Exhibit 10.16
SECURITY AND STOCK PLEDGE AGREEMENT
This Security and Stock Pledge Agreement effective as of November 1, 1998 by
and between Xxxx Xxxxx ("Borrower") and TomaHawk II Inc. ("Lender").
In consideration of the mutual terms, conditions and covenants herein under set
forth, Borrower and Lender agree as follows:
(1) In exchange of consideration stated in two Promissory Notes aggregating
the sum of One Hundred Ten Thousand Seven Hundred and Seventy Five
Dollars ($110,775) all of which were consolidated in a Consolidated
Promissory Note, Borrower agrees to provide as security shares of stock
of the Tomahawk Corporation, which are evidenced and represented by the
following Stock Certificates for the number of shares identified and for
the following sums of money as herein identified.
(a) Certificate C00680, No. of Shares 425,000, Amount $50,000
(b) Certificate C01102, No. of Shares 425,000, Amount $60,000
(2) As security for the loan, evidenced in the accompanying Consolidated
Promissory Note, Borrower hereby pledges, assigns, transfers and grants to
Lender a security interest in the number of shares as listed in the
preceding paragraph.
(3) In furtherance of the pledge, assignment, transfer and grant of the
security interest, Borrower shall, and has, delivered to Lender the number
of shares as listed in paragraph (1) of this agreement as evidenced and
represented by Stock Certificate Nos. C00680, C01102.
(4) Borrower shall not pledge, borrow against, collaterize against,
hypothecate, assign, transfer, sell or in any other manner diminish or
impair the value of the stock pledged or the security interest without the
express written authorization of the Lender.
(5) During the term of this agreement, which shall run contemporaneously with
the accompanying Consolidated Promissory Note, the Borrower shall own the
pledged shares. The pledged stock shall be held in trust by Lender for
Borrower in a safe place and Lender shall not alienate, transfer, assign,
hypothecate, sell, pledge, or in any other manner dispose of, or impair
the value of the pledged stock until such time as the Borrower is in
default of the
SECURITY AND STOCK PLEDGE AGREEMENT PAGE 2 (XXXX XXXXX)
accompanying Consolidated Promissory Note. Lender shall return the
security pledged in this agreement to Borrower upon the compliance
within the terms contained in the accompanying Consolidated Promissory
Note. Upon default and after exhausting efforts to sell the stock as
referenced in paragraph 6 of this agreement, the Lender and/or Borrower,
depending upon which party is in possession, shall return any unsold
shares to the Tomahawk Corporation.
(6) If in default in the terms of this agreement or the accompanying
Consolidated Promissory note is not paid when due, Lender shall be deemed
the owner of the stock described above and Borrower hereby consents to the
transfer to the stock to Lender without further notice The foregoing
notwithstanding, at any time Borrower seeks to sell the
stock pledged under this agreement, the parties agree to cooperate
reasonably and in good faith to arrange a sale of that portion of the
shares of stock pledged under this agreement as is reasonably appropriate
to raise funds necessary to satisfy Borrower's obligation. Borrower agrees
that all proceeds from the sale of pledged stock shall first be applied to
satisfy Borrowers obligation under the Consolidated Promissory Note. It is
expressly understood that to the extent that the stock secured and pledged
by this agreement upon sale does not satisfy the debt, the Borrower is not
liable for any deficiency. To the extent that any balance of the shares
remains after satisfaction of the debt, such shares shall be returned to
Borrower.
(7) Borrower shall have the right to exercise all voting rights to the stock
pledged.
(8) The parties may amend or modify this agreement in writing.
INTENDING TO BE LEGALLY BOUND, the parties hereto have caused this Security and
Pledge Agreement to be executed as of the date first above written.
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XXXX XXXXX, Borrower TOMAHAWK II, INC. Lender
BY:
