Stock Pledge And Security Agreement

EXHIBIT 10.12



STOCK PLEDGE AND SECURITY AGREEMENT

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(WITH IRREVOCABLE PROXY)

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THIS STOCK PLEDGE AND SECURITY AGREEMENT (WITH IRREVOCABLE PROXY) ("Agreement"), is entered into as of the 29th day of December, 1994, by and between G. DEAN BOOTH, a single man ("Pledgor"), and GREYHOUND FINANCIAL CORPORATION, a Delaware corporation ("Secured Party").



A. CPS Acquisition Corp., a Georgia corporation ("Issuing Corporation"), has requested that Secured Party extend to it a loan ("Term Loan") in an amount not to exceed One Million Five Hundred Thousand Dollars ($1,500,000) pursuant to a Term Loan Agreement between Issuing Corporation and Secured Party dated as of even date herewith (as it may be from time to time renewed, amended, restated or replaced, "Term Loan Agreement") and evidenced by a promissory note (as from time to time renewed, amended, restated or replaced, "Term Loan Note").



B. CPS Systems Inc., a Texas corporation ("Company"; and Issuing Corporation and Company collectively, "Borrowers"), has requested that Secured Party extend to it in the form a revolving line of credit a loan ("Revolver Loan"; and the Term Loan and Revolver Loan collectively, "Loans") in a principal amount not to exceed One Million Dollars ($1,000,000) pursuant to a Revolver Loan and Security Agreement between Company and Secured Party dated as of even date herewith (as it may be from time to time renewed, amended, restated or replaced, "Revolver Loan Agreement"; and the Term Loan Agreement and the Revolver Loan Agreement collectively, "Loan Agreements") and evidenced by a promissory note (as from time to time renewed, amended, restated or replaced, "Revolver Loan Note"; and the Term Loan Note and the Revolver Loan Note collectively, "Notes").



C. The Loan Agreements, Notes, and all other documents now or hereafter evidencing and/or securing the Loans are hereinafter referred to as the "Credit Facilities Documents."



D. The Term Loan will be used to pay a part of the acquisition costs of Issuing Corporation for all of the capital stock of Company. Under the terms of the Credit Facilities Documents, Acquisition Corp. is required to merge into Company. Upon such merger, the term "Issuing Corporation" shall mean Company and the term "Borrowers" will include only Company.



E. Pledgor owns the shares of common stock of Issuing Corporation described in Schedule E (including any of the share of capital stock of Company into which it may be converted upon consummation of the merger, "Shares").

F. In order to induce Secured Party to make the Loans, Pledgor desires to grant a security interest in, pledge, assign and transfer to Secured Party, as additional security for the Loans and other obligations, all of Pledgor's right, title and interest in and to the Shares.



A G R E E M E N T:

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NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants, conditions, representations and warranties contained herein, the parties hereto do hereby agree as follows:



1. Security Interest. Pledgor hereby grants a security interest to

----------------- Secured Party in and to the Shares, together with all rights thereof or arising therefrom, all certificates, options or warrants associated therewith, all additions thereto, dividends and payments arising thereunder, all substitutions therefor and the proceeds (including, without limitation, all accounts, chattel paper, contract rights, documents, general intangibles, instruments, and equipment, inventory and other goods) of all of the foregoing (collectively, "Collateral"), as security for all of the following (collectively, "Obligations"): the obligations of Borrowers, or either of them, to Secured Party under the Loan Agreements and any and all of the other Credit Facilities Documents, all obligations of Pledgor under this Agreement, and all other obligations now or hereafter owed to Secured Party by Borrowers, or either of them, or their respective successors and/or assigns to Secured Party. Upon execution of this Agreement, Pledgor shall deliver to Secured Party the certificates evidencing the Shares together with stock power(s) and assignment(s) separate from certificate for the certificates representing the Shares, endorsed in blank, with signature guaranteed as required by the transfer agent for the Shares, and the books of Issuing Corporation of such Shares shall contain a legend to reflect such pledge of the Shares hereunder.



2. Covenants, Representations and Warranties. Pledgor covenants,

----------------------------------------- represents and warrants to Secured Party, with the understanding that Secured Party is relying on such representations and warranties, that:



(a) the Collateral is the sole and separate Property of

Pledgor, and Pledgor has title to the Collateral and is the legal and

beneficial owner of the Collateral, free from any liens, security

interests, assignments, encumbrances or claims of any kind, other than

the security interest created by this Agreement and, subject to the

provisions of the Subordination Agreement (as defined in the Term Loan

Agreement), and the Subordinated Indebtedness Liens (as defined in the

Term Loan Agreement);





(b) Except for the Subordinated Indebtedness Lien, so long as it is subject to the terms and conditions of the Subordination Agreement, Pledgor will not assign, pledge, encumber or otherwise transfer in any way, so long as this Agreement shall remain in effect, the whole or any part of the Collateral;



(c) Except for the Subordinated Indebtedness Liens, so long as it is subject to the terms and conditions of the Subordination Agreement, Pledgor will not permit or suffer to exist any lien, security interest, encumbrance or claim of any kind upon the Collateral, except those in favor of Secured Party;



(d) Pledgor shall deliver to Secured Party and Secured Party shall retain physical possession of all stock certificates and other instruments and documents representing or evidencing any of the Collateral, which stock certificates shall be duly endorsed for transfer to Secured Party;



(e) Pledgor will not amend or waive or consent to any amendment or waiver of the instruments or documents constituting the Collateral or make any compromise, adjustment, settlement or termination in connection therewith, and Pledgor will preserve and enforce all of its rights under the corporate governance documents establishing the rights of holders of shares of stock of the class held by Pledgor, unless failure to do so would not adversely affect the Collateral;



(f) Pledgor will accept no payments, distributions or dividends on the Collateral, Pledgor will hold any such payment, distribution or dividend received by Pledgor in trust for Secured Party and not commingle it with its general funds, and Pledgor will immediately remit to Secured Party any payment, distribution or dividend received by it;



(g) The execution and delivery of this Agreement, and the performance of its terms, will not result in any violation of or constitute a default under the terms of any agreement, or other instrument, license, judgment, order, statute, ordinance or other governmental rule or regulation, applicable to Pledgor or the Collateral;



(h) Upon its execution and delivery, this Agreement shall create an enforceable and valid lien upon and security interest in the Collateral;



(i) Pledgor has full power and authority to enter into this Agreement and, if Pledgor is other than a natural person,







the person executing this Agreement on behalf of Pledgor have been duly authorized to act on behalf of Pledgor in the execution thereof;



(j) The capitalization of the Issuing Corporation consists of ten thousand (10,000) authorized and issued shares of common stock and upon the merger of Issuing Corporation into Company will convert into ten thousand (10,000) shares of common stock of Company; the capitalization of Company consists of five thousand six hundred (5,600) authorized and issued shares of common stock and except for the warrants described in Schedule 2(j), there are no agreements in effect which require or obligate Issuing Corporation or Company to issue any additional shares of stock of Issuing Corporation or Company and there are no outstanding warrants, options of other rights to purchase any shares of stock of Issuing Corporation;



(k) Other than Pledgor and the other stockholders of Issuing Corporation listed in Schedule 2(k), there are no persons who assert any type of ownership interest or control (whether by virtue of voting rights or otherwise) whatsoever in Issuing Corporation; and other than Issuing Corporation, there are no other persons who assert any type of ownership interest in Company.



(1) Other than this Agreement and the pledge agreement creating the Subordinated Indebtedness Liens on the Collateral, there is no agreement which imposes any conditions or restrictions on the Shares, and Pledgor shall take no action to impose any such restrictions prior to full satisfaction of all of Borrowers' Obligations under the Credit Facilities Documents;



(m) All of the Shares have been duly authorized, validly issued and are fully paid and non-assessable;



(n) The granting by Pledgor to Secured Party of the security interest in the Collateral as evidenced by this Agreement complies with all applicable federal and state securities laws or qualifies for an exemption from such registration;



(o) Pledgor will promptly (but not later than three (3) days after receipt thereof) deliver to Secured Party copies of any notices received with respect to matters materially affecting the Collateral; and









(p) Pledgor's principal place of business, chief executive

office and/or (if it is a natural person) residence is located at the

mailing address set forth in Schedule 2(m) and Pledgor will not change

the location of its principal place of business or chief executive

office or (if it is a natural person) residence without ten (10) days

prior written notice to Secured Party.



3. Default. The occurrence of any of the following shall constitute an

------- event of default ("Event of Default") under this Agreement:



(a) A default or violation shall occur in the performance

of any of the obligations of Pledgor under Section 2;



(b) A default or violation in the performance of Pledgor's

obligations under this Agreement or any of the other Loan Documents

(other than a default or violation referred to elsewhere in this

Section 3) which continues unremedied (i) for a period of five (5)

Business Days (as defined below) after notice of such default or

violation to Pledgor in the case of any default or violation which can

be cured by the payment of money alone or (ii) for a period of twenty

(20) Business Days after notice to Pledgor in the case of any other

default or violation;



(c) Any representation or warranty of Pledgor contained herein

or in any certificate furnished to Secured Party hereunder by or on

behalf of Pledgor proves to be, in any material respect, false or

misleading as of the date deemed made; or



(d) An "Event of Default," as defined elsewhere in any of the

other Credit Facilities Documents.



As used herein, the term "Business Day" means any day other than a Saturday, Sunday or a day on which banks in, Los Angeles, California, or New York, New York, are required to close.



4. Remedies. Upon the occurrence of any Event of Default, Secured Party

-------- may, at its option and without further notice to Pledgor, do one or more of the following:



(a) Sell, assign and deliver any or all of the Collateral or

any rights or interest therein at public or private sale, at Secured

Party's option;













(b) Collect any and all dividends or proceeds due from the

Collateral and apply such to all costs and expenses of Secured Party

and to all obligations secured hereby; and



(c) Take such other action and remedies as are provided in the

applicable Uniform Commercial Code or as otherwise allowed by law.



With respect to any sale of the Collateral by Secured Party, whether public or private, under the UCC or otherwise, notice of such sale shall be deemed commercially reasonable if given to Pledgor at least ten (10) Business Days prior to the date of the intended disposition. Any and all remedies conferred upon Secured Party shall be deemed cumulative with and non-exclusive of any other remedies allowed by law. The exercise of any one remedy ...