EXHIBIT 10.20
(FORM OF MED SUBSIDIARIES COLLATERAL AGENCY AGREEMENT)
CITIBANK CUSTODY & ADVISOR SERVICES
Collateral Agency Agreement
by and among
Citibank, N.A.
as "Collateral Agent"
Private Investment Bank Limited,
as "Secured Party" and
collateral account holder
and
Med Diversified, Inc. and
its direct and indirect subsidiaries
signatory hereto,
as "Pledgors"
361089
--------------------------------------
(Account Number)
CITIBANK COLLATERAL AGENT CUSTODY ACCOUNT
THIS COLLATERAL AGENCY AGREEMENT (this Collateral Agency Agreement, including
all Schedules attached hereto, all of the terms and conditions which are
incorporated herein by reference, in each case as amended and/or supplemented
from time to time in accordance with the terms hereof, this "Collateral Agency
Agreement") is made this 14th day of August, 2002 by and among the following:
(i) Private Investment Bank Limited, a Bahamas bank and trust company, as
secured party (the "Secured Party" herein);
(ii) Med Diversified, Inc., a Nevada corporation ("Med"), and the direct or
indirect subsidiaries of Med who are signatories hereto as "Pledgors" (Med and
each such Med subsidiary, collectively, the "Pledgors" and, individually, a
"Pledgor", herein); and
(iii) CITIBANK, N.A., a national banking association organized and existing
under the laws of the United States of America acting in its capacity as
collateral agent for the Secured Party (the "Collateral Agent" herein).
RECITALS
WHEREAS, pursuant to that certain Amendment Agreement dated as of June 28, 2002
by and among Med, the other Pledgors, Secured Party and certain other parties
thereto (as the same may be modified, restated, supplemented and otherwise in
effect from time to time, the "Amendment Agreement"), Pledgors have agreed to
grant to Secured Party, among other things, a first priority security interest
in any and all capital stock or other equity securities of certain Med
subsidiaries (collectively, the "Interests"), to secure certain indebtedness and
other obligations owed to Secured Party including certain debentures in an
aggregate original principal amount of $57.5 million (the "Indebtedness"); and
WHEREAS, pursuant to the Amendment Agreement, Med, the other Pledgors and
Secured Party have entered into that certain Medf Subsidiaries Pledge and
Security Agreement dated as of June 28, 2002 by and among Med, the other
Pledgors and Secured Party (as the same may be modified, restated, supplemented
and otherwise in effect from time to time, the "Med Subsidiaries Pledge and
Security Agreement"), Pledgors have, among other things, pledged to Secured
Party and granted Secured Party a security interest in the Interests; and
WHEREAS, the Amendment Agreement and the Med Subsidiaries Pledge and Security
Agreement contemplate that Collateral Agent shall hold the certificates,
instruments and other evidence of the Interests as the agent of Secured Party
(in an account opened by the Collateral Agent in the name of the Secured Party,
the "Account") pursuant to this Collateral Agency Agreement.
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NOW, THEREFORE, the above-named parties appoint said Collateral Agent with the
duties and responsibilities and upon the terms and conditions provided in
SCHEDULES A and B annexed hereto and made apart hereof.
ARTICLE FIRST: The above-named parties agree that the following provisions shall
control with respect to the rights, duties, liabilities, privileges and
immunities of the Collateral Agent:
a) The Collateral Agent shall hold the Interests, including all certificates,
instruments and other evidence of the Interests, as the agent of Secured
Party and in an account opened by the Collateral Agent by the Secured
Party, all subject to the terms of this Collateral Agency Agreement.
b) The Collateral Agent shall neither be responsible for or under, nor
chargeable with knowledge of, the terms and conditions of any other
agreement, instrument or document executed between/among the parties
hereto, other than this Collateral Agency Agreement, including SCHEDULES
A, B, C, D and E attached hereto. This Collateral Agency Agreement, along
with SCHEDULES A, B, C, D and E attached hereto, sets forth all of the
obligations of the parties hereto, and no additional obligations shall be
implied from the terms of this Collateral Agency Agreement or any other
agreement, instrument or document.
c) The Collateral Agent may act in reliance upon any instructions, notice,
certification, demand, consent, authorization, receipt, power of attorney
or other writing delivered to it by any other party without being required
to determine the authenticity or validity thereof or the correctness of
any fact stated therein, the propriety or validity of the service thereof,
or the jurisdiction of the court issuing any judgment or order. The
Collateral Agent may act in reliance upon any signature believed by it to
be genuine, and may assume that such person has been properly authorized
to do so.
