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EXHIBIT 10.10
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement (this "Agreement") is entered into this
28th day of February, 1994, by and between Myriad Industries, Inc., a Delaware
corporation ("Pledgor"), and Fairfield Developments, Inc., a Washington
Corporation ("Pledgee").
RECITALS
A. Pledgor is indebted to Pledgee in the amount of $55,000.00, as evidenced by a
promissory note of even date herewith made and delivered by Pledgor to Pledgee.
B. Pursuant to the agreement of the parties, Pledgee has agreed to forego its
rights of collection with respect to all existing indebtedness of Pledgor in
return for Pledgor's promissory note in the amount set forth above and its
pledge to Pledgee of the shares of the common stock of any new subsidiary
subsequently purchased or organized by Myriad pursuant to the terms and
conditions set forth below.
C. Pledgor has determined that it is in its best interest to agree to the terms
set forth above.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing
premises, the mutual covenants set forth and other good and valuable
consideration, hereby agree as follows:
1. PLEDGE OF STOCK.
a. Pledge. Pledgor hereby assigns and transfers to
Pledgee, and grants a security interest to Pledgee in, the Shares as security
for the prompt payment to Pledgee when due, whether by acceleration or
otherwise, and at all times thereafter, of Pledgor's obligation to make payments
to Pledgee from the date hereof pursuant to the Promissory Note.
b. Delivery. Concurrently with the exception and
delivery of this Agreement, Pledgor agrees to promptly deliver to Pledgee any
and all Certificates representing Pledgor's interests in any new subsidiary
subsequently purchased or organized by Myriad pursuant to the terms and
conditions set forth below. Pledgee agrees that so long as Pledgor does not
breach or default in any payment due Pledgee pursuant to the Promissory Note or
this Agreement, Pledgee shall hold in trust pursuant to the provisions of this
Agreement the Certificates and any other items called for hereinbelow.
2. RIGHTS AND BENEFITS OF PLEDGED SHARES.
Unless and until default shall occur under the terms of this Agreement, Pledgor
shall be entitled to vote the Shares and to receive cash dividends upon the
shares; provided, however, that Pledgor
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shall be permitted to receive no cash dividends at any time while Pledgor is in
default of its obligations to Pledgee pursuant to the Promissory Note and all
such cash dividends shall be deposited with Pledgee.
3. APPOINTMENT OF PLEDGEE AS ATTORNEY-IN-FACT.
In the event of a default hereunder, Pledgor hereby appoints and constitute
Pledgee as its true and lawful attorney-in-fact and with full power of
substitution in the premises to execute assignments and endorsements of the
Shares as may be necessary to effect the rights and remedies which Pledgee has
under this Agreement.
4. WARRANTIES OF PLEDGOR
a. Pledgor has marketable title to the Stock, free from prior
liens, encumbrances, charges or pledges of any kind;
b. The Stock constitutes duly authorized and issued shares of
Pledgor in accordance with the Articles of Incorporation and Bylaws of Pledgor
and in compliance with all applicable law;
c. Pledgor has been duly formed and is in good standing as a
Delaware corporation, and is in compliance with all applicable law of each
jurisdiction in which it does business;
d. Pledgor's entry into this Agreement will not violate any
prior agreement, contract, court order or applicable law, or Pledgor's Articles
of Incorporation or Bylaws;
5. COVENANTS OF PLEDGOR.
a. Pledgor hereby covenants that, so long as this Agreement
shall remain in force, Pledgor shall not take any of the following actions
without the prior written consent of Pledgee:
(1) Dissolve, merge or liquidate Pledgor;
(2) Change materially the nature of the business of
Pledgor taken as a whole.
(3) Issue additional shares of its common stock or
authorize the issuance of additional share of its common stock;
(4) Declare or distribute a stock dividend or make any
other distribution with respect to its common stock;
(5) Sell or lease all or essentially all of its assets
outside of the ordinary course of business; or,
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(6) Issue any rights to subscribe to additional shares of
its common stock.
b. Pledgor hereby covenants that, so long as this Agreement
shall remain in force, Pledgor shall:
(1) Pay promptly all liens, taxes, assessments, or
contributions required by law;
(2) Maintain its corporate existence and comply with all
applicable law;
(3) Maintain its properties and assets in good working
condition; and,
(4) Reimburse Pledgee for all expenses or costs reasonably
incurred in protecting or realizing on the Stock.
6. EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute a default
hereunder:
a. The failure of Pledgor to pay when due, whether by
acceleration or otherwise; any payment to Pledgee called for by the Promissory
Note referred to therein and the failure of Pledgor to make such payment without
thirty (30) days following notice from Pledgee of Pledgor's failure to make
timely payment thereof;
b. Pledgor breaches any covenant, warranty or agreement
contained in this Agreement;
c. Pledgor becomes insolvent;
d. The filing of a petition in bankruptcy or other arrangement
under the Federal Bankruptcy Code by or against a Pledgor, an assignment for the
benefit of creditors by Pledgor, or the appointment of a receiver for Pledgor or
any property of Pledgor;
e. The making of any levy, seizure or attachment of any of the
Shares which continues unpaid for a period of thirty (30) days or longer.
7. POWER TO SELL FOLLOWING DEFAULT.
Upon the occurrence of an event of default under the provisions of this
Agreement, Pledgee shall have the option to declare this Agreement in default
and thereupon Pledgee is authorized to exercise, and shall have, in addition to
all other rights and remedies, the rights and remedies of a secured party under
the Uniform Commercial Code of Washington and any other applicable laws and the
rights and remedies provided in this Agreement.
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Pledgee is authorized, at its option and without further notice or demand, to
cause the Shares to be transferred of record to Pledgee and shall be entitled to
exercise all rights of ownership in respect to the Shares and all property
received with respect to the Shares. Further, Pledgee shall have the right to
hold and vote the Shares and, at its option and upon thirty (30) days' notice in
writing to Pledgor, shall have the right to sell and transfer the Shares and the
property received with respect to the Shares or any portion thereof at any
public or private sale, including private placement based upon investment
representations, and for cash or such other consideration as Pledgee shall in
his discretion determine to be reasonable and Pledgor shall have no right or
equity of redemption in connection with any such sale; provided, however, that
during such thirty (30) day period Pledgor shall have the right to cure any
default by paying all indebtedness and other obligations to Pledgee together
with all expenses incurred by Pledgee, including without limitation, reasonable
attorneys' fees and expenses, in obtaining, holding, and preparing for sale the
Shares and the property received with respect to the Shares, and in arranging
for the sale. After deducting the expenses of such sale, including reasonable
attorney's fees, the proceeds therefrom shall be applied to the payment of
Pledgor's obligations to Pledgee pursuant to the Stock Sale Agreement and the
surplus, if any, shall be paid to Pledgor. Nothing in this Agreement shall
preclude Pledgee from collecting any indebtedness without resorting to the
Stock.
8. COMPLIANCE WITH SECURITIES LAW.
Pledgee recognizes and agrees that the requirements of federal securities law,
applicable blue sky or other state securities law, and similar laws analogous in
purpose or effect may limit Pledgee's actions if Pledgee, after a default by
Pledgor, elects to dispose of any part of the Stock, and may also limit a
subsequent transferee's ability to transfer the Stock. Accordingly, Pledgee
agrees that if Pledgee sells the Stock at any public or private sale, Pledgee
will sell only to a buyer who will give further assurance, in form satisfactory
to Pledgor and its legal counsel, to the effect that the sale is exempt from
registration under the federal Securities Act of 1933 as amended and under
applicable state securities laws.
9. RELEASE OF COLLATERAL.
At such time as all payments secured pursuant to this Agreement have been paid
in full, Pledgee shall deliver the Shares and any property distributed with
respect to the Shares to Pledgor in accordance with the terms of this Agreement
and Pledgor shall be discharged in full from any and all obligations hereunder.
10. DELAY; WAIVER.
All rights and remedies of Pledgee under this Agreement are cumulative and are
in addition to but not in limitation of any rights or remedies which Pledgee may
have by law.
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No delay on the part of Pledgee in the exercise of any right or remedy under
this Agreement shall operate as a waiver thereof, and no single or partial
exercise by Pledgee of any right or remedy under this Agreement shall preclude
other or further exercise thereof or the exercise of any other right or remedy.
No waiver by Pledgee of any right or remedy under this Agreement shall be deemed
to be or construed as a further or continuing waiver of such right or remedy or
as a waiver of any other right or remedy.
11. COOPERATION.
At the execution of this Agreement and at any time or from time to time
thereafter, each of the parties agrees to cooperate in carrying out the terms of
this Agreement, including the execution and delivery of such further instruments
and documents as may be reasonably requested in order to more effectively carry
out the terms and conditions thereof.
12. MISCELLANEOUS.
a. Notices. Any demand, notice, or request required or
permitted under this Agreement shall be given in writing, and shall be deemed to
have been properly made, as of the time of such delivery, if personally
delivered, or as of the third day after such mailing, if sent by certified mail,
postage prepaid, return receipt requested, to the addresses set forth below:
Pledgor: Myriad Industries, Inc.
0000 Xx Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Pledgee: Fairfield Developments, Inc.
00000 X.X. 0xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Either of the above may change its mailing address by giving written notice to
the other in the manner provided for in this paragraph.
b. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.
c. Parties Bound. All the terms, covenants, representations,
warranties and conditions of this Agreement shall be binding upon, and inure to
the benefit of and be enforceable by, the parties hereto and their respective
heirs, personal representatives, successors and assigns.
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d. Attorneys' Fees; Costs. In the event of a dispute as to the
interpretation or enforcement of any provision of this Agreement and any party
hereto refers such dispute to any attorney for resolution, the prevailing party
shall be entitled to recover its reasonable costs and attorney fees incurred in
connection therewith, whether or not litigation is commenced.
e. Applicable Law; Venue. This Agreement shall be governed by
and construed in accordance with the laws of the State of Washington. Venue for
resolution of any dispute arising hereunder shall be in the Superior Court for
King County, Washington, and shall not be removed therefrom.
f. Headings. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
g. Time of Essence. Time is of the essence as to the
performance of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
PLEDGOR: PLEDGEE:
Myriad Industries, Inc. Fairfield Developments, Inc.
By: /S/ Xxxxxx X. Xxxxxxxx By: /S/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Its: President Its: Vice President
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