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Exhibit 10.01
FORM OF STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT, is made and entered into as of the ____
day of ________, 1999, by and between (i) XXXXXXX X. XXXXXXXXXX, whose mailing
address and residence is located at 0000 XxxXxxx Xxxx, Xxxxxx, Xxxx 00000 (the
"Pledgor"), and (ii) PEOPLESERVE, INC., a Delaware corporation (the "Company").
PRELIMINARY STATEMENT:
A. The Company and Res-Care, Inc., a Kentucky corporation
("Res-Care"), have entered into an Agreement and Plan of Merger dated
____________, 1999 (the "Merger Agreement"). As result of the consummation of
the transactions contemplated in the Merger Agreement (the "Merger"), Pledgor is
the owner of ____________________ common shares of Res-Care.
B. In connection with the Merger Agreement, Pledgor and the Company
have entered into that certain Indemnity Agreement of even date herewith (the
"Indemnity"). Pledgor has voluntarily offered to secure his obligations under
the Indemnity by the pledge of certain of the Res-Care common shares issued to
him in connection with the Merger and/or certain other collateral acceptable to
the Company.
C. The execution of the Indemnity and this Stock Pledge Agreement are
conditions precedent to the consummation of the transactions contemplated by the
Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants set forth herein and in the Indemnity, and for other good and
valuable consideration, the mutuality, receipt and sufficiency of which are
hereby acknowledged, the parties hereto do hereby agree as follows:
1. DEFINITIONS. The following terms or phrases shall have the
following meanings:
1.1 "Collateral" has the meaning set forth in Section 2.1 of this
Stock Pledge Agreement.
1.2 "Event of Default" shall have the meaning set forth in Section
7 of this Stock Pledge Agreement.
1.3 "Pledged Shares" means that number of common shares of
Res-Care which is equal to $4,500,000 divided by the Closing Price (as defined
in the Merger Agreement) or such amount of other pledged marketable securities
as Pledgor elects to substitute for Res-Care shares with the approval of the
Company but does not include any Pledged Shares released pursuant to Section 14
of this Stock Pledge Agreement.
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1.4 "Secured Obligations" has the meaning set forth in Section 2.1
of this Stock Pledge Agreement.
2. GRANT OF SECURITY INTEREST.
2.1 The Pledgor hereby pledges and assigns to the Company and
hereby grants to the Company a security interest in the Pledged Shares, together
with (i) any and all stock rights, rights to subscribe, liquidating dividends,
dividends paid in stock, new securities or any other property to which the
Pledgor is or may hereafter become entitled to receive on account of the Pledged
Shares, and (ii) all dividends and distributions declared in respect of the
Pledged Shares and all proceeds of any sale or other disposition of the Pledged
Shares and other property described in this Section 2 to which the Pledgor is
entitled (hereinafter collectively referred to as the "Collateral"), to secure
the payment and performance of all liabilities, obligations, covenants and
duties owing by the Pledgor to the Company or any other Indemnified Parties (as
defined in the Indemnity) arising under the Indemnity (hereinafter collectively
referred to as the "Secured Obligations"). The Secured Obligations are secured
by the Collateral without preference, distinction or priority of any kind
whatsoever. The Company shall hold the Collateral upon the terms and provisions
of this Stock Pledge Agreement, and the security interest in the Collateral
granted to the Company pursuant to this Stock Pledge Agreement shall continue
until all of the Secured Obligations have been respectively paid in full,
subject to the provisions of Section 14 hereof.
2.2 If the Pledgor receives Collateral, the Pledgor shall
immediately deliver such property to the Company, to be held by the Company
pursuant to this Stock Pledge Agreement.
2.3 Upon execution of this Stock Pledge Agreement and any
substitution of collateral approved by the Company, the Pledgor shall deliver to
the Company the share certificates evidencing the Pledged Shares, together with
executed blank stock powers. The Company agrees to deliver to Pledgor
certificates and related blank stock powers for all Pledged Shares for which
substitute Pledged Shares are delivered to the Company pursuant to this Stock
Pledge Agreement.
3. REPRESENTATIONS AND WARRANTIES. The Pledgor hereby represents and
warrants to the Company as follows, which representations and warranties shall
survive the execution and delivery of this Stock Pledge Agreement and the
delivery and/or substitution of the Pledged Shares to the Company:
3.1 The Pledgor has the full right, power and authority to enter
into and perform this Stock Pledge Agreement. This Stock Pledge Agreement has
been duly entered into and delivered by the Pledgor and constitutes the legal,
valid and binding obligation of the Pledgor,
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enforceable in accordance with its terms, except as enforceability thereof may
be limited by applicable bankruptcy, insolvency or other laws affecting
creditors' rights generally, and by the application of usual equitable
principles where equitable remedies are sought.
