EXHIBIT 10.2
STOCK PLEDGE AGREEMENT
----------------------
1. As collateral security for the payment of any and all
indebtedness (principal, interest, fees, collection costs and expenses and other
amounts), liabilities and obligations of the undersigned, FIRST BANKS, INC., a
Missouri corporation ("Debtor"), to INVESTORS OF AMERICA LIMITED PARTNERSHIP, a
------
Nevada limited partnership ("Secured Party") evidenced by or arising under the
-------------
Revolving Credit Note dated the date hereof, executed by Debtor, and payable to
the order of Secured Party in the principal amount of up to $30,000,000.00 (as
amended, the "Note") (each, a "Liability;" and collectively, "Liabilities"),
---- --------- -----------
Debtor hereby pledges and delivers to Secured Party and grants Secured Party a
security interest in and a lien upon the following: (a)(i) 100 shares of the
common stock of Coast Financial Holdings, Inc., a Florida corporation ("Coast
-----
Financial"), and (ii) 100 shares of common stock of The San Francisco Company, a
- ---------
Delaware corporation ("SF Company"), set forth and described on Collateral
----------
Schedule #1 attached hereto and incorporated herein by reference (collectively,
- -----------
the "Pledged Shares") and the certificates representing the Pledged Shares, and
--------------
all dividends, cash, instruments, stock, securities and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares, (b) all additional shares of any
class of capital stock of Coast Financial or SF Company (individually, a
"Subsidiary," and collectively, the "Subsidiaries") from time to time acquired
by Debtor in any manner (collectively, the "Additional Shares"), and the
------------------
certificates representing such Additional Shares, and all dividends, cash,
instruments, stock, securities and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Additional Shares, (c) all other rights appurtenant to the property
described in clauses (a) and (b) above (including, without limitation, voting
rights) and (d) all cash and noncash proceeds of any and all of the foregoing
(collectively, the "Collateral"). Certificates representing the Pledged Shares
----------
set forth on Collateral Schedule #1 attached hereto, accompanied by proper
-----------------------
instruments of assignment duly executed in blank by Debtor, are herewith being
delivered to Secured Party. Promptly upon Debtor's acquisition of any Additional
Shares, Debtor will (i) deliver to Secured Party the certificates representing
such Additional Shares together with proper instruments of assignment duly
executed in blank by Debtor and (ii) amend Collateral Schedule #1 to include
------------------------
such Additional Shares.
2. Debtor hereby covenants and agrees that (a) with respect to all
shares of any class of capital stock of either Subsidiary pledged to Secured
Party contemporaneously with the execution of or pursuant to this Stock Pledge
Agreement (this "Agreement"), or at any time hereafter, if any stock dividends,
---------
stock splits, reclassifications, adjustments or other changes are made in the
capital structure of either Subsidiary (whether as a result of a reorganization,
recapitalization, share split up, merger, transfer, consolidation or otherwise),
all new, additional or substituted securities issued with respect to any of such
shares by reason of any such change shall be subject to Secured Party's security
interest and immediately delivered to Secured Party, which shall hold such
shares or securities so issued as additional Collateral, (b) if any warrants,
options or other rights now or hereafter exist with respect to any of the
Pledged Shares, any of the Additional Shares or any of the other Collateral,
Debtor has and hereafter shall immediately so advise Secured Party of the
existence of such warrants, options and rights, all such warrants, options and
rights shall be subject to Secured Party's security interest and all stock or
securities issued pursuant to the exercise of any such warrant, option or right
shall be subject to Secured Party's security interest and immediately delivered
to Secured Party, which shall hold such shares or securities as additional
Collateral, (c) Debtor shall immediately pledge and deliver to Secured Party any
and all shares of any class of capital stock of such Subsidiary now owned or
hereafter acquired by Debtor and (d) Debtor shall not, without the prior written
consent of Secured Party, (i) sell, assign or otherwise transfer or pledge any
of the Pledged Shares, any of the Additional Shares or any of the other
Collateral, (ii) create or permit any other lien or encumbrance upon, or any
other security interest in, any of the Pledged Shares, any of the Additional
Shares or any of the other Collateral or (iii) grant any option or right with
respect to any of the Pledged Shares, any of the Additional Shares or any of the
other Collateral.
3. Debtor hereby represents and warrants to Secured Party that:
(a) Debtor is the sole legal, beneficial and record owner
of all of the Collateral pledged hereunder and none of the Collateral pledged
hereunder is or will be subject to any security interests, liens, encumbrances,
charges, claims, warrants, options, proxies, restrictions on transfer, resale or
other disposition, restrictions on voting rights, preferences and/or other
preferential arrangements of any kind or nature whatsoever (except those in
favor of Secured Party under this Agreement);
(b) the Pledged Shares have been duly authorized and validly
issued by the applicable Subsidiary and are fully paid and non-assessable;
(c) Debtor has all requisite corporate power and authority
to (i) pledge, assign, grant a security interest in, transfer and deliver the
Collateral to Secured Party in the manner hereby done or contemplated and (ii)
execute, deliver and perform all of its obligations under this Agreement;
(d) this Agreement has been duly authorized, executed and
delivered by Debtor and constitutes the legal, valid and binding obligation of
Debtor, enforceable in accordance with its terms;
(e) no consent, approval, authorization or other order of any
governmental or regulatory agency, authority, body or official or any other
third party is or will be required for (i) the execution, delivery and/or
performance of this Agreement by Debtor or the delivery by Debtor of the
Collateral to Secured Party as provided herein or (ii) 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;
(f) the execution, delivery and performance by Debtor of this
Agreement do not and will not (i) violate any provision of the Articles of
Incorporation or Bylaws of Debtor or any law, rule, regulation (including,
without limitation, Regulations U and X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree, determination or
award presently in effect having applicability to Debtor, (ii) result in a
breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, document or instrument to which Debtor is a
party or by which it or its properties may be bound or affected, or (iii) result
in or require the creation or imposition of any mortgage, deed of trust, pledge,
lien, security interest or other charge or encumbrance of any nature upon or
with respect to any of the property or assets of Debtor (other than in favor of
Secured Party as provided for in this Agreement);
(g) upon the execution of this Agreement, Secured Party will
have a valid and enforceable security interest in the Collateral. So long as
Secured Party has possession of the certificates representing the Pledged
Shares, Secured Party's security interest in the Pledged Shares and the proceeds
thereof will be perfected and have a first priority; and
(h) the authorized capital of Coast Financial consists solely
of 20,000 shares of common stock, $5.00 par value and 5,000,000 shares of
preferred stock, $0.01 par value, and the authorized capital stock of SF Company
consists solely of 1,000 shares of common stock, $0.10 par value, and no shares
of preferred stock. As of the date hereof, (i) there are 100 shares of common
stock of Coast Financial and 100 shares of common stock of SF Company issued and
outstanding; (ii) Debtor is the sole legal, beneficial and record owner of all
of such shares, representing all of the issued and outstanding shares of common
stock of Coast Financial and SF Company, respectively; and (iii) the Pledged
Shares consist of all of the outstanding shares of capital stock of each of the
Subsidiaries. The Pledged Shares are subject to no security interests, liens,
encumbrances, warrants, options, proxies, restrictions on transfer, resale or
other disposition or restrictions on voting rights (except those in favor of
Secured Party). As of the date hereof, there are no warrants or options, or any
agreements to issue any warrants or options, outstanding with respect to any
class of capital stock of either of the Subsidiaries.
4. Debtor hereby covenants and agrees that: (a) it will not cause or
permit either Subsidiary to (i) authorize or issue any new types, varieties or
classes of capital stock or any bonds or debentures, subordinated or otherwise,
or any stock warrants or options, (ii) authorize or issue any additional shares
of any existing class of capital stock or (iii) declare any stock dividends or
stock splits or take any other action which could, directly or indirectly,
decrease Debtor's ownership interest in such corporation; and (b) without the
prior written consent of Secured Party, (i) it will not cause or permit either
Subsidiary to amend or otherwise change its Articles or Certificate of
Incorporation or its Bylaws in any manner which could affect any of the voting
or other rights of any of the shares of capital stock of such corporation now
owned or hereafter acquired by Debtor and (ii) it will not take or cause or
permit either Subsidiary to take any other action which could, directly or
indirectly, affect the voting rights of Debtor with respect to any shares of
capital stock of such corporation now owned or hereafter acquired by Debtor.
5. So long as no Event of Default (as hereinafter defined) under
this Agreement has occurred and is continuing, notwithstanding any other
provision of this Agreement to the contrary:
(a) Debtor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Shares or any part thereof
for any purpose not inconsistent with the terms of this Agreement or the terms
of the Note; provided, however, that (i) Debtor shall not exercise or refrain
from exercising any such right if such action could reasonably be expected to
have an adverse effect on the value of the Pledged Shares or any part thereof
and (ii) Debtor shall not exercise or refrain from exercising any such right in
a manner which would authorize or effect (A) the dissolution or liquidation, in
whole or in part, of either Subsidiary, (B) the consolidation or merger of
either Subsidiary with or into any corporation or other entity unless such
corporation is the surviving entity, (C) the sale, disposition or encumbrance of
all or substantially all of the property or assets of either Subsidiary, (D) any
change in the authorized capital of either Subsidiary, (E) the issuance of any
additional shares of any class of capital stock of either Subsidiary or (F) the
alteration of the voting rights with respect to any class of capital stock of
either Subsidiary; and
(b) Debtor shall be entitled to collect and use for its
proper corporate purposes all cash dividends (except cash dividends paid or
payable in respect of the total or partial liquidation of Coast Financial or SF
Company) paid on the Pledged Shares; provided, however, that until actually
paid, all rights to such dividends shall remain subject to the security interest
created by this Agreement. All dividends (other than cash dividends governed by
the immediately preceding sentence) and all other distributions in respect of
any of the Pledged Shares or any of the other Collateral, whenever paid or made,
shall be delivered to Secured Party and held by it subject to the security
interest created by this Agreement.
6. If any one or more of the following events (each, an "Event
-----
of Default") shall occur and be continuing: (a) Debtor shall fail to make any
- ----------
payment of any principal of or interest on any of the Liabilities as and when
the same shall become due and payable taking into account any applicable notice,
grace or cure periods, whether by reason of demand, maturity, acceleration or
otherwise; (b) Debtor shall fail to perform or observe any term, provision,
covenant or agreement contained in this Agreement and any such failure shall
remain unremedied for thirty (30) days after the earlier of (i) written notice
of default is given to Debtor by Secured Party or (ii) an officer of Debtor
obtaining knowledge of such default; (c) any representation or warranty made by
Debtor in this Agreement shall prove to be untrue or incorrect in any material
respect; (d) if the shares of common stock of either Subsidiary then pledged by
Debtor to Secured Party pursuant to this Agreement shall at any time constitute
less than all of the then issued and outstanding shares of common stock of such
Subsidiary; or (e) any "Event of Default" (as defined therein) shall occur under
or within the meaning of the Note; then Secured Party may, at its option, (A)
declare the principal of and interest on any or all of the Liabilities to be
immediately due and payable, (B) exercise all voting rights with respect to the
Collateral, (C) appropriate and apply toward the payment and discharge of any
such Liability, moneys on deposit or otherwise held by Secured Party for the
account of, to the credit of or belonging to Debtor, (D) sell or cause to be
sold any Collateral, (E) have transferred to or registered in the name of
Secured Party, or its nominee or nominees, any Collateral and thereafter to
exercise all rights with respect thereto as the absolute owner thereof, without
notice or liability to Debtor, except to account for money or property actually
received by Secured Party; provided, however, that Secured Party may treat all
cash proceeds as additional Collateral and such proceeds need not be applied to
the reduction of the Liabilities of Debtor unless Secured Party so elects, (F)
in Secured Party's name, or in the name of Debtor, demand, sue for, collect and
receive money, securities or other property which may at any time be payable or
receivable on account of or in exchange for any of the Collateral, or make any
compromise or settlement that Secured Party considers desirable with respect
thereto or renew or extend the time of payment or otherwise modify the terms of
any obligation included in the Collateral; provided, however, that it is
expressly agreed that Secured Party shall not be obligated to take any step to
preserve rights against prior parties on any of the Collateral, and that
reasonable care of the Collateral shall not include the taking of any such step
and (G) exercise any or all of the rights and remedies of a Secured Party under
the Uniform Commercial Code of the State of Missouri, as from time to time
amended (the "Code"), or other applicable law. Any sale of Collateral may be
----
made without demand of performance and any requirement of the Code for
reasonable notice to Debtor shall be met if such notice is mailed, postage
prepaid, to Debtor at its address as it appears herein or as last shown on the
records of Secured Party at least five (5) business days before the time of
sale, disposition or other event giving rise to the notice. Debtor acknowledges
and agrees that it shall be reasonable for Secured Party to sell the Collateral
on credit for present or future delivery without any assumption of any credit
risk. In case of a public sale, notice published by Secured Party for ten (10)
days in a newspaper of general circulation in the City or County where the sale
is to be held shall be sufficient. The proceeds of any sale, or sales, of
Collateral shall be applied by Secured Party in the following order: (1) to
expenses, including attorneys' fees and expenses actually incurred, arising from
the enforcement of any of the provisions hereof, or of the Liabilities or of any
actual or attempted sale; (2) to the payment or the reduction of any of the
Liabilities of Debtor to Secured Party with the right of Secured Party to
distribute or allocate such proceeds in such order and manner as Secured Party
shall elect, and its determination with respect to such allocation shall be
conclusive; and (3) to the payment of any surplus remaining after payment of the
amounts mentioned, to Debtor or to whomsoever may be lawfully entitled thereto.
