledgor will promptly give to the
Lender copies of any notices or other communications received by it with
respect to Pledged Securities registered in the name of such Pledgor.
The Lender shall at all times have the right to exchange the
certificates representing Pledged Securities for certificates of smaller
or larger denominations for any purposes consistent with this Pledge
Agreement. It is expressly agreed that the registration of the Pledged
Securities in the name of the Lender or its nominee pursuant to clause
(b) does not alter or amend in any way the rights and obligations of the
parties set forth in any other provision of this Pledge Agreement.
Section 5. Irrevocable Proxy; Voting Rights; Dividends and Interest;
etc.
9. (a) For so long as this Pledge Agreement and the pledge and
security interest created hereby remain in effect, and whether or not
the Collateral or any of the Pledged Securities has been transferred
into the name of the Lender or its nominee, each Pledgor hereby grants
to the Lender a present, irrevocable proxy, coupled with an interest,
and hereby constitutes and appoints the Lender as such Pledgor's proxy
with full power, in the same manner, to the same extent and with the
same effect as if such Pledgor were to do the same, to exercise all
voting, consenting, corporate and other rights accruing to such Pledgor
as owner of the Collateral or any part thereof, or arising out of or
otherwise pertaining to the Collateral, and whether at any meeting of
shareholders of the Issuer or in the absence of any such meeting or
otherwise, and any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to
such Collateral as if it were the absolute owner thereof (including,
without limitation, the right to exchange at its discretion any and all
of the Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the
corporate structure of the Issuer, or upon the exercise by such Pledgor
or the Lender of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit
and deliver any and all of the Pledged Securities with any committee,
depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Lender may determine), all without
liability except to account for property actually received by it, but
the Lender shall have no duty to such Pledgor to exercise any such
right, privilege or option and shall not be responsible for any failure
to do so or delay in so doing. As further assurance of the proxy
granted hereby, each Pledgor shall from time to time execute and deliver
to the Lender, all such additional written proxies, powers of attorney,
and other instruments as the Lender shall request for the purpose of
enabling the Lender to exercise the voting and other rights which it is
entitled to exercise hereunder at any time. Each Pledgor hereby revokes
any proxy or proxies given by such Pledgor to any person or persons
whatsoever and agrees not to give any other proxies in derogation hereof
until this Pledge Agreement is no longer in full force and effect as
hereinafter provided. NOTWITHSTANDING THE PRECEDING PRESENT GRANT OF
IRREVOCABLE PROXIES, THE LENDER AGREES NOT TO EXERCISE SUCH PROXY (AND
TO PERMIT EACH PLEDGOR TO CONTINUE TO EXERCISE VOTING AND OTHER RIGHTS
COVERED BY SUCH PROXIES AND PERTAINING TO THE PLEDGED SECURITIES PLEDGED
BY EACH PLEDGOR ON AND SUBJECT TO THE CONDITIONS SET FORTH IN THIS
PARAGRAPH 5(a)(i)) UNTIL THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT. Except as provided in subparagraphs (b) and (c) of
this Section 5:
(i) Each Pledgor shall be entitled to exercise any and all voting rights
and other consensual rights accruing to it as the owner of Pledged
Securities for any purpose consistent with the terms of this Pledge
Agreement and the other Loan Documents so long as such exercise of
rights could not reasonably be expected in the reasonable judgment of
the Lender to materially adversely affect the rights and remedies of the
Lender under this Pledge Agreement or any other Loan Document or
the ability of the Lender to exercise the same.
(ii) The Lender shall execute and deliver to each Pledgor, or cause to
be executed and delivered to each Pledgor, all such proxies, powers of
attorney, and other instruments as the relevant Pledgor may reasonably
request for the purpose of enabling such Pledgor to exercise the voting
rights which it is entitled to exercise pursuant to subparagraph (i)
above.
