EXHIBIT 7.14
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT is entered into and effective as of February
24, 1999, by and among: (i) J. XXXXXX XXXXXX, an individual of Jacksonville,
Florida ("Guarantor"`), (ii) XXXXXX FINANCIAL CORPORATION, a Florida corporation
having its principal office in Jacksonville, Florida ("Borrower"), and (iii)
IMAGINE INVESTMENTS, INC., a Delaware corporation having its principal office in
Dallas, Texas ("Lender").
RECITALS:
A. Pursuant to the terms of that certain Loan Agreement of even date
herewith among Borrower, Lender and Guarantor (the "Loan Agreement"), and that
certain Term Promissory Note of even date herewith, executed by Borrower in
favor of Lender in the face principal amount of Six Million Dollars
($6,000,000.00) (the "Note"), as the same may hereafter be amended or otherwise
modified from time to time in writing by the parties thereto, Lender has agreed
to extend a term loan to Borrower in the amount of Six Million Dollars
($6,000,000) (the "Term Loan").
B. Guarantor has personally guaranteed the obligations of Borrower to
Lender pursuant to the Note, the Term Loan and the In-Kind Note as defined in
Section 12 of the Loan Agreement.
C. Guarantor currently owns 100% of the issued and outstanding preferred
capital stock of Borrower and 59.8 % of the issued and outstanding common
capital stock of Borrower.
D. In order to induce Lender to make the Term Loan, without which
inducement Lender would be unwilling to do so, Guarantor has agreed to pledge
all of the shares of the issued and outstanding common and preferred capital
stock of Borrower owned by Guarantor to Lender, to secure the payment of the
Term Loan and the other obligations of Borrower to Lender, including, without
limitation, the In-Kind Note.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows
1. PLEDGE AND DEPOSIT OF SHARES. Guarantor hereby pledges, assigns and
grants a security interest to Lender in 598 shares of the common stock of
Borrower and 336 shares of the preferred stock of Borrower (collectively, the
"Stock"), as represented by Certificate Nos. 2 and 20 with respect to the common
stock and Certificate Nos. 2 and 3 with respect to the preferred stock, now
standing in Guarantor's name and constituting 59.8% of the issued and
outstanding common capital stock of Borrower and 100% of the issued and
outstanding preferred capital stock of Borrower, all as collateral security for
the full and punctual payment and due performance by Borrower and Guarantor of
(i) the Note and Guarantor's guaranty of the Note, and (ii) all other
liabilities, obligations and indebtedness of whatever kind of Borrower and
Guarantor to Lender, whether created directly or acquired by Lender by
assignment or otherwise, whether now existing or hereafter created, arising or
acquired, absolute or contingent, joint or several, due or to become due, and
including, but not limited to, future advances by Lender to Borrower and
Guarantor. All of the foregoing are referred to collectively herein as the
"Secured Obligations."
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2. FURTHER PLEDGE AND DELIVERIES. The certificates or other instruments
evidencing all new shares of capital stock and all other securities, rights,
warrants, options and the like hereafter created in respect of the Stock,
whether by stock split, stock dividend, merger, consolidation or otherwise,
shall be delivered by Guarantor to, and shall be held by, Lender under the terms
and conditions of this Stock Pledge Agreement and subject to the pledge and
security interest herein granted and the term "Stock," as used herein, shall be
deemed to include all such new shares, securities, rights, warrants, options and
the like. At its sole option, Lender may transfer the shares of Stock into its
own name.
3. COVENANTS. During the period the Stock is being held as security
hereunder, Guarantor shall not, without the prior written consent of Lender,
allow Borrower to (i) issue any additional capital stock or other equity
securities of any kind or options, subscription rights, warrants or other
instruments with respect thereto or any other instruments convertible into
shares of its capital stock, or sell or issue any treasury stock, (ii) merge
into or with or consolidate with any other corporation or business or otherwise
participate in any reorganization or sell or lease to others all or
substantially all of its assets, (iii) amend its Articles of Incorporation or
By-Laws in any manner that would have a material adverse effect on Lender's
rights with respect to the Stock, or liquidate or dissolve or take any steps to
effect same, or (iv) effect a recapitalization or alter its capital structure.
4. VOTING RIGHTS; DIVIDENDS, ETC. So long as no Event of Default shall
have occurred, Guarantor shall be entitled to exercise any and all voting and/or
consensual rights and powers relating or pertaining to the Stock or any part
thereof for any purpose not inconsistent with the terms of this Stock Pledge
Agreement. All dividends and distributions, regardless whether in cash, stock,
rights, options or other property, and all stock splits, stock dividends and the
like and the proceeds of all redemptions and liquidations that are made, paid or
declared with respect to the Stock shall be paid directly to Lender, and shall,
at Lender's sole election, either be applied as a payment on the Secured
Obligations or held by Lender as additional security for the Secured Obligations
(and Borrower shall execute all instruments in connection therewith as are
requested by Lender).
5. STATUS OF THE STOCK. Guarantor hereby represents and warrants to
Lender that (a) the Stock is validly issued and outstanding, fully paid and
non-assessable; and (b) Guarantor is the registered and absolute beneficial
owner of 59.8% of the issued and outstanding common capital stock of Borrower
and 100% of the issued and outstanding preferred capital stock of Borrower; (c)
the Stock is free and clear of liens, charges and encumbrances in favor of
persons other than Lender; (d) Guarantor has the full power and authority to
pledge the Stock to Lender pursuant to this Stock Pledge Agreement; and (e)
Borrower is a corporation validly existing under the laws of the State of
Florida. No part of the Stock shall be sold, transferred or further assigned by
Guarantor without the prior written consent of Lender, which consent may be
arbitrarily withheld so long as this Stock Pledge Agreement is in effect.
6. MAINTENANCE OF PRIORITY OF PLEDGE. Guarantor shall be liable for and
shall from time to time pay and discharge all taxes, assessments and
governmental charges imposed upon the Stock by any federal, state or local
authority, the liens of which would or might be held prior to the right of
Lender in and to the Stock or which are imposed on the holders and/or registered
owners of the Stock. Guarantor shall not, at any time while this Stock Pledge
Agreement is in effect, do or suffer any act or thing whereby the rights of
Lender in the Stock would or might be materially impaired or diminished.
Guarantor shall execute and deliver such further documents and take such further
actions as may be required to confirm the rights
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of Lender in and to the Stock or otherwise to effectuate the intention of this
Stock Pledge Agreement.
7. EVENTS OF DEFAULT. Each of the following shall be deemed an "Event of
Default" hereunder:
7.1 Cross Default. The occurrence of any Event of Default under the
Note or any "Security Document," as such term is defined in the Note, or under
any other related instrument or agreement; or
7.2 Default Hereunder. The occurrence of any default of any kind
whatsoever under the terms, covenants and conditions of this Stock Pledge
Agreement; or
7.3 Breach of Covenants. If any covenant, representation or
warranty made in this Stock Pledge Agreement or in any other Security Document
or related instruments or agreements executed by Guarantor or Borrower in
connection with the Term Loan shall prove to be untrue and misleading in any
respect; or
8. REMEDIES UPON DEFAULT. Upon the occurrence of any Event of Default
referred to in Section 7 above, Lender shall have all rights and remedies in and
against the Stock and otherwise of a secured party under the Uniform Commercial
Code as enacted in the Commonwealth of Kentucky and the State of Florida (the
"UCC") and all other applicable laws, and shall also have all of the rights
provided herein in the Note and in all other Security Documents, all of which
rights and remedies shall be cumulative to the fullest extent permitted by law.
In connection with the foregoing, Lender shall have the right:
8.1 Voting Rights. To exercise all voting rights and privileges
whatsoever respect to the Stock, and to that end Guarantor hereby constitutes
Lender as his proxy and attorney-in-fact for all purposes of voting the Stock,
and this appointment shall be deemed coupled with an interest and is and shall
be irrevocable until the Secured Obligations have been fully paid and this Stock
Pledge Agreement terminated, and all persons whatsoever shall be conclusively
entitled to rely upon Lender's verbal or written certification that it is
entitled to vote the Stock hereunder. Guarantor shall execute and deliver to
Lender any and all additional proxies and powers of attorney that Lender may
desire in order to vote more effectively the Stock in its own name. Upon any
Event of Default hereunder, Lender may vote the Stock to remove the directors
and officers of Borrower and to elect new such officers and directors who shall
thereafter manage the affairs of Borrower, operate any of its properties, carry
on any business, and otherwise take any action with respect thereto as they
shall deem necessary and appropriate, and may also liquidate Borrower and its
business, and may authorize the borrowing of money in the name of Borrower and
the pledge of its assets to secure such borrowing.
8.2 Right of Sale. To declare the Note and the other Secured
Obligations immediately due and payable in full, and to sell the Stock in one or
more lots, and from time to time, upon ten (10) business days' prior to written
notice to Guarantor of the time and place of sale (which notice Guarantor hereby
conclusively agrees is commercially reasonable), for cash or upon credit or for
future delivery, Guarantor hereby waiving all rights, if any, of marshaling the
Stock and any other security for the payment of the Note and other Secured
Obligations, and at the option and in the sole discretion of Lender, to either:
(i) Sell the Stock at a public sale or sales, including a sale
at or on any broker's board or stock exchange; or
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(ii) Sell the Stock at a private sale or sales.
Lender may bid for and acquire the Stock or any portion thereof at
any public sale, free from any redemption rights of Guarantor, and in lieu of
paying cash therefor, may make settlement for the selling price of the Stock or
any part thereof by crediting the net selling price of the Stock against the
Note and other Secured Obligations, after deducting all of Lender's costs and
expenses of every kind and nature therefrom, including Lender's attorneys' fees
incurred in connection with realizing upon the Stock and enforcing the Security
Documents and the Note, provided the same is not prohibited by the laws of the
Commonwealth of Kentucky.
From time to time Lender may, but shall not be obligated to, postpone
the time of any proposed sale of any of the Stock which has been the subject of
a notice as provided above, and also, upon ten (10) days' prior written notice
to Guarantor (which notice Guarantor conclusively agrees is commercially
reasonable), may change the time and/or place of such sale.
In the case of any sale by Lender of the Stock or any portion thereof
on credit or for future delivery, which may be elected at the option and in the
sole discretion of Lender, the Stock so sold may, at the sole option of Lender,
either be delivered to the purchaser or retained by Lender until the selling
price is paid by the purchaser, but in either event Lender shall incur no
liability, to Guarantor or otherwise, in case of failure of the purchaser to
take up and pay for the Stock so sold. In case of any such failure, such Stock
may be sold again by Lender in the manner provided in this Section 8.
Guarantor covenants and agrees that, during any period of sale or
liquidation of the Stock by Lender, Guarantor shall not sell any other stock of
Borrower if such sale would restrict or limit Lender's sale of the Stock under
Rule 144 or other Rule of the Securities and Exchange Commission or if such sale
by Guarantor would cause or contribute to a decline in the share price of the
Stock. Guarantor further agrees in the event of any such sale or liquidation by
Lender to execute any and all forms, including, but not limited to, Forms 144
and customary broker's and seller's representation letters, to enable Lender to
effect the sale of the Stock. Guarantor shall further take and shall cause
Borrower to take all necessary actions to remove any restrictive legend
affecting the Stock, and to assist in the effectuation of the sale of the Stock
including, at Guarantor's expense, the supplying of opinions of counsel
customarily required to effect such sales.
8.3 Costs and Expenses. After deducting all of Lender's costs and
expenses of every kind, including, but not limited to, legal fees and
registration (Securities and Exchange Commission and other) fees and expenses,
if any, incurred in connection with the sale of the Stock, Lender shall apply
the residue of the proceeds of any sale or sales of the Stock against the Note
and the other Secured Obligations, in the order of priority elected by Lender.
Lender shall not incur any liability to Guarantor or otherwise as a result of
the sale of the Stock at any private sale or sales, and Guarantor hereby waives
any claim arising by reason of (i) the fact that the price or prices for which
the Stock or any portion thereof is sold at such private sale or sales is less
than the price which would have been obtained at a public sale or sales or is
less than the amount due under the Note and other obligations secured hereby,
even if Lender accepts the first offer received and does not offer the Stock or
any portion thereof to more than one offeree, (ii) any delay by Lender in
selling the Stock following an Event of Default hereunder, even if the price of
the Stock thereafter declines, or (iii) the immediate sale of the
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Stock upon the occurrence of an Event of Default hereunder, even if the price of
the Stock should thereafter increase. Guarantor shall remain liable for any
deficiency remaining due under the Note, this Stock Pledge Agreement, any of the
other Security Documents or any related documents or instruments.
9. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given (i) upon being
delivered personally (or by confirmed telefax or other electronic delivery
method; or (ii) four (4) days after being mailed by certified mail, return
receipt requested, postage prepaid, or (iii) one (1) day after being sent by
Federal Express or other reputable overnight delivery service providing delivery
confirmation, for next day delivery, in each case to the parties at the
following address (or at such other address, for a party as shall be specified
by like notice):
If to Guarantor: J. Xxxxxx Xxxxxx
Xxxxxx Financial Corporation
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
With a copy to: Holland &. Knight
One Independent Drive, Suite 2000
Post Office Box 1559
Jacksonville, Florida 32201-1559
(32202 for street address)
Attention: Xxxxxxx Xxxxxx, Esq.
If to Borrower: Xxxxxx Financial Corporation
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: J. Xxxxxx Xxxxxx
With a copy to: Xxxxxxx & Xxxxxx
Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Post Office Box 1559
Jacksonville, Florida 32201-1559
(32202 for street address)
Attention: Xxxxxxx Xxxxxx, Esq.
If to Lender, to: Imagine Investments, Inc.
0000 Xx. Xxxxxxx Xxxxxxxxxx Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx, General Counsel
With a copy to: Xxxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxxx Xxxx & XxXxxxxx PLLC
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
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10. MISCELLANEOUS.
10.1 Future Advances. This Stock Pledge Agreement also secures all
additional loans and/or future advances that may be made hereafter at any time
by Lender to Borrower and/or Guarantor.
10.2 Governing Law. The laws of the Commonwealth of Kentucky shall
govern the construction of this Stock Pledge Agreement and the rights, remedies
and duties of the parties hereunder.
10.3 Successors and Assigns. This Stock Pledge Agreement shall bind
Guarantor and his successors and assigns, and shall inure to the benefit of
Lender and its successors and assigns.
10.4 Time of Essence. Time shall be of the essence in the
performance of Guarantor's obligations hereunder.
10.5 Captions. The several captions, headings, sections and
subsections of this Stock Pledge Agreement are inserted for convenience only and
shall be ignored in interpreting the provisions of this Stock Pledge Agreement.
10.6 Modifications. This Stock Pledge Agreement may be modified or
amended only by written agreement executed by all of the parties hereto.
11. TERMINATION. This Stock Pledge Agreement shall terminate when the
Note and all the other Secured Obligations have been paid in full, at which time
Lender shall reassign and redeliver, without recourse upon or warranty by Lender
and at the expense of Guarantor (or cause to be so reassigned and redelivered to
Guarantor or to such person or persons as Guarantor shall designate), against
receipt, such of the Stock (if any) as shall not have been sold or otherwise
applied by Lender pursuant to the terms hereof and shall still be held by it
hereunder, together with appropriate instruments of reassignment and release.
IN WITNESS WHEREOF, the parties have entered into this Stock Pledge
Agreement as of the date first written above.
illegible /s/ J. Xxxxxx Xxxxxx
_________________________ ____________________________________
Witness J. XXXXXX XXXXXX
("Guarantor")
XXXXXX FINANCIAL CORPORATION
Xxxxxxxxx X. Xxxx /s/ J. Xxxxxx Xxxxxx
_________________________ By:_________________________________
Witness
President
Title:______________________________
("Borrower")
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IMAGINE INVESTMENTS, INC.
illegible By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------- ---------------------------------
Witness Title: Vice President
------------------------------
("Lender")
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