STOCK PLEDGE AGREEMENT
Exhibit
10.2
STOCK
PLEDGE AGREEMENT ("Agreement")
entered into as of the 26th day of March, 2007 by and among Xxxx Xxxx (the
“Secured
Party”),
and
the persons identified on the signature page hereof (each individually a
“Pledgor” and collectively, the “Pledgors”).
RECITALS
A. The
Pledgors have agreed, jointly and severally, to pledge certain securities to
secure (i) the performance by CenterStaging Corp., a Delaware corporation with
offices at 0000 Xxxxxx Xxxxxx, Xxxxxxx, XX 00000 (“the Maker”) of its
obligations under its Series 2007 Original Issue Discount Secured Note in an
aggregate face amount of up to Two Million Four Hundred Thousand and Twenty
Four
and 00/100 Dollars ($2,400,024.00) payable to the Secured Party (the
“Note”),
and
(ii) the performance by the Pledgors of their respective Guarantees delivered
to
the Secured Party of even date herewith. Capitalized terms in this Agreement
which are not identified herein will have the meanings given such terms in
the
Note.
B. The
Secured Party is willing to accept the Note only upon receiving the Pledgors’s
guarantees and pledge of certain securities as set forth in this Agreement.
NOW,
THEREFORE, in consideration of the premises, the mutual covenants and conditions
contained herein, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as
follows:
1. Grant
of Security Interest; True-up of Collateral.
The
Pledgors hereby pledge to the Secured Party as collateral and security for
the
Secured Obligations (as defined in Section
2)
the
securities initially set forth on the attached Schedule 1 of this Agreement,
together with medallion guaranteed stock powers and an irrevocable instruction
letter to the transfer agent (the “Transfer
Agent”)
of the
Maker’s common stock (the “Pledged
Shares”).
If, at
any time during the term of the Note, the market value of the Collateral (as
defined below) then held by the escrow agent does not equal or exceed four
hundred percent (400%) of the Maturity Amount of the Note, then the Pledgors
shall deliver to the escrow agent for deposit into escrow within three (3)
days
of such date a certificate for additional shares of the Common Stock of the
Maker (“Common
Stock”),
which
shares shall have been issued no later than the Pledged Shares, such that the
value of all Pledged Shares shall equal not less than four hundred percent
(400%) of the Maturity Amount of the Note, together with stock powers in blank,
medallion guaranteed and an irrevocable letter of instruction to the Transfer
Agent with respect to the newly-delivered shares of Common Stock, and a
statement setting forth the necessary amount of Collateral, not later than
the
first business day following such default. If the Pledgors fail to deliver
the
True-up Shares to the Secured Party within five (5) business days after receipt
of notice by the Secured Party therefore, the Pledgors collectively shall pay
to
the Secured Party, in cash, One Hundred Dollars ($100) per business day until
such certificates are delivered. Unless otherwise set forth on Schedule
1
of this
Agreement, the Pledgors are the beneficial and record owners of the Pledged
Shares set forth on such Schedule. Such Pledged Shares, together with any
additions, replacements, accessions or substitutes therefor or proceeds thereof,
are hereinafter referred to collectively as the “Collateral.”
For
purposes of this Section
1,
the
Market Value of the Collateral shall be calculated as the average of
the volume weighted average prices for the Common Stock for the five (5) trading
days immediately preceding the date on which it is measured, as reported by
Bloomberg L.P. The value of any additional shares delivered into escrow as
provided above shall be deemed to be the Market Value on the date on which
the
deficiency shall have occurred.
2. Secured
Obligations.
During
the term hereof, the Collateral shall secure the performance by the Pledgors
of
their respective obligations, covenants, and agreements under their respective
Guaranties and this Pledge Agreement and the performance by the Maker of its
Obligations under the Note (the “Secured
Obligations”).
3. Perfection
of Security Interests.
(a)
Upon execution of this Agreement, the Pledgors shall deliver the Pledged Shares,
together with Stock Powers (with Medallion Guarantees annexed), to the Secured
Party.
(b) The
Pledgors will, at their own expense, cause to be searched the public records
with respect to the Collateral and will execute, deliver, file and record (in
such manner and form as the Secured Party may require), or permit the Secured
Party to file and record, as the Pledgors’s attorney-in-fact, any financing
statements, any carbon, photographic or other reproduction of a financing
statement or this Agreement (which shall be sufficient as a financing statement
hereunder), any specific assignments or other paper that may be reasonably
necessary or desirable, or that the Secured Party may request, in order to
create, preserve, perfect or validate any Security Interest or to enable the
Secured Party to exercise and enforce its rights hereunder with respect to
any
of the Collateral. The Pledgors hereby appoint the Secured Party as the
Pledgors’s attorney-in-fact to execute in the name and behalf of the Pledgors
such additional financing statements as the Secured Party may request.
