EXHIBIT 10.44
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT (this "Agreement"), dated February 26, 2002
by and between XXXXXXX X. BLACK, an individual (the "Pledgor"); COMMERCIAL
CONSOLIDATORS CORP., an Alberta, Canada corporation (the "Company"); and THE
SHAAR FUND LTD., a ___________ corporation (the "Pledgee");
W I T N E S S E T H:
WHEREAS, the Company and the Pledgee have entered into a subscription
agreement, dated of even date herewith (the "Subscription Agreement"); and
WHEREAS, pursuant to the provisions of the Subscription Agreement, on
this date, the Pledgee is making a $250,000 loan to the Company evidenced by a
8% Secured Convertible Promissory Note of even date herewith in the principal
amount of (U.S.) $250,000 (the "Note"); and
WHEREAS, as security for the payment of the Note, the Pledgor has
issued to Pledgee his non-recourse guaranty of the obligations of the Company
under the Note, pursuant to a guaranty, dated of even date (the "Guaranty"); and
WHEREAS, in order to induce Pledgor to accept the Note and the
Guaranty, the Pledgor and the Company have agreed to secure all of the Company's
obligations under the Note with the grant to the Pledgee of a first priority
security interest in 125,000 shares of Common Stock of the Company which is
owned of record and beneficially by the Pledgee, under the terms and subject to
the conditions of this Agreement; and
WHEREAS, the Pledgor is an executive officer, director and a principal
stockholder of the Company and will derive substantial benefit from the
transactions contemplated by the Subscription Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Definitions.
Unless otherwise separately defined herein, all capitalized
term used in this Agreement shall have the same meaning as is defined in the
Subscription Agreement. In addition to those terms defined elsewhere in this
Agreement, the following terms shall have the following meanings wherever used
in this Agreement:
(a) "Event of Default" shall mean the failure of the Company
to pay, after any applicable grace periods, any installment of principal or
interest when due under the Note, or other payment due under the Note including
the payment provided for in Section 4.8 of the Note.
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(b) "Obligations" shall mean all principal and interest or
other payment which may be due and payable under the Note, including the payment
provided for in Section 4.8 of the Note, whether upon stated maturity, by
acceleration, or otherwise.
(c) "Pledged Stock" shall mean 125,000 shares of the Common
Stock of the Company owned of record and beneficially by the Pledgor.
(d) "Satisfaction Date" shall mean that date on which all of
the Obligations have been paid or otherwise satisfied in full.
2. Pledge of the Pledged Stock.
(a) As security for the due and timely payment and
performance of all of the Obligations of the Company from time to time, the
Pledgor hereby pledges to the Pledgee, and grants to the Pledgee a first
priority lien and security interest in, all of the Pledged Stock (as same are
constituted from time to time), together with all cash dividends, stock
dividends, interest, profits, premiums, redemptions, warrants, subscription
rights, options, substitutions, exchanges and other distributions now or
hereafter made on the Pledged Stock and all cash and non-cash proceeds thereof,
until the Satisfaction Date. The Pledged Stock and all property at any time
pledged to the Pledgee hereunder or in which the Pledgee is granted a security
interest (whether described herein or not) and all income therefrom and proceeds
thereof are herein collectively called the "Pledged Collateral".
(b) In furtherance of the pledge hereunder, the Pledgor is,
concurrently herewith, delivering to the Pledgee the certificates representing
all of the Pledged Stock, each of which now remains in the name of the Pledgor
and is, to the extent requested by the Pledgee, accompanied by appropriate
undated stock powers duly endorsed in blank by the Pledgor.
(c) If, while this Agreement is in effect, the Pledgor
becomes entitled to receive or receives any stock certificate (including,
without limitation, any certificate representing a stock dividend or a
distribution in connection with any reclassification, increase or reduction of
capital or issued in connection with any reorganization), option or rights,
whether as an addition to, in substitution of, or in exchange for, any Pledged
Stock or otherwise, the Pledgor agrees to accept the same as agent for the
Pledgee, to hold the same in trust on behalf of and for the benefit of the
Pledgee, and to deliver the same forthwith to the Pledgee in the exact form
received, with the endorsement of the Pledgor when necessary and/or appropriate
undated stock or other powers duly executed in blank, to be held by the Pledgee,
subject to the terms hereof, as additional collateral security for the
Obligations. Any sums paid on or in respect of the Pledged Stock on the
liquidation or dissolution of the Pledgor shall be paid over to the Pledgee, to
be held by the Pledgee, subject to the terms and conditions hereof, as
additional collateral security for the Obligations.
3. Retention of the Pledged Stock.
(a) Except as otherwise provided herein, the Pledgee shall
have no obligation with respect to the Pledged Collateral, except to use
reasonable care in the custody and preservation thereof, to the extent required
by law.
(b) The Pledgee shall hold the Pledged Collateral in the
form in which same are delivered herewith, unless and until there shall occur an
Event of Default.
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4. Rights of the Pledgor. Throughout the term of this Agreement,
so long as no Event of Default has occurred and is continuing, the Pledgor shall
have the right to vote the Pledged Stock in all matters presented to the
stockholders of the Pledgor for vote thereon, except in a manner inconsistent
with the terms of this Agreement or detrimental to the interests of the Pledgee.
5. Event of Default; Power of Attorney.
(a) Upon the occurrence and during the continuance of any
Event of Default, the Pledgee shall have the right to: (i) exercise all voting
and corporate rights of, and all rights of conversion, exchange, subscription or
any other rights, privileges or options pertaining to, any Pledged Stock as if
the Pledgee were the absolute owner thereof, including (without limitation) the
right to exchange, at its discretion, any and all of the Pledged Stock upon the
merger, consolidation, reorganization, recapitalization or other readjustment of
the Pledgor or upon the exercise by the Pledgor or the Pledgee of any right,
privilege or option pertaining to any of the Pledged Stock and, in connection
therewith, to deposit and deliver any and all of the Pledged Stock with any
committee, depository, transfer agent, registrar or other designated agency on
such terms and conditions as the Pledgee may determine, all without liability
except to account for property actually received by it; (ii) apply any funds or
other property received in respect of the Pledged Stock to the Obligations, and
receive in its own name any and all further distributions which may be paid in
respect of the Pledged Stock, all of which shall, upon receipt by the Pledgee,
be applied to the Obligations; (iii) transfer all or any portion of the Pledged
Stock (as determined by the Pledgee in its discretion) on the books of the
Pledgor to and in the name of the Pledgee or such other person or persons as the
Pledgee may designate; (iv) effect any sale, transfer or disposition of all or
any portion of the Pledged Stock and in furtherance thereof, take possession of
and endorse any and all checks, drafts, bills of exchange, money orders or other
documents and instruments received on account of the Pledged Stock; (v) collect,
xxx for and give acquittance for any money due on account of any of the
foregoing; and (vi) take any and all other action contemplated by this
Agreement, or as otherwise permitted by law, or as the Pledgee may reasonably
deem necessary or appropriate, in order to accomplish the purposes of this
Agreement.
(b) In furtherance of the foregoing powers of the Pledgee,
the Pledgor hereby authorizes and appoints the Pledgee, with full powers of
substitution, as the true and lawful attorney-in-fact of the Pledgor, in his
name, place and stead, to take any and all such action as the Pledgee, in its
sole discretion, may deem necessary or appropriate in furtherance of the
exercise of the aforesaid powers. Such power of attorney shall be coupled with
an interest, and shall be irrevocable until the Satisfaction Date. Without
limitation of the foregoing, such power of attorney shall not in any manner be
affected or impaired by reason of any act of the Pledgor or by operation of law.
Nothing herein contained, however, shall be deemed to require or impose any duty
upon the Pledgee to exercise any of the rights or powers granted herein.
(c) The foregoing rights and powers granted to the Pledgee,
and the foregoing power of attorney, shall be fully binding upon any person who
may acquire any beneficial interest in any of the Pledged Stock or any other
property held or received by the Pledgee hereunder.
6. Foreclosure; Sale of Pledged Stock.
(a) Without limitation of paragraph 5 above, in the event
that the Pledgee shall make any sale or other disposition of any or all of the
Pledged Stock following an Event of Default, the Pledgee may also:
(i) offer and sell all or any portion of the
Pledged Stock publicly through a registered broker-dealer, or by means of a
private placement restricting the offer or sale to a limited number of
prospective purchasers who meet such suitability standards as the Pledgee and
its counsel may deem appropriate, and who may be required to represent that they
are purchasing Pledged Stock for investment and not with a view to distribution;
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(ii) purchase all or any portion of the Pledged Stock
for the Pledgee's own account in reduction of the Obligations at a price per
share not less than the closing price of the Company's Common Stock as traded on
the American Stock Exchange, Inc. or any other securities exchange, as at the
date the Pledgee shall elect to foreclose on the Pledged Stock;
(iii) sell any or all of the Pledged Stock upon credit
or for future delivery, without being in any way liable for failure of the
purchaser to pay for the subject Pledged Stock; and
(iv) receive and collect the net proceeds of any sale
or other disposition of any Pledged Stock, and apply same in such order and to
such of the Obligations (including the costs and expenses of the sale or
disposition of the Pledged Stock) as the Pledgee may, in its absolute
discretion, deem appropriate.
(b) Upon any sale of any of the Pledged Stock in accordance
with this Agreement, the Pledgee shall have the right to assign, transfer and
deliver the subject Pledged Stock to the purchaser(s) thereof, and each such
purchaser shall be entitled to hold such Pledged Stock absolutely free from any
right or claim of the Pledgor and/or any other person claiming any beneficial
interest in the Pledged Stock, including any equity of redemption (which right
and all other such rights are hereby waived by the Pledgor to the fullest extent
permitted by law).
(c) Following the occurrence and during the existence of an
Event of Default, Pledgor and Company will cooperate and provide such
certificate, resolutions, representations, legal opinions and all other matters
necessary to facilitate a transfer or sale of any part of the Pledged Stock
pursuant to Rule 144. Pledgor and Company are unaware of any impediment to the
resale of the Pledged Stock in reliance on Rule 144, by the Pledgee upon an
Event of Default. Pledgor and Company will take no action that would impede or
limit the Pledgee's ability to resell all the Pledged Stock upon an Event of
Default pursuant to Rule 144. For so long as any Pledged Stock are subject to
this Agreement, the Pledgor will not sell any security of the Company which sale
would or could be aggregated with sales by the Pledgee pursuant to Rule 144.
Company shall issue instructions to its transfer agent to comply with the
foregoing sentence. Company will not permit the transfer of any security of the
Company if such transfer would or could aggregate for purposes of Rule 144 with
sales of the Pledged Stock by the Pledgor or any sales of the Pledged Stock.
Pledgor represents and warrants that he has not sold any security of the Company
during the ninety (90) days prior to the date of this Agreement. The Company
acknowledges that upon transfer of the Pledged Stock to the Pledgee or other
transferee, the Pledgee's holding period under subsection (d) of Rule 144 may be
"tacked" with the Pledgor's holding period. Pledgor and Company further
represent that the Notes were issued in a bona fide loan transaction.
(d) Anything to the contrary herein notwithstanding, the
Pledged Stock may be released after the occurrence of an Event of Default,
directly to the Pledgee, at Pledgee's election, at any time after written notice
to the Company and Pledgor of the occurrence of an Event of Default hereunder
("Notice of Default"), and expiration of cure periods, if any. The Pledgee shall
notify the Company and Pledgor of any release of the Pledged Stock in writing
five business days after such release. The attributed value of the Pledged Stock
to be released pursuant to the foregoing shall be equal to the Conversion Price
(as defined in the Note) in effect on the date Notice of Default is given to the
Pledgee. The Notice of Default must include a statement supporting the
determination of the Conversion Price being employed. The Pledgee may not
release, at any one time, an amount of Pledged Stock to Pledgee that would be in
excess of the amount of Common Stock of the Company that the Pledgee would be
permitted to receive under Section 9.3 of the Subscription Agreement upon
delivery of a Conversion Notice (as defined in the Note). The Company and
Pledgor shall receive a credit against the amount due under the Note in an
amount corresponding to the Conversion Price employed, multiplied by the number
of shares of Pledged Stock released to Pledgee.
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(e) Nothing herein contained shall be deemed to require the
Pledgee to effect any sale or disposition of any Pledged Stock at any time, or
to consummate any proposed public or private sale at the time and place at which
same was initially called. It is the intention of the parties hereto that the
Pledgee shall, subject to any further conditions imposed by this Agreement, at
all times following the occurrence of an Event of Default, have the right to use
or deal with the Pledged Stock as if the Pledgee were the outright owner
thereof, and to exercise any and all rights and remedies, as a secured party in
possession of collateral or otherwise, under any and all provisions of law.
7. Covenants, Representations and Warranties.
In connection with the transactions contemplated by this
Agreement, and knowing that the Pledgee is and shall be relying hereon, the
Pledgor hereby covenants, represents and warrants that:
(a) the Pledged Stock have been and will be duly and
validly issued, are and will be fully paid and non-assessable, and are and will
be owned by the Pledgor free and clear of any and all restrictions, pledges,
liens, encumbrances or other security interests of any kind, save and except for
the pledge to the Pledgee pursuant to this Agreement;
(b) there are and will be no options, warrants or other
rights in respect of the sale, transfer or other disposition of any of the
Pledged Stock by the Pledgor, and the Pledgor has the absolute right to pledge
the Pledged Stock hereunder without the necessity of any consent of any Person;
(c) neither the execution or delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, nor the compliance
with or performance of this Agreement by the Pledgor, conflicts with or will
result in the breach or violation of or a default under the terms, conditions or
provisions of (i) any mortgage, security agreement, indenture, evidence of
indebtedness, loan or financing agreement, or other agreement or instrument to
which the Pledgor is a party or by which the Pledgor is bound, or (ii) any
provision of law, any order of any court or administrative agency, or any rule
or regulation applicable to the Pledgor;
(d) this Agreement has been duly executed and delivered by
the Pledgor, and constitutes the legal, valid and binding obligation of the
Pledgor, enforceable against the Pledgor in accordance with its terms; and
(e) there are no actions, suits or proceedings pending or
threatened against or affecting the Pledgor that involve or relate to the
Pledged Collateral.
8. Company Right to Substitute Collateral. Notwithstanding
anything to contrary, express or implied, contained in this Agreement, the
Company shall have the right at any time before occurrence of an Event of
Default during the term of this Agreement and prior to the Satisfaction Date to
deliver to the Pledgee, in lieu of the Pledged Securities deposited by the
Pledgor, an aggregate of 125,000 shares of Company Common Stock which shall have
been registered in the name of the Pledgee and which have been registered for
resale under the United States Securities Act of 1933, as amended, pursuant to a
registration statement on Form F-1 (or other applicable form of registration)
which has been declared effective by the United States Securities and Exchange
Commission. In the event that the Company shall substitute such fully registered
shares of its Common Stock as collateral under this Agreement, such shares
shall, for all purposes hereunder, be deemed to be the "Pledged Stock" and all
Pledged Securities previously delivered hereunder and registered in the name of
the Pledgor shall forthwith be returned by the Pledgee to the Pledgor. The
substitute shares of Common Stock must be over and above any common stock
required to be registered by the Company pursuant to Section 10 of the
Subscription Agreement.
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9. Return of the Pledged Stock. To the extent that the Pledgee
shall not previously have taken, acquired, sold, transferred, disposed of or
otherwise realized value on the Pledged Collateral in accordance with this
Agreement, at the Satisfaction Date, any security interest in the Pledged
Collateral shall automatically terminate, cease to exist and be released, and
the Pledgee shall forthwith return the Pledged Collateral to and in the name of
the Pledgor.
10. Expenses of the Pledgee. All expenses incurred by the Pledgee
(including but not limited to reasonable attorneys' fees) in connection with any
actual or attempted sale or other disposition of Pledged Stock hereunder shall
be reimbursed to the Pledgee by the Pledgor (jointly and severally) on demand,
or, at the Pledgee's option, such expenses may be added to the Obligations and
shall be payable on demand.
11. Further Assurances. From time to time hereafter, each party
shall take any and all such further action, and shall execute and deliver any
and all such further documents and/or instruments, as any other party may
request in order to accomplish the purposes of and fulfill the parties'
obligations under this Agreement, in order to enable the Pledgee to exercise any
of its rights hereunder, and/or in order to secure more fully the Pledgee's
interest in the Pledged Collateral.
12. Miscellaneous.
(a) Any notices or consents required or permitted under
this Agreement shall be in writing and shall be deemed given as, when and in the
manner provided in the Subscription Agreement. The address and telecopier notice
for Pledgor are: 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx X0X 0X0,
Xxxxxx, telecopier number: (000) 000-0000.
(b) The laws of the Province of Ontario shall govern the
construction and enforcement of this Agreement and the rights and remedies of
the parties hereto. The parties hereby consent to the exclusive jurisdiction of
all courts sitting in the State and County of New York, in connection with any
action or proceeding under or relating to this Agreement, and waive trial by
jury in any such action or proceeding.
(c) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns. The
Pledgor shall not, however, assign any of its or his rights or obligations
hereunder without the prior written consent of the Pledgee, and the Pledgee
shall not assign its rights hereunder without simultaneously assigning its
obligations hereunder to the subject assignee. Except as otherwise referred to
herein, this Agreement, and the documents executed and delivered pursuant
hereto, constitute the entire agreement between the parties relating to the
specific subject matter hereof.
(d) Neither any course of dealing between the Pledgor and the
Pledgee nor any failure to exercise, or any delay in exercising, on the part of
the Pledgee, any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege operate as a waiver of any other exercise of such right, power or
privilege or any other right, power or privilege.
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(e) The Pledgee's rights and remedies, whether hereunder or
pursuant to any other agreements or by law or in equity, shall be cumulative and
may be exercised singly or concurrently.
(f) No change, amendment, modification, waiver, assignment
of rights or obligations, cancellation or discharge hereof, or of any part
hereof, shall be valid unless the Pledgee shall have consented thereto in
writing.
(g) The captions and paragraph headings in this Agreement
are for convenience of reference only, and shall not in any way define, limit or
describe the construction, terms or provisions of this Agreement.
(h) If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision shall thereupon be deemed modified only
to the extent necessary to render same valid, or not applicable to given
circumstances, or excised from this Agreement, as the situation may require, and
this Agreement shall be construed and enforced as if such provision had been
included herein as so modified in scope or application, or had not been included
herein, as the case may be.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the date first set forth above.
COMMERCIAL CONSOLIDATORS CORP.
By: ____________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chairman
Pledgor:
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XXXXXXX X. BLACK
Pledgee:
THE SHAAR FUND LTD.
By:______________________________
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