E-423
Exhibit No. 14
Form 8-K
Headway Corporate Resources, Inc.
SEC File No. 0-23170
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Agreement") dated as of March
19, 1998 is made between HEADWAY CORPORATE RESOURCES, INC., a
Delaware corporation (the "Borrower"), EACH OF THE UNDERSIGNED
SUBSIDIARIES OF THE BORROWER (the "Subsidiary Pledgors", and
together with the Borrower, the "Pledgors", and each individually
a "Pledgor"), and NATIONSBANK, NATIONAL ASSOCIATION, a national
banking association organized and existing under the laws of the
United States, as agent (the "Agent") for each of the lenders
(the "Lenders" and collectively with the Agent, the "Secured
Parties") now or hereafter party to the Credit Agreement (as
defined below). All capitalized terms used but not otherwise
defined herein shall have the respective meanings assigned
thereto in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have agreed to provide to the
Borrower a certain revolving credit facility with a letter of
credit sublimit pursuant to the Credit Agreement dated as of
March 19, 1998 among the Borrower, the Agent and the Lenders (as
from time to time amended, revised, modified, supplemented or
amended and restated, the "Credit Agreement"); and
WHEREAS, each of the Subsidiary Pledgors has entered into
that certain Guaranty Agreement of even date herewith (the
"Guaranty"); and
WHEREAS, as collateral security for the payment and
performance of the Borrower's Obligations and the Subsidiary
Pledgors' obligations under the Guaranty, each Pledgor is willing
to pledge and grant to the Agent for the benefit of the Lenders a
security interest in all of the issued and outstanding shares of
capital stock, whether now in existence or hereafter issued, of
ownership or other equity interest, whether now owned or
hereafter acquired, of each of its subsidiaries which are
Domestic Subsidiaries, and 66% of the issued and outstanding
shares of voting capital stock and 100% of the issued and
outstanding shares of non-voting capital stock whether now in
existence or hereafter issued, or ownership or other equity
interest, whether now or hereafter existing, of each of its
subsidiaries which are Direct Foreign Subsidiaries all of which
are required to be subject to a Pledge Agreement pursuant to the
Credit Agreement (such shares of capital stock being referred to
herein as the "Pledged Stock", and all such other ownership or
equity interests being collectively referred to herein, together
with the Pledged Stock, as the "Pledged Interests"), including
without limitation the Pledged Interests in such Subsidiaries
more particularly described on Schedule I hereto (such
Subsidiaries, together with all other Subsidiaries whose capital
stock, ownership or other equity interest may be required to be
subject to a Pledge Agreement from time to time, are hereinafter
referred to collectively as the "Pledged Subsidiaries"); and
WHEREAS, the Lenders are unwilling to enter into the Loan
Documents unless each Pledgor enters into this Agreement;
NOW, THEREFORE, in order to induce the Secured Parties to
enter into the Loan Documents and to make Loans and issue Letters
of Credit and in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. Pledge of Stock; Other Collateral.
(a) As collateral security for the payment and performance
by the Borrower of its now or hereafter existing Obligations and
by the Subsidiary Pledgors of their now or hereafter existing
liabilities and obligations under the Guaranty (collectively with
the Obligations, the "Secured Obligations"), each Pledgor hereby
pledges and collaterally assigns to the Agent for the benefit of
the Secured Parties, and grants to the Agent for the benefit of
the Secured Parties a first priority lien and security interest
in, the Pledged Interests and all of the following:
(i) all cash, securities, dividends, rights, and
other property at any time and from time to time declared or
distributed in respect of or in exchange for any or all of
the Pledged Interests, other than cash dividends permitted
to be retained by the Pledgors under Section 9 hereof;
(ii) all other property hereafter delivered to the
Agent in substitution for or in addition to any of the
foregoing, all certificates and instruments representing or
evidencing such property and all cash, securities, interest,
dividends, rights, and other property at any time and from
time to time declared or distributed in respect of or in
exchange for any or all of the Pledged Interests; and
(iii) all proceeds of any of the foregoing.