4. Assignment.
In
connection with the transfer of the Note in accordance with its terms, the
Secured Party may assign or transfer the whole or any part of his security
interest granted hereunder, and may transfer as collateral security the whole
or
any part of his security interest in the Collateral. Any transferee of the
Collateral shall be vested with all of the rights and powers of the Secured
Party hereunder with respect to the Collateral.
5. Pledgors’s
Warranty.
A.
Title.
The
Pledgors jointly and severally represent and warrant hereby to the Secured
Party
as follows with respect to the Pledged Shares:
(i) The
Collateral is free and clear of any encumbrances of every nature whatsoever,
and
the Pledgors are the sole owner of the Pledged Shares;
(ii) The
Pledgors further agree not to grant or create, any security interest, claim,
lien, pledge or other encumbrance with respect to such Collateral or attempt
to
sell, transfer or otherwise dispose of the Collateral, until the Secured
Obligations have been paid in full or this Agreement terminates;
and
(iii) This
Agreement constitutes a legal, valid and binding obligation of the Pledgors
enforceable in accordance with its terms (except as the enforcement thereof
may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, and similar laws now or hereafter in effect),
B. Other.
(i) The
Pledgors have made necessary inquiries of the Maker and believe that the Maker
fully intends to fulfill and has the capability of fulfilling the Secured
Obligations to be performed by the Maker in accordance with the terms of the
Note.
(ii) The
Pledgors are not acting, and have not agreed to act, in any plan to sell or
dispose of any Pledged Shares in a manner intended to circumvent the
registration requirements of the Securities Act of 1933, as amended, or any
applicable state law.
(iii) The
Pledgors have been advised by counsel of the elements of a bona-fide pledge
for
purposes of Rule 144(d)(3)(iv) under the Securities Act of 1933, as amended,
including the relevant SEC interpretations, and affirms that the pledge of
shares by the undersigned pursuant to this Pledge Agreement will constitute
a
bona-fide pledge of such shares for purposes of such Rule.
6. Collection
of Dividends and Interest.
During
the term of this Agreement and so long as the Pledgors are not in default under
the Note, the Pledgors are authorized to collect all dividends, distributions,
interest payments, and other amounts that may be, or may become, due on any
of
the Collateral.
7. Voting
Rights.
During
the term of this Agreement and until such time as this Agreement has terminated
or the Secured Party has exercised his rights under this Agreement to foreclose
its security interest in the Collateral, The Pledgors shall have the right
to
exercise any voting rights evidenced by, or relating to, the
Collateral.
8. Warrants
and Options.
In the
event that, during the term of this Agreement, subscription, spin-off, warrants,
dividends, or any other rights or option shall be issued in connection with
the
Collateral, such warrants, dividends, rights and options shall be immediately
delivered to the Secured Party to be held under the terms hereof in the same
manner as the Collateral.
9. Preservation
of the Value of the Collateral.
The
Pledgors shall pay all taxes, charges, and assessments against the Collateral
and do all acts necessary to preserve and maintain the value
thereof.
10. The
Secured Party as the Pledgors's Attorney-in-Fact.
(a) The
Pledgors hereby irrevocably appoint the Secured Party as the Pledgors's
attorney-in-fact, with full authority in the place and stead of the Pledgors
and
in the name of the Pledgors, the Secured Party or otherwise, from time to time
at the Secured Party's discretion, to take any action and to execute any
instrument that the Secured Party may reasonably deem necessary or advisable
to
accomplish the purposes of this Agreement, including: (i) upon the occurrence
and during the continuance of an Event of Default (as defined below), to
receive, endorse, and collect all instruments made payable to the Pledgors
representing any dividend, interest payment or other distribution in respect
of
the Collateral (as defined in the Note) or any part thereof to the extent
permitted hereunder and to give full discharge for the same and to execute
and
file governmental notifications and reporting forms; (ii) to arrange for the
transfer of the Collateral on the books of the Maker or any other person to
the
name of the Secured Party or to the name of the Secured Party's
nominee.
(b) In
addition to the designation of the Secured Party as the Pledgors's
attorney-in-fact in subsection (a), the Pledgors hereby irrevocably appoint
the
Secured Party as the Pledgors's agent and attorney-in-fact to make, execute
and
deliver any and all documents and writings which may be necessary or appropriate
for approval of, or be required by, any regulatory authority located in any
city, county, state or country where the Pledgors, or any of them, or the Maker
(as defined in the Note) engage in business, in order to transfer or to more
effectively transfer any of the Pledged Interests or otherwise enforce the
Secured Party's rights hereunder.
11. Remedies
upon Default.
Upon
the occurrence and during the continuance of an Event of Default under the
Note
(“Event
of Default”):
(a) The
Secured Party may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a Secured Party on default under the Code (irrespective
of whether the Code applies to the affected items of Collateral), and the
Secured Party may also without notice (except as specified below) sell the
Collateral or any part thereof in one or more parcels in an open market public
sale on any exchange or trading platform. To the maximum extent permitted by
applicable law, the Secured Party may be the purchaser of any or all of the
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion
of
the Collateral sold at any such public sale, to use and apply all or any part
of
the Secured Obligations as a credit on account of the purchase price of any
Collateral payable at such sale. Each purchaser at any such sale shall hold
the
property sold absolutely free from any claim or right on the part of the
Pledgors, and the Pledgors hereby waive (to the extent permitted by law) all
rights of redemption, stay, or appraisal that it now has or may at any time
in
the future have under any rule of law or statute now existing or hereafter
enacted. The Pledgors agree that, to the extent notice of sale shall be required
by law, at least ten (10) calendar days notice to the Pledgors of the time
and
place of any public sale or the time after which a private sale is to be made
shall constitute reasonable notification. The Secured Party shall not be
obligated to make any sale of 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. To the maximum extent permitted by law, The Pledgors hereby waive
any
claims against the Secured Party arising because the price at which any
Collateral may have been sold at such a private sale was less than the price
that might have been obtained at a public sale, even if the Secured Party
accepts the first offer received and does not offer such Collateral to more
than
one offeree.
(b) Notwithstanding
the foregoing, the Secured Party hereby acknowledges that the total number
of
shares of stock that may be sold pursuant to Section 11(a) of this Agreement
shall not exceed, on any given trading day, the greater of: (i) 3% of the
aggregate trading volume during the previous five (5) trading days, including
that day; (ii) 15% of the trading volume on that day; or (iii) such number
of
shares as yield proceeds (net of commissions) of $75,000.
(c) The
Secured Party hereby acknowledges and agrees that the total number of shares
of
stock that may be sold pursuant to Section
11(b)
of this
Agreement shall not exceed such number of shares as are necessary to yield
gross
proceeds equal to the Maturity Amount, as adjusted pursuant to Section 7 of
the
Note. Upon receipt by Secured Party of gross proceeds equal to the Maturity
Amount, the security interests granted herein shall automatically terminate
and
all rights to the Collateral shall revert to Pledgor.
(d) The
Secured Party hereby agrees that, upon delivery of an opinion of counsel stating
that the rights of the Secured Party, including without limitation the right
to
sell such shares under Rule 144(k) promulgated under the Securities Act of
1933,
as amended, will not be affected thereby, other shares of the Borrower’s common
stock issued no later than August 17, 2005 may at any time be substituted for
all or a portion of the Pledged Shares;
(e) Notwithstanding
the foregoing, in the event of a default by Borrower pursuant to the Note,
the
Holder shall sell all of the Collateral prior to exercising its rights and
remedies against any of the Guarantors (as defined in the respective Guaranties)
pursuant to the respective Guaranties.
(f) The
Pledgors hereby agree that any sale or other disposition of the Collateral
conducted in conformity with reasonable commercial practices of banks, insurance
companies, or other financial institutions in the city and state where the
Secured Party is located in disposing of property similar to the Collateral
shall be deemed to be commercially reasonable.
(g) The
Pledgors hereby acknowledge that the sale by the Secured Party of any Collateral
pursuant to the terms hereof in compliance with the Securities Act of 1933,
as
amended, as now in effect or as hereafter amended, or any similar statute
hereafter adopted with similar purpose or effect (the "Securities
Act"),
as
well as applicable "Blue Sky" or other state securities laws, may require strict
limitations as to the manner in which the Secured Party or any subsequent
transferee of the Collateral may dispose thereof. The Pledgors acknowledge
and
agree that in order to protect the Secured Party's interest it may be necessary
to sell the Collateral at a price less than the maximum price attainable if
a
sale were delayed or were made in another manner, such as a public offering
under the Securities Act. The Pledgors have no objection to sale in such a
manner and agrees that the Secured Party shall have no obligation to obtain
the
maximum possible price for the Collateral.
(h) If
the
Secured Party shall determine to exercise its right to sell all or any portion
of the Collateral pursuant to this Section, then the Pledgors agree that, upon
request of the Secured Party, the Pledgors, at their own expense,
shall:
(i) execute
and deliver, or cause the officers and directors of the Maker to execute and
deliver, to any person, entity or governmental authority as the Secured Party
may choose, any and all documents and writings which, in the Secured Party's
reasonable judgment, may be necessary or appropriate for approval, or be
required by, any regulatory authority located in any city, county, state or
country where the Pledgors or the Maker engage in business, in order to transfer
or to more effectively transfer the Pledged Interests or otherwise enforce
the
Secured Party's rights hereunder; and
(ii) do
or
cause to be done all such other acts and things as may be necessary to make
such
sale of the Collateral or any part thereof valid and binding and in compliance
with applicable law; and
(iii) cause
the
Maker to timely file all periodic reports required to be filed by the Maker
under the Securities Exchange Act of 1934, as amended.
The
Pledgors acknowledge that there is no adequate remedy at law for failure by
them
to comply with the provisions of this Section
11
and that
such failure would not be adequately compensable in damages, and therefore
agree
that their agreements contained in this Section
11
may be
specifically enforced.
(e) THE
PLEDGORS EXPRESSLY WAIVE TO THE MAXIMUM EXTENT PERMITTED BY LAW: (i) ANY
CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE TIME THE
SECURED PARTY DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS PROVIDED IN
THIS
SECTION; (ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT THEY NOW HAVE
OR
MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW EXISTING
OR HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION
(a)
OF THIS
SECTION
11,
ANY
REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.
12. (a) Term
of Agreement.
This
Agreement shall continue in full force and effect until payment in full of
all
obligations now or hereafter due under the Note. Upon payment in full of all
such obligations, the security interests in the relevant Collateral shall be
deemed released, and any portion of the Collateral not transferred to or sold
by
the Secured Party shall be returned to the Pledgors within five (5) trading
days
to the Pledgors, as contemplated above (and for such purpose, delivery to Xxxxxx
Xxxxxx, Esq., of Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP of New York, NY shall
deemed to comply with such return requirement).
(b) Application
of Proceeds.
Upon
the occurrence and during the continuance of an Event of Default, any cash
held
by the Secured Party as 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 Collateral pursuant to the exercise by the Secured Party
of
its remedies as a secured creditor as provided in Section
11
shall be
applied from time to time by the Secured Party as provided in the
Note.
13. Indemnity
and Expenses.
The
Pledgors agree, jointly and severally:
(a) To
indemnify and hold harmless the Secured Party and each of his agents and
affiliates from and against any and all claims, damages, demands, losses,
obligations, judgments and liabilities (including, without limitation,
reasonable attorneys' fees and expenses) in any way arising out of or in
connection with this Agreement or the Secured Obligations, except to the extent
the same shall arise as a result of the gross negligence or willful misconduct
of the party seeking to be indemnified; and
(b) To
pay
and reimburse the Secured Party upon demand for all reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) that the Secured Party may incur in connection with (i) the custody,
use or preservation of, or the sale of, collection from or other realization
upon, any of the Collateral, including the reasonable expenses of re-taking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, (ii) the exercise or enforcement of any rights
or
remedies granted hereunder, under the Note or otherwise available to it (whether
at law, in equity or otherwise), or (iii) the failure by the Pledgors to perform
or observe any of the provisions hereof. The provisions of this Section
13
shall
survive the execution and delivery of this Agreement, the repayment of any
of
the Secured Obligations, the termination of the commitments of the Secured
Party
under the Note and the termination of this Agreement.
14. Duties
of the Secured Party.
The
powers conferred upon the Secured Party hereunder are solely to protect his
interests in the Collateral and shall not impose on him any duty to exercise
such powers. Except as provided in Section 9-207 of the Uniform Commercial
Code,
The Secured Party shall have no duty with respect to the Collateral or any
responsibility for taking any necessary steps to preserve rights against any
Persons with respect to any Collateral.
15. Choice
of Law and Venue; Submission to Jurisdiction; Service of Process.
(a) THE
VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT,
AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY,
AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS (WITHOUT
REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF).
