PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of August 29,
2000, is by and among the parties identified as "Pledgors" on the signature
pages hereto and such other parties as may become Pledgors hereunder after
the date hereof (individually a "Pledgor", and collectively the "Pledgors")
and BANK OF AMERICA, N.A., as collateral agent (in such capacity, the
"Collateral Agent") for the holders of the Secured Obligations referenced
below.
W I T N E S S E T H
WHEREAS, a $125 million credit facility has been established in favor
of RehabCare Group, Inc., a Delaware corporation (the "Borrower"), pursuant
to the terms of that Credit Agreement dated as of the date hereof (as
amended, modified, increased, extended, renewed or replaced, the "Credit
Agreement") among the Borrower, the subsidiaries and affiliates identified
therein, as guarantors, the lenders identified therein and Bank of America,
N.A., as Administrative Agent;
WHEREAS, this Pledge Agreement is required under the terms of the
Credit Agreement;
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Terms used herein but not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. As
used herein:
"Secured Obligations" means, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders and the Administrative
Agent, whenever arising, under the Credit Agreement or any of the other
Credit Documents (including, but not limited to, any interest accruing
after the occurrence of a Bankruptcy Event with respect to any Credit
Party, regardless of whether such interest is an allowed claim under
the Bankruptcy Code), whether now existing or hereafter arising, due or
to become due, direct or indirect, absolute or contingent, howsoever
evidenced, held or acquired, as such obligations may be amended,
modified, increased, extended, renewed or replaced from time to time,
(ii) all obligations owing by the Credit Parties to the Lenders or any
affiliate of a Lender, whenever arising, under any interest rate
protection agreements, foreign currency exchange agreements or
commodity purchase or option agreements to the extent permitted under
the Credit Agreement, and (iii) all costs and expenses incurred in
connection with enforcement and collection of the Secured Obligations,
including reasonable attorneys' fees.
2. Pledge and Grant of Security Interest. To secure the prompt
payment and performance in full when due, whether by lapse of time or
otherwise, of the Secured Obligations, each Pledgor hereby pledges and
assigns to the Collateral Agent, for the benefit of the holders of the
Secured Obligations, and grants to the Collateral Agent, for the benefit of
the holders of the Secured Obligations, a continuing security interest in any
and all right, title and interest of such Pledgor in and to the following,
whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the "Pledged Collateral"):
(a) Pledged Shares. (i) 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding Capital Stock
owned by such Pledgor of each Domestic Subsidiary set forth on Schedule
2(a) attached hereto and (ii) 65% (or, if less, the full amount owned
by such Pledgor) of the issued and outstanding shares of Capital Stock
entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) ("Voting Equity") and 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding Capital Stock not
entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) ("Non-Voting Equity") owned by such Pledgor of each
Foreign Subsidiary set forth on Schedule 2(a) attached hereto, in each
case together with the certificates (or other agreements or
instruments), if any, representing such Capital Stock, and all options
and other rights, contractual or otherwise, with respect thereto
(collectively, together with the Capital Stock described in Section
2(b) and 2(c) below, the "Pledged Shares"), including, but not limited
to, the following:
(A) all shares, securities, membership interests or other
equity interests representing a dividend on any of the Pledged
Shares, or representing a distribution or return of capital upon
or in respect of the Pledged Shares, or resulting from a stock
split, revision, reclassification or other exchange therefor, and
any subscriptions, warrants, rights or options issued to the
holder of, or otherwise in respect of, the Pledged Shares; and
(B) without affecting the obligations of the Pledgors
under any provision prohibiting such action hereunder or under
the Credit Agreement, in the event of any consolidation or merger
involving the issuer of any Pledged Shares and in which such
issuer is not the surviving entity, all Capital Stock of the
successor entity formed by or resulting from such consolidation
or merger.
(b) Additional Shares. 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding Capital Stock
owned by such Pledgor of any Person which hereafter becomes a Domestic
Subsidiary and 65% (or, if less, the full amount owned by such Pledgor)
of the Voting Equity and 100% (or, if less, the full amount owned by
such Pledgor) of the Non-Voting Equity owned by such Pledgor of any
Person which hereafter becomes a Foreign Subsidiary, including, without
limitation, the certificates representing such Capital Stock.
(c) Proceeds. All proceeds and products of the foregoing,
however and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional Capital Stock to the Collateral Agent as
collateral security for the Secured Obligations. Upon delivery to the
Collateral Agent, such additional Capital Stock shall be deemed to be part of
the Pledged Collateral of such Pledgor and shall be subject to the terms of
this Pledge Agreement whether or not Schedule 2(a) is amended to refer to
such additional Capital Stock.
3. Security for Secured Obligations. The security interest created
hereby in the Pledged Collateral of each Pledgor constitutes continuing
collateral security for all of the obligations of the Credit Parties to the
holders of the Secured Obligations (including the Issuing Lender) and the
Collateral Agent, whenever arising, under the Credit Agreement, the
Collateral Documents or any of the other Credit Documents (including, but not
limited to, any interest accruing after the occurrence of a Bankruptcy Event
with respect to any Credit Party, regardless of whether such interest is an
allowed claim under the Bankruptcy Code), howsoever evidenced, created,
incurred or acquired, whether primary, secondary, direct, contingent, or
joint and several.
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees
that:
(a) Each Pledgor shall deliver to the Collateral Agent (i)
simultaneously with or prior to the execution and delivery of this
Pledge Agreement, all certificates representing the Pledged Shares of
such Pledgor and (ii) promptly upon the receipt thereof by or on behalf
of a Pledgor, all other certificates and instruments constituting
Pledged Collateral of a Pledgor. Prior to delivery to the Collateral
Agent, all such certificates and instruments constituting Pledged
Collateral of a Pledgor shall be held in trust by such Pledgor for the
benefit of the Collateral Agent pursuant hereto. All such certificates
shall be delivered in suitable form for transfer by delivery or shall
be accompanied by duly executed instruments of transfer or assignment
in blank, substantially in the form provided in Exhibit 4(a) attached
hereto.
(b) Additional Securities. If such Pledgor shall receive by
virtue of its being or having been the owner of any Pledged Collateral,
any (i) certificate, including without limitation, any certificate
representing a dividend or distribution in connection with any increase
or reduction of capital, reclassification, merger, consolidation, sale
of assets, combination of shares or other equity interests, stock
splits, spin-off or split-off, promissory notes or other instrument;
(ii) option or right, whether as an addition to, substitution for, or
an exchange for, any Pledged Collateral or otherwise; (iii) dividends
payable in securities; or (iv) distributions of securities or other
equity interests in connection with a partial or total liquidation,
dissolution or reduction of capital, capital surplus or paid-in
surplus, then such Pledgor shall receive such stock certificate,
instrument, option, right or distribution in trust for the benefit of
the Collateral Agent, shall segregate it from such Pledgor's other
property and shall deliver it forthwith to the Collateral Agent in the
exact form received together with any necessary endorsement and/or
appropriate stock power duly executed in blank, substantially in the
form provided in Exhibit 4(a), to be held by the Collateral Agent as
Pledged Collateral and as further collateral security for the Secured
Obligations.
(c) Financing Statements. Each Pledgor shall execute and
deliver to the Collateral Agent such UCC or other applicable financing
statements as may be reasonably requested by the Collateral Agent in
order to perfect and protect the security interest created hereby in
the Pledged Collateral of such Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents
and warrants to the Collateral Agent, for the benefit of the holders of the
Secured Obligations, that so long as the Secured Obligations remain
outstanding and until all of the commitments relating thereto shall have been
terminated:
(a) Authorization of Pledged Shares. The Pledged Shares are
duly authorized and validly issued, are fully paid and nonassessable
and are not subject to the preemptive rights of any Person.
(b) Title. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal
and beneficial owner of such Pledged Collateral free and clear of any
Lien, other than Permitted Liens. There exists no "adverse claim"
within the meaning of Section 8-302 of the Uniform Commercial Code as
in effect in the State of North Carolina as of the date hereof (the
"UCC") with respect to the Pledged Shares of such Pledgor.
(c) Exercising of Rights. The exercise by the Collateral Agent
of its rights and remedies hereunder will not violate any law or
governmental regulation or any material contractual restriction binding
on or affecting a Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or action
by, and no notice or filing with any Governmental Authority or with the
issuer of any Pledged Stock is required either (i) for the pledge made
by a Pledgor or for the granting of the security interest by a Pledgor
pursuant to this Pledge Agreement (except as have been already
obtained) or (ii) for the exercise by the Collateral Agent or the
holders of the Secured Obligations of their rights and remedies
hereunder (except as may be required by laws affecting the offering and
sale of securities).
