EXHIBIT 10.77
STOCK PLEDGE AND SECURITY AGREEMENT
This Agreement is made as of January 29, 1998, by and between XXXXXXXX
TECHNOLOGIES, INC., a Delaware corporation (the "Company") and XXXXXX FINANCIAL,
INC., a Delaware corporation, with offices at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000 ("Xxxxxx").
Whereas, Xxxxxx and XxxxxXxx Technologies of Minnesota, Inc., a
Minnesota corporation ("GTIM") and XxxxxXxx Technologies of Georgia, Inc., a
Georgia corporation ("GTIG") have entered into various financing arrangements
including, without limitation, that certain Loan and Security Agreement of even
date herewith and various related instruments, documents and agreements, all as
amended from time to time (collectively called the "Financing Arrangement"); and
Whereas, the Company, as the sole shareholder of XxxxxXxx Acquisition
Corp., a Delaware corporation ("GAC"), which is the sole shareholder of GTIM and
GTIG has agreed to guaranty the obligations of GTIM and GTIG with respect to the
Financing Arrangement pursuant to the terms of that certain Guaranty of Payment
of even date herewith (the "Guaranty") and, in order to secure the payment and
performance of its obligations under the Guaranty of the Financing Arrangement,
has agreed to pledge and xxxxx x xxxx and security interest in all of the
securities listed and described in Section 1 hereof and Exhibit "A" hereto;
Now, Therefore, in consideration of the foregoing, the covenants and
conditions herein contained and the mutual agreements of the parties hereto, the
Company and Xxxxxx hereby agree as follows:
1. Collateral. To secure the payment and performance of the Company's
obligations and liabilities under the Financing Arrangement, absolute
or contingent, due or to become due, direct or indirect, and whether
now existing or hereafter and howsoever arising, the Company hereby
pledges and assigns to Xxxxxx and grants unto Xxxxxx a security
interest in the following (hereinafter collectively called the
"Collateral"):
1.1 The securities described in the attached Exhibit "A", with stock
powers duly endorsed in blank, herewith delivered to Xxxxxx;
1.2 Any and all other or additional securities to which the Company
(without additional consideration) now is, or hereafter may be,
entitled by virtue of its ownership of any of the foregoing securities
as the result of any corporate reorganization, merger or consolidation,
stock split, stock dividend or otherwise; and
1.3 All proceeds and products of the foregoing, including, without
limitation, any and all dividends, distributions and other amounts to
which Xxxxxx is entitled pursuant to the provisions of Section 4
hereof.
2. Representations and Warranties. The Company represents and warrants to Xxxxxx
that:
2.1 The execution, delivery and performance by the Company of this
Agreement will not violate any provision of law, any order of any court
or other agency of government, or any indenture agreement or other
instrument to which the Company is a party or by which the Company or
any of the Company's property is bound or be in conflict with, result
in a breach of or constitute (with due notice or lapse of time, or
both) a default under any such indenture, agreement or other
instrument, or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the Company's
property or assets, except as contemplated by the provisions of this
Agreement;
2.2 This Agreement constitutes a legal, valid and binding obligation of
the Company in accordance with its terms;
2.3 As to the Collateral deposited with Xxxxxx on the date hereof, (i)
the Company is the legal and beneficial owner thereof; (ii) the same is
validly issued, fully paid and non assessable and is registered in the
Company's name; (iii) the stock transfer forms attached to the
certificates representing such Collateral have been duly executed and
delivered by the Company to Xxxxxx; and (iv) none of such Collateral is
subject to any security interest, pledge, lien or other encumbrance, or
adverse claim of any kind whatsoever, except in favor of Xxxxxx;
2.4 No consent of, or registration or filing with, any person or
entity, including under any state or federal securities law or
regulation, is required for the pledge of the Collateral hereunder; and
2.5 The Collateral deposited with Xxxxxx on the date hereof constitutes
all of the issued and outstanding stock of XxxxxXxx Technologies of
Minnesota, Inc. and XxxxxXxx Technologies of Georgia, Inc.
