1
EXHIBIT 6.2
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT, dated as of September 20, 1995, between CVF, Inc.
("Pledgor") and CVF Corp. ("Pledgee").
W I T N E S S E T H :
WHEREAS, Pledgor and Pledgee have entered into a Service Agreement dated
as of September 20, 1995 (the "Service Agreement"), pursuant to which Pledgor
has agreed to provide certain management services to Pledgee and pay certain
expenses of Pledgee (the "Financial Obligations");
WHEREAS, Pledgor has agreed to provide security for the performance of the
Financial Obligations;
NOW, THEREFORE, in consideration of the premises and the covenants set
forth herein and in the Service Agreement, the parties hereto agree as follows.
1. Definitions. Capitalized terms used but not defined herein and defined
in the Service Agreement are used herein as therein defined. References to
this "Agreement" shall mean this Stock Pledge Agreement as the same may be in
effect at the time such reference becomes operative, including all amendments,
modifications and supplements hereto and any exhibits or schedules to any of
the foregoing.
2. Pledge. In order to secure the payment in full of all of the Financial
Obligations, Pledgor hereby pledges, assigns, grants a security interest in,
transfers and delivers unto Pledgee each of the following (the "Collateral"):
(a) all of Pledgor's right, title and interest in and to all shares
(the "Pledged Shares") of capital stock described in Schedule I hereto
and the certificates, if any, representing the Pledged Shares, and all
dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;
(b) all other rights appurtenant to the property described in clause
(a) above (including, without limitation, voting rights); and
(c) all cash and noncash proceeds of the foregoing.
Certificates representing the Pledged Shares set forth on Schedule I hereto,
accompanied by proper instruments of assignment duly executed in blank by
Pledgor, are herewith delivered to Pledgee.
3. Representations and Warranties. Pledgor hereby represents and warrants
to Pledgee that as of the date hereof:
2
(a) Pledgor is the sole holder of record and beneficial owner of the
Pledged Shares set forth on Schedule I hereto, free and clear of any
pledge, hypothecation, assignment, lien, charge, claim, security
interest, option, preference, priority or other preferential arrangement
of any kind or nature whatsoever ("Lien") thereon or affecting the title
thereto.
(b) The Pledged Shares have been duly authorized and validly issued
and are fully paid and non-assessable, and Pledgor has the right and all
requisite corporate authority to pledge, assign, grant a security
interest in, transfer and deliver the Collateral to Pledgee as provided
herein.
(c) This Agreement has been duly authorized, executed and delivered
by Pledgor and constitutes the legal, valid and binding obligation of
Pledgor, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of
equity.
(d) No consent, approval, authorization or other order of any Person
is required for (i) the execution and delivery of this Agreement by
Pledgor or the delivery by Pledgor of the Collateral to Pledgee as
provided herein, or (ii) for the exercise by Pledgee of the voting or
other rights provided for in this Agreement or the remedies in respect of
the Collateral pursuant to this Agreement, except as may be required in
connection with the disposition of the Collateral by laws affecting the
offering and sale of securities generally.
(e) Upon the delivery to Pledgee of the certificates representing
the Pledged Shares, Pledgee will have a valid and perfected security
interest therein subject to no prior Lien.
The representations and warranties set forth in this Section 3 shall
survive the execution and delivery of this Agreement.
4. Rights of Pledgor. Unless Pledgor shall have failed to satisfy its
Financial Obligations:
(a) Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Shares or any part
thereof for any purpose not inconsistent with the terms of this
Agreement.
(b) Pledgor shall be entitled, from time to time, to collect and
receive for its own use all cash dividends (except cash dividends paid or
payable in respect of the total or partial liquidation) paid on the
Pledged Shares; provided, however, that until actually paid, all rights
to such dividends shall remain subject to the Lien of this Agreement.
All dividends (other than cash dividends governed by the immediately
preceding sentence) and all other distributions in respect of any of the
Collateral, whenever paid or made, shall be delivered to Pledgee and held
by it subject to the Lien created by this Agreement.
5. Covenants. Pledgor covenants and agrees that until the termination of
this Agreement:
(a) Pledgor will not, without the prior written consent of Pledgee,
sell, assign, transfer, mortgage, pledge or otherwise encumber any of its
rights in or to the Collateral or any dividends or other distributions or
payments with respect thereto or xxxxx x Xxxx on any thereof.
2
3
(b) Pledgor will, at its own expense, execute, acknowledge and
deliver all such instruments and take all such action as Pledgee from
time to time may reasonably request in order to ensure to Pledgee the
benefits of the first priority Lien on and to the Collateral intended to
be created by this Agreement.
(c) Pledgor will defend the title to the Collateral and the Lien of
Pledgee thereon against the claim of any Person claiming against or
through Pledgor and will maintain and preserve such Lien so long as this
Agreement shall remain in effect.
(d) Unless Pledgor shall have given Pledgee not less than 30 days'
prior notice thereof, Pledgor will not change (i) its name, identity or
corporate structure in any manner or (ii) the location of its chief
executive office.
