Exhibit 10.12
SECURITY AND STOCK PLEDGE AGREEMENT
This Security and Stock Pledge Agreement effective as of November 1, 1998 by
and between Xxxxxxx Xxxxxx ("Borrower") and TomaHawk II Inc. ("Lender").
In consideration of the mutual terms, conditions and covenants herein under
set forth, Borrower and Lender agree as follows:
(1) In exchange of consideration stated in three Promissory Notes aggregating
the sum of One Hundred Eighty Eight Thousand Nine Hundred and Seventy Four
Dollars ($188,174) all of which were consolidated in a Consolidated
Promissory Note, Borrower agrees to provide as security shares of stock of
the Tomahawk Corporation, which are evidenced and represented by the
following Stock Certificates for the number of shares identified and for
the following sums of money as herein identified.
(a) Certificate C01092, No. of Shares 500,000, Amount $71,500
(b) Certificate C00678, No. of Shares 500,000, Amount $58,824
(c) Certificate C00893, No. of Shares 500,000, Amount $58,650
(2) As security for the loan, evidenced in the accompanying Consolidated
Promissory Note, Borrower hereby pledges, assigns, transfers and grants to
Lender a security interest in the number of shares as listed in the
preceding paragraph.
(3) In furtherance of the pledge, assignment, transfer and grant of the
security interest, Borrower shall, and has, delivered to Lender the number
of shares as listed in paragraph (1) of this agreement as evidenced and
represented by Stock Certificate Nos. C01092, C00678, C00893.
(4) Borrower shall not pledge, borrow against, collaterize against,
hypothecate, assign, transfer, sell or in any other manner diminish or
impair the value of the stock pledged or the security interest without the
express written authorization of the Lender.
(5) During the term of this agreement, which shall run contemporaneously with
the accompanying Consolidated Promissory Note, the Borrower shall own the
pledged shares. The pledged stock shall be held in trust by Lender for
Borrower in a safe place and Lender shall not alienate, transfer, assign,
hypothecate, sell, pledge, or in any other manner dispose of, or impair
the value of the pledged stock until such time as the Borrower is in
default of
SECURITY AND STOCK PLEDGE AGREEMENT PAGE 2 (XXXXXXX XXXXXX)
the accompanying Consolidated Promissory Note. Lender shall return the
security pledged in this agreement to Borrower upon the compliance within
the terms contained in the accompanying Consolidated Promissory Note. Upon
default and after exhausting efforts to sell the stock as referenced in
paragraph 6 of this agreement, the Lender and/or Borrower, depending upon
which party is in possession, shall return any unsold shares to the
Tomahawk Corporation.
(6) If in default under the terms of this agreement or the accompanying
Consolidated Promissory note is not paid when due, Lender shall be deemed
the owner of the stock described above and Borrower hereby consents to the
transfer to the stock to Lender without further notice. The foregoing
notwithstanding, any time Borrower seeks to sell the stock pledged under
this agreement, the parties agree to cooperate reasonably and in good faith
to arrange a sale of that portion of the shares of stock pledged under this
agreement as is reasonably appropriate to raise funds necessary to satisfy
Borrower's obligation. Borrower agrees that all proceeds from the sale of
pledged stock shall first be applied to satisfy Borrowers obligation under
the Consolidated Promissory Note. It is expressly understood that to the
extent that the stock secured and pledged by this agreement upon sale does
not satisfy the debt, the Borrower is not liable for any deficiency. To the
extent that any balance of the shares remains after satisfaction of the
debt, such shares shall be returned to Borrower.
(7) Borrower shall have the right to exercise all voting rights to the stock
pledged.
(8) The parties may amend or modify this agreement in writing.
INTENDING TO BE LEGALLY BOUND, the parties hereto have caused this Security and
Pledge Agreement to be executed as of the date first above written.
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XXXXXXX XXXXXX, Borrower TOMAHAWK II, INC. Lender
BY:
