PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of February 4, 1997, by Fidenas
International Limited, L.L.C., a New Jersey limited liability company
(the "Pledgor") in favor of TM Capital Corp., a Delaware corporation, the
Settlement Agent (as defined in that certain Stipulation of Settlement and
Order (the "Stipulation"), approved pursuant to an Order of the United
States District Court for the District of New Jersey, Xxxxxxxxx Xxxxxxxx X.
Xxxxxxx (the "Court"), dated November 19, 1996 (a copy of the Stipulation
is annexed hereto as Exhibit A)), acting as collateral agent hereunder
(in such capacity, the "Collateral Agent") in the manner and to the extent
described in the Stipulation for the benefit of Xxxxx Xxxxxxxx, a German
citizen residing in Switzerland, Xxxxxx Xxxxxxx, as Official Liquidator
of Fidenas International Bank Limited, a Bahamian banking company, Barclays Bank
PLC, a corporation organized under the laws of the United Kingdom ("Barclays"
and, collectively, the "Creditors") and Xxxxxxxx X. Xxxxxx, a German citizen
residing in Hong Kong ("Xxxxxx").
W I T N E S S E T H:
WHEREAS, the Pledgor, Xxxxxx, Xxxxxxx Radio Corp., a Delaware
Corporation ("Xxxxxxx"), the Creditors, Elision International, Inc., a Utah
corporation ("Elision"), GSE Multimedia Technologies, Inc. (formerly known as
GSE Electronic Systems, Inc.), a Delaware corporation ("GSE") and Xxxxx X.
Xxxxxx, as Official Liquidator of Fidenas Investment Limited, a Bahamian
company, are parties to the Stipulation;
WHEREAS, pursuant to paragraph 1(a) of the Stipulation, (i) Xxxxxx,
the Pledgor, Centralinvest S.A. and Pentland Finance Limited are jointly and
severally liable to the Creditors for the payment of the aggregate sum of $49.5
million (the "Settlement Amount"), in accordance with the terms thereof; (ii) to
the extent set forth in the Consent Judgments described in the Stipulation, GSE
is jointly and severally liable to Barclays for the payment of $1,835,423.26;
and (iii) subject to the provisions of the Stipulation, Xxxxxx will be paid the
sum of $3.5 million solely from the proceeds of the sale of the Xxxxxxx Shares
(as defined in the Stipulation) (the "Xxxxxx Payment" and, together with the
Settlement Amount, the "Aggregate Amount");
WHEREAS, pursuant to the terms of the Stipulation, some or all of the
Xxxxxxx Shares shall be sold and the proceeds shall be applied to, among other
things, the payment of the Aggregate Amount;
WHEREAS, in accordance with paragraph 2 of the Stipulation, the
Xxxxxxx Shares shall secure the payment of the Settlement Amount to the
Creditors on a first priority basis, and, on a subordinated basis and subject to
the provisions of the Stipulation, shall secure the payment of the Xxxxxx
Payment to Xxxxxx;
WHEREAS, in order to induce the Creditors to execute and deliver the
Stipulation, the Pledgor has agreed to the pledge of the Xxxxxxx Shares as
collateral security for the Pledge Obligations and the Subordinated Pledge
Obligations (each as defined below);
WHEREAS, the Stipulation requires that the Pledgor execute and deliver
to the Collateral Agent this Pledge Agreement; and
WHEREAS, the Pledgor desires to execute this Pledge Agreement to
satisfy the requirement described in the preceding paragraph and to induce the
Creditors to accept the payment of the Settlement Amount in order to resolve all
claims described in the Stipulation and, except as specifically provided
therein, all other pending litigation among the parties thereto and all
potential claims by, between and among the parties described therein and in
Exhibit B thereto.
NOW, THEREFORE, in consideration of the foregoing, the Pledgor hereby
covenants and agrees with the Collateral Agent as follows:
SECTION 1. DEFINITIONS. Except as otherwise provided herein, all
terms used herein which are defined in the Stipulation shall have the same
meanings herein as therein defined. As used in this Pledge Agreement, the
following terms shall have the following meanings, such meanings to be equally
applicable to both the singular and plural forms of the terms defined:
"Collateral" shall have the meaning assigned to such term in Section 2
hereof.
