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Exhibit 10.82
SECOND AMENDED AND RESTATED SECOND LIEN PLEDGE
AGREEMENT
THIS SECOND AMENDED AND RESTATED SECOND LIEN PLEDGE AGREEMENT
(this " Agreement ") is effective as of the 26 th
day of November, 2008, by and between Arthur E. Lipper, M.D. ("
Lipper " or the " Pledgor ") and Bank of America,
N.A., as administrative agent, and its successors and assigns
(collectively, the " Administrative Agent ") under the
Credit Agreement (as defined below). Capitalized terms used
herein, but not defined herein, shall have the respective meanings
set forth in the Credit Agreement.
RECITALS
A.
Administrative Agent and Jacob Y. Terner, M.D. (" Original
Owner ") are party to that certain Second Lien Pledge Agreement
dated as of August 8, 2007 (the " Original Pledge
Agreement "), wherein Original Owner granted to Administrative
Agent a lien and security interest in the Stock, as more fully set
forth therein.
B.
Administrative Agent and Osmundo R. Saguil, M.D. (" Prior
Owner ") are party to that certain Amended and Restated Second
Lien Pledge Agreement dated as of August 8, 2008 (the "
Prior Pledge Agreement "), wherein Prior Owner granted to
Administrative Agent a lien and security interest in the Stock, as
more fully set forth therein.
C.
Simultaneous with the execution of the Prior Pledge Agreement, the
Prior Owner acquired from Original Owner, (i) all of the
issued and outstanding shares of PMG and (ii) all of the
shares of Nuestra Familia Medical Group, Inc. owned by PMG,
representing 55.02% of the issued and outstanding shares thereof
(collectively with (i), the " Stock ").
D.
Simultaneous with the execution of this Agreement, the Pledgor has
acquired from Prior Owner the Stock.
E.
Simultaneous with the execution of this Agreement, the Pledgor has
been appointed (i) Chief Executive Officer of PMG,
(ii) Vice President of PMG’s affiliate, Holdings, and
(iii) Vice President and Chief Medical Officer of
Holdings’ subsidiary, PMS.
F.
Pursuant to the terms of the Loan Documents, Pledgor is required to
grant to the Administrative Agent, for the benefit of the Secured
Parties, a lien and security interest in the Stock and Collateral
(as defined below).
G.
Pledgor and the Administrative Agent desire to amend and restate
the Prior Pledge Agreement in its entirety as set forth herein.
NOW THEREFORE, in consideration of the foregoing promises and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties, the Administrative
Agent and the Pledgor agree to amend and restate the Prior Pledge
Agreement to read in its entirety as follows:
1.
GRANT OF SECURITY INTEREST.
(a)
The Pledgor hereby irrevocably and unconditionally grants a second
priority security interest in, a lien upon and the right of set-off
against, and assigns and transfers to the
Administrative Agent, for the benefit of the Administrative
Agent and the Secured Parties, all property referred to in
Exhibit A attached hereto and incorporated herein, as
hereafter amended or supplemented from time to time (the "
Collateral "). The parties hereto expressly agree that
all rights, assets and property at any time held in or credited to
any securities account constituting Collateral shall be treated as
financial assets as defined in the Uniform Commercial Code as in
effect in any applicable state (the " UCC ").
(b)
Notwithstanding anything contained herein to the contrary, the
liens and security interests granted to the Administrative Agent,
for the benefit of the Lenders, pursuant to this Agreement, and the
exercise of any right or remedy by the Administrative Agent, for
the benefit of the Lenders, under this Agreement, are subject to
the provisions of the Intercreditor Agreement. In the event of any
conflict between the terms of the Intercreditor Agreement and this
Agreement, the terms of the Intercreditor Agreement shall govern
and control.
2.
INDEBTEDNESS.
(a)
The Collateral secures and will secure all Indebtedness of
(i) Prospect Medical Group, Inc., a California
professional corporation (" PMG "), (ii) Prospect
Medical Holdings, Inc., a Delaware corporation ("
Holdings ") and (iii) PMS, in each case, owed to the
Administrative Agent and the Lenders. Each person or entity
obligated under any Indebtedness is sometimes referred to in this
Agreement as a "Debtor".
