EXHIBIT 10.2
SECOND AMENDED AND RESTATED STOCK PLEDGE AGREEMENT
This Second Amended and Restated Stock Pledge Agreement is entered into
as of March __, 2003 by nStor Technologies, Inc., a Delaware corporation
("Pledgor") for the benefit of Xxxxxxx Xxxxxx, ("Pledgee Xxxxxx"), The Xxxxxxxxx
Xxxxxx 1993 Trust ("Pledgee Trust"), Xxxx Xxxxxx ("Pledgee Xxxxxx") and WRS
Advisors III LLC ("Pledgee WRS" and together with Pledgee Xxxxxx, Pledgee Trust
and Pledgee Xxxxxx, the "Pledgees").
RECITALS
WHEREAS, Pledgor is the record and beneficial owner of the shares of
capital stock described in Exhibit A hereto (the "Pledged Securities") issued by
Stonehouse Technologies, Inc., a Texas corporation and Pledgor previously made
(i) that certain promissory note dated as of February 19, 2003 in the original
principal amount of $700,000 in favor of Pledgee Xxxxxx (the "Initial Xxxxxx
Note"), and (ii) that certain promissory note dated as of February 19, 2003 in
the original principal amount of $200,000 in favor of H. Xxxxx Xxxx ("Xxxx"),
both of which promissory notes were secured by that certain stock pledge
agreement dated as of February 19, 2003 between Pledgor, Levy and Pledgee Xxxxxx
(the "Amended and Restated Stock Pledge Agreement");
WHEREAS, Levy has agreed to release the Company of its obligation to
include him as a party under this agreement; and
WHEREAS, Pledgor has made (i) that certain promissory note of even date
herewith in the original principal amount of $1,700,000 in favor of Pledgee
Xxxxxx which amends and restates the Initial Xxxxxx Note (the "Xxxxxx Note"),
(ii) that certain promissory note of even date herewith in the original
principal amount of $500,000 in favor of Pledgee Trust (the "Trust Note"), (iii)
that certain promissory note of even date herewith in the original principal
amount of $250,000 in favor of Pledgee Xxxxxx (the "Xxxxxx Note") and (iv) that
certain promissory note of even date herewith in the original principal amount
of $250,000 in favor of Pledgee WRS (the "WRS Note" and together with the Xxxxxx
Note, Xxxxxx Note and Trust Note, the "Notes"), and as security for the payment
and performance when due of all of the obligations of Pledgor under the Notes
(the "Secured Obligations"), the Pledgees are requiring that Pledgor execute and
deliver this Second Amended and Restated Stock Pledge Agreement (which amends
and restates the Amended and Restated Stock Pledge Agreement) and grant the
security interest contemplated hereby.
TERMS OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, and to induce the Pledgees to accept the Notes, it is
agreed as follows:
1. Definitions. Unless otherwise defined herein, terms defined in the
Notes are used herein as therein defined, and the following shall have (unless
otherwise provided elsewhere in this Second Amended and Restated Stock Pledge
Agreement) the following respective meanings (such meanings being equally
applicable to both the singular and plural form of the terms defined):
"Agreement" shall mean this Second Amended and Restated Stock Pledge
Agreement, including all amendments, modifications and supplements and any
exhibits or schedules to any of the foregoing, and shall refer to the Agreement
as the same may be in effect at the time such reference becomes operative.
"Bankruptcy Code" shall mean Xxxxx 00, Xxxxxx Xxxxxx Code, as amended
from time to time, and any successor statute thereto.
"Pledged Collateral" shall have the meaning assigned to such term in
Section 2 hereof.
2. Pledge. Pledgor hereby pledges, conveys, hypothecates, mortgages,
assigns, sets over, delivers and grants to the Pledgees a security interest in
all of the following (collectively, the "Pledged Collateral"):
2.1. The Pledged Securities and the certificates representing the
Pledged Securities, and all dividends, distributions, cash, instruments and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Securities; and
2.2. All proceeds of any of the foregoing.
3. Security for Obligations. This Agreement secures, and the Pledged
Collateral is security for, the payment and performance of all of the Secured
Obligations.
4. Delivery of Pledged Collateral. All certificates representing or
evidencing the Pledged Securities shall be delivered to the Pledgees upon
execution of this Agreement and held by the Pledgees pursuant hereto and shall
be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Pledgees.
5. Representations and Warranties. Pledgor represents and warrants to
the Pledgees that:
5.1. Pledgor is, and at the time of delivery of the Pledged
Securities to the Pledgees pursuant to Section 4 hereof will be, the sole holder
of record and the sole beneficial owner of the Pledged Collateral.
5.2. Pledgor has the right and requisite authority to pledge,
assign, transfer, deliver, deposit and set over the Pledged Collateral to the
Pledgees as provided herein.
5.3. The pledge, assignment and delivery of the Pledged
Collateral pursuant to this Agreement will create a valid first priority Lien on
and a first priority perfected security interest in the Pledged Collateral
pledged by Pledgor, and the proceeds thereof, securing the payment of the
Secured Obligations.
The representations and warranties set forth in this Section 5 shall
survive the execution and delivery of this Agreement.
6. Distributions; Etc.
6.1. Right of Pledgor to Receive Distributions. For so long as no
Event of Default exists, Pledgor shall have the right to receive cash
distributions declared and paid with respect to the Pledged Collateral. Any and
all stock distributions made on or in respect of Pledged Collateral, whether
resulting from a subdivision, combination or reclassification shall be and
become part of the Pledged Collateral pledged hereunder and, if received by
Pledgor, shall be received in trust for benefit of the Pledgees, be segregated
from the other property and funds of Pledgor, and shall forthwith be delivered
to the Pledgees to be held subject to the terms of this Agreement.
6.2. Holding Pledged Collateral. The Pledgees may hold any of the
Pledged Collateral, endorsed or assigned in blank. Until an Event of Default has
occurred, the Pledgees shall not transfer to or register in the name of the
Pledgees or any other person, any or all of the Pledged Collateral. The Pledgees
acknowledge and agree that until the Pledged Collateral has been sold pursuant
to Section 7 hereof, (i) Pledgor shall continue to be the beneficial owner of
the Pledged Collateral and (ii) Pledgor shall be entitled to exercise any and
all voting and other ownership rights with respect to the Pledged Collateral.
Pledgees shall have no right to transfer, pledge, encumber or otherwise dispose
of the Pledged Collateral other than pursuant to Section 7 hereof.
7. Remedies. Upon and after an Event of Default, the Pledgees shall have
the following rights and remedies:
7.1. Secured Creditor. All of the rights and remedies of a
secured party under the Uniform Commercial Code of the State where such rights
and remedies are asserted, or under other applicable law, all of which rights
and remedies shall be cumulative, and none of which shall be exclusive, to the
extent permitted by law, in addition to any other rights and remedies contained
in this Agreement.
7.2. Right of Sale. (a) Except as set forth in Section 7.2(b)
below, any Pledgee may, without demand and without advertisement, notice or
legal process of any kind (except as may be required by law) sell the Pledged
Collateral, or any part thereof at public or private sale or at any broker's
board or on any securities exchange, for cash, upon credit or for future
delivery as such Pledgee shall deem appropriate. Each Pledgee and the Pledgor
agree that the proceeds realized from the sale of any Pledged Collateral shall
be (i) distributed pro rata to each Pledgee based on the outstanding principal
balance of, and accrued but unpaid interest on, each Pledgee's Note and (ii)
applied first against unpaid interest accrued on each Note and then to reduce
the principal thereof.
(b) Notwithstanding anything to the contrary set forth herein, to the
extent that either Pledgee is entitled, pursuant to Section 7.2(a) above, to
sell all or any portion of the Pledged Collateral (the "Selling Pledgee"), such
Selling Pledgee shall provide written notice (the "Selling Notice") to the other
Pledgee (the "Other Pledgee") of such Selling Pledgee's intent to exercise its
sale right. The Other Pledgee may, in its sole discretion, to the extent
permitted under the terms of the Selling Pledgee's Note, elect to purchase the
Selling Pledgee's Note for an amount equal to the outstanding principal balance
of, and accrued but unpaid interest on, the Selling Pledgee's Note (the
"Purchase Price"), by delivering written notice of such election to the Selling
Pledgee as soon as practicable but in any event within twenty (20) days of
receipt of the Selling Notice. If the Other Pledgee elects to purchase the
Selling Pledgee's Note and such purchase is not prohibited by the terms of the
Selling Pledgee's Note, (i) the Other Pledgee shall deliver to the Selling
Pledgee the Purchase Price, (ii) the Selling Pledgee shall deliver to the Other
Pledgee the original Selling Pledgee's Note, together with all certificates
representing or evidencing the Pledged Securities and the duly executed
instruments of transfer or assignment in blank, to the extent such certificates
and transfer or assignment documents are in such Selling Pledgee's possession or
control, and (iii) the Company shall continue to be liable to the Other Pledgee
for all amounts previously owed to the Selling Pledgee under the terms of the
Selling Pledgee's Note and all such amounts owed to the Other Pledgee under both
the Selling Pledgee's Note and the Other Pledgee's Note shall be secured by the
Pledged Collateral pursuant to the terms of this Agreement.
