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STOCK PLEDGE AGREEMENT
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EQUITY HOLDINGS LIMITED
This STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of December l5,
1993, by EQUITY HOLDINGS LIMITED, an Illinois limited partnership (the
"Pledgor") with THE FIRST NATIONAL BANK OF BOSTON (the "Pledgee"). Capitalized
terms which are used herein without definition and which are defined in the
Loan Agreement referred to below shall have the same meanings herein as in the
Loan Agreement.
WHEREAS, Equity Holdings, an Illinois general partnership ("Equity
Holdings"), Equity-DQSB, Inc., an Illinois corporation ("Equity-DQSB"),
Riverside Partners, an Illinois limited partnership ("Riverside") and the
Pledgee wish to provide for the making of loans to the Pledgor, Equity
Holdings, Equity-DQSB, and Riverside (the Pledgor together with Equity
Holdings, Equity-DQSB and Riverside, the "Borrowers"), pursuant to a Loan
Agreement dated as of the date hereof (as amended and in effect from time to
time, the "Loan Agreement") among the Borrowers and the Pledgee; and
WHEREAS, in order to induce the Pledgee to enter into the Loan Agreement
and as a condition precedent thereto the Pledgor has agreed to enter into this
Agreement in order to secure the due and prompt payment and performance of the
obligations of the Pledgor and the other Borrowers now or hereafter arising
under the Loan Agreement and the other Loan Documents;
NOW, THEREFORE, in consideration of these premises (the foregoing recitals
being part of this Agreement), the Pledgor agrees with the Pledgee as follows:
Section 1. Pledge of Securities and Use of Proceeds. The Pledgor hereby
pledges, assigns and delivers to the Pledgee, the securities described on
Schedule 1 hereto to be held by the Pledgee or its agent subject to the terms
and conditions hereinafter set forth. The certificates for such securities,
accompanied by instruments of assignment thereof duly executed in blank by the
Pledgor, have been delivered to the Pledgee.
Section 2. Definitions.
(a) The term "Securities" as used herein includes any securities described
on Schedule 1 hereto and any additional securities of any corporation or
company at the time pledged with the Pledgee hereunder.
(b) The term "Obligations" as used herein means all indebtedness,
obligations and liabilities of the Pledgor or any of the other Borrowers to the
Pledgee under the Loan Agreement and the Note, in each case as such instrument
is originally executed or, if modified, amended, restated or extended after the
date hereof, as so
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modified, amended, restated or extended, whether such obligations are
now existing or hereafter arising, direct or indirect, absolute or contingent,
due or to become due, matured or unmatured, liquidated or unliquidated, arising
by contract, operation of law or otherwise.
(c) The term "Collateral" as used herein means the property, including,
without limitation, the property described on Schedule 1, at any time,
whether now or hereafter, pledged with the Pledgee hereunder (whether described
herein or not) and all income therefrom, increases therein and proceeds
thereof, other than income, increases or proceeds received by the Pledgor
pursuant to Section 6 hereof.
(d) The term "Event of Default" shall mean any of the following events:
default by the Pledgor in any of the terms, covenants or conditions of
this Agreement (which default shall continue for thirty (30) days after written
notice of such failure is given to the Pledgor), the occurrence of any Event of
Default under the Loan Agreement, the Note, or any other note or loan agreement
evidencing the Loan or any portion thereof, or default by the Pledgor in the
payment or performance of any Obligations.
Section 3. Security for Obligations. This Agreement and this pledge
of the Collateral hereunder is made with the Pledgee as security for
the Obligations.
Section 4. Liquidation, Recapitalization, etc. Any sums paid upon or
with respect to any of the Securities upon the liquidation or dissolution of any
issuer thereof shall be paid over to the Pledgee to be held by it as security
for the Obligations; and in case any distribution of capital shall be made on
or in respect of any of the Securities or any property shall be distributed
upon or with respect to any of the Securities pursuant to the recapitalization
or reclassification of the capital of the issuer thereof or pursuant to the
reorganization thereof, the property so distributed shall be delivered to the
Pledgee to be held by it as security for the obligations. All sums of money and
property paid or distributed in respect of the Securities upon such a
liquidation, dissolution, recapitalization or reclassification which are
received by the Pledgor shall, until paid or delivered to the Pledgee, be held
in trust for the Pledgee as security for the Obligations.
