EXHIBIT 10.51
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT, dated as of September 12, 2000, made by and
between R. ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇, an individual whose place of business is ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Pledgor"), and ▇▇▇▇▇▇
International, Inc., a Maryland corporation, (the "Pledgee" or the "Company").
W I T N E S S E T H:
WHEREAS, the Pledgor is the record and beneficial owner of 12,500
shares of the issued and outstanding shares of common stock, $.001 par value, of
the Company (the "Common Stock"), acquired in connection with the Pledgor's
exercise of a certain stock option granted by the Company to the Pledgor dated
September 19, 1990, along with 22,309 additional shares of Common Stock
(collectively, to the extent required to secure the Note (as defined below), the
"Pledged Shares");
WHEREAS, the Pledgor has agreed to secure, to the extent hereinafter
set forth, the payment in full and the performance of the obligations of the
Pledgor to the Pledgee under a non-recourse promissory note, dated as of the
date hereof, in the amount of $36,700 (such promissory note as it may hereafter
be amended or otherwise modified from time to time, the "Note"); and the
capitalized terms used herein, and not otherwise defined herein, are used with
the meanings ascribed to them in the Note); and
WHEREAS, the Pledgor hereby pledges and grants a lien and security
interest to Pledgee in the Pledged Shares to secure the Pledgor's obligations
under the Note.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Pledgee to make the loan under the Note, the Pledgor hereby agrees as
follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the Pledgee, and
grants to the Pledgee a security interest in the Pledged Shares and certificates
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares, and all proceeds
thereof, additions thereto and changes therein (the "Pledged Collateral").
SECTION 2. Security for Obligations; Non-Recourse Obligations. (a) This
Agreement secures the payment of all liabilities, obligations and indebtedness
of any and every kind and nature heretofore, now or hereafter owing, arising,
due or payable from the Pledgor to the Pledgee pursuant to the Note, however
evidenced, created, incurred, acquired or owing, whether primary or secondary,
direct or indirect, joint or several, contingent or fixed, or otherwise,
including without limitation, obligations of performance, and whether arising
under any other agreements, documents or instruments entered into in connection
with the Note, now or hereafter given by the Pledgor to the Pledgee and whether
arising by book entry, agreement or operation of law and whether or not
evidenced by promissory notes or other evidences of indebtedness (all such
obligations of the Pledgor being the "Obligations").
(b) It is expressly understood and agreed that it is the intention of
the parties that the Obligations of the Pledgor under the Note are non-recourse
obligations of the Pledgor and that the Pledgee's right to recover against the
Pledgor hereunder in respect of such Obligations shall be limited solely to the
Pledged Collateral.
SECTION 3. Delivery and Release of Pledged Collateral. (a) All
certificates or instruments representing or evidencing the Pledged Collateral
shall be delivered to and held by or on behalf of the Pledgee pursuant hereto
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Pledgee. The Pledgee shall hold the Pledged
Collateral in the form in which it is delivered to the Pledgee unless and until
the occurrence and continuation of an Event of Default under the Note (unless
such Event of Default is waived by the Pledgee) or as otherwise provided in
Section 3(b) below. Upon the occurrence and continuance of an Event of Default
under the Note, the Pledgee shall have the right, at any time in its discretion
and without notice to the Pledgor, to transfer to or to register in the name of
the Pledgee or any of its nominees any or all of the Pledged Collateral, subject
only to the revocable rights specified in Section 6(a) below. In addition, the
Pledgee shall have the right at any time to exchange certificates or instruments
representing or evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations.
(b) The number of shares of Common Stock pledged hereunder shall be no
less than the difference between (i) the amount of the Note from time to time
due and owing and (ii) the fair market value of other collateral held by the
Pledgee hereunder, with such difference divided by the then fair market value of
the Common Stock. For purposes of this paragraph 3(b), "fair market value" of
the Common Stock shall mean the price of the Common Stock as reported on NASDAQ,
provided, however, that if rules and regulations of the Federal Reserve Board
require a different valuation of the Common Stock, such valuation shall be given
full force and effect. The Pledgor may substitute additional collateral in lieu
of the Pledged Shares, provided, however, that the fair market value of such
additional collateral, plus the fair market value of the Pledged Shares, shall
at all times exceed the amount of the Note from time to time due and owing
hereunder.
SECTION 4. Representations and Warranties. The Pledgor represents and
warrants as follows:
(a) The Pledgor is the legal and beneficial owner of the Pledged
Collateral free and clear of any lien, adverse claim, security interest, option
or other charge or encumbrance, except for the security interest created by this
Agreement.
(b) The pledge of the Pledge Collateral pursuant to this Agreement
creates a valid and perfected first priority security interest in the Pledged
Collateral, securing the payment of the Obligations.
(c) Neither the execution or delivery of this Agreement, nor the
consummation of the transaction contemplated hereby, nor the compliance with or
performance of the terms and conditions of this Agreement by the Pledgor is
prevented by, limited by, 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, trust agreement, stockholder agreement, or other agreement
or instrument to which the Pledgor is a party or by which he 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, subject to applicable state and
federal securities laws.
(d) This Agreement constitutes the legal, valid and binding obligation
of the Pledgor, enforceable in accordance with its terms.
(e) There are no actions, suits or proceedings (whether or not
purportedly on behalf or the Pledgor) pending or, to the best knowledge of the
Pledgor, threatened affecting the Pledgor that involve the Pledged Collateral.
(f) All consents or approvals, if any, required as a condition
precedent to or in connection with the due and valid execution, delivery and
performance by the Pledgor of this Agreement have been obtained, subject to
applicable state and federal securities laws.
SECTION 5. Further Assurances. The Pledgor agrees that at any time and
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Pledgee may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Pledgee to exercise and enforce
its rights and remedies hereunder, subject to applicable state and federal
securities laws, with respect to any Pledged Collateral.
SECTION 6. Voting Rights; Dividends, Etc. (a) So long as no Event of
Default under the Notes shall have occurred and be continuing:
(i) The Pledgor 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 Agreement or the
Notes.
(ii) The Pledgor shall be entitled to receive and retain any and
all dividends and interest paid, in respect of the Pledged Collateral; provided,
however, that any and all:
(A) dividends and interest paid or payable other than in cash
in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Pledged Collateral
(whether resulting from a subdivision, combination or reclassification of the
outstanding capital stock of the Company, or any merger, consolidation,
acquisition or other exchange of assets or securities to which the Company may
be a party, or any conversion, call or redemption, or otherwise);
(B) dividends and other distributions paid or payable in cash
in respect of any Pledged Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in-surplus; and
(C) cash paid, payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Pledged Collateral,
shall be, at the option and request of the Pledge, forthwith
delivered to the Pledgee to hold as Pledged Collateral and shall, if received by
the Pledgor, be received in trust for the benefit of the Pledgee, be segregated
from the other property or funds of the Pledgor, and be forthwith delivered to
the Pledgee as Pledged Collateral in the same form as so received (with any
necessary endorsement).
(iii) The Pledgee shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other instruments as
the Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights which he is entitled to exercise pursuant
to paragraph (i) above and to receive the dividends or interest payments which
he is authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default under the Notes, and at the election of Pledgee:
(i) All rights of the Pledgor to exercise the voting and other
consensual rights which he would otherwise be entitled to exercise pursuant to
Section 6(a)(i) and to receive the dividends and interest payments which he
would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii)
shall cease for the period subsequent to the Event of Default, and all such
rights shall thereupon become vested in the Pledgee who shall thereupon have the
sole right to exercise such voting and other consensual rights and to receive
and hold as Pledged Collateral such dividends and interest payments.
(ii) All dividends and interest payments which are received by
the Pledgor contrary to the provisions of paragraph (i) of this Section 6(b)
shall be received in trust for the benefit of the Pledgee, shall be segregated
from other funds of the Pledgor and shall be forthwith paid over to the Pledgee
and Pledged Collateral in the same form as so received (with any necessary
endorsement).
(c) In the even that during the term of this Agreement subscription
warrants or other rights or options shall be issued in connection with the
Pledged Collateral, all such stock warrants, rights and options shall forthwith
be assigned by the Pledgor to the Pledgee and said stock warrants, rights and
options shall be, and, to the extent exercised by Pledgor, all new stock issued
pursuant thereto shall be pledged by Pledgor to Pledgee to be held as, and shall
be deemed to be part of, the "Pledged Collateral" under the terms of this
Agreement in the same manner as the shares of stock originally pledged
hereunder.
SECTION 7. Transfers and other Liens; Additional Shares. The Pledgor
agrees that he will not (i) sell or otherwise dispose of, or grant any option
with respect to, any of the Pledged Collateral, or (ii) create or permit to
exist any lien, security interest, or other charge or encumbrance upon or with
respect to any of the Pledged Collateral, except for the security interest under
this Agreement.
SECTION 8. Litigation Respecting Pledged Shares. In the event any
action, suit or other proceeding at law, in equity, in arbitration or before any
other authority involving or affecting the Pledged Collateral becomes known to
or is contemplated by the Pledgor, the Pledgor shall give the Pledgee immediate
notice thereof and if the Pledgor is contemplating such action, suit or other
proceeding, the Pledgor shall receive the written consent of the Pledgee prior
to commencing any such action, suit or other proceeding.
SECTION 9. Pledgee Appointed Attorney-in-Fact. (a) If an Event of
Default shall occur and be continuing under the Notes (unless such Event of
Default is waived by the Pledgee), Pledgor hereby appoints the Pledgee (and any
officer or agent of the Pledgee with full power of substitution and revocation)
the Pledgor's true and lawful attorney-in-fact, with full authority in the place
and stead of the Pledgor and in the name of the Pledgor or otherwise, from time
to time in the Pledgee's discretion to take any action and to execute any
instrument which the Pledgee may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, (i) to receive,
endorse and collect all instruments made payable to the Pledgor representing any
dividend, interest payment or other distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same; and (ii)
to transfer the Pledged Collateral on the books of the Company, in whole or in
part, to the name of the Pledgee or such other person or persons as the Pledgee
may designate; take possession of an endorse any one or more checks, drafts,
bills of exchange, money orders or any other documents received on account of
the Pledged Collateral; collect, ▇▇▇ for and give acquittances for moneys due on
account of the foregoing; withdraw any claims, suits, or proceedings pertaining
to or arising out of the foregoing; execute and record or file on behalf of the
Pledgor any evidence of a security interest contemplated by this Agreement or
any refiling, continuation or extension thereof; take any other action
contemplated by this Agreement; and sign, execute, acknowledge, swear to,
verify, deliver, file, record and publish any one or more of the foregoing.
(b) The powers of attorney which shall be granted pursuant to Section
9(a) and all authority thereby conferred shall be granted and conferred solely
to protect the Pledgee's interests in the Pledged Collateral and shall not
impose any duty upon the attorney-in-fact to exercise such powers. Such powers
of attorney shall be irrevocable prior to the performance in full of the
Obligations and shall not be terminated prior thereto or affected by any act of
the Pledgor or other person or by operation of law, including, but not limited
to, the dissolution, death, disability or incompetency of any person, the
termination of any trust, or the occurrence of any other event, and if the
Pledgor or any other person should be dissolved or die or become disabled or
incompetent or any other event should occur before the performance in full of
the Obligations and termination of this Agreement, such attorney-in-fact shall
nevertheless be fully authorized to act under such powers of attorney as if such
dissolution, death, disability or incompetency or other event had not occurred
and regardless of notice thereof.
(c) Each person who shall be a transferee of the beneficial ownership
of the Pledged Collateral, by the acceptance of such a transfer, shall be deemed
to have irrevocably appointed the Pledgee, with full power of substitution and
revocation, such person's true and lawful attorney-in-fact in such person's name
and otherwise to do any and all acts permitted to, and to exercise any and all
powers herein conferred upon, such attorney-in-fact.
SECTION 10. Reasonable Care. The Pledgee shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Pledgee accords its own property, it being
understood that the Pledgee shall not have any responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral, whether
or not the Pledgee has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Pledged Collateral.
SECTION 11. Remedies Upon Event of Default. (a) Subject to Section 2(b)
hereof, if any Event of Default under the Note shall have occurred and be
continuing (unless such Event of Default is waived by the Pledgee), for the
period subsequent to the Event of Default:
(i) The Pledgee may receive and retain all payments of any kind
with respect to the Pledged Collateral and may notify the obligors or other
parties, if any, interested in any items of Pledged Collateral of the interest
of the Pledgee therein and of any action proposed to be taken with respect
thereto, and inform any of those parties that all payments otherwise payable to
the Pledgor with respect thereto shall be made to the Pledgee until all amounts
due under the Note have been paid in full;
(ii) The 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 on
default under the Uniform Commercial Code (the "Code") in effect in the State of
New Jersey at that time, and the 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 any of the
Pledgee's offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Pledgee may deem commercially reasonable. The
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to the Pledgor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Pledgee shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given. The Pledgee
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned;
(iii) Any cash held by the Pledgee as Pledged Collateral and all
cash proceeds received by the 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 the Pledgee, be held by the Pledgee as collateral for,
and/or then or at any time thereafter applied in whole or in part by the Pledgee
against, all or any part of the Obligations in such order as the Pledgee shall
elect. Any surplus of such cash or cash proceeds held by the Pledgee remaining
after payment in full of all the Obligations shall be paid over to the Pledgor
or to whomsoever maybe lawfully entitled to receive such surplus; and
(iv) The Pledgee may otherwise use or deal from time to time with
the Pledged Collateral, in whole or in part, in all respects as if the Pledgee
were the outright owner thereof.
(b) Except as set forth in Section 11(a)(iii), the Pledgee shall have
the sole right to determine the order in which Obligations shall be deemed
discharged by the application of the Pledged Collateral or any other property or
money held hereunder or any amount realized thereon. Any requirement of
reasonable notice imposed by law shall be deemed met if such notice is in
writing and is mailed, telegraphed or hand delivered to the Pledgor at least
three days prior to the sale, disposition or other event giving rise to such
notice requirement.
(c) The Pledgee shall collect the cash proceeds received from any sale
or other disposition or from any other source contemplated by subsection (a)
above and shall apply the full proceeds in accordance with the provisions of
this Agreement.
(d) Notwithstanding the foregoing, none of the provisions of this
Section 11 shall confer on the Pledgee any rights or privileges that are not
permissible under applicable law. The Pledgee may effect the provisions of this
Section 11 only in compliance with all applicable federal and state securities
laws.
(e) In connection with the provisions of this Agreement, the Pledgor
from time to time shall promptly execute and deliver, or cause to be executed
and delivered, to the Pledgee such documents and instruments, shall join in such
notices and shall take, or cause to be taken, such other lawful actions as the
Pledgee shall deem reasonably necessary or desirable to enable it to exercise
any of the rights with respect to the Pledged Collateral granted to it pursuant
to this Agreement.
SECTION 12. Waivers and Amendments, Etc. The rights and remedies given
hereby are in addition to all others however arising, but it is not intended
that any right or remedy be exercised in any jurisdiction in which such exercise
would be prohibited by law. No action, failure to act or knowledge of the
Pledgee shall be deemed to constitute a waiver of any power, right or remedy
hereunder, nor shall any single or partial exercise thereof preclude any further
exercise thereof or the exercise of any other power, right or remedy. Any waiver
or consent respecting any covenant, representation, warranty or other term or
provision of this Agreement shall be effective only in the specified instance
and for the specific purpose for which given and shall not be deemed, regardless
of frequency given, to be a further or continuing waiver or consent. The failure
or delay of the Pledgee at any time or times to require performance of, or to
exercise its rights with respect to, any representation, warranty, covenant or
other term or provision of this Agreement in no manner shall affect its right at
a later time to enforce any such provision. No notice to or demand on a party in
any case shall entitle such party to any other or further notice or demand in
the same, similar, or other circumstances. Any right or power of the Pledgee
hereunder respecting the Pledged Collateral and any other property or money held
hereunder may at the option of the Pledgee be exercised as to all or any part of
the same and the term "Pledged Collateral" wherever used herein, unless the
context clearly requires otherwise, shall be deemed to mean (and shall be read
as) the "Pledged Collateral and any other property or money held hereunder or
any part thereof". This Agreement shall not be amended nor shall any right
hereunder be deemed waived except by a written agreement expressly setting forth
the amendment or waiver and signed by the party against whom or which such
amendment or waiver is sought to be charged.
SECTION 13. Notices. All noticed hereunder shall be given and deemed
received as set forth in the Note.
SECTION 14. Continuing Security Interest and Reinstatement. (a) This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon the Pledgor, his heirs, successors and assigns,
and (ii) inure to the benefit of the Pledgee and its successors, transferees and
assigns. Upon the payment in full or performance of the Obligations, the Pledgor
shall be entitled to the return, upon his request and at his expense, of such of
the Pledged Collateral as shall not have been released, sold or otherwise
applied pursuant to the terms of the Agreement.
(b) If at any time after payment in full by the Pledgor of all
Obligations and termination of the pledge granted in this Agreement, any
payments on Obligations theretofore made by the Pledgor must be disgorged by the
Pledgee for any reason whatsoever, this Agreement and the pledge granted
hereunder shall be reinstated as to all disgorged payments as though such
payments had not been made, and the Pledgor shall sign and deliver to Pledgee
all documents and things necessary to reperfect the terminated pledge.
SECTION 15. Severability. In the event that any provision of this
Agreement shall be determined to be superseded, invalid or otherwise
unenforceable pursuant to applicable law, such determination shall not affect
the validity of the remaining provisions of this Agreement, and the remaining
provisions of this Agreement shall be enforced as if the invalid provision were
deleted.
SECTION 16. Survival of Representations, Etc. All representations,
warranties, covenants and other agreements made herein shall survive the
execution and delivery of this Agreement and shall continue in full force and
effect until all amounts due under the Note have been paid in full. This
Agreement shall remain and continue in full force and effect without regard to
any modification, execution, renewal, amendment or waiver of any provision of
the Note.
SECTION 17. Termination and Return of Pledged Stock. This Agreement
shall continue in full force and effect until all of the Obligations shall have
been paid and satisfied or until the release, discharge or termination of the
Note, whichever occurs last. Upon the termination of this Agreement, the Pledgee
shall cause to be transferred to Pledgor all of the Pledged Collateral and any
money, property and rights received by Pledgor pursuant thereto, to the extent
Pledgee has not released, taken, sold or otherwise realized upon the same
pursuant to its rights and obligations hereunder.
SECTION 18. Transfer and Assignment. The Pledgee may transfer the
Pledged Collateral and any other property or money held hereunder to any
transferee of the obligations or any part thereof. The transferee shall
thereupon succeed to all of the Pledgee's rights hereunder with respect to the
Pledged Collateral so transferred. Thereafter, the Pledgee shall have no
obligation to Pledgor with respect to the Pledged Collateral so transferred. The
Pledgee shall, however, retain all of its rights and powers with respect to any
part of the Pledged Collateral not transferred. Every agent or nominee of the
Pledgee shall have the benefit of this agreement as if named herein and may
exercise all of the rights and powers given to the Pledgee hereunder.
SECTION 19. Entire Agreement. This Agreement and the Secured
Non-Recourse Promissory Note contain the entire agreement of the parties and
supersedes all other agreements, understandings representations, oral or
otherwise, between the parties with respect to the matters contained herein.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, assigns, heirs, administrators,
fiduciaries, next of kin and executors. Section headings used herein are for
convenience only and shall not affect the meaning or construction of any of the
provisions hereof. This Agreement may be executed in any number of counterparts
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 20. Governing Law; Terms. This Agreement shall be governed by
and construed in accordance with the substantive laws of the State of New Jersey
without giving effect to its conflict of laws provisions. Unless otherwise
defined herein or in the Notes, terms defined in Article 9 of the Uniform
Commercial Code in the State of New Jersey are used herein as therein defined.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
/s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇
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R. ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ INTERNATIONAL, INC.
By:
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