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EXHIBIT 10.6
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT ("Agreement") is effective as of the 13th
day of August, 1999, by and between Xxxxx X. Xxxxxxxxxx, Xx., whose address is
00 Xxxxx Xxxx, Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000 ("Pledgor") and Convergent
Group Corporation, whose address is 0000 Xxxxx Xxxxxxxx Xxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000 ("Pledgee").
RECITALS
A. Pledgee has made a loan to Pledgor in the amount of $2,000,000,
which is evidenced by a Promissory Note dated as of the date
hereof and payable by Pledgor in favor of Pledgee (the "Note").
B. As security for the Note, Pledgor and Pledgee have agreed that
Pledgor will provide Pledgee certain collateral, as described
herein.
C. Pledgor and Pledgee wish to enter into this Agreement in order to
establish the security arrangements contemplated hereby.
AGREEMENT
NOW, THEREFORE, in consideration of the covenants, conditions, and
mutual promises set forth below, the parties hereto agree as follows:
1. Defined Terms.
"Collateral" shall mean the Pledged Stock and any other or additional
stock or securities or property described in Section 5, including any other or
additional securities and moneys received and held by Pledgee hereunder,
together with all proceeds thereof.
"Common Stock" shall mean shares of $0.001 par value common stock of
Convergent Group Corporation.
"Event of Default" shall mean the occurrence of any one or more of the
following: (i) Pledgor applies for or consents to the appointment of a trustee
or receiver for all or any part of its properties, (ii) any bankruptcy,
reorganization, debt arrangement, dissolution or liquidation proceeding is
commenced or consented to by Pledgor; (iii) any application for an appointment
of a receiver or a trustee or any proceeding for bankruptcy, reorganization,
debt management or liquidation is filed for or commenced against Pledgor and is
not withdrawn or dismissed within 30 days thereafter; (iv) Pledgor shall fail to
pay any Obligation when due; (v) Pledgor shall by formal legal proceeding or in
response to a legal proceeding initiated by Pledgee contest for any reason the
validity of any Obligation; (vi) any court shall determine that all or
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any part of the Obligations of Pledgor are invalid or unenforceable; and (vii)
Pledgor commits a breach of this Agreement.
"Fair Market Value" shall have the meaning given that term in Section
3(c).
"Obligations" shall mean Pledgor's obligation to make all payments of
principal and interest and other amounts with respect to the Note when due to
Pledgee, and all other obligations of Pledgor to Pledgee under the Note or
hereunder.
"Pledged Stock" shall mean all of the Common Stock owned by Pledgor
together with all other or additional stock or securities described in Section 5
now or hereafter pledged hereunder.
2. Grant of Security Interest. As security for the punctual payment and
performance of the Obligations when and as due, Pledgor hereby (a) grants to
Pledgee a continuing first priority security interest in all of the Collateral;
(b) pledges and deposits as security with Pledgee the Pledged Stock, and
delivers to pledgee certificates therefor, accompanied by stock powers duly
executed in blank by Pledgor with signature guarantees or such other instruments
of transfer as are acceptable to Pledgee; and (c) assigns, transfers,
hypothecates, mortgages, charges and sets over to Pledgee all of Pledgor's
right, title and interest in and to such Pledged Stock (and in and to the
certificates or instruments evidencing such Stock), to be held by Pledgee, upon
the terms and conditions set forth in this Agreement.
3. Character of Obligations. The obligations of Xxxxxxxxxx under the Note shall
initially be with full recourse against Xxxxxxxxxx, but may become without
recourse against Xxxxxxxxxx in accordance with the terms and conditions of the
Note.
4. Voting Absent Event of Default. Unless and until an Event of Default shall
have occurred and be continuing, Pledgor shall be entitled to vote any and all
Pledged Stock and to give consents, waivers or ratifications in respect thereof,
provided that no vote shall be cast nor any consent, waiver or ratification
given nor any action taken which would violate or be inconsistent with any of
the terms of this Agreement. All such rights of Pledgor to vote and to give
consents, waivers and ratifications shall cease so long as an Event of Default
shall occur and be continuing, and Section 7 hereof shall become applicable.
5. Dividends and Other Distributions. Unless an Event of Default shall have
occurred and be continuing, and subject to the restrictions set forth below, all
cash dividends payable in respect of the Pledged Stock shall be paid to Pledgor,
provided that all cash dividends payable in respect of the Pledged Stock which
represent an extraordinary (i.e., a dividend in excess of 10% of the value of
the Pledged Stock at the time of the declaration of such dividend) liquidating
or other distribution in return of capital shall be paid to Pledgee and retained
by it as part of the Collateral. Pledgee shall also be entitled to receive
directly, and to retain as part of the Collateral:
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(a) All other or additional stock or securities or property (other than
cash) paid or distributed by way of dividend in respect of the Pledged Stock;
(b) All other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Pledged Stock by way of
stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement; and
(c) All other or additional stock or other securities or property which
may be paid in respect of the Collateral by reason of any consolidation, merger,
exchange of stock, conveyance of assets, liquidation or similar corporate
reorganization.
6. Representations and Warranties. Pledgor represents and warrants as follows:
(a) Pledgor is the sole legal, record and beneficial owner of, and has
good and marketable title to, the Collateral free and clear of any lien,
security interest, charge, claim, or encumbrance of any third party;
(b) This Agreement creates a valid first priority security interest in
the Collateral;
(c) Pledgor has full power, authority and legal right to pledge all the
Collateral pursuant to this Agreement, and no additional authorization,
approval, or other action by Pledgor or any other individual or entity is
required in order to grant Pledgee the security interest granted by this
Agreement;
(d) The execution, delivery and performance of this Agreement does not
violate any provision of any applicable law or regulation or of any order,
judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, or of any mortgage, indenture, lease, contract
or other agreement, instrument or undertaking to which Pledgor is a party or
which purports to be binding upon Pledgor or upon any of Pledgor's assets and
does not result in the creation or imposition of any lien on any of the assets
of Pledgor except as contemplated by this Agreement;
7. Remedies in Case of Event of Default. In case an Event of Default shall have
occurred and be continuing, Pledgee shall, to the extent permitted by applicable
law, be entitled to exercise all of the rights, powers and remedies vested in it
by this Agreement or by law (including, without limitation, the Uniform
Commercial Code) in respect of the Collateral, including, without limitation,
the following rights, which Pledgor hereby agrees to be commercially reasonable:
(a) To receive all amounts payable in respect of the collateral or
otherwise payable under the first sentence of Section 5 to Pledgor;
(b) To transfer all or any part of the Pledged Stock into Pledgee's
name or the name of its nominee or nominees;
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(c) To vote all or any part of the Pledged Stock (whether or not
transferred into the name of Pledgee) and give all consents, waivers and
ratifications in respect of the Collateral and otherwise act with respect
thereto as though it were the outright owner thereof (Pledgor hereby irrevocably
constituting and appointing Pledgee the proxy and attorney-in-fact of Pledgor,
with full power of substitution to do so); and
(d) At any time or from time to time to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any interest
therein, at any public or private sale, without demand of performance,
advertisement or notice of intention to sell or of the time or place of sale or
adjournment thereof or to redeem or otherwise (all of which are hereby waived by
Pledgor), for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or prices and
on such terms as Pledgee may in good xxxxx xxxx reasonable under the
circumstances. Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after a sale hereunder, and all rights, if any, of
marshalling the Collateral and any other security for the Obligations or
otherwise. At any such sale, unless prohibited by applicable law, Pledgee may
bid for and purchase all or any part of the Collateral so sold free from any
such right or equity of redemption. Pledgee shall not be liable for failure to
collect or realize upon any or all of the collateral or for any delay in so
doing nor shall it be under any obligation to take any action whatsoever with
regard thereto.
8. Remedies Cumulative; Subrogation and Certain Procedures Waived. Each right,
power and remedy of Pledgee provided for in this Agreement or now or hereafter
existing at law or in equity or by contract or statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by Pledgee of any one or more of the
rights, powers or remedies provided for in this Agreement, or now or hereafter
existing at law or in equity or by statute or contract or otherwise shall not
preclude the simultaneous or later exercise by Pledgee of all such other rights,
powers or remedies, and no failure or delay on the part of Pledgee to exercise
any such right, power or remedy shall operate as a waiver thereof.
Notwithstanding the exercise by Pledgee of any remedies with respect to the
Collateral, Pledgor shall not be entitled to be subrogated to any of the rights
with respect to any of the Obligations until all Obligations shall have been
paid and performed in full. The right of Pledgee to proceed against the
collateral pledged hereunder shall not be conditioned or contingent upon the
pursuit by Pledgee of any right or remedy against any other person which may
become liable to make payment of or perform all or any part of the Obligations
or against any other collateral held by Pledgee or any other person therefor.
9. Application of Proceeds. All moneys collected by Pledgee upon any sale or
other disposition of the Collateral, together with all other moneys received by
Pledgee hereunder, shall be applied to the payment of all costs and expenses
incurred by Pledgee in connection with such sale, the delivery of the Collateral
or the collection of any such
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moneys (including, without limitation, attorneys' fees and expenses), and the
balance of such moneys shall be held by Pledgee and applied by it to satisfy the
Obligations. If, after such application, additional Obligations remain unpaid
and secured hereby which are not yet matured, Pledgee shall hold such proceeds
as security for the payment of such Obligations. If the proceeds of the
disposition of the Collateral are insufficient to pay all Obligations, then such
proceeds shall be applied to payment of the Obligations in such manner as
Pledgee shall elect. Any proceeds remaining after payment and performance in
full of the Obligations shall be distributed to Pledgor or the person lawfully
entitled thereto.
10. Purchasers of Collateral. Upon any sale of any Collateral by Pledgee
hereunder (whether by virtue of the power of sale herein granted, pursuant to
judicial process or otherwise), the receipt of Pledgee or the officer making the
sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold, and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to Pledgee or
such officer or be answerable in any way for the misapplication or
nonapplication thereof.
11. Indemnity and Expenses. Pledgor agrees to indemnify and hold harmless
Pledgee from and against any and all claims, demands, losses, judgments and
liabilities (including liabilities for penalties) of whatsoever kind or nature,
and to reimburse Pledgee for all costs and expenses, including, without
limitation, reasonable attorneys' fees and any stamp, document, transfer,
recording and other taxes growing out of or resulting from this Agreement or the
proper exercise by Pledgee of any right or remedy granted to it hereunder. In no
event shall Pledgee be liable, in the absence of gross negligence or willful
misconduct on its part, for any matter or thing in connection with this
Agreement, other than to account for moneys actually received by it in
accordance with the terms hereof. If and to the extent that the obligations of
Pledgor under this Section 11 are unenforceable for any reason, Pledgor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
12. Further Assurances. Pledgor agrees that it will join with Pledgee in
executing and, at its own expense, file and refile under the Uniform Commercial
Code such financing statements, continuation statements and other documents in
such offices as Pledgee may deem necessary or appropriate in order to perfect
and preserve Pledgee's security interest in the Collateral, and hereby
authorizes Pledgee to file financing statements and amendments thereto relative
to all or any part of the Collateral without the signature of Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to Pledgee such additional conveyances, assignments, agreements and
instruments as Pledgee may reasonably require or deem advisable to carry into
effect the purposes of this Agreement or to further assure and confirm unto
Pledgee its rights, powers and remedies hereunder. Pledgor covenants and agrees
that it will defend Pledgee's right, title and security interest in and to the
Collateral against the claims and demands of all persons whomsoever. Pledgor
covenants and agrees that it
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shall give prompt written notice to Pledgee of any change of his address from
that referred to in the first paragraph of this Agreement.
13. Pledgee. Pledgee will hold in accordance with this Agreement all items of
the Collateral at any time received under this Agreement. It is expressly
understood and agreed that the obligations of Pledgee as holder of the
Collateral and with respect to the disposition thereof and otherwise under this
Agreement, are only those expressly set forth in this Agreement. Pledgee shall
exercise reasonable care in the custody of the Collateral in its possession or
control hereunder at any time, but shall be deemed to have exercised reasonable
care if such Collateral is accorded treatment substantially equal to that which
Pledgee accords its own property or if Pledgee takes such action with respect to
such Collateral as Pledgor shall request, but no failure to comply with any such
request shall of itself be deemed a failure to exercise reasonable care, nor
shall any failure of Pledgee to take steps to reserve rights against any parties
with respect to any such Collateral be deemed a failure to exercise reasonable
care.
14. Transfer by Pledgor. Pledgor will not sell, assign, pledge or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except pursuant to this
Agreement).
15. Pledgor's Obligations Absolute. The obligations of Pledgor under this
Agreement shall not be released, suspended, discharged, terminated or otherwise
affected by, any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any obligations or this Agreement.
16. Private Sale by Pledgee. If at any time when Pledgee shall determine to
exercise its right to sell all or any part of the Pledged Stock pursuant to
Section 7, such Pledged stock or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under the Securities Act of 1933,
as then in effect, Pledgee may, in its sole and absolute discretion and to the
extent permitted by law, sell such Pledged Stock or part thereof by private sale
in such manner and under such circumstances as Pledgee may deem necessary or
advisable in order that such sale may legally be effected without such
registration, provided that at least 10 days' notice of the time and place of
any such sale shall be given to Pledgor. Without limiting the generality of the
foregoing, in any such event Pledgee, in its sole and absolute discretion may
(i) to the extent permitted by law, proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Stock or part thereof shall have been filed under the Securities
Act of 1933, (ii) approach and negotiate with a single possible purchaser to
effect such sale, and (iii) restrict such sale to a purchaser who will represent
and agree that such purchaser is purchasing for its own account, for investment,
and not with a view to the distribution or sale of such Pledged Stock or part
thereof. In the event of any such sale, Pledgee shall incur no responsibility or
liability for selling all or any part of the Pledged Stock at a price which
Pledgee, in its sole and discretion, may in good xxxxx xxxx reasonable under the
circumstances, notwithstanding the possibility that a
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substantially higher price might be realized if the sale were deferred until
after registration as aforesaid.
17. Termination; Complete Release. When all obligations have been paid and
performed in full, this Agreement shall terminate, and Pledgee, at the request
and expense of Pledgor, will execute and deliver to Pledgor a proper instrument
or instruments acknowledging the satisfaction and termination of this Agreement,
and will duly assign, transfer and deliver to Pledgor (without recourse and
without any representation or warranty) such of the Collateral as has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement, together with any moneys at the time held by Pledgee hereunder.
18. Pledgee May Perform. If Pledgor fails to perform any obligation contained in
this Agreement, Pledgee may itself perform, or cause performance of, such
obligation, and the expenses incurred by Pledgee in connection therewith shall
be payable to Pledgee by Pledgor upon demand by Pledgee.
19. Assignment. Neither party shall assign any of its rights or delegate any of
its duties hereunder without the prior written consent of the other, which
consent shall not be unreasonably withheld or delayed, and any assignment or
delegation made without such consent shall be void.
20. Amendments. No modification of or amendment to this Agreement shall be valid
and binding unless in writing and signed by both parties.
21. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, without regard to the
conflicts of laws principles of such State.
22. Waiver. Failure by either party in any one or more instances to insist upon
strict performance of any of the terms and conditions of this Agreement or to
exercise any right herein conferred shall not be construed as a waiver or
relinquishment of that right or of the right to assert or rely upon the terms of
this Agreement.
23. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision.
24. Authority. Each party warrants that it has the full power and authority to
enter into and perform under this Agreement and to make all representations,
warranties, and grants set forth herein.
25. Notices. All notices or other communications which are required to be given
or may be given to the parties pursuant to the terms of this Agreement shall be
sufficient in all respects if given in writing and delivered personally, sent by
nationally-recognized, overnight courier or mailed by registered or certified
mail (return receipt requested), postage prepaid, to the parties addressed as
set forth in the first paragraph of this
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Agreement. All such notices and other communications shall be deemed to have
been given and received (A) in the case of personal delivery, on the date of
such delivery, and (B) in the case of delivery by nationally-recognized,
overnight courier, and in the case of mailing, on the delivery or refusal date
as indicated on the return receipt. Either party may change his or its address
for such notices or communications by giving notice thereof to the other party
in conformity with this Section 25.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement by their authorized representatives as of the date first written
above.
PLEDGOR:
/s/ XXXXX X. XXXXXXXXXX, XX.
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Xxxxx X. Xxxxxxxxxx, Xx.
PLEDGEE:
Convergent Group Corporation,
a Delaware corporation
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
DENVER:0934750.02
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