All such Pledged Interests, certificates, instruments, cash,
securities, interest, dividends, rights and other property
referred to in this Section 1, other than cash dividends issued
in respect of such Pledged Stock that are permitted to be
retained by the Pledgors under Section 9 hereof, are herein
collectively referred to as the "Collateral." All of the Pledged
Interests described on Schedule I in effect from time to time is
currently owned by the respective Pledgors and, with respect to
the Pledged Stock only, represented by the stock certificates
listed on Schedule I hereto. There have been delivered to the
Agent (A) with respect to all the Pledged Stock existing on the
Closing Date, certificates evidencing such Pledged Stock,
together with stock powers duly executed in blank by the
Pledgors, and (B) with respect to all other Pledged Interests
existing on the Closing Date, registrar's pledge certificates in
the form of Exhibit B hereto.
(b) Each Pledgor agrees to deliver all the Collateral to
the Agent at such location or locations as the Agent shall from
time to time designate by written notice pursuant to Section 18
hereof for its custody at all times until termination of this
Agreement, together with such instruments of assignment and
transfer as requested by the Agent.
(c) Each Pledgor agrees to deliver all share certificates,
documents, agreements, financing statements, amendments thereto,
assignments or other writings as the Agent may request to carry
out the terms of this Agreement or to protect or enforce the lien
and security interest in the Collateral hereunder granted thereby
to the Agent for the benefit of the Lenders and further agrees to
do and cause to be done, upon the Agent's request, all things
determined by the Agent to be necessary to perfect and keep in
full force the Lien in the Collateral hereunder granted thereby
in favor of the Agent for the benefit of the Lenders, including,
but not limited to, the prompt payment of all documented out-of-
pocket fees and expenses incurred in connection with any filings
made to perfect or continue the Lien and security interest in the
Collateral hereunder granted thereby in favor of the Agent for
the benefit of the Lenders. Each Pledgor agrees to make
appropriate entries upon its books and records (including without
limitation its stock record and transfer books) disclosing the
Lien against the Collateral hereunder granted thereby to the
Agent for the benefit of the Lenders hereunder.
(d) All advances, charges, costs and expenses, including
reasonable attorneys' fees, incurred or paid by any Secured Party
in exercising any right, power or remedy conferred by this
Agreement, or in the enforcement thereof, shall become a part of
the Secured Obligations and shall be paid to the Agent for the
benefit of the Lenders by the Pledgors immediately upon demand
therefor, with interest thereon until paid in full at the Default
Rate for Base Rate Loans.
(e) Each Pledgor agrees to register the Pledged Interests
of the Agent on the registration books of each of its Pledged
Subsidiaries. Each Pledgor agrees, except with respect to the
Pledged Stock, that (i) it shall not issue certificates
representing the Pledged Interests without the Agent's written
consent and (ii) it shall issue certificates with respect to any
Pledged Interests at the Agent's request.