d) Each of the Pledgors, jointly and severally, agrees to reimburse the
Collateral Agent on demand for, and to indemnify and hold the Collateral
Agent and its employees, officers and directors (each, an "INDEMNIFIED
PARTY") harmless against and with respect to, any and all claims, loss,
actions, liability, damage or expense (including, but without limitation,
attorneys' fees, costs and disbursements) (collectively "LOSSES") that the
Collateral Agent may suffer or incur in connection with this Collateral
Agency Agreement and its performance hereunder or in connection herewith,
except to the extent such loss, liability, damage or expense arises from
its willful misconduct or gross negligence as adjudicated by a court of
competent jurisdiction. In addition, when any Indemnified Party acts on
any information, instructions, communications (including, but not limited
to, communications with respect to the delivery of the Interests or the
wire transfer of funds) sent by telex or facsimile, the Indemnified Party,
absent gross negligence as adjudicated by a court of competent
jurisdiction, shall not be responsible or liable in the event such
information, instruction or communication is not an authorized or
authentic information, instruction or communication or is not in the form
sent or intended to be sent (whether due to fraud, distortion or
otherwise). Each of the Pledgors, jointly and severally, shall indemnify
any Indemnified Party against any Losses it may incur
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in connection with its acting in accordance with any such information,
instruction or communication. This Article First, subsection 4(d) shall
survive the termination of this Collateral Agency Agreement and the
resignation or removal of the Collateral Agent.
e) The Collateral Agent may consult with legal counsel of its selection in
the event of any dispute or question as to the meaning or construction of
any of the provisions hereof or its duties hereunder, and it shall incur
no liability and shall be fully protected in acting in accordance with the
opinion and instructions of such counsel. Each of the Pledgors, jointly
and severally, agrees to reimburse the Collateral Agent on demand for such
legal fees, disbursements and expenses and in addition, the Collateral
Agent shall have the right to reimburse itself for such fees,
disbursements and expenses from the property held in escrow hereunder.
f) The Collateral Agent shall be under no duty to give the property held by
it hereunder any greater degree of care than it gives its own similar
property.
g) The Collateral Agent shall invest the property held by it hereunder in
such a manner as directed in SCHEDULE A annexed hereto, which may include
deposits in Citibank and mutual funds advised, serviced or made available
by Citibank or its affiliates even though Citibank or its affiliates may
receive a benefit or profit therefrom.
THE PARTIES TO THIS AGREEMENT ACKNOWLEDGE THAT NON-DEPOSIT INVESTMENT PRODUCTS
ARE NOT OBLIGATIONS OF, OR GUARANTEED, BY CITIBANK/CITICORP NOR ANY OF ITS
AFFILIATES; ARE NOT FDIC INSURED; AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. ONLY DEPOSITS IN THE UNITED
STATES ARE SUBJECT TO FDIC INSURANCE.
h) In the event of any disagreement between/among any of the parties to this
agreement, or between/among them or either or any of them and any other
person, resulting in adverse claims or demands being made in connection
with the subject matter of this Collateral Agency Agreement, or in the
event that the Collateral Agent, in good faith, be in doubt as to what
action it should take hereunder, the Collateral Agent may, at its option,
refuse to comply with any claims or demands on it, or refuse to take any
other action hereunder, so long as such disagreement continues or such
doubt exists, and in any such event, the Collateral Agent shall not become
liable in any way or to any person for its failure or refusal to act, and
the Collateral Agent shall be entitled to continue so to refrain from
acting until (i) the rights of all parties shall have been fully and
finally adjudicated by a court of competent jurisdiction, or (ii) all
differences shall have been adjusted and all doubt resolved by agreement
among all of the interested persons, and the Collateral Agent shall have
been notified thereof in writing signed by all such persons. The
Collateral Agent shall have the option, after 30 calendar days' notice to
the other parties of its intention to do so, to file an action in
interpleader requiring the parties to answer and litigate any claims and
rights among themselves. The rights of the Collateral Agent under this
paragraph are cumulative of all other rights which it may have by law or
otherwise.
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i) The Collateral Agent is authorized, for any securities at any time held
hereunder, to register such securities in the name of its nominee(s) or
the nominees of any securities depository, and such nominee(s) may sign
the name of any of the parties hereto to whom or to which such securities
belong and guarantee such signature in order to transfer securities or
certify ownership thereof to tax or other governmental authorities.
j) Notice to the parties shall be given as provided in SCHEDULE B annexed
hereto.
ARTICLE SECOND: The Collateral Agent shall make distributions of income earned
on the property held pursuant to this Collateral Agency Agreement as provided in
SCHEDULE A annexed hereto. Each such payee shall provide to the Collateral Agent
an appropriate W-9 form for tax identification number certification or a W-8
form for non-resident alien certification. The Collateral Agent shall be
responsible only for income reporting to the Internal Revenue Service with
respect to income earned on the escrowed property.
ARTICLE THIRD: (a) The Secured Party may remove the Collateral Agent at any time
by giving to the Collateral Agent thirty (30) calendar days' prior written
notice of removal signed by an authorized person of the Secured Party, with a
copy of such notice to Med. The Collateral Agent may resign at any time by
giving to each of Med and the Secured Party fifteen (15) calendar days' prior
written notice of resignation.
