STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT made and entered into by and between
XXXXXX XXXX (hereinafter referred to as "PLEDGOR"), to MEDLEY CREDIT ACCEPTANCE
CORP. (hereinafter referred to as "PLEDGEE"). (Collectively throughout this
Agreement PLEDGOR and PLEDGEE may be referred to as "Parties" for convenience.
W I T N E S S E T H:
WHEREAS, the PLEDGOR has guaranteed the indebtedness of METRO DADE
COMMUNITY MENTAL HEALTH CENTER, INC. ("DEBTOR") to PLEDGEE in the amount of
$110,000.00, a copy of said Guarantee being attached as Exhibit "A", and
WHEREAS, said debt is evidenced by a Promissory Note, a copy of which
is attached hereto and made a part hereof as Exhibit"B", and
WHEREAS, the debt in part is to be secured by a Pledge and Assignment
of the PLEDGOR's stock in Debtor, (hereinafter referred to as "Corporation"),
which stock will constitute on the date hereof all of the authorized, issued
and outstanding shares in said corporation, and
WHEREAS, the PLEDGOR has a financial interest in the DEBTOR, and
WHEREAS, the Parties desire to document their understanding concerning
the pledging of the security described in this Agreement to a written
instrument.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein the Parties agree as follows:
1. Recitals: The above and foregoing recitals are true and correct and
are incorporated herein.
2. PLEDGOR's Grant of Security Interest in Pledged Stock:
A. For value received and to induce PLEDGEE to lend to
DEBTOR, the sum of ONE HUNDRED TEN THOUSAND DOLLARS ($110,000.00), the PLEDGOR
hereby pledges to the PLEDGEE a first priority security interest in all of the
authorized, issued and outstanding common stock of DEBTOR (hereinafter referred
to as "PLEDGED STOCK"), consisting of 100 shares of common stock having a par
value of $0.00 per share; together with all proceeds and dividends, if any,
produced thereby. Al1 Certificates evidencing such PLEDGED STOCK and stock
powers shall be executed by the PLEDGOR in blank and held by Xxxxxxx X.
Xxxxxxx, Esq., in escrow, until all of the obligations of the PLEDGOR to the
PLEDGEE have been paid or performed in full.
3. Representations, Warranties and Covenants Regarding Pledge: The
PLEDGOR represents, warrants, covenants and agrees and so long as this
Agreement is in effect shall be deemed continuously to represent, warrant,
covenant and agree that:
A. The PLEDGOR is the owner or shall be at the time of
closing, the owner of the PLEDGED STOCK, free and clear of all liens, except
the lien created by this Agreement.
B. The PLEDGOR is authorized to enter into this Agreement and
has the full and lawful power and authority to pledge the PLEDGED STOCK as
provided for herein.
C. This Agreement and the pledge of the PLEDGED STOCK do not
violate or contravene any applicable federal or state law or regulation
applicable to the PLEDGOR or the corporation or any agreement or instrument
binding on the PLEDGOR, the PLEDGED STOCK or the corporation.
D. The execution and delivery and the performance of this
Agreement shall not be in contravention of any indenture, agreement or
undertaking to which the corporation or the PLEDGOR may be a party
E. As long as any amount remains unpaid on the obligation
secured by this pledge, the corporation will not enter into or execute any
security agreement or financing statement covering any of the assets of the
corporation without the specific prior written consent and approval of the
PLEDGEE.
F. The PLEDGOR agrees to procure, pay for, affix to any and
all documents and cancel any documentary tax stamps required by, and in
accordance with, applicable law and the PLEDGOR hereby indemnifies and holds
the PLEDGEE harmless against any liability in respect of such documentary stamp
taxes.
G. Except as specifically provided for herein, the assets of
the corporation as of the date of closing shall remain in the corporation's
possession and control. All assets consisting of real and or personal property
owned by the corporation shall be kept insured by the corporation and the
PLEDGEE shall be named on all of said insurance policies as a party insured
thereby in the event of loss. Copies of said policies shall be furnished to the
PLEDGEE prior to or at the closing.
H. Except as otherwise specifically provided for herein, the
corporation will not sell or offer to sell, lease, assign, convey, transfer or
otherwise encumber or dispose of any assets owned by the corporation or any
interest therein which would reduce or decrease the net worth of the
corporation.
4. Voting Rights: For so long as the PLEDGOR is not in default under
the terms and conditions of the Promissory Note secured by this instrument and
the other instruments of
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security, the PLEDGOR shall be entitled to vote the PLEDGED STOCK for the
purpose of conducting the business of the corporation. However, in no event
will the PLEDGED STOCK be voted in favor of or be counted for the purpose of a
quorum in a meeting held to consider, the merger, consolidation, sale of all or
substantially all of the assets of, the dissolution, liquidation,
reorganization, reclassification or recapitalization of the corporation or an
amendment to its Articles of Incorporation or By Laws without the written
consent of the PLEDGEE, which consent shall not be unreasonably withheld.
