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EXHIBIT 10.22
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement (the "Agreement") is entered into as of
December 21, 1997 by and between Xxxxxxx X. Xxxxxxx ("Pledgor") and CSK GROUP,
LTD., a Delaware corporation ("Secured Party").
W I T N E S S E T H
WHEREAS, the Secured Party has agreed to make a loan to Pledgor in the
aggregate amount of $441,500 and, as evidence thereof, Pledgor has executed and
delivered to Secured Party a Promissory Note dated as of even date herewith
(the "Note");
WHEREAS, Pledgor will utilize the funds lent to Pledgor to purchase at
least 2,144 shares (the "Pledged Shares") of the Class C Stock, par value $0.01
per share, of Secured Party; and
WHEREAS, as a condition to the making of the loan evidenced by the
Note, the parties contemplate that the Pledged Shares will be pledged and
delivered by the Pledgor to the Secured Party, with duly endorsed instruments
of transfer, as security for such loan.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and provisions contained herein and in the Note and for other good and valuable
consideration, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein without
definition, which are defined in or by reference in the Note, shall have the
respective meanings specified therein.
Section 2. Pledge. Pledgor hereby conveys, pledges, assigns and
transfers to Secured Party, and hereby grants to the Secured Party, a valid,
first priority security interest (the "Security Interest") in Pledgor's right,
title, interest in and to the following (the "Pledged Collateral"):
(a) the Pledged Shares and the certificates representing the
Pledged Shares, all dividends, cash, securities, instruments and other property
from time to time paid, payable or otherwise distributed in respect of or in
exchange for all or any part of the Pledged Shares and all proceeds thereof;
and
(b) all securities issued by Secured Party, or any successor
thereto, from time to time acquired by Pledgor in substitution for or with
respect to any of the securities described in (a) above, including without
limitation all stock of Secured Party, all securities convertible into or
exchangeable for such stock and all options, warrants and other rights to
purchase such stock, all certificates and instruments representing such
securities, together with the interest coupons (if any) attached thereto, and
all dividends, cash, securities, instruments and other property from time to
time paid, payable or otherwise distributed in respect of or in exchange for
any or all of such securities and all proceeds thereof.
Section 3. Secured Obligations. The Security Interest shall
secure for the benefit of the Secured Party the following (collectively, the
"Secured Obligations"):
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(a) payment and performance of each and every obligation, covenant
and agreement of the Pledgor now or hereafter existing contained herein or in
the Note, whether for principal, interest, fees, expenses or otherwise, and any
amendments or supplements thereto, extensions or renewals thereof or
replacements therefor; and
(b) payment of all sums advanced upon an Event of Default or in
accordance herewith by Secured Party to protect the Pledged Collateral, with
interest thereon at the rate equal to the highest interest rate under the Note
as in effect from time to time;
in each case whether direct or indirect, joint or several, absolute or
contingent, liquidated or unliquidated, now or hereafter existing, renewed or
restructured, whether or not from time to time decreased or extinguished
(except as provided in Section 17 hereof) and later increased, created or
incurred, and including all indebtedness, obligations and liabilities of the
Pledgor under any instrument now or hereafter evidencing or securing any of the
foregoing.
Section 4. Delivery of Collateral; Issuance of Additional
Shares.
(a) All certificates or instruments representing or evidencing the
Pledged Shares shall be delivered to the Secured Party on the date hereof, and
shall be held by the Secured Party pursuant hereto at all times hereafter, and
all certificates and instruments representing or evidencing stock or other
securities acquired by the Pledgor after the date hereof and constituting
Pledged Collateral hereunder shall be delivered to the Secured Party
immediately upon, and held by the Secured Party at all times after, acquisition
thereof by Pledgor. All such certificates or instruments shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Secured Party.
(b) Upon the occurrence and during the continuance of an Event of
Default hereunder, the Secured Party shall have the right, at any time in its
discretion, to transfer to or to register on the books of Secured Party in the
name of the Secured Party or any of its nominees any or all of the Pledged
Collateral (with, in the discretion of the Secured Party, such transfer or
registration expressly empowering the Secured Party to vote shares of stock
included in the Pledged Collateral), subject only to the revocable rights
specified in Section 7(a). In addition, the Secured Party shall have the right
at any time to exchange certificates or instruments representing or evidencing
Pledged Collateral for certificates or instruments of smaller or larger
denominations.
Section 5. Representations and Warranties; Certain Covenants.
(a) Pledgor hereby represents and warrants that Pledgor is the
legal and equitable owner of the Pledged Collateral free and clear of all
liens, charges, encumbrances and security interests of every kind and nature,
other than Permitted Encumbrances (as defined below).