(b) Within thirty (30) calendar days after giving the foregoing
notice of removal to the Collateral Agent or within fifteen (15) calendar days
after receiving the foregoing notice of resignation from the Collateral Agent,
the Secured Party shall appoint a successor collateral agent and give notice of
such successor collateral agent to the Collateral Agent, with a copy of such
notice to Med. If a successor collateral agent has not accepted such appointment
by the end of such (i) 30-day period, in the case of the Collateral Agent's
removal, or (ii) 15-day period, in the case of the Collateral Agent's
resignation, the Collateral Agent may, in its sole discretion, either deliver
the Interests to the Secured Party at the address set forth in SCHEDULE B or may
apply to a court of competent jurisdiction for the appointment of a successor
collateral agent or for other appropriate relief.
(c) Upon receipt of notice of the identity of the successor
collateral agent, the Collateral Agent shall either deliver the Interests then
held hereunder to the successor collateral agent, less the Collateral Agent's
fees, costs, expenses and the value of other obligations owed to the Collateral
Agent hereunder, or hold such Interests (or any portion thereof) pending
distribution, until all such fees, costs and expenses or the value of other
obligations are paid to it.
(d) Upon delivery of the Interests to the successor collateral agent
or to the Secured Party, the Collateral Agent shall have no further duties,
responsibilities or obligations hereunder.
ARTICLE FOURTH: The Collateral Agent shall receive from Med the fees provided in
SCHEDULE E annexed hereto. In the event that such fees are not paid to the
Collateral Agent within 30 calendar days of presentment to Med as set forth in
said SCHEDULE E, then the Collateral Agent may pay itself such fees from the
property held in escrow hereunder.
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ARTICLE FIFTH: Secured Party hereby guarantees Pledgors' performance of their
obligation to reimburse, indemnify and hold harmless the Collateral Agent, and
pay fees to the Collateral Agent, pursuant to the provisions of the First and
Fourth Articles of this Collateral Agency Agreement. Pledgors shall, jointly and
severally, reimburse Secured Party for any and all loss, liability, damage or
expense (including, but without limitation, attorneys' fees, costs and
disbursements and all payments to the Collateral Agent by Secured Party or out
of property held hereunder) that the Secured Party may suffer or incur in
connection with its guaranty of the Pledgors' obligations to the Collateral
Agent.
ARTICLE SIXTH: Any modification of this Collateral Agency Agreement or any
additional obligations assumed by any party hereto shall be binding only if
evidenced by a writing signed by each of the parties hereto.
ARTICLE SEVENTH: In the event funds transfer instructions are given (other than
in writing at the time of execution of this Collateral Agency Agreement),
whether in writing, by telecopier or otherwise, the Collateral Agent is
authorized to seek confirmation of such instructions by telephone call back to
the person or persons designated in SCHEDULE C or D annexed hereto (as
applicable), and the Collateral Agent may rely upon the confirmations of anyone
purporting to be the person or persons so designated. To assure accuracy of the
instructions it receives, the Collateral Agent may record such call backs. If
the Collateral Agent is unable to verify the instructions, or is not satisfied
with the verification it receives, it will not execute the instruction until all
issues have been resolved. The persons and telephone numbers for call backs may
be changed only in writing actually received and acknowledged by the Collateral
Agent. The parties agree to notify the Collateral Agent of any errors, delays or
other problems within 30 calendar days after receiving notification that a
transaction has been executed. If it is determined that the transaction was
delayed or erroneously executed as a result of the Collateral Agent's error, the
Collateral Agent's sole obligation is to pay or refund such amounts as may be
required by applicable law. In no event shall the Collateral Agent be
responsible for any incidental or consequential damages or expenses in
connection with the instruction. Any claim for interest payable will be at the
Collateral Agent's published savings account rate in effect in New York, New
York.
ARTICLE EIGHTH: This Collateral Agency Agreement shall be governed by the law of
the State of New York in all respects (without regard for its conflict of laws
principles). The parties hereto irrevocably and unconditionally submit to the
jurisdiction of a federal or state court located in the Borough of Manhattan,
City, County and State of New York, in connection with any proceedings commenced
regarding this Collateral Agency Agreement, including but not limited to, any
interpleader proceeding or proceeding for the appointment of a successor
collateral agent the Collateral Agent may commence pursuant to this Collateral
Agency Agreement, and all parties irrevocably submit to the jurisdiction of such
courts for the determination of all issues in such proceedings, without regard
to any principles of conflicts of laws, and irrevocably waive any objection to
venue or inconvenient forum. The parties hereto irrevocably and unconditionally
waive, to the fullest extent permitted by law, and agree not to plead or claim,
any right of immunity from legal action, suit or proceeding, from setoff or
counterclaim, from the jurisdiction of any court, from service of process, from
attachment upon or prior to judgment, from attachment in aid of execution or
judgment, from execution of judgment, or from any other legal process or
proceeding for the giving of any relief or for the enforcement of any judgment,
and consents
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to such relief and enforcement against it, its assets and its revenues in any
jurisdiction, in each case with respect to any matter arising out of, or in
connection with, this Collateral Agency Agreement.