2. Status of Pledged Stock. Each Pledgor hereby represents
and warrants to the Agent for the benefit of the Lenders that (i)
with respect to its Subsidiaries that are corporations, all of
the shares of Pledged Stock are validly issued and outstanding,
fully paid and nonassessable and constitute all the authorized,
issued and outstanding shares of capital stock of each of such
Subsidiaries which are Domestic Subsidiaries and 66% of the
authorized, issued and outstanding shares of voting capital stock
and 100% of the authorized, issued and outstanding shares of non-
voting capital stock of each of such Subsidiaries which are
Direct Foreign Subsidiaries, (ii) with respect to such
Subsidiaries that are not corporations, the Pledged Interests of
such Subsidiaries constitute all of the equity or other ownership
interest in each of such Subsidiaries which are Domestic
Subsidiaries and 66% of the equity or other ownership interest of
each of such Subsidiaries which are Direct Foreign
Subsidiaries, (iii) such Pledgor is the registered and record and
beneficial owner of such Pledged Interests, free and clear of all
Liens, charges, equities, encumbrances and restrictions on pledge
or transfer (other than the pledge hereunder and restrictions
imposed by applicable law), (iv) such Pledgor has full corporate
power, legal right and lawful authority to execute this Agreement
and to pledge, assign and transfer such Pledged Interests in the
manner and form hereof, and (v) the pledge, assignment and
delivery of such Pledged Interests by the Pledgors to the Agent
for the benefit of the Lenders pursuant to this Agreement
creates, together with the delivery of certificates evidencing
the Pledged Stock and the delivery of registrar's pledge
certificates with respect to all other Pledged Interests, which
delivery has heretofore been accomplished, and the filing of UCC-
1 financing statements in the appropriate jurisdictions, a valid
and perfected first priority security interest in such Pledged
Interests in favor of the Agent for the benefit of the Lenders,
securing the payment of the Secured Obligations. Except as
permitted under Sections 9.5 or 9.7 of the Credit Agreement,
none of the Pledged Stock (nor any interest therein or thereto)
shall be sold, transferred or assigned, nor any Lien created
therein, without the Agent's prior written consent, which may be
withheld for any reason. Each Pledgor covenants with the Agent
for the benefit of the Lenders that it shall at all times cause
the Pledged Interests to be represented by the certificates now
and hereafter delivered to the Agent in accordance with Section 1
hereof and that it shall not cause, suffer or permit any of the
Pledged Subsidiaries to issue any capital stock, or securities
convertible into, or exercisable or exchangeable for, capital
stock, at any time during the term of this Agreement other than
to the Pledgors and subject to this Agreement pursuant to Section
23 hereof.
3. Preservation and Protection of Collateral.
(a) The Agent shall be under no duty or liability with
respect to the collection, protection or preservation of the
Collateral, or otherwise, other than the obligation to deal with
the Collateral while in its possession in the same manner as the
Agent deals with similar securities or property for its own
account.
(b) Each Pledgor agrees to pay when due all taxes, charges,
Liens and assessments against the Collateral in which it has an
interest, unless being contested in good faith by appropriate
proceedings diligently conducted and against which adequate
reserves have been established in accordance with GAAP and
evidenced to the satisfaction of the Agent and provided further
that all enforcement proceedings in the nature of levy or
foreclosure are effectively stayed. Upon the failure of the
Pledgors to so pay or contest such taxes, charges, Liens or
assessments, the Agent at its option may pay or contest any of
them (the Agent having the sole right to determine the legality
or validity and the amount necessary to discharge such taxes,
charges, Liens or assessments).
4. Default. Upon the occurrence and during the
continuance of any Event of Default, the Agent is given full
power and authority, then or at any time thereafter, to sell,
assign and deliver or collect the whole or any part of the
Collateral, or any substitute therefor or any addition thereto,
in one or more sales, with or without any previous demands or
demand of performance or, to the extent permitted by law, notice
or advertisement, in such order as the Agent may elect; and any
such sale may be made either at public or private sale at the
Agent's place of business or elsewhere, either for cash or upon
credit or for future delivery, at such price as the Agent may
reasonably deem fair; and the Agent may be the purchaser of any
or all Collateral so sold and hold the same thereafter in its own
right free from any claim of the Pledgors or right of redemption.
Demands of performance, advertisements and presence of property
and sale and notice of sale are hereby waived to the extent
permissible by law and the Pledgors acknowledge that the
Collateral is of a type customarily sold on a recognized market.
Any sale hereunder may be conducted by an auctioneer or any
officer or agent of the Agent. Each Pledgor recognizes that the
Agent may be unable to effect a public sale of the Collateral by
reason of certain prohibitions contained in the Securities Act of
1933, as amended (the "Securities Act"), and applicable law, and
may be otherwise delayed or adversely affected in effecting any
sale by reason of present or future restrictions thereon imposed
by governmental authorities, and that as a consequence of such
prohibitions and restrictions the Agent may be compelled (i) to
resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to
acquire the stock for their own account, for investment and not
with a view to the distribution or resale thereof, or (ii) to
seek regulatory approval of any proposed sale or sales, or (iii)
to limit the amount of Collateral sold to any Person or group.
Each Pledgor agrees and acknowledges that private sales so made
may be at prices and upon terms less favorable to the Pledgors
than if such Collateral was sold either at public sales or at
private sales not subject to other regulatory restrictions, and
that the Agent has no obligation to delay the sale of any of the
Collateral for the period of time necessary to permit the issuer
of such Collateral to register or otherwise qualify the Pledged
Interests, even if such issuer would agree to register or
otherwise qualify for public sale under the Securities Act or
applicable state law. Each Pledgor further agrees, to the extent
permitted by applicable law, that the use of private sales made
under the foregoing circumstances to dispose of the Collateral
shall be deemed to be dispositions in a commercially reasonable
manner. Each Pledgor hereby acknowledges that a ready market may
not exist for the Pledged Stock since it is not traded on a
national securities exchange or quoted on an automated quotation
system and agrees and acknowledges that in such event the Pledged
Stock may be sold for an amount less than a pro rata share of the
fair market value of the issuer's assets minus its liabilities.
In addition to the foregoing, the Lenders may exercise such other
rights and remedies as may be available under the Loan Documents,
at law or in equity.
5. Proceeds of Sale. The proceeds of the sale of any of
the Collateral and all sums received or collected from or on
account of such Collateral shall be applied to the payment of
expenses incurred or paid by the Agent in connection with any
holding, sale, transfer or delivery of the Collateral, to the
payment of any other reasonable costs, charges, reasonable
attorneys' fees or expenses mentioned herein, and to the payment
of the Secured Obligations or any part thereof, all in such order
and manner as is provided in Section 10.5 of the Credit Agreement
and otherwise as the Agent may determine and as permitted by
applicable law.
6. Presentments, Demands and Notices. The Agent shall not
be under any duty or obligation whatsoever to make or give any
presentments, demands for performances, notices of
nonperformance, protests, notice of protest or notice of dishonor
in connection with any obligations or evidences of indebtedness
held thereby as collateral, or in connection with any obligations
or evidences of indebtedness which constitute in whole or in part
the Secured Obligations secured hereunder.
7. Attorney-in-Fact. Each Pledgor hereby appoints the
Agent as such Pledgor's attorney-in-fact for the purposes of
carrying out the provisions of this Agreement and taking any
action and executing any instrument which the Agent may deem
necessary or advisable to accomplish the purposes hereof, which
appointment is coupled with an interest and is irrevocable;
provided, that the Agent shall have and may exercise rights under
this power of attorney only upon the occurrence and during the
continuance of an Event of Default. Without limiting the
generality of the foregoing, upon the occurrence and during the
continuance of an Event of Default, the Agent shall have the
right and power to receive, endorse and collect all checks and
other orders for the payment of money made payable to such
Pledgor representing any dividend, interest payment, principal
payment or other distribution payable or distributable in respect
of, or otherwise constituting, the Collateral or any part thereof
and to give full discharge for the same.
8. Waiver by Pledgors. Each Pledgor waives (to the extent
permitted by applicable law) any right to require the Agent or
any Lender or any other obligee of the Secured Obligations to (a)
proceed against any other Pledgor or any Person, including
without limitation any Guarantor, (b) proceed against or exhaust
any Collateral or other collateral for the Secured Obligations,
or (c) pursue any other remedy in its power; and waives (to the
extent permitted by applicable law) any defense arising by reason
of any disability or other defense of any other Pledgor or any
other Person, including without limitation any Guarantor, or by
reason of the cessation from any cause whatsoever of the
liability of any other Pledgor or any other Person, including
without limitation, any Guarantor. The Agent may at any time
deliver (without representation, recourse or warranty) the
Collateral or any part thereof to any Pledgor who has an interest
therein and the receipt thereof by such Pledgor shall be deemed a
complete and full acquittance for the Collateral so delivered,
and the Agent shall thereafter be discharged from any liability
or responsibility therefor.
9. Dividends and Voting Rights.
(a) All dividends and other distributions with respect to
the Pledged Stock shall be subject to the pledge hereunder,
provided, however, that so long as no Event of Default shall have
occurred and be continuing, any cash dividends that are permitted
to be made under the Credit Agreement may be retained by the
Pledgors free from any Lien hereunder. Upon the occurrence and
during the continuance of any Event of Default, any cash
dividends and other distributions with respect to the Pledged
Interests shall be promptly delivered to the Agent (together, if
the Agent shall request, with stock powers or instruments of
assignment duly executed in blank affixed to any stock
certificate or other negotiable document or instrument so
distributed) to be held, released or disposed of by it hereunder
or, at the option of the Agent, to be applied to the Secured
Obligations as they become due.
(b) So long as no Event of Default shall have occurred and
be continuing, the registration of the Collateral in the name of
any Pledgor shall not be changed and the Pledgors shall be
entitled to exercise all voting and other rights and powers
pertaining to the Collateral for all purposes not inconsistent
with the terms hereof.
(c) Upon the occurrence and during the continuance of any
Event of Default, at the option of the Agent, all rights of the
Pledgors to receive and retain cash dividends or other
distributions upon the Collateral pursuant to subsection (a)
above shall cease and shall thereupon be vested in the Agent for
the benefit of the Lenders.
(d) Upon the occurrence and during the continuance of any
Event of Default, at the option of the Agent, all rights of the
Pledgors to exercise the voting or consensual rights and powers
which they are authorized to exercise with respect to the
Collateral pursuant to subsection (b) above shall cease and the
Agent may thereupon (but shall not be obligated to), at its
request, cause such Collateral to be registered in the name of
the Agent or its nominee or agent for the benefit of the Lenders
and exercise such voting or consensual rights and powers as
appertain to ownership of such Collateral, and to that end each
Pledgor hereby appoints the Agent as its proxy, with full power
of substitution, to vote and exercise all other rights as a
shareholder or other owner or equity holder with respect to the
Pledged Interests hereunder upon the occurrence and during the
continuance of any Event of Default, which proxy is coupled with
an interest and is irrevocable prior to the earlier of a cure or
waiver of such Event of Default or the termination of this
Agreement as set forth in Section 22 hereof, and each Pledgor
hereby agrees to provide such further proxies as the Agent may
reasonably request consistent with this subsection (d); provided,
however, that the Agent in its discretion may from time to time
refrain from exercising, and shall not be obligated to exercise,
any such voting or consensual rights or such proxy.
10. Power of Sale. Until the occurrence of the Collateral
Termination Date, the power of sale and other rights, powers and
remedies granted to the Agent for the benefit of the Lenders
hereunder shall continue to exist and may be exercised by the
Agent at any time and from time to time irrespective of the fact
that any Secured Obligations or any part thereof may have become
barred by any statute of limitations or that the liability of any
Pledgor may have ceased.
11. Other Rights. The rights, powers and remedies given to
the Agent for the benefit of the Lenders by this Agreement shall
be in addition to all rights, powers and remedies given to any
Lenders by virtue of any statute or rule of law. Any forbearance
or failure or delay by the Agent in exercising any right, power
or remedy hereunder shall not be deemed to be a waiver of such
right, power or remedy, and any single or partial exercise of any
right, power or remedy hereunder shall not preclude the further
exercise thereof. Every right, power and remedy of the Lenders
shall continue in full force and effect until such right, power
or remedy is specifically waived by the Required Lenders by an
instrument in writing.
12. AntiMarshalling Provisions. The right is hereby given
by each Pledgor to the Agent, for the benefit of the Secured
Parties, to make releases (whether in whole or in part) of all or
any part of the Collateral agreeable to the Agent without notice
to, or the consent, approval or agreement of other parties and
interests, including junior lienors, which releases shall not
impair in any manner the validity of or priority of the Liens and
security interests in the remaining Collateral conferred under
such documents, nor release such Pledgor from personal liability
for the Secured Obligations hereby secured. Notwithstanding the
existence of any other security interest in the Collateral held
by the Agent, for the benefit of the Secured Parties, the Agent
shall have the right to determine the order in which any or all
of the Collateral shall be subjected to the remedies provided in
this Agreement. The proceeds realized upon the exercise of the
remedies provided herein shall be applied by the Agent, for the
benefit of the Secured Parties, in the manner provided in Section
10.5 of the Credit Agreement. Each Pledgor hereby waives any and
all right to require the marshalling of assets in connection with
the exercise of any of the remedies permitted by applicable law
or provided herein.
13. Absolute Rights and Obligations. All rights of the
Secured Parties, and all obligations of the Pledgors hereunder,
shall be absolute and unconditional irrespective of:
(a) 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 departure from, the Credit Agreement or any other
Loan Document, including, but not limited to, (i) an
increase or decrease in the Secured Obligations and (ii) an
amendment of any Loan Document to permit the Agent or the
Lenders or any one or more of them to extend further or
additional credit to the Borrower in any form including
credit by way of loan, purchase of assets, guarantee or
otherwise, which credit shall thereupon be and become
subject to the Credit Agreement and the other Loan Documents
as a Secured Obligation;
(b) any taking and holding of collateral or guarantees
(including without limitation any collateral pledged as
security for the Secured Obligations under the other
Security Instruments) for all or any of the Secured
Obligations; or any amendment, alteration, exchange,
substitution, transfer, enforcement, waiver, subordination,
termination or release of any such collateral or guarantees,
or any nonperfection of any such collateral, or any consent
to departure from any such guaranty;
(c) any manner of application of collateral, or
proceeds thereof, securing payment or enforcement of all or
any of the Secured Obligations, or the manner of sale of any
such collateral;
(d) any consent by the Secured Parties to the change,
restructure or termination of the corporate structure or
existence of the Borrower or any Pledgor and any
corresponding restructure of the Secured Obligations, or any
other restructure or refinancing of the Secured Obligations
or any portion thereof;
(e) any modification, compromise, settlement or
release by the Secured Parties, by operation of law or
otherwise, collection or other liquidation of the Secured
Obligations or the liability of the Borrower, any Pledgor or
any Guarantor or of any collateral for the Secured
Obligation (including without limitation any collateral
pledged as security for the Secured Obligations under the
other Security Instruments), in whole or in part, and any
refusal of payment by the Agent or any Lender in whole or in
part, from any obligor or Guarantor in connection with any
of the Secured Obligations, whether or not with notice to,
or further assent by, or any reservation of rights against,
any Pledgor; or
(f) any other circumstance (including without
limitation any statute of limitations) that might otherwise
constitute a defense available to, or a discharge of, the
Borrower, any Guarantor or a Pledgor.
The granting of a Security Interest in the Collateral shall
continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Secured Obligations is
rescinded or must otherwise be returned by any Secured Party,
upon the insolvency, bankruptcy or reorganization of the Borrower
or any Pledgor or otherwise, all as though such payment had not
been made.
14. Definitions. All terms used herein shall be defined in
accordance with the appropriate definitions appearing in the
Uniform Commercial Code as in effect in New York, and such
definitions are hereby incorporated herein by reference and made
a part hereof.
15. Entire Agreement. This Agreement, together with the
Credit Agreement, the Guaranty Agreement and other Loan
Documents, constitutes and expresses the entire understanding
between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings,
inducements, commitments or conditions, express or implied, oral
or written, except as herein contained. The express terms hereof
control and supersede any course of performance or usage of the
trade inconsistent with any of the terms hereof. Neither this
Agreement nor any portion or provision hereof may be changed,
altered, modified, supplemented, discharged, canceled,
terminated, or amended orally or in any manner other than by an
agreement, in writing signed by the parties hereto.
