STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement") is entered into as
of June 2, 2005 by Xxxxxxx X. Xxxxxx, Xxx XxXxxxx, Xxxx Xxxxxxxx, Xxxxxx
Xxxxxxxx and Xxxxxxx Xxxxxx (collectively, "Pledgors"), Xxxxxxxx X.
Xxxx, Xx. ("Seller") and Xxxxxx Xxxxxx, Esq., as escrow agent ("Escrow
Agent").
WHEREAS, the Pledgors have executed and delivered to Seller a
Secured Note dated this date (the "Note"); and
WHEREAS, the Pledgors have agreed to pledge certain of the issued
and outstanding capital stock of Centale, Inc. ("Centale") and to place
said capital stock in escrow for the benefit of Seller or any assignee
of the Note (the "Holder").
NOW THEREFORE, in consideration of the promises and mutual
agreements, covenants and provision herein contained, the parties agree
as follows:
1. The term "Secured Obligations" shall mean: (a) any and all
unsatisfied obligations, liabilities and indebtedness of
Pledgors to the Holder under the terms of the Note, (b) all
costs and expenses incurred by the Holder in connection
with realization of the security granted hereby, and (c)
all costs and expenses of any proceedings to which this
Stock Pledge Agreement may give rise.
2. An "Event of Default" under this Agreement shall exist if
either: (a) Pledgors shall have any past-due obligation to
make payment to the Holder which they have not discharged;
or (b) Pledgors shall breach or fail to perform any term or
condition of this Agreement or any term of condition of the
Stock Purchase Agreement pursuant to which this Stock
Pledge Agreement was made..
3. As collateral security for performance in full of the
Secured Obligations, Pledgors hereby grant to the Holder an
initial security interest in 2,284,000 issued and
outstanding shares of the capital stock of Centale
("Shares") and in any additional or replacement Centale
shares subject to the Stock Purchase Agreement to the
extent that those Seller shares hereafter delivered to the
Escrow Agent according to the terms and conditions
otherwise described herein, together with all proceeds,
products and increases thereof and substitutions and
replacements therefore, (collectively, the "Collateral").
4. Simultaneously herewith, Pledgors have delivered to the
Escrow Agent certificates representing the Collateral (the
"Certificates") and corresponding stock powers with respect
to the Certificates, duly endorsed in blank (collectively
the "Pledged Securities"), receipt of which is hereby
acknowledged.
5. Pledgors each represent and warrant as to the
Certificate(s) in his/her name that: (a) Pledgor holds
record and beneficial ownership of the Collateral, free and
clear of all liens and encumbrances; (b) there are no
restrictions upon the transfer of the Collateral, other
than restrictions arising under applicable state or federal
securities laws; and (c) the pledge, assignment and
delivery of the Collateral pursuant to this Agreement
creates a valid first lien on and a first priority security
interest in the Collateral, and the proceeds thereof,
subject to no prior lien or to any agreement purporting to
grant to any third party a lien on the property or assets
of the Pledgors which would include the Collateral. The
Pledgors covenant and agree that the Pledgors will defend
the Holder's right, title and security interest in and to
the Collateral and the proceeds thereof against the claims
and demands of all persons whomsoever; and covenant and
agree that the Pledgors will have like title to and right
to pledge any other property at any time hereafter pledged
to the Holder as Collateral hereunder and will likewise
defend the Holder's right thereto and security interest
therein.
6. At any time during the term of this Agreement the Pledgors
may deliver to the Escrow Agent certificates for shares of
Centale common stock accompanied by stock powers with
medallion-guaranteed signatures. Upon receipt of such
documents, the Escrow Agent shall deliver to the Pledgors
or per their instructions certificates for an equal number
of Shares previously included in the Collateral.
7. The Pledgors and the Holder agree that the number of
Centale shares representing the Collateral shall, from time
to time and during the term of this Agreement, be reduced
to account for the partial satisfaction of the Pledgors'
obligations. If, during the term of this Agreement, the
Pledgors present the Escrow Agent with satisfactory written
evidence of a reduction of the principal amount of the
Note, the Escrow Agent shall deliver to Pledgors or per
their instructions certificates for Shares. The number of
Shares which the Escrow Agent shall release from the
Collateral in this manner will equal one Share for every
three Dollars reduction in the principal amount.