(e) Security Interest/Priority. This Pledge Agreement creates
a valid security interest in favor of the Collateral Agent for the
benefit of the holders of the Secured Obligations, in the Pledged
Collateral. The taking of possession by the Collateral Agent of the
certificates representing the Pledged Shares and all other certificates
and instruments constituting Pledged Collateral will perfect and
establish the first priority of the Collateral Agent's security
interest in the Pledged Shares and, when properly perfected by filing
or registration, in all other Pledged Collateral represented by such
Pledged Shares and instruments securing the Secured Obligations.
Except as set forth in this Section 5(e), no action is necessary to
perfect or otherwise protect such security interest.
(f) No Other Shares. No Pledgor owns any Capital Stock in any
Subsidiary other than as set forth on Schedule 2(a) attached hereto.
(g) Partnership and Membership Interests. Except as previously
disclosed to the Collateral Agent, none of the Pledged Shares
consisting of partnership or limited liability company interests (i) is
dealt in or traded on a securities exchange or in a securities market,
(ii) by its terms expressly provides that it is a security governed by
Article 8 of the UCC, (iii) is an investment company security, (iv) is
held in a securities account or (v) constitutes a "security" or a
"financial asset" as such terms are defined in Article 8 of the UCC.
6. Covenants. Each Pledgor hereby covenants, that so long as the
Secured Obligations shall remain outstanding and until all of the commitments
relating thereto shall have been terminated, such Pledgor shall:
(a) Books and Records. Mark its books and records (and shall
cause the issuer of the Pledged Shares of such Pledgor to mark its
books and records) to reflect the security interest granted to the
Collateral Agent, for the benefit of the holders of the Secured
Obligations, pursuant to this Pledge Agreement.
(b) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral of such Pledgor at its own expense
against the claims and demands of all other parties claiming an
interest therein, keep the Pledged Collateral free from all Liens,
except for Permitted Liens, and not sell, exchange, transfer, assign,
lease or otherwise dispose of Pledged Collateral of such Pledgor or any
interest therein, except as permitted under the Credit Agreement and
the other Credit Documents.
(c) Further Assurances. Promptly execute and deliver at its
expense all further instruments and documents and take all further
action that may be necessary and desirable or that the Collateral Agent
may reasonably request in order to (i) perfect and protect the security
interest created hereby in the Pledged Collateral of such Pledgor
(including, without limitation, any and all action necessary to satisfy
the Collateral Agent that the Collateral Agent has obtained a first
priority perfected security interest in any Capital Stock); (ii) enable
the Collateral Agent to exercise and enforce its rights and remedies
hereunder in respect of the Pledged Collateral of such Pledgor; and
(iii) otherwise effect the purposes of this Pledge Agreement,
including, without limitation and if requested by the Collateral Agent,
delivering to the Collateral Agent irrevocable proxies in respect of
the Pledged Collateral of such Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any
restriction with respect to any of the Pledged Collateral of such
Pledgor other than pursuant hereto or as may be permitted under the
Credit Agreement.
(e) Compliance with Securities Laws. File all reports and
other information now or hereafter required to be filed by such Pledgor
with the United States Securities and Exchange Commission and any other
state, federal or foreign agency in connection with the ownership of
the Pledged Collateral of such Pledgor.
(f) Issuance or Acquisition of Capital Stock. Not, without
executing and delivering, or causing to be executed and delivered, to
the Collateral Agent such agreements, documents and instruments as the
Collateral Agent may require, issue or acquire any Capital Stock
consisting of an interest in a partnership or a limited liability
company that (i) is dealt in or traded on a securities exchange or in a
securities market, (ii) by its terms expressly provides that it is a
security governed by Article 8 of the UCC, (iii) is an investment
company security, (iv) is held in a securities account or (v)
constitutes a "security" or a "financial asset" as such terms are
defined in Article 8 of the UCC.
7. Advances by holders of the Secured Obligations. On failure of
any Pledgor to perform any of the covenants and agreements contained herein,
the Collateral Agent may, at its sole option and in its sole discretion,
perform the same and in so doing may expend such sums as the Collateral Agent
may reasonably deem advisable in the performance thereof, including, without
limitation, the payment of any insurance premiums, the payment of any taxes,
a payment to obtain a release of a Lien or potential Lien, expenditures made
in defending against any adverse claim and all other expenditures which the
Collateral Agent or the holders of the Secured Obligations may make for the
protection of the security hereof or which may be compelled to make by
operation of law. All such sums and amounts so expended shall be repayable
by the Pledgors on a joint and several basis promptly upon timely notice
thereof and demand therefor, shall constitute additional Secured Obligations
and shall bear interest from the date said amounts are expended at the
default rate specified in Section 3.1 of the Credit Agreement for Revolving
Loans that are Base Rate Loans. No such performance of any covenant or
agreement by the Collateral Agent or the holders of the Secured Obligations
on behalf of any Pledgor, and no such advance or expenditure therefor, shall
relieve the Pledgors of any default under the terms of this Pledge Agreement,
the other Credit Documents or any other documents relating to the Secured
Obligations. The holders of the Secured Obligations may make any payment
hereby authorized in accordance with any bill, statement or estimate procured
from the appropriate public office or holder of the claim to be discharged
without inquiry into the accuracy of such bill, statement or estimate or into
the validity of any tax assessment, sale, forfeiture, tax lien, title or
claim except to the extent such payment is being contested in good faith by a
Pledgor in appropriate proceedings and against which adequate reserves are
being maintained in accordance with GAAP.
8. Events of Default. The occurrence of an event which under the
Credit Agreement would constitute an Event of Default shall be an Event of
Default hereunder (an "Event of Default").
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and during the continuation thereof, the Collateral Agent and
the holders of the Secured Obligations shall have, in respect of the
Pledged Collateral of any Pledgor, in addition to the rights and
remedies provided herein, in the Credit Documents, in any other
documents relating to the Secured Obligations, or by law, the rights
and remedies of a secured party under the UCC or any other applicable
law.
(b) Sale of Pledged Collateral. Upon the occurrence of an
Event of Default and during the continuation thereof, without limiting
the generality of this Section and without notice, the Collateral Agent
may, in its sole discretion, sell or otherwise dispose of or realize
upon the Pledged Collateral, or any part thereof, in one or more
parcels, at public or private sale, at any exchange or broker's board
or elsewhere, at such price or prices and on such other terms as the
Collateral Agent may deem commercially reasonable, for cash, credit or
for future delivery or otherwise in accordance with applicable law. To
the extent permitted by law, any Lender may in such event, bid for the
purchase of such securities. Each Pledgor agrees that, to the extent
notice of sale shall be required by law and has not been waived by such
Pledgor, any requirement of reasonable notice shall be met if notice,
specifying the place of any public sale or the time after which any
private sale is to be made, is personally served on or mailed, postage
prepaid, to such Pledgor, in accordance with the notice provisions of
Section 11.1 of the Credit Agreement at least 10 days before the time
of such sale. The Collateral Agent shall not be obligated to make any
sale of Pledged Collateral of such Pledgor regardless of notice of sale
having been given. The Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(c) Private Sale. Upon the occurrence of an Event of Default
and during the continuation thereof, the Pledgors recognize that the
Collateral Agent may deem it impracticable to effect a public sale of
all or any part of the Pledged Shares or any of the securities
constituting Pledged Collateral and that the Collateral Agent may,
therefore, determine to make one or more private sales of any such
securities 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. Each Pledgor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than the
prices and other terms which might have been obtained at a public sale
and, notwithstanding the foregoing, agrees that such private sale shall
be deemed to have been made in a commercially reasonable manner and
that the Collateral Agent shall have 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. Each Pledgor further acknowledges and agrees that
any offer to sell such securities which has been (i) publicly
advertised on a bona fide basis in a newspaper or other publication of
general circulation in the financial community of New York, New York
(to the extent that such offer may be advertised without prior
registration under the Securities Act), or (ii) made privately in the
manner described above shall be deemed to involve a "public sale" under
the UCC, notwithstanding that such sale may not constitute a "public
offering" under the Securities Act, and the Collateral Agent may, in
such event, bid for the purchase of such securities.