(iii) Each Pledgor shall be entitled to receive and retain any and all
dividends, payments, and distributions paid on the Pledged Securities to
the extent and only to the extent that such dividends, payments and
distributions (1) are paid to such Pledgor in the absence of an Event of
Default which is continuing and (2) are permitted by, and otherwise paid
in accordance with, the terms and conditions of the Loan Documents and
applicable laws. All payments, dividends and distributions made on or
in respect of Pledged Securities, not made in accordance with the
preceding sentence of this Section 5(a)(iii), whether paid or payable in
cash, securities or other property, and whether resulting from a
subdivision, combination or reclassification of the outstanding capital
stock of the Issuer of any Pledged Securities or received in exchange
for or in redemption of Pledged Securities or any part thereof, or as a
result of any merger, consolidation, acquisition or other exchange of
assets to which the Issuer may be a party or otherwise, shall be and
become part of the Collateral and, if received by such Pledgor, shall
not be commingled by such Pledgor with any of its other funds or
property but shall be held separate and apart therefrom in trust for the
benefit of the Lender and shall be delivered to the Lender in the same
form as so received (with any necessary endorsement).
10. (b) After the occurrence and during the continuance of an
Event of Default, all rights of each Pledgor to dividends which such
Pledgor is authorized to receive pursuant to paragraph (a)(iii) of this
Section 5 shall cease, and all such rights shall thereupon become vested
in the Lender, who shall have the sole and exclusive right and authority
to receive and retain such dividend payments. All dividends which are
received by a Pledgor contrary to the provisions of this Section 5(b)
shall be received in trust for the benefit of the Lender, shall be
segregated from other property or funds of such Pledgor and shall be
immediately delivered to the Lender in the same form as so received
(with any necessary endorsement). Any and all money and other property
paid over to or received by the Lender pursuant to the provisions of
this paragraph (b) shall be deposited by the Lender in an account to be
established by the Lender upon receipt of such money or other property
and such money or other property and interest thereon shall be applied
in accordance with the provisions of Section 7 hereof.
11. (c) UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT
OF DEFAULT, AND WHETHER OR NOT THE COLLATERAL SHALL HAVE BEEN REGISTERED
IN THE NAME OF THE LENDER OR A NOMINEE OR SHALL REMAIN REGISTERED IN THE
NAME OF A PLEDGOR, ALL RIGHTS OF THE RELEVANT PLEDGOR TO EXERCISE THE
VOTING RIGHTS WHICH IT IS ENTITLED TO EXERCISE PURSUANT TO PARAGRAPH
(a)(i) OF THIS SECTION 5 SHALL CEASE, AND THE LENDER MAY THEREUPON FULLY
EXERCISE, TO THE EXCLUSION OF SUCH PLEDGOR, THE PROXY GRANTED TO IT IN
PARAGRAPH 5(a).
(d) Each Pledgor hereby authorizes and instructs the Issuer of any
Pledged Securities pledged by such Pledgor hereunder to (i) comply with
any instruction received by it from the Lender in writing that (x)
states that an Event of Default has occurred and is continuing and (y)
is otherwise in accordance with the terms of this Pledge Agreement,
without any other or further instructions from such Pledgor, and each
Pledgor agrees that the Issuer shall be fully protected in so complying,
and (ii) unless otherwise expressly permitted hereby, pay any dividends
or other payments with respect to the Pledged Securities directly to the
Lender.
Section 6. Remedies upon Default. After the occurrence and during the
continuance of an Event of Default, whether or not all of the Secured
Obligations shall have become due and payable, in addition to its rights
under the Loan Documents:
(a) The Lender shall have all of the rights and remedies with respect to
the Collateral of a secured party under the Uniform Commercial Code as
in effect in the State of New York (the "NYUCC") (whether or not the
NYUCC is in effect in the jurisdiction where the rights and remedies are
asserted and whether or not the NYUCC applies to the affected
Collateral) and such additional rights and remedies to which a secured
party is entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted, including without
limitation the right, to the maximum extent permitted by law, to
exercise all voting, consensual and other powers of ownership pertaining
to the Collateral as if the Lender were the sole and absolute owner
thereof (and each Pledgor agrees to take all such action as may be
appropriate to give effect to such right).
12. (b) The Lender in its discretion may, in its name or in the name
of any Pledgor or otherwise, demand, xxx for, collect or receive any
money or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation to
do so.
13. (c) The Lender may sell, lease, assign, grant options with
respect to or otherwise dispose of all or part of the Collateral, at
such place or places as the Lender reasonably deems best, and for cash
or for credit or for future delivery (without thereby assuming any
credit risk), at public or private sale, without demand of performance
or notice of intention to effect any such disposition or of the time or
place thereof (except such notice as is required above or by applicable
statute and cannot be waived), and the Lender or anyone else may be the
purchaser, lessee, assignee or recipient of any or all of the Collateral
so disposed of at any public sale (or, to the extent permitted by law,
at any private sale) and thereafter hold the same absolutely, free from
any claim or right of whatsoever kind, including any right or equity of
redemption (statutory or otherwise) of each Pledgor, any such demand,
notice and right or equity being hereby expressly waived and released.
Each Pledgor agrees that, to the extent notice of sale shall be required
by law, at least ten days' notice to such Pledgor of the time and place
of any public sale or the time after which such private sale is to be
made shall constitute reasonable notification; however the Lender shall
not be obligated to make a sale of the Collateral regardless of notice
of sale having been given. The Lender may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed
for the sale, and such sale may be made at any time or place to which
the sale may be so adjourned.
14. (d) Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended from
time to time (the "Securities Act"), and applicable state securities
laws, the Lender may be compelled, with respect to any sale of all or
any part of the Collateral, to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof.
Each Pledgor acknowledges that any such private sales may be at prices
and on terms less favorable to the Lender than those obtainable through
a public sale without such restrictions, and, notwithstanding such
circumstances, agree that any such private sale shall be deemed to have
been made in a commercially reasonable manner and that the Lender shall
have no obligation to engage in public sales and no obligation to delay
the sale of any Collateral for the period of time necessary to permit
registration of such Collateral for public sale.
Each Pledgor will bear all reasonable costs and expenses of carrying out
its obligations hereunder with respect to the foregoing. Each Pledgor
acknowledges that there is no adequate remedy at law for failure by them
to comply with the foregoing provisions and that such failure would not
be adequately compensable in damages, and therefore agrees that their
agreements with respect to the foregoing may be specifically enforced.
Section 7. Application of Proceeds of Sale. The proceeds of any sale of
Collateral pursuant to Section 6 hereof, as well as any Collateral
consisting of cash, shall be applied by the Lender first to the payment
of the reasonable costs and expenses of any such sale, including
reasonable fees and disbursements of the Lender's agents and counsel,
and of any judicial proceeding wherein the same may be made, and of all
expenses, liabilities and advances (to the extent such advances are
reasonably made for the protection of the Collateral or the enforcement
of the Lender's security interest in the Collateral) made or incurred by
the Lender, second, to meet amounts due and payable under the Loan
Documents as and when the same become payable, in each case, together
with interest thereon (as well after as before judgment and payable on
demand) at the rate determined in accordance with Article 2 of the Loan
Agreement from the date the same become due and payable until the date
the same are unconditionally and irrevocably paid and discharged in full
(provided that like interest payable under any of the Loan Documents
should not be double counted) and third, to whomsoever may be lawfully
entitled to receive any surplus. Each Pledgor waives and agrees not to
assert any rights or privileges which it may acquire under Section 9-112
of the NYUCC. The Company shall remain liable for any deficiency if the
proceeds of sale or other disposition of the Collateral are insufficient
to pay the Secured Obligations and the fees and disbursements of any
attorneys employed by the Lender to collect such deficiency.
Section 8. Lender Appointed Attorney-in-Fact; Certain Other Provisions
Regarding Security Trustee.