6. Remedy. Upon the failure of the Pledgor to perform its Financial
Obligations under the Service Agreement during any fiscal quarter, the Pledgee
may repurchase for $0.01 per share the number of Pledged Shares equal to the
unpaid dollar amount of the Financial Obligations, divided by the Market Price
of the Pledged Shares. For purposes hereof, "Market Price" shall equal the 90
day weighted average trading price of the Pledged Shares over the prior
quarter.
7. Exoneration of Pledgee. Other than the exercise of reasonable care in
the custody and preservation of the Collateral, Pledgee shall have no duty with
respect thereto. Pledgee shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which it accords
its own property, and shall not be liable or responsible for any loss or damage
to any of the Collateral, or for any diminution in the value thereof, by reason
of the act or omission of any agent or bailee selected by Pledgee in good
faith.
8. Waiver. No delay on Pledgee's part in exercising any right hereunder,
and no notice or demand which may be given to or made upon Pledgor by Pledgee
with respect to any right hereunder, shall constitute a waiver thereof, or
limit or impair Pledgee's right to take any action or to exercise any right
hereunder, without notice or demand, or prejudice Pledgee's rights as against
Pledgor in any respect.
9. Assignment. Neither party may assign its rights under this agreement,
except that in the event of assignment by Pledgee of its rights under the
Service Agreement in accordance therewith, the party to whom such assignment is
made shall be entitled to Pledgee's rights hereunder.
10. Termination. At such time as (a) all Financial Obligations have been
fully satisfied and (b) the Service Agreement shall have been terminated,
Pledgee shall deliver to Pledgor the Collateral at the time subject to this
Agreement and all instruments of assignment executed in connection therewith,
free and clear of the Lien hereof and all of Pledgor's obligations hereunder
shall thereupon terminate. When so released, such Collateral shall be free and
clear of any lien or encumbrance hereunder.
11. Expenses. Pledgor will reimburse Pledgee for all expenses (including
reasonable expenses for legal services of every kind) of, or incidental to the
preparation or enforcement of any of the provisions of, this Agreement or any
enforcement, collection, compromise or settlement of any of the Collateral and
for the care of the Collateral and defending or asserting the rights and claims
of Pledgee in respect of the Collateral, by litigation or otherwise, including
but not limited to expenses of insurance and the fees and expenses of counsel
for Pledgee. All such expenses shall be deemed additional Financial
Obligations.
3
4
12. Miscellaneous.
(a) Pledgee may execute any of its duties hereunder by or through
agents or employees. Pledgee may consult with legal counsel and any
action taken or suffered in good faith in accordance with the advice of
such counsel shall be full justification and protection to it.
(b) Neither Pledgee nor any of its officers, directors, employees,
agents or counsel shall be liable for any action lawfully taken or
omitted to be taken by it or them hereunder or in connection herewith,
except for their own gross negligence or willful misconduct and Pledgee
shall not be liable for any error of judgment made by it in good faith.
(c) This Agreement shall be binding upon Pledgor and its successors
and assigns, and shall inure to the benefit of, and be enforceable by,
Pledgee and its successors, transferees and assigns. None of the terms
or provisions of this Agreement may be waived, altered, modified or
amended except in writing duly signed for and on behalf of Pledgee and
Pledgor.
(d) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE.
13. Further Assurances; Pledgee May Perform.
(a) At Pledgor's expense, Pledgor will do all such acts, and will
furnish to Pledgee all such financing statements, certificates, legal
opinions and other documents and will do or cause to be done all such
other things as Pledgee may reasonably request from time to time in order
to give full effect to this Agreement and to secure the rights intended
to be granted to Pledgee hereunder. To the extent permitted by
applicable law, Pledgor hereby authorizes Pledgee to execute and file, in
the name of Pledgor or otherwise, Uniform Commercial Code financing
statements (which may be photocopies of this Agreement) which Pledgee in
its sole discretion may deem necessary or appropriate.
(b) If Pledgor fails to perform any act required by this Agreement,
Pledgee may perform, or cause performance of, such act, and the expenses
of Pledgee incurred in connection therewith shall be governed by Section
11 hereof.
14. Notices. Except as otherwise provided herein, any notice required
hereunder shall be in writing, and shall be deemed to have been validly served,
given or delivered upon receipt after transmittal by hand or by Federal Express
or similar service, or five business days after deposit in the United States
mails, registered first class mail, with proper postage prepaid. Failure to
comply with the provisions set forth above with respect to the delivery of
copies shall not impair the validity of any notice otherwise complying with the
terms hereof.
4
5
15. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Stock Pledge
Agreement to be duly executed as of the date first above written.
CVF Corp.
/s/ Xxxxxxx Xxxxxx
--------------------------------
By: Xxxxxxx Xxxxxx
Title: President
CVF, Inc.
/s/ Xxxxxxx Xxxxxx
--------------------------------
By: Xxxxxxx Xxxxxx
Title: President
5