7.3. Notice. In addition thereto, Pledgor further agrees that in
the event that notice is necessary under applicable law, written notice mailed
to Pledgor in the manner specified in Section 13 hereof twenty (20) days prior
to the date of the disposition of the Pledged Collateral subject to the security
interest created herein at any such public sale or sale at any broker's board or
on any such securities exchange, or prior to the date after which private sale
or any other disposition of said Pledged Collateral will be made, shall
constitute commercially reasonable and fair notice.
8. Waiver. No delay on the Pledgees' part in exercising any power of
sale, lien, option or other right hereunder, and no notice or demand which may
be given to or made upon Pledgor by the Pledgee with respect to any power of
sale, lien, option or other right hereunder, shall constitute a waiver thereof,
or limit or impair the Pledgees' right to take any action or to exercise any
power of sale, Lien, option, or any other right hereunder, without notice or
demand, or prejudice the Pledgees' rights as against Pledgor in any respect.
9. Assignment. The Pledgees may not assign this Agreement without the
prior written consent of the Pledgor.
10. Termination. This Agreement shall terminate and be of no further
force or effect with respect to a Pledgee at such time as the Secured
Obligations owed to such Pledgee shall be paid and performed in full. Upon such
termination of this Agreement with respect to a Pledgee, (i) in the event the
Secured Obligations owed to such Pledgee are paid and/or satisfied by the
Pledgor, such Pledgee shall deliver to Pledgor the Pledged Collateral and all
instruments of assignment executed in connection therewith, free and clear of
the liens hereof and, except as otherwise provided herein, all of Pledgor's
obligations hereunder with respect to such Pledgee under this Agreement shall
terminate at such time and (ii) in the event the Secured Obligations owed to
such Pledgee are paid and/or satisfied by the Other Pledgee pursuant to Section
7.2(b) of this Agreement, all of Pledgor's obligations hereunder with respect to
such Pledgee under this agreement shall terminate at such time and Pledgor's
obligations hereunder shall be solely with respect to the Other Pledgee.
11. Miscellaneous. This Agreement shall be binding upon Pledgor and
Pledgor's successors and assigns, and shall inure to the benefit of, and be
enforceable by, the Pledgees and their successors and assigns, and shall be
governed by, and construed and enforced in accordance with, the internal laws in
effect in the State of Florida, and none of the terms or provisions of this
Agreement may be waived, altered, modified or amended except in writing duly
signed for and on behalf of the Pledgees and Pledgor.
12. Severability. If for any reason any provision or provisions hereof
are determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those portions of this
Agreement which are valid.
13. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other party, or whenever any of the parties desires to give or
serve upon any other a communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be sufficient if sent by overnight mail or
courier, postage prepaid, and addressed as follows: (a) if to the Pledgees, to
the addresses set forth below or to such addresses as Pledgees may hereafter
from time to time notify to the Pledgor in writing for the purposes of notice
hereunder, and (b) if to Pledgor, to the address set forth below or to such
address as Pledgor may hereafter from time to time notify to the Pledgees in
writing for the purposes of notice hereunder.
14. Section Titles. The Section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of the agreement between the parties hereto.
15. Counterparts. This Agreement may be executed in any number of
counterparts, which shall, collectively and separately, constitute one
agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
IN WITNESS WHEREOF, this Agreement has been duly executed under
seal as of the date first written above.
nSTOR TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Address for Notices:
000 Xxxxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attn: H. Xxxxx Xxxx
By: /s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Address for Notices:
0000 Xxxxx Xxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Address for Notices:
000 Xxxxx Xxxx Xxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
WRS Advisors III LLC
By: /s/ Xxxxxxx Xxxx 3/27/03
Name Xxxxxxx Xxxx
Address for Notices:
1301 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxx
The Xxxxxxxxx Xxxxxx 1993 Trust
By: Its trustee /s/ Xxxxxxx Xxxxxx
Name Xxxxxxx Xxxxxx
Address for Notices:
0000 Xxxxx Xxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
EXHIBIT A
to the Second Amended and Restated Stock Pledge Agreement
Attached to and forming a part of that certain Second Amended and
Restated Stock Pledge Agreement dated as of March __, 2003, executed and
delivered by nStor Technologies, Inc. to Xxxxxxx Xxxxxx, The Xxxxxxxxx Xxxxxx
1993 Trust, Xxxx Xxxxxx and WRS Advisors III LLC.
Issuer Class of Stock Certificate No. Number of Shares
Stonehouse Technologies, Inc. Common 9 16,000,000