Section 5. Warranties. The Pledgor warrants that it has acquired the
Securities in good faith and without notice of any encumbrance or adverse claim
within the meaning of the Uniform Commercial Code, that it has not granted or
created with respect to the Securities any pledge, lien, security interest,
charge, option, restriction or other encumbrance except for the security
interest created by this Agreement, and that it has the power, authority and
legal right to pledge all of such Securities pursuant to this Agreement. The
Pledgor covenants that it will defend the Pledgee's security interest in such
Securities against the claims and
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demands of all persons whomsoever; and the Pledgor covenants that it will have
the like title to and right to pledge any additional Collateral and will
likewise defend the Pledgee's rights and security interest therein.
Section 6. Dividends, Voting Prior to Maturity. Unless and until an
Event of Default shall have occurred, the Pledgor shall be entitled
to receive all cash dividends paid in respect of the Securities, to exercise
any voting rights accruing to the Securities, and to give consents, waivers,
and ratifications in respect of the Securities; provided, however, that no vote
shall be cast, or consent, waiver or ratification given or action taken which
would be inconsistent with or violate any provisions of this Agreement or any
note or loan agreement evidencing the Loan; and provided, further, that the
Pledgee may at any time after an Event of Default cause the Securities to be
transferred into its own name or that of its nominee or nominees, as collateral
security. All such rights of the Pledgor to receive cash dividends or other
distributions shall cease upon the occurrence of an Event of Default. All such
rights of the Pledgor to vote and give consents, waivers and ratifications with
respect to the Securities shall, at Pledgee's option as evidenced by Pledgee's
notifying Pledgor of such election, cease upon the occurrence of an Event of
Default.
Section 7. Remedies. If an Event of Default shall have occurred, unless
such Event of Default shall have been remedied, the Pledgee shall have the
following rights and remedies (to the extent permitted by applicable law) in
addition to the rights and remedies of a secured party under the Uniform
Commercial Code of Massachusetts, all such rights and remedies being
cumulative, not exclusive, and enforceable alternatively, successively or
concurrently, at such time or times as the Pledgee deems expedient:
(a) the Pledgee shall have the sole and exclusive right and
authority to receive, retain and use all cash dividends and other
proceeds payable on or in respect of all or any of the Securities and
shall apply the same as provided below in this Section 7 with respect to
proceeds of sales or dispositions. If any cash dividends or other proceeds
shall be paid, remitted or distributed to the undersigned Pledgor on all or
any of the Securities, the undersigned Pledgor will hold all of the said
cash dividends and other proceeds in trust for the Pledgee without
commingling the same with any other funds or property of the Pledgor, and,
promptly after the Pledgor's receipt thereof, the Pledgor will pay or
deliver the same directly to the Pledgee;
(b) if the Pledgee so elects and gives notice of such election
to Pledgor, the Pledgee may exercise any voting rights accruing to the
Securities (whether or not the same shall have been transferred into its
name or the name of its nominee or nominees) and give all consents,
waivers and ratification's in respect of the Securities and otherwise act
with respect thereto as though it were the outright owner thereof (after
an Event of Default the Pledgor hereby irrevocably constituting and
appointing
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the Pledgee the proxy and attorney-in-fact of the Pledgor, with full power of
substitution, to do so);
(c) the Pledgee may demand, ▇▇▇ for, collect or make any
compromise or settlement the Pledgee deems suitable in respect of any
Collateral held by it hereunder;
(d) the Pledgee may sell, resell, assign and deliver, or
otherwise dispose of any or all of the Collateral, for cash and/or
credit and upon such terms, at such place or places and at such time or
times and to such persons, firms, companies or corporations as the Pledgee
thinks expedient subject to applicable requirements of Federal securities
laws, after notice to Pledgor but without demand for performance by the
Pledgor or any other notice or advertisement whatsoever except such as may
be required by law; and
(e) the Pledgee may cause all or any part of the Securities
held by it to be transferred into its name or the name of its nominee
or nominees, if it has not already done so.