"Pledge Agreement" shall mean this Pledge Agreement, as the same may
be modified, supplemented or amended from time to time.
"Pledge Obligations" shall have the meaning assigned to such term in
Section 3 hereof.
"Pledged Stock" shall mean and include all of the Xxxxxxx Shares, and
any and all shares, stock certificates, options, dividends or rights paid or
issued by Xxxxxxx in respect of, in substitution of or in exchange for any such
shares, and any and all proceeds thereof, whether now or hereafter owned or
acquired.
"Subordinated Pledge Obligations" shall have the meaning assigned to
such term in Section 3 hereof.
SECTION 2. PLEDGE. To secure the payment of the Pledge Obligations
and the Subordinated Pledge Obligations in accordance with the Stipulation, the
Pledgor hereby pledges to the Collateral Agent, and grants to the Collateral
Agent a security interest in the Pledged Stock owned by the Pledgor and
registered in the name of the Pledgor on Xxxxxxx'x books and records and all
certificates representing such Pledged Stock and all dividends, distributions,
cash, instruments and other property or payments from time to time received,
receivable or otherwise distributed in payment of, in respect of or in exchange
for any or all of the Pledged Stock (collectively, the "Collateral").
SECTION 3. SECURITY FOR OBLIGATIONS. The Collateral secures the
payment in full of the Settlement Amount on a first priority basis (the "Pledge
Obligations") and, on a subordinated basis as set forth in paragraph 2(a) of the
Stipulation and subject to the provisions of the Stipulation, the Collateral
also secures the payment in full of the Xxxxxx Payment (the "Subordinated Pledge
Obligations").
SECTION 4. DELIVERY OF PLEDGED COLLATERAL; PERFECTION. (a) All
certificates or instruments representing or evidencing the Pool A Shares shall
be delivered to and held by the Collateral Agent pursuant to the Stipulation and
this Pledge Agreement and shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Collateral Agent. All certificates or instruments representing or evidencing
the Pool B Shares shall be delivered to and held by the Office of the Clerk of
the Court, as the bailee and agent of the Collateral Agent, and shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Collateral Agent. Pursuant to
paragraph 1 of the Stipulation, if at any time it becomes unnecessary (whether
as a result of waiver, amendment, modification, payment or redemption or other
change in circumstances with respect to the Indenture or the Senior Credit
Agreement) for the Court to hold any or all of the Pool B Shares in custody,
then it is the intention of the parties that, in accordance with the
Stipulation, such shares will (i) immediately be delivered to the Collateral
Agent, together with duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Collateral Agent, and (ii)
become part of the Pool A Shares.
(b) For purposes of perfecting the security interest and lien granted
hereunder and pursuant to the Stipulation and the Uniform Commercial Code, the
Collateral Agent acknowledges that (i) it holds, and will continue to hold, the
Pool A Shares as Collateral Agent, (ii) the Office of the Clerk of the Court
holds, and will continue to hold, the Pool B Shares as the Collateral Agent's
bailee and agent for such purposes, and (iii) each has received a copy of the
Stipulation, which constitutes written notification of such security interest in
and lien upon the Collateral granted by the Pledgor to the Collateral Agent
hereunder and pursuant to the Stipulation.
SECTION 5. REPRESENTATIONS AND WARRANTIES. The Pledgor represents
and warrants as follows:
(a) It is a limited liability company, validly existing and in
good standing under the laws of the jurisdiction of the State of New
Jersey and has all requisite power and authority, corporate or
otherwise, to conduct its business and to own its properties and to
execute and deliver, and to perform all of its obligations under, this
Pledge Agreement;
(b) The execution, delivery and performance of this Pledge
Agreement have been duly authorized by all necessary action on the
part of the Pledgor, and do not and will not (i) require any other
consent or approval of its members, (ii) violate any provision of any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to it,
(iii) result in a breach of, result in a mandatory prepayment or
acceleration of any indebtedness evidenced or secured by, or
constitute a default under, any indenture or loan or credit agreement,
or any other agreement, lease or instrument to which the Pledgor is a
party or by which its properties may be bound or affected; and the
Pledgor is not in default under any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument, or (iv) result in (except
as contemplated by this Pledge Agreement and the Stipulation) or
require the creation or imposition of any lien or security interest of
any nature upon or with respect to any of the properties or assets now
owned or hereafter acquired by the Pledgor;
(c) The Pledged Stock has been duly authorized and validly
issued and is fully paid and non-assessable;
(d) As of the Effective Date, the Pledgor will be the legal and
beneficial owner of the Collateral free and clear of all mortgages,
pledges, security interests, liens, encumbrances or charges of any
kind whatsoever except for (i) the security interest granted pursuant
to the Stipulation and this Pledge Agreement, (ii) the restrictions on
the exercise of voting power with respect to such shares set forth in
the Indenture, and the Senior Credit Agreement, and (iii) all other
similar restrictions, all of which are set forth on Schedule I to the
Stipulation (collectively, the "Permitted Liens");
(e) Assuming that the Collateral Agent has received no notice of
any adverse claim with respect to the Pledged Stock, then the
execution and delivery of this Pledge Agreement and the delivery to,
and possession of, the Pledged Stock by the Collateral Agent (or its
bailee) will result in the creation and perfection of a valid first
priority security interest in the Collateral, securing (i) the payment
of the Pledge Obligations and (ii) on a subordinated basis as set
forth in paragraph 2 of the Stipulation and subject to the provisions
of the Stipulation, the payment of the Subordinated Pledge
Obligations;
(f) No authorization, consent, approval, or other action by, and
no notice to or filing with, any governmental authority or regulatory
body is required either (i) for the pledge by the Pledgor of the
Collateral pursuant to this Pledge Agreement or for the execution,
delivery or performance of this Pledge Agreement by the Pledgor or
(ii) for the exercise (upon the termination of the Stipulation
pursuant to paragraph 11(b) thereof, unless the Court otherwise
directs, in accordance with Section 7(c) hereof) by the Collateral
Agent of the voting or other rights provided for in this Pledge
Agreement or the remedies in respect of the Collateral pursuant to
this Pledge Agreement (except as may be required in connection with
such disposition by laws affecting the offering and sale of securities
generally); and
(g) The Pledged Stock is comprised of 29,152,542 shares of the
40,252,772 shares of the issued and outstanding Xxxxxxx common stock
and, except for Xxxxxx'x existing options to purchase shares of
Xxxxxxx common stock described in paragraph 8(b) of the Stipulation,
and as reflected in the quarterly and annual reports filed by Xxxxxxx
in accordance with the Securities Act, no rights exist in favor of any
party, including the Pledgor, to acquire any other equity securities
of Xxxxxxx.
All representations, warranties and covenants of the Pledgor contained
in this Pledge Agreement shall survive the execution, delivery and performance
of this Pledge Agreement.
SECTION 6. FURTHER ASSURANCES. The Pledgor agrees that from time to
time, at its expense, the Pledgor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be reasonably
necessary or desirable, or that the Collateral Agent may request in its
discretion reasonably exercised, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the Collateral
Agent to exercise and enforce any of its rights and remedies hereunder with
respect to any Collateral.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC. (a) So long as all or any
portion of the Pledge Obligations or the Subordinated Pledge Obligations remain
unpaid and (x) any Pool A Shares are held by the Collateral Agent or any Pool B
Shares are in the custody of the Court, and (y) the Stipulation has not been
terminated pursuant to paragraph 11(b) thereof:
(i) The Pledgor shall retain the right to vote with respect
to all of the Xxxxxxx Shares, subject to the provisions of paragraph 4
of the Stipulation; and
(ii) Any and all dividends and other distributions paid in
respect of the Collateral shall be, and shall be forthwith delivered
to the Collateral Agent to hold as, Collateral and shall, if received
by the Pledgor, be received in trust for the benefit of the Collateral
Agent, be segregated from the other property or funds of the Pledgor,
and be forthwith delivered to the Collateral Agent as Collateral in
the same form as so received (with any necessary endorsement).
