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EXHIBIT 10(b)(4)
STOCK PLEDGE SECURITY AGREEMENT
(SECURITIES)
AGREEMENT by and between XXXXX EQUITY, INC., ("Lender") and XXXXXX
XXXXXX ("Borrower") dated as set forth in subsection 1.5 below. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth
in the Loan Agreement (as defined below).
1. DEFINITIONS
The terms set forth below shall be defined as follows:
1.1 "Account" means securities account number 040-21650
at Bear, Xxxxxxx Securities Corp.
1.2 "Borrower" means Xxxxxx Xxxxxx, an individual.
1.3 "Borrower's Address" is: 0000 X.X. 00xx Xxxxxx, Xxxx
Xxxxx, Xxxxxxx 00000.
1.4 "Borrower's Collateral" means (i) the Loan Stock;
(ii) the Account, all funds, Financial Assets and
Investment Property therein and all certificates and
instruments from time to time representing or
evidencing the Account or any funds, securities,
investments, Financial Assets, Investment Property
or other property deposited and held in the Account
(including, without limitation, all Loan Stock
deposited in the Account) and all other property or
rights assigned or allocable to the Account; (iii)
all notes, certificates of deposit, deposit amounts,
checks and other investments from time to time
hereafter delivered to or otherwise possessed by
Borrower in substitution for any or all of the
foregoing; (iv) all interest, cash, instruments and
other property from time to time received,
receivable, or distributed in respect of any or all
of the foregoing; (v) all Security Entitlements of
Borrower in or with respect to any and all of the
foregoing; (vi) all rights of Borrower under the
Control Agreement; and (vii) all proceeds of any and
all of the foregoing.
1.5 "Collateral Account Control Agreement" means that
certain Account Control Agreement among Lender,
Bear, Xxxxxxx Securities Corp. and Borrower being
executed contemporaneously herewith.
1.6 "Date of Agreement" is: dated as of February 17,
2000.
1.7 "Event of Default" means each and every event
specified in Section 4 of this Agreement.
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1.8 "Lender's Address" is: 8880 Freedom Crossing Trial,
Xxxxxxxxxxxx, Xxxxxxx 00000.
1.9 "Loan" means that certain loan from Lender to
Borrower as set forth in the Loan Agreement and as
evidenced by the Notes.
1.10 "Loan Agreement" means the Stock Purchase and Loan
Agreement between Borrower and Lender being executed
herewith.
1.11 "Loan Amount" means the total amount of the loan
from Lender to Borrower as set forth in the Notes
which amount is sufficient to enable Borrower to
purchase up to a maximum of 150,000 shares of
Lender's common stock as provided in the Loan
Agreement.
1.12 "Loan Stock" means the common stock of the Lender
purchased by Borrower with proceeds from the Loan.
1.13 "Notes" means the 25% Recourse Note and the No
Recourse Note both as described in the Loan
Agreement.
1.14 "Obligations" means all indebtedness, obligations
and liabilities of Borrower to Lender arising
pursuant to the Loan Agreement and the Notes and all
interest, taxes, fees, charges, expenses and
reasonable attorneys' fees chargeable to Borrower or
incurred by Lender under this Agreement, or any
other document or instrument delivered in connection
with the Loan Agreement.
1.15 "Uniform Commercial Code" means the Uniform
Commercial Code as enacted in the State of Florida
and in effect from time to time.
To the extent not defined in Section 1 or the Loan
Agreement, unless the context otherwise requires,
all other terms contained in this Agreement shall
have the meanings attributed to them by the Uniform
Commercial Code in force in the State of Florida, as
of the Date of Agreement, to the extent that same
are used or defined therein.
To the extent not defined in Section 1, unless the
context otherwise requires, all other accounting
terms contained in this Agreement shall have the
meanings attributed to them by generally accepted
accounting principals, as of the Date of Agreement,
to the extent that same are used or defined therein.
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2. GRANT OF SECURITY INTEREST
To secure payment and performance of Borrower's
obligations and duties under the terms of the Loan
Agreement and the Notes, Borrower hereby pledges,
assigns and transfers to Lender, and grants to
Lender a continuing lien on and security interest in
and to Borrower's Collateral.
3. SPECIFIC REPRESENTATIONS, WARRANTIES AND COVENANTS WITH
RESPECT TO BORROWER'S COLLATERAL
With respect to Borrower's Collateral, Borrower hereby
represents and warrants and covenants with Lender, as
follows:
3.1 Borrower agrees to reimburse Lender, on demand, for
any amounts paid or advanced by Lender for the
purpose of preserving Borrower's Collateral or any
part thereof and/or any liabilities or expenses
incurred by Lender as the transferee or holder of
Borrower's Collateral.
3.2 Lender shall be under no duty to:
3.2.1 Collect or protect Borrower's Collateral or
any proceeds thereof or give any notice
with respect thereto.
3.2.2 Preserve the rights of Borrower with
respect to Borrower's Collateral against
prior parties.
3.2.3 Preserve rights against any parties to any
instrument or chattel paper which may be a
part of Borrower's Collateral.
3.2.4 Sell or otherwise realize upon Borrower's
Collateral.
3.2.5 Seek payment from any particular source.
Without limiting the generality of the foregoing,
Lender shall not be obligated to take any action in
connection with any conversion, call, redemption,
retirement, or any other event relating to any of
Borrower's Collateral.
3.3 Lender shall exercise reasonable care in the custody
and preservation of Borrower's Collateral to the
extent required by applicable statute and use its
best efforts to take such action as the Borrower may
reasonably request in writing but the failure to do
any such act shall not be deemed a failure to
exercise reasonable care.
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3.4 Borrower will not withdraw any money or property
from the Account, nor sell nor offer to sell nor
otherwise transfer any portion of the Borrower's
Collateral, except upon Xxxxxx'x payment to Lender
of the "Per Share Release Price" from the proceeds
derived from the sale of the Loan Stock as provided
in Section 2.2(E) of the Loan Agreement. Such sums
or securities may be withdrawn only upon notice to
and the prior written consent of Lender which shall
not be withheld provided that Xxxxxx pays Lender the
Per Share Release Price. Lender acknowledges that
the total value of the Account may exceed the Loan
Amount, but that Lender's right to recovery upon the
Loan Agreement, the Notes and this Agreement shall
be limited to the amounts specified in the Notes. If
no Event of Default has occurred or is continuing,
Borrower may make trades in such account. Borrower
may exercise any voting or consensual rights with
respect to the Borrower's Collateral.
3.5 If the Borrower's Collateral is in a securities
account maintained by Borrower or on behalf of
Borrower at a third party, Borrower will furnish or
cause to be furnished to Lender a control agreement
signed by Borrower and such third party pursuant to
which such third party agrees, among other things,
to take no instructions with respect to the
Borrower's Collateral, except as provided in such
agreement.
4. EVENTS OF DEFAULT AND ACCELERATION
4.1 The occurrence of any one or more of the following
events shall constitute an Event of Default
hereunder:
4.1.1 Failure to perform or observe any covenant,
term or agreement herein set forth or set
forth in the Notes beyond any applicable
grace period;
4.1.2 Occurrence of any Event of Default beyond
any applicable grace period provided for in
the Loan Agreement;
4.1.3 Termination of the Account except as
permitted by the Collateral Account Control
Agreement; and
4.1.4 Termination of any Collateral Account
Control Agreement except as provided in
such agreement.
4.2 If any Event of Default shall occur and be
continuing beyond any applicable grace period, then
or at any time thereafter, while such Event of
Default shall continue, Lender may declare all
Obligations to be due and payable, without notice,
protest, presentment or demand, all of which are
hereby expressly waived by Borrower.
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4.3 If any Event of Default shall occur hereunder or
under the Loan Agreement, Borrower shall, if
required by Lender, cease making trades in the
Account.
5. RIGHTS AND REMEDIES
Lender shall have the rights and remedies set forth in the
Loan Agreement, together with:
5.1 The right to proceed at law or in equity against the
Account and without demand or advertisement (which
are hereby waived) but on ten (10) days prior
written notice to Borrower, to sell, assign and
deliver the whole or any of the Borrower's
Collateral at any time or times, at such prices as
it may deem best, either at any broker's board or at
public or private sale in Florida or elsewhere; and
at any sale at broker's board or at public auction,
Lender may purchase and hold the whole or any part
of the Borrower's Collateral sold, free from any
claim or right of redemption of Borrower and the
Borrower's Collateral sold may be retained by Lender
until the selling price is paid by the purchaser;
Lender shall incur no liability in the case of the
failure of the purchaser to take up and pay for the
Borrower's Collateral so sold, and in the event of
such failure, the Borrower's Collateral may again be
sold; and upon the sale of any Borrower's
Collateral, the Lender shall apply the net proceeds
thereof to the payment of expenses of such sale and
the reduction in payment of the Loan Amount,
accounting to Borrower for any surplus.
5.2 The right to file a copy (including a carbon,
photographic or other reproduction) of this Security
Agreement in lieu of a financing statement.
6. GENERAL PROVISIONS
6.1 This Agreement is a security agreement within the
meaning of the Uniform Commercial Code in force in
the State of Florida.
6.2 The terms and conditions set forth in the Loan
Agreement shall be fully applicable and are
incorporated herein as terms and conditions of this
Agreement.
7. WAIVER OF JURY TRIAL
BORROWER WAIVES TRIAL BY JURY AND CONSENTS TO AND CONFERS
PERSONAL JURISDICTION ON COURTS OF THE STATE OF NEW JERSEY OR
OF THE FEDERAL DISTRICT OF FLORIDA, AND EXPRESSLY WAIVES ANY
OBJECTIONS AS TO VENUE IN ANY OF
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SUCH COURTS AND AGREES THAT SERVICE OF PROCESS MAY BE MADE ON
BORROWER BY MAILING A COPY OF THE SUMMONS TO BORROWER AT
BORROWER'S ADDRESS. LENDER LIKEWISE WAIVES TRIAL BY JURY.
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IN WITNESS WHEREOF, the undersigned has set his hand and seal as of
the day and year first written above.
LENDER:
XXXXX EQUITY, INC., a Florida corporation
By: /s/ W. Xxxxxxxx Xxxxxxx
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Name: W. Xxxxxxxx Xxxxxxx
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Title: Vice President
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BORROWER:
By: /s/ Xxx Xxxxxx
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Xxxxxx Xxxxxx, individually
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