Exhibit 10.2
STOCK PLEDGE AGREEMENT
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This Stock Pledge Agreement is made and entered into as of August 18,
2006, by and between Girls' Life, Inc. (the "Pledge Holder") and Xxxxx Xxxxxx
(the "Pledgor"). This Agreement is entered into for the purpose of securing
the performance by Girls' Life Acquisition Corporation, a Delaware corporation
("Buyer"), of its obligations under a certain Promissory Note of even date
herewith in the principal amount of $900,000.00 (the "Note") delivered to
Pledge Holder as payment of the purchase price by Buyer for certain assets
owned by the Pledgor.
1. Stock Pledge. In order to secure the full and timely payment of
the amounts due under the Note, Pledgor hereby pledges, transfers and grants to
Pledge Holder a first priority lien and security interest in and to 1,000
shares of common stock of the Buyer, representing all of the issued and
outstanding shares of the Buyer (the "Pledged Shares"), together with an
Assignment Separate from Certificate of such Pledged Shares. Pledge Holder
hereby accepts delivery of the Pledged Shares, subject to the terms and
provisions of this Agreement.
2. Rights in Shares. Except as otherwise provided hereunder, legal
title to the Pledged Shares shall remain in the Pledgor during the term of
this Agreement. Pledge Holder shall hold the Pledged Shares as security for
the full and timely satisfaction of the Buyer's payment obligations under the
Note. So long as Buyer is not in default in the payment of the Note, Pledgor
shall have all of the rights and privileges incident to ownership of the
Pledged Shares, including, but not limited to, the right to vote the Pledged
Shares.
3. Term of Agreement. The Pledged Shares shall remain pledged to
Pledge Holder until the Note has been fully paid.
4. Release of Lien on Pledged Shares. When the Note has been fully
paid the lien created hereby automatically shall cease to exist.
5. Representations and Warranties of Pledgor. Pledgor represents and
warrants to the Pledge Holder that as of the date hereof and at all times prior
to payment in full of the Note, that: Pledgor is the sole record and beneficial
owner of the Pledged Shares, and Pledgor has good and marketable title to the
Pledged Shares, free and clear of any and all liens, pledges and security
interests except those in favor of the Pledge Holder.
6. Exclusive Remedy on Default; Acknowledgement of Additional Debt.
(a) If an Event of Default occurs under the Note, the Pledge Holder shall
transfer the Pledged Shares into its name or the name of its assignee pursuant
to the Assignment Separate from Certificate of such Pledged Shares delivered
with this Pledge Agreement. The Pledge Holder shall give Pledgor reasonable
notification of the time and place of any transfer. It is agreed that any
requirement of reasonable notice shall be met if notice is mailed to Buyer at
least five (5) business days before transfer. The right of the Pledge Holder to
transfer the Pledged Shares as provided in this Section 5, together with the
remedy provided in the next sentence, shall be the Pledge Holder's exclusive
remedy for an Event of Default under the Note, and the Pledge Holder by signing
and delivering this Agreement waives all other remedies provided by law or
equity. If the Event of Default under the Note results from a breach of the
Note Period Business Operations Covenant and the Pledgor receives a personal
benefit from such breach, then in addition to the transfer right set forth in
the first sentence of this Section, Pledgor will pay the Pledge Holder
liquidated damages in an amount equal to twice the amount of such personal
benefit gained as liquidated damages. Upon the transfer of the Pledged Shares
in accordance with this Agreement to the Pledge Holder, the payment obligations
of the Buyer under the Note shall be deemed satisfied in full, and Buyer may
xxxx the Note accordingly.
(b) Pledge Holder acknowledges that the Buyer will borrow up to $500,000
in order to fund printing costs and working capital ("Additional Debt") during
the period prior to the Maturity Date of the Note. Accordingly, if an Event of
Default occurs and the Pledge Holder exercises its remedy to transfer the
Pledged Shares into its name or the name of its assignee before the Additional
Debt is repaid, the Additional Debt will be the continuing obligation of the
Buyer at the time the Pledge Holder obtains control of the Buyer. Pledgor
further agrees that during the Note Period she (i) will remain employed in an
executive capacity with the Buyer and (ii) will not permit the Buyer to pledge
the Purchased Assets as security for obtaining the Additional Debt or for any
other reason.
7. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed electronic mail, telex or
facsimile if sent during normal business hours of the recipient, if not, then
on the next business day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or
(d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to the address as set forth below or at such
other address or electronic mail address as the Pledge Holder or Pledgor may
designate by ten (10) days advance written notice to the other party hereto.
If to Pledgor, to: If to Pledge Holder, to:
Girls' Life Acquisition Corporation Monarch Services, Inc.
0000 Xxxxxxx Xxxx 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, CEO Attention: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000 x000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
8. Miscellaneous. (a) The waiver or indulgence of any default under
any of the agreements entered into between the parties shall not be construed
as a waiver of any other default or of the same default on a future occasion.
(b) This Agreement shall be construed in accordance with the laws
of the State of Maryland.
[SIGNATURE PAGE FOR STOCK PLEDGE AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this Stock Pledge
Agreement on the date first above written.
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
GIRLS' LIFE, INC.
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By: /s/ A. Xxxx Xxxx
Name: A. Xxxx Xxxx
Title: President
STOCK ASSIGNMENT
(SEPARATE FROM CERTIFICATE)
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FOR VALUE RECEIVED, the undersigned does hereby sell, assign and convey
unto_________________________________, all right, title and interest of the
undersigned in and to 1,000 shares of the common stock of Girls' Life
Acquisition Corporation, a Delaware corporation, standing in the name of the
undersigned on the books of said corporation, and represented by the stock
certificate to which this stock assignment is appended, with full power of
substitution in the premises as attorney-in-fact for the undersigned.
Dated: As of August 18, 2006
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
