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EXHIBIT 10.4
AMENDED AND RESTATED COLLATERAL PLEDGE AGREEMENT
THIS AMENDED AND RESTATED COLLATERAL PLEDGE AGREEMENT ("Agreement") is
made this 11th day of August 2000, by and among Xxxx Xxxxxx, a resident of the
State of California ("Pledgor"), and XXXX SPORTS, INC., a California corporation
("XXXX").
1. Pledge
As security for Pledgor's amended and restated promissory note ("Note")
to XXXX of even date herewith, which Note evidences the indebtedness of Pledgor
to XXXX, Pledgor hereby pledges, mortgages, hypothecates, assigns, transfers,
delivers, sets over and confirms unto XXXX, its success and assigns, the
following property, to wit:
5,608 shares of Common Stock of XXXX SPORTS CORP., a Delaware
corporation ("BSC"), together with all proceeds thereof,
additions thereto and substitutions therefor, including
without limitation any other securities, cash, or other
properties distributed with respect to the foregoing
securities subject to this Agreement, whether as a result of
merger, consolidation, dissolution, reorganization,
recapitalization, interest payment, stock split, stock
dividend, reclassification or redemption or any other change
declared or made in the capital structure of XXXX, BSC, or
otherwise,
as collateral security for the payment in full when due of any and all
obligations and indebtedness of Pledgor to XXXX, whether direct, indirect or
contingent, whether now existing or hereafter incurred and whether or not
otherwise secured (hereinafter collectively referred to as the "Obligations"),
including without limitation, all obligations and indebtedness of Pledgor under
the Note and any extensions, amendments and renewals thereto. In the event of a
conflict or inconsistency between the terms hereof and the terms of the Note,
the terms of the Note shall control. Pledgor warrants and represents that
Pledgor has the right to pledge, mortgage, hypothecate, assign, transfer,
deliver, set over and confirm unto XXXX all of the foregoing shares free of any
encumbrance.
Pledgor hereby agrees promptly to pledge and deposit hereunder with
XXXX any stock, securities, or other property with respect to any of the
securities represented thereby, whether taken in substitution for or in addition
to the above described property. Such stock, other securities and property shall
stand pledged and assigned for the Obligations in the same manner as the
property described in the first paragraph hereof. All of the property described
in this Section 1 and in the first and second paragraphs hereof is hereinafter
called the "Pledged Property."
2. Voting Power, Dividends, Etc.
(a) Unless and until an Event of Default (as hereinafter
defined) or an event which, with the passage of time or giving of notice or both
would constitute an Event of Default, has occurred, Pledgor shall have the right
to exercise all voting, consensual and other powers of ownership pertaining to
the Pledged Property, and Pledgor shall be entitled to receive and retain
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any dividends on the Pledged Property paid in cash out of earned surplus on BSC
to the extent such dividends are reasonable in amount and paid in the ordinary
course of business. To the extent not so permitted, such sums shall be applied
to the amount owing under the Note.
(b) Pledgor hereby irrevocably appoints the Chief
Executive Officer of XXXX as Pledgor's proxy holder with respect to the Pledged
Property with full power and authority to vote such Pledged Property and
otherwise act with respect to such Pledged Property on behalf of Pledgor,
provided that this proxy shall be operative only upon an Event of Default. This
Proxy shall be irrevocable for so long as any of the Obligations remain in
existence, and shall be coupled with an interest. If any Event of Default shall
have occurred, then whether or not any holder of the Note, or the Obligations,
exercises any available options to declare the Note or the Obligations due and
payable or seeks or pursues any other relief or remedy available to such holder
under this pledge Agreement or Obligations:
(i) The Chief Executive Officer of XXXX, or his
nominee or nominees, shall forthwith, without further action on the part of any
person, have the sole and exclusive right to exercise the proxy granted above
and all voting, consensual and other powers of ownership pertaining to the
Pledged Property and shall exercise such powers in such manner as such person,
in his sole reasonable discretion, shall determine to be necessary, appropriate
or advisable, and, if XXXX shall so request in writing, Pledgor agrees to
execute and deliver to XXXX such other and additional powers, authorizations,
proxies, dividends and such other documents as XXXX may reasonably request to
secure to XXXX the rights, powers and authorities intended to be conferred upon
XXXX by this Subsection (b); and
(ii) All dividends and other distribution on the
Pledged Property shall be deposited in a sinking fund to be established for the
benefit of XXXX, and, if XXXX shall so request in writing, Pledgor agrees to
execute and deliver to XXXX appropriate additional dividend, distribution and
other orders and documents to that end.
3. Sale of Pledged Property After an Event of Default.
If any Event of Default shall have occurred, then, unless the Note and
the Obligations shall have been paid in full at or before the time XXXX gives
Pledgor the notice provided for in Subsection (a) of this Section 3 or at or
before the time the suit provided for in Subsection (b) of this Section 3 shall
be begun, XXXX may, in its sole discretion, without further demand,
advertisement or notice, except as expressly provided for in Subsection (a) of
this Section 3, (i) apply the cash, if any, then held by it as collateral
hereunder, for the purposes and in the manner provided in Section 4 hereof, and
(ii) if there shall be no such cash or the cash so applied shall be insufficient
to make in full all payments provided in Subsections (a) and (b) of Sections 4
hereof:
(a) Sell the Pledged Property, or any part
thereof, in one or more sales, at public or private sale, conducted by an
officer or agent or auctioneer or attorney for, XXXX, at XXXX'x place of
business or elsewhere, for cash, upon credit or future deliver, and at such
price or prices as XXXX shall, in its sole discretion, determine, and XXXX may
be the purchaser of any or all of the pledged Property so sold and shall hold
the same thereafter in its own right, free from any claims of Pledgor or any
right of redemption of Pledgor. Upon any such sale XXXX shall have the right to
deliver, assign and transfer to the purchaser thereof the Pledged Property
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so sold. Each purchaser (including XXXX) at any such sale shall hold the Pledged
Property so sold including, without limitation, any equity or right of
redemption of the Pledgor, which the Pledgor hereby specifically waives, to the
extent he may lawfully do so, and all rights of redemption, stay or appraisal
which he has or may have under any rule of law of statute now existing or
hereafter adopted. XXXX shall give the Pledgor at least five (5) days written
notice, in case of public or private sale. Any such public sale shall be held at
such time or times within ordinary business hours as XXXX shall fix in the
notice of such sale. At any such sale the Pledged Property may be sold in one
lot as an entity or in separate parcels. XXXX shall not be obligated to make any
sale pursuant to any notice. XXXX may, without notice or publication, adjourn
any public or private sale from time to time by announcement at the time and
place fixed for such sale, or any adjournment thereof, and any such sale may be
made at any time or place to which the same may be so adjourned without further
notice or publication. In case of any sale of all or any part of the Pledged
Property for credit or for future delivery, the Pledged Property so sold may be
retained by XXXX until the selling price is paid by the purchaser thereof, but
XXXX shall not incur any liability in case of the failure of such purchaser to
take up and pay for the Pledged Property so sold, and in case of any such
failure, such Pledged Property may again be sold under and pursuant tot he
provisions hereof, or
(b) Proceed by a suit or suits at law or in
equity to foreclose upon this Agreement and sell the Pledged Property, or any
portion therefor, under a judgment or decree of a court or courts of competent
jurisdiction.
This Chief Executive Officer of XXXX, as attorney-in-fact pursuant to
Section 5 hereof may, in the name and stead of Pledgor, make and execute all
conveyances, assignments and transfers of the Pledged Property sold pursuant to
Subsection (a) or (b) of this Section 3. Pledgor shall, if so requested by XXXX,
ratify and confirm any sale or sales by executing and delivery to XXXX or to
such purchaser or purchasers all such instruments as may, in the sole judgment
of XXXX, be advisable.
4. Application of Proceeds.
If an Event of Default exists, the proceeds of any sale, or of
collection, of all or any party of the Pledged Property shall be applied by
XXXX, without any marshaling of assets, in the following order:
(a) first, the payment of all of the costs and expenses
of such sale, including, without limitation, reasonable compensation to XXXX and
its agents, attorneys and counsel, and all other reasonable expenses,
liabilities and advances made or incurred by XXXX in connection therewith; and
(b) second to the payment of the principal of and
premium, if any, and interest on the Note, and all obligations of the Pledgor
under the Note and this Agreement and then to pay any other Obligations; and
(c) finally, to the payment of Pledgor, her successors or
assigns, or their respective heirs, executors or administrators, or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, or any surplus remaining
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from such proceeds after payments of the character referred to in Subsections
(a) and (b) of this Section 4 shall have been made.
5. Chief Executive Officer of XXXX Appointed Attorney-in-Fact;
Indemnity.
Upon an Event of Default, the Chief Executive Officer of XXXX, his
successors and assigns, is hereby appointed attorney-in-fact, with full power of
substitution, of Pledgor for the purpose of carrying out the provisions of the
Pledge Agreement and taking any action and executing any instruments which such
attorney-in-fact may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with an
interest. Pledgor will indemnify and save harmless such person from and against
any liability or damage which he may incur, in good faith and without gross
negligence, in the exercise and performance of any of its or his powers and
duties specifically set forth herein.
6. No Waiver.
No failure on the part of XXXX to exercise, and no delay on the part of
XXXX in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by XXXX of any right,
power or remedy hereunder preclude any other or further right, power or remedy.
The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law or equity.
7. Termination of Pledge.
When all of the Obligations, including, without limitation, the
indebtedness evidenced or secured by the Note or this Agreement, shall have been
paid in full, this Agreement shall terminate. XXXX shall forthwith assign,
transfer and deliver to Pledgor or her assignees, without representation,
warranty or recourse, against appropriate receipts, all the Pledged Property, if
any, then held by him in pledge hereunder.
8. Representations and Warranties.
Pledgor hereby represents and warrantees that, when the Pledged
Property is pledged hereunder:
(a) Ownership of Pledged Property. Pledgor is the legal
and equitable owner of the Pledged Property free and clear of all liens,
charges, encumbrances and security interests of every kind and nature, other
than those created hereunder.
(b) Authority to Pledge. Pledgor has taken all action
necessary to make this Pledge and all obligations hereunder fully enforceable
against Pledgor.
(c) Continuous Security Interest. Pledgor hereby agrees
that until payment of principal, interest, and all other sums owing pursuant to
the Note in accordance with the terms thereof and performance in full of all of
the Obligations and the covenants, conditions and
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agreements to Pledgor hereunder, all rights, powers and remedies granted to XXXX
hereunder shall continue to exist and may be exercised by XXXX.
(d) Right to Transfer. Pledgor hereby represents and
warrants that on the date of this Agreement he has the absolute right and
authority to enter into this Agreement and thereby to create in favor of XXXX a
valid and binding security interest in the Pledged Property, subject to no
liens, charges, encumbrances or rights of others.
(e) No Transfer, Further Encumbering, Etc. Pledgor hereby
agrees not to directly or indirectly assign, transfer, or convey or further
encumber the Pledged Property or any part thereof or interest therein without
the prior written consent of XXXX.
9. Governing Law.
This Agreement shall in all respects be construed and interpreted in
accordance with and governed by the laws of the State of California applicable
to agreements made and to be performed entirely in California by California
residents.
10. Successor and Assigns.
This Agreement shall be binding upon and insure to the benefit of the
respective successor and assign of Pledgor and XXXX, and any subsequent holder
of the Note or the Obligations.
11. Additional Instruments and Assurance.
Pledgor hereby agrees, at her own expense, to execute and deliver, from
time to time, any and all further or other instruments, and to perform such acts
as XXXX may reasonably request for purposes of this Agreement and to secure to
XXXX, and to all persons who may from time to time be the holder of the Note or
the Obligations, the benefits of all rights, authorities and remedies conferred
upon XXXX by the terms of this Agreement.
12. Notices.
All notices or other communications provided for hereunder shall be in
writing (including telegraphic communication) and mailed or telegraphed or
delivered, if to Pledgor, at her address at 00000 Xxxxxxxxxxxxx, Xxxx Xxxxx, XX
00000, or if to XXXX at 0000 Xxx Xxxxxxx, Xxx Xxxx, XX 00000, ATTN: Chief
Financial Officer, or, as to each party, at such other address as shall be
designated by such party in a written notice to the other party, complying with
the foregoing terms. All such notices and communications shall, when mailed or
telegraphed, be effective when deposited in the United States mail, postage
prepaid, certified, registered or express, return receipt requested, or
delivered to the telegraph company or overnight courier, charges prepaid,
respectively, addressed as aforesaid.
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13. Entire Agreement.
This Amended and Restated Collateral Pledge Agreement amends and
restates in its entirety Collateral Pledge Agreement dated April 17, 2000.
14. Severability.
In case any one or more of the provisions of this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had not been included.
15. Events of Default.
Pledgor shall be in default under this Agreement upon the occurrence of
any one of the following events (herein referred to as an "Event of Default"):
(a) Default by Pledgor in the due observance or
performance of any covenant or agreement contained herein or breach by Pledgor
of any representation or warranty herein contained; or
(b) any default by Pledgor in the payment or performance
when due of any of the Obligations, including, without limitation, the payment
of the principal of, or interest on, any indebtedness of Pledgor to XXXX, as set
forth in the Note; or
(c) The occurrence of any Event of Default under the
provisions of the Note, and any other instrument, document or agreement security
the indebtedness evidenced by the Note.
16. Heading.
The headings of the Sections of this Agreement have been inserted for
convenience of reference only and shall in no way affect the construction or
interpretation of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have entered into this Amended and
Restated Collateral Pledge Agreement as of the date first above written.
PLEDGOR:
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
XXXX SPORTS, INC.
By: /s/ Xxxxxxx X Xxxxxx
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Name: Xxxxxxx X Xxxxxx
Title: President & CEO
