Pledge Agreement
(Stocks, Bonds and Commercial Paper)
THIS PLEDGE AGREEMENT, dated as of this 30th day of June,
1997, is made by FREEDOM FINANCIAL CORPORATION (the "Pledgor"),
with an address at X.X. Xxx 0000, Xxxxxxxxxx, Xxxxxxxx 00000, in
favor of PNC BANK (the "Secured Party"), with an address at
Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
1. Pledge. In order to induce the Secured Party to extend
the Obligations (as defined below), the Pledgor hereby grants a
security interest in and pledges to the Secured Party all of the
pledgor's right, title and interest in and to the collateral
described in Exhibit A attached hereto and made a part hereof,
whether now owned or hereafter acquired, together with all
additions, submissions, replacement and proceeds and all income,
interest, dividends and other distributions thereof (the
"Collateral"). If the Collateral includes certificated
securities, documents or instruments, such certificates are
herewith delivered to the Secured Party accompanied by duly
executed blank stock or bond powers or assignments as applicable.
The Pledgor hereby authorized the transfer of possession of all
certificates, instruments, documents and other evidence of the
Collateral to the Secured Party.
2. Obligations Secured. The Collateral secures payment to
the Secured Party of all loans, advances, debts, liabilities,
obligations, covenants and duties owing to the Secured Party from
the Pledgor and from FREEDOM HOLDING, INC. (the "Borrower"), of
any kind or nature, present or future, whether or not evidenced
by any note, guaranty or other instrument, whether arising under
any agreement, instrument or document, whether or not for the
payment of money, whether arising by reason of an extension of
credit, opening of a letter of credit, loan or guarantee or in
any other manner, whether arising out of overdrafts on deposit or
other accounts or electronic funds transfers (whether through
automatic clearing houses or otherwise) or out of the Secured
Party's non-receipt of or inability to collect funds or otherwise
not being made whole in connection with depository transfer check
or other similar arrangements, whether direct or indirect
(including those acquired by assignment or participation),
absolute or contingent, joint or several, due or to become due,
now existing or hereafter arising, and any amendments,
exceptions, renewals or increase, and all costs and expenses of
the Secured Party incurred in the documentation, negotiation,
modification, enforcement, collection or otherwise in connection
with any of the foregoing, including reasonable attorneys' fees
and expenses (collectively, the "Obligations").
3. Representations and Warranties. The Pledgor represents
and warrants to the Secured Party as follows:
3.1 There are no restrictions on the pledge or
transfer of any of the Collateral, other than restrictions
referenced on the face of any certificates evidencing the
Collateral.
3.2 The Pledgor is the legal owner of the Collateral,
which is registered in the name of the Pledgor, the Custodian (as
hereinafter defined) or a nominee.
3.3 The Collateral is free and clear of any security
interests, pledges, liens, encumbrances, charges, agreements,
claims or other arrangements or restrictions of any kind, except
as referenced in Section 3.1 above, and the Pledgor will not
incur, create, assume or permit to exist any pledge, security
interest, lien, charge or other encumbrance of any nature
whatsoever on any of the Collateral or assign, pledge or
otherwise encumber any right to receive income from the
Collateral.
3.4 The Pledgor has the right to transfer the
Collateral free of any encumbrances and the Pledgor will defend
the Pledgor's title to the Collateral against the claims of all
persons, and any registration with, or consent or approval of, or
other action by, any federal, state or other governmental
authority or regulatory body which was or is necessary for the
validity of the pledge of and grant of the security interest in
the Collateral has been obtained.
3.5 The pledge of and grant of the security interest
in the Collateral is effective to vest in the Secured Party a
valid and perfected first priority security interest, superior to
the rights of any other person, in and to the Collateral as set
forth herein.
4. Covenants.
4.1 Unless otherwise agreed in writing between the
Pledgor and the Secured Party, the Pledgor agrees to maintain
Collateral having a Minimum Margin Value of at least $700,000.00
or the outstanding amount of the Obligations, whichever is
higher, and to provide additional Collateral to the Secured Party
immediately upon the Secured Party's request if the Minimum
Margin Value is not maintained. "Minimum Margin Value" shall be
calculated by multiplying the market value of the Collateral
times the Secured Party's margin requirements for the type of
Collateral as set forth on Exhibit A or as otherwise agreed in
writing.
4.2 If all or part of the Collateral constitutes
"margin stock" within the meaning of Regulation U of the Federal
Reserve Board, the Pledgor agrees to execute and deliver Form U-1
to the Secured Party and, unless otherwise agreed in writing
between the Pledgor and the Secured Party, no part of the
proceeds of the Obligations may be used to purchase or carry
margin stock.
5. Default.
5.1 If any of the following occur (each an "Event of
Default"): (i) any Event of Default (as defined in any of the
Obligations), (ii) any default under any of the Obligations that
does not have a defined set of "Events of Default" and the lapse
of any notice or cure period provided in such Obligations with
respect to such default, (iii) demand by the Secured Party under
any of the Obligations that have a demand feature, (iv) the
failure by the Pledgor to perform any of its obligations
hereunder, (v) the Falsity, inaccuracy or material breach by the
Pledgor of any written warranty, representation or statement made
or furnished to the Secured Party by or on behalf of the Pledgor,
(vi) the failure of the Secured Party to have a perfected first
priority security interest in the Collateral, or (vii) the
termination or breach of the notification and consent agreement
referred to in Section 8 below, then the Secured Party is
authorized in its discretion to declare any or all of the
Obligations to be immediately due and payable without demand or
notice, which are expressly waived, and may exercise any one or
more of the rights and remedies granted pursuant to this Pledge
Agreement or given to a secured party under the Uniform
Commercial Code of the applicable state, as it may be amended
from time to time or otherwise at law or in equity, including the
right to sell or otherwise dispose of the Collateral.
5.2 (a) At any bona fide public sale the Secured
Party shall be free to purchase all or any part of the
Collateral. Any such sale may be on cash or credit. The Secured
Party shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or
purchasers to persons who will represent and agree that they are
purchasing the Collateral for their own account in compliance
with Regulation D of the Securities Act of 1933 or any other
applicable exemption available under such Act. The Secured Party
will not be obligated to make any sale if it determines not to do
so, regardless of the fact that notice of the sale may have been
given. The Secured Party may adjourn any sale and sell at the
time and place to which the sale is adjourned. If the Collateral
is customarily sold on a recognized market or threatens to
decline speedily in value, the Secured Party may sell such
Collateral at any time without giving prior notice to the
Pledgor. Whenever notice is otherwise required by law to be sent
by the Secured Party to the Pledgor of any sale or other
disposition of the Collateral, five days written notice sent to
the Pledgor at the notice address specified below will be
reasonable.
(b) The Pledgor recognizes that the Secured Party may
be unable to effect or cause to be effected a public sale of the
Collateral by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the "Act"), so that the
Secured Party may be compelled to resort to one or more private
sales to a restricted group of purchasers who will be obligated
to agree, among other things, to acquire the Collateral for their
own account, for investment and without a view to the
distribution or resale thereof. The Pledgor understands that
private sales so made may be at prices and on other terms less
favorable to the seller than if the Collateral were sold at
public sales, and agrees that the Secured Party has no obligation
to delay or agree to delay the sale of any of the Collateral for
the period of time necessary to permit the issuer of the
securities which are part of the Collateral (even if the issuer
would agree), to register such securities for sale under the Act.
The Pledgor agrees that private sales made under the foregoing
circumstances shall be deemed to have been made in a commercially
reasonable manner.
5.3. The net proceeds arising from the disposition of
the Collateral after deducting expenses incurred by the Secured
Party will be applied to the Obligations in the order determined
by the Secured Party. If any excess remains after the discharge
of all of the Obligations, the same will be paid to the Pledgor.
If after exhausting all of the Collateral there is a deficiency,
the Pledgor or, if the Pledgor is not borrowing from the Secured
Party or providing a guaranty of the Borrower's obligations, the
Borrower will be liable therefor to the Secured Party; provided,
however, that nothing contained herein will obligate the Secured
Party to proceed against the Borrower or any other party
obligated under the Obligations or against any other collateral
for the Obligations prior to proceeding against the Collateral.
5.4. If any demand is made at any time upon the Secured
Party for the repayment or recovery of any amount received by it
in payment or on account of any of the Obligations from the
disposition of the Collateral and if the Secured Party repays all
or any part of such amount, the Pledgor or, if the Pledgor is not
borrowing from the Secured Party or providing a guaranty of the
Borrower's obligations, the Borrower will be and remain liable
for the amounts so repaid or recovered to the same extent as if
never originally received by the Secured Party.
6. Voting Rights and Transfer. Prior to the occurrence of
an Event of Default, the Pledgor will have the right to exercise
all voting rights with respect to the Collateral. At any time
after the occurrence of an Event of Default, the Secured Party
may transfer any or all of the Collateral into its name or that
of its nominee and may exercise all voting rights with respect to
the Collateral, but no such transfer shall constitute a taking of
such Collateral in satisfaction of any or all of the Obligations
unless the Secured Party expressly so indicates by written notice
to the Pledgor.
7. Dividends, Interest and Premiums. The Pledgor will
have the right to receive all cash dividends, interest and
premiums declared and paid on the Collateral prior to the
occurrence of any Event of Default. In the event any additional
shares are issued to the Pledgor as a stock dividend or in lieu
of interest on any of the Collateral, as a result of any split of
any of the Collateral, by reclassification or otherwise, any
certificates evidencing any such additional shares will be
immediately delivered to the Secured Party and such shares will
be subject to this Pledge Agreement and a part of the Collateral
to the same extent as the original Collateral. At any time after
the occurrence of an Event of Default, the Secured Party shall be
entitled to receive all cash or stock dividends, interest and
premiums declared or paid on the Collateral, all of which shall
be subject to the Secured Party's rights under Section 5 above.
8. Uncertificated Securities. If the Collateral includes
uncertificated securities, then the Pledgor agrees to cause the
financial intermediary on whose books and records the ownership
interest of the Pledgor in the Collateral appears (the
"Custodian") to execute and deliver a notification and consent
agreement satisfactory to the Secured Party in order to perfect
and protect the Secured Party's security interest in the
Collateral.
9. Further Assurances. At any time and from time to time,
upon demand of the Secured Party, the Pledgor will give, execute,
file and record any notice, financing statement, continuation
statement, instrument, document or agreement that the Secured
Party may consider necessary or desirable to create, preserve
continue, perfect or validate any security interest granted
hereunder or to enable the Secured Party to exercise or enforce
its rights hereunder with respect to such security interest.
Without limiting the generality of the foregoing, the Pledgor
hereby irrevocably appoints the Secured Party as the Pledgor's
attorney-in-fact to do all acts and things in the Pledgor's name
that the Secured Party may deem necessary or desirable. The
Secured Party is authorized to file financing statements,
continuation statements and other documents under the Uniform
Commercial Code relating to the Collateral without the Pledgor's
signature, naming the Pledgor as debtor and the Secured Party as
secured party.
10. Notices. All notices, demands, requests,
consents, approvals and other communications required or
permitted hereunder must be in writing and will be effective upon
receipt if delivered personally to the Pledgor or the Secured
Party, or if sent by facsimile transmission with confirmation of
delivery, or by nationally recognized overnight courier service,
to the address set forth above or to such other address as either
the Pledgor or the Secured Party may give to the other in writing
for such purpose.
11. Preservation of Rights. No delay or omission on
the Secured Party's part to exercise any right or power arising
hereunder will impair any such right or power or be considered a
waiver of any such right or power, nor will the Secured Party's
action or inaction impair any such right or power. The Secured
Party's rights and remedies hereunder are cumulative and not
exclusive of any other rights or remedies which the Secured Party
may have under other agreements, at law or in equity.
12. Illegality. In case any one or more of the
provisions contained in the Pledge Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby.
13. Changes in Writing. No modification, amendment or
waiver of any provision of this Pledge Agreement nor consent to
any departure by the Pledgor therefrom will be effective unless
made in a writing signed by the Secured Party, and then such
waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or
demand on the Pledgor in any case will entitle the Pledgor to any
other or further notice or demand in the same, similar or other
circumstance.
14. Entire Agreement. This Pledge Agreement
(including the documents and instruments referred to herein)
constitutes the entire agreement and supersedes all other prior
agreements and understandings, both written and oral, between the
Pledgor and the Secured Party with respect to the subject matter
hereof.
15. Successors and Assigns. This Pledge Agreement
will be binding upon and inure to the benefit of the Pledgor and
the Secured Party and their respective heirs, executors,
administrators, successors and assigns; provided, however, that
the Pledgor may not assign this Pledge Agreement in whole or in
part without the Secured Party's prior written consent and the
Secured Party at any time may assign this Pledge Agreement in
whole or in part.
16. Interpretation. In this Pledge Agreement, unless
the Secured Party and the Pledgor otherwise agree in writing, the
singular includes the plural and the plural the singular;
references to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the
statute referred to; the word "or" shall be deemed to include
"and/or", the words "including", "includes" and "include" shall
be deemed to be followed by the words "without limitation."
Section headings in this Pledge Agreement are included for
convenience of reference only and shall not constitute a part of
this Pledge Agreement for any other purpose. If this Pledge
Agreement is executed by more than one party as Pledgor, the
obligations of such persons or entities will be joint and
several.
17. Indemnity. The Pledgor agrees to indemnify each
of the Secured Party, its directors, officers and employees and
each legal entity, if any, who controls the Secured Party
(the "Indemnified Parties") and to hold each Indemnified Party
harmless from and against any and all claims, damages, losses,
liabilities and expenses (including all fees of counsel with whom
any Indemnified Party may consult and all expenses of litigation
or preparation therefor) which any Indemnified Party may incur or
which may be asserted against any Indemnified Party as a result
of the execution of or performance under this Pledge Agreement;
provided, however, that the foregoing indemnity agreement shall
not apply to claims, damages, losses, liabilities and expenses
solely attributable to an Indemnified Party's gross negligence or
willful misconduct. The indemnity agreement contained in this
Section shall survive the termination of this Pledge Agreement.
The Pledgor may participate at its expense in the defense of any
such claim.
18. Governing Laws and Jurisdiction. This Pledge
Agreement has been delivered to and accepted by the Secured Party
and will be deemed to be made in the State where the Secured
Party's office indicated above is located. THIS PLEDGE AGREEMENT
WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PLEDGOR
AND THE SECURED PARTY DETERMINED IN ACCORDANCE WITH THE LAWS OF
THE STATE WHERE THE SECURED PARTY'S OFFICE INDICATED ABOVE IS
LOCATED EXCLUDING ITS CONFLICT OF LAWS RULES. The Pledgor hereby
irrevocably consents to the exclusive jurisdiction of any state
or federal court for the county or judicial district where the
Secured Party's office indicated above is located, and consents
that all service of process be sent by nationally recognized
overnight courier service directed to the Pledgor at the
Pledgor's address set forth herein and service so made will be
deemed to be completed on the business day after deposit with
such courier, provided that nothing contained in this Pledge
Agreement will prevent the Secured Party from bringing any
action, enforcing any award or judgment or exercising any rights
against the Pledgor individually, against any security or against
any property of the Pledgor within any other county, state or
other foreign or domestic jurisdiction. The Pledgor acknowledges
and agrees that the venue provided above is the most convenient
forum for both the Secured Party and the Pledgor. The Pledgor
waives any objection to venue and any objection based on a more
convenient forum in any action insinuated under this Pledge
Agreement.
19. WAIVER OF JURY TRIAL. THE PLEDGOR IRREVOCABLY
WAIVES ANY AND ALL RIGHT THE PLEDGOR MAY HAVE TO A TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS
PLEDGE AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS
PLEDGE AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH
DOCUMENTS. THE PLEDGOR ACKNOWLEDGES THAT THE FOREGOING WAIVER IS
KNOWING AND VOLUNTARY.
The Pledgor acknowledges that it has read and understood all the
provisions of this Pledge Agreement, including the waiver of jury
trial, and has been advised by counsel as necessary or
appropriate.
WITNESS the due execution hereof as a document under seal, as of
the date first written above.
WITNESS/ATTEST: FREEDOM FINANCIAL CORPORATION
(Corporation, Partnership or
other Entity)
/s/ X.X. Xxxxxxxx By:/s/ X.X. Xxxxxxx
Print Name: X.X. Xxxxxxxx Print Name: X.X. Xxxxxxx
Title: Chairman & CEO
______________________________ ______________________________
(Individual) (SEAL)
Print Name: __________________ Print Name:___________________
______________________________ ______________________________
(Individual) (SEAL)
Print Name: __________________ Print Name: __________________
EXHIBIT A TO PLEDGE AGREEMENT
(CERTIFICATED SECURITIES)
The specific assets listed below are pledge as collateral and are
restricted from trading and withdrawals. The Secured Party's
written approval is required prior to any trading or withdrawals
of such assets.
Quantity Description of Securities Certificate Number(s)
200,000 shares Florida Gaming, Inc. FGC2160, FGC2188,
FGC2154