(b)
"Indebtedness" means:
(i)
all "Obligations" (as such term is defined in the Credit Agreement)
under (A) that certain Second Lien Credit Agreement (as
amended, restated, modified or otherwise supplemented, the "
Credit Agreement ") dated as of August 8, 2007 among
Holdings, PMG, the Administrative Agent and the other financial
institutions from time to time party thereto (the " Lenders
"), (B) the other Loan Documents, and (C) and all other
instruments, documents and agreements of every kind and nature now
or hereafter executed in connection with the Credit Agreement
(including all renewals, increases, extensions, restatements and
replacements thereof and amendments and modifications of any of the
foregoing),
(ii)
all obligations and liabilities of Pledgor to the Administrative
Agent hereunder, and
(iii)
all costs, attorneys’ fees and expenses incurred by the
Administrative Agent in connection with the collection or
enforcement of any of the above.
(c)
Unless otherwise agreed in writing, "Indebtedness" shall not
include any debts, obligations or liabilities which are or may
hereafter be "consumer credit" subject to the disclosure
requirements of the Federal Truth in Lending law or any regulation
promulgated thereunder.
3.
COVENANTS, REPRESENTATIONS AND WARRANTIES. Pledgor and
each Debtor covenant, represent and warrant that unless compliance
is waived by the Administrative Agent in writing:
(a)
Pledgor is the legal and beneficial owner of all the Collateral
free and clear of any and all liens, encumbrances, or interests of
any third parties other than the Second Priority Lien of the
Administrative Agent and the first priority security interest of
the First Lien Administrative Agent, and will keep the Collateral
free of all liens, claims, security interests and encumbrances
of
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any kind or nature, whether voluntary or involuntary, except the
Second Priority Lien of the Administrative Agent and the first
priority security interest of the First Lien Administrative
Agent. Pledgor is the (i) Chief Executive Officer of
PMG, (ii) Vice President of PMG’s affiliate, Holdings,
and (iii) Vice President and Chief Medical Officer of
Holdings’ subsidiary, PMS. Pledgor holds title to the
Collateral as an individual and such Collateral is subject to
assignable option agreements that allow PMS and PMG, as applicable,
to acquire the Collateral or designate a successor physician as the
record holder of such Collateral at any time (collectively, as each
may be amended, the " Option Agreement ").
(b)
Pledgor and each Debtor shall, at PMG’s expense, take all
actions necessary or advisable from time to time to maintain the
Second Priority Lien and perfection thereof of the Administrative
Agent in the Collateral and shall not take any actions that would
alter, impair or eliminate said priority or perfection.
(c)
Pledgor and each Debtor agree to cause PMG, and PMG agrees, to pay
prior to delinquency all taxes, charges, liens and assessments
against the Collateral, and upon the failure of Pledgor to do so,
the Administrative Agent at its option may pay any of them and
shall be the sole judge of the legality or validity thereof and the
amount necessary to discharge the same.
(d)
If any of the Collateral is margin stock as defined in Regulation U
promulgated by the Board of Governors of the Federal Reserve System
of the United States (" FRB "), Pledgor will provide the
Administrative Agent a properly executed Form U-1 Purpose
Statement. The Administrative Agent and Pledgor will comply with
the requirements and restrictions imposed by Regulation U.
(e)
Pledgor’s exact legal name is correctly set forth on the
signature page hereof. Pledgor will notify the Administrative
Agent in writing at least 30 days prior to any change in
Pledgor’s name or identity.
(f)
Pledgor resides and has for the four month period preceding the
date hereof resided in the state specified on the signature
page hereof. Pledgor shall give the Administrative Agent
at least thirty (30) days notice before changing the location of
his residence.
4.
REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING EQUITY
SECURITIES COLLATERAL. Pledgor and each Debtor hereby
represent, warrant and covenant the following with respect to any
equity securities comprising any or all of the Collateral
(collectively, the " Equity Securities ") and covenant and
agree to promptly notify the Administrative Agent in writing in the
event that any of the foregoing representations and warranties is
no longer true and correct:
(a)
The Equity Securities have been duly authorized and validly issued
and are fully paid and non-assessable.
