Exhibit 10.38
PLEDGE AGREEMENT
DEPOSIT ACCOUNT
This Pledge Agreement - Deposit Account
(as the same may be amended, restated or otherwise modified, this
“Agreement”) is made as of the 14 day of March, 2006 by
and between the FIRST ALBANY COMPANIES INC. , a New York
corporation with its principal office and place of business at 677
Broadway, Albany, New York 12207 (the “Debtor”) and
KEYBANK NATIONAL ASSOCIATION , a national banking
association duly constituted and existing under the laws of the
United States of America, with an office for the transaction of
business at 66 South Pearl Street, Albany, New York 12207 (the
“Secured Party”).
For good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties to this Pledge Agreement hereby agree as
follows;
As used herein, “Obligations”
shell mean: (i) all Obligations, as defined in the Loan Agreement
Re: $11,000,000.00 Term Loan dated as of March 14, 2006 (the
“Loan Agreement”), including, but not limited to all
obligations and/or indebtedness due under or evidenced or
contemplated by the Loan Documents, the 2006 Term Note, the
“loan documents” as defined in the 2004 Loan Agreement,
the “loan documents” as defined in the 2005 Loan
Agreement, the 2005/2004 Term Loan Mandatory Prepayment, and all
modifications, extensions, renewals and replacements thereof; (ii)
every liability, now or hereinafter owing to Bank by Borrower under
and pursuant to those credit facilities (the "Credit
Facilities”) established for the Borrower by the Bank under
and pursuant to the Loan Agreement, the 2005 Loan Agreement and/or
the 2004 Loan Agreement, and all amendments, modifications,
renewals and replacements of the foregoing; (iii) every other
liability, now or hereafter owing to Bank by Borrower, including,
without limitation, every liability, whether owing by only Borrower
or by Borrower with one or more others in a several, joint or joint
and several capacity, whether owing absolutely or contingently,
whether created by note, overdraft, guaranty of payment or other
contract or by a quasi-contract, tort, statute or other operation
of law, whether incurred directly to Bank or acquired by Bank by
purchase, pledge or otherwise and whether participated to or from
Bank in whole or in part; (iv) all costs and expenses, including
attorneys’ fees, incurred by Bank in connection with the
collection of any portion of the indebtedness described in (i) and
(ii) hereof; and (v) the payment of all other sums, with interest
thereon, advanced in accordance with the terms of this Agreement,
the Loan Agreement and all other documents, instruments and
agreements held by the Bank in connection with the Obligations
and/or pursuant to the terms of the “loan documents”,
as defined in the Loan Agreement, the 2005 Loan Agreement or the
2004 Loan Agreement, to protect the security of this Agreement and
the performance of the covenants and agreements of Borrower
contained in this Agreement and the other Loan Documents (the
obligations referenced or encompassed within (i) – (v) are
referred to herein as the “Secured Obligations”)
Capitalized terms used herein which are not defined herein
shall have that meaning ascribed to such terms in the Loan
Agreement.
Grant of Security Interest.
Debtor hereby pledges, assigns and
grants to the Secured Party, to secure the payment and performance
in full of the Obligations, a first priority security interest in
the following properties, assets and rights of the Debtor, (all of
the same being hereinafter called the
“Collateral”):
Deposit Account no. 329 681 044429 in the
present amount of $200.00 currently maintained by Debtor with
Secured Party (“Deposit Account”), together with all
interest whether accrued or hereafter accruing, and any and all
additional deposits hereafter made to the Deposit Account, any and
all proceeds from the Deposit Account, and all renewals,
replacements and substitutions for any of the foregoing.
1.
Authorization to File Financing
Statements. Debtor
hereby irrevocably authorizes the Secured Party to file any UCC
financing statements to perfect Secured Party’s security
interest in the Collateral. The Debtor agrees to sign all
documents that are necessary to perfect, protect or continue
Secured Party’s security interest in the Collateral and to
furnish any additional information to the Secured Party promptly
upon the Secured Party’s request.
2.
Other Actions. Debtor agrees to take any and all other actions
as the Secured Party may determine to be necessary or useful for
the attachment, perfection and first priority of, and the ability
of the Secured Party to enforce, the Secured Party’s security
interest in any and all of the Collateral, including, without
limitation, (i) executing, delivering and, where appropriate,
filing financing statements and amendments relating thereto under
the Uniform Commercial Code (“UCC”), to the extent, if
any, that the Debtor’s signature thereon is required
therefor, (ii) complying with any statute, regulation or treaty of
the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of,
or ability of the Secured Party to enforce, the Secured
Party’s security interest in such Collateral, (iii) obtaining
governmental and other third party waivers, consents and approvals
in form and substance satisfactory to the Secured Party, (iv)
taking all actions under any earlier versions of the UCC or under
any other law, as reasonably determined by the Secured Party to be
applicable in any relevant UCC or other Jurisdiction, including any
foreign jurisdiction.
3.
Secured Party’s
Rights. (a) While this
Agreement is in effect the Debtor shall have no right to make
withdrawal from the Deposit Account, except as otherwise provided
herein and in the other Loan Documents, and the Secured Party shall
retain all rights to possession of the Collateral, together with
any evidence of the Collateral, such as certificates or passbooks.
Secured Party shall exercise reasonable care in the physical
custody of any certificate or passbook, but shall have no other
obligation to protect or maintain the Collateral or its value.
Without limitation, Secured Party shall have no
responsibility to collect or protect income on the Collateral, to
protect any rights against the issuers of the Collateral, to
ascertain maturities or exchanges of the Collateral, or to inform
the Debtor regarding any of the foregoing. Secured Party may
take, in its sole discretion, any action on Debtor’s behalf,
to maintain or preserve title to the Collateral; any amounts
expended by Secured Party in taking such action will be payable by
Debtor and will be secured by this Agreement.
(b)
Debtor hereby irrevocably appoints
Secured Party as its true and lawful attorney-in-fact, with full
power of substitution, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments necessary or useful
to accomplish the purposes of this Agreement. This power is
given as security for the Obligations and shall remain in full
force and effect until this Agreement is terminated.
(c)
From time to time as required by Section
2.11 of the Loan Agreement, Secured Party shall transfer certain of
the funds on deposit in the Deposit Account to the Debtor in
connection with an Excess Collateral Amount Event as and when
specified in Section 2.11 of the Loan Agreement
