Exhibit 10.5
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into this
14th day of October, 1999 by and between ▇▇▇▇ ▇▇▇▇▇▇ ("Pledgor") and Lifemark
Corporation, a Delaware corporation ("Secured Party").
1. PLEDGE. Pledgor hereby grants to Secured Party a security
interest in the following described corporate stock:
25,000 shares of common stock, $0.01 par value, of Lifemark
Corporation.
currently represented by Certificate Nos. 6432 together with stock powers
duly endorsed in blank (with signature guaranteed by a qualified member in a
Medallion Guarantee Program approved by the Securities Transfer Association,
Inc.) and herewith delivered to Secured Party, and all proceeds, products and
increases thereof and substitutions and replacements therefor (collectively
referred to herein as the "Pledged Shares"). Secured Party shall hold the
Pledged Shares as security for payment of the Note (as defined below) and shall
not encumber or dispose of the Pledged Shares except in accordance with Sections
6 or 8 of this Agreement.
2. SECURED INDEBTEDNESS. This Agreement shall secure all indebtedness now
or hereafter incurred by Pledgor under the provisions of that certain Promissory
Note (the "Note") of even date herewith made by Pledgor to Secured Party in the
original principal amount of seventy three thousand four hundred twenty five
($73,425), bearing interest at the rate per annum equal to 6.02%, with accrued
interest being due and payable on December 31, 1999 and each December 31
thereafter, and with all principal and accrued interest being due and payable on
October 14, 2008, and any and all other indebtedness of the Pledgor to the
Secured Party incurred in connection with the acquisition of common stock of the
Secured Party and the payment of any related withholding tax.
3. VOTING RIGHTS. During the term of this Agreement, and so long as
Pledgor is not in default in the performance of any of the terms of this
Agreement or in the payment of the principal or interest of the Note, Pledgor
shall have the right to vote the Pledged Shares on all corporate questions, and
Secured Party shall, upon request, execute due and timely proxies in favor of
Pledgor to this end.
4. REPRESENTATIONS. Pledgor represents and warrants that there are no
restrictions upon the transfer of any of the Pledged Shares, other than may
appear on the face of the Certificate referred to in Section 1, and other than
as may be imposed under Rule 144 under the Securities Act of 1933, and that the
Pledgor has the right to transfer such shares free and clear of all liens and
encumbrances, except the lien of this Agreement, and the Pledgor is delivering
herewith copies of Form 144 duly executed in blank.
1
5. ADJUSTMENTS. In the event that, during the term of this Agreement, any
share dividend, reclassification, readjustment or other change is declared or
made in the capital structure of Lifemark Corporation, all new, substituted and
additional shares, or other securities, issued by reason of any such change
shall be held by Secured Party under the terms of this Agreement in the same
manner as the shares originally pledged hereunder.
6. PAYMENT OF THE NOTE. Upon payment of all outstanding principal and
accrued interest of the Note, less amounts theretofore received and applied by
Secured Party in reduction thereof, Secured Party shall transfer to Pledgor all
the Pledged Shares and all rights received by Secured Party as a result of this
pledge.
7. EVENTS OF DEFAULT. Occurrence of any of the following events (each such
event referred to herein as an "Event of Default") shall, at the option of
Secured Party, constitute a default hereunder:
(a) Failure of Pledgor to pay when due any indebtedness secured by this
Agreement, either principal or interest, if such failure shall continue uncured
for a period of five days; provided, however, it shall not be an event of
default if Pledgor fails to pay, interest due on the Note if Secured Party fails
to pay Pledgor the bonus provided for in the second paragraph of the letter
agreement dated October 14, 1999 between Pledgor and Secured Party;
(b) Default by Pledgor under any agreements to which Pledgor and Secured
Party are, or may hereafter become, parties which secure indebtedness of Pledgor
to Secured Party; or
(c) Any other event of default under the Note; or
(d) Any breach by Pledgor of (i) any duty to, or (ii) any employment,
severance, non-disclosure or other material agreement between the Pledgor and,
the Secured Party.
