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Exhibit 10.20
LOAN AND PLEDGE AGREEMENT
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LOAN AND PLEDGE AGREEMENT dated as of November __, 1997, between Xxxxxx
Holding Co. (PA), Inc., a Pennsylvania corporation (the "Lender"), and (the
"Borrower").
The parties hereto agree as follows:
1. AMOUNT AND TERMS OF THE LOAN.
1.1. THE LOAN. On the terms and subject to the conditions of
this Agreement, the Lender agrees to lend $______to the Borrower for the purpose
of enabling the Borrower to purchase shares of Class C Common Stock, par value
$0.01 per share, of the Lender (collectively, the "Purchased Shares"), said loan
is being made pursuant to the Xxxxxx Holding Co. (PA), Inc. 1997 Stock Loan Plan
(the "Plan"). Except as otherwise defined herein, capitalized terms used in this
Agreement have the respective meanings set forth in the Plan.
1.2. MATURITY DATE. Subject to the prepayment provisions of
subsections 1.3 and 1.4 and the acceleration provisions set forth below and in
Section 3 below, the Loan shall mature on November 24, 2004 (the "Maturity
Date"). Notwithstanding the foregoing, all principal and accrued but unpaid
interest outstanding under the Loan will automatically become due and payable on
the date the Borrower's employment with the Lender and its affiliates terminates
if the Borrower terminates employment before age 65 unless his employment
terminates (i) by reason of his death or Disability, or (ii) for a reason other
than Cause.
1.3. MANDATORY PREPAYMENTS AND PAYMENTS.
(a) In the event that any cash dividend or distribution is
paid by the Lender with respect to any Pledged Property relating to the
Loan, the Borrower shall make a mandatory prepayment with respect to
the Loan equal to the amount of such dividend or distribution, which
shall be applied first to accrued but unpaid interest under the Loan,
then to principal. Notwithstanding the foregoing, in the event that the
Committee under the Plan determines that the Borrower would recognize a
net increase in taxable income from the receipt of any such dividends
or distributions after giving effect to any deduction for the related
payment under the Loan, the Committee may in its discretion permit the
Borrower to retain a portion of the dividends or distributions so as to
be able to pay all or part of his related increase in taxes.
(b) Any cash received upon an exchange or conversion of
Pledged Property shall be applied to reduce the outstanding Loan
balance (with any accrued but unpaid interest being reduced first). Any
cash in excess of that applied to repay in full all principal and
interest outstanding under the Loan shall be paid to the Borrower.
(c) Borrower shall pay any accrued interest on the Loan on the
first day of each calendar quarter.
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(d) Borrower agrees to make annual principal payments on this
Note within two (2) business days of his receipt of his annual
employment bonus, if any, from Lender or a subsidiary of Lender in an
amount equal to percent (__%) of such bonus amount, net of applicable
state and federal taxes due thereon.
1.4 OPTIONAL PREPAYMENTS.
(a) The Borrower may make voluntary prepayments on the Loan at
any time without penalty in such minimum amounts as the Committee may
determine, which shall be applied first to accrued but unpaid interest,
and then to principal.
(b) In the event that the Borrower at any time desires to
obtain a release of all or part of any Pledged Property securing the
Loan, whether for the purpose of selling such Pledged Property or
otherwise, as a condition to the release, the Borrower shall make
arrangements satisfactory to the Lender for the prepayment by the
Borrower of an amount equal to the higher of (i) a percentage of the
outstanding Loan balance as of the date of the release equal to the
percentage in value of the Pledged Property sought to be released and
(ii) a sufficient portion of the outstanding Loan balance so that the
amount of the outstanding Loan balance remaining unpaid after giving
effect to such payment does not exceed fifty percent (50%) of the fair
market value of the Pledged Property, as determined in good faith by
the Committee, that will remain subject to this Agreement after giving
effect to the release, which shall be applied first to accrued but
unpaid interest under the Loan, then to principal.
1.5. EVIDENCE OF BORROWING. The Loan will be evidenced by a
promissory note in substantially the form attached as Exhibit A to this
Agreement (the "Note"). The Borrower will promptly execute and deliver to the
Lender any other instruments evidencing the Loan reasonably requested by the
Lender.
2. SECURITY.
2.1. GRANT OF SECURITY INTEREST. As security for the
Borrower's performance of this Agreement and the Borrower's indefeasible payment
in full of the Loan and all interest thereon in accordance with this Agreement,
the Borrower hereby pledges, hypothecates, assigns, transfers and delivers to
the Lender and grants the Lender a continuing security interest in the
Borrower's right, title and interest in and to the Pledged Property, to have and
to hold, together with all rights, titles, interests, privileges and preferences
appertaining or incidental thereto, unto the Lender, its successors and assigns,
forever, subject to the terms and conditions of this Agreement.
2.2. PERFECTION OF SECURITY INTEREST. Simultaneously with the
execution and delivery of this Agreement, the Borrower will deliver to the
Lender all instruments and certificates evidencing the Pledged Property and will
execute and deliver to the Lender stock powers or assignments in such forms as
may reasonably be requested by the Lender with respect to each such instrument
or certificate. The Borrower will perform all additional acts and execute all
other documents reasonably requested by the Lender at any time to further
evidence, perfect,
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maintain and enforce the Lender's security interest in the Pledged Property. The
Borrower will not pledge, hypothecate or grant a security interest in any of the
Pledged Property to any other person without the prior written consent of the
Lender.
2.3. VOTING AND OTHER RIGHTS OF THE BORROWER AND THE LENDER.
So long as no Event of Default (as described in subsection 3.1) has occurred and
is continuing, the Borrower will be entitled to vote and to exercise all other
rights and remedies with respect to the Pledged Property. Upon the occurrence
and during the continuance of an Event of Default, the Lender, subject to the
terms and conditions of this Agreement, will have the right, after the delivery
of written notice to the Borrower, to vote and to exercise all other rights and
remedies with respect to the Pledged Property.
2.4. RELEASE OF COLLATERAL. In the event of any prepayment of
principal under the Loan, the Lender will release from the pledge under this
Agreement a portion of the Pledged Property equal to the percentage of the
outstanding principal balance so paid, provided, that the Lender will retain
Pledged Property with an aggregate fair market value, as determined in good
faith by the Committee, equal to at least two hundred percent (200%) of the
outstanding Loan balance as of the date of the prepayment (after giving effect
to the prepayment).
3. EVENTS OF DEFAULT.
3.1. EVENTS OF DEFAULT. For purposes of this Agreement, any of
the following events will constitute an Event of Default:
(a) the Borrower fails to pay any amount due under the Loan
and the default remains uncured for a period of (10) days after the
date the Lender gives the Borrower notice of the default;
(b) the Borrower defaults under or breaches any other
covenant, representation or warranty under the Note, this Agreement or
any other agreement under the Plan and the default or breach remains
uncured for a period of thirty (30) days after the date the Lender
gives the Borrower notice of his default or breach;
(c) the Borrower applies for or consents to the appointment of
a receiver, trustee, custodian or liquidator of any of his property,
admits in writing his inability to pay his debts as they mature, makes
a general assignment as a bankrupt or insolvent or is the subject of an
order for relief under Chapter 7 or Chapter 13 of the United States
Bankruptcy Code or files a voluntary petition in bankruptcy or a
petition or answer seeking an arrangement with creditors to take
advantage of any bankruptcy, insolvency, readjustment or debt or
liquidation law or statute, or an answer admitting the material
allegations of a petition filed against him in any proceeding under any
such law; or
(d) any court of competent jurisdiction enters an order,
judgment or decree, without the application, approval or consent of the
Borrower, approving a petition appointing a receiver, trustee,
custodian or liquidator of all or a
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substantial part of the assets of the Borrower, and such order,
judgment or decree continues unstayed and in effect for a period of
thirty (30) days.
3.2. CONSEQUENCES OF EVENTS OF DEFAULT. If an Event of Default
occurs, the Lender may foreclose on the Pledged Property and may otherwise
enforce its rights under the Plan, the Note and any other agreement entered into
under the Plan.
4. GENERAL.
4.1. COMPLIANCE WITH WITHHOLDING. The Lender shall have the
right to require the Borrower to pay to the Lender the amount of any taxes that
are required to be withheld in connection with any repayment of a Loan, any
release of Pledged Property or any sale of Pledged Property. To the extent
permitted by the Committee, the Borrower may elect to have any distribution
otherwise required to be made under this Agreement to be withheld to fulfill any
tax withholding obligation.
4.2. AMENDMENT AND WAIVER. This Agreement may be amended by
written agreement of the Borrower and the Lender, without the consent of any
other person.
4.3. SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
4.4. COMPLETE AGREEMENT. This document and the documents
referred to herein contain the complete agreement between the parties and
supersede any prior understandings, agreements or representations by or between
the parties, written or oral, which relate to the subject matter hereof.
4.5. GOVERNING LAW. The provisions of this Agreement shall be
construed in accordance with the internal laws of the Commonwealth of
Pennsylvania.
4.6. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first written above.
BORROWER XXXXXX HOLDING CO. (PA), INC.
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Its
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