STOCK PLEDGE AND SECURITY AGREEMENT
THIS STOCK PLEDGE AND SECURITY AGREEMENT ("Agreement") effective as of
the fifteenth day of May, 1998 is entered into by and between ______________
("Borrower") and __________________________ ("Lender") and _______________
("Holder") with reference to the facts set forth below.
RECITALS
A. Borrower has executed a Purchase and Sale Agreement with Lender
("Purchase Agreement") and on the effective date of this Stock Pledge and
Security Agreement is purchasing from Lender, and will become the legal and
beneficial owner of ______________ shares of common stock of Price
Enterprises, Inc. a Maryland corporation, hereinafter called the "Pledged
Shares".
B. Borrower has executed a Promissory Note of even date herewith
("Note") in favor of Lender in the principal sum of _____________. Lender
has agreed to accept said Note in partial payment of the purchase price of
the Pledged Shares.
C. The execution of this Agreement is a condition precedent to the
obligation of Lender to accept the Note as partial payment of the purchase
price of the Pledged Shares.
NOW, THEREFORE, in consideration of the recitals and the agreement of
the parties contained herein and for other good and valuable consideration,
the receipt of which are hereby acknowledged, the parties hereby agree as
follows:
1. PLEDGE. Borrower hereby pledges and grants a first priority
security interest to Lender in all of its right, title, and interest in and
to the "Pledged Shares", and except as set forth herein, all renewals, voting
rights, substitutions, additions, replacements, dividends, earnings and
proceeds and products thereof, including without limitation whatever is
receivable or received when the foregoing is sold, collected, exchanged or
otherwise dispensed of, and all future earnings and interest paid or payable
thereon (collectively the "Securities").
2. BROKERAGE ACCOUNT AND POSSESSION OF STOCK. Borrower agrees
___________ ("Holder") shall open an account with Xxxx Xxxxxx at its office
located at 0000 Xxxxxxx, Xxxxxx Xxxxx, Xx Xxxxx, Xx. 00000 in the name of
Holder, as Custodian for Buyer ("Broker account"). Upon Closing of the
Purchase Agreement , Borrower consents, and directs Seller to deposit the
Pledged Shares to the Broker Account. Buyer acknowledges and agrees that
under the terms of the Broker Account only the Holder shall be entitled to
give instructions regarding the assets held in the Broker Account and Buyer
shall have no ability to withdraw the Pledged Shares from the Account.
3. OBLIGATIONS OF THE HOLDER TO BORROWER.
(a) Holder agrees to maintain the Brokerage Account as the
custodian of Buyer and to retain the Pledged Shares in the Broker Account
until either (i) this Pledge terminates under the provisions of Paragraph 5
or (ii) he receives written notice from Lender that an event of default under
the Note has occurred and Borrower has failed to cure said default within
five business days from date of occurrence.
(b) At any time prior to the Maturity Date of the Note, Borrower
shall have the right to direct Holder, and Holder shall be obligated at
Buyer's written direction, to sell the Securities and pay to Lender the
lesser of (i) the net proceeds of the sale or (ii) the full amount of the
Secured Obligations. Upon such sale of Securities and payment to Lender the
Note shall be deemed paid in full and Lender shall have no further right to
collect on the Note.
4. REPRESENTATIONS AND WARRANTIES. Borrower represents that as of the
effective date of this Pledge Agreement (A) Borrower is the owner of the
Securities and that Borrower has not otherwise assigned or transferred, and
agrees that Borrower shall not assign or transfer, absolutely or for
security, the Securities or any interest therein to any other person or
entity; (B) there are no outstanding options, warrants or other agreements
with respect to the Securities; (C) the Securities have been validly issued
and are fully paid and non-assessable, and the holder or holders thereof are
not and will not be subject to any personal liability; (D) any consent,
approval or authorization or designation or filing with any governmental
authority on the part of Borrower which is required in connection with the
pledge and security interest granted under this Agreement has been obtained
or effected; and (E) the execution and delivery of this Agreement by Borrower
will not result in a violation of any mortgage, indenture, material contract,
instrument, judgement, decree, order, statute, rule or regulation to which
Borrower is subject.
5. OBLIGATIONS SECURED. This pledge and security interest granted
hereunder secures the faithful performance and payment of all obligations of
Borrower to Lender now existing or hereafter existing or arising under the
Note, and all extensions, modifications, substitutions, replacements, and
renewals of any of the obligations set forth therein (collectively the
"Secured Obligations"). This pledge shall terminate only upon performance
and payment in full of all of the Secured Obligations, or upon the written
release of the Lender as the Lender shall give in its sole and absolute
discretion.
6. DEFAULT AND REMEDIES. Any breach of or event of default under the
Note or any failure to comply with any of the terms under this Agreement
shall be a default hereunder. Upon any default hereunder, Lender shall have
the right to exercise its remedies as a secured party with respect to the
Securities, including, without limitation, the right to debit all or any
portion of the Securities and apply amounts debited in Lender's sole and
absolute discretion (a) toward cure of the default; (b) to payment of
principal (whether or not otherwise accelerated), interest or any other
amount owing from Borrower to Lender, in such order as Lender may determine,
without curing the default; or (c) in such combination thereof as Lender may
determine. Lender shall in no event be required to use proceeds of the
Securities to cure a default.
7. ADMINISTRATION OF SECURITIES. The provisions set forth below shall
govern the administration of the Securities:
(a) VOTING. Until there shall have occurred any default
hereunder, Borrower shall be entitled to vote or consent with respect to the
Securities in any manner not inconsistent with this Agreement, to the extent
the Securities carry any rights of voting or consent. Holder hereby grants
to Borrower a proxy to vote the securities which proxy shall be automatically
revoked upon the occurrence of any default hereunder. Holder agrees to
deliver to Borrower such further evidence of the grant of such proxy as
Borrower may request from time to time.
(b) DISTRIBUTIONS. Until there shall have occurred any default
hereunder, Borrower shall be entitled to receive, free and clear of this
pledge agreement, any and all cash dividends paid on the Pledged Shares.
Borrower shall not, however, be entitled to receive any stock dividends or
other distributions of stock, paid on the Pledged Shares. Until there shall
have occurred an Event of Default hereunder, Holder agrees to cause to be
distributed to Borrower all cash dividends paid on the Pledged Shares. Any
stock dividends or stock distributed on the Pledged Shares shall be retained
by Holder in the Broker Account as additional security and shall become part
of the Securities.
(c) FURTHER DOCUMENTS. Borrower will forthwith upon request by
Lender and in confirmation of the security interest hereby created, execute
and deliver to Lender such further assignments, transfers, assurances,
instruments, notices and agreements in form and substance as the Lender shall
reasonably request.
(d) REMEDIES. In addition to any rights and remedies otherwise
available in law or in equity, and in addition to the other provisions of
this Agreement, and any other documents or instruments delivered or to be
delivered in connection herewith or therewith, or any document or instrument
now in existence, or which may hereafter be made, with respect to any of the
Secured Obligations, the provisions set forth below shall, to the extent
permitted by applicable law, govern Lender's rights to realize on the
Securities upon a default hereunder.
(e) CONDUCT OF SALE.
(i) Any sale of the Pledged Securities shall be made through
Holder. Holder shall not make any sale or other disposition, unless the terms
thereof shall be satisfactory to Lender in its sole and absolute discretion.
(ii) Upon giving written notice of default to Holder pursuant to
the terms of Section 3 of this Agreement, Lender may direct Holder to sell as
many of the Pledged Shares as are required to produce net funds sufficient to
pay Lender the full amount of the Secured Obligations and to transfer the
proceeds of such sale to Lender. Holder shall be obligated to carry out the
instructions given to him by Lender.
(iii) Once Lender has been paid the full amount of the Secured
Obligations, Holder shall pay any funds remaining in the Broker Account to
Borrower and close the Broker Account.
