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EXHIBIT 10.17
BORROWER PLEDGE AGREEMENT
THIS BORROWER PLEDGE AGREEMENT dated as of January 31, 1996 (this
"Agreement"), is by and between SNELLING AND SNELLING, INC., a Pennsylvania
corporation ("Pledgor") and THE FIRST NATIONAL BANK OF BOSTON, as agent for
itself and the other Banks (the "Secured Party").
RECITALS:
0.10 Pledgor, certain lenders named therein ("Banks") and Secured
Party have entered into that certain Credit Agreement of even date herewith
(such Credit Agreement, as the same may be amended or otherwise modified from
time to time, being hereinafter referred to as the "Credit Agreement"; terms
defined in the Credit Agreement and not otherwise defined herein being used as
defined therein).
0.11 Secured Party and the Banks have conditioned their obligations
under the Credit Agreement upon the execution and delivery of this Agreement by
Pledgor.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
Security Interest and Pledge
Section 1.1 SECURITY INTEREST AND PLEDGE. As collateral security
for the prompt payment in full when due of the Obligations (whether at stated
maturity, by acceleration, or otherwise) and all present and future obligations
of Pledgor under this Agreement, Pledgor hereby pledges and grants to Secured
Party a first priority security interest in the following property (such
property being hereinafter sometimes called the "Collateral"):
(a) all of Pledgor's shares of stock of the companies
described on SCHEDULE 1 hereto, now owned or hereafter acquired,
including, without limitation, the shares of stock of such companies
described on SCHEDULE 1 hereto; and
(b) all products, proceeds, revenues, distributions,
dividends, stock dividends, securities and other property, rights and
interests that Pledgor receives or is at any time entitled to receive
on account of the same.
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ARTICLE 2
AFFIRMATIVE AND NEGATIVE COVENANTS
Pledgor covenants and agrees with Secured Party that:
Section 2.1 DELIVERY. Prior to or concurrently with the execution
and delivery of this Agreement, Pledgor shall deliver to Secured Party all
certificate(s) identified in Schedule 1 hereto, accompanied by undated stock
powers duly executed in blank.
Section 2.2 ENCUMBRANCES. Pledgor shall not create, permit, or
suffer to exist, and shall defend the Collateral against, any Lien, security
interest, or other encumbrance on the Collateral except the pledge and security
interest of Secured Party hereunder, and Pledgor shall defend Pledgor's rights
in the Collateral and Secured Party's security interest in the Collateral
against the claims of all Persons.
Section 2.3 SALE OF COLLATERAL. Pledgor shall not sell, assign, or
otherwise dispose of the Collateral or any part thereof without the prior
written consent of Secured Party or as permitted pursuant to SECTION 10.8 of
the Credit Agreement.
Section 2.4 DISTRIBUTIONS. If Pledgor shall become entitled to
receive or shall receive: (i) any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase, or reduction of capital or
issued in connection with any reorganization), option or rights, whether as an
addition to, in substitution of, or in exchange for any Collateral; (ii) any
sums paid in respect of the Collateral upon the liquidation or dissolution of
the issuer thereof; (iii) any other distribution of capital made on or in
respect of the Collateral or any other property distributed upon or in respect
of the Collateral pursuant to any recapitalization or reclassification of the
capital of the issuer thereof or pursuant to any reorganization of the issuer
thereof; or (iv) subject to the right of Pledgor to receive cash dividends
under SECTION 3.3 hereof, any other Collateral the possession of which is
necessary to perfect the security interest of Secured Party therein, then (1)
Pledgor agrees to accept the same as Secured Party's agent and to hold the same
in trust for Secured Party, and to deliver the same forthwith to Secured Party
in the exact form received, with the appropriate endorsement of Pledgor when
necessary and/or appropriate undated stock powers duly executed in blank, to be
held by Secured Party as additional Collateral for the Obligations, subject to
the terms hereof, or (2) in the case of a disposition of the stock or assets of
PMC as permitted by SECTION 10.8 of the Credit Agreement, Pledgor may use the
proceeds as permitted by SECTION 10.8 of the Credit Agreement. All sums of
money and property so paid or distributed in respect of the Collateral that are
received by Pledgor shall, until paid or delivered to Secured Party, be held by
Pledgor in trust as additional security for the Obligations.
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ARTICLE 3
RIGHTS OF SECURED PARTY AND PLEDGOR
Section 3.1 POWER OF ATTORNEY. PLEDGOR HEREBY IRREVOCABLY
CONSTITUTES AND APPOINTS SECURED PARTY AND ANY OFFICER OR AGENT THEREOF, WITH
FULL POWER OF SUBSTITUTION, AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL
IRREVOCABLE POWER AND AUTHORITY IN THE PLACE AND STEAD AND IN THE NAME OF
PLEDGOR OR IN ITS OWN NAME, IN SECURED PARTY'S DISCRETION, TO TAKE, AFTER THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, ANY AND ALL
ACTION AND TO EXECUTE ANY AND ALL DOCUMENTS AND INSTRUMENTS WHICH MAY BE
NECESSARY OR DESIRABLE TO ACCOMPLISH THE PURPOSES OF THIS AGREEMENT AND,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, HEREBY GIVES SECURED PARTY
THE POWER AND RIGHT ON BEHALF OF PLEDGOR AND IN ITS OWN NAME TO DO, AFTER THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, ANY OF THE
FOLLOWING (SUBJECT TO THE RIGHTS OF PLEDGOR UNDER SECTION 3.2 AND 3.3 HEREOF)
WITHOUT NOTICE TO OR THE CONSENT OF PLEDGOR:
(a) to demand, sue for, collect, or receive in the name of
Pledgor or in its own name, any money or property at any time payable
or receivable on account of or in exchange for any of the Collateral
and, in connection therewith, endorse checks, notes, drafts,
acceptances, money orders, or any other instruments for the payment
of money under the Collateral;
(b) to pay or discharge taxes, Liens, security interests,
or other encumbrances levied or placed on or threatened against the
Collateral;
(c) (i) to direct account debtors and any other parties
liable for any payment under any of the Collateral to make payment of
any and all monies due and to become due thereunder directly to
Secured Party or as Secured Party shall direct; (ii) 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 Collateral; (iii) to sign and endorse any drafts, assignments,
proxies, stock powers, verifications, notices, and other documents
relating to the Collateral; (iv) to commence and prosecute any suit,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (v) to defend
any suit, action, or proceeding brought against Pledgor with respect
to any Collateral; (vi) to settle, compromise, or adjust any suit,
action, or proceeding described above and, in connection therewith, to
give such discharges or releases as Secured Party may deem
appropriate; (vii) to exchange any of the Collateral for other
property upon any merger, consolidation, reorganization,
recapitalization, or other readjustment of the
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issuer thereof and, in connection therewith, deposit any of the
Collateral with any committee, depositary, transfer agent, registrar,
or other designated agency upon such terms as Secured Party may
determine; (viii) to add or release any guarantor, indorser, surety,
or other party to any of the Collateral or the Obligations; (ix) to
renew, extend, or otherwise change the terms and conditions of any of
the Collateral or Obligations; and (x) to sell, transfer, pledge, make
any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though Secured Party were the
absolute owner thereof for all purposes, and to do, at Secured Party's
option and Pledgor's expense, at any time, or from time to time, all
acts and things which Secured Party deems necessary to protect,
preserve, or realize upon the Collateral and Secured Party's security
interest therein.
THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL
BE IRREVOCABLE UNTIL ALL OF THE OBLIGATIONS ARE PAID IN FULL. Secured Party
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
Secured Party in this Agreement, and Secured Party shall not be liable for any
failure to do so or any delay in doing so. Secured Party 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 in its capacity as attorney-in-fact except
acts or omissions resulting from its willful misconduct. This power of
attorney is conferred on Secured Party solely to protect, preserve and realize
upon its security interest in the Collateral.
Section 3.2 VOTING RIGHTS. Unless and until an Event of Default
shall have occurred and is continuing, Pledgor shall be entitled to exercise
any and all voting rights pertaining to the Collateral or any part thereof for
any purpose not inconsistent with the terms of this Agreement or the Credit
Agreement. Secured Party shall execute and deliver to the Pledgor all such
proxies and other instruments as Pledgor may reasonably request for the purpose
of enabling Pledgor to exercise the voting rights which it is entitled to
exercise pursuant to this Section.
Section 3.3 DIVIDENDS. Unless and until an Event of Default shall
have occurred and is continuing, Pledgor shall be entitled to receive and
retain any dividends on the Collateral paid in cash out of earned surplus to
the extent and only to the extent that such dividends are permitted by the
Credit Agreement.
Section 3.4 SECURED PARTY'S DUTY OF CARE. Other than the exercise
of reasonable care in the physical custody of the Collateral while held by
Secured Party hereunder, Secured Party shall have no responsibility for or
obligation or duty with respect to all or any part of the Collateral or any
matter or proceeding arising out of or relating thereto, including, without
limitation, any obligation or duty to collect any sums due in respect thereof
or to protect or preserve any rights against prior parties or any other rights
pertaining thereto, it being understood and agreed that Pledgor shall be
responsible for preservation of all rights in the Collateral. Without limiting
the generality of the foregoing, Secured Party shall be conclusively deemed to
have exercised reasonable care in the custody of the Collateral if Secured
Party takes
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such action, for purposes of preserving rights in the Collateral, as Pledgor
may reasonably request in writing, but no failure or omission or delay by
Secured Party in complying with any such request by Pledgor, and no refusal by
Secured Party to comply with any such request by Pledgor, shall be deemed to be
a failure to exercise reasonable care unless such failure, omission, delay or
refusal constitutes willful misconduct or gross negligence.
Section 3.5 ASSIGNMENT BY SECURED PARTY. Subject to the terms of
the Credit Agreement, Secured Party may at any time and from time to time
assign the Obligations and any portion thereof and/or the Collateral and any
portion thereof, and the assignee shall be entitled to all of the rights and
remedies of Secured Party under this Agreement in relation thereto.
ARTICLE 4
DEFAULT
Section 4.1 RIGHTS AND REMEDIES. If any Event of Default shall
occur and be continuing, Secured Party shall have the following rights and
remedies:
(a) In addition to all other rights and remedies granted to
Secured Party in this Agreement and in any other instrument or
agreement securing, evidencing, or relating to the Obligations,
Secured Party shall have all of the rights and remedies of a secured
party under the Uniform Commercial Code as adopted by the State of
Texas. Without limiting the generality of the foregoing, Secured
Party may (i) without demand or notice to Pledgor, collect, receive,
or take possession of the Collateral or any part thereof, (ii) sell or
otherwise dispose of the Collateral, or any part thereof, in one or
more parcels at public or private sale or sales, at Secured Party's
offices or elsewhere, for cash, on credit, or for future delivery
and/or (iii) bid and become a purchaser at any sale free of any right
or equity of redemption in Pledgor, which right or equity is hereby
expressly waived and released by Pledgor. Upon the request of Secured
Party, Pledgor shall assemble the Collateral and make it available to
Secured Party at any place designated by Secured Party that is
reasonably convenient to Pledgor and Secured Party. Pledgor agrees
that Secured Party shall not be obligated to give more than ten (10)
days written notice of the time and place of any public sale or of the
time after which any private sale may take place and that such notice
shall constitute reasonable notice of such matters. Secured Party
shall not be obligated to make any sale of the Collateral regardless
of notice of sale having been given. Secured Party 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. Pledgor
shall be liable for all expenses of retaking, holding, preparing for
sale, or the like, and all attorneys' fees and other expenses incurred
by Secured Party in connection with the collection of the Obligations
and the enforcement of Secured Party's rights under this Agreement,
all of which expenses and fees shall constitute additional Obligations
secured by this Agreement. Secured Party may apply the Collateral
against the
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Obligations in accordance with the Credit Agreement. Pledgor shall
remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay the Obligations.
Pledgor waives all rights of marshalling in respect of the Collateral.
(b) Secured Party may cause any or all of the Collateral
held by it to be transferred into the name of Secured Party or the
name or names of Secured Party's nominee or nominees.
(c) Secured Party may collect or receive all 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.
(d) Secured Party shall have the right, but shall not be
obligated to, exercise or cause to be exercised all voting, consensual
and other powers of ownership pertaining to the Collateral, and
Pledgor shall deliver to Secured Party, if requested by Secured Party,
irrevocable proxies with respect to the Collateral in form
satisfactory to Secured Party.
(e) Pledgor hereby acknowledges and confirms that Secured
Party may be unable to effect a public sale of any or all of the
Collateral by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, and applicable state securities
laws and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers who will be obligated to
agree, among other things, to acquire any shares of the Collateral for
their own respective accounts for investment and not with a view to
distribution or resale thereof. Pledgor further acknowledges and
confirms that any such private sale may result in prices or other
terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially
reasonable manner, and Secured Party shall be under no obligation to
take any steps in order to permit the Collateral to be sold at a
public sale. Secured Party shall be under no obligation to delay a
sale of any of the Collateral for any period of time necessary to
permit any issuer thereof to register such Collateral for public sale
under the Securities Act of 1933, as amended, or under applicable
state securities laws.
(f) On any sale of the Collateral, Secured Party is hereby
authorized to comply with any limitation or restriction with which
compliance is necessary, in the view of Secured Party's counsel, in
order to avoid any violation of applicable law or in order to obtain
any required approval of the purchaser or purchasers by any
applicable governmental authority.
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ARTICLE 5
MISCELLANEOUS
Section 5.1 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of Pledgor and Secured Party and their
respective heirs, successors and assigns, except that Pledgor may not assign
any of its rights or obligations under this Agreement without the prior written
consent of Secured Party. Any assignment made in violation of this SECTION 5.1
shall be void.
Section 5.2 AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT EMBODIES
THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS
AMONG THE PARTIES HERETO. The provisions of this Agreement may be amended or
waived only by an instrument in writing signed by the parties hereto.
Section 5.3 NOTICES. All notices and other communications provided
for in this Agreement shall be given or made in accordance with the Credit
Agreement.
Section 5.4 APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas and the
applicable laws of the United States of America.
Section 5.5 HEADINGS. The headings, captions and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 5.6 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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Section 5.7 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
PLEDGOR:
SNELLING AND SNELLING, INC.
By: /s/ J. RUSSELL CREWS
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Name: J. Russell Crews
Title: Senior Vice President
SECURED PARTY:
THE FIRST NATIONAL BANK OF BOSTON,
as Agent
By: /s/ WILLIAM C. PURINTON
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Name: William C. Purinton
Title: Vice President
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