15. (a) Except as otherwise provided herein, each Pledgor hereby
appoints the Lender its attorney-in-fact for the purposes of carrying
out the provisions of this Pledge Agreement or taking any action or
executing any instrument which the Lender may reasonably deem necessary
or advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest. Without limiting the
generality of the foregoing, the Lender shall have the right, after the
occurrence and during the continuance of an Event of Default, with full
power of substitution either in the Lender's name or in the name of the
relevant Pledgor, to ask for, demand, xxx for, collect, receive and give
acquittance for any and all monies due or to become due under or by
virtue of any Collateral, to endorse checks, drafts, orders and other
instruments for the payment of money payable to such Pledgor
constituting Collateral or any part thereof or on account thereof and to
give full discharge for the same, to settle, compromise, prosecute or
defend any action, claim or proceeding with respect thereto, and to
sell, assign, endorse, pledge, transfer and make any agreement
respecting, or otherwise deal with, the same; provided, however, that
nothing herein contained shall be construed as requiring or obligating
the Lender to make any commitment or to make any inquiry as to the
nature or sufficiency of any payment received by the Lender, or to
present or file any claim or notice, or to take any action with respect
to the Collateral or any part thereof or the monies due or to become due
in respect thereof or any property covered thereby, and no action taken
by the Lender or omitted to be taken with respect to the Collateral or
any part thereof shall give rise to any defense, counterclaim or offset
in favor of a Pledgor or to any claim or action against the Lender
unless the Lender acts with willful misconduct or gross negligence.
(b) If any Pledgor fails to perform any agreement contained herein, the
Lender may (but shall not be required to) itself perform, or cause
performance of, such agreement and the expenses of the Lender incurred
in connection therewith shall be payable by such Pledgor under Section
13.
16. (c) Each Pledgor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Pledge Agreement are
coupled with an interest and are irrevocable until this Pledge Agreement
is terminated and the security interests created hereby are released.
17. (d) The Lender's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the NYUCC or otherwise, shall be to
deal with it in the same manner as the Lender deals with similar
property for its own account. In the absence of willful misconduct or
gross negligence, neither the Lender nor any of its officers, directors,
employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall
be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Pledgor or any other person or to take any other
action whatsoever with regard to the Collateral or any part thereof.
The powers conferred on the Lender hereunder are solely to protect the
Lender's interests in the Collateral and shall not impose any duty upon
the Lender to exercise any such powers. The Lender shall be accountable
only for amounts that it actually receives as a result of the exercise
of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to any Pledgor for any act or
failure to act hereunder, except for their own gross negligence or
willful misconduct.
18. (e) Pursuant to Section 9-402 of the NYUCC and any other
applicable law, each Pledgor authorizes the Lender to file or record
financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such
Pledgor in such form and in such offices as the Lender reasonably
determines appropriate to perfect the security interests granted
hereunder. A photographic or other reproduction of this Pledge
Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any
jurisdiction.
Section 9. No Waiver. No failure on the part of the Lender to exercise,
and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy by the Lender preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and are not exclusive of
any other remedies provided by law. The Lender shall not be deemed to
have waived any rights hereunder or under any other agreement or
instrument unless such waiver shall be in writing and signed by such
parties.
Section 10. Security Interest Absolute. The obligations of each Pledgor
under this Pledge Agreement are independent of the obligations under any
of the other Loan Documents, and a separate action or actions may be
brought and prosecuted against the Pledgors to enforce this Pledge
Agreement. All rights of the Lender hereunder, the grant of a security
interest in the Collateral and all obligations of each Pledgor hereunder
shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of any Loan Document, any agreement with
respect to any of the Secured Obligations or any other agreement or
instrument relating to any of the foregoing, (b) 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 amendment or waiver of or any
consent to any departure from any Loan Document or any other agreement
or instrument, (c) any exchange, release, amendment or waiver of, or
consent to or departure from, any guaranty for all or any of the Secured
Obligations, (d) any change, restructuring or termination of the
corporate structure or existence of any Pledgor or Issuer or (e) any
other circumstance which might otherwise constitute a defense available
to, or a discharge of, the Pledgors or any of them in respect of the
Secured Obligations or in respect of this Pledge Agreement.
Section 11. New Shares. If any Pledgor acquires any equity security
interests in any corporation, limited liability company, partnership or
other entity (an "Entity"), then such Pledgor will execute and deliver a
pledge agreement (substantially in the form of this Pledge Agreement) to
the Lender, which pledges unto the Lender and grants the Lender a
security interest in, all right, title and interest such Pledgor has in
the shares of capital stock and other ownership interests of such Entity
and all shares of capital stock, partnership interests, membership
interests, other ownership interests and other securities and
instruments of such Entity (including without limitation options,
warrants, subscription rights with respect to any such ownership
interests, and instruments evidencing indebtedness of such Entity) then
owned or obtained in the future by such Pledgor and the certificates
representing or evidencing all such shares or other interests or
securities, and all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the
conversion of the securities, instruments, other ownership interests and
other items referred to in this Section 11.
Section 12. Further Assurances. Each Pledgor agrees to do such further
acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Lender may at any time
reasonably request in connection with the administration and enforcement
of this Pledge Agreement, with respect to the Collateral or any part
thereof or in order better to assure and confirm unto the Lender its
rights and remedies hereunder.
Section 13. Lender's Fees and Expenses; Indemnification.
19. (a) Each Pledgor agrees to pay upon demand to the Lender the
amount of any and all out-of-pocket expenses, including the reasonable
fees and expenses of its counsel (including without limitation the
allocated fees and expenses of in-house counsel) and of any experts or
agents, which the Lender may reasonably incur in connection with (i) the
administration of this Pledge Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other realization
upon, any of the Collateral, (iii) the exercise or enforcement of any of
the rights of the Lender hereunder, or (iv) the failure by any Pledgor
to perform or observe any of the provisions hereof.
20. (b) Without limiting the foregoing, each Pledgor agrees to pay,
and to save the Lender from, and to indemnify it against, any and all
liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Pledge
Agreement. Any such amounts payable as provided hereunder shall be
additional Secured Obligations secured by this Pledge Agreement and the
other Loan Documents to which any Pledgor is party. Each Pledgor
further agrees to pay, and to save the Lender harmless from, and to
indemnify it against, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Pledge Agreement, or arising out of or relating to the Lender's
relationship with each Pledgor hereunder or under any other Loan
Document.
21. (c) The agreements in this Section 13 shall survive repayment of
the Secured Obligations and all other amounts payable under the Loan
Agreement and the other Loan Documents.
Section 14. Binding Agreement; Assignments. This Pledge Agreement, and
the terms, covenants and conditions hereof, shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and permitted assigns, except that no Pledgor shall be
permitted to assign this Pledge Agreement or any interest herein or in
the Collateral or any part thereof, or otherwise pledge, encumber or
grant any option with respect to the Collateral or any part thereof, or
any cash or property held by the Lender as Collateral under this Pledge
Agreement, except as contemplated by this Pledge Agreement.
Section 15. Governing Law. This Pledge Agreement shall be governed by
and construed in accordance with the laws of the State of New York,
without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of New York or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other
than the State of New York.
Section 16. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN NEW YORK CITY, NEW YORK, U.S.A. AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT EACH PLEDGOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH
THIS AGREEMENT. TO THE EXTENT PERMITTED BY LAW, EACH PLEDGOR HEREBY
AGREES THAT SERVICE UPON IT BY CERTIFIED MAIL SHALL CONSTITUTE
SUFFICIENT NOTICE AND SERVICE OF PROCESS. NOTHING HEREIN SHALL AFFECT
THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF THE LENDER TO BRING PROCEEDINGS AGAINST ANY PLEDGOR
IN THE COURTS OF ANY OTHER JURISDICTION.
Section 17. Waiver of Jury Trial. EACH PLEDGOR AND THE LENDER HEREBY
IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY
JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH,
OR ARISING OUT OF THIS AGREEMENT, OR THE VALIDITY, PROTECTION,
INTERPRETATION, COLLECTION OR ENFORCEMENT HEREOF. EACH PLEDGOR AGREES
THAT THIS SECTION 17 IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT
AND ACKNOWLEDGES THAT THE LENDER WOULD NOT EXTEND TO THE COMPANY ANY
AMOUNTS UNDER THE LOAN DOCUMENTS IF THIS SECTION 17 WERE NOT PART OF
THIS AGREEMENT.
Section 18. Waiver. Notwithstanding anything contained in this Pledge
Agreement to the contrary, no claim may be made by any Pledgor against
the Lender for any lost profits or any special, indirect or
consequential damages in respect of any breach or wrongful conduct
(other than willful misconduct or actual fraud) in connection with,
arising out of or in any way related to the transactions contemplated
hereunder, or any act, omission or event occurring in connection
therewith; and each Pledgor hereby waives, releases and agrees not to
xxx upon any such claim for any such damages. EACH PLEDGOR AGREES THAT
THIS SECTION 18 IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND
ACKNOWLEDGES THAT THE LENDER WOULD NOT EXTEND TO THE COMPANY ANY AMOUNTS
UNDER THE LOAN DOCUMENTS IF THIS SECTION 18 WERE NOT PART OF THIS
AGREEMENT.
Section 19. Notices.
22. (a) All notices or other communications to be made hereunder
shall be made by facsimile or otherwise in writing.
23. (b) Any notices or other communications to be served on a
Pledgor (except as provided in Section 16 of this Pledge Agreement)
pursuant to this Pledge Agreement shall be made or delivered to it at
the address and/or facsimile number set out under its name and signature
of its authorised signatory at the end of this Pledge Agreement, or at
such other address and/or facsimile as such Pledgor may hereafter advise
the Lender of in writing.
24. (c) Any notice to the Lender shall be addressed and delivered to
the Lender at the address set out under its name and signature of its
authorised signatory at the end of this Pledge Agreement, or to such
other address as the Lender may hereafter notify the Company of in
writing.
25. (d) Any notice to a Pledgor shall be deemed to have been given:
(i) if delivered personally, at the time of such delivery;
(ii) if mailed, on the second Business Day following the day on which it
was despatched by first class mail (airmail, if appropriate) postage
prepaid; and
(iii) if sent by facsimile transmission, on the Business Day on which
transmitted.
26. (e) Any notice to the Lender shall be deemed to have been given
only on actual receipt by the Lender.
Section 20. Severability. In case any one or more of the provisions
contained in this Pledge Agreement should be invalid, illegal or
unenforceable in any respect, no party hereto shall be required to
comply with such provision for so long as such provision is held to be
invalid, illegal or unenforceable and the validity, legality and
enforceability of the remaining provisions contained herein shall not in
any way be affected or impaired. The parties shall endeavor in good-
faith negotiations to replace the invalid, illegal and unenforceable
provisions with valid provisions, the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable
provisions.
Section 21. Section Headings. The section and other headings used
herein are for convenience only and are not to affect the construction
of, or to be taken into consideration in interpreting, this Pledge
Agreement.
Section 22. Counterparts. This Pledge Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but
all of which, when taken together, shall constitute but one instrument.
Section 23. Termination.
27. (a) At such time as all of the Secured Obligations (other than
any indemnity and similar obligations which expressly survive
termination of this Pledge Agreement or the Loan Agreement and are not
then due and payable) have been paid irrevocably and in full, this
Pledge Agreement and all obligations (other than those expressly stated
to survive such termination) of the Lender and the Pledgors shall
terminate, and the Collateral shall be released from the pledge and
security interests created hereby, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Pledgors. At the request and sole
expense of the Pledgors following any such termination, the Lender shall
deliver to the Pledgors any Collateral then held by the Lender hereunder
and shall execute and deliver to each Pledgor, but without recourse to
or warranty by the Lender, such Uniform Commercial Code termination
statements and similar documents prepared by each Pledgor which such
Pledgor shall reasonably request to evidence the release of the
Collateral from the security constituted hereby.
28. (b) Notwithstanding anything to the contrary contained in this
Pledge Agreement, this Pledge Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or
against any Pledgor or any of them for liquidation or reorganization,
should any Pledgor become insolvent or make an assignment for any
benefit of creditors or should a receiver or trustee be appointed for
all or any significant part of such Pledgor's assets, and shall continue
to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Secured Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a "voidable preference," "fraudulent conveyance"
or otherwise, all as though such payment, or any part thereof, had not
been made.
Section 23. Joint and Several Obligations; Waiver of Joinder. All
representations, warranties, covenants and undertakings by the Pledgors
hereunder shall be their joint and several obligations. Each Pledgor
hereby waives any requirement that any Pledgor or other person be joined
in or made party to any action to enforce this Pledge Agreement or any
right or remedy hereunder.
