EXHIBIT 10.7
STOCK PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, dated June 17, 1996, by and between XXXXX
XXXXXXX (the "Pledgor") and EQUITY ONE' INC. (the "Pledgee").
W I T N E S S E T H:
WHEREAS, the Pledgor has executed and delivered a certain Promissory
Note of even date (the "Note") evidencing the debt from the Pledgor to the
Pledgee of $1,128,750.00,
WHEREAS, as an inducement to the Pledgee to make the loan provided for
in the Note, the Pledgor agreed to execute this agreement and, pursuant hereto,
to pledge the Pledged Stock, as defined in this Agreement, as security for the
prompt satisfaction of all of the loan `given by the Pledgee to the Pledgor (the
"Obligations")- .
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the parties agree as follows:
1. The term "Pledged Stock" shall mean the shares described in Schedule
I hereto, together with all certificates, options, rights, or other
distributions issued as an addition to, in substitution or in exchange for, or
on account of any such shares, and all proceeds of all of the foregoing, now or
hereafter owned or acquired by the Pledgor. The Pledgor may, at his sole option,
provide other collateral to secure the payment of the Obligations, provided that
such collateral, including any combination with any of the Pledged Stock
remaining, is valued at no less than one hundred thirty percent (130%) of the
Obligations due from the Pledgor to the Pledgee, and further provided that the
Pledgor shall execute and deliver to the Pledgee such documents' and shall
otherwise take such other action, as shall be required for the Pledgee to
perfect its first priority security interest in the substitute collateral.
2. (a) As security for the prompt satisfaction of the Obligations, the
Pledgor hereby pledges to the Pledgee the Pledged Stock and grants the Pledgee a
lien on and security interest therein.
(b) If the Pledgor shall become entitled to receive or shall
receive, in connection with any of the Pledged Stock, any:
(i) Stock certificate, including, but without limitation, any
certificate representing a stock dividend or in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale of assets,
combination of shares, stock split, spin-off or split-off;
(ii) option, warrant, or right, whether as aN addition. to or in
substitution or in exchange for any of the Pledged Stock, or otherwise;
(iii) Dividend or distribution payable in property, including
securities issued by other than the issuer of any of the Pledged Stock; or
(iv) Dividends or distributions of any sort, then: the Pledgor
shall accept the same as the Pledgee's agent, in trust for the Pledgee, and
shall deliver them forthwith to the Pledgee in the exact form received with, as
applicable, the Pledgor's endorsement when necessary, or appropriate stock
powers duly executed in blank, to be held by the Pledgee, subject to the terms
hereof, as part of the Pledged Stock.
(c) At any time Pledgee, at its option, may have any or all of the
Pledged Stock registered in its name or that of its nominee, and the Pledgor
hereby covenants that, upon the Pledgee's request, the Pledgor will cause the
issuer of the Pledged Stock to effect such registration. If that shall be done
prior to the occurrence of a default under the Note (an "Event of Default"), the
Pledgor shall nevertheless retain all voting rights with respect to the Pledged
Stock, and, for that purpose, the Pledgee shall execute and deliver to the
Pledgor all necessary proxies. Immediately and without further notice, upon the
occurrence of an Event of Default, whether or not the Pledged Stock shall have
been registered in the name of the Pledgee or its nominee, the Pledgee or its
nominee shall have, with respect to the Pledged Stock, the right to exercise
all Voting rights as to all shares issued by other than a borrower under the
Note (a "Borrower"), and, as to all of the Pledged Stock, all other corporate
rights and all conversion, exchange, subscription or other rights, privileges or
options pertaining thereto as if it were the absolute owner thereof, including,
without limitation, the right to exchange any or all of The Pledged Stock upon
the merger, consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof, or upon the exercise by such issuer of any
right, privilege, or option pertaining to any of the Pledged Stock, and, in
connection therewith, to deliver any of the Pledged Stock to any committee,
depository, transfer agent, registrar or other designated agency upon such terms
and conditions as it may determine, all without liability except to account for
property actually received by it; but the Pledgee shall have not duty to
exercise any of the
aforesaid rights, privileges or options and shall not be responsible for any
failure to do so or delay in so doing.
(d) Unless an Event of Default shall have occurred and be
continuing, the Pledgor shall be entitled to receive for its own use cash
dividends on the Pledged Stock paid out of earned surplus. Upon the occurrence
of an Event of Default, the Pledgee may require any such cash dividends to be
delivered to the Pledgee as additional security hereunder or applied toward the
satisfaction of the obligations.