3.2 The Pledgor has good and marketable title to the Pledged
Shares, and the Pledged Shares are not and will not be subject to any lien,
charge, pledge, encumbrance, claim or security interest of any nature
whatsoever, other than the security interest created by this Stock Pledge
Agreement or applicable restrictions under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
3.3 The Pledged Shares have been issued to and are registered in
the name of the Pledgor or are held in street name by an independent agent of
Pledgor who acknowledges this pledge.
3.4 Except as specifically provided in the Merger Agreement, the
Pledgor has not entered into any stock restriction or purchase agreement with
respect to the Pledged Shares which would in any way restrict the sale, pledge
or other transfer of the Pledged Shares or of any interest in or to the Pledged
Shares.
3.5 The execution and delivery of this Stock Pledge Agreement and
the performance of the transactions contemplated hereby will not contravene or
constitute a default under or result in a lien upon any property of the Pledgor
pursuant to any applicable law or decree or any agreement, document or
instrument binding upon or affecting the Pledgor or any of its assets.
3.6 There is no action, suit or proceeding pending or, to the best
of the Pledgor's knowledge, information and belief, threatened against the
Pledgor which might adversely affect his property or financial condition in any
respect.
3.7 All statements contained herein pertaining to the Pledged
Shares and the other Collateral are true and correct.
4. AFFIRMATIVE COVENANTS. The Pledgor hereby covenants and agrees
with the Company that the Pledgor will observe and perform all of the following
provisions until all of the Secured Obligations have respectively been paid in
full and this Stock Pledge Agreement has been terminated by the Company:
4.1 The Pledgor will take all actions and will execute all
documents and instruments that may be necessary or as may be reasonably
requested by the Company (a) to perfect the Company's security interest in all
of the Collateral in accordance with the requirements of applicable law, (b) to
achieve and maintain the priority of the Company's security interest in all of
the Collateral, and (c) to maintain, preserve and protect the Collateral and the
Company's security interest therein.
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4.2 The Pledgor will promptly pay when due, and before penalties
would attach, all taxes, assessments, charges, encumbrances and liens now or
hereafter imposed upon or affecting the Collateral or any part thereof, unless
the Pledgor at his own expense is contesting any such amount in good faith by an
appropriate proceeding timely instituted and which shall operate to prevent the
collection or satisfaction of the lien or amount so contested. If the Pledgor
fails to pay such amounts and is not contesting the validity or amount thereof
in accordance with the preceding sentence, the Company may, but is not obligated
to, pay such amounts, and such payment shall be conclusive evidence of the
legality or validity thereof.
4.3 The Pledgor will keep the Collateral free and clear of all
levies, security interests and other liens and charges whatsoever, excepting
only the Company's first priority perfected security interest in the Collateral.
4.4 The Pledgor will execute and deliver from time to time, in
recordable form, all endorsements, Uniform Commercial Code Financing Statements,
Uniform Commercial Code Continuation Statements, Uniform Commercial Code
Assignments and all other documents and instruments deemed necessary or
appropriate by the Company in its reasonable judgment to perfect, maintain and
protect its perfected security interest in the Collateral.
4.5 The Pledgor will appear in and defend any action or proceeding
which may affect his title to the Collateral and/or the Company's perfected
security interest in the Collateral.
5. NEGATIVE COVENANTS. The Pledgor hereby covenants and agrees with
the Company that the Pledgor will not surrender or lose possession of the
Collateral which is then being held pursuant to this Pledge Agreement or any
part thereof (other than to the Company pursuant hereto), or sell, further
encumber or otherwise dispose of or transfer the Collateral which is then being
held pursuant to this Pledge Agreement or any part thereof or any of his rights,
titles or interests therein without the prior written consent of the Company.
6. CERTAIN RIGHTS RESPECTING THE PLEDGED SHARES.
6.1 So long as no Event of Default has occurred and is continuing,
the Pledgor may exercise all voting rights with respect to the Pledged Shares
and shall have full right to substitute other Pledged Shares reasonably
acceptable to the Company for Res-Care common shares constituting the Pledged
Shares. Provided, upon the occurrence of any Event of Default, and so long as
such Event of Default exists, the Company may, at its sole option, exercise all
voting rights with respect to the Pledged Shares, and to that end the Pledgor
hereby constitutes any officer of the Company as his proxy and attorney-in-fact
for all purposes of voting the Pledged Shares at any annual, regular or special
meeting of shareholders of the Company, and this appointment shall be deemed
coupled with an interest and is and shall be irrevocable until all of the
Secured Obligations have been respectively paid in full, and all persons
whatsoever shall be conclusively entitled to rely
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upon any oral or written certification of the Company that it is entitled to
vote the Pledged Shares hereunder. The Pledgor shall execute and deliver to the
Company any additional proxies and powers of attorney that the Company may
desire in its own name to effectuate the provisions of this Stock Pledge
Agreement.
6.2 Upon the occurrence and during the continuation of any Event
of Default, all dividends and distributions, including liquidating dividends,
paid in respect of the Pledged Shares shall be immediately remitted to the
Company, to be applied to the Secured Obligations on a pro rata basis without
preference, distinction or priority of any kind whatsoever. Until all such
dividends or other distributions are paid to the Company, the Pledgor shall hold
all of the same in trust and as a fiduciary for the Company.
7. EVENT OF DEFAULT. The following shall each constitute an "Event of
Default" hereunder:
7.1 If the Pledgor shall breach, violate or fail to perform or
observe any covenant, obligation, agreement, condition or other provision
contained in this Stock Pledge Agreement, and the same is not cured to the
reasonable satisfaction of the Company within thirty (30) days after the Company
has specified such default in a written notice delivered to the Pledgor.
7.2 The occurrence and continuation of any default under and as
defined in the Indemnity.
8. REMEDIES.
8.1 Upon the occurrence of any Event of Default, the Company may
at its option exercise the rights with respect to the Pledged Shares
contemplated in Section 6 of this Stock Pledge Agreement, and the Company, in
addition to exercising all other rights or remedies, may proceed to exercise
with respect to the Pledged Shares or other Collateral all rights, options and
remedies of a secured party upon default as provided under the Uniform
Commercial Code as then adopted in the Commonwealth of Kentucky.
8.2 The rights of the Company upon the occurrence of any Event of
Default shall include, without limitation, the following:
(a) The right to the immediate possession of the Pledged
Shares and/or the other Collateral not then in the Company's possession
without requirement of notice or demand or of any legal process.
(b) The right to sell or otherwise dispose of the Pledged
Shares and/or the other Collateral or any part thereof at one or more
public sales, in one or more lots or parcels, regardless of whether the
Pledged Shares and/or the other Collateral is present at the place
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of sale, for cash or credit or for future delivery, and on such
commercially reasonable terms and conditions and in such manner as the
Company may reasonably determine, with the Company having the right to
bid upon and be the purchaser of any or all of the Pledged Shares
and/or the other Collateral so sold at any public sale. The Company
acknowledges that the Collateral may be subject to restrictions under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder.
(c) The right to recover the reasonable expenses of the
Company in preparing for sale and selling the Pledged Shares and/or
other Collateral and other like expenses, together with court costs and
reasonable attorneys' fees incurred by the Company.
(d) The right to proceed by appropriate legal process at law
or in equity to enforce any provision of this Stock Pledge Agreement or
in aid of the execution of any power of sale, or for foreclosure of the
security interest of the Company in the Pledged Shares and/or the other
Collateral, or for the sale of the Pledged Shares and/or the other
Collateral under the judgment or decree of any court.
8.3 All proceeds derived from the enforcement by the Company of
any one or more of the rights and remedies set forth in this Section 8, after
deducting therefrom all reasonable costs and expenses incurred or paid by the
Company in enforcing such rights and remedies, shall be applied to the payment
of the Secured Obligations without preference, distinction or priority of any
kind whatsoever.
9. EXERCISE OF REMEDIES. The rights and remedies of the Company upon
the occurrence of an Event of Default, whether arising at law, in equity and/or
under this Stock Pledge Agreement or under the Indemnity, shall be deemed to be
cumulative, and the exercise of any right or remedy shall not be deemed to be an
election of that right or remedy to the exclusion of any other right or remedy.
10. WAIVER. The Pledgor hereby waives any claim arising by reason of
(a) any reasonable delay by the Company in selling the Pledged Shares following
the occurrence of an Event of Default, including, without limitation, any delays
in selling the Pledged Shares resulting from the compliance by the Company with
applicable federal and state securities laws, even if the price of the Pledged
Shares thereafter declines; or (b) the immediate sale of the Pledged Shares upon
the occurrence of an Event of Default, even if the price of the Pledged Shares
should thereafter increase.
11. PAYMENT OF COSTS, ATTORNEYS' FEES AND EXPENSES. To the extent not
paid out of the proceeds of sale of the Pledged Shares, the Pledgor shall pay
any and all reasonable costs, attorneys' fees and other direct out of pocket
expenses incurred by the Company in connection with enforcing this Stock Pledge
Agreement.
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12. ADVANCES BY COMPANY. The Pledgor shall reimburse the Company for
all reasonable advances made by the Company in performing any actions on behalf
of the Pledgor pursuant to this Stock Pledge Agreement, which Pledgor fails to
take within five (5) days after written notice and demand to Pledgor, including,
without limitation, all amounts paid by the Company (a) to discharge taxes,
levies, liens and/or security interests against the Pledged Shares and/or the
other Collateral, and/or (b) in connection with the exercise by the Company of
its rights and remedies hereunder or under the Indemnity and/or at law or in
equity. All such advances made by the Company shall bear interest at the
interest rate provided in the Indemnity and all such advances and all interest
thereon shall be secured by this Stock Pledge Agreement with the same priority
as the Indemnity to the fullest extent permitted by applicable law, and shall be
due and payable in full to the Company, as applicable, upon demand made therefor
by the Company at any time in its sole and absolute discretion.
13. IRREVOCABLE ATTORNEY-IN-FACT. The Pledgor hereby irrevocably
appoints the Company as the Pledgor's attorney-in-fact to do all acts and things
which the Company may deem necessary or appropriate in its reasonable discretion
to perfect and to continue the perfected status of the security interest in the
Collateral created in favor of the Company pursuant to this Stock Pledge
Agreement and to protect the Collateral.
14. PARTIAL RELEASE OF SECURITIES. Provided that an Event of Default
shall not have occurred or be continuing, on each anniversary of the date of
this Stock Pledge Agreement prior to its termination hereof, Pledgor may, at his
option, request that the Company release certain of the Pledged Shares from the
security interest created hereby. Such request (a "Release Request") shall be
shall be delivered to the Company in writing and shall certify (a) that no
default or event with which the passage of time shall constitute a default, has
occurred with respect to any of the indebtedness which is secured by any of the
Guaranties (as defined in the Indemnity), (b) the aggregate outstanding balance,
computed as of the date of the Release Request, of the obligations under the
indebtedness which is secured by the Guaranties (the "Current Guaranty Amount"),
(c) a calculation of the aggregate value of the Collateral then subject to the
security interest created hereby, which, (i) if the Collateral shall be common
shares of Res-Care, shall be calculated by reference to the closing price per
share of the common shares of Res-Care on the Nasdaq National Market (or any
other nationally quoted exchange on which such shares are then trading) for the
trading date immediately prior to the date of the Release Request, or (ii) if
clause (i) above shall not be applicable, the aggregate fair market value
thereof (such value so determined pursuant to this clause (c) shall be
hereinafter referred to as the "Securities Value"). Within thirty (30) days
after the date of the Release Notice, the Company shall release from the
security interest created hereby that amount of the Collateral having a value
(as determined in the preceding sentence) which is equal to the excess of the
Securities Value over the Current Guaranty Value and deliver to Pledgor the
share certificates and stock powers evidencing and relating to the released
Pledged Shares. The Company agrees to provide separate certificates for any
released Res-Care Shares and any remaining Res-Care Pledged Shares at no cost
to Pledgor.
15. RETURN OF COLLATERAL. The Company may at any time deliver the
Pledged Shares or other Collateral, or any part thereof, to the Pledgor. The
receipt by the Pledgor of the Pledged Shares or other Collateral shall be a
complete and full discharge of the Company with respect to such
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Pledged Shares or other Collateral, and the Company shall be discharged from any
liability or responsibility with respect thereto.
16. GENERAL WAIVERS. Any forbearance or failure or delay by the
Company in exercising any right, power or remedy shall not preclude the further
exercise thereof, and every right, power and remedy of the Company shall
continue in full force and effect until such right, power or remedy is
specifically waived in a writing executed by the Company. The Pledgor hereby
irrevocably and expressly waives (a) any right to require the Company to proceed
against any person or to exhaust any other security for the Secured Obligations
or to pursue any remedy in their power prior to enforcing the Company's security
interest in the Pledged Shares and the other Collateral and the Company's other
rights hereunder, and (b) any right to require the Company to enforce its
security interest in all of the Pledged Shares and the other Collateral
contemporaneously in time. It is understood and agreed by the Pledgor that the
Company has the right, in its sole and absolute discretion, to enforce or
forbear from enforcing its security interest in the Pledged Shares and the other
Collateral or any part thereof as the Company elect in its sole and absolute
discretion.
17. NOTICE.
17.1 Any requirement of the Uniform Commercial Code of reasonable
notice of the intended sale or other disposition of the Pledged Shares and the
other Collateral which may not otherwise be waived shall be met if such notice
is given to the Pledgor at least ten (10) business days before the time of sale,
disposition or other event or thing giving rise to the requirement of notice.
17.2 All notices and other communications under this Stock Pledge
Agreement shall be in writing and shall be personally delivered or sent by
express courier service, or by registered or certified United States mail,
return receipt requested, postage prepaid, addressed as follows (or to such
other address as to which either the Pledgor or the Company shall have given the
other written notice):
If to the Pledgor: Xxxxxxx X. Xxxxxxxxxx
0000 XxxXxxx Xxxx
Xxxxxx, Xxxx 00000
With a copy to: Xxxxxxx Xxxxxxx, Esquire
Porter, Wright, Xxxxxx & Xxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
If to the Company: Xxxxxx X. Xxxxx
President
PeopleServe, Inc.
10140 Linn Xxxxxxx Xxxx
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Xxxxxxxxxx, Xxxxxxxx 00000
All written notices and other communications required under this Stock
Pledge Agreement shall be deemed given upon the earliest of (a) actual delivery
in person, (b) one (1) Business Day (as defined in the Merger Agreement) after
having been delivered to an express courier service, or (c) two (2) Business
Days after having been deposited in the United States mails, in accordance with
the foregoing.
18. FURTHER ASSURANCES. The Pledgor shall execute all such other
documents or instruments, and shall take such other actions, an the Company may
reasonably request to more fully create and maintain, or to verify, ratify or
perfect, the security interest in the Pledged Shares and the other Collateral
hereby created in favor of the Company pursuant to this Stock Pledge Agreement.
19. NO IMPLIED WAIVER. All options and rights of the Company hereunder
are continuing, and the failure of the Company to exercise any such option or
right in any instance shall not be construed as waiving the right to exercise
such option or right at any subsequent time or be construed as waiving the right
to exercise any other option or right hereunder or at law or in equity. No
exercise by the Company of any of the options, rights or powers provided herein
and no delay or omission in the exercise of such options, rights or powers
provided herein shall be construed to exhaust the same or be construed as a
waiver thereof, and each such option, right and power may be exercised at any
time and from time to time.
20. SEVERABILITY OF PROVISIONS. If any term or provision of this Stock
Pledge Agreement is held to be invalid or unenforceable in any jurisdiction, the
other terms and provisions hereof shall remain in full force and effect in such
jurisdiction and the invalid or unenforceable provision shall remain in full
force and effect in all other jurisdictions.
21. GOVERNING LAW. This Stock Pledge Agreement and the respective
rights, duties and obligations of the parties hereto shall be governed by and
construed in accordance with the laws of the Commonwealth of Kentucky.
22. SUCCESSORS AND ASSIGNS. This Stock Pledge Agreement shall bind the
Pledgor and its successors and assigns and shall inure to the benefit of the
Company and their respective successors and assigns, including, without
limitation, any Indemnified Party.
23. CAPTIONS. The various section headings used in this Stock Pledge
Agreement are inserted for convenience of reference only and shall be ignored in
interpreting or construing the provisions hereof.
24. TIME OF THE ESSENCE. Time shall be of the essence in the
performance of all of the Pledgor's covenants, obligations and agreements under
this Stock Pledge Agreement.
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25. ENTIRE AGREEMENT. This Stock Pledge Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and supersedes all prior understandings with respect to the subject matter
hereof. No change, modification, addition or termination of this Stock Pledge
Agreement shall be enforceable unless in writing and signed by the party against
whom enforcement is sought.
IN WITNESS WHEREOF, the Pledgor and the Company have executed this
Stock Pledge Agreement on the day and year first above written.
_________________________________________
Xxxxxxx X. Xxxxxxxxxx
(the "Pledgor")
PeopleServe, Inc., a Delaware corporation
By: _____________________________________
Its: ____________________________________
(the "Company")
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