ARTICLE NINTH: This Collateral Agency Agreement may be executed in one or more
counterparts, each of which counterparts shall be deemed to be an original and
all of which counterparts, taken together, shall constitute but one and the same
Agreement. Facsimile signatures on counterparts of this Collateral Agency
Agreement shall be deemed original signatures with all rights accruing thereto.
Each of the parties hereto agrees to provide original signatures to the
Collateral Agency Agent within 15 business days after execution.
[REST OF PAGE LEFT BLANK INTENTIONALLY]
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In witness whereof, the parties have executed this Collateral Agency Agreement
as of the date first above written.
CITIBANK, N.A.
as Collateral Agent
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
SECURED PARTY: MED:
PRIVATE INVESTMENT BANK LIMITED MED DIVERSIFIED, INC.
By By
----------------------------------- -----------------------------------
(SIGNATURE) (SIGNATURE)
Name: Francois Rouge Name
Title: Chairman ---------------------------------
Title
--------------------------------
By
-----------------------------------
(SIGNATURE)
Name: ▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
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OTHER PLEDGORS:
AMERICAN REIMBURSEMENT, LLC
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CHARTWELL DIVERSIFIED SERVICES, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
TENDER LOVING CARE HEALTH CARE
SERVICES, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
TRESTLE CORPORATION
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
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RESOURCE PHARMACY, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CHARTWELL COMMUNITY SERVICES, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CHARTWELL CARE GIVERS, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CHARTWELL MANAGEMENT COMPANY, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CHARTWELL HOME THERAPIES, L.P.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
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CHARTWELL PENNSYLVANIA, L.P.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CHARTWELL MIDWEST INDIANA, LLC
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CHARTWELL SOUTHERN NEW ENGLAND, LLC
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CHARTWELL ROCKY MOUNTAIN REGIONAL SERVICES
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CHARTWELL U.C. ▇▇▇▇▇ HEALTH SYSTEMS, LLC
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
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CHARTWELL MICHIGAN, LLC
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
NORTHWEST HOME CARE, LLC
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
INNOVA HOME THERAPIES, LLC
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CHARTWELL WISCONSIN ENTERPRISES, LLC
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CHARTWELL-MIDWEST WISCONSIN, LLC
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
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CHARTWELL-MIDWEST WISCONSIN HEALTH
RESOURCES, LLC
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ HOME CARE, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
CARECO, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
T.L.C. MIDWEST, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
T.L.C. MEDICARE SERVICES OF DADE, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
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T.L.C. MEDICARE SERVICES OF BROWARD, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
TENDER LOVING CARE HOME CARE SERVICES, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
U.S. ETHICARE CORPORATION
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
U.S. ETHICARE CHAUTAUQUA CORPORATION
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
U.S. ETHICARE ERIE CORPORATION
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
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U.S. ETHICARE NIAGARA CORPORATION
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
ETHICARE CERTIFIED SERVICES, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
STAFF BUILDERS, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
S.B.H.F., INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
STAFF BUILDERS SERVICES, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
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STAFF BUILDERS HOME HEALTH CARE, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
STAFF BUILDERS INTERNATIONAL, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
A RELIABLE HOMEMAKER OF ▇▇▇▇▇▇-ST.
LUCIE COUNTY, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
ST. LUCIE HOME HEALTH AGENCY, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
T.L.C. HOME HEALTH CARE, INC.
By
-----------------------------------
(SIGNATURE)
Name
---------------------------------
Title
--------------------------------
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SCHEDULE A
1. The Interests initially held by the Collateral Agent shall include the
following (other than the Interests described below as "Uncertificated"):
MED SUBSIDIARY PLEDGED INTEREST
------------------------------------------------- -------------------------------------------
Trestle Corporation 2,800,000 shares of common stock
Resource Pharmacy, Inc. 1,000 shares of common stock
Chartwell Diversified Services, Inc. 1,000 shares of common stock
Chartwell Community Services, Inc. 100 shares of common stock
Chartwell Care Givers, Inc. 100 shares of common stock
Chartwell Management Company, Inc. 100 shares of common stock
Chartwell Home Therapies, L.P. All Partnership Interests (Uncertificated)
Chartwell Pennsylvania, L.P. All Membership Interests (Uncertificated)
Chartwell Midwest Indiana, LLC All Membership Interests (Uncertificated)
Chartwell Southern New England, LLC All Membership Interests (Uncertificated)
Chartwell Rocky Mountain Region All Membership Interests (Uncertificated)
Chartwell U.C. ▇▇▇▇▇ Health Systems, LLC All Membership Interests (Uncertificated)
Chartwell Michigan, LLC All Membership Interests (Uncertificated)
Northwest Home Care, LLC All Membership Interests (Uncertificated)
Innova Home Therapies, LLC All Membership Interests (Uncertificated)
Chartwell Wisconsin Enterprises, LLC All Membership Interests (Uncertificated)
Chartwell-Midwest Wisconsin Health Resources, LLC All Membership Interests (Uncertificated)
Tender Loving Care Health Care Services, Inc. 5,000,000 shares of common stock
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Home Care, Inc. 1,000 shares of common stock
Careco, Inc. 100 shares of common stock
T.L.C. Midwest, Inc. 1,000 shares of common stock
T.L.C. Home Health Care, Inc. 100 shares of common stock
T.L.C. Medicare Services of Dade, Inc. 500 shares of common stock
T.L.C. Medicare Services of Broward, Inc. 500 shares of common stock
Tender Loving Care Home Care Services, Inc. 100 shares of common stock
U.S. Ethicare Corporation 100 shares of common stock
U.S. Ethicare Chautauqua Corporation 500 shares of common stock
U.S. Ethicare Erie Corporation 500 shares of common stock
U.S. Ethicare Niagara Corporation 500 shares of common stock
Ethicare Certified Services, Inc. 100 shares of common stock
Staff Builders, Inc. 100 shares of common stock
S.B.H.F., Inc. 100 shares of common stock
Staff Builders Services, Inc. 100 shares of common stock
Staff Builders Home Health Care, Inc. 100 shares of common stock
Staff Builders International, Inc. 100 shares of common stock
St. Lucie Home Health Agency, Inc. 500 shares of common stock
A Reliable Homemaker of ▇▇▇▇▇▇-St. Lucie County, Inc. 1,000 shares of common stock
In addition, the Collateral Agent shall hold any other Interests from time
to time hereafter pledged to Secured Party pursuant to the Med
Subsidiaries Pledge and Security Agreement and delivered to the Collateral
Agent. The Collateral Agent shall, however, have no obligation to solicit
the delivery of any Interests to the Collateral Agent.