16. Further Assurances. Each Pledgor agrees at its own
expense to do such further acts and things, and to execute and
deliver such additional conveyances, assignments, financing
statements, agreements and instruments, as the Agent may at any
time reasonably request in connection with the administration or
enforcement of this Agreement or related to the Collateral or any
part thereof or in order better to assure and confirm unto the
Agent its rights, powers and remedies for the benefit of the
Lenders hereunder. Each Pledgor hereby consents and agrees that
the issuers of or obligors in respect of the Collateral shall be
entitled to accept the provisions hereof as conclusive evidence
of the right of the Agent, on behalf of the Lenders, to exercise
its rights hereunder with respect to the Collateral,
notwithstanding any other notice or direction to the contrary
heretofore or hereafter given by the Pledgors or any other Person
to any of such issuers or obligors.
17. Binding Agreement; Assignment. This Agreement, and the
terms, covenants and conditions hereof, shall be binding upon and
inure to the benefit of the parties hereto, and to their
respective successors and assigns, except that no Pledgor shall
assign this 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 Agent as Collateral
under this Agreement. All references herein to the Agent shall
include any successor thereof, each Lender and any other obligees
from time to time of the Secured Obligations.
18. Swap Agreements. All obligations of the Borrower under
Swap Agreements to which any Lender or its affiliates are a party
shall be deemed to be Secured Obligations secured hereby, and
each Lender or affiliate of a Lender party to any such Swap
Agreement shall be deemed to be a Secured Party hereunder.
19. Severability. In case any Lien, security interest or
other right of any Secured Party or any provision hereof shall be
held to be invalid, illegal or unenforceable, such invalidity,
illegality or unenforceability shall not affect any other Lien,
security interest or other right granted hereby or provision
hereof.
20. Counterparts. This Agreement may be executed in any
number of counterparts and all the counterparts taken together
shall be deemed to constitute one and the same instrument.
21. Indemnification. Without limitation of Section 12.9 of
the Credit Agreement or any other indemnification provision in
any Loan Document, each Pledgor hereby covenants and agrees to
pay, indemnify, and hold the Secured Parties harmless from and
against any and all other out-of-pocket liabilities, costs,
expenses or disbursements of any kind or nature whatsoever
arising in connection with any claim or litigation by any Person
resulting from the execution, delivery, enforcement, performance
and administration of this Agreement, including without
limitation expenses incurred pursuant to Section 3(b) hereof, or
the Loan Documents, or the transactions contemplated hereby or
thereby, or in any respect relating to the Collateral or any
transaction pursuant to which the Assignor has incurred any
Obligation (all the foregoing, collectively, the "indemnified
liabilities"); provided, however, that the Assignor shall have no
obligation hereunder with respect to indemnified liabilities
directly or primarily arising from the willful misconduct or
gross negligence of the Agent or any Lender. The agreements in
this Section 21 shall survive repayment of all Secured
Obligations, termination or expiration of this Agreement and
occurrence of the Collateral Termination Date.
22. Termination. This Agreement and all obligations of the
Pledgors hereunder shall terminate on the Collateral Termination
Date, at which time the Liens and rights granted to the Agent for
the benefit of the Lenders hereunder shall automatically
terminate and no longer be in effect, and the Collateral shall
automatically be released from the Liens created hereby. Upon
such termination of this Agreement, the Agent shall, at the sole
expense of the Pledgors, deliver to the Pledgors the certificates
evidencing the Pledged Stock or terminated registrar's
certificates with respect to all other Pledged Interests (and any
other property received as a dividend or distribution or
otherwise in respect of the Pledged Interests then in its
custody), together with any cash then constituting the
Collateral, not then sold or otherwise disposed of in accordance
with the provisions hereof and take such further actions as may
be necessary to effect the same and as shall be reasonably
acceptable to the Agent.
