Exhibit F
STOCK PLEDGE AND SECURITY AGREEMENT
STOCK PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated September
21, 2001, by and among MINNESOTA ASE, LLC, a Minnesota limited liability company
("Buyer" or "Pledgor"), and CELSIUS, INC., a Delaware corporation ("Celsius" or
"Pledgee").
W I T N E S S E T H:
WHEREAS, Buyer and Celsius are parties to a Stock Purchase Agreement,
dated this date, (the "Purchase Agreement"), pursuant to which, among other
things, the Pledgee is selling certain of its stock interest in AERO SYSTEMS
ENGINEERING, INC., a Minnesota corporation ("ASE" or "Company"), to Buyer;
WHEREAS, At the request of the Buyer the Pledgee has made a loan to ASE
in the amount of $1,500,000 evidenced by a Secured Promissory Note of even date
herewith (the "Note");
WHEREAS, in order to induce the Pledgee to make the loan evidenced by
the Note, ASE has agreed to secure all of ASE's obligations under the Note with
a lien on and security interest in certain assets of ASE pursuant to a Security
Agreement of even date herewith;
WHEREAS, in order to provide further inducement to the Pledgee to make
the loan evidenced by the Note, the Pledgor has also agreed to secure all of
ASE's obligations under the Note with the grant to the Pledgee of a first
priority security interest in all of the shares of capital stock of the Company
now owned or hereafter acquired by the Pledgor, under the terms and subject to
the conditions of this Agreement; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Definitions.
In addition to those terms defined elsewhere in this
Agreement, the following terms shall have the following meanings wherever used
in this Agreement:
(a) "ASE Common Stock" shall mean the common stock, par value
$0.20 per share, of ASE.
(b) "Escrow Agent" shall be Xxxxxx & Xxxx, LLP of even date
herewith.
(c) "Event of Default" shall have the same meaning as provided
in the Note.
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(d) "Obligations" shall mean all principal, interest and other
amounts which may be due and payable under the Note at any time and from time to
time, whether upon stated maturity, by acceleration, or otherwise, and all other
covenants and agreements of the Buyer under the Note and that Certain
Indemnification Agreement between Company and Celsius dated the date hereof.
(e) "Satisfaction Date" shall mean that date on which all of
the Obligations have been paid or otherwise satisfied in full.
(f) "Securities" shall mean, collectively: (i) all of ASE
Common Stock owned of record or beneficially by the Pledgor on the date hereof;
(ii) any additional shares of ASE Common Stock which may hereafter be issued to
and/or owned beneficially or of record by the Pledgor, and any and all
securities which may hereafter be issued in respect of such additional shares of
ASE Common Stock; and (iii) any options, warrants or other rights to acquire
shares of capital stock of ASE which may hereafter be issued to and/or owned
beneficially or of record by the Pledgor, and any and all securities which may
hereafter be issued in respect or upon exercise of such options, warrants or
other rights.
2. Pledge of the Securities.
(a) As security for the due and timely payment and performance
of all of the Obligations from time to time, the Pledgor hereby pledges to the
Pledgee, and grants to the Pledgee a first priority lien and security interest
in, all of the Securities (as same are constituted from time to time), together
with all cash dividends, stock dividends, interest, profits, premiums,
redemptions, warrants, subscription rights, options, substitutions, exchanges
and other distributions now or hereafter made on the Securities and all cash and
non-cash proceeds thereof, until the Satisfaction Date. All property at any time
pledged to the Pledgee hereunder or in which the Pledgee is granted a security
interest (whether described herein or not) and all income therefrom and proceeds
thereof are herein collectively called the "Pledged Collateral".
(b) In furtherance of the pledge hereunder, the Pledgor is,
concurrently herewith, delivering to the Escrow Agent the certificates
representing all of the currently outstanding Securities, each of which now
remains in the name of the Pledgor and is, to the extent requested by the
Pledgee, accompanied by appropriate undated stock powers duly endorsed in blank
by the Pledgor.
(c) If, while this Agreement is in effect, the Pledgor becomes
entitled to receive or receives any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or issued
in connection with any reorganization), option or rights, whether as an addition
to, in substitution of, or in exchange for, any Securities or otherwise, the
Pledgor agrees to accept the same as agent for the Pledgee, to hold the same in
trust on behalf of and for the benefit of the Pledgee, and to deliver the same
forthwith to the Pledgee in the exact form received, with the endorsement of the
Pledgor when necessary and/or appropriate undated stock or other powers duly
executed in blank, to be held by the Pledgee, subject to the terms hereof, as
additional collateral security for the Obligations. Any sums paid on or in
respect of the Securities on the liquidation or dissolution of the Buyer shall
be paid over to the Pledgee, to be held by the Pledgee, subject to the terms and
conditions hereof, as additional collateral security for the Obligations.
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3. Retention of the Securities.
(a) Except as otherwise provided herein, the Pledgee shall
have no obligation with respect to the Pledged Collateral, except to use
reasonable care in the custody and preservation thereof, to the extent required
by law.
(b) The Escrow Agent shall hold the Pledged Collateral in the
form in which same are delivered herewith, unless and until there shall occur an
Event of Default.
4. Rights of the Pledgor. Throughout the term of this Agreement, so
long as no Event of Default has occurred and is continuing, the Pledgor shall
have the right to vote the Securities in all matters presented to the
stockholders of the Buyer for vote thereon, except in a manner inconsistent with
the terms of this Agreement.
5. Event of Default; Power of Attorney.
(a) Upon the occurrence and during the continuance of any
Event of Default, the Pledgee shall have the right to: (i) exercise all voting
and corporate rights of, and all rights of conversion, exchange, subscription or
any other rights, privileges or options pertaining to, any Securities as if the
Pledgee were the absolute owner thereof, including (without limitation) the
right to exchange, at its discretion, any and all of the Securities upon the
merger, consolidation, reorganization, recapitalization or other readjustment of
the Buyer or upon the exercise by the Buyer or the Pledgee of any right,
privilege or option pertaining to any of the Securities and, in connection
therewith, to deposit and deliver any and all of the Securities with any
committee, depository, transfer agent, registrar or other designated agency on
such terms and conditions as the Pledgee may determine, all without liability
except to account for property actually received by it; (ii) apply any funds or
other property received in respect of the Securities to the Obligations, and
receive in its own name any and all further distributions which may be paid in
respect of the Securities, all of which shall, upon receipt by the Pledgee, be
applied to the Obligations; (iii) transfer all or any portion of the Securities
(as determined by the Pledgee in its discretion) on the books of the Buyer to
and in the name of the Pledgee or such other person or persons as the Pledgee
may designate; (iv) effect any sale, transfer or disposition of all or any
portion of the Securities and in furtherance thereof, take possession of and
endorse any and all checks, drafts, bills of exchange, money orders or other
documents and instruments received on account of the Securities; (v) collect,
xxx for and give acquittance for any money due on account of any of the
foregoing; and (vi) take any and all other action contemplated by this
Agreement, or as otherwise permitted by law, or as the Pledgee may reasonably
deem necessary or appropriate, in order to accomplish the purposes of this
Agreement.
(b) In furtherance of the foregoing powers of the Pledgee, the
Pledgor hereby authorizes and appoints the Pledgee, with full powers of
substitution, as the true and lawful attorney-in-fact of the Pledgor, in his
name, place and stead, to take any and all such action as the Pledgee, in its
sole discretion, may deem necessary or appropriate in furtherance of the
exercise of the aforesaid powers. Such power of attorney shall be coupled with
an interest, and shall be irrevocable until the Satisfaction Date. Without
limitation of the foregoing, such power of attorney shall not in any manner be
affected or impaired by reason of any act of the Pledgor or by operation
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of law. Nothing herein contained, however, shall be deemed to require or impose
any duty upon the Pledgee to exercise any of the rights or powers granted
herein.
(c) The foregoing rights and powers granted to the Pledgee,
and the foregoing power of attorney, shall be fully binding upon any person who
may acquire any beneficial interest in any of the Securities or any other
property held or received by the Pledgee hereunder.
6. Foreclosure; Sale of Securities.
(a) Without limitation of paragraph 5 above, in the event that
the Pledgee shall make any sale or other disposition of any or all of the
Securities following an Event of Default, the Pledgee may also:
(i) offer and sell all or any portion of the
Securities by means of a private placement restricting the offer or sale to a
limited number of prospective purchasers who meet such suitability standards as
the Pledgee and its counsel may deem appropriate, and who may be required to
represent that they are purchasing Securities for investment and not with a view
to distribution;
(ii) purchase all or any portion of the Securities
for the Pledgee's own account at a price not less than the highest bona fide
offer received therefor, which if effected in a manner in compliance with
applicable law, shall be deemed to be a commercially reasonable disposition of
the subject Securities;
(iii) sell any or all of the Securities upon credit
or for future delivery, without being in any way liable for failure of the
purchaser to pay for the subject Securities; and
(iv) receive and collect the net proceeds of any sale
or other disposition of any Securities, and apply same in such order and to such
of the Obligations (including the costs and expenses of the sale or disposition
of the Securities) as the Pledgee may, in its absolute discretion, deem
appropriate.
(b) Upon any sale of any of the Securities in accordance with
this Agreement, the Pledgee shall have the right to assign, transfer and deliver
the subject Securities to the purchaser(s) thereof, and each such purchaser
shall be entitled to hold such Securities absolutely free from any right or
claim of the Pledgor and/or any other person claiming any beneficial interest in
the Securities, including any equity of redemption (which right and all other
such rights are hereby waived by the Pledgor to the fullest extent permitted by
law).
(c) Nothing herein contained shall be deemed to require the
Pledgee to effect any sale or disposition of any Securities at any time, or to
consummate any proposed public or private sale at the time and place at which
same was initially called. It is the intention of the parties hereto that the
Pledgee shall, subject to any further conditions imposed by this Agreement, at
all times following the occurrence of an Event of Default, have the right to use
or deal with the Securities as if the Pledgee were the outright owner thereof,
and to exercise any and all rights and remedies, as a secured party in
possession of collateral or otherwise, under any and all provisions of law.
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7. Covenants, Representations and Warranties.
In connection with the transactions contemplated by this
Agreement, and knowing that the Pledgee is and shall be relying hereon, the
Pledgor hereby covenants, represents and warrants that, except as contemplated
in the Purchase Agreement:
(a) the Securities have been and will be duly and validly
issued, are and will be fully paid and non-assessable, and are and will be owned
by the Pledgor free and clear of any and all restrictions, pledges, liens,
encumbrances or other security interests of any kind, save and except for the
pledge to the Pledgee pursuant to this Agreement;
(b) there are and will be no options, warrants or other rights
in respect of the sale, transfer or other disposition of any of the Securities
by the Pledgor, and the Pledgor has the absolute right to pledge the Securities
hereunder without the necessity of any consent of any Person;
(c) the Securities constitute fifty-one percent (51%) of the
outstanding capital stock and other securities of ASE on the date hereof; and,
as of the date hereof there are no options, warrants or other rights to
subscribe for or acquire any capital stock or other securities of ASE, or any
securities or other rights exercisable for or convertible into any capital
stock, securities or rights to acquire securities of the ASE;
(d) neither the execution or delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, nor the compliance
with or performance of this Agreement by the Pledgor, conflicts with or will
result in the breach or violation of or a default under the terms, conditions or
provisions of (i) any mortgage, security agreement, indenture, evidence of
indebtedness, loan or financing agreement, or other agreement or instrument to
which the Pledgor is a party or by which the Pledgor is bound, or (ii) any
provision of law, any order of any court or administrative agency, or any rule
or regulation applicable to the Pledgor;
(e) this Agreement has been duly executed and delivered by the
Pledgor, and constitutes the legal, valid and binding obligation of the Pledgor,
enforceable against the Pledgor in accordance with its terms;
(f) there are no actions, suits or proceedings pending or
threatened against or affecting the Pledgor that involve or relate to the
Pledged Collateral; and
(g) the Pledgor shall not, at any time prior to the release of
the Lien on the Pledged Collateral in accordance with paragraph 8 below, (i)
sell, transfer or convey any interest in any of the Pledged Collateral, or (ii)
cause any other pledge, lien or encumbrance to be created upon or granted with
respect to any of the Pledged Collateral.
8. Return of the Securities. To the extent that the Pledgee shall not
previously have taken, acquired, sold, transferred, disposed of or otherwise
realized value on the Pledged Collateral in accordance with this Agreement, at
the Satisfaction Date, any security interest in the Pledged Collateral shall
automatically terminate, cease to exist and be released, and the Escrow Agent
shall forthwith return the Pledged Collateral to and in the name of the Pledgor.
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9. Expenses of the Pledgee. All expenses incurred by the Pledgee
(including but not limited to reasonable attorneys' fees) in connection with any
actual or attempted sale or other disposition of Securities hereunder shall be
reimbursed to the Pledgee by the Pledgor (jointly and severally) on demand, or,
at the Pledgee's option, such expenses may be added to the Obligations and shall
be payable on demand.
10. Further Assurances. From time to time hereafter, each party shall
take any and all such further action, and shall execute and deliver any and all
such further documents and/or instruments, as any other party may request in
order to accomplish the purposes of and fulfill the parties' obligations under
this Agreement, in order to enable the Pledgee to exercise any of its rights
hereunder, and/or in order to secure more fully the Pledgee's interest in the
Pledged Collateral.
11. Miscellaneous.
(a) Any notices or consents required or permitted under this
Agreement shall be in writing and shall be deemed given as, when and in the
manner provided in the Purchase Agreement.
(b) The laws of the State of Delaware shall govern the
construction and enforcement of this Agreement and the rights and remedies of
the parties hereto. The parties hereby consent to the jurisdiction of all courts
sitting in the State of Delaware in connection with any action or proceeding
under or relating to this Agreement, and waive trial by jury in any such action
or proceeding.
(c) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns. The
Pledgor shall not, however, assign any of its or his rights or obligations
hereunder without the prior written consent of the Pledgee, and the Pledgee
shall not assign its rights hereunder without simultaneously assigning its
obligations hereunder to the subject assignee. Except as otherwise referred to
herein, this Agreement, and the documents executed and delivered pursuant
hereto, constitute the entire agreement between the parties relating to the
specific subject matter hereof.
(d) Neither any course of dealing between the Pledgor and the
Pledgee nor any failure to exercise, or any delay in exercising, on the part of
the Pledgee, any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege operate as a waiver of any other exercise of such right, power or
privilege or any other right, power or privilege.
(e) The Pledgee's rights and remedies, whether hereunder or
pursuant to any other agreements or by law or in equity, shall be cumulative and
may be exercised singly or concurrently.
(f) No change, amendment, modification, waiver, assignment of
rights or obligations, cancellation or discharge hereof, or of any part hereof,
shall be valid unless the Pledgee shall have consented thereto in writing.
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(g) The captions and paragraph headings in this Agreement are
for convenience of reference only, and shall not in any way define, limit or
describe the construction, terms or provisions of this Agreement.
(h) If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision shall thereupon be deemed modified only
to the extent necessary to render same valid, or not applicable to given
circumstances, or excised from this Agreement, as the situation may require, and
this Agreement shall be construed and enforced as if such provision had been
included herein as so modified in scope or application, or had not been included
herein, as the case may be.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the date first set forth above.
MINNESOTA ASE, LLC
By:
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Name:
Title:
CELSIUS, INC.
By:
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Name:
Title:
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