EXHIBIT 10.46
XXXXXX.XXX INC.
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STOCK PLEDGE AGREEMENT
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AGREEMENT made as of this 12th day of April, 2000, by and between
Xxxxxx.xxx, a Delaware corporation (the "Corporation"), and Xxxx Xxxxx
("Pledgor").
RECITALS
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A. In connection with the Guarantee made by the Corporation to
Xxxxxxx Xxxxx Barney Inc. ("SSB") on behalf of Pledgor, Pledgor has issued that
certain revolving note secured by stock pledge agreement (the "Note") dated
April 12, 2000 payable to the order of the Corporation in the principal amount
of $6,000,000 (or such lesser amount which may due under the terms of the Note).
B. Such Note is secured by 1,467,000 shares of the Corporation's
Common Stock and all shares of capital stock of EncrypTix, Inc. held by Pledgor
(the "Pledged Shares") and other collateral upon the terms set forth in this
Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Security Interest. Pledgor hereby grants the Corporation
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a security interest in, and assigns, transfers to and pledges with the
Corporation, the following securities and other property (collectively, the
"Collateral"):
(i) the Pledged Shares;
(ii) any and all new, additional or different securities or
other property subsequently distributed with respect to the Pledged Shares
which are to be delivered to and deposited with the Corporation pursuant to
the requirements of Paragraph 3 of this Agreement;
(iii) any and all other property and money which is delivered
to or comes into the possession of the Corporation pursuant to the terms of
this Agreement; and
(iv) the proceeds of any sale, exchange or disposition of
the property and securities described in subparagraphs (i), (ii) or (iii)
above.
2. Warranties. Except for any liens against shares of the
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Corporation's Common Stock held by Pledgor that may from time to time exist in
favor of SSB, Pledgor hereby warrants that Pledgor is the owner of the
Collateral and has the right to pledge the Collateral and that the Collateral is
free from all liens, adverse claims and other security interests (other than
those created hereby).
3. Duty to Deliver. The Pledged Shares and any new, additional or
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different securities or other property (other than regular cash dividends) which
may now or hereafter become distributable with respect to the Collateral by
reason of (i) any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the Common Stock as a class
without the Corporation's receipt of consideration or (ii) any merger,
consolidation or other reorganization affecting the capital structure of the
Corporation shall be promptly become part of the Collateral hereunder. Any such
securities shall be in suitable form for transfer by delivery or accompanied by
duly executed instruments of assignment or transfer in blank.
4. Payment of Taxes and Other Charges. Pledgor shall pay, prior to
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the delinquency date, all taxes, liens, assessments and other charges against
the Collateral, and in the event of Pledgor's failure to do so, the Corporation
may at its election pay any or all of such taxes and other charges without
contesting the validity or legality thereof. The payments so made shall become
part of the indebtedness secured hereunder and until paid shall bear interest at
the minimum per annum rate, compounded semi-annually, required to avoid the
imputation of interest income to the Corporation and compensation income to
Pledgor under the Federal tax laws.
5. Shareholder Rights. So long as there exists no event of default
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under Paragraph 10 of this Agreement, Pledgor may exercise all shareholder
voting rights and be entitled to receive any and all regular cash dividends paid
on the Collateral and all proxy statements and other shareholder materials
pertaining to the Collateral.
6. Rights and Powers of Corporation. The Corporation may, without
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obligation to do so, exercise at any time and from time to time one or more of
the following rights and powers with respect to any or all of the Collateral:
(i) subject to the applicable limitations of Paragraph 9,
accept in its discretion other property of Pledgor in exchange for all or
part of the Collateral and release Collateral to Pledgor to the extent
necessary to effect such exchange, and in such event the other property
received in the exchange shall become part of the Collateral hereunder;
2.
(ii) perform such acts as are necessary to preserve and
protect the Collateral and the rights, powers and remedies granted with
respect to such Collateral by this Agreement; and
(iii) transfer record ownership of the Collateral to the
Corporation or its nominee and receive, endorse and give receipt for, or
collect by legal proceedings or otherwise, dividends or other distributions
made or paid with respect to the Collateral, provided and only if there
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exists at the time an outstanding event of default under Paragraph 10 of
this Agreement. Any cash sums which the Corporation may so receive shall be
applied to the payment of the Note and any other indebtedness secured
hereunder, in such order of application as the Corporation deems
appropriate. Any remaining cash shall be paid over to Pledgor.
Any action by the Corporation pursuant to the provisions of this
Paragraph 6 may be taken without notice to Pledgor. Expenses reasonably incurred
in connection with such action shall be payable by Pledgor and form part of the
indebtedness secured hereunder as provided in Paragraph 12.
7. Care of Collateral. The Corporation shall exercise reasonable
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care in the custody and preservation of the Collateral in its possession.
Notwithstanding the foregoing, the Corporation shall have no obligation to (i)
initiate any action with respect to, or otherwise inform Pledgor of, any
conversion, call, exchange right, preemptive right, subscription right, purchase
offer or other right or privilege relating to or affecting the Collateral, (ii)
preserve the rights of Pledgor against adverse claims or protect the Collateral
against the possibility of a decline in market value or (iii) take any action
with respect to the Collateral requested by Pledgor unless the request is made
in writing and the Corporation determines that the requested action will not
unreasonably jeopardize the value of the Collateral as security for the Note and
other indebtedness secured hereunder.
Subject to the limitations of Paragraph 9, the Corporation may at any
time release and deliver all or part of the Collateral to Pledgor, and the
receipt thereof by Pledgor shall constitute a complete and full acquittance for
the Collateral so released and delivered. The Corporation shall accordingly be
discharged from any further liability or responsibility for the Collateral, and
the released Collateral shall no longer be subject to the provisions of this
Agreement.
8. Transfer of Collateral. In connection with the transfer or
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assignment of the Note (whether by negotiation, discount or otherwise), the
Corporation may transfer all or any part of the Collateral, and the transferee
shall thereupon succeed to all the rights, powers and remedies granted the
Corporation hereunder with respect to the Collateral so transferred. Upon such
transfer, the Corporation shall be fully discharged from all liability and
responsibility for the transferred Collateral.
9. Release of Collateral. Provided all indebtedness secured
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hereunder (other than payments not yet due and payable under the Note) shall at
the time have been paid in
3.
full and there does not otherwise exist any event of default under Paragraph 10,
the Pledged Shares, together with any additional Collateral which may hereafter
be pledged and deposited hereunder, shall be released from pledge and returned
to Pledgor in accordance with the following provisions:
(i) Upon payment or prepayment of principal under the Note,
together with payment of all accrued interest to date on the principal
amount so paid or prepaid, one or more of the Pledged Shares held as
Collateral hereunder shall (subject to the applicable limitations of
Paragraphs 9(iii) and 9(v) below) be released at the time of such payment
or prepayment. The number of the shares to be so released shall be equal to
the number obtained by multiplying (i) the total number of Pledged Shares
held under this Agreement at the time of the payment or prepayment, by (ii)
a fraction, the numerator of which shall be the amount of the principal
paid or prepaid and the denominator of which shall be the unpaid principal
balance of the Note immediately prior to such payment or prepayment. In no
event, however, shall any fractional shares be released.
(ii) Any additional Collateral which may hereafter be pledged
and deposited with the Corporation (pursuant to the requirements of
Paragraph 3) with respect to the Pledged Shares shall be released at the
same time the particular shares of Common Stock to which the additional
Collateral relates are to be released in accordance with the applicable
provisions of Paragraph 9(i).
(iii) Under no circumstances, however, shall any Pledged Shares
or any other Collateral be released if previously applied to the payment of
any indebtedness secured hereunder. In addition, in no event shall any
Pledged Shares or other Collateral be released pursuant to the provisions
of Paragraph 9(i) or 9(ii) if, and to the extent, the fair market value of
the Common Stock and all other Collateral which would otherwise remain in
pledge hereunder after such release were effected would be less than the
unpaid principal and accrued interest under the Note.
(iv) For all valuation purposes under this Agreement, the fair
market value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:
(A) If the Common Stock is at the time traded on the
Nasdaq National Market, the fair market value shall be the closing selling
price per share of Common Stock on the date in question, as such prices are
reported by the National Association of Securities Dealers on the Nasdaq
National Market. If there is no reported closing selling price for the
Common Stock on the date in question, then the closing selling price on the
last preceding date for which such quotation exists shall be determinative
of fair market value.
(B) If the Common Stock is at the time listed on the
American Stock Exchange or the New York Stock Exchange, then the fair
4.
market value shall be the closing selling price per share of Common Stock
on the date in question on the securities exchange serving as the primary
market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no reported
sale of Common Stock on such exchange on the date in question, then the
fair market value shall be the closing selling price on the exchange on the
last preceding date for which such quotation exists.
(C) If the Common Stock is at the time neither
listed on any securities exchange nor traded on the Nasdaq National Market,
the fair market value shall be determined by the Corporation's Board of
Directors after taking into account such factors as the Board shall deem
appropriate.
10. Events of Default. The occurrence of one or more of the
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following events shall constitute an event of default under this Agreement:
(i) the failure of Pledgor to pay, when due under the
Note, any installment of principal or accrued interest; or
(ii) the occurrence of any other acceleration event
specified in the Note; or
(iii) the failure of Pledgor to perform any obligation
imposed upon Pledgor by reason of this Agreement; or
(iv) the breach of any warranty of Pledgor contained in
this Agreement.
Upon the occurrence of any such event of default, the Corporation may,
at its election, declare the Note and all other indebtedness secured hereunder
to become immediately due and payable and may exercise any or all of the rights
and remedies granted to a secured party under the provisions of the California
Uniform Commercial Code (as now or hereafter in effect), including (without
limitation) the power to dispose of the Collateral by public or private sale or
to accept the Collateral in full payment of the Note and all other indebtedness
secured hereunder.
Any proceeds realized from the disposition of the Collateral pursuant
to the foregoing power of sale shall be applied first to the payment of expenses
incurred by the Corporation in connection with the disposition, then to the
payment of the Note and finally to any other indebtedness secured hereunder.
Any surplus proceeds shall be paid over to Pledgor. However, in the event such
proceeds prove insufficient to satisfy all obligations of Pledgor under the
Note, then Pledgor shall remain personally liable for the resulting deficiency.
11. Other Remedies. The rights, powers and remedies granted to
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the Corporation pursuant to the provisions of this Agreement shall be in
addition to all rights, powers and remedies granted to the Corporation under any
statute or rule of law. Any forbearance, failure or delay by the Corporation in
exercising any right, power or remedy under this Agreement shall not be deemed
to be a waiver of such right, power or remedy. Any single or
5.
partial exercise of any right, power or remedy under this Agreement shall not
preclude the further exercise thereof, and every right, power and remedy of the
Corporation under this Agreement shall continue in full force and effect unless
such right, power or remedy is specifically waived by an instrument executed by
the Corporation.
12. Costs and Expenses. All costs and expenses (including
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reasonable attorneys fees) incurred by the Corporation in the exercise or
enforcement of any right, power or remedy granted it under this Agreement shall
become part of the indebtedness secured hereunder and shall constitute a
personal liability of Pledgor payable immediately upon demand and bearing
interest until paid at the minimum per annum rate, compounded semi-annually,
required to avoid the imputation of interest income to the Corporation and
compensation income to Pledgor under the Federal tax laws.
13. Applicable Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of California without resort
to that State's conflict-of-laws rules.
14. Successors. This Agreement shall be binding upon the
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Corporation and its successors and assigns and upon Pledgor and the executors,
heirs and legatees of Pledgor's estate.
15. Severability. If any provision of this Agreement is held to
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be invalid under applicable law, then such provision shall be ineffective only
to the extent of such invalidity, and neither the remainder of such provision
nor any other provisions of this Agreement shall be affected thereby.
IN WITNESS WHEREOF, this Agreement has been executed by Pledgor
and the Corporation as of the date first set forth above.
/s/ Xxxx X. Xxxxx
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Xxxx Xxxxx
Address: 000 Xxxxxx Xxxxxx
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Xxxxxx Xxxxx, XX 00000
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AGREED TO AND ACCEPTED BY:
XXXXXX.XXX INC.
By: /s/ Xxxx X. XxXxxxx
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Title: EVP and CFO
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6.
