Exhibit 4(d)
SHARE SECURITY AGREEMENT
This SHARE SECURITY AGREEMENT (the "Agreement") is made as
of the ___ day of January, 1997, by and between KAREN S. HUGHES,
an individual resident of the State of Georgia ("Pledgor"), and
RIDGEWOOD PROPERTIES, INC., a Delaware corporation (the
"Pledgee").
W I T N E S S E T H:
WHEREAS, the Pledgor is an employee of Pledgee;
WHEREAS, the Pledgor has issued a promissory note of even
date herewith (the "Note"); and
WHEREAS, the Pledgor has agreed to enter into this
Agreement and to pledge 75,000 shares of the common stock, par
value $.01 per share (the "Shares"), of Pledgee as security for
the performance of Pledgor's obligations under the Note.
NOW THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, and to secure the payment and
performance of the Pledgor's obligations under the Note, the
parties hereto agree as follows:
1. Pledge. As collateral security for the due and
punctual payment of the Note, Pledgor hereby pledges,
hypothecates, transfers, sets over, delivers and assigns to
Pledgee, and hereby grants Pledgee a first security interest in,
the following:
(a) the Shares and the certificates representing the
Shares, and all cash, securities and other property or proceeds
at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for all or
any portion of the Shares;
(b) all securities hereafter delivered to Pledgor by
Pledgee in substitution for or in addition to any of the
foregoing, and all certificates and instruments representing or
evidencing such securities, together with all interest, cash,
securities and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for or on conversion of any or all thereof (all such
Shares, indebtedness, shares, certificates, interest, cash,
securities and other property received, receivable or otherwise
distributed in respect of any or all thereof being included
within the definition of "Collateral" for purposes of this
Agreement).
TO HAVE AND TO HOLD the Collateral, together with all
rights, titles, interests, privileges and preferences
appertaining or incidental thereto, unto Pledgee, its successors
and assigns, forever, subject, however, to the terms, covenants
and conditions hereinafter set forth.
2. Indebtedness and Obligations Secured. This Agreement
and the Collateral secure repayment of the indebtedness and the
obligations of Pledgor indicated below (collectively, the
"Obligations"), equally and ratably as to all such indebtedness
and obligations and without preference or priority as to any
class of such indebtedness or obligations or any component
thereof:
(a) the indebtedness evidenced by the Note (and any
promissory note of Pledgor issued in exchange for, or
replacement of, or substitution for, the Note, which shall be
included in the term "Note" as used herein), with interest and
premiums thereon as therein provided;
(b) all other amounts payable by Pledgor under the Note,
including without limitation, all fees, costs, expenses and
indemnities payable by Pledgor thereunder;
(c) all indebtedness of Pledgor arising under this
Agreement and all costs and expenses of Pledgee in enforcing
this Agreement and the Note; and
(d) all renewals and extensions, in whole or in part, of
the Note or of any other indebtedness or obligation described
above in this Section.
3. Representations and Warranties. As of the date hereof,
(i) Pledgor is the holder of record of all of the Shares;
Pledgor has good, right and lawful authority to enter into this
Agreement and to pledge the Collateral in the manner hereby
contemplated and will defend Pledgor's title thereto against the
claims of all persons whomsoever, (ii) there are no liens,
claims, pledges, security interests, encumbrances or rights of
third parties whatsoever with respect to the Collateral, (iii)
this Agreement has been duly authorized, executed and delivered
and constitutes the legal, valid and binding obligation of
Pledgor, enforceable in accordance with its terms, and (iv) no
consent or approval of any court, governmental body or
regulatory authority (federal, state or local) is or was
necessary to the validity of the pledge granted hereby.
4. Appointment of Agents; Registration in Nominee Name.
Pledgee shall have the right to appoint one or more agents for
the purpose of retaining physical possession of the certificates
or instruments representing or evidencing the Collateral, which
certificates or instruments may be held (in the discretion of
Pledgee) in the name of the Pledgor, endorsed or assigned in
blank or in favor of Pledgee, or in the name of Pledgee or any
agent appointed by Pledgee to retain physical possession of such
certificates or instruments, or in the name of any nominee of
Pledgee or any such agent. In addition, Pledgee shall at all
times have the right to exchange certificates or instruments
representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations. The Pledgor
hereby agrees that any registrar or transfer agent for any
securities included in the Collateral shall be entitled to rely
on the provisions of this Section as conclusive evidence of the
authority of Pledgee to effect re-registration of any such
securities in the name of Pledgee or that of its agents or its
or their nominees or to exchange certificates or instruments
representing or evidencing such Collateral for certificates or
instruments of smaller or larger denominations, notwithstanding
any notice or direction to such registrar or transfer agent from
the Pledgor to the contrary.
5. Pledgor's Rights and Powers. So long as no Event of
Default (as defined in Section 6 of this Agreement) shall have
occurred and be continuing, Pledgor may, during the term of this
Agreement, exercise all rights and privileges of a shareholder
of Pledgee with respect to the Shares. Upon the occurrence and
during the continuance of an Event of Default hereunder, all
rights of Pledgor to exercise the rights and powers that Pledgor
is entitled to exercise pursuant to this Section 5 shall cease,
and all such rights shall thereupon become vested in Pledgee,
who shall have the sole and exclusive right and authority to
exercise such rights and powers.
6. Events of Default. The occurrence or continuation of
any of the following events shall constitute an Event of Default
hereunder:
(a) Failure of Pledgor to pay, when due, any amount
payable under the Note;
(b) Any other Event of Default as defined in the Note or
any other applicable agreement; and
(c) Any default in the due observance or performance of
any term, covenant, warranty, agreement or condition contained
in this Agreement, which default continues for ten (10) calendar
days after Pledgee gives notice of such failure to Pledgor.
7. Remedies upon Default. Upon the occurrence and during
the continuance of an Event of Default hereunder, Pledgee may,
without giving any notice to Pledgor other than as required in
paragraph (b) below and in addition to the exercise by Pledgee
of its rights and remedies under any other section of this
Agreement or under the Note, or otherwise available to it at law
or in equity:
(a) apply the cash (if any) then held by it as Collateral
hereunder to the payment of any Obligations, whether or not then
due and in any order selected by Pledgee; and
(b) if there shall be no such cash or the cash so applied
shall be insufficient to pay all such Obligations in full,
exercise all the rights and remedies of a secured party under
the Uniform Commercial Code in effect in the State of Georgia at
that time and sell (in compliance with applicable securities
laws) the Collateral, or any part thereof, at public or private
sale, at any broker's board, upon any securities exchange, at
Pledgee's offices or elsewhere, for cash, upon credit or for
future delivery, as Pledgee may deem appropriate in the
circumstances and commercially reasonable. In connection
therewith, Pledgee shall have the right to impose such
limitations and restrictions on the sale of the Collateral as
Pledgee may deem to be necessary or appropriate to comply with
any law, rule or regulation (federal, state or local) having
applicability to the sale, including, without limitation,
restrictions on the number and qualifications of the offerees
and requirements for any necessary governmental approvals, and
Pledgee shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective offerees or
purchasers to persons who will represent and agree that they are
purchasing securities included in the Collateral for their own
account and not with a view to the distribution or sale thereof
in violation of applicable securities laws. Upon consummation
of any such sale, Pledgee shall have the right to assign,
transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall
hold the property sold absolutely, free from any claim or right
on the part of Pledgor, and Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay or appraisal
that it now has or may at any time in the future have under any
rule of law or statute now existing or hereafter enacted. To
the extent that notice of sale shall be required to be given by
law, Pledgee shall give Pledgor at least ten (10) calendar days'
prior written notice of Pledgee's intention to make any public
or private sale of such Collateral. Such notice shall state the
time and place fixed for sale, and the Collateral, or portion
thereof, to be offered for sale. Any such sale shall be held at
such time or times within ordinary business hours and at such
place or places as Pledgee may fix in the notice of such sale.
At any such sale, the Collateral, or portion thereof, to be sold
may be sold in one lot as an entirety or in separate parcels, as
Pledgee may (in its sole and absolute discretion) determine, and
Pledgee may itself bid for (which bid may be in whole or in part
in the form of cancellation of Obligations) and purchase the
whole or any part of the Collateral.
Pledgee shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of the Collateral may have been given.
Pledgee may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for sale, and
such sale may, without further notice, be made at the time and
place to which the same was so adjourned. In case the sale of
all or any part of the Collateral is made on credit or for
future delivery, the Collateral so sold may be retained by
Pledgee until the sale price is paid by the purchaser or
purchasers thereof, but Pledgee shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure,
such Collateral may be sold again upon like notice. As an
alternative to exercising the power of sale herein conferred
upon it, Pledgee may proceed by a suit or suits at law or in
equity to foreclose this Agreement and sell the Collateral, or
any portion thereof, pursuant to a judgment or decree of a court
or courts of competent jurisdiction.
8. Application of Proceeds of Sale; Deficiency. The
proceeds of the sale of the Collateral sold pursuant to Section
7 hereof shall be applied by Pledgee as follows:
First: to the payment of the costs and expenses of such
sale, including the out-of-pocket expenses of Pledgee and the
reasonable fees and out-of-pocket expenses of counsel employed
in connection therewith, and the payment of all costs and
expenses incurred by Pledgee in connection with the
administration and enforcement of this Agreement, to the extent
that such costs and expenses shall not have been previously
reimbursed or paid to Pledgee;
Second: to the payment or prepayment in full of all other
Obligations, whether or not then due and in any order selected
by Pledgee; and
Third: the balance (if any) of such proceeds shall be paid
to Pledgor or as a court of competent jurisdiction may direct.
Pledgor shall be liable for any deficiency.
9. Pledgee Appointed Attorney-In-Fact. Pledgor hereby
appoints Pledgee as Pledgor's attorney-in-fact, with full power
of substitution, for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any
agreement or instrument on behalf of Pledgor that Pledgee may
deem necessary or advisable to accomplish the purposes hereof,
which appointment is coupled with an interest and is
irrevocable. Without limiting the generality of the foregoing,
Pledgor agrees and understands that Pledgee shall have the right
and power to receive, endorse and collect all checks and other
orders for the payment of money made payable to Pledgor which
represents any dividend, principal or interest payment or other
distribution payable or distributable in respect of the
Collateral or any part thereof and to give full discharge for
the same.
10. Responsibility of Pledgee; Care of Collateral.
Neither Pledgee, nor any director, officer, employee or agent of
Pledgee, shall be liable for any action taken or omitted to be
taken by it or them with respect to this Agreement or any of the
Collateral, except for its or their gross negligence or willful
misconduct, and Pledgee shall not be liable for any action or
omission to act on the part of any agent appointed by Pledgee to
act hereunder or with respect to the Collateral (or any part
thereof), if selected by Pledgee with reasonable care.
Notwithstanding the provisions of Section 5 hereof, Pledgee
shall have no duty to exercise any voting or any other
consensual rights and powers becoming vested in Pledgee with
respect to the Collateral or any part thereof, to exercise any
right to redeem, convert or exchange any securities included in
the Collateral, to enforce or see to the payment of any
dividend, principal or interest or any other distribution
payable or distributable on or with respect to the Collateral or
any part thereof or otherwise to preserve any rights with
respect to the Collateral against any third parties, and Pledgee
shall not be liable or accountable to Pledgor in respect of any
of the foregoing. Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of the
Collateral if Pledgee shall take such action for such purpose as
Pledgor may request in writing, but the failure of Pledgee to
take any action requested by Pledgor shall not, in and of
itself, be deemed to constitute a failure on the part of Pledgee
to exercise reasonable care with respect to the custody and
preservation of the Collateral or any part thereof.
11. Expenses. Pledgor agrees to pay Pledgee, upon its
demand, all of Pledgee's out-of-pocket expenses (including its
reasonable attorneys' fees) incurred in connection with the
administration or enforcement of this Agreement, the care and
custody of the Collateral (or any part thereof), the
registration, re-registration or transfer of the Collateral (or
any part thereof) and the sale or collection of the Collateral
(or any part thereof). Should Pledgor fail to do any act or
thing that Pledgor has covenanted to do hereunder, or should any
representation or warranty on the part of Pledgor contained
herein be breached, Pledgee may (but shall not be obligated to)
do the same or cause it to be done, or remedy any such breach,
and there shall be added to the liabilities of Pledgor hereunder
the cost or expense to Pledgee in so doing, and any and all
amounts expended by Pledgee in taking any such action shall be
repayable to it by Pledgor upon Pledgee's demand.
12. Release of Collateral. After the repayment of
Pledgor's indebtedness and obligations to Pledgee under the
Note, Pledgee will release to Pledgor the Collateral pledged
hereunder and deliver to Pledgor certificates for the number of
shares listed above.
13. Restriction on Transfer. Pledgor shall not sell,
transfer, pledge, hypothecate or otherwise dispose of any shares
of Shares except in compliance with this Agreement and the
Ridgewood Properties, Inc. 1993 Stock Option Plan, as amended
(the "Plan"). Any purported sale, transfer, pledge,
hypothecation or other disposition of the Shares in
contravention of the terms of this Agreement or the Plan shall
be null, void and of no force and effect.
14. Miscellaneous.
a. Notices. Any notice required or permitted
hereunder shall be given in writing and shall be deemed
effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified
mail with postage and fees prepaid, addressed to Pledgor at
Pledgor's address shown on Pledgee's employment records and
to Pledgee at the address of its principal corporate
offices (Attention: President) or at such other address as
such party may designate by advance written notice to the
other party hereto.
b. Further Assurances. The Pledgor agrees to do
such further acts and things, and to execute and deliver
such agreements and instruments, including without
limitation stock and bond powers, as Pledgee may at any
time request in connection with the administration or
enforcement of this Agreement or related to the Collateral
or any part thereof or in order better to assure and
confirm unto Pledgee its rights, powers and remedies
hereunder.
c. Binding Agreement; Assignment. This
Agreement, and the terms, covenants and conditions hereof,
shall be binding upon and inure to the benefit of the
parties hereto, and their respective heirs, administrators,
successors and assigns, as the case may be, except that the
Pledgor shall not be permitted to assign this Agreement or
any interest in the Collateral, or any part thereof, or
otherwise pledge, encumber or grant any option with respect
to the Collateral, or any part thereof, or any cash or
property held by Pledgee as collateral under this
Agreement, without the prior written consent of Pledgee.
d. Waiver, Modification, etc. Neither this
Agreement nor any provisions hereof may be amended,
modified, waived, discharged or terminated, nor may any of
the Collateral be released or the pledge or the security
interest created hereby extended, except by an instrument
in writing signed on behalf of the party to be charged.
The Section headings used herein are for convenience of
reference only and shall not define or limit the provisions
of this Agreement. This Agreement may be executed in
counterparts, each of which shall be deemed to be an
original and both of which together shall constitute the
Agreement.
e. Governing Law; Consent to Jurisdiction and
Venue. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE
STATE OF GEORGIA AND SHALL BE INTERPRETED, AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF GEORGIA (WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS). AS PART OF THE CONSIDERATION
FOR THE BENEFITS RECEIVED BY THE PLEDGOR, PLEDGOR HEREBY
CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE STATE OF GEORGIA, AND CONSENTS THAT ALL
SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL
DIRECTED TO SUCH PARTY AT THE ADDRESS SET FORTH ON THE SIGNATURE
PAGE TO THIS AGREEMENT, AND SERVICE SO MADE SHALL BE DEEMED TO
BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR
FIVE (5) CALENDAR DAYS AFTER DEPOSIT IN THE UNITED STATES
MAILS, PROPER POSTAGE PREPAID. TO THE EXTENT PERMITTED BY
LAW, EACH SUCH PARTY TO THIS AGREEMENT WAIVES ANY OBJECTION SUCH
PARTY MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING
INSTITUTED HEREUNDER. NOTHING IN THIS SECTION SHALL AFFECT THE
RIGHT OF PLEDGEE TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF PLEDGEE TO BRING ANY
ACTION OR PROCEEDING AGAINST PLEDGOR OR PLEDGOR'S PROPERTIES IN
THE COURTS OF ANY OTHER JURISDICTION THAT HAS JURISDICTION
OVER PLEDGOR OR PLEDGOR'S PROPERTY.
IN WITNESS WHEREOF, Pledgee has caused this Agreement to be
duly executed and delivered by its duly authorized officers, and
Pledgor has executed and delivered this Agreement, all as of the
day and year first above written.
/s/ Karen S. Hughes (SEAL)
KAREN S. HUGHES, Pledgor
Address: 2377 Emory Lane
Marietta, GA 30068
RIDGEWOOD PROPERTIES, INC.
[CORPORATE SEAL] By: /s/ N. R. Walden
Its: President
ATTEST:
/s/ Gregory T. Weigle
Assistant Secretary