(b) Upon the sale of any Xxxxxxx Shares to a third party in
accordance with this Pledge Agreement, the Stipulation or a subsequent order of
the Court, the voting rights shall be transferred to the purchaser of such
shares without the restrictions set forth in paragraph 4 of the Stipulation and
the security interest and lien granted hereunder shall terminate and attach to
the proceeds thereof.
(c) In the event that the Stipulation is terminated pursuant to
paragraph 11(b) thereof prior to the payment in full of the Pledge Obligations
and the Subordinated Pledge Obligations, unless the Court otherwise directs, (i)
all rights of the Pledgor to exercise the voting rights with respect to the Pool
A Shares which it would otherwise be entitled to exercise pursuant to Section
7(a)(i) hereof shall automatically and immediately cease and all such rights
shall thereupon become vested in the Collateral Agent who shall thereupon have
the sole right to exercise such voting rights in accordance with written
instructions signed by each of the Creditors; and (ii) all such voting rights of
the Pledgor with respect to the Pool B Shares shall cease and become vested in
the Collateral Agent who shall exercise such voting rights in accordance with
written instructions signed by each of the Creditors only upon order of the
Court.
SECTION 8. TRANSFERS AND OTHER LIENS. The Pledgor agrees that it
will not (i) sell, transfer, assign or otherwise dispose of, or grant any option
with respect to, any of the Collateral, or (ii) create or permit to exist any
mortgages, pledges, security interests, liens, encumbrances or charges of any
kind whatsoever with respect to the Collateral, except for Permitted Liens.
SECTION 9. RELEASE OF PLEDGED STOCK. The Pledged Stock (or the
relevant portion thereof, as the case may be) shall be automatically released
from pledge hereunder upon the earlier to occur of (i) the sale thereof, in
whole or in part, to a third party in accordance with this Pledge Agreement, the
Stipulation or a subsequent order of the Court, and (ii) the payment in full of
the Pledge Obligations, the Subordinated Pledge Obligations and reimbursement of
any amounts paid by Xxxxxxx in accordance with paragraph 3(g) of the
Stipulation. The proceeds of any sale of any Xxxxxxx Shares to a third party
shall be distributed in accordance with paragraphs 3(f) and (g) of the
Stipulation. Upon payment in full of the Pledge Obligations and the
Subordinated Pledge Obligations to the Creditors and Xxxxxx (subject to the
provisions of the Stipulation) and reimbursement of amounts paid by Xxxxxxx in
accordance with paragraph 3(g) of the Stipulation, any Pledged Stock or other
Collateral remaining in the possession of the Collateral Agent or in the custody
of the Court, including any proceeds of the Xxxxxxx Shares in excess of the
Pledge Obligations, the Subordinated Pledge Obligations and any such amounts to
be reimbursed, shall be returned to the Pledgor or its designee, unless
otherwise required by law, by the Collateral Agent and/or the Office of the
Clerk of the Court, as the case may be. The security interest and lien granted
pursuant hereto and pursuant to the Stipulation shall be deemed released upon
such payment in full.
SECTION 10. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. The Pledgor
hereby irrevocably appoints the Collateral Agent its attorney-in-fact (which
appointment shall be irrevocable while the Pledge Obligations and the
Subordinated Pledge Obligations remain outstanding and shall be deemed coupled
with an interest), with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, to take any action not inconsistent
with this Pledge Agreement and the Stipulation and to execute any instrument
which the Collateral Agent may deem necessary or advisable to accomplish the
purposes of this Pledge Agreement or the Stipulation, PROVIDED, however, that,
unless the Court otherwise directs, the Collateral Agent will not exercise any
of its rights under Section 12 hereof except upon the termination of the
Stipulation pursuant to paragraph 11(b) thereof prior to the payment in full of
the Pledge Obligations and the Subordinated Pledge Obligations.