(b)
There are no restrictions on the pledge of the Equity Securities by
Pledgor to the Administrative Agent nor on the sale of the Equity
Securities by Pledgor or the Administrative Agent (whether pursuant
to securities laws or regulations or any shareholder, lock-up or
other similar agreement or insider trading rules of the
issuer).
5.
ADMINISTRATIVE AGENT APPOINTED ATTORNEY IN FACT. Upon the
occurrence and during the continuation of an Event of Default,
Pledgor authorizes and irrevocably appoints the Administrative
Agent as Pledgor’s true and lawful attorney-in-fact with full
power of substitution to take any action and execute or otherwise
authenticate any record or other documentation
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that the Administrative Agent considers necessary or advisable
to accomplish the purposes of this Agreement, including but not
limited to, the following actions: (a) to endorse, receive,
accept and collect all checks, drafts, other payment orders and
instruments representing or included in the Collateral or
representing any payment, dividend or distribution relating to any
Collateral or to take any other action to enforce, collect or
compromise any of the Collateral; (b) to transfer any
Collateral (including converting physical certificates to
book-entry holdings) into the name of the Administrative Agent or
its nominee or any broker-dealer (which may be an affiliate of the
Administrative Agent) and to execute any control agreement covering
any Collateral on Pledgor’s behalf and as attorney-in-fact
for Pledgor in order to perfect the Administrative Agent’s
Second Priority Lien in the Collateral and in order to provide the
Administrative Agent with control of the Collateral, and
Pledgor’s signature on this Agreement or other authentication
of this Agreement shall constitute an irrevocable direction by
Pledgor to any bank, custodian, broker dealer, any other securities
intermediary or commodity intermediary holding any Collateral or
any issuer of any letters of credit to comply with any instructions
or entitlement orders, of the Administrative Agent without further
consent of Pledgor; (c) to participate in any
recapitalization, reclassification, reorganization, consolidation,
redemption, stock split, merger or liquidation of any issuer of
securities which constitute Collateral, and in connection therewith
the Administrative Agent may deposit or surrender control of the
Collateral, accept money or other property in exchange for the
Collateral, and take such action as it deems proper in connection
therewith, and any money or property received on account of or in
exchange for the Collateral shall be applied to the Indebtedness or
held by the Administrative Agent thereafter as Collateral pursuant
to the provisions hereof; (d) to exercise any right, privilege
or option pertaining to any Collateral, but the Administrative
Agent has no obligation to do so; (e) to file any claims, take
any actions or institute any proceedings which the Administrative
Agent determines to be necessary or appropriate to collect or
preserve the Collateral or to enforce the Administrative
Agent’s rights with respect to the Collateral; (f) to
execute in the name or otherwise authenticate on behalf of Pledgor
any record reasonably believed necessary or appropriate by the
Administrative Agent for compliance with laws, rules or
regulations applicable to any Collateral, or in connection with
exercising the Administrative Agent’s rights under this
Agreement; (g) to file any financing statement relating to
this Agreement; (h) to make any compromise or settlement it
deems desirable or proper with reference to the Collateral;
(i) to do and take any and all actions with respect to the
Collateral and to perform any of Pledgor’s obligations under
this Agreement; and (j) to execute any documentation
reasonably believed necessary by the Administrative Agent for
compliance with Rule 144 or any other restrictions, laws,
rules or regulations applicable to any Collateral hereunder
that constitutes restricted or control securities under the
securities laws. The foregoing appointments are irrevocable
and coupled with an interest and shall survive the death or
disability of Pledgor and shall not be revoked without the
Administrative Agent’s written consent. To the extent
permitted by law, Pledgor hereby ratifies all said attorney-in-fact
shall lawfully do by virtue hereof.
6.
VOTING RIGHTS.
(a)
So long as no Event of Default shall have occurred and is
continuing and the Administrative Agent has not delivered the
notice specified in subsection (b) below, Pledgor shall be
entitled to exercise any and all voting and other consensual rights
pertaining to the Collateral or any part thereof for any purpose
not inconsistent with the terms of this Agreement or any document
or agreement executed in connection herewith.