If any of the Collateral is sold by the Pledgee upon credit or for future
delivery, the Pledgee shall not be liable for the failure of the purchaser to
pay the same and, in such event, the Pledgee may resell such Collateral. The
Pledgee may buy any part or all of the Collateral at any public or private sale
and may make payments thereof by any means. The Pledgee may apply the proceeds
actually received from any sale or other disposition to the reasonable expenses
of retaking, holding, preparing for sale, selling and the like, to reasonable
attorneys' fees, and to all legal expenses, travel and other expenses which
may be incurred by the Pledgee in attempting to collect the Obligations or to
enforce this Agreement or in the prosecution or defense of any action or
proceeding related to the subject matter of this Agreement; and then to the
Obligations in the order set forth in Section 12 hereof, and any surplus shall
be paid to the Pledgor.
The Pledgor recognizes that the Pledgee may be unable to effect a public
sale of the Securities by reason of certain prohibitions contained in the
Securities Act of l933, as amended, and that, after making reasonable efforts,
Pledgee may be compelled to resort to one or more private sales thereof to a
restricted group of purchasers. The Pledgor agrees that any such private sales
may be at prices and on other terms less favorable to the seller than if sold
at public sales and that such private sales shall not by reason thereof be
deemed not to have been made in a commercially reasonable manner. The Pledgee
shall be under no obligation to delay a sale of any of the Securities for the
period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act of 1933, as amended,
even if the issuer would agree to do so.
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Section 8. Marshalling. The Pledgee shall not be required to marshal
any present or future security for (including, but not limited to, this
Agreement and the Collateral pledged hereunder), or guaranties of, the
Obligations or any of them, or to resort to such security or guaranties in any
particular order; and all of its rights hereunder and in respect of such
securities and guaranties shall be cumulative and in addition to all other
rights, however existing or arising. To the extent that it lawfully may, the
Pledgor hereby agrees that it will not invoke any law relating to the
marshalling of collateral which might cause delay in or impede the enforcement
of the Pledgee's rights under this Agreement or under any other instrument
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or guaranteed, and to
the extent that it lawfully may the Pledgor hereby irrevocably waives the
benefits of all such laws.
Section 9. Pledgor's Obligations Not Affected. The
obligations of the Pledgor hereunder shall remain in full force and
effect without regard to, and shall not be impaired by (a) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition, liquidation
or the like of the Pledgor; (b) any exercise or nonexercise, or any waiver, by
the Pledgee or the Pledgor of any right, remedy, power or privilege under or in
respect of any of the Obligations or any security thereof (including this
Agreement); (c) any amendment to or modification of any note or loan agreement
evidencing modification of any instrument (other than this Agreement) securing
any of the Obligations; or (e) the taking of additional security for, or any
guaranty of, any of the Obligations or the release or discharge or termination
of any security for or guaranty of any of the Obligations; whether or not the
Pledgor shall have notice or knowledge of any of the foregoing.
Section 10. Transfer by Pledgor. Without the prior written
consent of the Pledgee, the Pledgor will not sell, assign, transfer or
otherwise dispose of, grant any option with respect to, or pledge or grant any
security interest in or otherwise encumber any of the Collateral or any
interest therein, except for the pledge thereof provided for in this Agreement.
Section ll. Further Assurances. The Pledgor will do all such
acts, and will furnish to the Pledgee all such financing statements,
certificates, legal opinions and other documents, and will obtain all such
governmental consents and corporate approvals, and will do or cause to be done
all such other things, as the Pledgee may reasonably request from time to time
in order to give full effect to this Agreement and to secure the rights of the
Pledgee hereunder.
Section 12. Pro-Rata Security. All amounts owing with respect
to the Obligations shall be equally and ratably secured by, and
proportionately entitled to the benefits of, the Collateral, provided, that the
costs, fees and expenses of the Pledgee in enforcing its rights hereunder shall
constitute a first claim on all the Collateral and be entitiled to priority
over all other Obligations in respect of all distributions of any proceeds from
any portion of the Collateral.
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Section 13. Exoneration. Under no circumstances shall the Pledgee be
deemed to assume any responsibility for or obligation or duty with respect to
any part or all of the Collateral of any nature or kind, other than the
physical custody thereof, or any matter or proceedings arising out of or
relating thereto. The Pledgee shall not be required to take any action of any
kind to collect, preserve or protect its or the Pledgor's rights in the
Collateral. The prior recourse of the Pledgee to any part or all of the
Collateral shall not constitute a condition of any demand, suit or proceeding
for payment or collection of the Obligations.
Section 14. No Waiver; Expenses. (a) No act, failure or delay by the
Pledgee shall constitute a waiver of its rights and remedies hereunder or
otherwise. No single or partial waiver by the Pledgee of any default or right
or remedy which it may have shall operate as a waiver of any other default,
right or remedy or of the same default, right or remedy on a future occasion.
The Pledgor hereby waives presentment, notice of dishonor and protest of all
instruments included in or evidencing any of the Obligations or the Collateral
and any and all other notices and demands whatsoever (except as expressly
provided herein).
(b) The Pledgor agrees to reimburse the Pledgee for, and to indemnify
Pledgee against, any and all losses, expenses and liabilities (including
liabilities for penalties) of whatsoever kind or nature sustained and incurred
in connection with any claim, demand, suit, or legal or arbitration proceeding
relating to this Agreement or the exercise of any rights or powers hereunder,
including reasonable attorneys' fees and disbursements.
Section 15. Notices. All notices and communications pursuant to
this Agreement shall be in writing, either delivered in hand or sent by
certified or registered mail, postage prepaid, or sent by telex or telegraph,
addressed as follows: (a) if to the Pledgor, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Telex No. 28-2576), Attention: Senior Vice
President Finance, with a copy to: ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq.; (b) if to the Pledgee, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Telex No. 94-0581), Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Managing
Director; or (c) to such other addresses or by way of such other telex numbers
as any party hereto shall have designated in a written notice to the other
parties hereto. Any notice or other communication pursuant to this Agreement
shall be deemed to have been duly given or made and to have become effective
when delivered in hand to a responsible officer of the party to which it is
directed, or, if sent by certified or registered mail, postage prepaid, or by
telex or telegraph, and properly addressed in accordance with the foregoing
provisions of this Section 15, (i) when received by the addressee, or (ii) on
the fifth day following the day of the dispatch thereof, whichever of (i) or
(ii) shall be the earlier.
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IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this Agreement
to be duly executed and delivered as of the date first above written.
EQUITY HOLDINGS LIMITED,
an Illinois limited partnership
By: ▇▇▇▇▇▇ ▇▇▇▇ Revocable Trust established
under Trust Agreement dated
January 17, 1990, general partner
By: /s/
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▇▇▇▇▇▇ ▇▇▇▇, Trustee
By: ▇▇▇▇▇▇ ▇. and B. ▇▇▇ ▇▇▇▇▇ Trust
established under Trust Agreement
establishing the ▇▇▇▇▇▇ ▇▇▇▇▇
Revocable Trust dated
December 19, 1989, general partner
By: /s/
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Trustee
THE FIRST NATIONAL BANK OF BOSTON
By: /s/
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Managing Director
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Schedule 1
to
STOCK PLEDGE AGREEMENT
of Equity Holdings, Limited
(as amended from time to time)
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220,046 shares of common stock, $.01 par value per share, of Great American
Management, Inc., a Delaware corporation, certificate number C 3788.
380,017 shares of common stock, $.01 par value per share, of Great American
Management, Inc., a Delaware corporation, certificate number C 4318.
25,000 shares of common stock, $.01 par value per share, of Great American
Management, Inc., a Delaware corporation, certificate number C 4843.
10,000 shares of common stock, $.01 par value per share, of Great American
Management, Inc., a Delaware corporation, certificate number SO 0021.
