EXHIBIT 10.12
MANAGEMENT STOCK PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is made as of September 29, 1997 between the
undersigned management employee ("Pledgor"), and Xxxxx Holdings, Inc., a Nevada
corporation (the "Company").
The Company and Pledgor are parties to a Management Stock Agreement
dated as of the date hereof, pursuant to which Pledgor purchased shares of the
Company's Common Stock, par value $.01 per share (the "Pledged Shares"). The
Company has allowed Pledgor to purchase the Pledged Shares by delivery to the
Company of a promissory note (the "Note") in an aggregate principal amount equal
to the purchase price of the Pledged Shares. This Pledge Agreement provides the
terms and conditions upon which the Note is secured by a pledge to the Company
of the Pledged Shares.
NOW, THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Company to accept the Note as
payment for the Pledged Shares, Pledgor and the Company hereby agree as follows:
1. Pledge. Pledgor hereby pledges to the Company, and grants to the
Company a security interest in, the Pledged Shares as security for the prompt
and complete payment when due of the unpaid principal of and interest on the
Note and full payment and performance of the obligations and liabilities of
Pledgor hereunder.
2. Delivery of Pledged Shares. In the event that the certificates
representing the Pledged Shares are at any time delivered to Pledgor under the
terms of the Management Stock Agreement, Pledgor shall immediately deliver to
the Company the certificates representing the Pledged Shares, together with duly
executed forms of assignment sufficient to transfer title thereto to the
Company.
3. Voting Rights; Cash Dividends. Notwithstanding anything to the
contrary contained herein, during the term of this Pledge Agreement until such
time as there exists a default in the payment of principal or interest on the
Note or any other default under the Note or hereunder, Pledgor shall be entitled
to all voting rights with respect to the Pledged Shares and shall, subject to
the terms of the Note, be entitled to receive all cash dividends paid in respect
of the Pledged Shares. Upon the occurrence of and during the continuance of any
such default, Pledgor shall no longer be able to vote the Pledged Shares and the
Company shall retain all such cash dividends payable on the Pledged Shares as
additional security hereunder.
4. Stock Dividends; Distributions, etc. If, while this Pledge
Agreement is in effect, Pledgor becomes entitled to receive or receives any
securities or other property in addition to, in substitution of, or in exchange
for any of the Pledged Shares (whether as a distribution in connection with any
recapitalization, reorganization or reclassification, a stock dividend or
otherwise), Pledgor shall accept such securities or other property on behalf of
and for the benefit of the Company as additional security for Pledgor's
obligations under the Note and shall promptly deliver such additional security
to the Company together with duly executed forms of assignment, and such
additional security shall be deemed to be part of the Pledged Shares hereunder.
5. Default. If Pledgor defaults in the payment of the principal or
interest under the Note when it becomes due (whether upon demand, acceleration
or otherwise) or any other event of default under the Note or this Pledge
Agreement occurs (including the bankruptcy or insolvency of Pledgor), the
Company may exercise any and all the rights, powers and remedies of any owner of
the Pledged Shares (including the right to vote the shares and receive dividends
and distributions with respect to such shares) and shall have and may exercise
without demand any and all the rights and remedies granted to a secured party
upon default under the Uniform Commercial Code of Illinois or otherwise
available to the Company under applicable law. Without limiting the foregoing,
the Company is authorized to sell, assign and deliver at its discretion, from
time to time, all or any part of the Pledged Shares at any private sale or
public auction, on not less than ten days written notice to Pledgor, at such
price or prices and upon such terms as the Company may deem advisable. Pledgor
shall have no right to redeem the Pledged Shares after any such sale or
assignment. At any such sale or auction, the Company may bid for, and become
the purchaser of, the whole or any part of the Pledged Shares offered for sale.
In case of any such sale, after deducting the costs, attorneys' fees and other
expenses of sale and delivery, the remaining proceeds of such sale shall be
applied to the principal of and accrued interest on the Note; provided that
after payment in full of the indebtedness evidenced by the Note, the balance of
the proceeds of sale then remaining shall be paid to Pledgor and Pledgor shall
be entitled to the return of any of the Pledged Shares remaining in the hands of
the Company. Pledgor shall be liable for any deficiency if the remaining
proceeds are insufficient to pay the indebtedness under the Note in full,
including the fees of any attorneys employed by the Company to collect such
deficiency.
6. Costs and Attorneys' Fees. All costs and expenses (including
reasonable attorneys' fees) incurred in exercising any right, power or remedy
conferred by this Pledge Agreement or in the enforcement thereof, shall become
part of the indebtedness secured hereunder and shall be paid by Pledgor or
repaid from the proceeds of the sale of the Pledged Shares hereunder.
7. Release of Pledged Shares. Pledged Shares which become Vested
Shares (as defined in the Management Stock Agreement) will no longer constitute
"Pledged Shares" for purposes of this Agreement, and will no longer be subject
to the restrictions hereunder.
8. No Other Liens; No Sales or Transfers. Pledgor hereby represents
and warrants that he has good and valid title to all of the Pledge Shares, free
and clear of all liens, security interests and other encumbrances, and Pledgor
hereby covenants that, until such time as all of the outstanding principal of
and interest on the Note has been repaid, Pledgor shall not (i) create, incur,
assume or suffer to exist any pledge, security interest, encumbrance, lien or
charge of any kind against the Pledged Shares or Pledgor's rights or a holder
thereof, other than pursuant to this Agreement, or (ii) sell or otherwise
transfer any Pledged Shares or any interest therein, except in accordance with
the provisions of the Management Stock Agreement.
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9. Further Assurances. Pledgor agrees that at any time and from
time to time upon the written request of the Company, Pledgor shall execute and
deliver such further documents (including UCC financing statements) and do such
further acts and things as the Company may reasonably request in order to effect
the purposes of this Pledge Agreement.
10. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. No Waiver; Cumulative Remedies. The Company shall not by any
act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Company, and then only to the extent therein set forth. A waiver by the
Company of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Company would otherwise have
on any future occasion. No failure to exercise nor any delay in exercising on
the part of the Company, any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
12. Waivers, Amendments; Applicable Law. None of the terms or
provisions of this Pledge Agreement may be waived, altered, modified or amended
except by an instrument in writing, duly executed by the parties hereto. This
Agreement and all obligations of the Pledgor hereunder shall together with the
rights and remedies of the Company hereunder, inure to the benefit of the
Company and its successors and assigns. This Pledge Agreement shall be governed
by, and be construed and interpreted in accordance with, the laws of the State
of Illinois.
* * * * *
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IN WITNESS WHEREOF, this Pledge Agreement has been executed as of the date
first above written.
XXXXX HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
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Its: Chief Financial Officer
PLEDGOR:
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx X. Xxxxxxx