SECTION 11. COLLATERAL AGENT'S DUTIES. The powers conferred on the
Collateral Agent hereunder are solely to protect the interests of the Collateral
Agent in the Collateral and shall not impose any duty upon it insofar as
concerns the Pledgor to exercise any such powers. The Collateral Agent shall
neither be responsible nor liable to the Pledgor for any shortage, discrepancy,
damage, loss or destruction of any part of the Collateral wherever the same may
be located regardless of the cause thereof unless the same shall happen through
gross negligence or willful misconduct of the Collateral Agent. The Collateral
Agent shall not, under any circumstances or any event whatsoever, have any
liability to the Pledgor for any error or omission or delivery of any kind made
in the settlement, collection or payment of any of the Collateral or any
instrument received in payment therefor or for any damage resulting therefrom
other than as a result of such gross negligence or willful misconduct.
SECTION 12. REMEDIES. If the Stipulation is terminated pursuant to
paragraph 11(b) thereof prior to the payment in full of the Pledge Obligations
and the Subordinated Pledge Obligations, unless the Court otherwise directs:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the Uniform Commercial Code (subject to
applicable securities laws) and may without notice, except as
specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange, broker's
board at any of the Collateral Agent's offices or elsewhere, for cash,
on credit or for future delivery, and at such price or prices and upon
such other terms as may be commercially reasonable. The Pledgor
agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days' notice to the Pledgor of the time and place of
any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Collateral Agent shall
not be obligated to make any sale of any of the Collateral by reason
of notice of sale having been given. The Collateral Agent may adjourn
any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Collateral Agent in
respect of any sale of, collection from, or other realization upon all
or any part of the Collateral under this Section 12 shall be applied,
in whole or in part, by the Collateral Agent, unless the Court
otherwise directs, as follows:
FIRST, to the payment to the Creditors of any and all amounts
owed to the Creditors in respect of the Pledge Obligations; and
SECOND, to the payment to Xxxxxx of any and all amounts owed to
Xxxxxx in respect of the Subordinated Pledge Obligations.
Any surplus of such cash or cash proceeds held by the Collateral Agent
and remaining after payment in full of the Pledge Obligations and the
reimbursement of expenses incurred by Xxxxxxx shall be paid over to the Pledgor
or its designee, unless otherwise required by law.
SECTION 13. SECURITIES LAWS; REGISTRATION RIGHTS. (a) In the event
that the Stipulation is terminated pursuant to paragraph 11(b) thereof prior to
the payment in full of the Pledge Obligations and the Subordinated Pledge
Obligations, the Court shall make a determination, based on the totality of the
circumstances, as to the extent to which the provisions of this Section 13 shall
apply and, to the extent that the Court determines that the provisions of this
Section 13 shall apply in such an event, such provisions shall, to the extent
inconsistent therewith, supersede the provisions of the Registration Rights
Agreement attached as Exhibit E to the Stipulation with respect to any sale of
the Pledged Stock pursuant to this Pledge Agreement.
(b) The Pledgor understands that questions under the Securities Act
may arise from the sale by the Collateral Agent of the Pledged Stock pursuant to
the terms of this Section 13. The Pledgor further understands that compliance
with the Securities Act may require strict limitations as to what the Collateral
Agent could do if it were to attempt to dispose of all or any part of the
Pledged Stock pursuant to this Section 13 and may also limit the extent to which
or the manner in which any subsequent transferee of any Pledged Stock may
dispose of the same. Similarly, there may be other legal restrictions or
limitations affecting the Collateral Agent in any attempt to dispose of all or
any part of the Pledged Stock under applicable Blue Sky or other state
securities laws or similar laws analogous in purpose or effect. The Pledgor
further understands that, in the absence of an agreement to the contrary, the
Collateral Agent may be held to have certain general duties and obligations to
the Pledgor to make some effort toward obtaining a fair price even though the
Pledge Obligations may be paid in full through realization of a lesser price.
Because the Pledgor clearly understands that the Collateral Agent is not to have
any such general duty and obligations, the Pledgor has agreed, and does hereby
agree, that, under circumstances in which the Collateral Agent is entitled to
sell all or any part of the Pledged Stock pursuant to this Section 13, the
Pledgor shall not attempt to hold it responsible for selling all or any part of
the Pledged Stock at an inadequate price even if the Collateral Agent accepts
the first offer received or does not approach more than one possible purchaser.
Without limiting the generality of the foregoing, this agreement would apply if,
for instance, the Collateral Agent were to place all or any part of the Pledged
Stock for private placement with an investment banking firm, or if such
investment banking firm purchased all of any part of such securities for its own
account, or if the Collateral Agent placed all or any part of such securities
privately with a purchaser or purchasers.
(c) The Pledgor and Xxxxxxx each agree that, upon the termination of
the Stipulation pursuant to paragraph 11(b) thereof prior to the payment in full
of the Pledge Obligations and the Subordinated Pledge Obligations, if for any
reason the Collateral Agent desires to sell any securities constituting
Collateral at a public or private sale, to the extent that the Court so directs,
Xxxxxxx will (consistent with its obligations under the provisions of the
Stipulation, including (without limitation) paragraph 7(b)(v) thereof and
Exhibit E thereto):
(i) use its best efforts to cause such securities to be registered
under the provisions of the Securities Act, and to cause the registration
statement relating thereto to become effective and to remain effective for such
period as prospectuses are required by law to be furnished, and to make all
amendments and supplements thereto and to the related prospectus which, in the
opinion of counsel for the Collateral Agent or the Advisor in accordance with a
Court-approved Marketing Plan or any Court-approved amendment thereto, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(ii) indemnify, defend and hold harmless the Collateral Agent and the
Advisor and any underwriter acting on behalf of any of them from and against all
losses, liabilities, expenses, costs, reasonable fees and disbursements of
counsel, and claims (including the reasonable costs of investigation) which they
may incur insofar as such loss, liability, expense or claim arises out of or is
based upon any alleged untrue statement of a material fact contained in any
prospectus (or any amendment or supplement thereto) or in any notification or
offering circular, or arises out of or is based upon any alleged omission to
state a material fact required to be stated therein or necessary to make the
statements in any thereof not misleading, except insofar as the same may have
been caused by any untrue statement or omission based upon information furnished
in writing to Xxxxxxx by the Collateral Agent, the Advisor or the underwriter
expressly for use therein;
(iii) use its best efforts to qualify such securities under any
applicable state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of such securities, as requested by the
Collateral Agent;
(iv) if necessary, use its best efforts to make available to its
security holders, as soon as practicable, an earnings statement which will
satisfy the provisions of Section 11(a) of the Securities Act; and
(v) use its best efforts to do or cause to be done all such other acts
and things as may be necessary to make such sale of securities or any part
thereof valid and binding and in compliance with applicable law.
Nothing in this paragraph (c) shall in any way alter the rights of the
Collateral Agent or the agreements of the Pledgor under paragraph (b) above.
The Pledgor acknowledges that there is no adequate remedy at law for its failure
to comply with the provisions of this Section 13 and that such failure would not
be adequately compensable in damages, and therefore agrees that its agreement
contained in this Section 13 may be specifically enforced.
(d) In the event of a registration of any of the Pledged Collateral
pursuant to the provisions hereof, each of the Lead Parties (other than
Xxxxxxx), the Advisor and/or the Settlement Agent (each an "Indemnifying
Person") will severally, and not jointly, indemnify and hold harmless Xxxxxxx
from and against all losses, liabilities, expenses, costs, reasonable fees and
disbursements of counsel, and claims to which Xxxxxxx may become subject under
the Securities Act, the Exchange Act (each as defined in the Indenture) or
otherwise, but only insofar as such losses, liabilities, expenses, costs,
counsel fees and disbursements and claims arise directly out of or are based
solely upon any untrue statement or alleged untrue statement of a material fact
contained or incorporated by reference in any registration statement or
prospectus with respect to the Pledged Collateral and any amendment or
supplement thereto or any document incorporated by reference therein, or arise
directly out of or are based solely upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
has been made or incorporated therein in reliance upon and in conformity with
written information furnished to Xxxxxxx by such Indemnifying Person
specifically stating that it is for use in the preparation thereof.
SECTION 14. ACTION BY THE COLLATERAL AGENT. (a) The Collateral Agent
may carry out any of its duties under this Pledge Agreement by or through its
agents, officers or employees. Neither the Collateral Agent nor any of its
agents, officers or employees shall be (i) liable to the Pledgor or the
Creditors or Xxxxxx for any action taken or omitted to be taken by it or them in
good faith, (ii) responsible for the consequence of any oversight or error of
judgment or (iii) answerable for any loss unless any of the foregoing shall
happen through its or their gross negligence or willful misconduct.
(b) Whenever the Collateral Agent may deem it necessary or prudent in
order either to conform to any law of any jurisdiction in which all or any part
of the Collateral shall be situated or to exercise any of its rights under this
Pledge Agreement, the Pledgor shall execute and deliver a supplemental agreement
and all other instruments and agreements necessary or proper to constitute
another bank or trust company to act hereunder, in any such case with such
powers as may be provided in such supplemental agreement, and to vest in such
bank or trust company any property, title, right or power of the Collateral
Agent deemed necessary or advisable by the Collateral Agent.
SECTION 15. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent, the security interest hereunder, and all obligations of the Pledgor
hereunder, shall be absolute and unconditional, irrespective of any circumstance
which might constitute a defense available to, or a discharge of, any guarantor
or other obligor in respect of the Pledge Obligations or the Subordinated Pledge
Obligations.
SECTION 16. AMENDMENTS; ETC. No amendment or waiver of any provision
of this Pledge Agreement, nor any consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the party against whom enforcement is sought, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 17. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing (including telecopy
communication) and shall be given in the manner and to the parties set forth in
paragraph 17 of the Stipulation with the addition of:
TM Capital Corp.
Xxx Xxxxxxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxxx Xxxxxxxxx
FAX: (000) 000-0000
with a copy to:
Pepper, Xxxxxxxx & Xxxxxxx
3000 Two Xxxxx Square
Eighteenth and Arch Streets
Philadelphia, Pennsylvania 19103
Attn: Xxxxx Xxxxxxx, Esq.
FAX: (000) 000-0000
SECTION 18. CONTINUING SECURITY INTEREST. This Pledge Agreement
shall create a continuing security interest in the Collateral as herein provided
and shall (i) remain in full force and effect until payment in full of the
Pledge Obligations and the Subordinated Pledge Obligations, (ii) be binding upon
the Pledgor, its heirs, successors and assigns, and (iii) inure, together with
the rights and remedies of the Collateral Agent, its successors, transferees and
assigns. Upon the payment in full of the Pledge Obligations and the
Subordinated Pledge Obligations, the security interest and lien granted hereby
shall terminate and all rights to the Collateral shall revert to the Pledgor or
its designee, unless otherwise required by law. The Pledgor shall be entitled
to the return of the Collateral, to the extent not sold or otherwise applied
pursuant to the terms hereof, against its receipt and upon its payment of the
reasonable expenses of the Collateral Agent in connection therewith. Upon any
such termination, the Collateral Agent will, at the Pledgor's expense, execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination but without recourse to or warranty by the
Collateral Agent.
SECTION 19. EFFECTIVE DATE; GOVERNING LAW. THIS PLEDGE
AGREEMENT SHALL BECOME EFFECTIVE ON THE EFFECTIVE DATE AND SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW JERSEY.
SECTION 20. WAIVER OF JURY TRIAL. It is the intention of the parties
that, to the fullest extent permitted by law, any action or proceeding arising
out of or relating to this Pledge Agreement, the Stipulation or the other
documents contemplated thereunder, or for recognition or enforcement of any
judgment, shall be submitted to and heard by the Court sitting without a jury.
Notwithstanding the foregoing, the Pledgor hereby waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect
of any litigation directly or indirectly arising out of, under or in connection
with this Pledge Agreement or the Stipulation or the other documents or the
transactions contemplated thereby whether or not such litigation shall be heard
by the Court. Each party hereto (a) certifies that no representative, agent or
attorney of any other party would, in the event of litigation, seek to enforce
the foregoing waiver, and (b) acknowledges that it and the other parties hereto
have been induced to enter into this Pledge Agreement and the Stipulation and
the other documents contemplated thereunder, as applicable, by, among other
things, the mutual waivers and certifications contained in this Section 20.
SECTION 21. SEVERABILITY. In the event any one or more of the
provisions contained in this Pledge Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 22. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) The
Pledgor hereby irrevocably and unconditionally submits, for itself and its
property to the fullest extent it may legally and effectively do so, to the
exclusive jurisdiction of the Court, and any appellate court therefrom, in any
action or proceeding arising out of or relating to this Pledge Agreement, the
Stipulation or the other documents contemplated thereunder, or for recognition
or enforcement of any judgment, and hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such court. The Pledgor hereby agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.
(b) The Pledgor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Pledge Agreement or the Stipulation or the
other documents contemplated thereunder in the Court. The Pledgor hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) The Pledgor irrevocably consents to service of process in the
manner provided for notices in Section 17 hereof. Nothing in this Pledge
Agreement will affect the right of any party to this Pledge Agreement to service
process in any other manner permitted by law.
SECTION 24. GOVERNING DOCUMENTS. In the event of a conflict between
the provisions of this Pledge Agreement and the provisions of the Stipulation,
such conflict shall be governed by the terms of the Stipulation.
SECTION 25. HEADINGS. Section headings in this Pledge Agreement are
included herein for the convenience of reference only and shall not constitute a
part of this Pledge Agreement for any other purpose.
IN WITNESS WHEREOF, the Pledgor, the Collateral Agent and Xxxxxxx have
caused this Pledge Agreement to be duly executed and delivered as of the date
first above written.
FIDENAS INTERNATIONAL LIMITED, L.L.C.
/s/ Xxxxxxxx X. Xxxxxx
By: Xxxxxxxx X. Xxxxxx
Title:
TM CAPITAL CORP.
/s/ W. Xxxxxxx Xxxxxxxxx
By: W. Xxxxxxx Xxxxxxxxx
Title: President
Xxxxxxx Radio Corp. acknowledges receipt of a copy of this Pledge
Agreement and agrees to be bound by the provisions of Section 13 hereof.
XXXXXXX RADIO CORP.
/s/ Xxxxxx X. Xxxxx
By: Xxxxxx X. Xxxxx
Title:
Each of the undersigned acknowledges receipt of a copy of this Pledge Agreement
and confirms that the terms thereof are acceptable to it.
/s/ Xxxxxx Xxxxxxx
XXXXXX XXXXXXX, OFFICIAL LIQUIDATOR
OF FIDENAS INTERNATIONAL BANK LIMITED
/s/ Xxxxxx X. Xxxxx
XXXXX XXXXXXXX, by Xxxxxx X. Xxxxx,
Attorney-In-Fact
BARCLAYS BANK PLC
/s/ Xxx Xxxxxxx
By: Xxx Xxxxxxx
Title: VP
/s/ Xxxxxxxx X. Xxxxxx
XXXXXXXX X. XXXXXX
ELISION INTERNATIONAL, INC.
/s/ Xxxxxxxx X. Xxxxxx
By: Xxxxxxxx X. Xxxxxx
Title:
GSE MULTIMEDIA TECHNOLOGIES, INC.,
F/K/A GSE ELECTRONIC SYSTEMS, INC.
By:
Title:
