UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934.
DYNAMIC ASSOCIATES, INC.
(Exact name of registrant as specified in its charter)
NEVADA 33-55254-03 87-0473323
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
7373 North Scottsdale Road, Suite B-150
Scottsdale, Arizona 85253
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 483-8700
AMENDMENT NO. 2
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its CURRENT REPORT on Form 8-K dated
August 27, 1996 as set forth in the pages attached hereto:
Letter agreement with Genesis Health Management Corporation. Page 3
Promissory note to Genesis shareholders (Exhibit A) Page 8
Pledge agreement with Genesis shareholders (Exhibit B) Page 9
Audited Financial Statements of Genesis Health Management Corporation will
be filed within the required time period.
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dynamic Associates, Inc.
Date: December 17, 1996 /s/ Logan B. Anderson
Logan B. Anderson, Secretary/Treasurer
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A. L. Blondeau
Attorney At Law
10124 Jefferson Highway (504) 293-2700
Baton Rouge, Louisiana 70809 Telefax (504) 293-2730
November 25, 1996
VIA TELEFAX
(602) 443-1235
AND OVERNIGHT MAIL
Harry Moll Jan Wallace
Scottsdale Centre, Suite B-150 Scottsdale Centre, Suite B-150
7373 North Scottsdale Road 7373 North Scottsdale Road
Scottsdale, Arizona 85253 Scottsdale, Arizona 85253
Genesis Acquisition Corporation Dynamic Associates, Inc.
Attn: Jan Wallace Scottsdale Centre, Suite B-150
Scottsdale Centre, Suite B-150 7373 North Scottsdale Road
7373 North Scottsdale Road, Scottsdale, Arizona 85253
Scottsdale, Arizona 85253
LETTER AGREEMENT
RE: Acquisition of Genesis Health Management Corporation ("Genesis") by Dynamic
Associates, Inc. ("Dynamic")
Gentlemen:
This is to acknowledge that you have informed us that Dynamic may be unable
to raise sufficient funds to close the referenced transaction on the stipulated
Closing Date of December 2, 1996. You have requested that we modify the
Acquisition Agreement to substitute a promissory note of Dynamic for a portion
of the cash consideration due at Closing to the Genesis Shareholders under the
terms of that agreement. We are agreeable to the following modifications to the
Acquisition Agreement with respect to the cash portion of the consideration due
by Dynamic at Closing:
1. Prior to the Closing Date, Genesis will make cash distributions (the
"Distributions") to the current Genesis Shareholders in a total amount equal to
fifty (50%) percent of the undistributed taxable income of Genesis for the 1996
tax year as of the December 2, 1996, Closing Date. Pursuant to your request,
Genesis, in calculating that undistributed taxable income figure, has written
off the past due balances due to Genesis by Independent Healthcare Management,
Inc., Independent Healthcare Management of Holly Springs, Inc., and the North
Sunflower County Hospital. In the event that all or any portion of those
write-offs are
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subsequently collected by Genesis Acquisition Corporation ("GAC"), Dynamic and
GAC will hold the Genesis Shareholders free and harmless from any additional
income taxes, penalties, etc. which may be due by those shareholders on account
of such collections. We have agreed that the Distributions will total Nine
Hundred Thousand ($900,000.00) Dollars. The Distributions will be funded by the
withdrawal of Seven Hundred and Fifty Thousand ($750,000.00) Dollars from
Genesis's cash on hand and, further, by a loan to Genesis from a financial
institution in the amount of One Hundred and Fifty Thousand ($150,000.00), at
that institution's customary commercial loan interest rate. That loan (the
"Distribution Loan") will be payable, in full, on or before December 31, 1996.
To reflect payment of the Distributions by Genesis to the Genesis
Shareholders, Dynamic's obligation under Section 2.2(a) of the Acquisition
Agreement (with respect to the cash portion of the purchase price ) will be
amended to reflect an obligation to pay the Genesis Shareholders on Closing the
sum of Fifteen Million ($15,000,000.00) Dollars as follows:
a) A deposit of Six Hundred Thousand ($600,000.00) Dollars, paid by
Dynamic and to be released to the Genesis Shareholders on Closing
pursuant to Section 12.2 of the Acquisition Agreement;
b) A cash payment (by bank draft, certified check or wire transfer) of
Eleven Million Four Hundred Thousand ($11,400,000.00) Dollars on
Closing, as contemplated by paragraph 2 of this letter; and
c) The issue of promissory note in the amount of Three Million
($3,000,000.00) Dollars on Closing, as contemplated by paragraph 3 of
this letter.
2. At the Closing, Dynamic will deliver certified funds to our attorney, A.
L. Blondeau, payable to "A. L. Blondeau, Attorney at Law, as Agent and Attorney
in fact for the Genesis Shareholders", in the amount of Eleven Million Four
Hundred Thousand ($11,400,000.00) Dollars. That sum, together with the Six
Hundred Thousand ($600,000.00) Dollars deposit previously made by Dynamic, shall
constitute the total sum of Twelve Million ($12,000,000.00) Dollars to be paid
in cash by Dynamic at the Closing.
3. Dynamic shall also deliver to the said A. L. Blondeau at the Closing
Dynamic's promissory note (the "Note"), in the principal amount of Three Million
($3,000,000.00) Dollars, payable to the Genesis Shareholders. Said note shall
bear interest at the rate of ten (10%) percent per annum and shall be payable in
eight (8) "interest only" monthly installments of Twenty-five Thousand
($25,000.00) Dollars, commencing January 2, 1997, and a final "balloon" payment
of all outstanding principal and interest on September 2, 1997. Said Note shall
be in the form attached hereto, and made a part hereof, as Exhibit "A". The
installment and balloon payments on the Note shall be made payable to "A. L.
Blondeau, as agent and attorney in fact for the Genesis Shareholders" and shall
be delivered to him at 10124 Jefferson Highway, Baton Rouge, Louisiana, 70809.
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4. The Note shall be secured by a pledge by Dynamic of Fifty-one (51%)
percent of the authorized stock of Genesis Acquisition Corporation; which said
Pledge shall be evidenced by a Pledge Agreement in the form attached hereto and
made a part hereof as Exhibit "B". The pledged stock certificate(s) and the
pledge agreement shall be delivered to A. L. Blondeau, as agent and attorney in
fact for the Genesis Shareholders, at the Closing.
5. Dynamic, GAC, Harry Moll and Jan Wallace (the "Dynamic Group") agrees
that until such time as the Note is paid in full, no distributions, dividends,
disbursements, or other payments outside of the normal course of business
operations shall be made by GAC except for the following purposes:
a) The required payments on the Distribution Loan;
b) Interest payments on any debentures or bonds issued by Dynamic
Associates, Inc.; and
c) Any interest payments, or payments of principal, on the Note.
6. The Dynamic Group further agrees that the net proceeds, after any
required brokerage fees, of any bond, or any other loan or debt instrument made,
and/or issued by Dynamic subsequent to November 20, 1996, shall be immediately
paid to A. L. Blondeau, as the agent and attorney in fact for the Genesis
Shareholders, and applied by them to the outstanding balance of the Note.
Notwithstanding any of the above, it is agreed that Dynamic may utilize any such
net proceeds to pay reasonable attorney's fees related to the Acquisition
Agreement and/or the issuance of any bonds issued by Dynamic and purchased on or
before November 20, 1996; provided that such fees do not, in the aggregate,
exceed the sum of Seventy-five Thousand ($75,000.00) Dollars.
7. The Dynamic Group further agrees that, until such time as the Note is
paid in full, GAC will not, without the written consent of the Genesis
Shareholders:
a) Amend or alter its Articles of Incorporation or By-laws;
b) Issue any additional stock of any sort, type, or class whatsoever;
c) Declare any stock splits or stock dividends; or
d) Sell, transfer, encumber, or otherwise grant a security interest in,
any of its authorized stock including, without limitation, the stock
pledged to the Genesis Shareholders pursuant to the above referenced
Pledge Agreement.
Except for the modifications stipulated herein, all of the existing terms
and conditions of the Acquisition Agreement shall remain in full force and
effect including, without limitation, those relating to the Dynamic Stock to be
transferred to the Genesis Shareholders for the remaining portion of the
consideration due by Dynamic at the Closing.
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In the event that the Dynamic Group does not close the transaction
stipulated in the Acquisition Agreement, as modified herein, on December 2, 1996
[for any reason other than the failure of Genesis and/or the Genesis
Shareholders and/or W. A. Lucky, III or Michael Asbury to deliver to Dynamic
and/or GAC those documents and/or agreements stipulated in Sections 2.2, 3.2(g),
8.2, 8.3, 8.4 or 10.1(b), inclusive, of the Acquisition Agreement]; Dynamic
acknowledges that it will be in default of said Agreement and agrees that the
Genesis Shareholders may immediately declare the existing Six Hundred Thousand
($600,000.00) Dollars Deposit forfeited. In such event, A. L. Blondeau is hereby
expressly authorized to immediately deliver possession and ownership of the said
deposit to the Genesis Shareholders.
If the matters set forth above are agreeable to you, please so indicate by
affixing your signatures to the enclosed duplicate original of this letter and
returning that duplicate original to me by overnight mail.
Sincerely,
The Genesis Shareholders and
Genesis Health Management Corp.
By: /s/ A.L. Blondeau, Jr.
A. L. Blondeau, Jr., Attorney at Law, as duly authorized agent for the
Genesis Shareholders and Genesis Health Management Corp.
AGREED TO ON THIS 26th DAY OF NOVEMBER, 1996:
/s/ Jan Wallace
Jan Wallace, Individually
/s/ Harry Moll
Harry Moll, Individually
DYNAMIC ASSOCIATES, INC.
By: /s/ Jan Wallace
Jan Wallace, President
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GENESIS ACQUISITION CORPORATION
By: /s/ Jan Wallace
Jan Wallace, President
ALB/jmh
Attachments
cc: W. A. Lucky, III
Vickie T. Lucky
Claudine D. Blondeau
Mary A. Roberts
J. T. Simmons
William H. Means, Jr.
Genesis Health Management Corp.
Ed Kaftal
Alb\gen\mgdynltr.wpd
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(Exhibit A)
PROMISSORY NOTE
Amount: $3,000,000.00 Scottsdale, ARIZONA
DECEMBER 2, 1996
For value received, DYNAMIC ASSOCIATES, INC. promises to pay to the order
of VICKIE T. LUCKY, J. T. SIMMONS, CLAUDINE D. BLONDEAU, WILLIAM H. MEANS, JR.,
and MARY A. ROBERTS the sum of THREE MILLION ($3,000,000.00) DOLLARS, with
interest at the rate of ten (10%) per cent per annum from date until paid,
payable at Baton Rouge, Louisiana, on the following terms and conditions:
Eight (8) monthly interest payments of Twenty-five Thousand ($25,000.00)
Dollars on the second day of each month, commencing January 2, 1997, and a
final payment of all outstanding principal and interest on September 2,
1997.
Payments, as received, shall be imputed first to payment of interest and
thereafter to principal until payment of the entire obligation. Default in the
payment of any single installment shall, at the option of the holder hereof,
without notice of default, mature the entire obligation. Obligor reserves the
right to pre-pay all or any part of this obligation without penalty. All makers,
endorsers and sureties hereto hereby severally waive presentment for payment,
demand, protest, notice of protest for nonpayment and all pleas of division and
discussion and agree that payment hereof may be extended without notice thereof.
In the event this note is placed in the hands of an attorney for collection of
same or any part thereof, including interest, whether with or without suit, to
pay attorney's fees which are hereby fixed at Fifteen (15%) per cent of the
amount due.
DYNAMIC ASSOCIATES, INC.
By: /s/ Jan Wallace
Jan Wallace, President
"Ne Varietur" to identify with an Act of
Pledge passed before me on
December 2, 1996
/s/ Gail L. Ward
Notary Public
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(Exhibit B)
PLEDGE AGREEMENT
BY: DYNAMIC ASSOCIATES, INC. STATE OF ARIZONA
TO: VICKIE T. LUCKY, J. T. SIMMONS COUNTY OF Maricopa
CLAUDINE D. BLONDEAU, MARY A.
ROBERTS, and WILLIAM H. MEANS, JR.
Before me, the undersigned notary public, and in the presence of the two
undersigned competent witnesses, came and appeared: DYNAMIC ASSOCIATES, INC.,
represented herein by its President, Jan Wallace, duly authorized (hereinafter
referred to as "Pledgor"), and VICKIE T. LUCKY, J. T. SIMMONS, CLAUDINE D.
BLONDEAU, MARY A. ROBERTS and WILLIAM H. MEANS, JR., each of the full age of
majority (hereinafter jointly referred to as "Pledgee"); represented herein by
A. L. Blondeau, their Agent and Attorney in Fact, duly authorized, who being
duly sworn did declare and state that:
I. PLEDGE AND GRANT OF SECURITY INTERESTS. In consideration and furtherance of
the terms and conditions of that certain "Acquisition Agreement", effective
August 1, 1996, by and between Pledgor, Pledgee, and various other parties
(as amended by that certain "Letter Agreement", dated November 25, 1996);
and in order to secure any and all payments due or to become due on
Pledgor's note to Pledgee (the "Note") in the original principal amount of
Three Million ($3,000,000.00) Dollars, dated with this act of pledge,
bearing interest at the rate of ten (10%) percent per annum and payable in
eight (8) monthly installments of interest only in the amount of
Twenty-five Thousand ($25,000.00) Dollars, commencing January 2, 1997, with
a final balloon payment of all outstanding principal and
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interest due on September 2, 1997 and, further, in order to secure
Pledgor's obligations to Pledgee under the aforementioned Acquisition
Agreement and Letter Agreement; Pledgor hereby pledges to Pledgee and
grants Pledgee a security interest in Five Hundred Ten Thousand (510,000)
shares of the common stock (the "Stock") of Genesis Acquisition
Corporation, a Louisiana corporation (the "Company"), represented by Stock
Certificate Number 2 of the Company delivered to Pledgee herewith,
duly endorsed in blank. Upon fulfillment by the Pledgor of all obligations
under the Note, the Collateral shall be returned to the Pledgor and this
Pledge Agreement shall be of no further force and effect.
II. WARRANTIES AND REPRESENTATIONS. Pledgor hereby warrants to Pledgee that:
(a) the Company is duly incorporated and validly existing under the laws of
the State of Louisiana; (b) Pledgor has taken all necessary corporate
action to authorize the execution, delivery and performance of this
Agreement and the Note, which constitute Pledgor's legally binding
obligations; (c) Pledgor is the sole owner of the Stock; (d) the Stock is
validly issued, is fully paid and non-assessable, and is not subject to any
encumbrance, claim, restriction or right other than under this Agreement;
(e) the Stock represents Fifty-one (51%) percent of the authorized, issued
and outstanding shares of the Company; (f) Pledgor may pledge and grant a
security interest in the Stock without obtaining the approval of any other
person, corporation, partnership, or other entity, or any governmental
authority; (g) there are no options, warrants, privileges or other rights
outstanding with respect to any of the Stock (or any other shares of the
Company); and (h) the Stock may be freely traded.
III. DELIVERY OF STOCK. Contemporaneous with the execution of this Agreement,
Pledgor will deliver to Pledgee's designated agent the above described
Stock including, without limitation, any and all certificates and/or
instruments evidencing Pledgor's Stock
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subject to this Agreement, appropriately endorsed in blank, together with
irrevocable stock powers also endorsed in blank. As long as this Agreement
remains in effect, Pledgor further agrees to immediately deliver to
Pledgee's designated agent any and all additions to and/or substitutions or
replacements for the Stock including, without limitation, any and all
future certificates representing the Stock subject hereto that may be
subsequently issued in favor of Pledgor or that are otherwise held or owned
by Pledgor.
IV. PLEDGOR'S OBLIGATIONS TO DELIVER STOCK CERTIFICATES, DIVIDENDS,
DISTRIBUTIONS, ETC. In the event that Pledgor should ever receive any: (a)
certificates and/or instruments representing any of the Stock including,
without limitation, any certificates and/or instruments representing a
stock dividend, or stock issued in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale of
assets, combination of shares, stock split, spin-off, or split-off or any
renewal or refinancing of any Stock; (b) options, warrants or rights,
whether as an addition to, or in substitution of, or exchange for, any of
the Stock, or otherwise; (c) non-cash dividends and/or other distributions
payable in property, including securities issued by third parties other
than the issuer(s) of the Stock; (d) cash and/or cash equivalent interest,
dividends or other distributions; and/or (e) proceeds and/or payments,
whether in cash or otherwise, derived or to be derived from the sale,
transfer, assignment, delivery or other distribution of the Stock; then
Pledgor shall accept the same (said items, together with the Stock, being
hereinafter sometimes referred to in globo as the "Collateral") as
Pledgee's agent in trust for and on behalf of Pledgee, and Pledgor shall
deliver them forthwith to Pledgee's designated agent in the exact form
received, with Pledgor's endorsement in blank, with the same to be held in
pledge,
11
subject to the terms and conditions of the Agreement, as collateral
security for repayment of the Note, as heretofore stated.
V. ASSIGNMENT OF INDEBTEDNESS; TRANSFER OF COLLATERAL. Pledgor hereby
recognizes and agrees that Pledgee may assign all or any portion of the
indebtedness to one or more third party creditors. Such transfers may
include, but are not limited to, sales of participation interests in the
Note. Pledgor specifically agrees and consents to all such transfers and
assignments and, further, waives any subsequent notice of such transfers or
assignments as may be provided under applicable Louisiana law. Pledgor
further agrees that Pledgee may transfer all or any portion of the
Collateral to such a third party assignee, in which case Pledgee will be
fully released from any and all of Pledgee's obligations and
responsibilities to Pledgor with regard to the transferred Collateral which
are assumed by such third party. Any third party creditor to whom the
Collateral is transferred will acquire all of Pledgee's rights and powers
with respect to the transferred Collateral, with Pledgee retaining all
powers and rights with regard to any of the Collateral which is not
transferred to another party.
VI. EVENTS OF DEFAULT. Any one or more of the following actions, omissions or
inactions shall constitute an Event of Default under this Agreement:
A. DEFAULT UNDER THE INDEBTEDNESS. Should Pledgor default in the payment
of any principal or interest due under the Note.
B. DEFAULT UNDER AGREEMENTS. Should Pledgor violate, or fail to fully
comply with any of the terms and conditions of: (a) this Agreement; or
(b) the Acquisition Agreement (as amended by the Letter Agreement of
November 25, 1996).
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C. INSOLVENCY. Should the suspension, failure or insolvency, however
evidenced, of Pledgor occur or exist.
D. READJUSTMENT OF INDEBTEDNESS. Should proceedings for readjustment of
indebtedness, reorganization, composition or extension under any
insolvency law be brought by or against Pledgor.
E. ASSIGNMENT FOR BENEFIT OF CREDITORS. Should Pledgor file proceedings
for a respite or make a general assignment for the benefit or
creditors.
F. RECEIVERSHIP. Should a receiver for all or any part of Pledgor's
property be applied for or appointed.
G. DISSOLUTION PROCEEDINGS. Should proceedings for the dissolution or
appointment of a liquidator of Pledgor be commenced.
H. FALSE STATEMENTS. Should any representation or warranty of Pledgor
made in connection with the Note or the Acquisition Agreement, as
amended, prove to be incorrect or misleading in any respect.
VII. RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Pledgee may exercise any one or more of
the following rights or remedies:
A. ACCELERATE INDEBTEDNESS. Pledgee, at its sole option, may accelerate
the maturity and declare and demand immediate payment in full of the
Note and any and all other indebtedness secured hereby in principal,
interest, costs, expenses, attorneys' fees and other fees and charges.
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B. SELL THE COLLATERAL. Sell the Collateral, at Pledgee's discretion, as
a unit or in parcels, at one or more public or private sales, or
through any exchange or broker, at such prices and on such terms as
Pledgee may deem best, for cash or on credit or future delivery,
without assumption of any credit risk, without any further demand or
notice upon Pledgor for performance, without appraisal, without the
intervention of any court and without any formalities other than those
provided herein. Any sale of the Collateral must be in a commercially
reasonable manner. At any such public or private sale or sales, the
Pledgee may itself become the purchaser of any and all of the pledged
property, free from any right of redemption on the part of Pledgor or
any party hereto, which right is hereby expressly waived, and the
Pledgee may thereafter hold and own the same in its own right
absolutely. For purposes of selling the Collateral, Pledgee has been
and is hereby made and constituted the agent of Pledgor, such agency
being coupled with an interest. Unless the Collateral is perishable or
threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Pledgee shall give or mail to Pledgor
notice at least ten (10) days in advance of the time and place of any
public sale, or of the date after which any private sale may be made.
Pledgor agrees that any requirement of reasonable notice is satisfied
if Pledgee mails notice by registered mail, return receipt requested,
addressed to Pledgor at the last address Pledgor has given Pledgee in
writing. If a public sale is held, there shall be sufficient
compliance with all requirements of notice to the public by a single
publication in any newspaper of general circulation in the parish or
county where the Collateral is located, setting forth the time and
place of sale and a brief property description of the property to be
sold. Pledgor agrees that any such sale shall be conclusively
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deemed to be conducted in a commercially reasonable manner if it is
made consistent with the standard of similar sales of collateral by
commercial banks in Bossier City, Louisiana. Pledgor recognizes that
Pledgee may not be able to effect a public sale on all or any part of
the Stock and/or other Collateral, and Pledgee may be compelled or
deem it best to resort to one or more private sales to a restricted
group of purchasers, who may be obligated to agree, among other
things, to acquire the Stock or other Collateral for their own account
for investment purposes only and not with a view of distribution or
resale. Pledgor acknowledges that any private sale of the Stock or
other Collateral may be at prices and on terms less favorable that
those of public sales, and Pledgor unconditionally agrees that such
private sales shall be deemed to have been made in a commercially
reasonable manner, and that Pledgee has no obligation to delay the
sale of any Stock to permit the issuer to register it for sale under
the Securities Act of 1933, as amended, or to qualify such Stock under
the "Blue Sky" laws of any state. Pledgor additionally agrees to use
Pledgor's best efforts to cause any issuer, transfer agent, or
registrar of the Stock to take all such actions and execute all such
documents as may be necessary or appropriate, upon request by Pledgee:
(a) to remove any restrictive legends placed on the Stock that are not
legally required; (b) to effect any sale or sales of the Stock in
accordance with Rule 144 of the Securities Act of 1933; and/or (c) to
effect any sale or other disposition of the Stock at any public or
private sale or other disposition.
C. PLEDGEE'S RIGHT TO VOTE STOCK. Immediately and without further notice,
upon the occurrence of any event of default under this Agreement,
whether or not the Stock may have previously been registered in the
name of Pledgee or in
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the name of Pledgee's nominee, Pledgee or its nominee shall have the
further right to exercise all voting rights with respect to the Stock.
Pledgee or its nominee shall have the further right to exercise any
and all additional corporate rights and all other conversion,
exchange, or subscription rights, privileges and/or options with
regard thereto, including, without limitation, the right to exchange
any and all shares of Stock upon the merger, consolidation,
reorganization, recapitalization or other readjustment of the
issuer(s) thereof, or upon the exercise by any such issuer(s) of any
rights, privileges or options pertaining thereto. Pledgee or its
nominee shall have the additional right to deliver the Stock to any
committee, depository, transfer agent, registrar or other designated
agency upon such terms and condition as Pledgee may determine, all
without liability except to account for property actually received by
Pledgee. Pledgee shall have no duty to exercise any of the foregoing
rights, privileges or options and shall not be responsible for any
failure to do so or delay in doing so. Pledgee may by written notice
to Pledgor, relinquish, either partially or completely in accordance
with any terms or conditions Pledgee may set forth in such notice, any
or all voting rights Pledgee may acquire pursuant to this Pledge
Agreement.
D. FORECLOSURE. Maintain a judicial suit for foreclosure and sale of the
Stock or other Collateral.
E. SPECIFIC PERFORMANCE. Pledgee may, in addition to the foregoing
remedies, or in lieu thereof, and in Pledgee's sole discretion,
commence an appropriate action or actions against Pledgor seeking
specific performance of any covenants contained herein, or in aid of
the execution or enforcement of any power herein granted.
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F. TRANSFER TITLE. Effect transfer of title upon sale of all or any part
of the Stock or other Collateral. For this purpose, Pledgor
irrevocably appoints Pledgee as its attorney-in-fact to execute any
required endorsements, assignments, and instruments in the name of
Pledgor and each of them (if more than one) as shall be necessary or
reasonable, in Pledgee's sole discretion.
G. OTHER RIGHTS AND REMEDIES. Have and exercise any or all of the rights
and remedies of a secured creditor under the provisions of the
Louisiana Commercial Laws (La. R.S. 10: 9-101, et seq.), at law, in
equity, or otherwise.
H. APPLICATION OF PROCEEDS AND PAYMENTS. Any and all proceeds, interest,
and/or profits that Pledgee actually receives and collects, whether
resulting from the public or private sale of the Collateral and/or
collection or exercise of any Pledgee's rights provided hereunder,
shall be applied first to reimburse Pledgee for its costs of
collecting the same (including, but not limited to, any attorney's
fees incurred by Pledgee and Pledgee's court costs, whether or not
there is a lawsuit, including any fees on appeal incurred by Pledgee
in connection with the collection or sale of the Collateral), with the
balance being applied to principal, interest, costs, expenses,
attorney's fees and other fees and charges under the Note, in such
order and with such preferences and priorities as Pledgee shall
determine within its sole discretion.
I. CUMULATIVE REMEDIES. All of Pledgee's rights and remedies, whether
evidenced by this Agreement or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election
by Pledgee to pursue any remedy shall not exclude pursuit of any other
remedy, and election to make expenditures or to take action to perform
an obligation of Pledgor under this Agreement, after
17
Pledgor's failure to perform, shall not affect Pledgee's right to
declare a default and to exercise its remedies. Nothing under this
Agreement or otherwise shall be construed so as to limit or restrict
the rights and remedies available to Pledgee following an Event of
Default, or in any way to limit or restrict the rights and ability of
Pledgee to proceed directly against Pledgor and/or to proceed against
any Collateral directly or indirectly securing the Note.
J. DELAY; WAIVER. The failure or delay by Pledgor in exercising any of
the Pledgor's rights hereunder or with respect to the Note or any
Collateral securing the Note in any instance shall not constitute a
waiver thereof in that or any other instance. Pledgor may waive its
rights only by an instrument in writing signed by Pledgee.
VIII.INDEMNIFICATION OF PLEDGEE. Pledgor agrees to indemnify, to defend and to
save and hold Pledgee harmless from any and all claims, suits, obligations,
damages, losses, costs, expenses (including without limitation, Pledgee's
reasonable attorney's fees), demands, liabilities, penalties, fines and
forfeitures of any nature whatsoever which may be asserted against or
incurred by Pledgee, arising out of or in any manner occasioned by this
Agreement or the rights and remedies granted to Pledgee hereunder. The
foregoing indemnity provision shall survive the cancellation of this
Agreement as to all matters arising or accruing prior to such cancellation,
and the foregoing indemnity provision shall further survive in the event
that Pledgee elects to exercise any of the remedies as provided under this
Agreement following any Event of Default hereunder.
IX. ADDITIONAL OBLIGATIONS OF PLEDGOR. Pledgor shall have the following
additional obligations under this Agreement:
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A. NO SALE OR ENCUMBRANCE. As long as this Agreement remains in effect,
Pledgor unconditionally agrees not to sell, option, assign, pledge, or
create or permit to exist any lien or security interest in or against
the Stock or Collateral in favor or any person other than Pledgee.