(e) Upon the occurrence of an Event of Default, the Pledgee shall
provide notice of default to the Pledgor and the Pledgor shall have twenty-one
(21) days within which to cure any default specified in the notice. In the event
the Event of Default is not cured within the applicable cure period, the Pledgor
may, at his option, tender all or any portion of the Pledged Stock for payment,
in full or in part, of the Obligations and the Pledgee shall credit the Pledgor
for the value of the Pledged Stock tendered in payment hereof, Any Pledged Stock
used in payment of the obligations shall be valued at (i) if the issuer's stock
is listed and traded on a securities exchange, at the price per share equal to
the average closing price over the 45 trading days preceding the date the
Pledged Stock is tendered fox payment by the Pledgor, (ii) if the issuer's stock
is not listed and traded on a securities exchange, the price per share equal to
the price per share of a third-party, arms' length sale of stock of Equity One,
Inc. during the six-month period immediately preceding the tender, or (iii) an
appraiser acceptable to both parties. If the parties are unable to appoint or
agree upon a mutually acceptable appraiser within ten (10) days after notice is
given of the proposed tender, the matter shall be submitted to binding
arbitration by the American Arbitration Association who shall appoint ONE (1)
arbitrator pursuant to the Rules of Commercial Arbitration within seven (7) days
after submission and said arbitrator shall determine the fair market value of
the Pledged Stock tendered by utilizing a nationally recognized, reputable
investment banking firm. The determination of fair market value must be
completed within thirty (30) days after the appointment of an arbitrator and the
arbitrator's findings shall be final. The proceedings shall take place in Miami,
Florida in the English language and each party shall pay ONE-half (1/2) the cost
of the proceedings and the appraisal. The Pledgor shall be permitted to tender
the only the number of shares of the Pledged Stock required to pay to the
Pledgee the amounts due under the Promissory Note and this Agreement .
(f) The proceeds of any such disposition or other action by the
Pledgee shall be applied as follows :
(i) First, to the costs and expenses incurred in connection
therewith or incidental thereto or to the care or safekeeping of any of the
Pledged Stock or in any way relating to the rights of the Pledgee hereunder,
including reasonable attorneys' fees and legal expenses;
(ii) Second, to the satisfaction of the Obligations;
(iii) Third, to the payment of any other amounts required by
applicable law; and
(iv) Fourth, to the Pledgor to the extent of any surplus
proceeds.
3. The Pledgor represents and warrants that:
(a) It has, and has duly exercised, all requisite power and
authority to enter into this Agreement, to pledge the Pledged Stock for the
purposes described in paragraph 2(a), and to carry out the transactions
contemplated by this Agreement;
(b) He is the legal and beneficial owner of all of the Pledged
Stock;
(c) All of the shares of the Pledged Stock have been duly and
validly issued, are fully paid and nonassessable, and are owned by the Pledgor
free of any pledge, mortgage, hypothecation, lien, charge, encumbrance or
security interest in such shares of the proceeds thereof, except for that
granted hereunder;
(d) The execution and delivery of this Agreement, and the
performance of its terms, will not result in any violation Of any provision of
the Pledgor's certificate of incorporation or by laws, or violate or constitute
a default under the terms of any agreement, indenture or other instrument,
license, judgment, decree, order, law, statute, ordinance or other governmental
rule or regulation, applicable to the Pledgor or any of its property; and
(e) Upon delivery of the Pledged Stock to the Pledgee or its
agent, this Agreement shall create a valid first lien upon and perfected
security interest in the Pledged stock and the proceeds thereof, subject to no
prior security interest, lien, charge or encumbrance, or agreement purporting
to grant to any third party a security interest in the property or assets of the
Pledgor which would include the Pledged Stock.
4. (a) The Pledgor hereby covenants that, until all of the Obligations
have been satisfied in full, he will not:
(i) Sell, convey, or otherwise dispose of any of the Pledged
Stock or any interest therein, or create, incur, or permit to exist any pledge,
mortgage, lien, charge, encumbrance or any security interest whatsoever in or
with respect to any of the Pledged Stock or the proceeds thereof, other than
that created hereby; or
(ii) Consent to or approve the issuance of any additional shares
of any class of capital stock in the issuer of the Pledged Stock; or any
securities convertible voluntarily by the holder thereof or automatically upon
the occurrence or nonoccurrence of any event or condition into, or exchangeable
for, any such shares; or any warrants, options, rights, or other commitment~
entitling any person to purchase or otherwise acquire any such shares,
(b) The Pledgor warrants and will, at its own expense, defend the
Pledgee's right, title, special property and security interest in and to the
Pledged Stock against the claims of any person, firm, corporation or other
entity.
5. (a) If the Pledgee shall elect to exercise its right to sell or
otherwise dispose of all or any part of the Pledged stock, and if, in the
opinion of counsel for the Pledgee, it is necessary to have the Pledged Stock or
that portion thereof to be sold registered under the provisions of the
securities Act of 1933, as amended (the "Securities Act"), the Pledgor will use
its best efforts to cause:
(i) The issuer of the Pledged Stock, its directors and officers,
to take all action necessary to register the Pledged Stock or that portion
thereof to be disposed of under the provisions of the Securities Act, at the
Pledgor's expense;
(ii) The registration statement relating thereto to become
effective and to remain so for not less than one year from the date of the first
public offering of the Pledged Stock or that portion thereof so to be disposed
of, and to make all amendments thereto and to the related prospectus which, in
the opinion of the Pledgee or its counsel, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto;
(iii) The issuer of the Pledged Stock to comply with the
provisions of the "Blue Sky" law of any jurisdiction which the Pledgee shall
designate; and
(iv) The issuer or the Xxxxxxx stock to make available to its
security holders, as soon as practicable, an earnings
statement (which need not be audited) covering a period of at least twelve
months but not more than eighteen months, beginning with the first month after
the effective date of any such registration statement, which earnings statement
will satisfy the provisions of Section ll(a) of the Securities Act,
(b) The Pledgor acknowledges that a breach of any of the covenants
Contained in paragraph 5(a) above may cause irreparable injury to the Pledgee;
that the Pledgee will have no adequate remedy at law with respect to such
breach; and, as consequence, that the Pledgor's covenants in paragraph 5 (a)
shall be specifically enforceable against the Pledgor; and the Pledgor hereby
waives, to the extent such waiver is enforceable under law, and shall not
assert, any defenses against an action for specific performance of such
covenants, except for a defense that no Event of Default has occurred.
6. The Pledgor will promptly deliver to the Pledgee all written
notices, and will promptly give the Pledgee written notice of any other notices,
received by it with respect to Pledged Stock, and the Pledgee will promptly give
like notice to the Pledgor of any such notices received by it or its nominee.
7. The Pledgor shall at any time, and from time to time, upon the
written request of the Pledgee, execute and deliver such further documents and
do such further acts and things as the Pledgee may reasonably request to effect
the purposes of this Agreement, including, without limitation, delivering to the
Pledgee upon the occurrence of an Event of Default irrevocable proxies with
respect to the Pledged Stock in form satisfactory to the Pledgee. Until receipt
thereof/ this Agreement shall constitute the Pledgor's proxy to the Pledgee or
its nominee to vote all shares of Pledged Stock (other than that issued by a
Borrower) then registered in the Pledgor's name.
8. Upon the satisfaction in full of all Obligations and the
Satisfaction of all additional costs and expenses of the Pledgee as provided
herein, this Agreement shall terminate and the Pledgee shall deliver to the
Pledgor, at the Pledgor's expense, such of the Pledged Stock as shall not have
been sold or otherwise applied pursuant to this Agreement.
9. (a) Beyond the exercise of reasonable care to assure the safe
custody of the Pledged Stock while held hereunder, the Pledgee shall have no
duty or liability to preserve rights pertaining thereto and shall be relieved of
all responsibility for the Pledged Stock upon surrendering it or tendering
surrender of it to the Pledgor.
(b) No course of dealing between the Pledgor and the
Pledgee, nor any failure to exercise, nor any delay in exercising, any right,
power or privilege of the Pledgee hereunder or under the Loan Agreement shall
operate as a waiver thereof, now shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
(C) The rights and remedies provided herein and in the Loan
Agreement and in all other agreements, instruments, and documents delivered
pursuant to or in connection with the Loan Agreement, are cumulative and are in
addition to and not exclusive of any rights or remedies provided by law,
including, but without limitation, the rights and remedies of a secured party
under the Uniform Commercial Code.
(d) The provisions of this Agreement are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any Jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision or part thereof in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction or any
other clause or provision in this Agreement in any jurisdiction.
10. Any notice required or permitted by this Pledge Agreement shall be
effective if given in accordance with the provisions of the Loan Agreement.
11. This Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the parties hereto.
12. This Agreement shall be construed in accordance with the
substantive law of the State of Florida without regard to principles of
conflicts of laws and is intended to take effect as an instrument under seal.
13. THE PLEDGEE AND THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT ANY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH,
OR IN RESPECT OF ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS ( WHETHER
ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PLEDGE ENTERING INTO THIS AGREEMENT,
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.
PLEDGOR:
-----------------------------------
/s/ XXXXX XXXXXXX
----------------------------------- ---------------------------------
XXXXX XXXXXXX
/s/ ILLEGIBLE PLEDGEE:
-----------------------------------
EQUITY ONE, INC.
By:
------------------------------------ ------------------------------
STATE OF FLORIDA )
: ss.
COUNTY OF DADE )
The foregoing instrument was acknowledged before me by XXXXX XXXXXXX,
on this _____day of ____________________, 1996, who is well known to me or who
has produced _____________________ as identification and who did/did not take an
oath,
----------------------------
Notary Public:
My Commission Expires:
STATE OF FLORIDA )
: ss.
COUNTY OF DADE )
The foregoing instrument was acknowledged before me by
________________, as President and _________________, as Secretary of EQUITY
ONE, INC., a Maryland corporation, on this day of _______________, 1996, who are
well-known to me or who have produced their ________________________as
identification and who did/did not take an oath.
-----------------------------
Notary Public
My commission Expires:
CERTIFICATE NO.
ISSUER NO. .OF SHARES SHAREHOLDER
------ ----------- ---------- -----------
EQUITY ON, INC. ________ ________ Xxxxx Xxxxxxx