8. During the term of this Agreement, provided that no Event
of Default has occurred and then exists hereunder, Pledgors
shall have the right, where applicable, to vote the
Collateral on all corporate questions.
9. Upon an Event of Default, the Holder shall have the right
to deliver to the Escrow Agent and Pledgors a letter
stating that an Event of Default has occurred. In such
letter the Holder shall specify in detail the nature of
such Event of Default (a "Default Letter"). If the Default
Letter specifies an Event of Default arising under the
Note, then upon receipt of the Default Letter the Escrow
Agent shall deliver to the Holder all Pledged and
Collateral Securities. Upon receipt of a Default Letter
specifying any other Event of Default and evidence of
delivery of same to the Pledgors, Escrow Agent shall
deliver to the Holder all Pledged and Collateral
Securities, unless, within two (2) days after receipt of
such Default Letter, a Pledgor delivers to Holder and
Escrow Agent an Affidavit stating that: (a) each Event of
Default alleged in the Default Letter has been cured and is
no longer continuing; or (b) that each alleged Event of
Default does not constitute a default for reasons which are
specified in such Affidavit ("Good Faith Dispute
Affidavit"). Should Escrow Agent receive a Good Faith
Dispute Affidavit within such aforementioned two (2) day
period, the Escrow Agent shall notify the Holder of such
receipt by sending the Holder a copy of the same, and
Escrow Agent shall not deliver to the Holder the Pledged
Securities until such time as there has been a
determination as to whether an Event of Default has or has
not occurred, and the Escrow Agent has received a judgment
of a court of competent jurisdiction, not subject to appeal
or as to which the time to appeal has expired, or a
direction from an arbitrator or a panel of arbitrators,
directing the Escrow Agent as to how to deliver the Pledged
Securities. Notwithstanding anything herein to the
contrary, upon Escrow Agent's receipt of a joint written
notice of direction from Holder and Pledgors ("Joint
Direction Letter"), the Escrow Agent shall deliver the
Pledged Securities as directed pursuant to such Joint
Direction Letter.
10. If after an Event of Default and receipt of a Default
Letter, the Escrow Agent delivers to the Holder the Pledged
Collateral, the Holder shall have all the rights and
remedies provided in the Uniform Commercial Code of New
York, except as otherwise specified in this Agreement. The
Holder may, upon ten (10) days' notice to the Pledgors,
without liability for any diminution in value or price
which may have occurred, sell all or any part of the
Collateral in such manner and for such price as the Holder
may determine. At any public sale the Holder shall be free
to purchase all or any part of the Collateral. The Holder
shall receive the proceeds of any such sale or sales, and,
after deducting therefrom any and all reasonable costs and
expenses incurred in connection with the sale thereof,
apply the net proceeds toward the payment of the Secured
Obligations, including interest, reasonable attorneys'
fees, and all other reasonable costs and expenses incurred
by Holder hereunder. If such proceeds be more than
sufficient to pay the same, then in case of a surplus, such
surplus shall be accounted for and paid over to Pledgors.
11. If after an Event of Default and receipt of a Default
Letter, the Escrow Agent delivers to the Holder the Pledged
Collateral, the Holder may, as an alternative to his rights
under Section 10 hereof, deliver to the Pledgors a written
notice of satisfaction of the Note, and transfer to himself
or his assignees the Collateral in full satisfaction of the
Note. The Pledgors grant this option to the Holder with
full knowledge that the fair value of the Collateral may
exceed the amount of the Secured Obligations. The Pledgors
acknowledge that the Seller has delivered to them
consideration, which makes the granting of this option fair
and reasonable.
12. Upon receipt of satisfactory evidence of indefeasible
payment in full of the Secured Obligations, the Escrow
Agent will deliver all of the remaining Collateral to
Pledgors along with all instruments of assignment executed
in connection therewith, at which time this Pledge
Agreement shall terminate.
13. During the term of this Pledge Agreement, the Pledgors will
not sell, assign, transfer, exchange, or otherwise dispose
of, or grant any option with respect to, the Collateral,
nor will the Pledgors create, incur or permit to exist any
lien with respect to any of the Collateral, or any interest
therein, or any proceeds thereof, except for the lien
provided for by this Agreement or in favor of the Holder.
14. Under this Agreement, the Escrow Agent:
(a) Shall not be bound in any way by any agreement or contract
between the parties hereto to which the Escrow Agent is not
a party (whether or not the Escrow Agent has knowledge thereof) and
the only duties or responsibilities of the Escrow Agent shall be
to hold and disburse the Certificates and Stock Powers in
accordance with the terms of this Escrow Agreement.
(b) May accept or act upon any instructions, directions,
documents or instruments purportedly signed or issued by,
or on behalf of, any corporation, partnership, fiduciary or
individual which is a party to this Escrow Agreement; it
shall not be necessary for the Escrow Agent to inquire into
their authority. The Escrow Agent shall not be required or
permitted to question the validity or invalidity of any
termination under the Pledge Agreement. The Escrow Agent
shall not be held liable in any event if he accepts as
accurate and acts in good faith upon the contents of any
notice received by him from any Pledgor or any Holder.
(c) May resign as escrow agent at any time by notifying the
other parties hereto in writing and, until a successor
escrow agent is appointed by them and accepts such
appointment, the only duty of the Escrow Agent shall be to
hold the Pledged Securities safely and to deliver the same
to a successor escrow agent designated by the Seller.
(d) Shall not be liable for any exercise of judgment in the
performance of his duties hereunder but only for his own
fraud, willful misconduct or gross negligence and the
duties of the Escrow Agent shall be determined solely by
the express provisions of this Escrow Agreement. In the
event the Collateral becomes involved in litigation
(including arbitration or any other type of proceeding
which may affect the rights to and ownership of the Pledged
Securities), the Pledgors hereby authorize the Escrow
Agent, without creating any obligation on the part of the
Escrow Agent, to deposit the Pledged Securities with the
clerk of the court in which the litigation is pending, or
with the arbitrator(s) in the case of arbitration, and
thereupon the Escrow Agent shall be fully relieved and
discharged of any further responsibility under this Escrow
Agreement. The parties also authorize the Escrow Agent, if
he is threatened with litigation, to interplead all
interested parties in any court of competent jurisdiction
and to deposit the collateral with the clerk of that court
and thereupon the Escrow Agent shall be fully relieved and
discharged of any further responsibility hereunder.
15. All notices and other communications relating to this
Escrow Agreement shall be in writing and shall be either
personally delivered or sent by overnight courier to the
parties at their addresses as set forth in the Stock
Purchase Agreement pursuant to which this Stock Pledge
Agreement has been made. Any party may from time to time
give notice changing his or her address for notice by
notice to the other parties. Notice shall be deemed given
delivered personally or two business days after tender to
an overnight courier of national reputation.
16. This Agreement shall be interpreted and the rights and
liabilities of the parties hereto determined in accordance
with the local law of the State of New York excluding any
conflicts of law rule or principle that might otherwise
refer construction or interpretation of this agreement to
the substantive law of another jurisdiction. Any action to
enforce, arising out of, or relating in any way to, any
provisions of this Stock Pledge Agreement shall only be
brought in a state or federal court sitting in New York
City.
17. Xxxxxxx X. Xxxxxx is hereby appointed to serve as
nominee for the Pledgors under this Agreement. Any action
that may be taken by the Pledgors pursuant to the terms of
this Agreement may be taken by Xxxxxxx X. Xxxxxx on behalf
of the Pledgors, and shall be as if taken by all five of
them.
IN WITNESS WHEREOF, Pledgors, Seller and the Escrow Agent have
executed this Agreement as of the date first above written.
/s/ Xxxxxxx X. Xxxxxx /s/ Xxx XxXxxxx
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Xxxxxxx X. Xxxxxx Xxx XxXxxxx
/s/ Xxxxxxx Xxxxxx /s/ Xxxx Xxxxxxxx
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Xxxxxxx Xxxxxx Xxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxx /s/ Xxxxxxxx X. Xxxx, Xx.
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Xxxxxx Xxxxxxxx Xxxxxxxx X. Xxxx, Xx.
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