23. Additional Shares. If any Pledgor shall acquire or
hold (a) any additional shares of capital stock of any Pledged
Subsidiary or (b) any shares of capital stock or any other equity
of ownership interest of any Subsidiary not listed on Schedule I
hereto which are required to be subject to a Pledge Agreement
pursuant to the terms of Article IV, Section 8.19 or any other
provision of the Credit Agreement (any such shares described in
clauses (a) or (b) above being referred to herein as the
"Additional Interests"), such Pledgor shall deliver to the Agent
for the benefit of the Lenders (i) a revised Schedule I hereto
reflecting the ownership and pledge of such and (ii) a Pledge
Agreement Supplement in the form of Exhibit A hereto with respect
to such Additional Interests duly completed and signed by such
Pledgor. Each Pledgor shall comply with the requirements of this
Section 23 concurrently with the acquisition of any such
Additional Interests in the case of shares described in clause
(a) above, and within the time period specified in Article IV or
elsewhere in the Credit Agreement with respect to shares
described in clause (b) above.
24. Remedies Cumulative. All remedies hereunder are
cumulative and are not exclusive of any other rights and remedies
of the Agent provided by law or under the Credit Agreement, the
other Loan Documents, or other applicable agreements or
instruments. The making of the Loans to the Borrower pursuant to
the Credit Agreement, and the issuing of Letters of Credit for
the benefit of, shall be conclusively presumed to have been made
or extended, respectively, in reliance upon each Assignor's
assignment of the Assigned Interests pursuant to the terms
hereof.
25. Notices. Any notice required or permitted hereunder
shall be given, (a) with respect to any Pledgor, care of the
Borrower at its address indicated in Section 12.2 of the Credit
Agreement and (b) with respect to the Agent or a Lender, at the
Agent's address indicated in Section 12.2 of the Credit
Agreement. All such notices shall be given and shall be
effective as provided in Section 12.2 of the Credit Agreement.
26. Governing Law; Venue; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED,
IN SUCH STATE NOTWITHSTANDING ITS EXECUTION AND DELIVERY
OUTSIDE SUCH STATE.
(b) EACH PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY
AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY
STATE OR FEDERAL COURT SITTING IN THE COUNTY OF NEW YORK,
STATE OF NEW YORK, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER
IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUCH SUIT, ACTION OR PROCEEDING.
(c) EACH PLEDGOR AGREES THAT SERVICE OF PROCESS MAY BE
MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE
PREPAID) TO THE ADDRESS OF THE BORROWER PROVIDED IN SECTION
12.2 OF THE CREDIT AGREEMENT, OR BY ANY OTHER METHOD OF
SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN
THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) or (c) HEREOF
SHALL PRECLUDE ANY SECURED PARTY FROM BRINGING ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN THE COURTS OF ANY
JURISDICTION WHERE ANY PLEDGOR OR ANY OF SUCH PLEDGOR'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION,
EACH PLEDGOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY
SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE
OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER
COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE
UNDER APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED
OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION
THEREWITH, EACH PLEDGOR AND THE AGENT ON BEHALF OF THE
SECURED PARTIES HEREBY AGREE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY
IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY
SUCH ACTION OR PROCEEDING.
IN WITNESS WHEREOF, the parties have duly executed this
Pledge Agreement on the day and year first written above.
PLEDGORS:
HEADWAY CORPORATE RESOURCES, INC.
By: (Signature)
WHITNEY PARTNERS, L.L.C.
By: (Signature)
HEADWAY CORPORATE STAFFING
SERVICES, INC.
HEADWAY CORPORATE STAFFING SERVICES
OF CONNECTICUT, INC.
HCSS EAST, INC.
HCSS HOLDINGS, INC.
By: (Signature)
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: (Signature)