(b)
Upon the occurrence and during the continuance of an Event of
Default, at the option of the Administrative Agent exercised in a
writing sent to Pledgor, all rights of Pledgor to exercise the
voting and other consensual rights which it would otherwise be
entitled to exercise pursuant to subsection (a) above shall
cease, and the Administrative Agent shall thereupon have the sole
right to exercise such voting and other consensual rights.
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7.
EVENTS OF DEFAULT; REMEDIES.
(a)
Any one or more of the following shall be a default hereunder (each
an, " Event of Default "):
(i)
An "Event of Default" under the Credit Agreement (as such term is
defined in the Credit Agreement) occurs and is continuing.
(ii)
Pledgor or any Debtor fails to pay any Indebtedness when due, after
giving effect to any applicable grace period.
(iii)
Pledgor or any Debtor fails to cure a breach of any collateral
maintenance provisions set forth in this Agreement or in any
agreement governing or executed or delivered in connection with any
Indebtedness within the applicable cure period specified
therein.
(iv)
Pledgor or any Debtor breaches any term, provision, warranty or
representation under this Agreement not specifically referred to in
subsection (a) of this Section or breaches any term,
provision, warranty or representation of the Credit Agreement or
any other agreement or instrument evidencing, securing or executed
or delivered in connection with the Indebtedness beyond any grace
period provided with respect thereto.
(v)
Any control agreement covering any Collateral is breached, or any
party to such control agreement terminates or notifies the
Administrative Agent or Pledgor of its intention to terminate the
control agreement or denies the enforceability of the control
agreement.
(vi)
Any involuntary lien of any kind or character attaches to any of
the Collateral.
(b)
If an Event of Default occurs, the Administrative Agent may do any
one or more of the following:
(i)
Declare any Indebtedness immediately due and payable, without
notice or demand.
(ii)
Exercise as to any or all of the Collateral all the rights, powers
and remedies of an owner, subject to the provisions of
Section 6 of this Agreement.
(iii)
Enforce the security interest given hereunder pursuant to the UCC
and any other applicable law.
(iv)
Subject to applicable Laws (including, without limitation,
securities laws and regulations), sell all or any part of the
Collateral at public or private sale in accordance with the UCC,
without advertisement, in such manner and order as the
Administrative Agent may elect. The Administrative Agent may
purchase the Collateral for its own account at any such sale.
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(v)
Enforce the security interest of the Administrative Agent in any
deposit account which is part of the Collateral by applying such
account to the Indebtedness.
(vi)
Exercise any other remedy provided under this Agreement or by any
applicable law.
(vii)
Comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and such compliance
will not be considered to affect adversely the commercial
reasonableness of any sale or other disposition of the
Collateral.
(viii)
Sell the Collateral without giving any warranties as to the
Collateral. The Administrative Agent may specifically
disclaim any warranties of title or the like. This procedure
will not be considered to affect adversely the commercial
reasonableness of any sale or other disposition of the
Collateral.
(ix)
If requested by the Administrative Agent, Holdings, PMS and/or PMG
will direct Pledgor (whether pursuant to the Option Agreement or
otherwise), or his estate, as the case may be, to sell and Pledgor,
or his estate, as the case may be, shall promptly sell all (or any
portion as may be directed by the Administrative Agent) of the
Collateral to such person(s) as Holdings, PMS and PMG shall in
their reasonable discretion direct, subject to the reasonable
approval of Administrative Agent (the " New Shareholder(s)
"). If requested by the Administrative Agent, such New
Shareholder(s) shall execute and deliver to the Administrative
Agent a pledge agreement and such other agreements, documents and
instruments as the Administrative Agent and the Lenders may request
evidencing or relating to the Collateral, each in form and
substance satisfactory to the Administrative Agent.
8.
RIGHT TO CURE; LIMITATION ON ADMINISTRATIVE AGENT’S
DUTIES. If Pledgor fails to perform any agreement contained
herein, the Administrative Agent may perform or cause performance
of such agreement and the expenses of the Administrative Agent
incurred in connection therewith shall be payable by the Debtors,
on a joint and several basis, under Section 13. Any
powers conferred on the Administrative Agent hereunder are solely
to protect its interest in the Collateral and shall not impose any
dut
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