(b) THE
PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS
LOCATED IN XXXX COUNTY, STATE OF ILLINOIS OR, AT THE SOLE OPTION OF THE SECURED
PARTY, IN ANY OTHER COURT IN WHICH THE SECURED PARTY SHALL INITIATE LEGAL OR
EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER
IN CONTROVERSY.
(b) THE
PLEDGORS HEREBY SUBMIT FOR THEMSELVES AND IN RESPECT OF THEIR PROPERTY,
GENERALLY AND UNCONDITIONALLY, TO THE JURISDICTION OF THE AFORESAID COURTS
AND
WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
(c) THE
PLEDGORS HEREBY WAIVE PERSONAL SERVICE OF THE SUMMONS, COMPLAINT, OR OTHER
PROCESS ISSUED IN ANY ACTION OR PROCEEDING AND AGREE THAT SERVICE OF SUCH
SUMMONS, COMPLAINT, OR OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL
ADDRESSED TO THE PLEDGORS AT THEIR RESPECTIVE ADDRESSES FOR NOTICES IN
ACCORDANCE WITH THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF THE PLEDGORS'S ACTUAL RECEIPT THEREOF OR THREE
(3)
DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE
PREPAID.
(d) NOTHING
IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF THE SECURED
PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO
PRECLUDE THE ENFORCEMENT BY THE SECURED PARTY OF ANY JUDGMENT OR ORDER OBTAINED
IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME
IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
16. Amendments;
etc. No
amendment or waiver of any provision of this Agreement nor consent to any
departure by the Pledgors herefrom shall in any event be effective unless the
same shall be in writing and signed by the Secured Party, and then 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 the Secured Party to
exercise, and no delay in exercising any right under this Agreement, any other
document or documents delivered in connection with the transactions contemplated
by the Note, this Agreement or the Guarantees (the “Guarantees”)
of
even date herewith (all such documents, including the Note, this Agreement
and
the Guarantees are hereinafter referred to collectively as the “Loan
Documents”,
and
each individually as a “Loan
Document”),
or
otherwise with respect to any of the Secured Obligations, shall operate as
a
waiver thereof; nor shall any single or partial exercise of any right under
this
Agreement, any other Loan Document, or otherwise with respect to any of the
Secured Obligations preclude any other or further exercise thereof or the
exercise of any other right. The remedies provided for in this Agreement or
otherwise with respect to any of the Secured Obligations are cumulative and
not
exclusive of any remedies provided by law.
17. Notices. Unless
otherwise specifically provided herein, all notices shall be in writing
addressed to the respective party as set forth below: and may be personally
served, faxed, telecopied or sent by overnight courier service or United States
mail:
If
to the
Pledgors:
0000
Xxxxxx Xxx.
Xxxxxxx,
XX 00000
With
copies to:
Xxxxxx
X.
Xxxxxx, Esq.
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000
Fax
No.: 000-000-0000
If
to the
Secured Party:
Xxxx
Xxxx
000
Xxxx
Xxxxxx Xxxxx
Xxxxx
000
Xxxxxxx,
XX 00000
Fax
No.:
000-000-0000
with
a
copy to:
Xxxxxxx
X. Xxxxx, Esq.
000
Xxxx
Xxxxxx Xxxxx
Xxxxx
000
Xxxxxxx,
XX 00000
Fax
No.:
000-000-0000
Any
notice given pursuant to this Section
17
shall be
deemed to have been given: (a) if delivered in person, when delivered; (b)
if
delivered by fax, on the date of transmission if transmitted on a Business
Day
before 4:00 p.m. at the place of receipt or, if not, on the next succeeding
Business Day (as defined in the Note); (c) if delivered by overnight courier,
two (2) days after delivery to such courier properly addressed; or (d) if by
United States mail, four (4) Business Days after depositing in the United States
mail, with postage prepaid and properly addressed. Any party hereto may change
the address or fax number at which it is to receive notices hereunder by notice
to the other party in writing in the foregoing manner.
18. Continuing
Security Interest. This
Agreement shall create a continuing security interest in the Collateral and
shall: (a) remain in full force and effect until the indefeasible payment in
full of the Secured Obligations, including the cash collateralization,
expiration, or cancellation of all Secured Obligations, if any, consisting
of
letters of credit, and the full and final termination of any commitment to
extend any financial accommodations under the Note; (b) be binding upon the
Pledgors and their respective successors and assigns; and (c) inure to the
benefit of the Secured Party and his successors, transferees, and assigns.
Upon
the indefeasible payment in full of the Secured Obligations, including the
cash
collateralization, expiration, or cancellation of all Secured Obligations,
if
any, consisting of letters of credit, and the full and final termination of
any
commitment to extend any financial accommodations under the Note, the security
interests granted herein shall automatically terminate and all rights to the
Collateral shall revert to the Pledgors. Upon any such termination, the Secured
Party, at the Pledgors's expense, shall execute and deliver to the Pledgors
such
documents as the Pledgors shall reasonably request to evidence such termination.
Such documents shall be prepared by the Pledgors and shall be in form and
substance reasonably satisfactory to the Secured Party.
19. Security
Interest Absolute. To
the
maximum extent permitted by law, all rights of the Secured Party, all security
interests hereunder, and all obligations of the Pledgors hereunder, shall be
absolute and unconditional irrespective of:
(a) any
lack
of validity or enforceability of any of the Secured Obligations or any other
agreement or instrument relating thereto, including any of the Loan
Documents;
(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 any departure from any of the Credit Documents, or any other
agreement or instrument relating thereto;
(c) any
exchange, release, or non-perfection of any other collateral, or any release
or
amendment or waiver of or consent to departure from any Guarantee for all or
any
of the Secured Obligations;
(d) any
other
circumstances that might otherwise constitute a defense available to, or a
discharge of, the Pledgors.
20. Headings. Section
and subsection headings in this Agreement are included herein for convenience
of
reference only and shall not constitute a part of this Agreement or be given
any
substantive effect.
21. Severability. In
case
any provision in or obligation under this Agreement shall be invalid, illegal
or
unenforceable in any jurisdiction, the validity, legality and enforceability
of
the remaining provisions or obligations, or of such provision or obligation
in
any other jurisdiction, shall not in any way be affected or impaired
thereby.
22. Counterparts;
Telefacsimile Execution. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original and all of which together shall constitute one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart
of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, or binding effect
hereof.
23. Waiver
of Marshaling. Each
of
the Pledgors and the Secured Party acknowledges and agrees that in exercising
any rights under or with respect to the Collateral: (a) the Secured Party is
under no obligation to marshal any Collateral; (b) may, in his absolute
discretion, realize upon the Collateral in any order and in any manner he so
elects; and (c) may, in his absolute discretion, apply the proceeds of any
or
all of the Collateral to the Secured Obligations in any order and in any manner
he so elects. The Pledgors and the Secured Party waive any right to require
the
marshaling of any of the Collateral.
24. Waiver
of Jury Trial. THE
PLEDGORS AND THE SECURED PARTY HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. THE PLEDGORS AND THE SECURED PARTY REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION,
A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the Pledgors and the Secured Party have caused this Agreement
to be duly executed and delivered by their officers thereunto duly authorized
as
of the date first written above.
| PLEDGORS | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxxx | |
|
|
Name:
|
Xxxxx Xxxxxx |
| By: | /s/ Xxxxxx Xxxxxxxxxx | |
|
Name:
|
Xxxxxx Xxxxxxxxxx |
|
| By: | /s/ Jan Parent | |
|
Name:
|
Jan Parent |
|
| By: | /s/ Xxxx X. Xxxxxxx | |
|
Name:
|
Xxxx X. Xxxxxxx |
|
| SECURED PARTY | ||
| XXXX XXXX | ||
|
By:
|
/s/ Xxxx Xxxx | |
|
|
|
|
Schedule
1
Pledged
Interests: Twelve Million Five Hundred Thousand Shares of Common Stock of
CenterStaging Corp.
Name
of
Maker: CenterStaging Corp.
Jurisdiction
of Organization: Delaware
Type
of
Interest: Shares of Common Stock
Number
of
Shares/Units (if applicable): 13,500,000
Certificate
Number(s) (if any): 42885,
42886, 42887, 42891, 43232, 43233, 42895, 42896, 42897, 42901, 43236, 43237,
42907, 42908, 42910, 42915, 42916, 42919, 42898
Percentage
of Outstanding Interests in Maker: 21%
Date
Acquired: August 17, 2005
Additional
Collateral as Set forth in Section 1.
Schedule
2
Pledgors
Information:
For
Pledgors that are Registered Organizations
Jurisdiction
of Organization: ___________________
Type
of
Organization: ___________________
Organizational
ID Number (if any): ___________________
For
Pledgors That Is An Individual
Address
of Principal Residence: See
Guaranty Side Letter
For
Pledgors That Is Neither a Registered Organization nor an
Individual:
Type
of
Organization:
___________________________________________________________