(d) Retention of Pledged Collateral. In addition to the rights
and remedies hereunder, upon the occurrence of an Event of Default, the
Collateral Agent may, after providing the notices required by Section
9-505(2) of the UCC or otherwise complying with the requirements of
applicable law of the relevant jurisdiction, retain all or any portion
of the Pledged Collateral in satisfaction of the Secured Obligations.
Unless and until the Collateral Agent shall have provided such notices,
however, the Collateral Agent shall not be deemed to have retained any
Pledged Collateral in satisfaction of any Secured Obligations for any
reason.
(e) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which
the Collateral Agent or the holders of the Secured Obligations are
legally entitled, the Pledgors shall be jointly and severally liable
for the deficiency, together with interest thereon at the default rate
specified in Section 3.1 of the Credit Agreement for Revolving Loans
that are Base Rate Loans, together with the costs of collection and the
reasonable fees of any attorneys employed by the Collateral Agent to
collect such deficiency. Any surplus remaining after the full payment
and satisfaction of the Secured Obligations shall be returned to the
Pledgors or to whomsoever a court of competent jurisdiction shall
determine to be entitled thereto.
10. Rights of the Collateral Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the
Collateral Agent, on behalf of the holders of the Secured Obligations,
and each of its designees or agents as attorney-in-fact of such
Pledgor, irrevocably and with power of substitution, with authority to
take any or all of the following actions upon the occurrence and during
the continuance of an Event of Default:
(i) to demand, collect, settle, compromise, adjust and
give discharges and releases concerning the Pledged Collateral of
such Pledgor, all as the Collateral Agent may reasonably
determine;
(ii) to commence and prosecute any actions at any court
for the purposes of collecting any of the Pledged Collateral of
such Pledgor and enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action brought
and, in connection therewith, give such discharge or release as
the Collateral Agent may deem reasonably appropriate;
(iv) to pay or discharge taxes, liens, security interests,
or other encumbrances levied or placed on or threatened against
the Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any payment under
any of the Pledged Collateral to make payment of any and all
monies due and to become due thereunder directly to the
Collateral Agent or as the Collateral Agent shall direct;
(vi) to receive payment of and receipt for any and all
monies, claims, and other amounts due and to become due at any
time in respect of or arising out of any Pledged Collateral of
such Pledgor;
(vii) to sign and endorse any drafts, assignments, proxies,
stock powers, verifications, notices and other documents relating
to the Pledged Collateral of such Pledgor;
(viii) to settle, compromise or adjust any suit,
action or proceeding described above and, in connection
therewith, to give such discharges or releases as the Collateral
Agent may deem reasonably appropriate;
(ix) to execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements,
pledge agreements, affidavits, notices and other agreements,
instruments and documents that the Collateral Agent may determine
necessary in order to perfect and maintain the security interests
and liens granted in this Pledge Agreement and in order to fully
consummate all of the transactions contemplated therein;
(x) to exchange any of the Pledged Collateral of such
Pledgor or other property upon any merger, consolidation,
reorganization, recapitalization or other readjustment of the
issuer thereof and, in connection therewith, deposit any of the
Pledged Collateral of such Pledgor with any committee,
depository, transfer agent, registrar or other designated agency
upon such terms as the Collateral Agent may determine;
(xi) to vote for a shareholder resolution, or to sign an
instrument in writing, sanctioning the transfer of any or all of
the Pledged Shares of such Pledgor into the name of the
Collateral Agent or one or more of the holders of the Secured
Obligations or into the name of any transferee to whom the
Pledged Shares of such Pledgor or any part thereof may be sold
pursuant to Section 10 hereof; and
(xii) to do and perform all such other acts and things as
the Collateral Agent may reasonably deem to be necessary, proper
or convenient in connection with the Pledged Collateral of such
Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Secured Obligations remain
outstanding, any Credit Document or any other documents relating to the
Secured Obligations, is in effect or any Letter of Credit shall remain
outstanding and (ii) until all of the Commitments shall have been
terminated. The Collateral Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and
options expressly or implicitly granted to the Collateral Agent in this
Pledge Agreement, and shall not be liable for any failure to do so or
any delay in doing so. The Collateral Agent shall not be liable for
any act or omission or for any error of judgment or any mistake of fact
or law in its individual capacity or its capacity as attorney-in-fact
except acts or omissions resulting from its gross negligence or willful
misconduct. This power of attorney is conferred on the Collateral
Agent solely to protect, preserve and realize upon its security
interest in Pledged Collateral.
(b) Assignment by the Collateral Agent. The Collateral Agent
may from time to time assign the Secured Obligations and any portion
thereof and/or the Pledged Collateral and any portion thereof, and the
assignee shall be entitled to all of the rights and remedies of the
Collateral Agent under this Pledge Agreement in relation thereto.
(c) The Collateral Agent's Duty of Care. Other than the
exercise of reasonable care to assure the safe custody of the Pledged
Collateral while being held by the Collateral Agent hereunder, the
Collateral Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that Pledgors shall
be responsible for preservation of all rights in the Pledged Collateral
of such Pledgor, and the Collateral Agent shall be relieved of all
responsibility for Pledged Collateral upon surrendering it or tendering
the surrender of it to the Pledgors. The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property, which shall be no
less than the treatment employed by a reasonable and prudent agent in
the industry, it being understood that the Collateral Agent shall not
have responsibility for (i) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Pledged Collateral, whether or not the Collateral Agent
has or is deemed to have knowledge of such matters; or (ii) taking any
necessary steps to preserve rights against any parties with respect to
any Pledged Collateral.
(d) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred
and be continuing, to the extent permitted by law, each Pledgor
may exercise any and all voting and other consensual rights
pertaining to the Pledged Collateral of such Pledgor or any part
thereof for any purpose not inconsistent with the terms of this
Pledge Agreement or the Credit Agreement; and
(ii) Upon the occurrence and during the continuance of an
Event of Default, at the election of the Collateral Agent, all
rights of a Pledgor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant
to paragraph (i) of this subsection shall cease and all such
rights shall thereupon become vested in the Collateral Agent
which shall then have the sole right to exercise such voting and
other consensual rights.
(e) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred
and be continuing and subject to Section 4(b) hereof, each
Pledgor may receive and retain any and all dividends (other than
stock dividends and other dividends constituting Pledged
Collateral which are addressed hereinabove) or interest paid in
respect of the Pledged Collateral to the extent they are allowed
under the Credit Agreement.
(ii) Upon the occurrence and during the continuance of an
Event of Default:
(A) at the election of the Collateral Agent, all
rights of a Pledgor to receive the dividends and interest
payments which it would otherwise be authorized to receive
and retain pursuant to paragraph (i) of this Section shall
cease and all such rights shall thereupon be vested in the
Collateral Agent which shall then have the sole right to
receive and hold as Pledged Collateral such dividends and
interest payments; and
(B) all dividends and interest payments which are
received by a Pledgor contrary to the provisions of
paragraph (A) of this Section shall be received in trust
for the benefit of the Collateral Agent, shall be
segregated from other property or funds of such Pledgor,
and shall be forthwith paid over to the Collateral Agent as
Pledged Collateral in the exact form received, to be held
by the Collateral Agent as Pledged Collateral and as
further collateral security for the Secured Obligations.
(f) Release of Pledged Collateral. The Collateral Agent may
release any of the Pledged Collateral from this Pledge Agreement or may
substitute any of the Pledged Collateral for other Pledged Collateral
without altering, varying or diminishing in any way the force, effect,
lien, pledge or security interest of this Pledge Agreement as to any
Pledged Collateral not expressly released or substituted, and this
Pledge Agreement shall continue as a first priority lien on all Pledged
Collateral not expressly released or substituted.
11. Rights of Required Lenders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the
Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of any Pledged Collateral, when received by the
Collateral Agent or any of the holders of the Secured Obligations in cash or
its equivalent, will be applied in reduction of the Secured Obligations in
the order set forth in the Credit Agreement or other document relating to the
Secured Obligations, and each Pledgor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees
that the Collateral Agent shall have the continuing and exclusive right to
apply and reapply any and all such payments and proceeds in the Collateral
Agent's sole discretion, notwithstanding any entry to the contrary upon any
of its books and records.
13. Costs of Counsel. At all times hereafter, the Pledgors agree to
promptly pay upon demand any and all reasonable costs and expenses of the
Collateral Agent or the holders of the Secured Obligations, (a) as required
under Section 11.5 of the Credit Agreement and (b) as necessary to protect
the Pledged Collateral or to exercise any rights or remedies under this
Pledge Agreement or with respect to any Pledged Collateral. All of the
foregoing costs and expenses shall constitute Secured Obligations hereunder.
14. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in
every respect and shall remain in full force and effect so long as the
Secured Obligations shall remain outstanding and until all of the
commitments relating thereto shall have been terminated (other than any
obligations with respect to the indemnities and the representations and
warranties set forth in the Credit Documents). Upon such payment and
termination, this Pledge Agreement shall be automatically terminated
and the Collateral Agent and the holders of the Secured Obligations
shall, upon the request and at the expense of the Pledgors, forthwith
release all of its liens and security interests hereunder and shall
executed and deliver all UCC termination statements and/or other
documents reasonably requested by the Pledgors evidencing such
termination. Notwithstanding the foregoing all releases and
indemnities provided hereunder shall survive termination of this Pledge
Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment,
in whole or in part, of any of the Secured Obligations is rescinded or
must otherwise be restored or returned by the Collateral Agent or any
holder of the Secured Obligations as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar
law, all as though such payment had not been made; provided that in the
event payment of all or any part of the Secured Obligations is
rescinded or must be restored or returned, all reasonable costs and
expenses (including without limitation any reasonable legal fees and
disbursements) incurred by the Collateral Agent or any holder of the
Secured Obligations in defending and enforcing such reinstatement shall
be deemed to be included as a part of the Secured Obligations.
15. Amendments; Waivers; Modifications. This Pledge Agreement and
the provisions hereof may not be amended, waived, modified, changed,
discharged or terminated except as set forth in Section 11.6 of the Credit
Agreement.
16. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor and its successors and assigns, and shall inure, together with the
rights and remedies of the Collateral Agent and the holders of the Secured
Obligations hereunder, to the benefit of the Collateral Agent and the holders
of the Secured Obligations and their successors and permitted assigns;
provided, however, that none of the Pledgors may assign its rights or
delegate its duties hereunder without the prior written consent of each
Lender or the Required Lenders, as required by the Credit Agreement. To the
fullest extent permitted by law, each Pledgor hereby releases the Collateral
Agent and each Lender, and its successors and assigns, from any liability for
any act or omission relating to this Pledge Agreement or the Collateral,
except for any liability arising from the gross negligence or willful
misconduct of the Collateral Agent, or such Lender, or its officers,
employees or agents.
17. Notices. All notices required or permitted to be given under
this Pledge Agreement shall be given as provided in the Credit Agreement.
18. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall
be an original, but all of which shall constitute one and the same
instrument. It shall not be necessary in making proof of this Pledge
Agreement to produce or account for more than one such counterpart.
19. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning
or construction of any provision of this Pledge Agreement.
20. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal
action or proceeding with respect to this Pledge Agreement may be
brought in the state or federal courts located in Charlotte, North
Carolina, and, by execution and delivery of this Pledge Agreement, each
Pledgor hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of such
courts. Each Pledgor further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to it at the address for notices pursuant to
Section 11.1 of the Credit Agreement, such service to become effective
three days after such mailing. Nothing herein shall affect the right
of the Collateral Agent to serve process in any other manner permitted
by law or to commence legal proceedings or to otherwise proceed against
any Pledgor in any other jurisdiction.
(b) Each Pledgor hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Pledge Agreement brought in the courts referred to in subsection
(a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
21. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
22. Severability. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid
or unenforceable provisions.
23. Entirety. This Pledge Agreement, the other Credit Documents and
the other documents relating to the Secured Obligations represent the entire
agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents, the
other documents relating to the Secured Obligations or the transactions
contemplated herein and therein.
24. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Security
Agreement, the other Credit Documents and the other documents relating to the
Secured Obligations, the delivery of the Notes and the extension of credit
thereunder or in connection therewith.
25. Other Security. To the extent that any of the Secured
Obligations are now or hereafter secured by property other than the Pledged
Collateral (including, without limitation, real and other personal property
owned by a Pledgor), or by a guarantee, endorsement or property of any other
Person, then the Collateral Agent and the holders of the Secured Obligations
shall have the right to proceed against such other property, guarantee or
endorsement upon the occurrence of any Event of Default, and the Collateral
Agent and the holders of the Secured Obligations have the right, in their
sole discretion, to determine which rights, security, liens, security
interests or remedies the Collateral Agent and the holders of the Secured
Obligations shall at any time pursue, relinquish, subordinate, modify or take
with respect thereto, without in any way modifying or affecting any of them
or the Secured Obligations or any of the rights of the Collateral Agent and
the holders of the Secured Obligations under this Pledge Agreement, under any
other of the Credit Documents or any other document relating to the Secured
Obligations.
26. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several
liability hereunder in consideration of the financial accommodation to
be provided by the Lenders under the Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Pledgors and in
consideration of the undertakings of each of the Pledgors to accept
joint and several liability for the obligations of each of them.
(b) Each of the Pledgors jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Pledgors with respect to the payment and performance of all of the
Secured Obligations arising under this Pledge Agreement, the other
Credit Documents and the other documents relating to the Secured
Obligations, it being the intention of the parties hereto that all the
Secured Obligations shall be the joint and several obligations of each
of the Pledgors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained
herein, in any other of the Credit Documents or in any other documents
relating to the Secured Obligations, the obligations of each Guarantor
under the Credit Agreement and the other Credit Documents shall be
limited to an aggregate amount equal to the largest amount that would
not render such obligations subject to avoidance under Section 548 of
the Bankruptcy Code or any comparable provisions of any applicable
state law.
27. Rights of Required Lenders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the
Required Lenders.
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REHABCARE GROUP, INC.
PLEDGE AGREEMENT
Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above
written.
PLEDGORS: REHABCARE GROUP, INC.,
a Delaware Corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
REHABCARE GROUP THERAPY SERVICES, INC.,
a Missouri corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
SALT LAKE PHYSICAL THERAPY ASSOCIATES, INC.,
a Utah corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
ALLSTAFF, INC.,
an Iowa corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
WESLEY MEDICAL RESOURCES, INC.,
a California corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
[Signature Pages Continue]
HEALTHCARE STAFFING SOLUTIONS, INC.,
a Massachusetts corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
EAI HEALTHCARE STAFFING SOLUTIONS, INC.,
a Delaware corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
REHABCARE GROUP EAST, INC.,
a Delaware corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
REHABCARE GROUP MANAGEMENT SERVICES, INC.,
a Delaware corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
REHABCARE TEXAS HOLDINGS, INC.,
a Delaware corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
HEALTH TOUR MANAGEMENT, INC.,
a Delaware corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
[Signature Pages Continue]
REHABCARE GROUP OF CALIFORNIA, INC.,
a Delaware corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
STARMED HEALTH PERSONNEL, INC.,
a Delaware corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
THERAPEUTIC SYSTEMS, LTD.,
an Illinois corporation
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
STARMED MANAGEMENT, L.L.C.,
a Delaware limited liability company
By: Healthcare Staffing Solutions, Inc.,
a Massachusetts corporation, as its Member
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Vice President
REHABCARE GROUP OF TEXAS, L.P.,
a Texas limited liability company
By: Rehabcare Group, Inc.,
a Delaware corporation, as its General
Partner
By: /s/ Gregory J. Eisenhauer
Name: Gregory J. Eisenhauer
Title: Senior Vice President, Finance
[Signature Pages Continue]
Accepted and agreed to as of the date first above written.
BANK OF AMERICA, N.A.,
as Collateral Agent
By:
Name:
Title:
Schedule 2(a)
to
Pledge Agreement
dated as of August 29, 2000
in favor of Bank of America, N.A.
as Collateral Agent
PLEDGED STOCK
Number of Certificate Percentage
Pledgor Issuer Shares Number Ownership
RehabCare Group, Inc.
Exhibit 4(a)
to
Pledge Agreement
dated as of August 29, 2000
in favor of Bank of America, N.A.
as Collateral Agent
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
to
the following shares of capital stock of _____________________, a
____________ corporation:
No. of Shares Certificate No.
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to
take all necessary and appropriate action to effect any such transfer. The
agent and attorney-in-fact may substitute and appoint one or more persons to
act for him. The effectiveness of a transfer pursuant to this stock power
shall be subject to any and all transfer restrictions referenced on the face
of the certificates evidencing such interest or in the certificate of
incorporation or bylaws of the subject corporation, to the extent they may
from time to time exist.
_______________________________
By:
Name:
Title: