Exhibit 99. d.
STOCK SECURITY AND PLEDGE AGREEMENT
THIS STOCK SECURITY AND PLEDGE AGREEMENT ("Agreement") made
and entered on this 27th day of January, 1999, by and among The Farmers &
Merchants National Bank, 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000
("Lender" and "Escrow Agent"), and COMREST, a New Jersey Partnership and W.H.R.
REALTY PARTNERSHIP, a New Jersey Partnership, 000 Xxxxxxxx Xxxxxx, Xxxxx xX,
Xxxxxxxxxxx, Xxx Xxxxxx 00000 ("Borrower"), and RASCALS COMEDY CLUB STAGE DOOR
GRILL INC., a New Jersey Corporation, 000 Xxxxxxxx Xxxxxx, Xxxxx 0X,
Xxxxxxxxxxx, Xxx Xxxxxx 00000 ("Guarantor"), and Xxxx Xxxxxxxxx and Xxxxxxx
Xxxxxxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxx 0X, Xxxxxxxxxxx, Xxx Xxxxxx 00000
("Stockholders").
BACKGROUND OF AGREEMENT
1. The Lender has loaned to the Borrower the sum of
$2,000,000.00 pursuant to a Loan Agreement dated January 27th, 1999 between the
Lender and the Borrower ("Loan Agreement").
2. The Borrower has executed and delivered to the Lender its
mortgage note ("Note"), in the principal sum of $2,000,000.00, and other
security ("Additional Collateral") pursuant to the Loan Agreement. The Guarantor
has executed and delivered to the Lender its guaranty agreement ("Guaranty")
wherein the Guarantor, among other things, has guaranteed payment of Borrower's
obligations to Lender incurred pursuant to the Loan Agreement and Note and other
Related Documents as defined in the Loan Agreement.
3. Stockholders, in consideration of the Note and in order to
secure the payment of the Note to the Lender have agreed to pledge all of the
outstanding shares of common stock of Guarantor, to wit, 500 shares, by the
delivery of the certificates evidencing such pledge shares to the Escrow Agent
pursuant to the terms of this Agreement.
W I T N E S S E T H:
NOW, THEREFORE, in consideration of Paragraphs 1 through 3 as
set forth in the Background of Agreement and in consideration of the covenants
set forth herein, and in the Loan Agreement and as an inducement for the Lender
to loan the sum of $2,000,000.00 to the Borrower and to accept the Note, and
Additional Collateral from the Borrower as aforesaid, and for other good and
valuable consideration the receipt and adequacy of which is hereby acknowledged,
the parties hereto, intending to be legally bound hereby agree as follows:
1. Incorporation of Recitals. The Lender, Escrow Agent,
Borrower, Guarantor, and Stockholders do hereby incorporate all of the terms and
conditions as set forth in Paragraphs 1 through 3 in the Background of Agreement
as if specifically set forth herein at length.
2. Escrow Agent. Lender, Borrower, Guarantor, and Stockholders
do hereby appoint and designate The Farmers & Merchants National Bank as the
Escrow Agent for the purposes herein set forth and the Escrow Agent shall serve
without charge unless a default shall occur.
3. Deposit of Shares. Guarantor and the Stockholders hereby
deposit with the Escrow Agent negotiable certificates, endorsed in blank, or
with stock powers attached, evidencing 500 shares of common stock of Guarantor
representing all of the outstanding, issued shares of the stock of Guarantor,
the certificates being described in the schedule hereto attached together with
all blank certificates and the stock ledger. All such certificates so deposited
with the Escrow Agent evidencing shares of the Stockholders will be held and
disposed of by the Escrow Agent in accordance with the terms and conditions of
this Agreement.
4. Terms. Guarantor and the Stockholders hereby authorize the
Escrow Agent to keep and preserve the Certificates evidencing the shares of
Guarantor and the Stockholders in its possession pending payment of the Note. If
the Borrower defaults in any of Borrower's undertaking set forth in the Note, or
the Additional Collateral or if the Stockholders shall be in default of this
Agreement and the default as defined in the Note, the Additional Collateral
and/or this Agreement shall occur and be continuing and
shall remain uncured after notice and a commercially reasonable opportunity to
cure, and the unpaid principal balance of the Note and accrued and unpaid
interest thereon shall thereby become due and payable, or if the Guarantor shall
be in default of the Guaranty, the Lender shall have the right to have all the
certificates then on deposit delivered to it and the Escrow Agent shall, at the
end of thirty (30) days after receipt of written demand from the Lender, and
evidence that notice of making such written demand shall have been given to
Guarantor and Stockholders, deliver to the Lender the certificates evidencing
common shares of Borrower then held by the Escrow Agent. Notwithstanding the
foregoing, Stockholders may exchange pledge shares hereunder, for shares to be
issued to Stockholders in RASCALS ENTERPRISES, INC., a Delaware Corporation,
without further approval by the Lender.
5. Events of Default. Notwithstanding anything above or in xxx
other agreement between the parties to the contrary, default of this Agreement
shall further be defined as including, but not being limited to the following:
a. Failure of Guarantor to pay any Corporate or Franchise tax
or Federal tax or assessment for a period of ninety (90) days from the date of
said payment becoming due.
b. A judgment or judgment in the aggregate amount of
$100,000.00 or more being entered against the Borrower, Guarantor, or any of the
Stockholders which remains unsatisfied for sixty (60) days which is not covered
by insurance.
c. The failure of the Guarantor to pay any liquor bills, if
any, within sixty (60) days after becoming due.
d. Any attempt on the part of Guarantor or any of its
Stockholders to issue additional stock or any form of debenture bond or dispose
of any of the stock of Guarantor or to assign, pledge, or otherwise encumber
said stock during the term of this Agreement or the aforementioned debt without
the consent of the Escrow Agent and the Lender.
e. Any attempt to transfer or attempt to transfer, assign,
pledge or otherwise encumber any Plenary Retail Consumption License, any Plenary
Retail Distribution License or any club license which Guarantor and/or
Stockholders now own or may hereafter own.
f. The incurring, after the date of the Note, two major
alcoholic beverage violations within any twelve (12) month period. For the
purpose of this Agreement, 'major alcoholic beverage violation' shall mean a
violation which is cause for the revocation of any license referred to in
paragraph e. above.
g. Any failure to pay when due, any of the principal and/or
interest payments of the Note for which this Agreement is collateral security.
h. Any violation of any of the laws of the State of New
Jersey, Township of Ocean, or Untied States of America which result in the
revocation of any permits, licenses or other municipal, state or federal
licenses which are needed in order to properly operate the Guarantor and/or the
business of the Guarantor.
i. Any violation and/or default in any of the terms and/or
conditions of the Loan Agreement, Note, Guaranty, or any violation and/or
default in any of the terms or conditions of the Related Documents as defined in
the Loan Agreement.
j. Any default in the Note, or any other document executed by
Borrower pursuant to the Loan Agreement or any default in any other document
executed by Borrower, Guarantor, and/or Stockholders to or for the benefit of
Lender in connection with the loan evidenced by the Loan Agreement and the Note.
k. The failure of Guarantor to maintain title to, and/or
ownership of, a certain Plenary Retail Consumption License No. 1337-33-013-006
respecting the RASCALS COMEDY CLUB or to obtain a renewal thereof or to obtain a
renewal of any other Plenary Retail Consumption License, Plenary Retail
Distribution License or any club license that Guarantor and Stockholders now own
or may hereafter own relating to or associated with the operations of Guarantor
in the Township of West Orange, New Jersey.
6. Consent to Transfer; Further Assurances. Guarantor
acknowledges and
agrees to execute a consent to transfer a Plenary Retail Consumption License No.
1337-33- 013-006 which it now owns. The Guarantor and Stockholders agree that at
any time and from time to time after the execution of this Agreement, they will
execute, acknowledge and deliver all such further or other assurances, consents,
documents, agreements, and amendments or supplements hereto or to any other of
the Related Documents defined in the Loan Agreement and take such other action
as may reasonable be required by Lender to effectuate the purposes of this
Agreement or to otherwise carry out the intention of or facilitate the
performance of this Agreement, or any other agreement with Lender. Guarantor
agrees to execute such consents to transfer said license to Lender or any other
Plenary Retail Consumption License that Guarantor may hereafter own.
Stockholders specifically agree to execute consents to transfer stock on forms
prescribed by Lender, provided however, that the execution of the aforesaid
consent to transfer shall not be prohibited by the State of New Jersey or any
political subdivision or commission thereof.
7. Loan Agreement. The Borrower, Guarantor, and Stockholders
hereby agree to be bound by all of the terms and conditions of the Loan
Agreements.
8. Statements. Guarantor and Stockholders agree that they will
furnish to the Lender during the term of the Note and this Agreement, financial
statements, quarterly statements, and income tax returns as required by Lender
in the Loan Agreement.
9. Voting Rights. So long as the Borrower is not in default
under the terms of the Loan Agreement and/or the Note, the Stockholders shall
have the right to vote the shares on deposit with the Escrow Agent and the
Lender shall, upon the signing of this Agreement, execute an appropriate proxy
to the Stockholders as may be reasonably required by the Stockholders.
10. Termination of Escrow. When satisfactory proof has been
presented to the Escrow Agent that all payments under the terms of the Note have
been paid in full, the Escrow Agent shall deliver to the Stockholders, the
shares in its possession, and all obligations between the Borrower, the
Stockholders, the Lender, and the Escrow Agent shall thereupon cease.
11. Expenses. The Borrower, Guarantor, and/or Stockholders
will pay all of the reasonable charges of the Escrow Agent, and such attorneys'
fees, expenses and other costs as may be incurred by the Escrow Agent in
connection with the administration of the provisions of this Agreement in the
event of a default by the Borrower, Guarantor, and/or Stockholders.
12. Applicable Law. This Agreement has been delivered to
Lender and accepted by Lender in the State of New Jersey. If there is a lawsuit,
Borrower, Guarantor, and Stockholders agree, upon Lender's request, to submit to
the jurisdiction of the courts of Cumberland County, State of New Jersey. The
parties hereto hereby waive the right to any jury trial in any action,
proceeding or counterclaim brought by either one against the other. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey.
13. Caption Headings. Caption headings in this Agreement are
for convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.
14. Notices. All notices required to be given under this
Agreement shall be given in writing and shall be effective when actually
delivered or when deposited in the United States mail, first class, postage
prepaid, addressed to the party to whom the notice is to be given at the address
shown above.
15. Severability. If a court of competent jurisdiction finds
any provision of this Agreement to be legally invalid, then in that event, such
provision shall be deemed stricken from this Agreement and all other provisions
of this Agreement in all other respects shall remain valid and enforceable.
16. Successors and Assigns. All covenants and agreements
contained by or on behalf of Borrower, Guarantor, and Stockholders shall bind
their successors and assigns and shall inure to the benefit of Lender, its
successors and assigns.
17. Waiver. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of the Lender in exercising any right
shall operate as a waiver of
such right or any other right. A waiver by Lender of a provision of this
Agreement shall not prejudice or constitute a waiver of Lender's right otherwise
to demand strict compliance with that provision or any other provision of this
Agreement. No prior waiver by Lender, nor any course of dealing between Lender
and any other party hereto, shall constitute a waiver of any of Lender's rights
or of any obligations of Borrower, Guarantor, or Stockholders as to any future
transactions.
18. Number and Gender. In this Agreement, the singular number
shall be deemed to include the plural number and the plural number shall be
deemed to include the singular number and each of the masculine, feminine and
neuter genders shall be deemed to include the other genders where to context of
this Agreement so requires.
IN WITNESS WHEREOF, the Lender, Borrower, Guarantor,
Stockholders and the Escrow Agent, have hereunto subscribed their names the date
and year first above written.
Attest: Lender:
The Farmers & Merchants National Bank
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Secretary Vice-President
Borrower:
COMREST, a New Jersey Partnership
---------------------------- --------------------------------
XXXXXX X. XXXXX Xxxxxxx Xxxxxxxxx, Partner
AN ATTORNEY AT LAW OF NEW JERSEY
---------------------------- --------------------------------
XXXXXX X. XXXXX Xxxx Xxxxxxxxx, Partner
AN ATTORNEY AT LAW OF NEW JERSEY
W.H.R. REALTY PARTNERSHIP, a New Jersey
Partnership
---------------------------- --------------------------------
XXXXXX X. XXXXX Xxxxxxx Xxxxxxxxx, Partner
AN ATTORNEY AT LAW OF NEW JERSEY
---------------------------- --------------------------------
XXXXXX X. XXXXX Xxxx Xxxxxxxxx, Partner
AN ATTORNEY AT LAW OF NEW JERSEY
Witness: Stockholders:
---------------------------- --------------------------------
XXXXXX X. XXXXX Xxxx Xxxxxxxxx
AN ATTORNEY AT LAW OF NEW JERSEY
---------------------------- --------------------------------
XXXXXX X. XXXXX Xxxxxxx Xxxxxxxxx
AN ATTORNEY AT LAW OF NEW JERSEY
Attest: Escrow Agent:
The Farmers & Merchants National Bank
---------------------------- --------------------------------
Secretary Vice-President
Guarantor:
RASCALS COMEDY CLUB STAGE DOOR
GRILL INC.,
A New Jersey Corporation
Attest:
---------------------------- --------------------------------
Xxxxxxx Xxxxxxxxx, Xxxx Xxxxxxxxx
Secretary President
STOCKHOLDERS
RASCALS COMEDY CLUB STAGE DOOR GRILL INC.
Stockholder Number of Shares Certificate Number
--------------------------------------------------------------------------------
Xxxx Xxxxxxxxx 250 4
Xxxxxxx Xxxxxxxxx 250 5
TRANSFER OF STOCK
FOR VALUE RECEIVED, Xxxx Xxxxxxxxx, hereby assigns and
transfers unto The Farmers & Merchants National Bank, two hundred fifty (250)
shares of the capital stock of RASCALS COMEDY CLUB STAGE DOOR GRILL INC., a New
Jersey Corporation standing in his name on the books of said Corporation,
represented by Certificate No. 4, and does hereby irrevocably constitute and
appoint The Farmers & Merchants National Bank as attorney to transfer the said
stock on the books of the within named Corporation with full power of
substitution in the premises and with full power to do any and all acts
necessary to transfer the said stock on the books of the within named
Corporation.
The within transfer is being executed in accordance with the
terms and conditions of a Stock Security and Pledge Agreement being executed
simultaneously herewith.
Date:
--------------------------------
Xxxx Xxxxxxxxx
In Presence of
-------------------------------------
XXXXXX X. XXXXX
AN ATTORNEY AT LAW OF NEW JERSEY
TRANSFER OF STOCK
FOR VALUE RECEIVED, Xxxxxxx Xxxxxxxxx, hereby assigns and
transfers unto The Farmers & Merchants National Bank, two hundred fifty (250)
shares of the capital stock of RASCALS COMEDY CLUB STAGE DOOR GRILL INC., a New
Jersey Corporation standing in his name on the books of said Corporation,
represented by Certificate No. 5, and does hereby irrevocably constitute and
appoint The Farmers & Merchants National Bank as attorney to transfer the said
stock on the books of the within named Corporation with full power of
substitution in the premises and with full power to do any and all acts
necessary to transfer the said stock on the books of the within named
Corporation.
The within transfer is being executed in accordance with the
terms and conditions of a Stock Security and Pledge Agreement being executed
simultaneously herewith.
Date:
--------------------------------
Xxxxxxx Xxxxxxxxx
In Presence of
---------------------------------
XXXXXX X. XXXXX
AN ATTORNEY AT LAW OF NEW JERSEY
CONSENT TO TRANSFER OF STOCK
To: Director of Alcohol Beverage Control
RASCALS COMEDY CLUB STAGE DOOR GRILL INC., a New Jersey
Corporation is the owner of Plenary Retail Consumption License No.
1337-33-013-006 heretofore issued by the Township of Ocean, County of Monmouth,
New Jersey. I, Xxxx Xxxxxxxxx hereby consent to the assignment and transfer to
The Farmers & Merchants National Bank of two hundred fifty (250) shares of the
capital stock of, RASCALS COMEDY CLUB STAGE DOOR GRILL INC., a New Jersey
Corporation, standing in my name on the books of said Corporation represented by
certificate number 4 and do hereby irrevocably constitute and appoint The
Farmers & Merchants National Bank as attorney to transfer the said stock on the
books of the within named Corporation with full power of substitution in the
premises and with full power to do any and all acts necessary to transfer the
said stock on the books of the within named Corporation.
The within transfer is being executed in accordance with the terms and
conditions of a Stock Security and Pledge Agreement being executed
simultaneously herewith.
Date:
--------------------------------
Xxxx Xxxxxxxxx
In Presence of
----------------------------------------
XXXXXX X. XXXXX
AN ATTORNEY AT LAW OF NEW JERSEY
CONSENT TO TRANSFER OF STOCK
To: Director of Alcohol Beverage Control
RASCALS COMEDY CLUB STAGE DOOR GRILL INC., a New Jersey Corporation is the owner
of Plenary Retail Consumption License No. 1337-33-013-006 heretofore issued by
the Township of Ocean, County of Monmouth, New Jersey. I,Xxxxxxx Xxxxxxxxx
hereby consent to the assignment and transfer to The Farmers & Merchants
National Bank of two hundred fifty (250) shares of the capital stock of, RASCALS
COMEDY CLUB STAGE DOOR GRILL INC., a New Jersey Corporation, standing in my name
on the books of said Corporation represented by certificate number 5 and do
hereby irrevocably constitute and appoint The Farmers & Merchants National Bank
as attorney to transfer the said stock on the books of the within named
Corporation with full power of substitution in the premises and with full power
to do any and all acts necessary to transfer the said stock on the books of the
within named Corporation.
The within transfer is being executed in accordance with the terms and
conditions of a Stock Security and Pledge Agreement being executed
simultaneously herewith.
Date:
--------------------------------
Xxxxxxx Xxxxxxxxx
In Presence of
---------------------------------
XXXXXX X. XXXXX
AN ATTORNEY AT LAW OF NEW JERSEY