B. NO CONSENT TO ISSUANCE OF ADDITIONAL STOCK. Pledgor will not, without
the prior written approval of Pledgee, consent to, or approve of, the
issuance of any additional shares of any class of its capital stock or
any securities convertible by the holder thereof, or automatically
upon the occurrence or non- occurrence of any event or condition into,
or exchangeable for , any such shares, or any warrants, options,
rights or other commitments entitling any person to purchase or
otherwise acquire any such shares.
C. ADDITIONAL DOCUMENTS. Pledgor agrees, at any time, from time to time,
one or more times, upon written request by Pledgee, to execute and
deliver such further documents and do such further acts and things and
Pledgee may reasonably request, within Pledgee's sole discretion, to
effect the purposes of this Agreement and perfect Pledgee's security
interest in the Stock, including, without limitation, the execution
and filing of financing statements under the Uniform Commercial Code
in effect in any state.
D. NOTIFICATION OF PLEDGEE. Pledgor will promptly deliver to Pledgee all
written notices, and will promptly give Pledgee written notice of any
other notices received by Pledgor with respect to the Collateral.
E. GOVERNING LAW; AGENT FOR SERVICE OF PROCESS. This Agreement and
Pledgor's rights and Pledgee's obligations hereunder shall be governed
by and construed in accordance with the law of the State of Louisiana.
Pledgor agrees that
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any legal action or proceeding with respect to this Agreement or any
of the Collateral shall be brought in the District Court of the Parish
of Bossier, State of Louisiana; and, for the purpose of any such legal
action or proceeding, Pledgor hereby submit to the exclusive
jurisdiction of such courts and agrees not to raise and waive any
objection Pledgor may have based upon personal or subject matter
jurisdiction, venue, or forum non coveniens. Pledgor agrees not to
bring any action or other proceeding with respect to this Agreement in
any other court unless such courts of the State of Louisiana determine
that they do not have jurisdiction in the matter. For purposes of any
proceeding involving the Note and/orthis Agreement, Pledgor hereby
irrevocably appoints Ken Hickman, Attorney at law, of Shreveport,
Louisiana, as its agent to receive service of process.
X. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part
of this Agreement.
A. AMENDMENTS. This Agreement, constitutes the entire understanding and
agreement of the parties as to the matters set forth in this
Agreement. No alteration of or amendment to this Agreement shall be
effective unless given in writing and signed by the party or parties
sought to be changed or bound by the alteration or amendment.
B. CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of the same.
C. NOTICES. All notices required or permitted under this Agreement must
be in writing and will be considered as given on the day it is
delivered by hand or
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deposited in the U.S. Mail, by registered or certified mail, to the
following addresses:
a) Dynamic Associates, Inc.
Scottsdale Centre
7373 North Scottsdale Road, Suite B-150
Scottsdale, Arizona 85253
b) Vickie T. Lucky, J. T. Simmons, Claudine D. Blondeau,
Mary A. Roberts and William H. Means, Jr.
c/o A. L. Blondeau
Attorney at Law
10124 Jefferson Highway
Baton Rouge, Louisiana 70809
D. SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be
within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be stricken and
all other provisions of this Agreement in all other respects shall
remain valid and enforceable.
E. SOLE DISCRETION OF PLEDGEE. Whenever Pledgee's consent or approval is
required under this Agreement, the decision as to whether or not to
consent or approve shall be in the sole and exclusive discretion of
Pledgee and Pledgee's decision shall be final and conclusive.
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THUS DONE AND SIGNED in the presence of the undersigned witnesses and me,
Notary, on this 2nd day of December, 1996.
DYNAMIC ASSOCIATES, INC. VICKIE T. LUCKY, J. T. SIMMONS,
CLAUDINE D. BLONDEAU, MARY A. ROBERTS,
and WILLIAM H. MEANS, JR.
By: /s/ Jan Wallace By: /s/ A.L. Blodeau
Jan Wallace, President A. L. Blondeau
Their duly authorized agent and attorney
in fact.
WITNESSES:
/s/ SFX O'Neill
/s/ Edwin J. Kaftal
/s/ Gail L. Ward
Notary Public
Alb\lucky\gen\mgpldag2.wpd
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