EXHIBIT 99.3
CHANNEL STOCK PLEDGE AGREEMENT
------------------------------
THIS CHANNEL STOCK PLEDGE AGREEMENT ("AGREEMENT"), dated as of
December 16, 2003, is entered into by Xxxxxxx X. Xxxxxxx XX ("PLEDGOR"), on the
one hand, and Outdoor Channel Holdings, Inc., an Alaska corporation ("PLEDGEE")
on the other hand.
RECITALS
--------
A. Pledgor and Pledgee are parties to a Confidential Severance
Agreement and General Release dated on or about the date hereof (the "SEVERANCE
Agreement").
B. Pursuant to the Severance Agreement, Pledgor has agreed to
pledge to Pledgee 30,500 shares (the "PLEDGED SHARES") of the common stock of
The Outdoor Channel, Inc. to secure certain of Pledgor's Obligations (as defined
below).
Therefore, the parties hereto agree as follows:
1. PLEDGE OF STOCK.
1.1 PLEDGE. Pledgor hereby pledges, grants a security interest
in, assigns, transfers and delivers unto Pledgee and its successors and assigns,
as non-exclusive security for the faithful performance of Pledgor's Obligations
all of the Pledged Shares, together with the certificates evidencing the same,
which certificates shall be duly endorsed in blank or accompanied by stock
powers duly executed in blank.
1.2 ADDITIONAL PLEDGED SHARES. In addition to the Pledged
Shares, Pledgor also pledges hereunder as additional collateral security for the
payment and performance in full when due by Pledgor of the Obligations (as
defined below), any and all additional or other securities, rights or property
to which a registered owner of the Pledged Shares may become entitled by reason
of such ownership, including, without limitation, subscription rights,
securities issued on or with respect to the Pledged Shares in connection with
any recapitalization or other change in the capital structure of the Company,
whether by merger, consolidation, sale of assets, exchange of stock or any other
manner whatsoever.
1.3 DELIVERY OF ADDITIONAL PLEDGED SHARES. In the event that
any of the securities described in Section 1.2 hereof (the "ADDITIONAL PLEDGED
SHARES") are received by Pledgor, Pledgor forthwith shall transfer and deliver
to Pledgee such Additional Pledged Shares, together with the certificates
evidencing the same, which shall be duly endorsed in blank or accompanied by
stock purchase powers duly executed in blank, all of which thereafter shall be
held by Pledgee as part of the collateral. For purposes of this Agreement, the
term "Pledged Shares" shall include all Additional Pledged Shares issued on
account of the Pledged Shares, if any.
1.4 TRANSFER OF PLEDGED SHARES. Until an "Event of Default" as
defined under Section 5 below shall have occurred, Pledgor shall remain the
record owner of the Pledged Shares. Upon an Event of Default, Pledgee may cause
the Pledged Shares to be transferred, registered or otherwise put into the name
of Pledgee or a nominee or nominees of Pledgee, and Pledgor shall take any steps
deemed necessary or helpful by Pledgee to cause such transfer or registration in
accordance with Section 6 below.
1.5 CASH DIVIDENDS. Until an "Event of Default" as defined
under Section 5 below shall have occurred, all cash dividends payable on account
of the Pledged Shares shall be paid to pledgor.
2. OBLIGATIONS SECURED. This Agreement is made and the pledge herein is
given to secure Pledgor's prompt and complete performance of the following
obligations (collectively, the "OBLIGATIONS"):
(a) The obligation of Pledgor to pay all federal and
state taxes associated with Pledgor's receipt of the Holdings Deferred Shares
and the Channel Deferred Shares (as those terms are defined in the Severance
Agreement) within 210 days of the date hereof;
(b) The obligation of Pledgor to pay any interest and
penalties attributable to any delay in paying the taxes attributable to the
receipt of the Holdings Deferred Shares and the Channel Deferred Shares, to the
extent Pledgor is responsible for such payments pursuant to Section 26 of the
Severance Agreement within 210 days of the date hereof; and
(c) Each representation, warranty, agreement and
covenant of Pledgor contained in this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF PLEDGOR. Pledgor hereby
represents, warrants and agrees as follows:
3.1 OWNERSHIP OF THE PLEDGED SHARES. Pledgor is, and until
transfer of the Pledged Shares under Section 1.4 above shall continue to be, the
record owner of the Pledged Shares.
3.2 OWNERSHIP OF THE ADDITIONAL PLEDGED SHARES. Pledgor shall
be, until transfer of the Additional Pledged Shares under Section 1.4 above, the
record owner of the Additional Pledged Shares, when duly authorized and validly
issued;
3.3 LIENS, CLAIMS, ENCUMBRANCES, ETC. Pledgor owns the Pledged
Shares and shall own the Additional Pledged Shares, when duly authorized and
validly issued, free and clear of any liens, claims, encumbrances or security
interests of any kind or nature whatsoever (not including the lien and security
interest created hereby);
-2-
3.4 OTHER AGREEMENTS. Pledgor is not, and at all times
hereafter shall not be, a party to or otherwise bound by any agreement, other
than this Agreement, which restricts in any manner the rights of any holder or
owner, as the case may be, of the Pledged Shares;
3.5 AUTHORITY. Pledgor is not precluded in any manner
whatsoever from executing, and has the requisite authority to execute, this
Agreement, and pledge, transfer and grant a security interest and lien in the
Pledged Shares as contemplated herein, without the approval or authorization of
any other person, including any regulatory authority whatsoever; and
3.6 TRUTH OF REPRESENTATIONS. All representations and
information now or hereafter made or given by Pledgor to Pledgee in connection
with the Obligations or this Agreement were or shall be true and correct when
given and shall continue to be correct.
4. COVENANTS BY PLEDGOR. Pledgor hereby covenants and agrees as
follows:
4.1 PERFORMANCE OF THE OBLIGATIONS. To promptly perform all of
the Obligations as and when the same shall become due, whether at maturity or
otherwise;
4.2 TAXES. To pay prior to delinquency all taxes, liens and
assessments of any kind whatsoever levied or assessed against the Pledged Shares
or any part thereof;
4.3 NOTICE OF ADDRESS CHANGE. To provide to Pledgee prompt
written notice of any change in address;
4.4 SALE, ENCUMBRANCE, ETC. To not sell, contract to sell,
encumber, hypothecate or permit or suffer any attachment, security interest,
lien or other encumbrance or judgment or other judicial or involuntary lien
against, or otherwise dispose of, the Pledged Shares or any part thereof;
4.5 DEFENSE OF PLEDGED SHARES. To defend, at Pledgor's sole
cost and expense, the Pledged Shares against any and all liens, charges,
security interests and other encumbrances, howsoever arising prior to or equal
to the lien and security interest created hereby; and
4.6 FURTHER ACTIONS. At the request of Pledgee at any time and
from time to time, execute all financing statements and other documents
reasonably deemed necessary or advisable by Pledgee to create and perfect a
security interest in, or otherwise relating to, the Pledged Shares.
-3-
5. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an event of default ("EVENT OF DEFAULT") under this Agreement:
5.1 DEFAULT ON THE OBLIGATIONS. Pledgor shall default in the
performance or observance of any of the Obligations; or
5.2 BREACH OF REPRESENTATION OR WARRANTY. Any representation
or warranty made by Pledgor herein shall be false on the date such
representation or warranty was made, or thereafter become false in any material
respect.
6. RIGHTS OF PLEDGEE UPON DEFAULT.
6.1 RIGHTS AND REMEDIES OF PLEDGEE. Upon the occurrence and
during the continuance of any Event of Default, Pledgee shall have all of the
rights and remedies accorded to a secured party by law or in equity, all of
which rights and remedies shall be cumulative to the fullest extent permitted by
law. Without limiting the generality of the foregoing, upon the occurrence and
during the continuance of any Event of Default, Pledgee is entitled at its
option (i) to foreclose on the Pledged Shares, and sell or otherwise dispose of
the Pledged Shares pursuant to Division 9 of the California Uniform Commercial
Code (the "COMMERCIAL CODE"); and (ii) to incur expenses, including without
limitation, reasonable attorneys' fees and costs, in the exercise of any right
or remedy hereunder, the repayment of which by Pledgor is secured by this
Agreement. After disposition of the collateral hereunder and the payment to
Pledgee of all amounts to which Pledgee is entitled, Pledgor shall be entitled
to any remaining surplus as provided for in Section 9504(2) of the Commercial
Code.
6.2 METHOD OF SALE. In furtherance of its rights under Section
6.1 hereof, Pledgee shall have the right, without demand of performance or other
demand, advertisement or notice of any kind (except such notices as may be
required by law) to or upon Pledgor or any other person (all and each of which
demands, advertisements and/or notices are hereby expressly waived to the extent
permitted by law), to proceed to forthwith sell, assign, give option or options
to purchase, contract to sell, or otherwise dispose of and deliver the Pledged
Shares or any part thereof in one or more portions at public or private sale or
sales at Pledgee's offices or elsewhere at such prices and on such terms
(including, without limitation, a requirement that any purchaser of all or any
part of the Pledged Shares shall be required to purchase the securities
constituting the Pledged Shares solely for investment and without any intention
to make a distribution thereof) as Pledgee in its sole and absolute discretion
may deem best. The foregoing disposition may be for cash or on credit or for
future delivery without assumption of any credit risk, with the right to Pledgee
to purchase all or any part of the Pledged Shares so sold at any such sale or
sales, public or private, free of any right or equity of redemption in Pledgor,
which right or equity is hereby expressly waived or released by Pledgor.
6.3 CUMULATIVE REMEDIES. All of Pledgee's rights and remedies
including but not limited to the foregoing, shall be cumulative and not
exclusive and shall be enforceable alternatively, successively or concurrently
as Pledgee may deem expedient.
-4-
6.4 PRIVATE SALES. Pledgor recognizes that Pledgee may be
unable to effect a public sale of all or a part of the Pledged Shares by reason
of certain prohibitions contained in the Securities Act of 1933, as amended (the
"ACT"), but may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire the Pledged Shares for their own account, for investment and not with
a view to the distribution or resale thereof. Pledgor agrees that private sales
so made may be at prices and on other terms less favorable to the seller than if
the Pledged Shares were sold at public sale, and that Pledgee has no obligation
to delay the sale of any Pledged Shares for the period of time necessary to
permit the registration of the Pledged Shares for public sale under the Act.
Pledgor agrees that a private sale or sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable
manner.
6.5 CONSENTS. If any consent, approval or authorization of any
state, municipal or other governmental department, agency or authority should be
necessary to effectuate any sale or other disposition of the Pledged Shares, or
any partial disposition of the Pledged Shares, Pledgor will execute all such
applications and other instruments as may be reasonably required in connection
with securing any such consent, approval or authorization, and will otherwise
use his best efforts to secure the same.
6.6 DELIVERY. Upon any sale or other disposition, Pledgee
shall have the right to deliver, assign and transfer to the purchaser thereof
the Pledged Shares so sold or disposed of. Each purchaser at any such sale or
other disposition (including Pledgee) shall hold the Pledged Shares free from
any claim or rights of whatever kind, including any equity or right of
redemption of Pledgor. Pledgor specifically waives all rights of redemption,
stay or appraisal which he had or may have under any rule of law or statute now
existing or hereafter adopted.
7. VOTING POWER, DIVIDENDS, AND PAYMENTS.
7.1 RIGHTS PRIOR TO DEFAULT. Unless and until there has
occurred an Event of Default and such Event of Default is continuing, Pledgor
shall have the right to exercise any and all voting, consensual and other powers
of ownership pertaining to the Pledged Shares.
7.2 RIGHTS FOLLOWING DEFAULT. In the event that there has
occurred an Event of Default, then so long as such Event of Default or any other
Event of Default is continuing, and whether or not Pledgee exercises any option
to declare the Notes due and payable or pursues any other remedy under the Notes
or this Agreement, Pledgee, or its nominee or nominees, shall, upon written
demand delivered to Pledgor, have the sole and exclusive right to exercise all
voting, consensual and other powers of ownership pertaining to the Pledged
-5-
Shares, including, without limitation, the right to receive cash dividends, and
shall exercise such powers in such manner as Pledgee, in its sole and absolute
discretion, shall determine to be necessary, appropriate or advisable. This
Agreement shall constitute an irrevocable proxy during the term hereof
empowering Pledgee to exercise all voting rights with respect to the Pledged
Shares upon the occurrence of an Event of Default and the delivery by Pledgee of
such demand until and unless such Event of Default shall have been cured or
waived by Pledgee.
8. TERMINATION OF SECURITY INTEREST. Upon receipt by Pledgee of (i)
completed filed tax returns of Pledgor properly reporting the income
attributable to the Holdings Deferred Shares and the Channel Deferred Shares and
(ii) evidence of full payment of the income taxes related to the income tax
shown on such returns, this Agreement and the security interest created hereby
in favor of Pledgee shall terminate, and Pledgee shall promptly return to
Pledgor all of the Pledged Shares then in its possession.
9. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Severance
Agreement contain all of the agreements, terms, promises, representations and
understandings made between the parties regarding the Pledged Shares and
supersede any other representations, understandings or agreements regarding the
Pledged Shares. The provisions of this Agreement may not be waived, altered,
amended or repealed in whole or in part except by the written consent of all of
the parties hereto.
10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
11. INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable, this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid or unenforceable provision, there shall be added automatically as part
of this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
12. WAIVER. The failure or delay on the part of any party hereto to
exercise any right, remedy, power or privilege shall not operate as a waiver
thereof. Any waiver must be in writing and signed by the party making such
waiver. A written waiver of any default shall not operate as a waiver of any
other default or of the same type of default on a future occasion.
-6-
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns, except as otherwise
provided herein.
14. NECESSARY ACTS. Each party hereto shall perform any further acts
and execute and deliver any additional agreements, assignments or documents that
may be reasonably necessary to carry out the provisions or to effectuate the
purposes of this Agreement.
15. POWER OF ATTORNEY. Pledgor hereby irrevocably nominates and
appoints Pledgee as his attorney-in-fact for the following purposes: (a) to do
all acts and things which Pledgee may deem necessary or advisable to hold the
Pledge Shares and other collateral held in pledge pursuant to this Agreement ;
(b) upon the occurrence and during the continuance of an Event of Default, to do
any and every act which Pledgor is obligated to do under this Agreement, at the
expense of Pledgor so obligated and without any obligation to do so; (c) upon
the occurrence and during the continuance of an Event of Default to execute any
and all papers and instruments and do all acts and other things necessary or
desirable to protect Pledgee's interests in the Pledged Shares; provided,
however, that Pledgee shall be under no obligation whatsoever to take any of the
foregoing actions, and absent bad faith or actual malice, Pledgee shall have no
liability or responsibility for any act or omission taken with respect thereto.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
17. NOTICES. All notices and other communications required or which may
be given hereunder shall be in writing and shall be deemed effectively given or
received for all purposes only (i) when presented personally, (ii) on receipt
when mailed by U.S. first class mail, registered or certified, postage prepaid,
return receipt requested, (iii) one day after being sent if sent by professional
overnight courier or messenger service guaranteeing one-day delivery with
receipt confirmed by the courier, or (iv) on the date of transmission if sent by
telegram, telex, telecopy or other means of electronic "hard copy" transmission,
with receipt confirmed by answer back or otherwise, addressed as follows (or
addressed as any party may subsequently designate by notice in accordance with
this Section 18):
To Pledgee at:
Outdoor Channel Holdings, Inc.
00000 Xxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
-7-
with a copy to: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx Xxxxx, Xxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
If to Pledgor:
To the address shown on the signature page hereto, or
to such other address Pledgor may specify by written
notice to the Pledgee.
18. HEADINGS AND CAPTIONS. The headings and captions used herein are
solely for the purpose of reference only and are not to be considered in
connection with the construction or interpretation of this Agreement.
19. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements made herein shall survive the execution and
delivery of this Agreement.
20. TIME OF THE ESSENCE. Time is of the essence in the performance of
the terms and provisions of this Agreement.
21. ASSIGNMENT. Neither party hereto shall assign, sell or transfer
this Agreement or any of its rights under this Agreement without the prior
written consent of the other party. Notwithstanding the foregoing, in an Event
of Default pursuant to Section 5 of this Agreement, Pledgee shall be entitled to
assign any of its rights under this Agreement and the priority between the
rights transferred and the rights maintained by Pledgee (if any) shall be
determined by Pledgee, in its sole and absolute discretion, at the time of the
transfer of such rights.
22. ARBITRATION. Any dispute regarding this Agreement shall be resolved
by binding arbitration in accordance with Section 22 of the Severance Agreement,
which Section is hereby incorporated herein.
[Signature Page Attached]
-8-
CHANNEL STOCK PLEDGE AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, Pledgor and Pledgee have duly executed
this Agreement as of the day and year first above written.
"PLEDGEE"
Outdoor Channel Holdings, Inc.
By: /S/ XXXXX X. XXXXXX
----------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
"PLEDGOR"
/S/ XXXXXXX X. XXXXXXX XX
-------------------------
Xxxxxxx X. Xxxxxxx XX
Address:
00000 Xxxxx Xxxxx,
Xxxxxxxx, XX, 00000
Facsimile: (000) 000-0000
-9-
