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Exhibit 10.10
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is made and entered into
as of APRIL 1, 1997 by XXXXXXX XXXXXX, an individual ("Hopley"), XXXXX XXXX an
individual ("Xxxx") and XXXXXX XXXXXX, an individual ("Xxxxxx") (together,
Hopley, Xxxx and Xxxxxx are referred to herein as "Pledgors"), in favor of
INTERNATIONAL FREEDOM, a TURKS & CAICOS corporation (together with its
successors and assigns, "Pledgee", and each is a "Pledgor"), having an address
at X.X. XXX 000, XXXXXX XXXXX, XXXXX 000, XXXXXXXXXXXXX, XXXXX & CAICOS ISLAND,
B.W.I. Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Note (as defined below).
WITNESSETH:
WHEREAS, Pledgors are directors and/or officers of Fremont Gold
Corporation, a Delaware corporation (the "Borrower");
WHEREAS, Pledgors are the legal and beneficial owners of the shares of
common stock, par value $.001, issued by Borrower and described on Schedule I
hereto;
WHEREAS, the Borrower has executed and delivered that certain Promissory
Note dated APRIL 1, 1997 made by Borrower in favor of Pledgee in the original
principal amount of $650,000.00US (as amended from time to time, the 'Note").
WHEREAS, as directors, officers and stockholders of the Borrower, Pledgors
shall receive benefits due to the Borrower's use of the proceeds of the
extension of credit evidenced by the Note for general corporate purposes,
including, but not limited to, administrative, property acquisition and mineral
exploration expenditures;
WHEREAS, Pledgee has required, as a condition to the extensions of credit
under the Note, that the Pledgors make the pledge contemplated by this Pledge
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, receipt of which is hereby acknowledged, and in order to
induce Pledgee to extend credit under the Note, Pledgors hereby agrees with
Pledgee:
SECTION 1. Pledge. Pledgors hereby pledge to Pledgee, and grant to Pledgee
a security interest in, the following collateral to secure the Secured
Obligations (as defined in Section 2) (the "Pledged Collateral"):
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a. the shares of stock issued by the Borrower identified on Schedule
I hereto held by each of the Pledgors (the "Pledged Shares") and the
certificates representing the Pledged Shares, and all stock dividends, cash
dividends, all other dividends, cash, instruments, chattel paper, warrants,
options and other rights, property or proceeds and products from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Shares;
b. all additional shares of stock of the Borrower at any time
acquired by Pledgors in any manner, and all securities convertible into and
warrants, options and other rights to purchase any shares of stock and the
certificates or other instruments representing such additional shares,
securities, warrants, options or other rights (and any such additional shares
shall constitute part of the Pledged Shares under this Pledge Agreement), and
all stock dividends, cash dividends, cash, instruments, chattel paper, warrants
and any other rights, property or proceeds and products from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all such shares, securities, warrants, options or other rights; and
c. all proceeds of any of the foregoing. The term "proceeds" shall
have the meaning assigned to that term under the Uniform Commercial Code as in
effect in any relevant jurisdiction.
SECTION 2. Security for Obligations. This Pledge Agreement and all of the
Pledged Collateral secure the payment when due of all obligations, liabilities
and indebtedness of every nature of Borrower to Pledgee, whether at stated
maturity, on mandatory prepayment, by acceleration or otherwise, now or
hereafter existing under or arising out of or in connection with the Note and
all renewals, extensions, restructurings and refinancings of the foregoing,
whether for principal, interest, fees, expenses or otherwise, and all
obligations or liabilities of Pledgors now or hereafter existing under this
Pledge Agreement (all such debts, obligations and liabilities being collectively
called the "Secured Obligations"). This Pledge Agreement is not a guaranty of
the Secured Obligations and is without recourse to Pledgors individually.
Nothing contained herein shall give cause of action to Pledgee to collect the
Secured Obligations, from Pledgors other than by retention of , or execution and
foreclosure upon, the Pledged Collateral.
SECTION 3. Delivery of Pledged Collateral. All certificates or instruments
representing or evidencing the Pledged Collateral shall be delivered to and held
by or on behalf of Pledgee pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed undated
instruments of transfer or assignment in blank with signatures guaranteed, all
in form and substance acceptable to Pledgee. Pledgee shall have the right, at
any time in its discretion and without notice to Pledgor following the
occurrence of an Event of Default under the Note, to transfer to or to register
in the name of Pledgee or any of its nominees any or all of the Pledged
Collateral.
SECTION 4. Representations and Warranties. In order to induce Pledgee to
enter into this Pledge Agreement, each of the Pledgors represents and warrants
severally, but not jointly, that the following statements are, true, correct and
complete as follows:
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a. Schedule I hereto completely and accurately sets forth the number
of shares of the issued and outstanding stock of the Borrower pledged hereby and
held, beneficially or of record, by Pledgor as of the Closing Date. All shares
of such stock owned by Pledgor have been, or will be upon issuance, duly
authorized and validly issued in compliance with all applicable securities laws
and are or will be, as the case may be, fully paid and nonassessable. There are
no outstanding warrants, options, subscriptions or other contractual
arrangements for the purchase of any other shares of stock or any securities
convertible into shares of stock of any of the issuers of the Pledged Shares,
and there are no preemptive rights with respect to the shares of stock of any
such issuer.
b. Pledgor is the legal, record and beneficial owner of the Pledged
Collateral.
c. No consent of any other party (including, without limitation, any
stockholder or creditor of Pledgor) and no consent, authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required either (i) for the pledge by Pledgor of the Pledged
Collateral pursuant to this Pledge Agreement or for the execution, delivery or
performance of this Pledge Agreement by Pledgor or (ii) for the exercise by
Pledgee of the voting or other rights provided for in this Pledge Agreement or
the remedies in respect of the Pledged Collateral pursuant to this Pledge
Agreement (except as may be required in connection with such disposition of any
Pledged Collateral by laws affecting the offering and sale of securities
generally).
d. This Pledge Agreement is the legal, valid and binding obligation
of Pledgor, enforceable against it in accordance with its terms.
e. All information heretofore, herein or hereafter supplied to
Pledgee by or on behalf of Pledgor with respect to the Pledged Collateral is and
will be accurate and complete in all material respects.
SECTION 5. Further Assurances.
a. Pledgors will, from time to time, at their expense, promptly
execute and deliver all further instruments and documents and take all further
action that may be necessary or desirable, or that Pledgee may request, in order
to protect any security interest granted or purported to be granted hereby, to
enable Pledgee to exercise and enforce the rights and remedies of Pledgee
hereunder with respect to any Pledged Collateral or to carry out the provisions
and purposes hereof.
b. Pledgors will, promptly upon request, provide to Pledgee all
information and evidence it may reasonably request concerning the Pledged
Collateral to enable Pledgee to enforce the provisions of this Pledge Agreement.
c. Pledgors will, immediately upon the purchase or acquisition of
any additional shares of stock of the issuers identified on Schedule I hereto,
deliver to Pledgee such Pledged Shares as required by Section 3 above, together
with a proxy substantially in the form attached hereto as Exhibit A, and a
pledge amendment, duly executed by Pledgor, in substantially the form of Exhibit
B
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hereto (a "Pledge Amendment"), in respect of the additional shares which are to
be pledged pursuant to this Pledge Agreement. Pledgors hereby authorize Pledgee
to attach each Pledge Amendment to this Pledge Agreement and agrees that all
shares listed on any Pledge Amendment delivered to Pledgee shall for all
purposes hereunder be considered Pledged Collateral.
SECTION 6. Negative Covenants. So long as any Secured Obligation shall
remain unpaid, Pledgors shall not:
a. create, incur, assume or suffer to exist any security interest,
lien or other encumbrance on any of the Pledged Collateral now owned or
hereafter acquired other than pursuant to this Pledge Agreement;
b. convert any of the Pledged Collateral into other stock or
securities (including any warrants, options, subscriptions or other contractual
arrangements for the purchase of stock or securities convertible into stock).
SECTION 7. Voting Rights, Dividends, Etc.
a. So long as no Event of Default shall have occurred and be
continuing (and in the case of subsection 7(a)(i) hereof, so long as Pledgee
shall not have made the election to exercise the rights set forth in subsection
(c) below):
i. Pledgors shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this
Pledge Agreement or the Note; and
ii. Pledgee shall execute and deliver (or cause to be executed
and delivered) to Pledgors all such proxies and other instruments as
Pledgor may reasonably request for the purpose of enabling Pledgors to
exercise the voting and other rights which it is entitled to exercise
pursuant to paragraph (i) above, and to receive the dividends which it is
authorized to receive.
b. Upon the occurrence and during the continuance of an Event of
Default:
i. All rights of Pledgor to receive and retain any cash
dividends and distributions on the Pledged Shares shall cease and become
vested solely in Pledgee, who shall thereupon have the sole right to
receive and hold as Pledged Collateral such dividends.
ii. Upon the election by Pledgee in accordance with subsection
7(c) below, all rights of Pledgors to exercise the voting and other
consensual rights pursuant to subsection 7(a)(i) above shall cease and be
vested solely in Pledgee, who shall thereupon have the exclusive right to
exercise such voting and other consensual
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rights. In order to effect such transfer of rights, Pledgors, at the
written request of Pledgee, shall execute and present to the issuer of the
Pledged Shares a form of irrevocable proxy substantially in the form
attached hereto as Exhibit A (a "Proxy").
iii. All dividends which are received by Pledgors contrary to
the provisions of subsection 7(b)(i) shall be received in trust for the
benefit of Pledgee, shall be segregated from other funds of Pledgors as
Pledged Collateral.
c. Notwithstanding anything to the contrary contained in this
Section 7, the rights of Pledgee to exercise voting and other consensual rights
pursuant to subsection 7(b)(ii) hereof without regard to directions from
Pledgors shall arise only upon the election by Pledgee from and after the
occurrence and during the continuance of any Event of Default to exercise such
rights. The exercise by Pledgee of its rights hereunder shall not constitute an
election by Pledgee to retain the Pledged Collateral in satisfaction of the
Secured Obligations.
SECTION 8. Subsequent Changes Affecting Collateral, Transfers and Other
Liens, Additional Shares.
a. Each of the Pledgors agrees not to (i) sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral or (ii) enter into any other contractual
obligations which could reasonably be expected to restrict or inhibit Pledgee's
rights or ability to sell or otherwise dispose of the Pledged Collateral or any
part thereof after the occurrence of an Event of Default.
b. Each of the Pledgors agree (i) not to cause the issuer of the
Pledged Shares to issue any stock or other securities (including any warrants,
options, subscriptions or other contractual arrangements for the purchase of
stock or securities convertible into stock) in addition to or in substitution
for the Pledged Shares except to Pledgors, and (ii) to deliver hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
writings evidencing any additional Pledged Collateral.
SECTION 9. Pledgee Appointed Attorney-in-Fact. Pledgor hereby irrevocably
appoints Pledgee as Pledgor's attorney-in-fact effective upon the occurrence of
an Event of Default, with full authority in the place and stead of Pledgor and
in the name of Pledgor, Pledgee or otherwise, from time to time in Pledgee's
discretion to take any action (including completion and presentation of the
Proxy) and to execute any instrument that Pledgee may deem necessary or
advisable to accomplish the purposes of this Pledge Agreement, including,
without limitation, to (i) receive, indorse and collect all instruments made
payable to Pledgor representing any dividend or other distribution in respect of
the Pledged Collateral or any part thereof and (ii) to exercise the voting and
other consensual rights pertaining to the Pledged Collateral; and (iii) sell,
transfer, pledge, make any agreement with respect to or otherwise deal with any
of the Pledged Collateral as fully and completely as though Pledgee were the
absolute owner thereof for all purposes, and to do, at Pledgee's option and
Pledgor's expense, at any time and from time to time, all acts and things that
Pledgee deems necessary to protect, preserve or realize upon the Pledged
Collateral. Pledgor hereby
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ratifies and approves all acts of Pledgee made or taken pursuant to this Section
9. This power of attorney is coupled with an interest and shall be irrevocable
until all Secured Obligations shall have been paid in full and the Loan
Documents shall have been terminated.
SECTION 10. Pledgee May Perform. If Pledgors fail to perform any agreement
contained herein, Pledgee may itself perform, or cause performance of, such
agreement, and the expenses of Pledgee incurred in connection therewith shall be
payable by Pledgors.
SECTION 11. Remedies upon Event of Default. If any Event of Default shall
have occurred:
a. Pledgee may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party under the Uniform
Commercial Code (the "UCC") in effect in the State of Arizona at that time,
whether or not the UCC applies to the affected Pledged Collateral, and Pledgee
may also, without notice except as specified below, sell the Pledged Collateral
or any part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of Pledgee's offices or elsewhere, for cash,
on credit, or for future delivery, at such price or prices and upon such other
terms as Pledgee deems commercially reasonable; provided, however, any such sale
of the Pledged Shares shall be pursuant to an effective Registration Statement
under the Securities Act of 1933, as amended (the "Securities Act"), or pursuant
to an exemption from registration pursuant to the Securities Act.
b. If Pledgee determines to exercise its right to sell any or all of
the Pledged Collateral, upon written request, Pledgor shall and shall cause the
issuer of the Pledged Shares from time to time to furnish to Pledgee all such
information Pledgee may request in order to determine the number of shares and
other instruments included in the Pledged Collateral which may be sold by
Pledgee as exempt transactions under the Securities Act and the rules of the
Securities and Exchange Commission thereunder, as the same are from time to time
in effect, and any other applicable laws.
c. Any cash held by Pledgee as Pledged Collateral and all cash
proceeds received by Pledgee in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Collateral may, in the
discretion of Pledgee, be held by Pledgee as collateral for, and/or then or at
any time thereafter applied (after payment of any amounts payable to Pledgee
pursuant to Section 14) in whole or in part by Pledgee against, all or any part
of the Secured Obligations in such order as Pledgee shall elect. Any surplus of
such cash or cash proceeds held by Pledgee and remaining after payment in full
of all the Secured Obligations shall be paid over to Pledgors or to whomsoever
may be lawfully entitled to receive such surplus or as a court of competent
jurisdiction may direct.
SECTION 12. Remedies Cumulative. No failure on the part of Pledgee to
exercise, and no delay in exercising and no course of dealing with respect to,
any power, privilege or right under the Note or this Pledge Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise by Pledgee
of any power, privilege or right under the Note or this Pledge Agreement
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preclude any other or further exercise thereof or the exercise of any other such
power, privilege or right. The powers, privileges and rights in this Pledge
Agreement and the Note are cumulative and are not exclusive of any other
remedies provided by law.
SECTION 13. Application of Proceeds. Upon the occurrence of an Event of
Default, the proceeds of any sale of, or other realization upon, all or any part
of the Pledged Collateral shall be applied: first to all reasonable fees, costs
and expenses incurred by Pledgee with respect to the Note or the Pledged
Collateral, including, without limitations those described in Section 14 herein;
second, to accrued and unpaid interest on the Secured Obligations; third, to the
principal amounts of the Secured Obligations outstanding; and fourth, to the
Pledgors.
SECTION 14. Expenses. Pledgors shall promptly pay to Pledgee all
reasonable out-of-pocket costs and expenses of Pledgee (after the execution of
this Pledge Agreement) in connection with protecting Pledgee's security interest
in the Pledged Collateral or in connection with any matters contemplated by or
arising out of this Pledge Agreement.
SECTION 15. Termination of Security Interests, Release of Collateral. Upon
payment in cash and performance in full of all Secured Obligations, the security
interests shall terminate and all rights to the Pledged Collateral shall revert
to Pledgors. Upon such termination of the security interests or release of any
Pledged Collateral, Pledgee will, at its own expense, execute and deliver to
Pledgors such documents as Pledgors shall reasonably request to evidence the
termination of the security interests or the release of such Pledged Collateral
which has not yet theretofore been sold or otherwise applied or released. Such
release shall be without recourse or warranty to Pledgee.
SECTION 16. Amendments, Waivers and Consents. No amendment, modification,
termination or waiver of any provision of this Pledge Agreement, or consent to
any departure by Pledgors herefrom, shall in any event be effective without the
written concurrence of Pledgee and Pledgors.
SECTION 17. Notices. Any notice, approval, request, demand, consent or
other communication hereunder, including any notice of default or notice of
sale, shall be given to Pledgors at their addresses indicated on Schedule I
hereto and to Pledgee, Attention: XXXXXXXXX XXXXX, at the address set forth
above (or to such other address previously designated by written notice to the
serving party) in accordance with the notice provisions of the Note.
SECTION 18. Continuing Security Interest, Successors and Assigns. This
Pledge Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until payment and
performance in full in cash of the Secured Obligations, (ii) be binding upon
Pledgors, their successors and assigns, and (iii) inure, together with the
rights and remedies of Pledgee hereunder, to the benefit of Pledgee and its
successors and assigns. Without limiting the generality of the foregoing clause
(iii), Pledgee may assign or otherwise transfer the Note or any interest therein
held by it to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to Pledgee herein or
otherwise. Until Pledgors receive written notice of such assignment or transfer,
Pledgor may continue to deal solely and
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directly with the existing Pledgee in connection with this Pledge Agreement.
Pledgors may not assign or transfer any of its interests or obligations
hereunder without the prior consent of Pledgee.
SECTION 19. Severability. The provisions of this Pledge 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 of this Pledge
Agreement in any jurisdiction.
SECTION 20. Interpretation. Time is of the essence of each provision of
this Pledge Agreement of which time is an element. All terms not defined herein
or in the Note shall have the meanings set forth in the UCC, except where the
context otherwise requires.
SECTION 21. Survival of Provisions. All agreements, representations and
warranties made herein shall survive the execution and delivery of this Pledge
Agreement and the Note, the extension of credit thereunder and the execution and
delivery of the Note.
SECTION 22. Headings Descriptive. The headings in this Pledge Agreement
are for convenience of reference only and shall not constitute a part of this
Pledge Agreement for any other purpose or be given any substantive effect.
SECTION 23. Entire Agreement. This Pledge Agreement is intended by the
parties as a final expression of their agreement with respect to the matters
covered hereby and is intended as a complete and exclusive statement of the
terms and conditions thereof.
SECTION 24. Counterparts. This Pledge Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
shall together constitute one and the same agreement.
SECTION 25. Governing Law. THIS PLEDGE AGREEMENT IS GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
ARIZONA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS GRANTED HEREBY, OR THE
REMEDIES HEREUNDER, IN RESPECT OF ANY PLEDGED COLLATERAL ARE GOVERNED BY THE
LAWS OF ANOTHER JURISDICTION.
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IN WITNESS WHEREOF, Pledgor has caused this Pledge Agreement to be duly
executed and delivered as of the day and year first above written.
_____________________________________
XXXXXXX XXXXXX
_____________________________________
XXXXXX XXXXXX
By acceptance hereof as of the day and year first above written, Pledgee
agrees to be bound by the provisions hereof.
Salem Management Company Ltd., a Turks &
Caicos corporation
By:__________________________________
Name:________________________________
Title:_______________________________
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IN WITNESS WHEREOF, Pledgor has caused this Pledge Agreement to be duly
executed and delivered as of the day and year first above written.
_____________________________________
XXXXX XXXX
By acceptance hereof as of the day and year first above written, Pledgee agrees
to be bound by the provisions hereof.
Salem Management Company Ltd., a Turks &
Caicos corporation
By:__________________________________
Name:________________________________
Title:_______________________________
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SCHEDULE I
TO
PLEDGE AGREEMENT
STOCK
CERTIFICATE NUMBER OF
PLEDGOR ISSUER CLASS OF STOCK NUMBERS SHARES
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxx Fremont Gold Common 49 104,500
000 Xxxxxx Corporation 50 104,500
Street, #2000 51 104,500
Xxxxxxxxx, X.X. -------
X0X 0X0 313,500
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx Fremont Gold Common 53 49,000
000 Xxxxxx Corporation 54 49,000
Street, #2000 55 49,000
Xxxxxxxxx, X.X. 000 00,000
X0X 0X0 19 73,309
125 16,250
56 12,000
122 16,250
123 16,250
124 16,250
117 15,000
118 15,000
119 15,000
-------
357,309
--------------------------------------------------------------------------------
Xxxxx Xxxx Common 41 93,000
000 Xxxxxx Xxxxxxx Gold 42 93,000
Street, #2000 Corporation 43 93,000
Vancouver, B.C. 17 138,603
-------
X0X 0X0 417,603
--------------------------------------------------------------------------------
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EXHIBIT A
IRREVOCABLE PROXY
The undersigned hereby appoints ____________________ ("Pledgee") as Proxy
with full power of substitution, and hereby authorizes Pledgee to represent and
vote all of the shares of the capital stock of Fremont Gold Corporation held of
record by the undersigned on the date of exercise hereof or at any meeting or at
any other time chosen by Pledgee in its sole discretion.
________________________________________,
an individual
Date:___________________________
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EXHIBIT B
PLEDGE AMENDMENT
This Pledge Amendment, dated ______________________ is delivered pursuant
to Section 5(c) of the Pledge Agreement referred to below. The undersigned
hereby agrees that this Pledge Amendment may be attached to the Pledge
Agreement, dated as of ________________, 1997, between the undersigned and
________________________, as Pledgee (the "Pledge Agreement"; capitalized terms
defined therein being used herein as therein defined) and that the shares listed
on this Pledge Amendment shall be deemed to be part of the Pledged Collateral
and shall secure all Secured Obligations.
_________________________________________,
an individual
By:_______________________________________
Name:_____________________________________
Title:____________________________________
STOCK
CERTIFICATE NUMBER OF
PLEDGOR ISSUER CLASS OF STOCK NUMBERS SHARES
--------------------------------------------------------------------------------
