PLEDGE AND SECURITY AGREEMENT
Exhibit 10.14
Exhibit A-2 to NSO Agreement with Xxxxx X. Xxxxx
THIS PLEDGE AND SECURITY AGREEMENT is made as of March 22, 2005 between Xxxxx X. Xxxxx
(“Purchaser”) and St. Xxxxxxx Medical Technologies, Inc., a Delaware corporation (the “Company”).
Whereas the Company has loaned to Purchaser the sum of $827,475.00 which Purchaser
has used to purchase 1,275,000 shares of Common Stock of the Company, and Purchaser has executed
and delivered to the Company a Promissory Note evidencing such loan, hereinafter called the “Note”;
and
Whereas Purchaser has agreed to pledge said stock with the Company as security for
the payment of the Note;
N o w, T h e r e f o r e, the parties agree as follows:
1. Purchaser hereby delivers to the Company certificates for 1,275,000 shares of Common Stock
of the Company, together with two Assignments Separate from Certificate signed by Purchaser.
Purchaser hereby pledges said stock as security for the payment of the Note. In the event of
default in payment of the Note, Purchaser hereby appoints the Company as Purchaser’s true and
lawful attorney to take such action as may be necessary or appropriate to cause said stock to be
transferred into the name of the Company, or to any purchaser thereof.
2. The Company agrees to hold said stock as security for the payment of the Note and interest
thereon as therein provided, and the Company shall not at any time dispose of said stock or
encumber same, except as otherwise provided herein.
3. At all times while the Company is holding said stock as security hereunder, the Company
shall (i) collect all dividends declared thereon and shall credit the same against principal
and interest of the Note, as part payment thereon, and (ii) collect and hold any other
securities and/or
other property distributed on account of such stock, all of which shall be
pledged to the Company hereunder.
4. While the Company holds said stock as security hereunder, Purchaser shall have the right to
vote the same at all meetings of the stockholders of the Company, so long as Purchaser is not in
default in the performance of any of the terms of this Agreement, or in the payments due under the
Note.
5. Upon repayment of the balance of the Note and all interest and other charges due thereon,
the Company shall redeliver to Purchaser the certificates for said stock, and the Assignment forms.
6. In the event Purchaser shall fail to perform any of the terms of this Agreement, or fail to
make payments when due under the Note as therein required, the Company shall have all the rights
and remedies of a creditor and secured party at law and in equity, including the rights and
remedies provided under the California Uniform Commercial Code, and without limiting the foregoing,
the Company may, after ten days’ prior written notice to Purchaser by certified mail at Purchaser’s
residence or business address, sell any or all of the stock pledged hereunder in such manner and
for such price as the Company may determine, and out of the proceeds of such sale the Company may
retain an amount sufficient to pay the principal and interest then due on the Note, together with
expenses of the sale and reasonable attorneys’ fees, and the Company shall pay the balance of said
proceeds, if any, to Purchaser. At any bona fide sale which qualifies as a public sale under the
California Uniform Commercial Code, the Company may (if the Company is the highest bidder) purchase
all or any part of said stock at such price as the Company deems proper. Purchaser shall be liable
for any deficiency remaining following exercise by the Company of its rights hereunder.
7. Provided Purchaser has not failed to perform on a timely basis any of Purchaser’s
obligations under the Note or this Agreement, the Company will release the shares from pledge
hereunder upon payment in full of the Note plus all accrued but unpaid interest.
8. This Agreement shall be governed by the laws of the State of California, without regard to
its choice of laws principles, and shall be construed in accordance therewith.
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IN WITNESS WHEREOF, the parties have hereunto set their hands as of the day and year
first above written.
| PURCHASER | ||||
| /s/ Xxxxx X. Xxxxx | ||||
| Name: Xxxxx X. Xxxxx | ||||
| ST. XXXXXXX MEDICAL TECHNOLOGIES, INC. | ||||
By |
/s/ Xxxxxxx X. Xxxxx | |||
| Chief Financial Officer and Treasurer | ||||
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