EXHIBIT 10.36
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement (this "Agreement") dated as of
December 13, 2004, between CORNELL CAPITAL PARTNERS, LP, a
Delaware limited partnership (the "Pledgee"), and Apros & Chay,
Ltd. (the "Pledgor").
BACKGROUND
DCI USA, Inc. ("DCI") has entered into a Securities
Purchase Agreement dated as of the date hereof (as amended,
modified, restated or supplemented from time to time (the "SPA
Agreement")) pursuant to which Pledgee provides or will provide
certain financial accommodations to DCI.
In order to induce Pledgee to provide or continue to provide
the financial accommodations described in the SPA Agreement,
Pledgor has agreed to pledge and grant a security interest in the
collateral described herein to Pledgee on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Defined Terms. All capitalized terms used herein which
are not defined shall have the meanings given to them in the SPA
Agreement.
2. Pledge and Grant of Security Interest. To secure the
full and punctual payment and performance of the obligations
under the SPA Agreement (the "Indebtedness"), Pledgor hereby
pledges, assigns, hypothecates, transfers and grants a security
interest to Pledgee in 48,500,000 shares of Technoprises Ltd.
(the "Issuer") common stock held by Pledgor (the "Collateral").
3. Delivery of Collateral. All certificates representing
or evidencing the Collateral shall be delivered to and held by or
on behalf of Pledgee pursuant hereto and shall be accompanied by
duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to Pledgee. Pledgor hereby
authorizes the Issuer upon demand by Pledgee to deliver any
certificates, instruments or other distributions issued in
connection with the Collateral directly to Pledgee, in each case
to be held by Pledgee, subject to the terms hereof. Upon an
Event of Default ("Event of Default") under the Secured Debenture
given by DCI USA, Inc. to the Pledgee on the date hereof, Pledgee
shall have the right, during such time in its discretion and
without notice to the Pledgor, to transfer to or to register in
the name of Pledgee or any of its nominees any or all of the
Collateral. In addition, Pledgee shall have the right at such
time to exchange certificates or instruments representing or
evidencing the Collateral for certificates or instruments of
smaller or larger denominations.
4. Representations and Warranties of Pledgor. Pledgor
represents and warrants to Pledgee (which representations and
warranties shall be deemed to continue to be made until all of
the Indebtedness has been paid in full) that:
(a) The execution, delivery and performance by Pledgor
of this Agreement and the pledge of the Collateral hereunder do
not and will not result in any violation of any agreement,
indenture, instrument, license, judgment, decree, order, law,
statute, ordinance or other governmental rule or regulation
applicable to Pledgor.
(b) This Agreement constitutes the legal, valid, and
binding obligation of Pledgor enforceable against Pledgor in
accordance with its terms.
(c) Pledgor is the direct and beneficial owner of each
share of the Collateral.
(d) All of the shares of the Collateral have been duly
authorized, validly issued and are fully paid and nonassessable.
(e) No consent or approval of any person, corporation,
governmental body, regulatory authority or other entity, is or
will be necessary for (i) the execution, delivery and performance
of this Agreement, (ii) the exercise by Pledgee of any rights
with respect to the Collateral or (iii) the pledge and assignment
of, and the grant of a security interest in, the Collateral
hereunder.
(f) There are no pending or, to the best of Pledgor's
knowledge, threatened actions or proceedings before any court,
judicial body, administrative agency or arbitrator which may
materially adversely affect the Collateral.
(g) Pledgor has the requisite power and authority to
enter into this Agreement and to pledge and assign the Collateral
to Pledgee in accordance with the terms of this Agreement.
(h) Pledgor owns the Collateral and, except for the
pledge and security interest granted to Pledgee hereunder, the
Collateral shall be, immediately following the closing of the
transactions contemplated by the SPA Agreement, free and clear of
any other security interest, pledge, claim, lien, charge,
hypothecation, assignment, offset or encumbrance whatsoever
(collectively, "Liens").
(i) None of the Collateral has been issued or
transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to
which such issuance or transfer may be subject.
(j) The pledge and assignment of the Collateral and the grant of
a security interest under this Agreement vest in Pledgee all
rights of Pledgor in the Collateral as contemplated by this
Agreement.
5. Covenants. Pledgor covenants that, until the
Indebtedness shall be satisfied in full:
(a) Pledgor will not sell, assign, transfer, convey,
or otherwise dispose of its rights in or to the Collateral or any
interest therein; nor will Pledgor create, incur or permit to
exist any Lien whatsoever with respect to any of the Collateral
or the proceeds thereof other than that created hereby.
