Exhibit 10.50
PLEDGE AND SECURITY AGREEMENT
AND IRREVOCABLE PROXY
(SEC)
THIS PLEDGE AND SECURITY AGREEMENT AND IRREVOCABLE PROXY is made and
entered into as of the 7th day of May, 1997, by SOUTHHAMPTON ENTERPRISES CORP.,
a British Columbia corporation (hereinafter called "Pledgor"), whose chief
executive office is located at 9211 Diplomacy Row, Dallas, Texas 75247 in favor
of THOMAS E. DOOLEY, JR., as agent for Sellers (defined below), and his heirs,
personal representatives, successors and assigns (hereinafter called "Secured
Party"), whose address is 12401 East Saddle Horn Drive, Scottsdale, Arizona
85259.
1. RECITALS
1.1 The parties identified on Schedule 1 hereto (the "Sellers"),
Pledgor, and Southhampton Enterprises Inc., a Texas corporation ("SEI") have
entered into a Stock Purchase Agreement dated April 21, 1997 (the "Stock
Purchase Agreement"), which provides for the purchase by SEI from Sellers of all
of the issued and outstanding common stock of The Antigua Group, Inc., a Nevada
corporation ("Antigua").
1.2 Secured Party has agreed to make certain financial accommodations
to Pledgor in connection with the Stock Purchase Agreement, provided that
Secured Party receives, among other things, a pledge and security interest in
all stock and securities issued by SEI now owned or hereafter acquired by
Pledgor.
1.3 Imperial Bank, a California banking corporation ("Imperial") has
agreed to provide certain financing to Antigua according to the terms of a
Credit Agreement, of even date herewith, by and among Imperial, Pledgor, SEI and
Antigua. In connection therewith and as a condition of that financing, Pledgor
has executed and delivered to Imperial a Pledge and Irrevocable Proxy Security
Agreement, of even date herewith, granting to Imperial a pledge and security
interest in, among other things, all stock and securities issued by SEI owned or
acquired by Pledgor (the "Imperial Pledge Agreement").
1.4 The Cruttenden Roth Bridge Fund, L.L.C, a California limited
liability company ("Cruttenden") has also agreed to provide certain financing to
Antigua according to the terms of a Securities Purchase Agreement, of even date
herewith, by and among Cruttenden, Pledgor, SEI and Antigua. In connection
therewith and as a condition of that financing, Pledgor has executed and
delivered to Cruttenden a Security and Pledge Agreement, of even date herewith,
granting to Cruttenden a pledge and security interest in, among other things,
all stock and securities issued by SEI owned or acquired by Pledgor (the
"Cruttenden Pledge Agreement").
1.5 Pledgor, as of the date of this Agreement, is the owner of the
shares of the common stock of SEI listed on Exhibit A attached hereto.
2. PLEDGE OF STOCK
2.1 Pledgor hereby assigns, transfers, pledges and delivers to Secured
Party and grants Secured Party a security interest in all issued and outstanding
stock in SEI now owned or hereafter acquired by Pledgor, including without
limitation the stock described on Exhibit "A" hereto, together with all earnings
thereon, all additions thereto, all proceeds thereof from sale or otherwise, all
substitutions therefor, and all securities issued with respect thereto as a
result of any stock dividend, stock split,
warrants or other rights, reclassification, readjustment or other change in the
capital structure of SEI, and the securities of any corporation or other
properties received upon the conversion or exchange thereofpursuant to any
merger, consolidation, reorganization, sale of assets or other agreement or
received upon any liquidation of SEI or such other corporation (all hereinafter
called the "Pledged Securities"), subject, however, to the prior and superior
pledge and security interests of Imperial and Cruttenden under the Imperial
Pledge Agreement and the Cruttenden Pledge Agreement, respectively.
2.2 In connection with the execution of this Agreement, Pledgor shall
irrevocably direct Imperial or Cruttenden, as the case may be, to deliver the
Pledged Securities, together with all stock transfer powers executed by Pledgor
and delivered to Imperial or Cruttenden, as the case may be, to Secured Party at
c/o Quarles & Brady, One East Camelback Road, Suite 400, Phoenix, Arizona
85012-1649, Attention: P. Robert Moya, Esq., or at such other address as Secured
Party may from time to time designate to Imperial or Cruttenden, as the case may
be, in writing, at such time as all of the obligations secured by the Imperial
Pledge Agreement and the Cruttenden Pledge Agreement have been satisfied or
Pledgor is otherwise entitled to the release of the Pledged Securities from any
interest under the Imperial Pledge Agreement and the Cruttenden Pledge
Agreement. In addition, Pledgor shall cause the following legend to be added to
all certificates evidencing the Pledged Securities:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE, AND THE RIGHTS
OF THE OWNER THEREOF, ARE SUBJECT TO CERTAIN PLEDGES AND
SECURITY INTERESTS IN FAVOR OF IMPERIAL BANK, THE CRUTTENDEN
ROTH BRIDGE FUND, LLC, AND THOMAS E. DOOLEY, JR., AS AGENT,
THE PRIORITIES OF WHICH ARE SET FORTH IN AN INTERCREDITOR
AGREEMENT AMONG SUCH PARTIES DATED MAY 7, 1997.
2.3 Upon termination of the Imperial Pledge Agreement and the
Cruttenden Pledge Agreement, Pledgor shall deliver to Secured Party all then
existing certificates for the Pledged Securities, together with appropriate
stock transfer powers therefor duly executed by Pledgor in blank, with
signatures guaranteed as required by the transfer agent for the Pledged
Securities. Immediately upon receipt, Pledgor shall deliver to Secured Party all
certificates and other evidences of the Pledged Securities that come into the
possession, custody or control of Pledgor after termination of the Imperial
Pledge Agreement and the Cruttenden Pledge Agreement, together with appropriate
stock transfer powers therefor duly executed by Pledgor in blank, with
signatures guaranteed as required by the transfer agent for the Pledged
Securities, and any other property constituting part of the Pledged Securities,
free and clear of any prior lien, claim, charge or encumbrance.
2.4 Secured Party may receive, hold and/or dispose of the Pledged
Securities subject and pursuant to all the terms, conditions and provisions
hereof until the Obligation (defined below) has been discharged in full. Secured
Party shall be under no duty to exercise, or to withhold the exercise of, any of
the rights, powers, privileges and options expressly or implicitly granted to
Secured Party in this Agreement, and shall not be responsible for any failure to
do so or delay in so doing.
3. OBLIGATION SECURED
3.1 This Agreement shall secure, in such order of priority as Secured
Party may elect:
(a) Payment of the sum of $5,198,000.00 with interest thereon,
extension and other fees, late charges, prepayment premiums and
attorneys' fees, according to the terms of that Promissory Note of even
date herewith, made by Pledgor, payable to the order
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of Secured Party, and all extensions, modifications, renewals or
replacements thereof (hereinafter called the "Three Year Note");
(b) Payment of the sum of $325,000.00 with interest thereon,
extension and other fees, late charges, prepayment premiums and
attorneys' fees, according to the terms of that Promissory Note of even
date herewith, made by Pledgor, payable to the order of Secured Party,
and all extensions, modifications, renewals or replacements thereof
(hereinafter called the "Two Year Note");
(c) Payment of the sum of $855,000.00 with interest thereon,
extension and other fees, late charges, prepayment premiums and
attorneys' fees, according to the terms of that Promissory Note of even
date herewith, made by Pledgor, payable to the order of Secured Party,
and all extensions, modifications, renewals or replacements thereof
(hereinafter called the "Profit Note");
(d) Payment, performance and observance by Pledgor, SEI and/or
Antigua of each covenant, condition and provision contained in any
other security agreement or pledge agreement of even date herewith
securing payment of the Note (defined below) or in any other document
or instrument evidencing, securing or executed and delivered in
connection with the indebtedness evidenced by the Note, and which
specifically refers to the Note, and of all monies expended or advanced
by Secured Party pursuant to the terms thereof or to preserve any right
of Secured Party thereunder; and
(e) Payment, performance and observance by Pledgor of each
covenant, condition, provision and agreement contained herein and of
all monies expended or advanced by Secured Party pursuant to the terms
hereof, or to preserve any right of Secured Party hereunder, or to
protect or preserve the Pledged Securities or any part thereof;
3.2 The Three Year Note, the Two Year Note and the Profit Note are
herein severally and collectively called the "Note". All the indebtedness and
obligations secured by this Agreement are hereafter collectively called the
"Obligation."
4. REPRESENTATIONS AND WARRANTIES OF PLEDGOR
Pledgor hereby represents and warrants that:
4.1 Pledgor (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized; (ii) is
qualified to do business and is in good standing under the laws of each state in
which it is doing business; (iii) has full power and authority to own its
properties and assets and to carry on its business as now conducted; and (iv) is
fully authorized and permitted to execute and deliver this Agreement. The
execution, delivery and performance by Pledgor of this Agreement and all other
documents and instruments relating to the Obligation will not result in any
breach of the terms and conditions of, nor constitute a default under, any
agreement or instrument under which Pledgor is a party or is obligated. Pledgor
is not in default in the performance or observance of any covenants, conditions
or provisions of any such agreement or instrument.
4.2 The address of Pledgor set forth at the beginning of this Agreement
is the chief executive office of Pledgor.
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4.3 The Pledged Securities are and shall be duly and validly issued and
pledged in accordance with applicable law, and this Agreement shall not
contravene any law, agreement or commitment binding Pledgor or SEI, and Pledgor
shall defend the right, title, lien and security interest of Secured Party in
and to the Pledged Securities against the claims and demands of all persons and
other entities whatsoever, subject only to the interest of Imperial and
Cruttenden under the Imperial Pledge Agreement and the Cruttenden Pledge
Agreement.
4.4 Pledgor has the right, power and authority to convey good and
marketable title to the Pledged Securities; and the Pledged Securities and the
proceeds thereof are and shall be free and clear of all claims, mortgages,
pledges, liens, encumbrances and security interest of every nature whatsoever,
except the interest of Imperial and Cruttenden under the Imperial Pledge
Agreement and the Cruttenden Pledge Agreement, respectively.
5. IRREVOCABLE PROXY
5.1 Pledgor irrevocably constitutes and appoints Secured Party, whether
or not the Pledged Securities have been transferred into the name of Secured
Party or its nominee, as Pledgor's proxy with full power, in the same manner, to
the same extent and with the same effect as if Pledgor were to do the same, in
the sole discretion of Secured Party:
(a) To call a meeting of the stockholders of SEI and to vote
the Pledged Securities, to seek the consent of such stockholders, to
remove the directors of SEI, or any of them, and to elect new directors
of SEI, who thereafter shall manage the affairs of SEI, operate its
properties and carry on its business, and otherwise take any action
with respect to the business, properties and affairs of SEI that such
new directors shall deem necessary or appropriate, including, but not
limited to, the maintenance, repair, renewal or alteration of any or
all of the properties of SEI, the leasing, subleasing, sale or other
disposition of any or all of such properties, the borrowing of money on
the credit of SEI (whether from Secured Party or others) that in the
judgment of such new directors shall be necessary to preserve any of
such properties or to discharge the obligations of SEI, and the
employment of any or all agents, attorneys, counsel, or other employees
as deemed by such new directors to be necessary for the proper
operation or conduct of the business, properties and affairs of SEI;
(b) To consent to any and all actions by or with respect to
SEI for which consent of the stockholders of SEI is or may be necessary
or appropriate; and
(c) Without limitation, to do all things that Pledgor can do
or could do as stockholder of SEI, giving Secured Party full power of
substitution and revocation;
provided, however, that the foregoing irrevocable proxy (i) shall not be
exercisable by Secured Party until termination of the Imperial Pledge Agreement
and the Cruttenden Pledge Agreement, (ii) after termination of the Imperial
Pledge Agreement and the Cruttenden Pledge Agreement, shall not be exercisable
by Secured Party, and Pledgor alone shall have the foregoing powers, so long as
there is no Event of Default hereunder, and (iii) shall terminate at such time
as this Agreement is no longer in full force and effect. The foregoing proxy is
coupled with an interest sufficient in law to support an irrevocable power and
shall be irrevocable and shall survive the death or incapacity of Pledgor.
Pledgor hereby revokes any proxy or proxies heretofore given to any person or
persons and agrees not to give any other proxies in derogation hereof until such
time as this Agreement is no longer in full force and effect.
6. COVENANTS OF PLEDGOR
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6.1 Pledgor shall not sell, transfer, assign or otherwise dispose of
any of the Pledged Securities or any interest therein without obtaining the
prior written consent of Secured Party and shall keep the Pledged Securities
free of all security interests or other encumbrances except the lien and
security interests granted herein, the interest of Imperial under the Imperial
Pledge Agreement, and the interest of Cruttenden under the Cruttenden Pledge
Agreement.
6.2 Pledgor shall pay when due all taxes, assessments, expenses and
other charges which may be levied or assessed against the Pledged Securities.
6.3 Pledgor, without the prior written consent of Secured Party, shall
not authorize or permit SEI to: (i) issue any additional shares of any class of
capital stock of SEI; (ii) issue any securities convertible into or exchangeable
for shares of capital stock of SEI; (iii) issue any warrants, options, contracts
or other commitments entitling any person or entity to purchase or otherwise
acquire shares of capital stock of SEI; or (iv) reorganize or liquidate, merge
or consolidate with any other entity, make any other change in its capital
structure, or sell substantially all of its assets.
6.4 Pledgor shall give Secured Party immediate written notice of any
change in Pledgor's name as set forth above and of any change in the location of
Pledgor's chief executive office.
6.5 Pledgor, at its cost and expense, shall protect and defend the
Pledged Securities, this Agreement and all of the rights of Secured Party
hereunder against all claims and demands of other parties. Pledgor shall pay all
claims and charges that in the reasonable judgment of Secured Party might
prejudice, imperil or otherwise affect the Pledged Securities. Pledgor shall
promptly notify Secured Party of any levy, distraint or other seizure, by legal
process or otherwise, of all or any part of the Pledged Securities and of any
threatened or filed claims or proceedings that might in any way affect or impair
the terms of this Agreement.
6.6 If Pledgor shall fail to pay any taxes, assessments, expenses or
charges, to keep all of the Pledged Securities free from other security
interests, encumbrances or claims, or to perform otherwise as required herein,
Secured Party may advance the monies necessary to pay the same or to so perform.
6.7 All rights, powers and remedies granted Secured Party herein, or
otherwise available to Secured Party, are for the sole benefit and protection of
Secured Party, and Secured Party may exercise any such right, power or remedy at
its option and in its sole and absolute discretion without any obligation to do
so. In addition, if, under the terms hereof, Secured Party is given two or more
alternative courses of action, Secured Party may elect any alternative or
combination of alternatives at its option and in its sole and absolute
discretion. All monies advanced by Secured Party under the terms hereof, all
amounts paid, suffered or incurred by Secured Party under the terms hereof and
all amounts paid, suffered or incurred by Secured Party in exercising any
authority granted herein, including reasonable attorneys' fees, shall be added
to the Obligation, shall be secured hereby, shall bear interest at the highest
rate payable on any of the Obligation until paid, and shall be due and payable
by Pledgor to Secured Party immediately without demand.
6.8 Secured Party shall use such reasonable care in handling,
preserving and protecting the Pledged Securities in its possession as it uses in
handling similar property for its own account. Secured Party, however, shall
have no liability for the loss, destruction or disappearance of any Pledged
Securities unless there is affirmative proof of a lack of due care; the lack of
due care shall not be implied solely by virtue of any loss, destruction or
disappearance. Secured Party shall not be required to take any steps necessary
to preserve any rights in the Pledged Securities against prior parties or to
protect, perfect, preserve or maintain any security interest given to secure the
Pledged Securities.
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6.9 Immediately upon demand by Secured Party, Pledgor shall execute and
deliver to Secured Party such other and additional applications, acceptances,
stock powers, authorizations, irrevocable proxies, dividend and other orders,
chattel paper, instruments or other evidences of payment and such other
documents as Secured Party may reasonably request to secure to Secured Party the
rights, powers and authorities intended to be conferred upon Secured Party by
this Agreement. All assignments and endorsements by Pledgor shall be in such
form and substance as may be satisfactory to Secured Party.
7. EVENTS OF DEFAULT; REMEDIES
7.1 "Event of Default" hereunder shall mean any "Event of Default" as
defined in the Note.
7.2 Upon the occurrence of any Event of Default and at any time while
such Event of Default is continuing, Secured Party shall have the following
rights and remedies and may do one or more of the following:
(a) Declare all or any part of the Obligation to be
immediately due and payable, and the same, with all costs and charges,
shall be collectible thereupon by action at law;
(b) Transfer the Pledged Securities or any part thereof into
its own name or that of its nominee so that Secured Party or its
nominee may appear of record as the sole owner thereof;
(c) Exercise any and all rights of conversion, exchange,
subscription, or any other rights, privileges or options pertaining to
any of the Pledged Securities including, but not limited to, the right
to exchange, at its discretion, any or all of the Pledged Securities
upon the merger, consolidation, reorganization, recapitalization or
other readjustment of SEI or upon the exercise by Pledgor or Secured
Party of any right, privilege or option pertaining to any of the shares
of the Pledged Securities, and in connection therewith to deposit and
deliver such shares of Pledged Securities with any committee,
depository, transfer agent, registrar or any other agency upon such
terms as Secured Party may determine without liability except to
account for the property actually received by it;
(d) Receive and retain any dividend or other distribution on
account of the Pledged Securities; and
(e) Sell any or all of the Pledged Securities in accordance
with the provisions hereof;
but Secured Party shall have no duty to exercise any of the aforesaid rights,
privileges or options and shall not be responsible for any failure to do so or
delay in so doing. Pledgor waives all rights to be advised or to receive any
notices, statements or communications received by Secured Party or its nominee
as the record owner of all or any of the Pledged Securities. Any cash received
and retained by Secured Party as additional collateral hereunder may be applied
to payment in the manner provided in Subparagraph below.
7.3 In connection with Secured Party's right to sell any or all of the
Pledged Securities, upon the occurrence of any Event of Default and at any time
while such Event of Default is continuing:
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(a) (i) Secured Party shall have the right at any time and
from time to time to sell, resell, assign and deliver, in its
discretion, all or any part of the Pledged Securities in one
or more units, at the same or different times, and all right,
title and interest, claim and demand therein, and right of
redemption thereof, at private sale, or at public sale to the
highest bidder for cash, upon credit or for future delivery,
Pledgor hereby waiving and releasing to the fullest extent
permitted by law any and all equity or right of redemption. If
any of the Pledged Securities are sold by Secured Party upon
credit or for future delivery, Secured Party shall not be
liable for the failure of the purchaser to purchase or pay for
same, and, in the event of any such failure, Secured Party may
resell such Pledged Securities. In no event shall Pledgor be
credited with any part of the proceeds of the sale of any
Pledged Securities until cash payment thereof has actually
been received by Secured Party.
(ii) No demand, advertisement or notice, all of which
are hereby expressly waived, shall be required in connection
with any sale or other disposition of all or any part of the
Pledged Securities that threatens to decline speedily in value
or that is of a type customarily sold on a recognized market;
otherwise Secured Party shall give Pledgor at least five (5)
days' prior notice of the time and place of any public sale or
of the time after which any private sale or other dispositions
are to be made, which Pledgor agrees is reasonable, all other
demands, advertisements and notices being hereby waived. Upon
any sale, whether under this Agreement or by virtue of
judicial proceedings, Secured Party may bid for and purchase
any or all of the Pledged Securities and, upon compliance with
the terms of the sale, may hold, retain, possess and dispose
of such items in its own absolute right without further
accountability, and as purchaser at such sale, in paying the
purchase price, may turn in any note or notes held by Secured
Party in lieu of cash up to the amount that would, upon
distribution of the net proceeds of such sale in accordance
with Subparagraph hereof, be payable to Secured Party. In case
the amount so payable thereon shall be less than the amount
due thereon, the note or notes turned in (in lieu of cash)
shall be returned to the holder thereof after being properly
stamped to show the partial payment effected by such purchase.
(b) Pledgor recognizes that Secured Party may be unable to
effect a sale to the public of all or a part of the Pledged Securities
by reason of prohibitions contained in applicable securities laws, but
may be compelled to resort to one or more sales to a restricted group
of purchasers who will be obliged to agree, among other things, to
acquire such Pledged Securities for their own account, for investment
and not with a view to the distribution or resale thereof. Pledgor
agrees that sales so made may be at prices and other terms less
favorable to the seller than if such Pledged Securities were sold to
the public, and that Secured Party has no obligation to delay sale of
any such Pledged Securities for the period of time necessary to permit
the issuer of such Pledged Securities to register the same for sale to
the public under the applicable securities laws. Pledgor agrees that
negotiated sales made under the foregoing circumstances shall be deemed
to have been made in a commercially reasonable manner.
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(c) In all sales of Pledged Securities, public or private,
Secured Party shall apply the proceeds of sale as follows:
(i) First, to the payment of all costs and expenses
incurred hereunder or for the sale, transfer, or delivery,
including broker's and attorneys' fees;
(ii) Next to the payment of the Obligation; and
(iii) The balance, if any, to Pledgor or to the
person or persons entitled thereto upon proper demand.
7.4 Secured Party shall have the right, for and in the name, place and
stead of Pledgor, to execute endorsements, assignments or other instruments of
conveyance or transfer with respect to all or any of the Pledged Securities and
any instruments, documents and statements that Pledgor is obligated to furnish
or execute hereunder. Pledgor shall execute and deliver such additional
documents as may be necessary to enable Secured Party to implement such right.
7.5 Pledgor shall pay all costs and expenses, including without
limitation court costs and reasonable attorneys' fees, incurred by Secured Party
in enforcing payment and performance of the Obligation or in exercising the
rights and remedies of Secured Party hereunder. All such costs and expenses
shall be secured by this Agreement and by all other lien and security documents
securing the Obligation. In the event of any court proceedings, court costs and
attorneys' fees shall be set by the court and not by jury and shall be included
in any judgment obtained by Secured Party.
7.6 In addition to any remedies provided herein for an Event of
Default, Secured Party shall have all the rights and remedies afforded a secured
party under the Uniform Commercial Code and all other legal and equitable
remedies allowed under applicable law. No failure on the part of Secured Party
to exercise any of its rights hereunder arising upon any Event of Default shall
be construed to prejudice its rights upon the occurrence of any other or
subsequent Event of Default. No delay on the part of Secured Party in exercising
any such rights shall be construed to preclude it from the exercise thereof at
any time while that Event of Default is continuing. Secured Party may enforce
any one or more rights or remedies hereunder successively or concurrently. By
accepting payment or performance of any of the Obligation after its due date,
Secured Party shall not thereby waive the agreement contained herein that time
is of the essence, nor shall Secured Party waive either its right to require
prompt payment or performance when due of the remainder of the Obligation or its
right to consider the failure to so pay or perform an Event of Default.
7.7 The exercise by the Secured Party of its rights and remedies upon
the occurrence of an Event of Default shall be subject to the rights of Imperial
and Cruttenden under the Imperial Pledge Agreement and the Cruttenden Pledge
Agreement, respectively.
8. MISCELLANEOUS PROVISIONS
8.1 The acceptance of this Agreement by Secured Party shall not be
considered a waiver of or in any way to affect or impair any other security that
Secured Party may have, acquire simultaneously herewith, or hereafter acquire
for the payment or performance of the Obligation, nor shall the taking by
Secured Party at any time of any such additional security be construed as a
waiver of or in any way to affect or impair the right and interest granted
herein; Secured Party may resort, for the payment or
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performance of the Obligation, to its several securities therefor in such order
and manner as it may determine.
8.2 Without notice or demand, without the necessity for any additional
endorsements, without affecting the obligations of Pledgor hereunder or the
personal liability of any person for payment or performance of the Obligation,
and without affecting the rights and interests granted herein, Secured Party,
from time to time, may: (i) extend the time for payment of all or any part of
the Obligation, accept a renewal note therefor, reduce the payments thereon,
release any person liable for all or any part thereof, or otherwise change the
terms of all or any part of the Obligation; (ii) take and hold other security
for the payment or performance of the Obligation and enforce, exchange,
substitute, subordinate, waive or release any such security; (iii) join in any
extension or subordination agreement; or (iv) release any part of the Pledged
Securities from this Agreement.
8.3 Pledgor waives and agrees not to assert: (i) any right to require
Secured Party to proceed against any guarantor, to proceed against or exhaust
any other security for the Obligation, to pursue any other remedy available to
Secured Party, or to pursue any remedy in any particular order or manner; (ii)
the benefits of any statute of limitations affecting the enforcement hereof;
(iii) the benefits of any legal or equitable doctrine or principle of
marshalling; (iv) demand, diligence, presentment for payment, protest and
demand, and notice of extension, dishonor, protest, demand and nonpayment,
relating to the Obligation; and (v) any benefit of, and any right to participate
in, any other security now or hereafter held by Secured Party.
8.4 The terms herein shall have the meanings in and be construed under
the Uniform Commercial Code. This Agreement shall be governed by and construed
according to the internal laws of the State of Arizona. Each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be void or
invalid, the same shall not affect the remainder hereof which shall be effective
as though the void or invalid provision had not been contained herein.
8.5 No modification, rescission, waiver, release or amendment of any
provision of this Agreement shall be made except by a written agreement executed
by Pledgor and Secured Party.
8.6 This Agreement shall remain in full force and effect until all of
the Obligation shall have been paid and performed in full.
8.7 No setoff or claim that Pledgor now has or may in the future have
against Secured Party shall relieve Pledgor from paying or performing its
obligations hereunder.
8.8 Time is of the essence hereof. If more than one Pledgor is named
herein, the word Pledgor shall mean all and any one or more of them, severally
and collectively. All liability hereunder shall be joint and several. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their heirs, personal representatives, successors and assigns. The
term "Secured Party" shall include not only the original Secured Party hereunder
but also any future owner and holder, including pledgees, of the note or notes
evidencing the Obligation. The provisions hereof shall apply to the parties
according to the context thereof and without regard to the number or gender of
words or expressions used.
8.9 All notices required or permitted to be given hereunder shall be in
writing and shall be given at the place and in the manner provided in the Stock
Purchase Agreement.
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8.10 All exhibits and schedules attached to this Agreement are
incorporated herein at each reference thereto.
8.11 A carbon, photographic or other reproduced copy of this Agreement
and/or any financing statement relating hereto shall be sufficient for filing
and/or recording as a financing statement.
8.12 Secured Party may bring any action or proceeding to enforce or
arising out of this Agreement in any court of competent jurisdiction. Any action
or proceeding brought by Debtor arising out of this Agreement shall be brought
solely in a court of competent jurisdiction located in the County of Maricopa,
State of Arizona, or in the United States District Court for the District of
Arizona. Pledgor waives any objection which it may now or hereafter have to
venue of any such action or proceeding and waives any right to seek removal of
any action or proceeding commenced in accordance herewith. If either party
commences any action or proceeding arising out of this Agreement, in a court
located in the County of Maricopa, State of Arizona, or the United States
District Court for the District of Arizona, the other party hereby agrees that
it will submit and does hereby irrevocably submit to the personal jurisdiction
of such courts and will not attempt to have such action dismissed, abated, or
transferred on the ground of forum non convenience or similar grounds; provided,
however, that nothing contained herein shall prohibit any party from seeking, by
appropriate motion, to remove any action brought in a Arizona state court to the
United States District Court for the District of Arizona. If such action is so
removed, however, neither party shall seek to transfer such action to any other
district, nor shall either party seek to transfer to any other district any
action which the other party originally commences in such federal court.
8.13 Pledgor agrees that a summons and complaint or equivalent
documents commencing an action or proceeding in any court shall be validly and
properly served and shall confer personal jurisdiction over Pledgor if served
upon Bonn, Luscher, Padden & Wilkins, 805 North Second Street, Phoenix, Arizona
85004, Attention: John M. Welch, Esq., whom Pledgor hereby designates and
appoints as Pledgor's authorized agent to accept and acknowledge on its behalf
service of any and all process which may be served in such action or proceeding
in any such court. Pledgor shall be sent, by certified mail to Pledgor's notice
address as provided herein, a copy of such summons and complaint at the time of
service upon such agent; provided, however, that any such copy shall be sent
solely as a courtesy for Pledgor and its failure to receive such copy shall in
no way affect the validity and propriety of the service made on Pledgor through
such agent. Pledgor agrees that if it desires to make any change in its agent
for service, such change shall be subject to Secured Party's written approval,
which approval shall not be unreasonably withheld.
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PLEDGOR AND SECURED PARTY HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE
PLEDGED SECURITIES, OR ANY DEALINGS BETWEEN PLEDGOR AND SECURED PARTY IN
CONNECTION WITH THE TRANSACTIONS THAT ARE THE SUBJECT OF THIS AGREEMENT, AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY. THIS PROVISION SHALL APPLY TO ANY SUCH ACTION OR PROCEEDING,
WHETHER INVOLVING A CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED IN CONTRACT,
TORT OR OTHERWISE. EITHER PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO
THE WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.
IN WITNESS WHEREOF, these presents are executed as of the date
indicated above.
SOUTHHAMPTON ENTERPRISES CORP., a British
Columbia corporation
By /s/ L. Steven Haynes
Its President
PLEDGOR
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SCHEDULE 1
Sellers
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Thomas E. Dooley, Jr. and Gail A. Dooley, Trustees under the Thomas E.
Dooley and Gail Dooley Revocable Trust of 1988, dated 10/4/88
Thomas E. Dooley as Custodian Under the Uniform Gifts to Minors Act fbo
Kim L. Dooley
Thomas E. Dooley as Custodian Under the Uniform Gifts to Minors Act fbo
Shawn T. Dooley
Thomas E. Dooley, Jr. and Gail A. Dooley, Trustees under the Thomas E.
Dooley and Gail Dooley Revocable Trust of 1988, dated 10/4/88
E. Louis Werner, Jr. Trustee, E. Louis Werner, Jr. Revocable Intervivos
Trust dated December 31, 1982
Bobbi D. Hunter, Trustee under the 1989 Trust Agreement established
separate irrevocable Gift Trusts f/b/o the children of Thomas and Gail
Dooley dated March 7, 1989
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Exhibit "A"
1,000 shares of common stock in Southhampton Enterprises, Inc., a Texas
corporation
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