8. DEFAULT. Upon the occurrence of an Event of Default, Secured Party
shall have the rights and remedies provided in the Uniform Commercial Code in
force in the State of Arizona at the date of this Agreement and in this
connection, Secured Party may, upon five days' written notice to Pledgor, sent
by registered mail, and without liability for any diminution in price which may
have occurred, sell all the Pledged Shares in such manner and for such price as
Secured Party may determine, so long as any such sale is conducted in a
commercially reasonable manner to obtain a fair and reasonable sale price for
the Pledged Shares. At any bona fide public sale Secured Party shall be free to
purchase all or any part of the Pledged Shares. Out of the proceeds of any sale
Secured Party may retain an amount equal to the principal and interest then due
on the Note, plus the amount of the reasonable expenses of the sale, and shall
pay any balance of such proceeds to Pledgor. In the event that the proceeds of
any sale are insufficient to cover the principal and interest of the Note plus
expenses of the sale, Pledgor shall remain liable to Secured Party for any
deficiency.
2
9. NOTICES. Any notice, request, information or other document to be given
hereunder to either of the parties shall be in writing and delivered personally
or sent by Federal Express, Overnight Delivery, or United States General Post
Office Express Mail Next Day Service, to the addresses listed below:
PLEDGOR: SECURED PARTY:
▇▇▇▇ ▇▇▇▇▇▇ Lifemark Corporation
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Suite 150
Phoenix, Arizona 85020
IN WITNESS WHEREOF, the parties have executed this agreement on the date
first above written.
PLEDGOR:
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------
SECURED PARTY:
LIFEMARK CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
3
Exhibit 10.5
PROMISSORY NOTE
$73,425 October 14, 1999
------
Phoenix, Arizona
FOR VALUE RECEIVED, the undersigned hereby promises to pay to the order of
Lifemark Corporation, a Delaware corporation (the "Company"), the principal sum
of $73,425 with interest (computed on the basis of the actual number of days
elapsed over a 365-day year) on the unpaid balance thereof at the rate of 6 and
02/100 percent (6.02%) per annum, from the date hereof until the principal
amount of this Note is paid in full, with accrued interest on all outstanding
principal due on December 31 of each year commencing with December 31, 1999, and
with all outstanding principal, plus all accrued but unpaid interest, being due
and payable on October 14, 2008.
Payments of principal and interest on this Note shall be payable at the
offices of the Company, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such
other place as the holder of this Note may from time to time designate in
writing.
This Note has been issued in connection with the purchase of 25,000 shares
of common stock, $0.01 par value per share, of the Company (the "Shares"),
pursuant to the exercise of an option granted to the undersigned under a stock
option agreement dated October 14, 1999. The full amount of all previously
unpaid principal, together with all interest accrued thereon, shall become due
and payable: (i) 180 days following termination of employment of the undersigned
by the Company without cause or because of disability; (ii) 60 days after any
termination by the undersigned of the employment of the undersigned with the
Company (or; or (iii) immediately upon any such termination which is for just
cause (as defined below) or upon any breach by the undersigned of (i) any duty
to the Company, or (ii) any employment, severance, non-disclosure or other
material agreement between the undersigned and the Company) the Standard Key
Employee Non-Disclosure Agreement. For purposes of this Note, termination "for
just cause" shall mean termination on account of gross negligence, dishonesty,
or any willful material violation of any reasonable rule or regulation of the
Company of which the undersigned has been advised in writing.
The undersigned shall have the right to prepay this Note, in whole or in
part, without premium or penalty.
The undersigned hereby waives presentment, notice of dishonor or protest
of dishonor of this Note.
This Note is fully negotiable and transferable by the Company.
This Note is secured by the 25,000 Shares, which shall be held by the
Company under a pledge agreement of even date herewith executed by the
undersigned and such other security as may be pledged by the Payee and held by
the Company from time to time. This Note shall be governed by and construed in
accordance with the laws of the State of Arizona.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------
1