3. Stock Splits, Stock Dividends, Etc.
3.1 In the event that the Company, now is, or hereafter becomes,
entitled (without additional consideration) to other or additional
securities as the result of any corporate reorganization, merger or
consolidation, stock split, stock dividend or otherwise, the Company
shall:
3.1.1 Cause the issuer to deliver to Xxxxxx the certificates
evidencing the Company's ownership thereof, and if such
certificates are delivered to the Company, take possession in
trust for Xxxxxx and forthwith deliver the same to Xxxxxx;
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3.1.2 Deliver to Xxxxxx a stock transfer form with respect to
such securities, executed in blank by the Company;
3.1.3 Deliver to Xxxxxx such other certificates, forms and
other instruments as Xxxxxx may request in connection with
such pledge.
3.2 The Company agrees that such securities shall constitute a portion
of the Collateral and be subject to this Agreement in the same manner
and to the same extent as the securities pledged hereby to Xxxxxx on
the date hereof
3.3 The Company shall not permit the issuer of the Collateral to issue
any voting or non voting capital stock or any options, warrants or
other rights to purchase or subscribe for any voting or non-voting
capital stock, or any evidence of indebtedness that is at any time
convertible into capital stock or has, or will have, at any time voting
rights.
4. Voting Power, Dividends. Substitutions. Unless and until an Event of Default
hereunder shall have occurred, the Company shall be entitled to: (a) Exercise
all voting powers pertaining to the securities included in the Collateral for
any purpose not inconsistent with, or in violation of, the provisions of this
Agreement; and (b) Collect and receive all cash dividends with respect to the
Collateral provided, however, Xxxxxx shall be entitled to collect and receive
all other dividends and distributions on such securities (whether in stock, cash
or other property) including any such dividends or distributions received or
receivable in exchange or distributable upon the liquidation, whether voluntary
or involuntary, of any issuer thereof. Cash received by Xxxxxx pursuant to the
provisions of this Section 4 may be commingled by Xxxxxx with its other funds,
and shall be non-interest bearing. The Company agrees that if it receives any of
such dividends, distributions, securities and other amounts to which Xxxxxx is
entitled, it shall take possession thereof in trust for Xxxxxx and forthwith
deliver the same to Xxxxxx, and agrees that the same shall constitute a portion
of the Collateral and be subject to this Agreement in the same manner and to the
same extent as the Collateral pledged to Xxxxxx on the date hereof.
5. Default and Remedies.
5.1 The occurrence of any of the following shall constitute an Event of
Default hereunder:
5.1.1 Any representation or warranty made by the Company to
Xxxxxx hereunder, or in any certificate delivered to Xxxxxx
pursuant hereto, or under any other agreement between the
Company and Xxxxxx, shall prove to have been false or
misleading in any material respect as of the date on which the
same was made; or
5.1.2 The Company shall fail to duly observe or perform any
other covenant or agreement made by the Company hereunder or
under any other agreement made by the Company and Xxxxxx; or
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5.1.3 An Event of Default under the Financing Arrangement
shall occur and be continuing; or
5.1.4 Bankruptcy, reorganization, receivership, insolvency or
other similar proceedings shall be instituted by or against
the Company or all or any part of its property under the
Federal Bankruptcy Act or other law of the United States or of
any state or other competent jurisdiction and, if against the
Company, the Company shall consent thereto or shall fail to
cause the same to be discharged within thirty (30) days.
5.2 If an Event of Default shall occur and be continuing, Xxxxxx may,
at its option, subject to any applicable cure periods provided in the
Financing Arrangement:
5.2.1 Immediately upon giving notice to the Company, cause the
Collateral to be registered in its name or in the name of its
nominee;
5.2.2 Immediately upon giving notice to the Company, exercise
all voting powers pertaining to such securities and otherwise
exercise all ownership rights as though Xxxxxx were the
outright owner of the Collateral (the Company hereby
irrevocably constituting and appointing Xxxxxx its proxy and
attorney-in-fact with full power of substitution so to do);
5.2.3 Receive all dividends and all other distributions of any
kind whatsoever on all or any of the Collateral;
5.2.4 Exercise any and all rights of collection, conversion or
exchange, and any and all other rights, privileges, options or
powers of the Company pertaining or relating to the Collateral
(the Company hereby irrevocably constituting and appointing
Xxxxxx its proxy and attorney-in-fact with full power of
substitution so to do);
5.2.5 Sell, assign and deliver the whole, or from time to
time, any part of the Collateral at any broker's board or at
any private sale or at public auction, with or without demand
for performance, advertisement or notice of the time or place
of sale or adjournment thereof or otherwise, and free from any
right of redemption, stay and/or appraisal which the Company
may now or hereafter have under applicable laws (all of which
the Company hereby expressly waives) for cash, for credit or
for other property, for immediate or future delivery, and for
such price or prices and on such terms as Xxxxxx in its
discretion may determine; and
5.2.6 Exercise any other remedy specifically granted under
this Agreement or now or hereafter existing in equity, at law,
by virtue of statute or otherwise.
5.3 For the purposes of this Section 5, an agreement to sell all or any
part of the Collateral shall be treated as a sale thereof and Xxxxxx
shall be free to carry out such sale
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pursuant to such agreement, and the Company shall not be entitled to
the return of any of the same subject thereto, notwithstanding that
after Xxxxxx shall have entered into such an agreement, all Events of
Default hereunder may have been remedied or all obligations under the
Financing Arrangement may have been paid and performed in full.
5.4 At any sale made pursuant to Subsection 5.2, Xxxxxx may bid for and
purchase, free from any right or equity of redemption on the part of
the Company (the same being hereby waived and released), any part of or
all of the Collateral that is offered for sale and may make payment on
account thereof by using any claim then due and payable to Xxxxxx by
the Company as a credit against the purchase price, and Xxxxxx may,
upon compliance with the terms of sale, hold, retain and dispose of
such securities without further accountability therefore.
5.5 Xxxxxx shall apply the proceeds of any sale of the whole or any
part of the Collateral and any other monies at the time held by Xxxxxx
under the provisions of this Agreement, after deducting all costs and
expenses of collection, sale and delivery (including, without
limitation, reasonable attorneys' fees and other legal expenses)
incurred by Xxxxxx in connection with such sale, towards the payment of
the Company's obligations, accrued and executory, under the Financing
Arrangement and any other obligations of the Company to Xxxxxx. After
full and final payment to Xxxxxx of all such obligations, Xxxxxx shall
remit any surplus to the Company.
5.6 Xxxxxx shall not have any duty to exercise any of the rights,
privileges, options or powers or to sell or otherwise realize upon any
of such securities, as hereinbefore authorized, and Xxxxxx shall not be
responsible for any failure to do so or delay in so doing.
5.7 Any sale of, or the grant of options to purchase, or any other
realization upon, all or any portion of such securities, under
Subsection 5.2 shall operate to divest all right, title, interest,
claim and demand, either at law or in equity, of the Company in and to
such securities so sold, optioned or realized upon, or any part
thereof, from, through and under the Company.
5.8 The Company recognizes that Xxxxxx may be unable to effect a public
sale of all or a part of the Collateral by reason of certain
prohibitions contained in the Securities Act of 1933 as amended (the
"Act") or other applicable state or federal laws, or that it may be
able to do so only after delay which might adversely affect the value
that might be realized upon the sale of the Collateral. Accordingly,
the Company agrees that Xxxxxx may, without the necessity of attempting
to cause any registration of the Collateral to be effected under the
Act or other applicable state or federal laws, sell the Collateral or
any part thereof in one or more private sales to a restricted group of
purchasers who may be required to agree, among other things, that they
are acquiring the Collateral for their own account for investment and
not with a view to the distribution or resale thereof. The Company
agrees that any such private sale may be at prices or on terms less
favorable to the owner of the Collateral than would be the case if they
were sold at public sale, and that any such private sale shall be
deemed to have been made in a commercially reasonable manner.
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6. Xxxxxx'x Obligations, Custodial Agreement.
6.1 Xxxxxx shall have no duty to protect, preserve or enforce rights
under the Collateral other than a duty of reasonable custodial care of
the Collateral in its possession. Xxxxxx shall have no liability for
the exercise or failure to exercise any puts, calls, conversion rights,
options, warrants, rights to vote or consent or any other rights with
respect to the Collateral.
6.2 The Company understands and agrees that Xxxxxx may deposit the
Collateral with a custodian and hereby agrees to pay reasonable fees of
any such custodian in connection with its acting as custodian.
7. Termination of Agreement. Upon termination of the Financing Arrangement
and the payment in full of all of the obligations secured hereby,
Xxxxxx shall cause to be transferred to the Company all of the
Collateral (less any portion of same sold, transferred or disposed of
pursuant to, and under the circumstances specified in, Section 5
hereof), and this Agreement shall thereupon be terminated.
8. Miscellaneous.
8.1 The Company further unconditionally agrees that if the Company is
in default under the Financing Arrangement, Xxxxxx may exercise its
rights and remedies hereunder prior to, concurrently with, or
subsequent to, the exercise by Xxxxxx of its rights and remedies under
the Financing Arrangement, or otherwise, or against any guarantor of
the Company's obligations.
8.2 Should Xxxxxx at any time assign any of its rights under the
Financing Arrangement, Xxxxxx may assign its rights under this
Agreement, and may deliver the Collateral or any portion thereof to the
assignee who shall thereupon, to the extent provided in the instrument
of assignment, have all of the rights of Xxxxxx hereunder with respect
to the Collateral and Xxxxxx shall, thereafter, be fully discharged
from any responsibility with respect to the Collateral so delivered to
such assignee. No such assignment, however, shall relieve such assignee
of those duties and obligations of Xxxxxx specified hereunder.
8.3 Each and every right, remedy and power granted to Xxxxxx hereunder
shall be cumulative and in addition to any other right, remedy or power
herein specifically granted or now or hereafter existing in equity, at
law, by virtue of statue or otherwise and may be exercised by Xxxxxx,
from time to time, concurrently or independently and as often and in
such order as Xxxxxx may xxxx expedient. Any failure or delay on the
part of Xxxxxx in exercising any such right, remedy or power, or
abandonment or discontinuance of steps to enforce the same, shall not
operate as a waiver thereof or affect Xxxxxx'x right thereafter to
exercise the same, and any single or partial exercise of any such
right, remedy or power shall not preclude any other or further exercise
thereof or the exercise of any other right, remedy or power.
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8.4 Any modification or waiver of any provision of this Agreement, or
any consent to any departure by Xxxxxx therefrom, shall not be
effective unless the same is in writing and signed by Xxxxxx, and then
such modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose given. Any notice to or
demand on the Company not specifically required of Xxxxxx hereunder
shall not entitle the Company to any other or further notice or demand
in the same, similar or other circumstances unless specifically
required hereunder.
8.5 The Company agrees that at any time, and from time to time, after
the execution and delivery of this Agreement, the Company will, upon
the request of Xxxxxx, execute and deliver such further documents and
do such further acts and things as Xxxxxx may reasonably request in
order to give effect to this Agreement.
8.6 Any notice, request, demand, consent, approval or other
communication provided or permitted hereunder shall be in writing and
be given by personal delivery or sent by United States first-class
mail, postage prepaid, addressed to the party for whom it is intended,
at its address stated in the first paragraph of this agreement or such
other address as either party requests by proper notice hereunder.
8.7 This Agreement shall be deemed to have been made under, and shall
be governed by, the laws of the State of Illinois in all respects,
including matters of construction, validity and performance.
8.8 If any provision of this Agreement is prohibited by, or is unlawful
or unenforceable under, any applicable law of any jurisdiction, such
provision shall, as to such jurisdiction, be ineffective to the extent
of such prohibition without invalidating the remaining provisions
hereof; provided, however, that any such prohibition in any
jurisdiction shall not invalidate such provision in any other
jurisdiction, and, provided further, that where the provisions of any
such applicable law may be waived, they hereby are waived by the
Company to the full extent permitted by law to the end that this
Agreement shall be deemed to be valid and binding in accordance with
its terms.
8.9 This Agreement shall inure to the benefit of the successors and
assigns of Xxxxxx and shall be binding upon the heirs, executors,
administrators, legal representatives, successors and assigns of the
Company.
In Witness Whereof, the Company and Xxxxxx have caused this Agreement to be
executed as of the date first above written.
XXXXXXXX TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President & CEO
XXXXXX FINANCIAL, INC.
By: /s/ Xxxxxxx X. XxXxxx
Name: Xxxxxxx X. XxXxxx
Title: Vice President
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EXHIBIT "A"
l. Capitalization and Stockholders of: XxxxxXxx Acquisition Corp.
Authorized: 3,000 Shares
Par Value: $.001
Issued and Outstanding: l00 Shares
Shares Held by Pledgor: l00 Shares
Stock Certificate Number: l