(b) Pledgor covenants that:
(i) except for the Security Interest granted hereby and
the security interests permitted under or otherwise contemplated
hereby ("Permitted Encumbrances"), Pledgor will not create, assume,
incur or permit to exist or to be created, assumed or incurred,
directly, or indirectly, any lien of any kind on, or any repurchase
agreement with respect to, the Pledged Collateral, and will defend the
Pledged Collateral against, and take such
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action as is necessary to remove, any such lien, and will defend the
Security Interest against the claims and demands of all persons; and
(ii) Pledgor shall advise the Secured Party promptly, in
reasonable detail, of any lien or claim made or asserted against any
of the Pledged Collateral; and of the occurrence of any other event
which would have a material adverse effect on the enforceability of
the Security Interest created hereunder.
Section 6. Further Assurances. Pledgor agrees that at any time
and from time to time, at the expense of Pledgor, Pledgor will promptly execute
and deliver all further instruments and documents, and take all further action
that the Secured Party may reasonably request, in order to perfect and protect
the Security Interest granted or intended to be granted hereby or to enable the
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral .
Section 7. Voting Rights: Dividends; Etc.
(a) So long as no Event of Default hereunder shall have occurred
and be continuing:
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights (if any) pertaining to the Pledged
Collateral or any part thereof for any purpose not prohibited by the
terms of this Agreement; and
(ii) except as otherwise provided in Sections 4(b) and
7(c) hereof, Pledgor shall be entitled to receive and retain any
dividends, cash and other property from time to time paid, payable or
otherwise distributed in respect of the Pledged Collateral.
(b) Pledgor hereby irrevocably appoints the Secured Party as
Pledgor's proxyholder with respect to the Pledged Shares and any other voting
securities forming a part of the Pledged Collateral with full power and
authority to vote such Pledged Shares and other voting securities and to
otherwise act with respect to such Pledged Shares or other voting securities on
behalf of such Pledgor, provided that this proxy shall only be operative upon
the occurrence of an Event of Default and so long as such Event of Default
continues. Such proxy shall be irrevocable for so long as any of the Secured
Obligations remain in existence. Pledgor shall execute and deliver (or cause
to be executed and delivered) to the Secured Party all proxies and other
instruments as the Secured Party may reasonably request for the purpose of
enabling the Secured Party to exercise the voting and other rights which it is
entitled to exercise pursuant to this Section 7(b); and
(c) Upon the occurrence and during the continuance of an Event of
Default hereunder, all rights of the Pledgor to receive and retain dividends,
cash and other property, which they would otherwise be authorized to receive
and retain pursuant to Section 7(a)(ii), shall cease and all such rights shall
thereupon be vested in the Secured Party, who shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends, cash and other
property. All cash and other property received by Pledgor contrary to the
provisions of this Section 7(c) shall be received in trust for the benefit of
the Secured Party, shall be segregated from other property or funds of Pledgor
and shall be forthwith delivered to the Secured Party as Pledged Collateral in
the same form as so received (with any necessary transfer documents or
endorsements).
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Section 8. Dispositions and Release of Collateral. Pledgor
covenants that Pledgor shall not enter into or perform any agreement to sell,
lease, transfer or otherwise dispose of all or any part of the Pledged
Collateral unless the Security Interest in such Pledged Collateral shall have
been released prior to the time such agreement is entered into.
Section 9. Reasonable Care. The Secured Party shall be deemed
to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if the Pledged Collateral is accorded
treatment substantially equal to that which the Secured Party accords its own
property, it being understood that the Secured Party shall have no
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not the Secured Party has or is deemed to have
knowledge of such matters, unless reasonably requested in writing to do so by
Pledgor, or (b) taking any necessary steps (other than steps taken in
accordance with the standard of care set forth above to maintain possession of
the Pledged Collateral) to preserve rights against any parties with respect to
any Pledged Collateral.
Section 10. Secured Party Appointed Attorney-in-Fact. Pledgor
hereby irrevocably appoints the Secured Party Pledgor's attorney-in-fact, with
full authority in the place and stead of Pledgor and in Pledgor's name or
otherwise, if Secured Party elects, upon an Event of Default, to take any
action and to execute any instrument which the Secured Party may deem
reasonably necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, to receive, endorse and collect all instruments
made payable to Pledgor representing any dividend, interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same, when and to the extent permitted by this
Agreement.
Section 11. Secured Party May Perform. Upon the occurrence and
during the continuance of an Event of Default hereunder (including an Event of
Default resulting from a failure to perform any agreement contained herein), if
Pledgor fails to perform any agreement contained herein, the Secured Party may
itself perform, or cause performance of, such agreement, and the expenses of
the Secured Party incurred in connection therewith shall be payable by Pledgor.
Section 12. Events of Default; Remedies.
(a) The occurrence of any of the following events shall constitute
an event of default ("Event of Default") hereunder:
(i) Any Event of Default (as defined in the Note) shall
have occurred, which Event of Default shall not be waived or, if
capable of being cured, shall not be cured within the respective
periods provided in such Note;
(ii) Pledgor fails, breaches or defaults in the payment or
performance of any of the obligations, covenants or conditions
contained in this Agreement; or
(iii) Any statement, representation or warranty made or
furnished by Pledgor in connection with this Agreement or any other
writing delivered to the Secured Party in connection with this
Agreement and the transactions contemplated herein is false,
misleading or erroneous in any material respect when made.
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(b) Upon or after the occurrence of an Event of Default:
(i) The Secured Party may exercise (in compliance with
all applicable securities laws) in respect of the Pledged Collateral,
in addition to other rights, powers and remedies provided for herein
or otherwise available to it, all the rights, powers and remedies of a
secured party after default under the Uniform Commercial Code in force
and effect in each state in which such rights, powers and remedies are
asserted, all of which rights, powers and remedies shall be cumulative
and not exclusive, to the extent permitted by applicable law.
(ii) The Secured Party may also, without notice except as
specified below, sell the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange, over
the counter or at any of the Secured Party's offices or elsewhere, for
cash, on credit or for future delivery, and at such price or prices
and upon such other terms as may be commercially reasonable or
otherwise in such manner as necessary to comply with applicable
federal and state securities laws. Pledgor agrees that the Secured
Party shall not be required to register or qualify any of the Pledged
Collateral under applicable state or federal securities laws in
connection with any such sale if the sale is effected in a manner that
complies with all applicable federal and state securities laws. The
Secured Party shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers
to persons who will represent and agree that they are purchasing the
Pledged Collateral for their own account, for investment and not with
a view to the distribution thereof. Upon consummation of any such
sale the Secured Party shall have the right to assign, transfer and
deliver to the purchaser or purchasers at any such sale, and such
purchasers shall hold, the property sold absolutely free from any
claim or right on the part of the Pledgor, and Pledgor hereby waives
(to the extent permitted by law) all rights of redemption, stay or
appraisal which he now has or may at any time in the future have under
applicable law now existing or hereafter enacted.
(iii) The Secured Party shall give the Pledgor at least ten
(10) days, (or such longer period as shall be specified by applicable
law) notice of the time and place of any public sale or the time after
which any private sale is to be made, which Pledgor agrees shall
constitute commercially reasonable notification. At any such public
sale and (to the extent permitted by law) at any such private sale,
the Secured Party may bid, in whole or in part, in the form of
cancellation of Secured Obligations, and the Secured Party may
purchase the whole or any part of the Pledged Collateral. The Secured
Party shall not be obligated to make any sale of Pledged Collateral
regardless of notice of sale having been given. The Secured Party may
adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so
adjourned.
(iv) If a sale of all or any part of the Pledged
Collateral is made on credit or for future delivery, the Pledged
Collateral so sold may be retained by the Secured Party until the sale
price is paid by the purchaser or purchasers thereof, but the Secured
Party shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Pledged Collateral so
sold and, in case of any such failure, such Pledged Collateral may be
sold again upon like notice. Pledgor agrees to the maximum extent
permitted by applicable law that any sale of the Pledged Collateral
conducted by the Secured Party in
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accordance with the foregoing provisions of this Section shall be
deemed to be a commercially reasonable sale under applicable law.
(v) As an alternative to exercising the power of sale
herein conferred upon it, the Secured Party may proceed by a suit or
suits at law or in equity to foreclose the Security Interest and to
sell the Pledged Collateral, or any portion thereof, pursuant to a
judgment or decree of a court or courts of competent jurisdiction.
(vi) Any cash held by the Secured Party as Pledged
Collateral and all cash proceeds received by the Secured Party in
respect of any sale of, collection from, or other realization upon all
or any part of the Pledged Collateral shall be applied as follows:
(a) first, to the payment to the Secured Party of the costs and
expenses of retaking, holding and preparing for sale of the Pledged
Collateral and any other fees, expenses, claims, demands, losses,
judgments, damages and liabilities payable to the Secured Party
pursuant to any provision hereof; and (b) second, in accordance with
the provisions of the Note.
(vii) Any surplus of such cash or cash proceeds held by the
Secured Party and remaining after payment in full of all the Secured
Obligations shall be reassigned and redelivered as provided in Section
17 hereof.
Section 13. Security Interest Absolute. All rights of the
Secured Party hereunder, the Security Interest, and all obligations of the
Pledgor hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Note, any
agreement with respect to any of the Secured Obligations, or any other
agreement or instrument relating to any of the foregoing;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to and departure from the Note or any
other agreement or instrument;
(c) any exchange, release or non-perfection of any other
collateral, or any release of, amendment to, waiver of, consent to or departure
from any guaranty, for all or any of the Secured Obligations; and
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Pledgor in respect of the Secured
Obligations or in respect of this Agreement.
Section 14. Notices. All notices, demands, requests, and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been given (i) when presented personally or (ii) three (3)
business days after being deposited in a regularly maintained receptacle for
the United States Postal Service, postage prepaid, registered or certified,
return receipt requested, addressed to the respective party, as the case may
be, at the following address, or such other address as any party may from time
to time designate by written notice to the others as herein required.
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If to Secured Party: CSK Group, Ltd.
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
If to Pledgor: Xxxxxxx X. Xxxxxxx
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Section 15. Amendments and Waivers. This Agreement may only be
amended by a document signed by Secured Party and the Pledgor. No waiver of
any provision of this Agreement nor consent by Secured Party to any departure
by Pledgor therefrom shall in any event be effective unless the same shall be
in writing and signed by Secured Party. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of Secured Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof (except as
provided above) nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right.
Section 16. Election of Remedies. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law. Secured
Party shall have all of the rights and remedies granted herein and available at
law or in equity, and these same rights and remedies may be pursued separately,
successively or concurrently against Pledgor, at the sole discretion of Secured
Party.
Section 17. Release of Pledged Collateral and Termination.
Unless an Event of Default shall have occurred and be continuing, the Pledged
Collateral shall be released from the pledge of this Agreement, and the Secured
Party shall reassign and redeliver (or cause to be reassigned and redelivered)
to Pledgor, or, subject to compliance with applicable law, to each person or
persons as Pledgor shall designate or to whoever may be lawfully entitled to
receive such surplus, against receipt, certificates representing the Pledged
Shares (if any) or such Pledged Collateral other than Pledged Shares (if any)
as shall not have been sold or otherwise applied by the Secured Party pursuant
to the terms hereof and shall still be held by it hereunder, together with
appropriate instruments of reassignment and release as follows:
(a) if the released shares are to be sold contemporaneously with
their release and the Secured Party is to receive all proceeds from such sale
which would otherwise be payable to Pledgor, promptly after payment of all such
proceeds as partial prepayment of the Note, the number of Pledged Shares so
sold; and
(b) upon payment in full of the principal of and interest on the
Note and any other amount due hereunder, the Secured Party shall transfer or
reassign and redeliver all remaining Pledged Collateral to Pledgor.
Any transfer, redelivery or reassignment provided for above shall be without
recourse upon or warranty by the Secured Party (other than a warranty that the
Secured Party has not assigned its rights and interests hereunder to any other
person) and at the expense of Pledgor.
Section 18. Continuing Security Interest; Assignments. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (a) remain in full force and effect
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until termination as provided in Section 17, (b) be binding upon the Pledgor,
the Secured Party and their respective successors and assigns, and (c) inure,
together with the rights, powers and remedies of the Pledgor and the Secured
Party hereunder, to the benefit of the Pledgor and the Secured Party and their
respective successors, transferees and assigns, as the case may be.
Notwithstanding the foregoing clause (b), Pledgor shall not be permitted to
assign this Agreement or any interest herein.
Section 19. Applicable Law and Jurisdiction.
(a) The parties hereto expressly acknowledge and agree that this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware. Pledgor hereby expressly and irrevocably agrees and
consents that any suit, action or proceeding arising out of or relating to this
Agreement and the transactions contemplated herein may be instituted by Secured
Party in any State or Federal court sitting in Phoenix, Arizona and, by the
execution and delivery of this Agreement, Pledgor expressly waives any
objection which he may have now or hereafter to the laying of the venue or to
the jurisdiction of any such suit, action or proceeding, and irrevocably
submits generally and unconditionally to the jurisdiction of any such court in
any such suit, action or proceeding.
(b) Nothing contained in subsection (a) hereof shall preclude
Secured Party from bringing any suit, action or proceeding arising out of or
relating to this Agreement or the Note in the courts of any place where Pledgor
or any of Pledgor's property or assets may be found or located. To the extent
permitted by the applicable laws of any such jurisdiction, Pledgor hereby
irrevocably submits to the jurisdiction of any such court and expressly waives,
in respect of any such suit, action or proceeding, the jurisdiction of any
court or courts which now or hereafter, by reason of his present, or future
domicile, or otherwise, may be available to him. PLEDGOR AND SECURED PARTY
HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY.
Section 20. Severability. Any provision of this Agreement which
is prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization, without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 21. Number and Gender. Whenever used herein, the
singular number shall include the plural and the plural the singular, and the
use of any gender shall be applicable to all genders.
Section 22. Captions. The captions, headings, and arrangements
used in this Agreement are for convenience only and do not and shall not be
deemed to affect, limit, amplify or modify the terms and provisions hereof.
Section 23. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized, as of the date first above written.
"PLEDGOR"
/s/
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Xxxxxxx X. Xxxxxxx
"SECURED PARTY"
CSK GROUP, LTD.
By: /s/
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Name:
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Title:
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