2. Each of the Secured Party, the Pledgors and the Collateral Agent
acknowledge and agree that (a) the Interests held by the Collateral Agent
hereunder are restricted securities
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evidencing ownership interests in privately-held entities which are
subsidiaries of Med and, as such, are illiquid assets not readily amenable
to valuation; (b) in the ordinary course of business under this Collateral
Agency Agreement, it is not expected that the Interests will be converted
into anything other than such restricted securities evidencing ownership
interests in privately-held entities, and (c) in the event the Interest
should be converted (including without limitation in any merger,
consolidation, reorganization or similar transaction) into different
securities or assets, the Collateral Agent shall, except as expressly
instructed by the Secured Party, hold such different securities or assets
as Interests hereunder in whatever form they come to the Collateral Agent.
3. The Collateral Agent shall invest and reinvest any moneys and funds in the
Account solely in the Citibank Custody Institutional Market Deposit
Account, a dollar-for-dollar interest-bearing deposit obligation of
Citibank, N.A., FDIC insured up to $100,000, unless such investment is
changed from time to time thereafter as the Secured Party shall direct the
Collateral Agent in a written instruction signed by an authorized person
of the Secured Party, notwithstanding that (A) the Collateral Agent or an
affiliate of the Collateral Agent charges and collects fees and expenses
from such fund for services rendered (provided that such charges, fees and
expenses are on terms consistent with terms negotiated at arm's length)
and (B) the Collateral Agent charges and collects fees and expenses for
services rendered pursuant to this Agreement. Neither the Collateral Agent
nor any of its affiliates shall be required to Account for any profits or
benefits received for services described in clause (A) or (B) above.
Neither the Collateral Agent nor any of its affiliates assume any duty or
liability for monitoring the rating of the selected investment. The
Collateral Agent shall have no responsibility for any investment losses
resulting from the investment, reinvestment or liquidation of the
Interests on deposit in the Account, provided that the Collateral Agent
has made such investment, reinvestment or liquidation of the funds on
deposit in the Account in accordance with the terms, and subject to the
conditions, of this Collateral Agency Agreement. The investment(s) in
which the moneys on deposit in the Account are invested from time to time
may be held by the Collateral Agent directly or through any clearing
agency or depository (collectively, the "Clearing Agency") including the
Federal Reserve/Treasury Book-Entry System for United States and federal
agency securities, and the Depository Trust Company. The Collateral Agent
shall not have any responsibility or liability for the actions or
omissions to act on the part of any Clearing Agency. Any investment
direction contained herein may be executed through an affiliated broker or
dealer of the Collateral Agent and such broker or dealer shall be entitled
to its usual and customary fee. The Collateral Agent shall have no
obligation to invest or reinvest any portion of the Account on the day of
the deposit if such funds are deposited with the Collateral Agent after
11:00 a.m. (
New York time) on such day. In such event, the Collateral
Agent shall invest or reinvest such funds no later than the close of
business on the following business day in
New York. Instructions to invest
or reinvest that are received after 11:00 a.m. (
New York time) will be
treated as if received on the following business day in
New York.
4. The Collateral Agent shall hold any distributions made or income earned on
the Interests during the term of this Collateral Agency Agreement in the
Account, and any distributions, interest accruing on, and other earnings
on investment of, the Interests shall be deemed to be a part of the
Interests, and Med shall be liable for taxes thereon.