Section 24. Acknowledgments. Each Pledgor acknowledges that: (a) it
has been advised by counsel in the negotiation, execution and delivery
of this Pledge Agreement and the other Loan Documents to which it is a
party; (b) the Lender has no fiduciary relationship with or duty to any
Pledgor arising out of or in connection with this Pledge Agreement or
any of the other Loan Documents, and the relationship between the
Pledgor, on the one hand, and the Lender, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
and (c) no joint venture is created hereby or by the Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby
between the Pledgor and the Lender.
Section 25. Additional Pledgors. Each person or entity that is required
to become a party to this Pledge Agreement pursuant to the Loan
Agreement shall become a Pledgor for all purposes of this Pledge
Agreement upon execution and delivery by such person or entity of an
Accession Agreement in the form of Annex 1 hereto.
Section 26. Conflicts. Only to the extent of a direct conflict between
the provisions of the Loan Agreement and Sections 3 and 5 hereof, the
provisions of the Loan Agreement shall control.
* * * * *
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused this Agreement to be duly executed, as of the day
and year first above written.
HEALTHCOMP EVALUATION SERVICES CORPORATION
By:_____________________
Name:
Title:
Pledgor's Address:
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
Fax:
AFTON, INC.
By:_____________________
Name:
Title:
Pledgor's Address:
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
Fax:
MEDICAL DRUG
TESTING, INC.
By:_____________________
Name:
Title:
Pledgor's Address:
0000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxx Xxxxxxxx, XX 00000
Attn:
Fax:
DILIGENTI, INC.
By:___________________
Name:
Secured Party's Address:
c/o Diligenti Limited
Xxxxxx Xxxxx
00 Xxxxxxxx Xxxxx
Xxxxxx X0X 0XX
Xxxxxxx
Fax:
Attn: Xxxxx Spanondakis
SCHEDULE I
PLEDGORS
SCHEDULE I
PLEDGOR
ISSUER
(jurisdiction
NUMBER AND TYPE OF SHARES
Annex 1
Form of Accession Agreement
[Attached]
FORM OF ACCESSION AGREEMENT TO PLEDGE AGREEMENT
This ACCESSION AGREEMENT dated as of __________________ is BETWEEN:
___________________, a _________________ organized under the laws of
______________________ (hereinafter called the "New Pledgor"), and
Diligenti, Inc., a Delaware corporation (the "Lender").
WHEREAS, this Agreement is entered into in connection with a Pledge
Agreement (the "Pledge Agreement") dated September 15, 2000 among
Healthcomp Evaluation Services Corporation, Afton, Inc., Medical Drug
Testing, Inc. and the Lender;
WHEREAS, the New Pledgor under the laws relating thereto is duly
authorized to enter into the Pledge Agreement and all things necessary,
including any necessary consents of shareholders of the New Pledgor,
have been done and performed to make the Pledge Agreement a valid and
binding obligation of the New Pledgor;
WHEREAS, this Agreement has been entered into to record the admission of
the New Pledgor pursuant to the Loan Agreement (as defined in the Pledge
Agreement);
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
premises and other good and valuable consideration, the receipt and
sufficiency whereof are hereby acknowledged, the New Pledgor covenants
and agrees with the Lender as follows:
1. DEFINITIONS
Terms defined in the Pledge Agreement shall have the same meaning when
used in this agreement.
2. WARRANTIES
The New Pledgor hereby makes to the Lender the representations,
warranties and covenants set forth in Section 3 of the Pledge Agreement.
3. UNDERTAKING
Effective as of the date hereof, the New Pledgor undertakes all
obligations of a Pledgor under the Pledge Agreement.
4. NOTICE
All communications and notices provided for under the Pledge Agreement
to the New Pledgor shall be addressed as follows:
___________________________
___________________________
___________________________
Attention: __________________
Telephone: _________________
Facsimile: __________________
with a copy to:
Diligenti, Inc.
Attention: __________________
Telephone: _________________
Facsimile: __________________
5. APPLICABLE LAW
This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York.
IN WITNESS WHEREOF the New Pledgor has duly executed this Accession
Agreement as of the date first set forth above.
[Name of New Pledgor]
By: ______________________
Name:
Title:
Accepted:
Diligenti, Inc.
By: _______________________
Name:
Title:
