AMENDED AND RESTATED
PLEDGE AGREEMENT
THIS AMENDED AND RESTATED STOCK PLEDGE AGREEMENT (this "Agreement") dated
as of January 14, 2000, by ▇▇▇▇▇ ▇▇▇▇▇▇ ("Pledgor") in favor of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇. ("Secured Party").
RECITALS
The authorized capital stock of Aarica Holdings, Inc., a Texas
corporation (the "Company"), consists of 20,000,000 shares of common stock, par
value $.01 per share, and 3,000,000 shares of preferred stock, $.01 par value.
There are currently issued and outstanding 2,800,000 common shares, which
constitutes all of the issued and outstanding shares of the corporation and of
which 2,400,000 are owned by Pledgor ("Pledged Shares").
Secured Party has agreed to loan to the Company and its subsidiaries
the aggregate principal amount of $2,377,500.00 (the "Loans"), upon the
condition, among others, that Pledgor shall have executed and delivered to
Secured Party, (i) a Guaranty in favor of Secured Party (the "Guaranty"),
guaranteeing the payment to Secured Party by the Company of the Loans; and (ii)
this Agreement granting a security interest in the Pledged Shares to Secured
Party, all to secure the payment and performance by Pledgor of his obligations
under the Guaranty and this Agreement.
As additional consideration for Secured Party to enter into the Loans,
Company, Pledgor and Secured Party have entered into a Common Stock Purchase
Warrant granting Secured Party Warrants to purchase common stock of the Company
and granting contingent Warrants to purchase Pledged Shares ("Warrant").
Accordingly, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, and of other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Pledge. Pledgor hereby pledges and grants to Secured Party a security
interest in the Pledged Shares and all interest, securities, dividends, rights,
cash and other property at any time or from time to time received, receivable or
otherwise distributable to Pledgor in respect of, upon conversion, or exercise
of, or in exchange for, the Pledged Shares and the products and proceeds of the
Pledged Shares (as such terms are defined in Article 9 of the Uniform Commercial
Code as currently in effect in the State of Florida), to secure the prompt and
indefeasible payment and performance in full when due of all obligations
existing under the Guaranty and this Agreement, as the same may be extended,
renewed, refinanced, refunded, amended, modified, supplemented or restated from
time to time (the "Secured Obligations"). Except as hereinafter expressly
provided, possession of all such property received, receivable, exchangeable or
otherwise distributed or distributable with respect to the Pledged Shares or any
other shares of the Company's stock of evidence of indebtedness of any nature
which come into possession of Pledgor shall be immediately delivered directly to
Secured Party upon the receipt thereof by Pledgor.
-8-
The Pledged Shares and any items received and/or receivable in respect
thereof or in exchange therefor are hereinafter collectively referred to as the
"Collateral."
2. Delivery of the Pledged Shares. Pledgor shall deliver to Secured Party,
concurrently with the execution of this Pledge Agreement, the certificate(s)
representing the Pledged Shares accompanied by an appropriate instrument of
assignment duly executed in blank by Pledgor and such certificates shall be in
transferable form.
3. Representations and Warranties. Pledgor represents and warrants to Secured
Party that:
(1) Pledgor is the sole holder of record and the sole beneficial owner of the
Collateral, free and clear of any security interest, lien, option, adverse
claim, encumbrance, covenant or restriction of any kind (except restrictions
imposed by United States Federal and state securities laws on the offer and sale
thereof) thereon or affecting the title thereto, except for the security
interest created by this Agreement.
(2) All of the Pledged Shares have been duly authorized, validly issued and are
fully paid and non-assessable and consist of 85.7% of the outstanding stock of
the Company.
(3) Pledgor has full legal right, capacity, competency and authority to pledge
and create a security interest in, and to deliver and deposit the Collateral
with Secured Party as provided herein.
(4) None of the Pledged Shares delivered to Secured Party hereunder have been
issued or transferred in violation of the securities registration, securities
disclosure or similar laws of any jurisdiction ("Securities Laws") to which such
issuance or transfer may be subject.
(5) No consent, authorization, approval or other action by, and no notice to,
registration or filing with, any governmental authority or other person is
required either (i) for the pledge by Pledgor of the Collateral pursuant to this
Agreement or for the execution, delivery or performance of this Agreement and
the Guaranty by Pledgor or (ii) for the exercise by Secured Party of the voting
or other rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in connection
with such disposition by laws affecting the offering and sale of securities
generally.
(6) This Agreement and the Guaranty have been duly executed and delivered by
Pledgor and constitute legal, valid and binding obligations of Pledgor
enforceable in accordance with their respective terms, except as enforceability
may be limited by bankruptcy, insolvency and other similar laws affecting the
rights of creditors generally and general principles of equity, whether applied
by a court in an action of law or a proceeding in equity.
(7) The representations and warranties set forth in this Section 3 shall survive
the execution and delivery of this Agreement.
4. Covenants. Pledgor covenants and agrees that until the earlier to occur of
the indefeasible payment of the Secured Obligations and/or the termination of
Secured Party's security interest in the Collateral:
(1) Without the prior written consent of Secured Party, Pledgor will not sell,
assign, transfer, pledge or otherwise encumber or restrict any of its rights in
or to the Collateral or create or suffer to exist any security interest, option,
adverse claim, lien or other encumbrance on the Collateral (each, a "Lien"),
except for the Warrant and the security interest created hereby.
(2) Pledgor will, at his expense, promptly execute, acknowledge, and deliver all
such instruments and take all such action as Secured Party may, at any time and
from time to time, request in order to ensure to Secured Party the benefits of
the security interest in the Collateral intended to be created by this
Agreement, including the execution and filing of Uniform Commercial Code
financing and continuation statements, and will cooperate with Secured Party in
obtaining all necessary approvals and making all necessary filings under
applicable law to perfect the security interest created hereby.
(3) Pledgor has and will defend the title to the Collateral and the security
interest of Secured Party therein against the claim of any person and will
maintain and preserve such security interest until the termination of such
security interest.
5. Dividends and Voting. So long as no default or Event of Default (as defined
in Section 7(a)) shall have occurred, Pledgor shall be entitled to (i) vote the
Pledged Shares (and (ii) receive any and all cash dividends and distributions
made out of earned surplus with respect to the Pledged Shares which Pledgor is
otherwise entitled to receive, subject, however, to the possession rights of
Secured Party pursuant to Section 1 upon the occurrence of such a default or
Event of Default.
6. Term of Pledge; Redelivery of Pledged Shares.
(1) The Collateral shall remain pledged and in the possession of Secured Party
until Pledgor has indefeasibly satisfied in full all of the Secured Obligations
or an Event of Default under this Pledge Agreement has occurred and Secured
Party forecloses its security interest in the Collateral.
(2) Upon Pledgor's indefeasible payment in full of the Secured Obligations,
Secured Party shall deliver to Pledgor or any other person legally entitled
thereto all of the Collateral in Secured Party's possession, including all
certificates evidencing or representing any securities included in the
Collateral together with any assignments separate from such certificates
executed and delivered by Pledgor hereunder, and the pledge of the Collateral
shall thereupon terminate.
(1)
7. Default.
(1) Under the terms of this Agreement, the term "default" means default in the
payment or performance by Pledgor of his obligations under the Guaranty, this
Agreement, or any of the terms of any other documentation evidencing the Loans
("Loan Documents"), and the term "Event of Default" means:
(1) The Company fails to pay the principal of, interest accrued on, or any other
amount at any time owing under the Loan Documents, as and when the same become
due and payable; or
(2) The Company defaults in the due observance or performance of any of its
covenants contained in the Loan
Documents; or
(3) The Company shall (i) become insolvent, however evidenced, (ii) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
trustee or similar official of or for itself or of or for all or a substantial
part of its property, (iii) make an assignment for the benefit of its creditors,
(iv) commence a voluntary case under the Federal Bankruptcy Code, as now or
hereafter in effect (the "Code"), (v) file a petition seeking to take advantage
of any other bankruptcy, insolvency, moratorium, reorganization or other similar
law of any jurisdiction ("Other Laws"), (vi) acquiesce as to, or fail to
controvert in a timely or appropriate manner, an involuntary case filed against
the Company under the Code, or (vii) take any corporate action in furtherance of
any of the foregoing; or
(4) A proceeding or involuntary case shall be commenced, without the application
or consent of the Company, in any court of competent jurisdiction (i) under the
Code, (ii) seeking liquidation, reorganization, dissolution, winding up or
composition or readjustment of its debts under any Other Laws, or (iii) seeking
the appointment of a trustee, receiver or similar official for it or for all or
any substantial part of its assets; or
(5) A final judgment for the payment of money shall be rendered by a court of
competent jurisdiction against the Company and the Company shall not discharge
the same, or procure a stay of execution thereof within 30 days from the date of
entry thereof and within such 30 day period or such longer period during which
execution of such judgment shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal, and such judgment,
together with all other judgments against the Company and its subsidiaries,
shall exceed in the aggregate $50,000 in excess of any insurance as to the
subject matter of such judgments, as to which coverage has not been declined or
the underlying claim rejected by the applicable insurer; or
(6) The liquidation or dissolution of the Company or any vote in favor thereof
by the board of directors and shareholders of the Company; or (1)
(7) A proceeding is commenced and remains pending in excess of ninety (90) days
to foreclose a security interest in or lien on any asset of the Company as a
result of a default in the payment or performance of any indebtedness of the
Company in excess of $50,000 (other than the Loans); or
(8) An attachment or garnishment is levied against the assets of the Company
involving an amount in excess of $50,000 and the lien created by such levy is
not vacated, bonded or stayed within 10 days after such lien has attached to
such assets; or
(9) Except as presently exists, the Company defaults in the payment (regardless
of amount) when due of the principal of, interest on, or any other liability on
account of, any indebtedness of the Company (other than the Loans) having an
unpaid principal amount in excess of $50,000, or a default occurs in the
performance or observance by the Company of any covenant or condition (other
than for the payment of money) contained in any note (other than the Loans) or
agreement evidencing or pertaining to any such indebtedness, which causes the
maturity of such indebtedness to be accelerated or permits the holder or holders
of such indebtedness to declare the same to be due prior to the stated maturity
thereof; or
(10) Any representation, warranty or statement of fact made by the Company in
the Loan Documents or in any certificate or financial statement delivered by the
Company to the Secured Party at any time proves to be false or misleading in any
material respect when made or deemed made by the Company.
(2) Upon the occurrence of a default or an Event of Default, Secured Party may
exercise from time to time with respect to the Collateral all rights and
remedies available to a secured party after the default under Article 9 of the
Uniform Commercial Code as in effect at the time in the State of Florida on the
date hereof subject to the following:
(1) In exercising any remedies hereunder with respect to the Pledged Shares,
Secured Party may foreclose its security interest in the Pledged Shares (i) if
Secured Party shall have accelerated the maturity of the Loans upon or following
the occurrence of an Event of Default (other than an Event of Default specified
in Sections (a)(i) through (a)(iv) inclusive, or (a)(vi) above) or (2) upon and
during the occurrence of an Event of Default specified in Section (a)(iii),
(iv), or (vi) above, or (3) upon and following the 91st day following the
occurrence of a default or Event of Default, if and while all obligations of
Pledgor under the Guaranty and this Pledge Agreement have not been paid in full
in cash.
(2) Pledgor acknowledges that Secured Party may be subject to certain
restrictions imposed by the Securities Act of 1933, as amended, and applicable
state securities law (collectively, "Securities Laws") in disposing of the
Pledged Shares or other securities constituting part of the Collateral and
agrees (i) that such securities may be sold privately subject to the customary
restrictions on resale which are imposed by reason of applicable Securities Laws
in such private sales and with a resulting reduction in the sale price and (ii)
that the sale of such securities may be delayed for extended periods of time in
order to register the securities under the applicable Securities Laws for public
sale. Pledgor agrees to cooperate with Secured Party in any such sale and,
without limiting the generality of the foregoing, to provide Secured Party with
all information, documents and access to Pledgor's management as Secured Party
may reasonably request in connection with any such sale.
8. Application of Proceeds. Any cash held by Secured Party as Collateral and all
cash proceeds received by Secured Party in respect of any sale or other
disposition of all or any part of the Collateral shall be applied by Secured
Party as follows:
first, to Secured Party in an amount sufficient to pay in full the
expenses of Secured Party in connection with such sale or other disposition
including legal fees and expenses of Secured Party;
second, to Secured Party to satisfy in full all outstanding Secured Obligations,
and ------
finally, upon the indefeasible payment in full of all the Secured
Obligations, to Pledgor or its representatives or to whomsoever may be lawfully
entitled to receive the same, or as a court of competent jurisdiction may
direct.
9. No Waiver; Cumulative Remedies. Secured Party shall not by any act, delay,
omission or otherwise be deemed to have waived any of its rights or remedies
hereunder, and no waiver of any of the provisions hereof or Pledgor's compliance
therewith shall be effective unless in writing, signed by Secured Party and then
only to the extent therein set forth. A waiver by Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which Secured Party would otherwise have had on any future
occasion. The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law. None of the terms or provisions of this Agreement may
be altered, modified or amended, except by an instrument in writing, duly
executed by Secured Party.
10. Assignment. The Loan Documents, the Guaranty and this Agreement may be
assigned by Secured Party to one or more third parties without the prior written
consent of Pledgor.
11. Successors and Assigns. This Agreement inures to the benefit of Secured
Party and his respective legal representatives, heirs, distributees, successors
and assigns and binds Pledgor, and his respective legal representatives, heirs,
distributees, successors and assigns, and the words "Secured Party" and
"Pledgor" whenever occurring herein shall be deemed and construed to include
such respective successors and assigns.
12. Governing Law. This Agreement shall in all respects be interpreted and
governed by, and construed in accordance with the laws of the State of Florida.
13. Notices. All notices required to be given to any of the parties hereunder
shall be in writing and shall be deemed to have been sufficiently given for all
purposes when presented personally to such party, sent by telecopier (with
original timely mailed), or sent by registered or express mail, return receipt
requested, to such party at its address set forth below:
If to Pledgor, to:
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇ ▇▇▇▇▇▇▇, Esq.
Continental Capital
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Secured Party, to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇., #▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇., ▇▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
14. Entire Agreement. This Pledge Agreement embodies the entire agreement and
understanding between Secured Party and the Pledgor as to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof and thereof.
15. Counterparts. This Agreement may be executed in any number of counterparts
which shall, collectively and separately, constitute one agreement.
16. Documentary Stamp Tax. Pledgor shall be responsible for all Florida
documentary stamp taxes owed, if any, as a result of the stock transfers made
under the terms of this Agreement.
17. Consent To Jurisdiction, Waiver Of Jury Trial.
PLEDGOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE SUPREME
COURT OF THE STATE OF FLORIDA, COUNTY OF ORANGE, AND THE UNITED STATES DISTRICT
COURT FOR THE MIDDLE DISTRICT OF FLORIDA IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS PLEDGE AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN
CONNECTION HEREWITH, AND PLEDGOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH FLORIDA
STATE OR FEDERAL COURT. PLEDGOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING. PLEDGOR ALSO IRREVOCABLY CONSENTS TO
THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OF PROCEEDING BY THE
MAILING OF A COPY OF SUCH PROCESS TO PLEDGOR BY REGISTERED OR EXPRESS MAIL,
RETURN RECEIPT REQUESTED, AT HIS ADDRESS SPECIFIED HEREIN. SUCH SERVICE WILL
BECOME EFFECTIVE THREE (3) BUSINESS DAYS AFTER SUCH MAILING AND WILL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE ON PLEDGOR IN SUCH ACTION OR PROCEEDING.
PLEDGOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY MANNER PROVIDED BY LAW.
NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF SECURED PARTY TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF
SECURED PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST PLEDGOR OR ITS PROPERTY
IN THE COURTS OF ANY OTHER JURISDICTION.
EACH OF PLEDGOR AND SECURED PARTY, BY ITS ACCEPTANCE HEREOF, HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY AGREEMENT EXECUTED IN
CONNECTION HEREWITH OR IN CONNECTION WITH ANY DEFENSE, COUNTERCLAIM OR
CROSSCLAIM ASSERTED BY PLEDGOR IN ANY SUCH LITIGATION.
IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly
executed as of the day and year first written above.
PLEDGOR:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
ORLDOCS 10006795.1 LMW
