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EXHIBIT 10.9
EXECUTIVE SECURITIES PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is made as of April 30, 1996, between Xxxxx
Xxxxxxxx ("Pledgor"), and Collectible Champions, Inc., a Delaware corporation
(the "Company").
The Company and Pledgor are parties to an Securities Purchase
Agreement, dated as of the date hereof, (the "Purchase Agreement"), pursuant to
which Pledgor purchased 2,500 shares of the Company's Common Stock, par value
$.01 per share (the "Common"), (ii) 226.43 shares of its Series A Preferred
Stock, par value $.01 per share (the "Series A Preferred") and (iii) a junior
subordinated promissory note in the form set forth in Exhibit B to the Purchase
Agreement in the aggregate principal amount of $95,615 (the "Subordinated Note")
collectively, with the Common and the Series A Preferred, the "Pledged
Securities"). The Company has allowed Pledgor to purchase the Pledged
Securities under the Purchase Agreement by delivery to the Company of a
promissory note (the "Note") in the aggregate principal amount of $120,758. This
Pledge Agreement provides the terms and conditions upon which the Note is
secured by a pledge to the Company of the Pledged Securities.
NOW, THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Company to accept the Note as
payment for the Pledged Securities, Pledgor and the Company hereby agree as
follows:
1. Pledge. Pledgor hereby pledges to the Company, and grants to the
Company a security interest in, the Pledged Securities as security for the
prompt and complete payment when due of the unpaid principal of and interest on
the Note and full payment and performance of the obligations and liabilities of
Pledgor hereunder.
2. Delivery of Pledged Securities. Upon the execution of this
Pledge Agreement, Pledgor shall deliver to the Company (i) the certificates
representing the Pledged Securities which are Stock and (ii) the instrument
representing the Subordinated Note together with duly executed forms of
assignment sufficient to transfer title thereto to the Company.
3. Voting Rights; Cash Dividends; Interest. Notwithstanding
anything to the contrary contained herein, during the term of this Pledge
Agreement until such time as there exists a default in the payment of principal
or interest on the Note or any other default under the Note or hereunder,
Pledgor shall be entitled to all voting rights with respect to the Pledged
Securities and shall be entitled to receive all cash dividends paid in respect
of the Pledged Securities. Upon the occurrence of and during the continuance of
any such default, (i) Pledgor shall no longer be able to vote the Pledged
Securities which are entitled to vote and (ii) the Company shall retain all
such cash dividends and interest payable on the Pledged Securities as additional
security hereunder.
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4. Stock Dividends; Distributions, etc. If, while this Pledge
Agreement is in effect, Pledgor becomes entitled to receive or receives any
securities or other property in addition to, in substitution of, or in exchange
for any of the Pledged Securities (whether as a distribution in connection with
any recapitalization, reorganization or reclassification, a stock dividend or
otherwise), Pledgor shall accept such securities or other property on behalf of
and for the benefit of the Company as additional security for Pledgor's
obligations under the Note and shall promptly deliver such additional security
to the Company together with duly executed forms of assignment, and such
additional security shall be deemed to be part of the Pledged Securities
hereunder.
5. Default. If Pledgor defaults in the payment of the principal or
interest under the Note when it becomes due (whether upon demand, acceleration
or otherwise) or any other event of default under the Note or this Pledge
Agreement occurs (including the bankruptcy or insolvency of Pledgor), the
Company may exercise any and all the rights, powers and remedies of any owner of
the Pledged Securities (including the right to vote the Pledged Securities which
are stock and receive dividends and distributions with respect to such shares)
and shall have and may exercise without demand any and all the rights and
remedies granted to a secured party upon default under the Uniform Commercial
Code of Illinois or otherwise available to the Company under applicable law.
Without limiting the foregoing, the Company is authorized to sell, assign and
deliver at its discretion, from time to time, all or any part of the Pledged
Securities at any private sale or public auction, on not less than ten days
written notice to Pledgor, at such price or prices and upon such terms as the
Company may deem advisable. Pledgor shall have no right to redeem the Pledged
Securities after any such sale or assignment. At any such sale or auction, the
Company may bid for, and become the purchaser of, the whole or any part of the
Pledged Securities offered for sale. In case of any such sale, after deducting
the costs, attorneys' fees and other expenses of sale and delivery, the
remaining proceeds of such sale shall be applied to the principal of and accrued
interest on the Note; provided that after payment in full of the indebtedness
evidenced by the Note, the balance of the proceeds of sale then remaining shall
be paid to Pledgor and Pledgor shall be entitled to the return of any of the
Pledged Securities remaining in the hands of the Company. Pledgor shall be
liable for any deficiency if the remaining proceeds are insufficient to pay the
indebtedness under the Note in full, including the fees of any attorneys
employed by the Company to collect such deficiency.
6. Costs and Attorneys' Fees. All costs and expenses (including
reasonable attorneys' fees) incurred in exercising any right, power or remedy
conferred by this Pledge Agreement or in the enforcement thereof, shall become
part of the indebtedness secured hereunder and shall be paid by Pledgor or
repaid from the proceeds of the sale of the Pledged Securities hereunder.
7. Payment of Indebtedness and Release of Pledged Securities. Upon
payment in full of the indebtedness evidenced by the Note, the Company shall
surrender the Pledged Securities to Pledgor together with all forms of
assignment.
8. No Other Liens; No Sales or Transfers. Pledgor hereby
represents and warrants that he has good and valid title to all of the Pledged
Securities, free and clear of all liens, security interests and other
encumbrances, and Pledgor hereby covenants that, until such time as all of the
outstanding principal of and interest on each of the Note has been repaid,
Pledgor shall not
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(i) create, incur, assume or suffer to exist any pledge, security interest,
encumbrance, lien or charge of any kind against the Pledged Securities or
Pledgor's rights or a holder thereof, other than pursuant to this Agreement and
the Executive Agreement, or (ii) sell or otherwise transfer any Pledged
Securities or any interest therein.
9. Further Assurances. Pledgor agrees that at any time and from
time to time upon the written request of the Company, Pledgor shall execute and
deliver such further documents (including UCC financing statements) and do such
further acts and things as the Company may reasonably request in order to
effect the purposes of this Pledge Agreement.
10. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. No Waiver; Cumulative Remedies. The Company shall not by any
act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Company, and then only to the extent therein set forth. A waiver by the
Company of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Company would otherwise have
on any future occasion. No failure to exercise nor any delay in exercising on
the part of the Company, any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
12. Waivers, Amendments; Applicable Law. None of the terms or
provisions of this Pledge Agreement may be waived, altered, modified or amended
except by an instrument in writing, duly executed by the parties hereto. This
Agreement and all obligations of the Pledgor hereunder shall, together with the
rights and remedies of the Company hereunder, inure to the benefit of the
Company and its respective successors and assigns. This Pledge Agreement shall
be governed by, and be construed and interpreted in accordance with, the laws of
the State of Illinois.
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IN WITNESS WHEREOF, this Pledge Agreement has been executed as
of the date first above written.
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx Xxxxxxxx
COLLECTIBLE CHAMPIONS, INC.
By: /s/ Xxxxxx X. Xxxx
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Its: President
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