(f) SALE OR DISPOSITION. Upon any sale or disposition, Holder
shall have the right to deliver, assign, and transfer to the purchaser
thereof the Securities so sold or disposed of. Each purchaser at any such
sale or other disposition shall hold the Securities free from any claim or
right of whatever kind, including any equity or right of redemption of the
Borrower. The Borrower specifically waives all rights of redemption, stay or
appraisal which it has or may hereafter have under any rule of law or statute
now existing or hereafter adopted.
(g) ATTORNEY-IN-FACT. Lender or its designee is hereby appointed
attorney-in-fact for Borrower for the purpose of carrying out the provisions
of this Agreement and taking any action in executing any instrument which
Lender reasonably may deem necessary and advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and one coupled
with an interest.
8. MISCELLANEOUS.
(a) TERMINATION. This Agreement shall terminate upon Borrower's
payment in full and the performance of the Secured Obligations. Upon such
termination, Lender and Holder shall return any of the securities their
respective possession that were not sold or otherwise disposed of to satisfy
the Secured Obligations.
(b) XXXX XXXXXX NOT A PARTY TO THE AGREEMENT. Xxxx Xxxxxx is
providing account services only and is not a party to this Agreement.
(c) SUCCESSOR TO HOLDER. Holder may resign at any time by giving
written notice of his resignation to Lender and Borrower at least thirty (30)
days prior to the effective date of the resignation. In the event Holder
resigns or becomes otherwise unable to perform his duties, a successor holder
shall be appointed by Lender subject to the approval of Borrower. Lender and
Borrower agree that Xxxx Xxxxxx shall be authorized to transfer the Broker
Account to the successor holder upon presentation of written instructions
signed by both Lender and Borrower. Prior to any transfer of the account to
the successor holder, the successor holder shall execute a counterpart of
this agreement.
(d) INDEMNIFICATION OF HOLDER AND LENDER. Borrower indemnifies
Holder and Lender against, and holds them harmless from, all losses,
damages, liabilities, claims, causes of action, judgments, court costs,
attorneys' fees and other reasonable expenses which either may suffer or
incur other than from the negligence or willful misconduct of Holder or
Lender (i) by reason of this Agreement or (ii) by reason of the execution of
this Agreement or in performance of any act required or permitted hereunder
or by law, or (iii) as a result of any failure of Borrower to perform
Borrower's obligations under this Agreement or the Note. Borrower's duty to
indemnify Holder and Lender shall survive the termination of this Agreement.
(e) AGREEMENT BINDING. This Agreement shall be binding upon
Borrower and Borrower's heirs, executors, personal representatives and
successors, and shall inure to the benefit of, and be enforceable by, Lender
and Lender's successors and assigns. Borrower hereby represents and warrants
to Lender that it has full legal authority to enter into this Agreement, to
pledge the
Securities and to carry out the provisions hereof and no consent or approval
from any other person or entity is necessary to enter into this agreement or
carry out its terms.
(f) SEVERABILITY. If any provision of this Agreement shall be
deemed or held to be invalid or unenforceable for any reason, such provision
shall be adjusted, if possible, rather than voided, so as to achieve the
intent of the parties to the fullest extent possible. In any event such
provision shall be severable from, and shall not be construed to have any
effect on, the remaining provisions of this Agreement, which shall continue
in full force and effect.
(g) GOVERNING LAW; JURISDICTION. This Agreement shall be governed
by and construed in accordance with the laws of the State of California
applicable to contracts, between residents thereof, to be wholly performed
within the State of California. Borrower hereby irrevocably consents to the
jurisdiction of the Courts of the State of California located in San Diego
County and of any Federal Court located in San Diego County, California in
connection with any action or proceeding arising out of or relating to this
Agreement.