If any deficiency arises upon any such sale or sales Debtor agrees to pay the
amount of such deficiency promptly upon demand with interest. Notwithstanding
that Secured Party may continue to hold the Collateral and regardless of the
value thereof, Debtor shall be and remain liable for the payment in full of the
principal of and interest on any balance of the Liabilities and expenses at any
time unpaid.
7. Secured Party shall have no duties or obligations with respect to
the Collateral except that while the Collateral is in Secured Party's
possession, Secured Party's obligation with respect to the same shall be limited
to preserving the physical condition of the same.
8. At any time, whether prior to or after the occurrence of an Event
of Default under this Agreement, Secured Party may, at its option, but shall not
be obligated to, surrender or deliver, without further liability on the part of
Secured Party to account therefor, all or any part of the Collateral to or upon
the written order of Debtor, permit substitutions therefor or additions thereto,
and accept the receipt of Debtor for any Collateral, or proceeds thereof, which
receipt shall be a full and complete discharge of Secured Party with respect to
the Collateral so delivered and proceeds so paid. Upon payment in full by Debtor
of all Liabilities, Secured Party will deliver to Debtor all certificates and
indorsements relating to the Pledged Shares.
9. The rights and powers of Secured Party under this Agreement (a)
are cumulative and do not exclude any other right which Secured Party may have
independent of this Agreement and (b) may be exercised or not exercised at the
discretion of Secured Party (i) without regard to any rights of Debtor, (ii)
without forfeiture or waiver because of any delay in the exercising thereof,
(iii) without imposing any liability on Secured Party for so exercising or
failing to exercise and (iv) in the event of a single or partial exercise
thereof, without precluding further exercise thereof. No delay or omission on
the part of Secured Party in exercising any right hereunder shall operate as a
waiver of such right or of any other right hereunder and no waiver shall be
construed as a bar to or waiver of any right or remedy in the future. The rights
and powers of Secured Party under this Agreement shall inure to the benefit of
its successors and assigns and any assignee of any Liability secured hereby. Any
and all liabilities and obligations of Debtor under this Agreement shall be
binding upon the successors and assigns of Debtor.
10. Debtor agrees to do such further acts and things and to execute
and deliver such additional conveyances, assignments, agreements and instruments
(including, but not limited to, one or more financing statements pursuant to the
Uniform Commercial Code) as Secured Party may at any time reasonably request in
connection with the administration or enforcement of this Agreement or related
to the Collateral or any part thereof or in order to better assure and confirm
to Secured Party its rights, powers and remedies hereunder. Effective upon the
occurrence of and during the continuance of an Event of Default, Debtor hereby
makes, constitutes and appoints Secured Party the true and lawful agent and
attorney-in-fact of Debtor with full power of substitution to execute, endorse
and deliver such agreements, documents and instruments and to take such other
action in the name and on behalf of Debtor as may be necessary or appropriate to
carry out the intent of this Agreement, including, without limitation, the grant
of the security interest granted under this Agreement, and to perfect and
protect the security interest granted to Secured Party in respect of the
Collateral and Secured Party's rights created under this Agreement, which power
of attorney is irrevocable during the term of this Agreement. Debtor hereby
consents and agrees that the issuers of or obligors in respect of the Collateral
or any registrar or transfer agent for any of the Collateral shall be entitled
to accept the provisions hereof as conclusive evidence of the right of Secured
Party to effect any transfer pursuant to this Agreement, notwithstanding any
other notice or direction or the contrary heretofore or hereafter given by
Debtor or any other person (unless consented to in writing by Secured Party) to
any such issuers or obligors or to any such registrar or transfer agent.
11. Except as otherwise specified in this Agreement, any notice,
request, demand, consent or other communication under this Agreement shall be in
writing and delivered in person, or sent by registered or certified mail, return
receipt requested and postage prepaid, or transmitted by facsimile, if to Debtor
at 600 James. S. McDonnell Blvd., Hazelwood, MO 63042, Attention: Terrance M.
McCarthy or Lisa K. Vansickle, (314) 592-6621 (FAX), or if to Secured Party at
135 N. Meramec, Clayton, MO 63105, Attention: James F. Dierberg, (314) 854-5454
(FAX) and 600 James S. McDonnell Blvd., Hazelwood, MO 63042, Attention: Marilyn
A. Callahan, (314) 592-6647 (FAX) or at such other address as either party may
designate as its address for communications hereunder by notice so given. Such
notices shall be deemed effective on the day on which delivered, if delivered in
person, on the third (3rd) business day after the day on which mailed, if sent
by registered or certified mail, or when with answerback confirmation received
if sent by facsimile.
12. The terms of this Agreement, the pledge of Collateral hereunder
and the security interest created by this Agreement are continuing and shall
apply to the Liabilities. Debtor may not revoke or terminate this Agreement
unless and until (a) all of the Liabilities shall have been indefeasibly paid in
full in cash, (b) the Note shall have been terminated and (c) Secured Party
shall have no further commitment or obligation to make advances or extend credit
to Debtor, whether under the Note or otherwise.
13. If claim is ever made on Secured Party for repayment or recovery
of any amount or amounts received by Secured Party in payment or on account of
any of the Liabilities (including payment under a guaranty or from application
of collateral) and Secured Party repays all or part of said amount by reason of
(a) any judgment, decree or order of any court or administrative body having
jurisdiction over Secured Party or any property of Secured Party or (b) any
settlement or compromise of any such claim effected by Secured Party with any
such claimant (including, without limitation, Debtor), then and in such event
Debtor agrees that any such judgment, decree, order, settlement or compromise
shall be binding on Debtor, notwithstanding any cancellation of any note or
other instrument or agreement evidencing such Liabilities or of this Agreement,
and this Agreement shall continue to be effective or be reinstated, as the case
may be, and shall secure the payment of the amount so repaid or recovered to the
same extent as if such amount had never originally been received by Secured
Party except to the extent such judgment, decree, order, settlement or
compromise were caused by the gross negligence or intentional misconduct of
Secured Party. This Agreement shall continue to be effective or be reinstated,
as the case may be, if (i) at any time any payment of any of the Liabilities is
rescinded or must otherwise be returned by Secured Party upon the insolvency,
bankruptcy or reorganization of Debtor or otherwise, all as though such payment
had not been made or (ii) this Agreement is released in consideration of a
payment of money or transfer of property or grant of a security interest by
Debtor or any other person or entity and such payment, transfer or grant is
rescinded or must otherwise be returned by Secured Party upon the insolvency,
bankruptcy or reorganization of such person or entity or otherwise, all as
though such payment, transfer or grant had not been made.
14. This Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Missouri (without reference to
conflict of law principles); provided, however, that the perfection and effect
of the perfection or nonperfection of the security interests and liens created
by this Agreement shall in all respects be governed, construed, applied and
enforced in accordance with the substantive laws of the applicable
jurisdictions.
15. DEBTOR IRREVOCABLY AGREES THAT, SUBJECT TO SECURED PARTY'S SOLE
AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT
ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT, THE OTHER AGREEMENTS OR THE
COLLATERAL SHALL BE LITIGATED ONLY IN COURTS HAVING SITUS WITHIN THE COUNTY OF
ST. LOUIS, STATE OF MISSOURI. DEBTOR HEREBY CONSENTS AND SUBMITS TO THE
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID COUNTY AND
STATE. DEBTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE
VENUE OF ANY LITIGATION BROUGHT IN ACCORDANCE WITH THIS SECTION. DEBTOR AND BY
ITS ACKNOWLEDGEMENT BELOW, SECURED PARTY, IRREVOCABLY WAIVE THE RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY ACTION IN WHICH DEBTOR AND SECURED PARTY ARE
PARTIES.
This Agreement executed by Debtor in favor of Secured Party as of May
15, 2008.
(SIGNATURES ON FOLLOWING PAGE)
SIGNATURE PAGE
STOCK PLEDGE AGREEMENT
Debtor:
FIRST BANKS, INC.
By: /s/ Terrance M. McCarthy
------------------------------------------
Terrance M. McCarthy
President and Chief Executive Officer
Acknowledged by and agreed to by Secured Party as of May 15, 2008:
Secured Party:
INVESTORS OF AMERICA LIMITED PARTNERSHIP
By: /s/ James F. Dierberg
---------------------------------------------------
James F. Dierberg
President of First Securities America, Inc.,
General Partner of Investors of America Limited Partnership