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STOCK PLEDGE AGREEMENT
(TWINLAB CORPORATION)
To: THE CIT GROUP/BUSINESS CREDIT, INC.
Address: 000 Xxxxx Xxxxx Xxx., 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Xxxxx 00, 0000
Xxxxxxxxx:
Reference is made to a certain Financing Agreement dated of even date herewith,
as amended (herein called the "Financing Agreement") between you and the
subsidiaries of the undersigned as the Borrowers named therein (herein each
called a "Company" and collectively, the Companies). Capitalized terms used
herein and defined in the Financing Agreement shall have the same meanings as
set forth therein unless otherwise specifically defined herein. As security for:
(a) the full and indefeasible payment and performance when due of all now
existing and future Obligations of the undersigned (herein the "Pledgor")
arising pursuant to any guaranty now or hereafter executed by the Pledgor in
your favor regarding the Companies (herein collectively the "Guaranty") (all of
which are herein called the "Secured Obligations"), the Pledgor hereby pledges,
assigns, transfers, delivers and sets over to you all of its right, title and
interest in and to the securities listed on the attached schedule, issued as
indicated on said schedule (the "Securities").
This pledge includes all right, title and interest in and to and a continuing
lien upon and security interest in, all of said Securities together with any and
all rights, coupons, warrants or rights to subscribe, options, dividends,
liquidating dividends, splits, dividends paid in stock, dividends paid in
Securities, new or reclassified Securities, or any other property which the
Pledgor is or may hereafter become entitled to receive on account of such
Securities, any and all increments, substitutions, additions or replacements
thereof, and any and all proceeds thereof (all collectively hereinafter referred
to as the "Pledged Collateral").
This Stock Pledge Agreement is executed as an inducement to you to make loans or
advances to any Company or issue guaranties at the request of any Company, or
otherwise to extend credit or financial accommodations to any Company or to
enter into or continue a financing arrangement with any Company, and is executed
in consideration of your doing or having done any of the foregoing.
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The Pledgor agrees that any of the foregoing shall be deemed to have been done
or extended by you in consideration of and in reliance upon the execution of
this Stock Pledge Agreement, but nothing herein shall obligate you to do any of
the foregoing.
The Pledgor shall be in default under this Pledge Agreement upon the occurrence
of any of the following (herein any such default shall be referred to as an
"Event of Default"):
1. the occurrence of any Event of Default under the Financing
Agreement;
2. if any warranty or representation contained in this Stock Pledge
Agreement is materially or substantially breached.
In the event of the happening of any such Event of Default, then on ten (10)
days prior notice to the Pledgor, without the curing of such default within such
time, you may, to the extent permitted by applicable law, without demand of
performance, advertisement or notice of intention to sell, or of the time or
place of sale, and without notice to redeem, or other notice or demand
whatsoever to or upon the Pledgor (all and each of which demands, advertisements
and/or notices are hereby expressly waived), forthwith or at any time or times
thereafter during the continuance of such Event of Default, transfer to and/or
register in your name, or the name of your nominee, any or all of the Pledged
Collateral and/or collect, receive, appropriate and realize upon said Pledged
Collateral. In addition, and also without any of the aforesaid demands,
advertisements, and/or notices, upon the occurrence of any Event of Default as
defined herein, you may sell, assign, transfer and deliver the whole or any part
of the Pledged Collateral then held by you under this Stock Pledge Agreement or
subject to this Stock Pledge Agreement in one or more parcels, at public or
private sale or sales, at any Exchange Broker's Board, at your office or
elsewhere, on such terms and conditions, and at such prices as you may deem
advisable, for cash, upon credit, or for future delivery, with the right on your
part to become the purchaser thereof at any such sale or sales, free and clear
of any right to equity of redemption (which right or equity is hereby expressly
waived and released). Any notice of sale, disposition, or other intended action
by you required by applicable law and sent to the Pledgor at least ten (10) days
prior to such action shall constitute reasonable notice to the Pledgor. Prior to
exercising your rights contained herein you may in your discretion forward the
various coupons coming due on any bonds covered hereby directly to the Pledgor
for collection.
Net proceeds of any such disposition as aforesaid, after deduction all costs,
including reasonable attorney's fees and expenses of every kind incurred
therein, shall be applied to the payment in whole or in part, in such order as
you may elect, of any of the Secured Obligations, whether then due or not due.
You agree to pay
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over and return any remaining balance to the Pledgor or to any person entitled
thereto, upon proper demand being made therefor, and if there be any deficiency,
the Pledgor and any Company shall continue to be fully liable for same.
Further, you are hereby expressly granted the right and irrevocable proxy, in
the event of the happening of any Event of Default (as defined herein), and on
ten (10) days prior notice to the Pledgor, without the curing of such Event of
Default within such time, to transfer to yourself or to your nominee any or all
of the Pledged Collateral or to register same in your name on the books of the
Company or entity issuing same; to receive cash dividends, coupons and income
thereon and to hold the same as additional collateral security hereunder, or to
apply it against the Secured Obligations and to exercise any voting rights with
respect to said Collateral for any purposes as you in your discretion deem
advisable, and to otherwise exercise as to such Pledged Collateral, all rights,
powers and remedies as the owner thereof.
The Pledgor hereby represents and warrants that the Pledged Collateral is owned
by the Pledgor absolutely, and is free and clear of all liens and encumbrances
except for the pledge in your favor and except for Permitted Encumbrances (as
defined in the Financing Agreement); that, except for restrictions under
applicable securities law, there are no restrictions upon the pledge or transfer
of any of the Pledged Collateral; that the Pledgor has full right to pledge and
transfer the same in accordance with the terms and conditions of this Stock
Pledge Agreement, free of all encumbrances (except said Permitted Encumbrances)
and without the consent of any other person, firm, entity or corporation and
without the need to notify the issuing company and/or obtain their consent to
the pledge; and that said Pledged Collateral is not subject to any assessment.
The Pledgor agrees to defend its title to the Pledged Collateral at its own cost
and expense, and to pay, satisfy and discharge and any all assessments, liens or
charges now or thereafter placed upon the Pledged Collateral.
The Pledgor recognizes that you may be unable to effect a public sale of any or
all of the Collateral, by reason of certain prohibitions contained in the
Securities Act of 1933 and applicable state securities law or otherwise, and may
be compelled to resort to one or more private sales thereof to a restricted
group of purchasers which will be obligated to agree, among other things, to
acquire such securities for their own account for investment and not with a view
to the distribution or resale thereof. The Pledgor acknowledges and agrees that
any such private sale may result in prices and other terms less favorable to you
than if such sale were a public sale and agrees that such circumstances shall
not, in and of themselves, result in a determination that such sale was not made
in a commercially reasonable manner. You shall be under no obligation to delay a
sale of any of the Pledged Collateral for the period of time necessary to permit
the issuer to register such securities for
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public sale under the Securities Act of 1933, or under applicable state
securities laws, even if the issuer agrees to do so.
The Pledgor affirms and certifies that the Secured Obligations were not, and
will not be, incurred for the purpose of providing or obtaining any credit for
purchasing or trading in registered equity securities or other marketable
securities.
The Pledgor hereby agrees at your request to execute all necessary stock powers
in blank, to have the signatures on said powers guaranteed, to execute a letter
or other form confirming that the Pledged Collateral is not being pledged to you
for the purpose of providing or obtaining any credit for purchasing or trading
in registered equity securities or other marketable securities, and to execute
any further documents or papers whatsoever reasonably requested by you in order
to carry out the intent and purpose of this Stock Pledge Agreement.
The pledge provided for herein shall be in addition to, and shall not be deemed
to affect, modify or limit any other rights, collateral, agreements or security
which you may now or hereafter hold whether granted or given to you by the
Pledgor, any Company or by any other person, firm or corporation.
It is understood and agreed that the rights and remedies herein enumerated are
not intended to be exhaustive but are in addition to any other rights or
remedies at law or in equity. You shall have the absolute right in your sole
discretion to determine the order in which your rights and remedies are to be
exercised, and your exercise of any right or remedy shall not preclude the
exercise of any other rights or remedies or be deemed to be a waiver thereof. No
act of forbearance, or agreement to forebear the enforcement of, or extension of
the date of maturity of, any Secured Obligation, shall in any way constitute a
release of, or a waiver or relinquishment of any of your rights or remedies.
The Pledgor expressly waives and relinquishes any rights of subrogation,
reimbursement, indemnity or recourse to or with respect to any of the assets or
properties of any Company to the extent the same arise from the existence or
performance of this Stock Pledge Agreement.
This Stock Pledge Agreement is to be governed by the laws of the State of
California and shall be binding on the heirs, administrators, executors,
successors and assigns of the Pledgor, and shall inure to the benefit of you and
your successors and assigns.
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Very truly yours,
Twinlab Corporation
By_______________________
Title:
Address:________________________
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SCHEDULE TO STOCK PLEDGE AGREEMENT
Issuer Owner Certificate # # of Shares
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