(h) RIGHTS CUMULATIVE; NO WAIVER. Lender's options, powers,
rights, privileges, and immunities specified herein or arising hereunder are
in addition to, and not exclusive of, those otherwise created or existing now
or at any time, whether by contract, by statute or by rule of law. Lender
shall not, by any act, delay, omission or otherwise, be deemed to have
modified, discharged or waived any of Lender's options, powers, or rights in
respect of this Agreement, and no modification, discharge or waiver of any
such option, power, or right shall be valid unless set forth in writing
signed by Lender or Lender's authorized agent, and then only to the extent
therein set forth. A waiver by Lender of any right or remedy hereunder on
any one occasion shall be effective only in the specific instance and for the
specific purpose for which given, and shall not be construed as a bar to any
right or remedy that Lender would otherwise have on any other occasion.
(i) ENTIRE AGREEMENT. This Agreement contains the entire
agreement between Borrower and Lender with respect to the Securities, and
supersedes all prior communications relating thereto, including, without
limitation, all oral statements or representations. No supplement to or
modification of this Agreement shall be binding unless executed in writing by
Borrower and Lender.
(j) COSTS OF ENFORCEMENT. Borrower shall upon demand pay to
Lender the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of counsel and/or any experts and agents,
that Lender may incur in connection with (a) the administration of this
Agreement, (b) the exercise or enforcement of any of the rights of Lender
hereunder (including the defense of any claims or counterclaims asserted
against Lender arising out of this Agreement or the transactions contemplated
hereby) or under any judgment awarded to Lender in respect of its rights
hereunder (which obligation shall be severable from the remainder of this
Agreement and shall survive the entry of any such judgment), or (c) the
failure by Borrower to perform or observe any of the provisions hereof. The
foregoing shall include any and all expenses and fees incurred by Lender in
connection with a bankruptcy, reorganization, receivership, or similar
debtor-relief proceeding by or affecting Borrower or the Securities.
(k) NOTICES. All notices, demands and other communications
required or permitted hereunder shall be in writing, addressed to the parties
at the following addresses:
Lender:
Xxx Xxxxx, Trustee
C/O Price Entities
0000 Xxxxxxx Xxxxx 000
Xx Xxxxx, XX 00000
Borrower:
Holder:
0000 Xxxxxxx Xxxxx 000
Xx Xxxxx, XX. 00000
or to such other address as may be designated from time to time by notice to the
other parties in the manner set forth herein. All such communications shall be
deemed effective (a) upon actual delivery if delivered by personal delivery or
certified postage prepaid mail, (b) three business days following deposit, first
class postage prepaid, with the United States Mail, or (c) on the next business
day after timely and proper deposit with an overnight air courier with request
for next business day delivery.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement is executed by the parties set forth
below as of the date first-above written.
BORROWER
LENDER
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XXX XXXXX, TRUSTEE
HOLDER
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EXHIBIT (C)(4)
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NUMBER OF
DATE LENDER BORROWER SHARES HOLDER LOAN AMOUNT
--------------- ---------------------------------- ------------------------------------ ----------- -------------- --------------
May 15, 1998 Price Family Charitable Trust Xxxx X. Xxxxxxxx, Xxxxxxxx & Price, 50,000 Xxx Xxxxxx $875,000
A Professional Corp., Profit
Sharing Plan - Trust B
--------------- ---------------------------------- ------------------------------------ ----------- -------------- --------------
May 15, 1998 Price Family Charitable Trust Xxx Xxxxxx 50,000 Xxxxxx Xxxxxx $875,000
--------------- ---------------------------------- ------------------------------------ ----------- -------------- --------------
May 15, 1998 Price Family Charitable Trust White & Xxxxxxxx, A Professional 50,000 Xxx Xxxxxx $875,000
Corp., Profit Sharing Plan
--------------- ---------------------------------- ------------------------------------ ----------- -------------- --------------
May 15, 1998 Price Family Charitable Trust Xxxxxx Xxxxxxxx, President, 100,000 Xxx Xxxxxx $1,750,000
Galinson Holdings LLC
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May 15, 1998 Price Charitable Remainder Trust Xxxx XxXxxxx 10,000 Xxx Xxxxxx $175,000
--------------- ---------------------------------- ------------------------------------ ----------- -------------- --------------
May 21, 1998 Price Charitable Remainder Trust Xxxx Xxxxxxx Xxxxx 20,000 Xxx Xxxxxx $350,000
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