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EXHIBIT 10.135
PLEDGE AGREEMENT
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(RESI)
This PLEDGE AGREEMENT (this "Agreement") is dated as of March 19,
1999 and entered into by and between RAMSAY EDUCATIONAL SERVICES, INC., a
Delaware corporation ("Pledgor") and FLEET CAPITAL CORPORATION, a Rhode Island
corporation, as agent for and representative of (in such capacity herein called
"Secured Party") the financial institutions ("Lenders") party to the Loan and
Security Agreement referred to below.
PRELIMINARY STATEMENTS
A. Secured Party, Lenders, Borrowers and Pledgor have entered into that
certain Loan and Security Agreement dated as of October 30, 1998, as amended by
that certain First Amendment to Loan and Security Agreement dated March ___,
1999 (the "First Amendment") (said Loan and Security Agreement, as it has been
and may hereafter be amended, restated, supplemented or otherwise modified from
time to time, being the "Loan and Security Agreement"; capitalized terms not
otherwise defined herein shall have the meaning ascribed to such terms in the
Loan and Security Agreement being used herein as therein defined), pursuant to
which Lenders have made certain commitments, subject to the terms and conditions
set forth in the Loan and Security Agreement, to extend certain credit
facilities to Borrowers.
B. It is a condition precedent to the First Amendment and extensions of
credit by Lenders under the terms of the Loan and Security Agreement that
Pledgor shall have secured its obligations under the Loan and Security Agreement
pursuant to this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Loan and Security
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1. Pledge of Security. Pledgor hereby assigns and pledges to
Secured Party for the benefit of the Lenders, and hereby grants to Secured Party
for the benefit of Lenders, a security interest in all of Pledgor's right, title
and interest in and to the following (the "Pledged Collateral"):
(a) the shares of stock described on Schedule I annexed hereto
(the "Pledged Shares") and the certificates representing the Pledged
Shares and any interest of Pledgor in the entries on the books of any
financial intermediary pertaining to the Pledged Shares, and all
dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Shares;
(b) all additional shares of, and all securities convertible
into and warrants, options and other rights to purchase or otherwise
acquire, stock of any issuer of the Pledged Shares from time to time
acquired by Pledgor in any manner (which shares shall be deemed to be
part of the Pledged Shares), the certificates or other instruments
representing such additional shares, securities, warrants, options or
other rights and any interest of Pledgor in the entries on the books of
any financial intermediary pertaining to such additional shares, and
all dividends, cash, warrants, rights, instruments
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and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of
such additional shares, securities, warrants, options or other rights;
and
(c) to the extent not covered by clauses (a) through (b)
above, all general intangibles (including causes of action) relating
to, and all proceeds of, any or all of the foregoing Pledged
Collateral. For purposes of this Agreement, the term "proceeds"
includes whatever is receivable or received when Pledged Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary, and includes,
without limitation, proceeds of any indemnity or guaranty payable to
Pledgor or Secured Party from time to time with respect to any of the
Pledged Collateral.
SECTION 2. Security for Obligations. This Agreement secures, and the
Pledged Collateral is collateral security for, the prompt payment or performance
in full when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the payment of amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), of the Obligations,
and all obligations of every nature of Pledgor now or hereafter existing under
this Agreement and any other Loan Documents to which Pledgor is a party (all
such obligations being hereinafter referred to collectively as the "Secured
Obligations").
SECTION 3. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Secured Party pursuant hereto and shall be in
suitable form for transfer by delivery or, as applicable, shall be accompanied
by Pledgor's endorsement, where necessary, or duly executed instruments of
transfer or assignment in blank substantially in the form of Schedule III
annexed hereto, all in form and substance satisfactory to Secured Party. Secured
Party shall have the right, at any time after the occurrence and during the
continuance of an Event of Default in its discretion and without notice to
Pledgor, to transfer to or to register in the name of Secured Party or any of
its nominees any or all of the Pledged Collateral, subject only to the revocable
rights specified in Section 7(a). In addition, Secured Party shall have the
right at any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and
warrants as follows:
(a) Due Authorization. etc. of Pledged Shares. All of the
Pledged Shares have been duly authorized and validly issued and are
fully paid and non-assessable. There are no outstanding options,
subscriptions, warrants or agreements by which any Company is bound
calling for the issuance of shares of any class of its capital stock or
for the issuance of any securities, convertible or exchangeable,
actually or contingently, into shares of its capital stock.
(b) Ownership of Pledged Collateral. Pledgor is the legal,
record and beneficial owner of the Pledged Collateral free and clear of
any Lien except for the security interest created by this Agreement.
(c) Perfection; Name; Locations. The pledge of the Pledged
Collateral pursuant to this Agreement creates a valid and enforceable
security interest in the Pledged Collateral, securing the payment of
the Secured Obligations. Upon the delivery to Secured Party of stock
certificates
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representing the Pledged Shares and the filing of a UCC-1 Financing
Statement naming Pledgor as debtor and Secured Party as secured party
covering the Pledged Collateral in the office of the Secretary of State
(or equivalent office) of Florida, the security interest created hereby
shall constitute a perfected, first priority security interest upon the
Pledged Collateral which shall be superior and prior to the rights of
all third Persons now existing or hereafter arising. The chief
executive office of Pledgor and the office where Pledgor keeps its
books and records are located (and have been located for the past four
months from the date hereof) at Columbus Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. The exact corporate name of
Pledgor is Ramsay Educational Services, Inc.
(d) Description of Pledged Shares. Except as provided in the
Loan Agreement, the Pledged Shares constitute all of the issued and
outstanding shares of stock of The ▇▇▇▇▇ Group, Inc., a Florida
corporation, and there are no outstanding warrants, options or other
rights to purchase, or other agreements outstanding with respect to, or
property that is now or hereafter convertible into, or that requires
the issuance or sale of, any Pledged Shares.
(e) Margin Regulations. The pledge of the Pledged Collateral
pursuant to this Agreement does not violate Regulation U or X of the
Board of Governors of the Federal Reserve System.
(f) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party by or on behalf of Pledgor with
respect to Pledgor or the Pledged Collateral is accurate and complete
in all material respects.
SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED COLLATERAL, ETC.
Pledgor shall:
(a) not (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral, (ii) create or suffer to exist any Lien upon or
with respect to any of the Pledged Collateral, except for the security
interest under this Agreement or (iii) permit any issuer of Pledged
Shares to merge or consolidate unless all the outstanding capital stock
of the surviving or resulting corporation is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other
property is distributed in respect of the outstanding shares of any
other constituent corporation;
(b) (i) cause each issuer of Pledged Shares not to issue any
stock or other securities in addition to or in substitution for the
Pledged Shares issued by such issuer, except to Pledgor, and (ii)
pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of Pledged Shares and any certificates or
other instruments hereafter delivered which are described in Section
1(b);
(c) promptly deliver to Secured Party all written notices
received by it with respect to the Pledged Collateral; and
(d) pay promptly when due all taxes, assessments and
governmental charges or levies imposed upon, and all claims against,
the Pledged Collateral, except to the extent the validity thereof is
being contested in good faith; provided that Pledgor shall in any event
pay such taxes, assessments, charges, levies or claims not later than
five days prior to the date of any proposed sale under any
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judgment, writ or warrant of attachment entered or filed against
Pledgor or any of the Pledged Collateral as a result of the failure to
make such payment.
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS; COVENANTS.
(a) Pledgor agrees that from time to time, at the expense of Pledgor,
Pledgor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that Secured
Party may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral. Without limiting the generality of the foregoing, Pledgor
will: (i) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as Secured Party may reasonably request, in order to perfect
and preserve the security interests granted or purported to be granted hereby
and (ii) at Secured Party's request, appear in and defend any action or
proceeding that may affect Pledgor's title to or Secured Party's security
interest in all or any part of the Pledged Collateral.
(b) Pledgor further agrees that it will, upon obtaining any additional
shares of stock or other securities required to be pledged hereunder as provided
in Section 5(b), promptly (and in any event within five Business Days) deliver
to Secured Party a Pledge Amendment, duly executed by Pledgor, in substantially
the form of Schedule II annexed hereto (a "Pledge Amendment"), in respect of the
additional certificates or instruments to be pledged pursuant to this Agreement.
Pledgor hereby authorizes Secured Party to attach each Pledge Amendment to this
Agreement and agrees that all certificates or instruments listed on any Pledge
Amendment delivered to Secured Party shall for all purposes hereunder be
considered Pledged Collateral; provided that the failure of Pledgor to execute a
Pledge Amendment with respect to any additional certificates or instruments
pledged pursuant to this Agreement shall not impair the security interest of
Secured Party therein or otherwise adversely affect the rights and remedies of
Secured Party hereunder with respect thereto.
(c) Pledgor will give Agent thirty (30) days prior written notice of
any change in Pledgor's name, identity or corporate structure.
(d) Pledgor will give Agent thirty (30) days prior written notice of
any change in the location of its chief executive office and will execute such
documentation and take such actions as Agent deems necessary to perfect and
protect the security interests granted hereby.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall be entitled to exercise any and all voting and other
rights pertaining to the Pledged Collateral or any part thereof for any purpose
not inconsistent with the terms of this Agreement or the Loan and Security
Agreement; provided, however, that Pledgor shall not exercise or refrain from
exercising any such right if Secured Parry shall have notified Pledgor that, in
Secured Party's reasonable judgment, such action would have a material adverse
effect on the value of the Pledged Collateral or any part thereof. It is
understood, however, that neither (A) the voting by
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Pledgor of any Pledged Shares for or Pledgor' s consent to the election
of directors at a regularly scheduled annual or other meeting of
stockholders or with respect to incidental matters at any such meeting
nor (B) Pledgor's consent to or approval of any action otherwise
permitted under this Agreement and under the Loan and Security
Agreement shall be deemed inconsistent with the terms of this Agreement
within the meaning of this Section 7(a)(i), and no notice of any such
voting or consent need be given to Secured Party.
(ii) Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all
dividends, interest or other amounts paid in respect of the Pledged
Collateral; provided, however, that any and all
(A) dividends and interest paid or payable other than
in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for
any Pledged Collateral,
shall be, and shall forthwith be delivered to Secured Party to hold as,
Pledged Collateral and shall, if received by Pledgor, be received in
trust for the benefit of Secured Party, be segregated from the other
property or funds of Pledgor and be forthwith delivered to Secured
Party as Pledged Collateral in the same form as so received (with all
necessary endorsements).
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies,
dividend payment orders and other instruments as Pledgor may from time
to time reasonably request for the purpose of enabling Pledgor to
exercise the voting and other rights which it is entitled to exercise
pursuant to paragraph (i) above and to receive the dividends,
principal, interest or other payments which it is authorized to receive
and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuation of an
Event of Default:
(i) Upon written notice from Secured Party to Pledgor, all
rights of Pledgor to exercise the voting and other rights which it
would otherwise be entitled to exercise pursuant to Section 7(a)(i)
shall cease, and all such rights shall thereupon become vested in
Secured Party who shall thereupon have the sole right to exercise such
voting and other rights.
(ii) All rights of Pledgor to receive the payments which it
would otherwise be authorized to receive and retain pursuant to Section
7(a)(ii) shall cease, and all such rights shall thereupon become vested
in Secured Party who shall thereupon have the sole right to receive and
hold as Pledged Collateral such payments.
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(iii) All dividends, principal, interest and other payments
which are received by Pledgor contrary to the provisions of paragraph
(ii) of this Section 7(b) shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of Pledgor and
shall forthwith be paid over to Secured Party as Pledged Collateral in
the same form as so received (with any necessary endorsements).
(c) In order to permit Secured Party to exercise the voting
and other rights which it may be entitled to exercise pursuant to
Section 7(b)(i) and to receive all dividends and other distributions
which it may be entitled to receive under Section 7(a)(ii) or Section
7(b)(ii), Pledgor shall promptly execute and deliver (or cause to be
executed and delivered) to Secured Party all such proxies, dividend
payment orders and other documentation as Secured Party may from time
to time reasonably request. Without limiting the effect of the
immediately preceding sentence, upon the occurrence and continuance of
an Event of Default, Pledgor hereby grants to Secured Party an
IRREVOCABLE PROXY to vote the Pledged Shares and to exercise all other
rights, powers, privileges and remedies to which a holder of the
Pledged Shares would be entitled (including, without limitation, giving
or withholding written consents of shareholders, calling special
meetings of shareholders and voting at such meetings), which proxy
shall be effective, automatically and without the necessity of any
action (including any transfer of any Pledged Shares on the record
books of the issuer thereof) by any other Person (including the issuer
of the Pledged Shares or any officer or agent thereof), which proxy
shall only terminate upon the payment in full of the Secured
Obligations.
SECTION 8. Secured Party Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Secured Party as Pledgor' s attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor, Secured
Party or otherwise, from time to time in Secured Party's reasonable discretion
to take any action and to execute any instrument that Secured Party may deem
reasonably necessary or advisable to accomplish the purposes of this Agreement,
including without limitation:
(a) to file one or more financing or continuation statements,
or amendments thereto, relative to all or any part of the Pledged
Collateral without the signature of Pledgor;
(b) after the occurrence and during the continuance of an
Event of Default, to ask, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Pledged Collateral which are of
the type described in subsections 7(a)(ii)(A) through (C) and to ask,
demand, collect, ▇▇▇ for, recover, compound, receive and give
acquittance and receipts for any other type of money due and to become
due under or in respect of any of the Pledged Collateral;
(c) after the occurrence and during the continuance of an
Event of Default, to receive, endorse, and collect any instruments made
payable to Pledgor representing any dividend, principal, interest or
other payment or other distribution in respect of the Pledged
Collateral of the type described in subsections 7(a)(ii)(A) through (C)
or any part thereof and to give full discharge for the same and to
receive, endorse and collect any instruments made payable to Pledgor
representing any other type of dividend, principal, interest or other
payment or other distribution in respect of the Pledged Collateral or
any part thereof and to give full discharge for the same; and
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(d) after the occurrence and during the continuance of an
Event of Default, to file any other claims or take any other action or
institute any other proceedings that Secured Party may deem necessary
or desirable for the collection of any of the Pledged Collateral or
otherwise to enforce the rights of Secured Party with respect to any of
the Pledged Collateral.
SECTION 9. SECURED PARTY MAY PERFORM. If Pledgor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgor under Section 13(b).
SECTION 10. STANDARD OF CARE. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the exercise
of reasonable care in the custody of any Pledged Collateral in its possession
and the accounting for moneys actually received by it hereunder, Secured Party
shall have no duty as to any Pledged Collateral, it being understood that
Secured Party shall have no responsibility for (a) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Pledged Collateral, whether or not Secured Party has or
is deemed to have knowledge of such matters, (b) taking any necessary steps
(other than steps taken in accordance with the standard of care set forth above
to maintain possession of the Pledged Collateral) to preserve rights against any
parties with respect to any Pledged Collateral, (c) taking any necessary steps
to collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Pledged Collateral, or (d) initiating any action
to protect the Pledged Collateral against the possibility of a decline in market
value. Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property of a similar nature.
SECTION 11. REMEDIES.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Pledged
Collateral, in addition to all other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the Uniform Commercial Code as in effect
in any relevant jurisdiction (the "Code") (whether or not the Code
applies to the affected Pledged Collateral), and Secured Party may also
in its sole discretion, without notice except as specified below, sell
the Pledged Collateral or any part thereof in one or more parcels at
public or private sale, at any exchange or broker's board or at any of
Secured Party's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon
such other terms as Secured Party may deem commercially reasonable,
irrespective of the impact of any such sales on the market price of the
Pledged Collateral. Secured Party may be the purchaser of any or all of
the Pledged Collateral at any such sale and shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Pledged Collateral sold at any such
public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Pledged Collateral
payable by Secured Party at such sale. Each purchaser at any such sale
shall hold the property sold absolutely free from any claim or right on
the part of Pledgor, and Pledgor hereby waives (to the extent permitted
by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Pledgor agrees
that, to the extent notice of sale shall be required by law, at least
ten days' notice to Pledgor of the time and place of any
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public sale or the time after which any private sale is to be made
shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Pledged Collateral regardless of notice
of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Pledgor hereby waives
any claims against Secured Party arising by reason of the fact that the
price at which any Pledged Collateral may have been sold at such a
private sale was less than the price which might have been obtained at
a public sale, even if Secured Party accepts the first offer received
and does not offer such Pledged Collateral to more than one offeree. If
the proceeds of any sale or other disposition of the Pledged Collateral
are insufficient to pay all the Secured Obligations, Pledgor shall be
liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as from time to time amended
(the "Securities Act"), and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of
the Pledged Shares conducted without prior registration or
qualification of such Pledged Shares under the Securities Act and/or
such state securities laws, to limit purchasers to those who will
agree, among other things, to acquire the Pledged Shares for their own
account, for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges that any such private sales may be
at prices and on terms less favorable to Secured Party than those
obtainable through a public sale without such restrictions (including,
without limitation, a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such
circumstances, Pledgor agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that
Secured Party shall have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Shares for the period of
time necessary to permit the issuer thereof to register it for a form
of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should,
agree to so register it.
(c) If Secured Party determines to exercise its right to sell
any or all of the Pledged Shares, upon written request, Pledgor shall
and shall cause each issuer of any Pledged Shares to be sold hereunder
from time to time to furnish to Secured Party all such information as
Secured Party may request in order to determine the number of shares
and other instruments included in the Pledged Shares which may be sold
by Secured Party in exempt transactions under the Securities Act and
the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
SECTION 12. Application of Proceeds. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Pledged Collateral shall be applied by Secured Party in accordance with the
provisions of the Loan and Security Agreement.
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SECTION 13. INDEMNITY AND EXPENSES.
(a) PLEDGOR AGREES TO INDEMNIFY SECURED PARTY FROM AND AGAINST
ANY AND ALL CLAIMS, LOSSES AND LIABILITIES IN ANY WAY RELATING TO,
GROWING OUT OF OR RESULTING FROM THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY (INCLUDING, WITHOUT LIMITATION, ENFORCEMENT OF THIS
AGREEMENT), EXCEPT TO THE EXTENT SUCH CLAIMS, LOSSES OR LIABILITIES
RESULT SOLELY FROM SECURED PARTY'S GROSS NEGLIGENCE, WILLFUL MISCONDUCT
OR BREACH OF THE TERMS HEREOF AS FINALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION.
(b) PLEDGOR WILL PAY TO SECURED PARTY UPON DEMAND THE AMOUNT
OF ANY AND ALL COSTS AND EXPENSES, INCLUDING THE REASONABLE FEES AND
EXPENSES OF ITS COUNSEL AND OF ANY EXPERTS AND AGENTS, THAT SECURED
PARTY MAY INCUR IN CONNECTION WITH (I) THE ADMINISTRATION OF THIS
AGREEMENT, (II) THE CUSTODY OR PRESERVATION OF, OR THE SALE OF,
COLLECTION FROM, OR OTHER REALIZATION UPON, ANY OF THE PLEDGED
COLLATERAL, (III) THE EXERCISE OR ENFORCEMENT OF ANY OF THE RIGHTS OF
SECURED PARTY HEREUNDER, OR (IV) THE FAILURE BY PLEDGOR TO PERFORM OR
OBSERVE ANY OF THE PROVISIONS HEREOF.
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (a) remain in full force and effect until the indefeasible payment in
full of all Secured Obligations and the cancellation or termination of the
Revolving Loan and Acquisition Loan Commitments, (b) be binding upon Pledgor,
its successors and assigns, and (c) inure, together with the rights and remedies
of Secured Party hereunder, to the benefit of Secured Party and its successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(c), but subject to the provisions of the Loan and Security Agreement, any
Lender may assign or otherwise transfer any Notes held by it to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Secured Party herein or otherwise. Upon
the indefeasible payment in full of all Secured Obligations and the cancellation
or termination of the Revolving Loan and Acquisition Loan Commitments, the
security interest granted hereby shall terminate and all rights to the Pledged
Collateral shall revert to Pledgor. Upon any such termination Secured Party
will, at Pledgor's expense, execute and deliver to Pledgor such documents as
Pledgor shall reasonably request to evidence such termination and Pledgor shall
be entitled to the return, upon its request and at its expense, against receipt
and without recourse to Secured Party, of so much of the Pledged Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof.
SECTION 15. SECURED PARTY AS AGENT. Secured Party has been appointed to
act as Secured Party hereunder by Lenders. Secured Party shall be obligated, and
shall have the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking any
action (including, without limitation, the release or substitution of Pledged
Collateral), solely in accordance with this Agreement and the Loan and Security
Agreement. Secured Party may resign and a successor Secured Party may be
appointed in the manner provided with respect to the Agent in accordance with
the provisions of the Loan and Security Agreement. Upon the acceptance of any
appointment as Secured Party by a successor Secured Party, that successor
Secured Party shall thereupon succeed to and become vested with all the rights,
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powers, privileges and duties of the retiring Secured Party under this
Agreement, and the retiring Secured Party shall thereupon be discharged from its
duties and obligations under this Agreement. After any retiring Secured Party's
resignation, the provisions of this Agreement shall inure to its benefit as to
any actions taken or omitted to be taken by it under this Agreement while it was
Secured Party.
SECTION 16. AMENDMENTS; ETC. No amendment or waiver of any provision of
this Agreement, or consent to any departure by Pledgor herefrom, shall in any
event be effective unless the same shall be in writing and signed by Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 17. NOTICES. Any notice or other communication herein required
or permitted to be given shall be in writing and given in accordance with the
provisions of the Loan and Security Agreement.
SECTION 18. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 19. SEVERABILITY. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 20. HEADINGS. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
SECTION 21. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF TEXAS, EXCEPT AS REQUIRED BY MANDATORY PROVISION OF LAW AND EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER,
OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS. Unless
otherwise defined herein or in the Loan and Security Agreement, terms used in
Article 9 of the Uniform Commercial Code in the State of Texas are used herein
as therein defined.
SECTION 22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
PLEDGOR/DEBTOR:
RAMSAY EDUCATIONAL SERVICES, INC.,
a Delaware corporation
By:
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▇▇▇▇▇ ▇▇▇▇
Vice President
SECURED PARTY:
FLEET CAPITAL CORPORATION, as Agent
By:
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Name:
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Title:
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