From and after the occurrence of a default, the PLEDGEE shall be
entitled but not have the obligation to vote the PLEDGED STOCK in respect of
such makers and for such purposes as the PLEDGEE shall deem appropriate in its
sole discretion and the PLEDGOR shall have not right to vote the PLEDGED STOCK
or take any action with respect thereto.
5. General Covenants: For so long as any of the obligations of the
PLEDGOR to the PLEDGEE remain outstanding, whether under a note or otherwise,
the corporation shall, unless the PLEDGEE shall otherwise consent in writing:
A. Pay and discharge all taxes, assessments and governmental
charges or levies imposed upon the corporation or upon any of its income or
profits, or upon any properties belonging to said corporation, prior to the
date on which penalties attached thereto, and all lawful claims which, if
unpaid, might become a lien or charge upon any properties of the PLEDGOR.
B. Maintain insurance with responsible and reputable
insurance companies in such amounts and covering such risks as is acceptable to
PLEDGEE.
C. Preserve and maintain the corporate existence, rights
franchises and privileges of the corporation in the State of Florida, and
qualify and remain qualified as a foreign corporation in each jurisdiction in
which such qualification is necessary or desirable in view of the business of
the corporation.
D. Comply with the requirements of all applicable laws,
rules, regulations and order of any governmental authority, noncompliance with
which could adversely affect the business or credit of the corporation.
E. Keep adequate records and books of account, in which
complete entries will be made in accordance with generally accepted accounting
principles consistently applied, reflecting all financial transactions of the
corporation.
F. Maintain and preserve all of the assets and property of
the corporation necessary or useful in the proper conduct of its business in
good working order and condition, ordinary wear and tear excepted, to the
extent that the failure to do so would adversely affect the financial condition
or results of operation of the corporation.
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G. The corporation will promptly comply with all present and
future laws, ordinances, rules and regulations of any governmental authority
affecting the business of the corporation of the assets owned by the
corporation.
6. Negative Covenants For so long as the obligations of the PLEDGOR to
the PLEDGEE shall remain outstanding, the corporation shall not, without the
prior written consent of the PLEDGEE:
A. Create, incur, assume or suffer to exist any lien,
mortgage, pledge, interest, or encumbrance of any nature upon or with respect
to any of the assets now owned or hereafter acquired by the corporation or
assign or otherwise convey any right to receive income, which would reduce or
decrease the net worth of the corporation.
B. The corporation will not merge or consolidate with, sell,
assign, lease or otherwise dispose of its assets without the express written
consent of the PLEDGEE
C. The corporation shall not declare or pay any dividends,
purchase, redeem, retire or otherwise acquire for value any of its capital
stock now or hereafter outstanding, return any capital to its stockholders, or
make any distribution of assets to its stockholders.
D. Issue any additional capital stock or any securities
convertible into or exchangeable for capital stock.
E. The corporation will not allow its Articles of
Incorporation to be amended in any respect.
F. Cease actively to transact business, or make, or permit
the making of, any . material change in the nature of the business now being
conducted by the corporation.
G. Enter into any agreement containing any provision which
would be violated or breached by the performance of its obligations hereunder
or under any instrument or document delivered or to be delivered hereunder.
7. Reporting Covenants: For so long as any of the obligations of the
PLEDGOR shall remain outstanding to the PLEDGEE, the PLEDGOR and the
corporation shall furnish the PLEDGEE the following:
A. As soon as available and in any event within thirty (30)
days after December 31st of each year: copies of all U.S. Income Tax Returns
filed by the corporation in each year subsequent to the execution of this
Pledge Agreement.
B. Such other information respecting the assets or the
condition or operations, financial or otherwise. of the corporation as the
PLEDGEE may from time to time request.
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8. Further Assurances: The PLEDGOR agrees to take such actions and to
execute such stock powers and such other or different writings as the PLEDGEE
may request, to further protect, confirm and assure the PLEDGEE's first
priority security interest in the PLEDGED STOCK and to assets the PLEDGEE's
realization thereon.
9. Default: The PLEDGOR shall be in default of this Agreement upon the
occurrence of any one or more of the following events:
A. The failure or refusal of the Corporation or the PLEDGOR
to pay the principal or interest due on the Promissory Note secured by this
Agreement or any part thereof, within ten (10) days of when the same becomes
due in accordance with the term hereof or the Promissory Note.
B. The failure or refusal of the PLEDGOR or the corporation
under any of the loan documents to punctually and properly perform, observe,
and comply with any covenant, agreement or condition contained in any of the
loan documents (other than the covenant to pay the principal and interest on
the Promissory Note) and such failure or refusal continues for a period of
fifteen (15) days after the PLEDGOR has received notice thereof from the
PLEDGEE.
C. The discovery by the PLEDGEE that any statement,
representation, or warranty in any of the loan documents is false, misleading,
or erroneous in any material respect.
D. The failure of the PLEDGEE to have granted hereunder a
first and prior lien and security interest against the PLEDGED STOCK, subject
to no other liens or security interests.
E. The failure of the PLEDGOR or corporation to make any
payment due on any indebtedness it may owe PLEDGEE and any default in any one
indebtedness will create a default under the terms of this Agreement.
F. The failure of the PLEDGOR or the corporation to satisfy
any final judgment or order entered against them either individually or
jointly.
G. In the event either the PLEDGOR or the corporation shall
become insolvent within the meaning of the Bankruptcy Act, as amended, make an
assignment for the benefit of creditors or make a proposal to its creditors
under any debtor relief law, admit in writing its inability to pay or otherwise
fail to pay its debts generally as they become due, voluntarily seek, consent
to, or acquiesce in the benefit or benefits of any debtor relief law, become a
debtor party to any proceeding provided for by any debt relief law that could
suspend or otherwise affect any of the rights of the PLEDGEE granted herein any
other loan document,
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consent to the appointment of a receiver, trustee, liquidator, conservator, or
similar person for all or any substantial part of their assets.
H. The PLEDGOR or the corporation shall involuntarily have an
order, judgment or decree entered against it pursuant to any debtor relief law
that could suspend or otherwise affect any of the rights granted to the PLEDGEE
herein or in any other loan document, and such order, judgment or decree is not
permanently stayed or reversed within sixty (60) days after the entry thereof;
I. The PLEDGOR or the corporation shall have a petition filed
against it seeking the benefit or benefits provided for by any debtor relief
law that could suspend or otherwise affect any of the rights granted to the
PLEDGEE herein or in any other loan document, and such petition is not
discharged within thirty (30) days after the filing thereof,
J. Any default under the Promissory Note given to MEDLEY
CREDIT ACCEPTANCE CORP.
K. The Corporation shall cease or stop production of the
movie.
10. Rights and Remedies of PLEDGEE Upon Default: In the event a
default has occurred by the PLEDGOR, and said default shall continue for more
than seven (7) days, the PLEDGEE shall have the following rights and remedies:
A. The PLEDGEE's rights and remedies with respect to the
PLEDGED STOCK shall be those of a secured party under the Uniform Commercial
Code as in effect in the State of Florida and under any other applicable law,
as the same may from time to time be in effect, in addition to those rights
granted herein and in any other agreement now or hereafter in effect between
the PLEDGOR and the PLEDGEE.
B. Without in any way requiring notice to be given in the
following time and manner, the PLEDGOR agrees that any notice by PLEDGEE of
sale, disposition or other intended auction hereunder in connection therewith,
whether required by the Uniform Commercial Code as in effect in the State of
Florida or otherwise, shall constitute reasonable notice to the PLEDGOR if such
notice is mailed by regular or certified mail, postage prepaid, at least five
(5) calendar days prior to such action, to the PLEDGOR's address referred to in
this Agreement or to any other address which the PLEDGOR has specified in
writing to the PLEDGEE as the address to which notice hereunder shall be given
to the PLEDGOR.
C. Upon notice by the PLEDGEE to the PLEDGOR, the PLEDGEE.
its assigns or their nominees shall have the sole and exclusive right to
exercise all voting and consensual powers pertaining to the PLEDGED STOCK or
any part thereof and may exercise such powers in such manner as they may elect.
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D. To institute legal proceedings with respect to the
collection of the debt and to employ agents and attorneys at the sole expense
of the PLEDGOR.
E. To cause the collateral to be transferee to the Secured
Parties name, provided nothing set forth herein shall serve to relieve the
PLEDGEE from liability.
11. Application of Proceeds: In the Event the PLEDGEE sells or
otherwise disposes of the PLEDGED STOCK in the course of exercising the
remedies provided for in this Agreement in the event of default, any amounts
held, realized or received by PLEDGEE pursuant to the provisions hereof,
including the proceeds of sale of any of the PLEDGED STOCK or any part thereof,
shall be applied by the PLEDGEE first towards the payment of any cost and
expenses incurred by the PLEDGEE in enforcing this Agreement or the Promissory
Note, in realizing on or protecting any PLEDGED STOCK and in enforcing or
collecting any obligation or any guarantee thereof, including, without
limitation, attorneys' fees and expenses incurred by the PLEDGEE (all of which
costs and expenses are secured by the PLEDGED STOCK), all of which cost and
expenses the PLEDGOR agrees to pay and then the interest and principal on the
Note in the method and manner called for by said Note. Any amounts and any
PLEDGED STOCK remaining after such application and after payment to PLEDGEE of
all of the obligations in full shall be paid or delivered to the PLEDGOR or a
court of competent jurisdiction as the PLEDGEE may elect.
12. Notices: Any communication, notice of demand to be given hereunder
shall be duly given if in writing and delivered, mailed certified mail or
telefaxed as follows:
(1 ) To the PLEDGOR: Xxxxxx Xxxx
0000 X. 00xx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
(2) To the PLEDGEE: Medley Credit Acceptance Corp.
0000 Xxxxx xx Xxxx Xxxxxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
13. Miscellaneous Provisions: This Agreement, together with the
Exhibits hereto, all of which are incorporated herein and made a part hereof by
this reference, and the Certificates and other instruments delivered by the
respective Parties pursuant thereto constitutes the entire agreement between
the Parties hereto with respect to the subject matter hereof and supersedes all
prior agreements understandings and discussions, both written and oral, between
the Parties hereto. This Agreement may not be amended or modified in any way
except by a written instrument executed by all of the Parties.
A. Benefits: Binding Effect: This Agreement shall be for the
benefit of and shall be binding upon the Parties hereto and their respective
successors. The PLEDGEE shall be entitled to assign its respective rights to
any holder or holders of the Note.
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B. Survival: The representations, warranties, and agreements
made in this Agreement shall be deemed to apply as of the date of the execution
of this Agreement and shall be construed as continuing warranties,
representations and agreements. The representations and warranties made by the
PLEDGOR and the corporation are made with the knowledge and expectation that
notwithstanding any investigation conducted by or on behalf of the PLEDGEE, the
PLEDGEE is placing complete reliance thereon and that such representations and
warranties are to be treated as material to the PLEDGEE.
C. Waiver and Remedies: The waiver by the PLEDGEE of any
obligers' prompt and complete performance, or breach or violation, of any
provision of this Agreement shall not operate nor be construed as a waiver of
any subsequent breach or violation, and the waiver by the PLEDGEE to exercise
any right or remedy which the PLEDGEE may possess hereunder shall not operate
nor be construed as a bar to the exercise of such rights or remedies by the
PLEDGEE upon the occurrence of any subsequent breach or violation. Except as
set forth herein, no right or remedy conferred upon or reserved to the PLEDGEE
by this Agreement shall exclude any other right or remedy, or each right or
remedy shall be cumulative and shall be in addition to every other right or
remedy hereunder or available at law or in equity.
D. Severability: The invalidity of any one or more of the
words, phrases, sentences, clauses, sections, or subsections contained in this
Agreement shall not affect the enforceability of the remaining portions of this
Agreement or any part hereof, all of which are inserted conditionally on their
being valid in law, and in the event that any one or more the words, phrases,
sentences, clauses, sections or subsections contained in this Agreement, shall
be declared invalid by a court of competent jurisdiction, this Agreement shall
be construed as if such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses. section or sections, or subsection or subsections
have not been inserted.
E. Expenses: The PLEDGOR agrees to pay on demand all out of
pocket expenses, including but without limitation, the reasonable fees and
expenses of the PLEDGEE's counsel, in any way relating to the enforcement or
protection of the rights of the PLEDGEE hereunder and further agrees that the
PLEDGED STOCK secures such payment.
F. Governing Law: This Agreement shall be governed by and
construed in accordance with, the laws of the State of Florida. Venue
concerning any dispute or litigation which may be filed pursuant to the terms
of this Agreement shall be in Dade County, Florida.
G. Counterparts: This Agreement shall be governed by and
construed in accordance with, the laws of the State of Florida Venue concerning
any dispute or litigation which may be filed pursuant to the terms of this
Agreement shall be in Dade County, Florida
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H. Headings: The headings of the articles and sections of
this Agreement are inserted for convenience only and shall not constitute a
part hereof nor be used in interpreting the meaning contained herein.
I. Release: Upon payment in full of the Note, the PLEDGEE
shall forthwith release this Pledge Agreement and reassign all rights
thereunder and t\he original stock certificate together with the original
assignment.
J. Attorneys' Fees: In the event of any litigation arising
out of the terms of the Agreement, the prevailing party shall be entitled to
reimbursement of reasonable attorneys' fees and costs at the trial and
appellate level.
IN WITNESS WHEREOF, the Parties have hereunto set their hands and
seals.
DATED as to the PLEDGOR this 30th day of January, 1998.
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Witness Xxxxxx Xxxx
---------------------
Witness
STATE OF FLORIDA )
:) SS
COUNTY OF DADE )
BEFORE ME, the undersigned authority, personally appeared XXXXXX XXXX,
to me well known to be the person described in and who executed the foregoing
instrument, and acknowledged to and before me that he executed said instrument
for the purposes therein expressed.
WITNESS my hand and official seal, this 30th day of January, 1998.
-----------------------------------
Notary Public, State of California at Large
My Commission Expires:
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