EXHIBIT 10.19
FOX & HOUND OF LITTLETON, INC.
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT ("Agreement") is entered into as of
the 12th day of June, 2002, by _________________ (hereinafter referred to as the
"Pledgor"), and TENT FINANCE, INC., a Delaware corporation ("TENT").
RECITALS
A. Pledgor and TENT entered into that certain Stockholders Agreement dated June
12, 2002, (the "Stockholders Agreement"), whereby Pledgor is obligated to sell
to Tent its shares in Fox & Hound of Littleton, Inc., a Colorado corporation
(the "Shares") under certain circumstances.
B. TENT desires to secure Pledgor's obligations under the Stockholders Agreement
by obtaining a security interest in the Shares.
C. The parties desire to set forth their respective rights and obligations in
and to the Shares pledged as provided below.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Pledge and Security Interest. As security for the obligations of
Pledgor to TENT, including without limitation Pledgor's obligations under the
Stockholders Agreement, and all amendments and modifications thereto (the
"Obligations"), together with any and all expenses which may be incurred by TENT
in collecting any or all of the Obligations or in enforcing any rights hereunder
(all such expenses being hereinafter referred to as the "Expenses"), and for
other good and valuable consideration the Pledgor hereby grants a security
interest in, pledges, hypothecates, assigns, transfers, sets over, and delivers
unto the TENT the Shares, all proceeds thereof, including, but not limited to,
all securities acquired with any such proceeds (the "Pledged Shares"), and the
certificates for the Pledged Shares accompanied by stock powers covering such
certificates executed in blank together with shares represented thereby and all
cash securities, dividends, or other property, at any time and from time to time
received, receivable, or otherwise distributed in respect of or in exchange for
any or all of such shares (all of the foregoing being herein collectively called
the "Collateral").
TO HAVE AND TO HOLD, the Collateral together with all rights, titles,
interests, powers, privileges and preferences appertaining or incidental
thereto, unto TENT, its successors and assigns, forever as security for the
Obligations and Expenses, subject, however, to the terms, covenants and
conditions hereinafter set forth.
2. Representations and Warranties. The Pledgor represents and warrants
as follows:
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a. The Pledged Shares have been or when issued will be duly
and validly authorized, executed and issued, and the Pledgor owns or
will own the same beneficially free and clear of any liens, charges or
encumbrances thereon or affecting the title thereto, except as set
forth in the Stockholders Agreement.
b. Pledgor has good right and lawful authority to pledge and
deposit the Collateral as provided herein and warrants and will
preserve and defend all right, title and interest in and to the
Collateral delivered to TENT hereunder against the claims of all
persons and will maintain and preserve the lien hereof as long as this
Agreement shall remain in full force and effect.
3. Appointment of Agents; Registration in Nominee Name. TENT shall have
the right to appoint one or more agents for the purpose of retaining physical
possession of the certificates representing or evidencing the Collateral, which
may be held (in the discretion of TENT) in the name of the Pledgor, endorsed or
assigned in blank or in favor of TENT, or in the name of TENT or any nominee or
nominees of TENT or an agent appointed by TENT. In addition to all other rights
possessed by TENT, TENT may from time to time after the occurrence of an Event
of Default (hereinafter defined), or an event which with the giving of notice or
the lapse of time, or both, would be such an Event of Default, at TENT's sole
discretion and without notice to the Pledgor, take any or all of the following
actions: (i) transfer all or any part of the Collateral into the name of TENT or
its nominee, with or without disclosing that such Collateral is subject to the
lien and security interest hereunder; (ii) take control of any proceeds of any
of the Collateral; and (iii) exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations for any purpose consistent with its performance of this Agreement.
4. Voting Rights, Dividends, Replacement of Collateral.
a. So long as there has not occurred an Event of Default, or
an event which with the giving of notice or the lapse of time, or both,
would be such an Event of Default, the Pledgor shall be entitled to
exercise any and all voting rights and powers relating or pertaining to
the Collateral or any part thereof for any purpose not inconsistent
with the terms of this Agreement.
b. So long as there has not occurred an Event of Default, or
an event which with the giving of notice or the lapse of time, or both,
would be such an Event of Default, the Pledgor shall receive and be
entitled to retain any and all cash dividends and distributions, if
any, paid on the Collateral. Any and all stock and/or liquidating
dividends, distributions in property, redemptions or other
distributions made on or in respect of the Collateral, whether
resulting from a subdivision, combination or reclassification of the
outstanding capital stock of the issuer thereof or received in exchange
for Collateral or any part thereof or as a result of any merger,
consolidation, acquisition, or other exchange of assets to which such
issuer or the Pledgor may be a party or otherwise, and any and all cash
and other property received in payment of the principal of or in
redemption of or in exchange for any Collateral (either upon call for
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redemption or otherwise), shall become part of the Collateral and, if
received by the Pledgor, shall be held in trust for the benefit of TENT
and shall forthwith be delivered to TENT or its designated agent
(accompanied by proper instruments of assignment and/or stock powers
executed by Pledgor in accordance with TENT's instructions) to be held
subject to the terms of this Agreement.
c. Upon the occurrence of an Event of Default, or an event
which with the giving of notice or the lapse of time, or both, would be
such an Event of Default, at the option of TENT, (i) all rights of the
Pledgor to exercise the voting rights and powers which he is entitled
to exercise pursuant to Section 4.a shall cease, and all such rights
shall thereupon become vested in TENT, which shall have the sole and
exclusive right and authority to exercise such voting and/or consensual
rights and powers, and (ii) TENT shall receive and be entitled to
retain any and all cash dividends and distributions, if any, paid in
respect of the Collateral. Any and all money and other property paid
over to or received by TENT pursuant to the provisions of Section 4.b
above shall be retained by TENT as part of the Collateral and be
applied in accordance with the provisions hereof.
5. Remedies Upon Default. Upon the occurrence of an Event of Default by
the Pledgor in any Obligation when due (whether by acceleration or otherwise),
then, in addition to having the right to exercise any rights and remedies of a
secured party upon default under the Uniform Commercial Code in effect in the
State of Kansas, TENT may, without being required to give any notice to the
Pledgor, transfer the Shares to the name of TENT or its nominee for the price as
established in the Stockholders Agreement, and apply such amount and any other
amounts held by it hereunder pursuant to Section 4 hereof to the payment in full
of the Obligations and all other indebtedness referred to in Section 6 hereof in
the order and manner specified therein.
6. Application of Proceeds of Collateral Sale. TENT shall apply all
cash held by it pursuant to Section 4 hereof and the proceeds from the
redemption of the Collateral as follows:
First: to the payment of the Expenses, including costs and
expenses of such sale or the collection of such cash, including the
out-of-pocket expenses of TENT and, to the extent permitted by law, the
reasonable fees and out-of-pocket expenses of counsel employed in
connection therewith, and to the payment of all advances made by TENT
for the account of the Pledgor hereunder and the payment of all costs
and expenses incurred by TENT in connection with the administration and
enforcement of this Agreement;
Second: the balance, if any, of such proceeds shall be paid to
the Pledgor or his assigns, or as a court of competent jurisdiction may
direct.
7. Agent Appointed Attorney-in-Fact. The Pledgor hereby irrevocably
appoints TENT the Pledgor's attorney-in-fact for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instrument
which TENT may deem necessary or advisable to accomplish the purposes hereof,
which appointment is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, TENT shall, to the extent permitted under
Section 4 hereof, have the right and power to receive, endorse and collect
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all checks and other orders for the payment of money made payable to the Pledgor
representing any dividend, interest payment or other distribution payable or
distributable in respect of the Collateral or any part thereof and to give full
discharge for the same. The power of attorney granted hereby shall be deemed to
be coupled with an interest shall be irrevocable and shall survive and be
unimpaired by the death, incompetence, or disability of Pledgor.
8. Miscellaneous.
a. No Waiver. No failure on the part of TENT to exercise, and
no delay in exercising, any right, power, or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise
of any such right, power, or remedy by TENT preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and not exclusive of any
other remedies provided by law. TENT may extend or renew the
Obligations, and grant releases, compromises, or indulgences with
respect to the Obligations or any extension or renewal thereof or any
security therefor or to any obligor hereunder or thereunder, and no
such action shall impair TENT's rights hereunder.
b. Termination. This Agreement shall terminate when the
Obligations have been fully performed and paid, at which time TENT
shall reassign and redeliver (or cause to be so reassigned and
redelivered) to the Pledgor, without recourse or warranty and at the
expense of the Pledgor against receipt, such of the Collateral (if any)
as shall not have been sold or otherwise applied by TENT pursuant to
the terms hereof and which is still held by TENT hereunder together
with appropriate instruments of reassignment and release.
c. Addresses for Notices, Etc. All notices, requests, demands,
directions, and other communications provided for hereunder shall be in
writing (including telegraphic communication) and mailed or telegraphed
or delivered to the applicable party at the addresses indicated below:
If to Pledgor:
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If to TENT:
0000 X. Xxxxxxx Xxx., Xxxxx 000
Xxxxxxx, Xxxxxx 00000
or as to either party, to such other address as such party shall
specify by a notice in writing to the other parties.
d. Further Assurances. The Pledgor agrees to do such further
reasonable acts and things, and to execute and deliver such additional
conveyances, assignments, agreements and instruments, as TENT may at
any time request in connection with the administration or enforcement
of this Agreement (including, without limitation, to aid
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TENT in the sale of all or any part of the Collateral) or related to
the Collateral or any part thereof or in order better to assure and
confirm unto TENT its rights, powers and remedies hereunder. The
Pledgor hereby consents and agrees that the issuer of the Collateral,
or any registrar or transfer agent for any of the Collateral, shall be
entitled to accept the provisions hereof as conclusive evidence of the
right of TENT to effect any transfer pursuant to Section 2,
notwithstanding any other notice or direction to the contrary
theretofore or hereafter given by the Pledgor or any other person to
such issuer or to any such registrar or transfer agent.
e. Binding Agreement; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, their
respective legal representatives, heirs, successors, and assigns,
except that the Pledgor shall not be permitted to assign this Agreement
or any interest herein or in the Collateral, or any part thereof, or
otherwise pledge, encumber or grant any option with respect to the
Collateral, or any part thereof, or any cash or property held by TENT
as Collateral under this Agreement.
f. Governing Law; Amendments. This Agreement shall be governed
by the laws of the State of Kansas. No provision of this Agreement may
be amended, waived or modified, nor may any of the Collateral be
released, unless specifically provided for herein, except in writing
signed by TENT.
g. Headings. Paragraph headings used herein are for
convenience only and shall not affect the construction of this
Agreement.
9. Definitions. "Event of Default" shall include, but not be limited to
any failure of Pledgor to comply with any of the covenants, agreements, or
obligations contained in the Stockholders Agreement, or any other writing with
TENT, as amended from time to time.
10. Stock Purchase Agreement. Except as set forth herein, when in
conflict with the terms of the Stockholders Agreement, the terms of this
Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
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[Name]
"Pledgor"
TENT FINANCE, INC.
By
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Its:
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"TENT"
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