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Any loss or expense incurred as a result of an investment will be borne by
the Interests. The parties recognize and agree that the Collateral Agent
will not provide supervision, recommendations or advice relating to either
the investment of the Interests or the purchase, sale, retention or other
disposition of any investment. The Collateral Agent is hereby authorized
to execute purchases and sales of investments as permitted hereunder
through the facilities of its own trading or capital markets operations or
those of any affiliated entity.
5. If Secured Party delivers to Collateral Agent a written notice signed by
an authorized person of the Secured Party that there is an "Event of
Default" under the Amendment Agreement or under the Med Subsidiaries
Pledge and Security Agreement, subject to the other provisions of this
Collateral Agency Agreement, Collateral Agent shall thereafter follow
Secured Party's written directions with respect to the Interests and
Secured Party's rights therein, including without limitation Secured
Party's directions regarding foreclosure upon or the exercise of any other
rights or remedies of Secured Party with respect to such Interests.
- 18 -
SCHEDULE B
Unless otherwise set forth herein, all capitalized terms used but not otherwise
defined herein shall have the meaning given to such terms in the Collateral
Agency Agreement. All terms and conditions of the Collateral Agency Agreement
are incorporated herein by reference.
APPOINTMENT & ACCEPTANCE OF COLLATERAL AGENT. Each of the parties hereto hereby
appoints Citibank, N.A. as the Collateral Agent for the Interests (as
hereinafter defined) and directs Citibank, N.A., as the Collateral Agent, to
open and maintain the Account, in each case upon the terms and conditions set
forth in the Collateral Agency Agreement. Citibank, N.A. hereby accepts such
appointment as the Collateral Agent for the Interests and agrees to open and
maintain the Account and to act as the Collateral Agent for the Interests, in
each case upon the terms and conditions set forth in the Collateral Agency
Agreement.
AUTHORIZED PERSON. Each of the parties hereto hereby designates each of the
persons identified in SCHEDULE C or D hereto (as applicable), and shall from
time to time hereafter designate one or more persons in writing, as persons
authorized to act on its behalf with respect to the Interests and the Collateral
Agency Agreement, including, without limitation, instructions to designate
additional or substitute persons authorized to so act.
DISTRIBUTION. The Collateral Agent shall distribute the Interests solely in
accordance with written instructions, signed by an authorized person of the
Secured Party, as soon as practicable upon receipt of such instructions
(together with any necessary stock or bond powers or similarly necessary
transfer documentation). The parties hereto agree that the Collateral Agent
shall incur no liability for any acts or omissions made in accordance with the
signed instructions of the Secured Party.
EXCLUSIVE BENEFIT; ASSIGNMENT. Except as specifically set forth in the
Collateral Agency Agreement, the Collateral Agency Agreement is for the
exclusive benefit of the parties hereto and their respective permitted
successors hereunder, and shall not be deemed to give, either expressly or
implicitly, any legal or equitable right, remedy, or claim to any other entity
or person whatsoever. No party may assign any of its rights or obligations under
the Collateral Agency Agreement without the prior written consent of the other
parties except that the Collateral Agent may resign upon the terms described
herein.
CORPORATE ACTIONS. The Collateral Agent does not, and shall not be deemed to,
assume any responsibility to monitor any corporate actions affecting the
Interests. The Collateral Agent shall have no responsibility and shall not be
liable for ascertaining or acting upon any calls, conversions, exchange offers,
tenders, interest rate changes, or similar matters relating to the Interests
unless the Collateral Agent shall have received actual and timely notice of the
same. The Collateral Agent does not, and shall not be deemed to, assume any
responsibility or incur any liability for any act or omission to act with
respect to any discretionary corporate action affecting the Interests. In the
event the Collateral Agent receives notice of any discretionary corporate action
in respect of the Interests, including, without limitation, the solicitation of
a vote or consent in respect of the Interests, the Collateral Agent shall
request written instructions from the person identified in SCHEDULE C or D (as
applicable) to give instructions in respect of discretionary corporate actions
and shall use commercially
- 19 -
reasonable efforts to act upon such instructions. In the absence of such
instructions, the Collateral Agent shall not be obligated to take any action in
respect of the discretionary corporate action affecting the Interests.
USE OF NAME. No printed or other material for publication or general
distribution in any language, including prospectuses, notices, reports, and
promotional material which mentions "Citibank" by name or the rights, powers, or
duties of the Collateral Agent under the Collateral Agency Agreement shall be
issued by any other parties hereto, or on such party's behalf, without the prior
written consent of the Collateral Agent.
FORCE MAJEURE. The Collateral Agent shall not incur any liability for not
performing any act or fulfilling any obligation hereunder by reason of any
occurrence beyond its control (including, but not limited to, any provision of
any present or future law or regulation or any act of any governmental
authority, any act of God or war or terrorism, or the unavailability of the
Federal Reserve Bank wire services or any electronic communication facility).
SEVERABILITY. The invalidity, illegality or unenforceability of any provision of
the Collateral Agency Agreement shall in no way affect the validity, legality or
enforceability of any other provision. If any provision of the Collateral Agency
Agreement is held to be unenforceable as a matter of law, the other provisions
shall not be affected thereby and shall remain in full force and effect.
REPRESENTATIONS & WARRANTIES. Each of the parties hereto hereby represents and
warrants that (i) the Collateral Agency Agreement has been duly authorized,
executed and delivered on its behalf by a person thereunto duly and validly
authorized and constitutes its legal, valid and binding obligation, and (ii) the
execution and delivery of, and the performance of its obligations under, the
Collateral Agency Agreement do not violate any law or regulation applicable to
it.
LIMITATION ON LIABILITY. The Collateral Agent shall not be liable for any action
taken or omitted or for any loss or injury resulting from its actions or its
performance or lack of performance of its duties hereunder in the absence of
gross negligence or willful misconduct on its part as adjudicated by a court of
competent jurisdiction. The Collateral Agent is authorized to act, and shall not
be liable for acting, in reliance upon any judgment, order, instruction, notice,
certification, demand, consent, authorization, receipt, power of attorney or
other writing delivered to it by any other party without being required to
determine the authenticity or validity thereof, the correctness of any fact
stated therein, the propriety or validity of the service thereof, or the
jurisdiction of the court issuing any judgement or order. The Collateral Agent
may act in reliance upon any signature believed by it to be genuine and may
assume that such person has been properly authorized to do so. The Collateral
Agent shall not be liable (i) for the acts or omissions of any nominees,
correspondents, designees, agents, subagents or subcustodians, (ii) for the
investment or reinvestment of any funds in the Account held by it hereunder, in
each case in good faith, in accordance with the terms hereof, including without
limitation any liability for any delays (not resulting from its gross negligence
or willful misconduct as adjudicated by a court of competent jurisdiction) in
the investment or reinvestment of said funds in the Account, or any loss of
interest incident to any such delays, or (iii) for an amount in excess of the
value of the Interests, valued as of the date of deposit, but only to the extent
of direct monetary damages.
- 20 -
NOTICES. Any notice or other communication required or permitted under the
Collateral Agency Agreement shall be deemed to have been duly given (i) five (5)
business days following deposit in the mails if sent by registered or certified
mail, postage prepaid, (ii) when sent, if sent by facsimile transmission, if
receipt thereof is confirmed by successful transmission, (iii) when delivered,
if delivered personally to the intended recipient and (iv) three (3) business
days following deposit with a nationally recognized courier service, in each
case addressed as follows:
(a) If to the Collateral Agent, to:
Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 212.804.5401
With a copy (which shall not constitute notice) to:
Patterson, Belknap, ▇▇▇▇ & Tyler LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 212.336.2222
(b) If to Med or any other Pledgor, to:
Med Diversified, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Chief Executive Officer
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 978.656.9691
With a copy (which shall not constitute notice) to:
Manatt, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 310.312.4224
(c) If to the Secured Party, to:
Private Investment Bank Limited
Devonshire House
Queen Street
- 21 -
P.O. Box N-3918
Attn.: Chairman or General Manager
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 242.302.5970
With a copy (which shall not constitute notice) to:
Irell & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 310.203.7623
or to such other address as any party may have furnished to the other parties in
writing in accordance with this paragraph.
ENTIRE AGREEMENT; KNOWLEDGE. Except as otherwise specifically set forth herein,
the Collateral Agency Agreement supersedes all prior oral or written agreements
or understandings in respect of the subject matter hereof. The Collateral Agency
Agreement sets forth the entire understanding of the parties with respect to the
Collateral Agent's duties and obligations regarding the Interests and the
Account, and no duties or obligations shall be implied from the terms of the
Collateral Agency Agreement or any other agreement, instrument or document
referenced herein. Notwithstanding anything else contained in this Collateral
Agency Agreement, the Collateral Agent shall neither be responsible for or
under, nor chargeable with knowledge of the existence, the content, or the terms
and conditions of, any other agreement, instrument or document, whether or not
referenced herein. The Collateral Agent shall not be attributed with any
knowledge or information that any other department or division of Citibank, N.A.
or any of Citibank, N.A.'s affiliates may have from time to time.
TERMINATION. The Collateral Agency Agreement shall terminate upon the earlier of
(a) the distribution of all Interests from the Account established hereunder in
accordance with the terms, and subject to the conditions, of the Collateral
Agency Agreement, and (b) a written notice to the Collateral Agent signed by an
authorized person of the Secured Party that this Collateral Agency Agreement is
terminated.
- 22 -
SCHEDULE C
INCUMBENCY CERTIFICATE OF PRIVATE INVESTMENT BANK LIMITED
The undersigned certifies that he is the Chairman of Private Investment Bank
Limited, a Bahamas bank and trust company (the "Company"), and as such s/he is
authorized to execute this Certificate and further certifies that the following
persons have been elected or appointed, are qualified, and are now acting as
officers of the Company in the capacity or capacities indicated below, and that
the signatures set forth opposite their respective names are their true and
genuine signatures. He further certifies that any of the persons listed below
are authorized, individually, to sign agreements and give written instructions
with regard to any matters pertaining to the Collateral Agency Agreement, dated
August __, 2002:
Name Title Phone Signature
---- ----- ----- ---------
Francois Rouge Chairman 242.302.5950
▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Director 242.302.5950
▇▇▇▇▇ ▇▇▇▇▇▇ General Manager 242.302.5950
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal
of the Company this _____ day of August, 2002.
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director & Secretary
Call Back Authorized Individuals:
The below listed persons (must list at least two individuals) have been
designated Call Back Authorized Individuals of the Company and will be
notified by Citibank, N.A. upon the release of any Interests from the
account unless an original "Standing or Predefined Instruction" letter is
on file with Citibank, N.A.
Name Phone
---- -----
Francois Rouge 242.302.5950
▇▇▇▇▇ ▇▇▇▇▇▇ 242.302.5950
- 23 -
SCHEDULE D
INCUMBENCY CERTIFICATE OF MED DIVERSIFIED, INC.
The undersigned certifies that s/he is the [INSERT TITLE] of Med Diversified,
Inc., a Nevada corporation (the "Company"), and as such s/he is authorized to
execute this Certificate and further certifies that the following persons have
been elected or appointed, are qualified, and are now acting as officers of the
Company in the capacity or capacities indicated below, and that the signatures
set forth opposite their respective names are their true and genuine signatures.
S/he further certifies that any of the persons listed below [is/are] authorized
[please choose one] [individually or jointly] to sign agreements and give
written instructions with regard to any matters pertaining to the Collateral
Agency Agreement, dated [DATE]:
Name Title Phone Signature
---- ----- ----- ---------
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal
of the Company this __ day of August, 2002
[SIGNED BY SOMEONE WHOSE NAME
IS NOT INCLUDED IN THE ABOVE LIST]
Name:
--------------------------
Title:
--------------------------
Call Back Authorized Individuals:
The below listed persons (must list at least two individuals) have been
designated Call Back Authorized Individuals of the Company and will be
notified by Citibank, N.A. upon the release of any Interests from the
account unless an original "Standing or Predefined Instruction" letter is
on file with Citibank, N.A.
6.
- 24 -
SCHEDULE E
FEES AND COSTS
[ATTACHED]
- 25 -
[CITIBANK LOGO]
SCHEDULE E
SCHEDULE OF FEES FOR SERVICES AS
COLLATERAL AGENT
FOR PRIVATE INVESTMENT BANK LIMITED &
MED DIVERSIFIED, INC.
AUGUST 13, 2002
ACCEPTANCE FEE
To cover the acceptance of the Escrow Agency appointment, the study of the
Escrow Agreement, and supporting documents submitted in connection with the
execution and delivery thereof, communication with other members of the working
group:
WAIVED
ANNUAL ADMINISTRATION FEE
To cover maintenance of accounts including safekeeping of assets, normal
administrative functions of the Escrow Agent, including maintenance of the
Escrow Agent's records, follow-up of the Escrow Agreement's provisions, and any
other duties required by the Escrow Agent under the terms of the Escrow
Agreement:
$12,500 PER ANNUM (OR ANY PART OF A YEAR THEREOF)
TRANSACTION FEE
WAIVED (CONDITIONAL UPON COLLATERAL FUNDS INVESTED IN THE
CITIBANK INSTITUTIONAL MARKET DEPOSIT ACCOUNT AS
APPLICABLE)
LEGAL FEE
To cover review of legal documents by Citibank's outside counsel on behalf of
Citigroup's Private Bank Custody & Advisor Services:
INITIAL REVIEW OF THE COLLATERAL AGENCY AGREEMENT $5,000 (ESTIMATE) +
DISBURSEMENTS, PENDING ENSUING NEGOTIATIONS
[CITIBANK LOGO]
OTHER FEES
$2,500 per amendment when necessary
ASSUMPTIONS:
- Funds deposited in the Collateral Account to be invested in the Citibank
Institutional Market Deposit Account (as applicable).
================================================================================
The above schedule of fees does not include charges for out-of-pocket expenses
or for any services of an extraordinary nature that we or our legal counsel may
be called upon from time to time to perform in either an agency or fiduciary
capacity, nor does it include the fees of our legal counsel. Fees are also
subject to satisfactory review of the documentation, and we reserve the right to
modify them should the characteristics of the transaction change. Our
participation in this program is subject to internal approval of the third party
depositing monies into the escrow account. The acceptance fee is payable upon
execution of the documents. Should this schedule of fees be accepted and agreed
upon and work commenced on this program but subsequently halted and the program
is not brought to market, the Acceptance Fee and legal fees incurred, if any,
will still be payable in full. This Fee Schedule is offered for, and applicable
to the program cited on page one only, and is guaranteed for thirty calendar
days from the date on this proposal. After thirty calendar days, this offer can
be extended in writing only by an authorized representative of Citibank, N.A.
Agreed and Accepted:
AUTHORIZED REPRESENTATIVE FOR MED
DIVERSIFIED
---------------------------------
(Signature)
---------------------------------
(Print Name/Company Name)
---------------------------------
(Title)
---------------------------------
(Date)