(b) Pledgor shall at any time, and from time to time,
upon the written request of Pledgee, execute and deliver such
further documents and do such further acts and things as Pledgee
may reasonably request in order to effect the purposes of this
Agreement including, but without limitation, delivering to
Pledgee upon the occurrence of an Event of Default irrevocable
proxies in respect of the Collateral in form satisfactory to
Pledgee.
6. Voting Rights and Dividends. Pledgor shall retain all
voting control and all other rights and incidents thereto until
the occurrence of an Event of Default.
7. Sale. Pledgor recognizes that, in the Event of Default
of the failure by DCI USA, Inc. to repay the Indebtedness,
Pledgee may liquidate the Collateral to pay off the balance
remaining to be paid. Any such sales shall be made in compliance
with the terms and conditions of the SPA Agreement.
8. Proceeds of Sale. The proceeds of any collection,
recovery, receipt, appropriation, realization or sale of the
Collateral shall be applied by Pledgee to the payment of the
Indebtedness, in whole or in part, in such order as Pledgee may
elect.
9. Waiver of Marshaling. Pledgor hereby waives any right
to compel any marshaling of any of the Collateral.
10. No Waiver. Any and all of Pledgee's rights with
respect to the Liens granted under this Agreement shall continue
unimpaired, and Pledgor shall be and remain obligated in
accordance with the terms hereof, notwithstanding (a) the
bankruptcy, insolvency or reorganization of Pledgor, (b) the
release or substitution of any item of the Collateral at any
time, or of any rights or interests therein, or (c) any delay,
extension of time, renewal, compromise or other indulgence
granted by Pledgee in reference to any of the Indebtedness.
Pledgor hereby waives all notice of any such delay, extension,
release, substitution, renewal, compromise or other indulgence,
and hereby consents to be bound hereby as fully and effectively
as if Pledgor had expressly agreed thereto in advance. No delay
or extension of time by Pledgee in exercising any power of sale,
option or other right or remedy hereunder, and no failure by
Pledgee to give notice or make demand, shall constitute a waiver
thereof, or limit, impair or prejudice Pledgee's right to take
any action against Pledgor or to exercise any other power of
sale, option or any other right or remedy.
11. Waivers.
(a) EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OTHER
AGREEMENT EXECUTED OR DELIVERED BY THEM IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING
IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HERETO HEREBY
AGREES AND CONSENTS THAT ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT
ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH
PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
12. Miscellaneous.
(a) This Agreement constitutes the entire and final
agreement among the parties with respect to the subject matter
hereof and may not be changed, terminated or otherwise varied
except by a writing duly executed by the parties hereto.
(b) No waiver of any term or condition of this
Agreement, whether by delay, omission or otherwise, shall be
effective unless in writing and signed by the party sought to be
charged, and then such waiver shall be effective only in the
specific instance and for the purpose for which given.
(c) In the event that any provision of this Agreement
or the application thereof to Pledgor or any circumstance in any
jurisdiction governing this Agreement shall, to any extent, be
invalid or unenforceable under any applicable statute,
regulation, or rule of law, such provision shall be deemed
inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform to such statute, regulation
or rule of law, and the remainder of this Agreement and the
application of any such invalid or unenforceable provision to
parties, jurisdictions, or circumstances other than to whom or to
which it is held invalid or unenforceable shall not be affected
thereby, nor shall same affect the validity or enforceability of
any other provision of this Agreement.
(d) This Agreement shall be binding upon Pledgor, and
Pledgor's successors and assigns, and shall inure to the benefit
of Pledgee and its successors and assigns.
(e) Any notice or other communication required or
permitted pursuant to this Agreement shall be given in accordance
with the Purchase Agreement.
(f) This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New
Jersey without regard to the principles of conflict of laws. The
parties further agree that any action between them shall be heard
in Xxxxxx County, New Jersey, and expressly consent to the
jurisdiction and venue of the Superior Court of New Jersey,
sitting in Xxxxxx County and the United States District Court for
the District of New Jersey sitting in Newark, New Jersey for the
adjudication of any civil action asserted pursuant to this
Paragraph.
(g) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all
of which when taken together shall constitute one and the same
agreement. Any signature delivered by a party by facsimile
transmission shall be deemed an original signature hereto.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the day and year first written above.
APROS & CHAY, LTD
By: /s/ Xxxx Xxxx
XXXXXXX CAPITAL PARTNERS, LP
By: Yorkville Advisors, LLC
Its: General Partner
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Portfolio Manager
The undersigned hereby acknowledges and consents to the
Stock Pledge Agreement and agrees to take all steps necessary or
desirable to recognize the Pledgee as the beneficial owner of the
Collateral upon notice from the Pledgee that an Event of Default
under the Secured Debenture has occurred.
TECHNOPRISES, LTD
By: /s/ Xxxx Xxxx
Name:_Adam
Ofek_________________________
Title: President
