EXHIBIT 10.2
PLEDGE AND SECURITY AGREEMENT
AGREEMENT dated November 27, 2002, by and between Advanced Technology
Industries, Inc. ("ATI"), a Delaware corporation (and all its subsidiaries,
including but not limited to Reseal Ltd. and Cetoni GMBH), LTD Network ("LTDN"),
a Delaware corporation, and Xxxxxxx, Xxxx & Xxxxxxx as Pledge Holder ("CCC" or
"Pledge Holder").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, on October 16, 2002 ATI and LTDN entered into a letter of
intent, which was later amended on November 27, 2002, whereby LTDN would acquire
controlling interest in ATI through a reverse merger or otherwise (the
"Acquisition");
WHEREAS, in the amended letter of intent, the parties seek to negotiate
and execute a definitive acquisition/merger agreement to consummate the
Acquisition;
WHEREAS, the amended letter of intent and a secured promissory note as
an exhibit to such letter provide for preliminary loans from LTDN to ATI prior
to the closing of the Acquisition;
WHEREAS, from November 1, 2002 to November 22, 2002, pursuant to such
Notes LTDN has advanced up to $200,000 as a loan and such loan is secured by
certain ATI's patents under the terms of the executed notes; and
WHEREAS, LTDN may advance other installments to ATI under such notes
which shall also be secured by other ATI patents and shares of ATI common stock
to be issued to LTDN;
NOW, THEREFORE, in consideration of the premises and the agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. PLEDGE.
(a) To secure the installments of $200,000 already lent by LTDN to
ATI and up to an additional $300,000 of installments that may
be so lent, ATI herewith deposits with CCC, and CCC
acknowledges receipt of any and all list of patents attached
hereto, patents and patent applications pertaining to its Star
Can Patents issued or to be issued in its name or that of its
subsidiaries, either Reseal Ltd. and/or Cetoni GMBH in any and
all jurisdictions (together called either the Star Patents or
as part of a total package referred to as "All ATI Patents"
whatever the case may be). The Star Patents are accompanied by
executed assignments in the form of Exhibit A hereto or
otherwise. This Agreement may be immediately filed with the
U.S. Patent Office, patent offices of other countries and
other governmental entities necessary to perfect LTDN's
security interests in such patents. ATI shall promptly
cooperate with LTDN to prepare, execute and file whatever
documents are necessary to perfect LTDN's security interests
to all ATI Patents when and if requested by LTDN.
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(b) In the event that LTDN advances other installments to ATI in
excess of the $500,000 referred to above and in order to
secure them, ATI shall deposit with CCC, and CCC, in turn,
will acknowledge receipt of a list of certain other patents
held by ATI, its patent applications and patents (together
called "Other ATI Patents" or as part of a total package
referred to as "All ATI Patents," whatever the case may be)
and the certificates representing a certain number of shares
of the Common Stock to be issued by ATI to LTDN (together with
any certificates, options or rights received pursuant to
Section 1(d), the "Pledged Stock"). The Other ATI Patents will
be accompanied by executed assignments in the form of Exhibit
A hereto.
(c) ATI pledges to LTDN, and grants and transfers to LTDN a first
priority security interest in the Star Patents, and shall
pledge to LTDN and grant and transfer a first priority
security interest in the Other ATI Patents and the Pledged
Stock, upon further advances of funds above a total of
$500,000 from LTDN, if any, as collateral security for the
full and timely payment when due to LTDN, of all principal and
interest from time to time due and owing in accordance with
the terms of the Notes (the "Note Obligations").
(d) The Pledge Holder hereby accepts delivery of the documents
pertaining to the Star Patents referred to above and shall
accept delivery of the documents pertaining to the Other ATI
Patents and the Pledged Stock referred to above when and if
further advances of funds by LTDN are made and shall hold All
ATI Patents and/or the Pledged Stock pursuant to this
Agreement. If, while this Agreement is in effect, the owner of
the Pledge Shares becomes entitled to receive or receives any
stock certificate (including, without limitation, any
certificate representing a stock dividend or a security issued
in connection with any reclassification, increase or reduction
of capital, or issued in connection with any merger,
consolidation or reorganization), option or rights
representing or with respect to the Pledged Stock or any other
capital stock of the Company, whether as an addition to, in
substitution of, or in exchange for any shares of any Pledged
Stock, ATI shall deliver the same forthwith to the Pledge
Holder, to be held by the Pledge Holder on behalf of and for
LTDN, subject to the terms of this Agreement, as additional
collateral security for the Note Obligations.
(e) LTDN shall grant to the Pledge Holder and the Pledge Holder's
successors and assigns hereunder its irrevocable proxy to vote
the Pledged Stock as required by, and subject to the
limitations set forth in, Section 4, following a Pledge
Default (as hereinafter defined). Such proxy is coupled with
an interest. LTDN shall execute and deliver to the Pledge
Holder such further transfers, stock powers, assurances,
irrevocable proxies and agreements as the Pledge Holder shall
reasonably request in connection with his duties hereunder.
LTDN shall take such actions and execute and deliver such
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documents as may be reasonably requested by the Pledge Holder
or otherwise necessary or appropriate to carry out the
purposes of this Agreement. The Pledge Holder shall be under
no obligation to make any such request.
(f) ATI hereby represents, warrants and covenants that except for
the pledge and security interest granted and transferred, or
to be granted and transferred, hereby, it and LTDN have, and
will have, while on deposit hereunder, good title to All ATI
Patents and the Pledged Stock, free and clear of all liens
superior to or PARI PASSU with the pledge and security
interest granted and transferred hereby, other than liens for
taxes not delinquent or being contested in good faith or
similar inchoate liens on ATI's assets generally. ATI shall
not sell, assign, transfer, exchange or otherwise dispose of
All ATI Patents or the Pledged Stock unless the loans made to
ATI by LTDN have been repaid in full, including all accrued
interest, or the terms of this Agreement have been otherwise
fulfilled. However, in the ordinary course of business, ATI
may license any or All ATI Patents and collect royalties or
licensing fees in this regard with the prior written approval
of LTDN.
(g) In the event that LTDN fails to furnish a total of Five
Hundred Thousand Dollars ($500,000) by January 30, 2002 to ATI
as advances pursuant to the secured promissory notes, then
LTDN loses and waives its rights to the security involving the
Star Patents, and such patents shall be returned to ATI by the
Pledge Holder within twenty one (21) days of written notice to
it of LTDN's failure to so fund ATI. In the event that LTDN
fails to furnish a total of Five Million Dollars ($5,000,000)
to ATI required by the amended letter of intent dated October
16, 2002 and November 27, 2002, respectively and under the
subsequent formal agreement contemplated by the parties or in
the event that LTDN voluntarily decides not to proceed with or
consummate the Acquisition, then LTDN waives and loses its
rights to All ATI Patents then pledged and secured hereunder
and is allowed to substitute a certain number of shares of ATI
common stock of equal value, all to be determined by the
parties hereto as security hereunder and pursuant to the
secured promissory notes. None of these waivers, losses or
changes and substitution of security hereunder shall become
effective if ATI is in default or has breached any material
terms, conditions or obligations under the secured promissory
notes, the amended letter of intent or the subsequent formal
agreement with regard to the Acquisition or if ATI has chosen
or opted not to proceed with or consummate such transaction of
its own accord. The Pledge Holder shall return such patents to
ATI, and ATI shall substitute such shares of its common stock
for such patents within twenty one (21) days of the failure of
LTDN to perform as herein provided, and this exchange of
security shall be deemed ATI's sole and exclusive remedy
against LTDN for such conduct.
(h) Upon further loan advances in excess of the initial $500,000,
LTDN and ATI shall identify and determine in writing on each
occasion the combination of Other Patents and/or the number of
ATI shares of common stock to be pledged hereunder as security
for the corresponding promissory notes to be executed by ATI.
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2. DIVIDEND, VOTING AND OTHER RIGHTS; TERMINATION.
(a) Subject to the taking by the Pledge Holder of any Authorized
Pledge Holder Action (as hereinafter defined) required to be
taken by the Pledge Holder pursuant to Section 4, LTDN shall
have all rights of a shareholder with respect to the Pledged
Stock, including without limitation the right to vote the
Pledged Stock and to receive dividends thereon, subject,
however, to Section 1(d) hereof and to any limitations to be
contained in the definitive merger or acquisition agreement
between ATI and LTDN.
(b) Upon payment in full of all outstanding Notes or consummation
of the merger and acquisition between ATI and LTDN, the pledge
and security interest granted and transferred by this
Agreement shall automatically terminate and ATI shall be
entitled to the prompt return of All ATI Patents and the
Pledged Stock. Subject to Section 4, the Pledge Holder shall
deliver the Pledged Stock and the ATI Patents to ATI following
receipt of a written notice from them to the effect that the
Notes have been paid in full or that such merger or
acquisition has been consummated and directing the Pledge
Holder to deliver all the Pledged Stock to ATI.
3. PLEDGE DEFAULT. "Pledge Default" as used in this Agreement
shall mean the failure of the parties to close the Acquisition
as a result of ATI's failure to proceed with the Acquisition
or breach of its obligations owed LTDN under the amended
letter of intent or the subsequent formal agreement
contemplated between the parties, or the failure of ATI to pay
the Notes following the occurrence of any Event of Default
under and as defined in the Notes and the declaration by LTDN
of all outstanding obligations thereunder to be due and
payable with respect to such Event of Default in accordance
with the terms and conditions of the Notes. For a Pledge
Default to exist prior to the consummation of the Acquisition,
LTDN, at the time thereof, has to have stood ready, willing
and able to proceed with, or to consummate, the Acquisition
but for the Pledge Default.
4. ACTIONS OF LTDN WITH RESPECT TO THE ATI PATENTS AND THE
PLEDGED STOCK.
(a) If a Pledge Default shall occur and so long as such Pledge
Default is continuing, LTDN may give a written notice to the
Pledge Holder and ATI reciting that a Pledge Default has
occurred and is continuing (a "Default Notice"), directing the
Pledge Holder:
(i) to vote the Pledged Stock in the manner prescribed
therein, or execute such proxies or other instruments
provided therein to enable LTDN to vote the Pledged
Stock, and/or
(ii) to exercise on behalf of LTDN any remedies
contemplated by Section 5.
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(b) In the event that the Pledge Holder receives a Default Notice
from LTDN pursuant to Section 4(a) or a notice from ATI
pursuant to Section 2(b) (the party giving such notice being
hereinafter referred to as the "Demanding Party"), in either
case directing the Pledge Holder to vote, make some
disposition of or take some other action with respect to All
ATI Patents and/or the Pledged Stock, but only one or more of
the actions expressly contemplated by Section 2(b) or 4(a), as
applicable (any such notice being hereinafter referred to as
an "Disposition Notice" and any such action or actions being
hereinafter referred to as an "Authorized Pledge Holder
Action"), the Pledge Holder shall give prompt written notice
of receipt of such Disposition Notice to LTDN and ATI, as the
case may be (the "Non-Demanding Party"), accompanied by a copy
of such Disposition Notice. Except as contemplated by Section
4(d), the Non-Demanding Party shall have the right to object
to the proposed Authorized Pledge Holder Action set forth in
the Disposition Notice, but only on the grounds that the
Demanding Party is not entitled under this Agreement to the
Authorized Pledge Holder Action requested, by giving the
Pledge Holder written notice of such objection setting forth
the grounds therefor (an "Objection Notice") within 15 days
after the giving of the Pledge Holder's notice under this
clause, but not thereafter, time being of the essence for
purposes of the foregoing time limitation. Upon timely receipt
of such an Objection Notice, the Pledge Holder shall promptly
give notice of such objection, including a copy thereof, to
the Demanding Party, and Section 4(c) shall be applicable. If
the Pledge Holder does not receive an Objection Notice within
such 15-day notice period, time being of the essence for
purposes of the foregoing time limitation, or if the Pledge
Holder at any time following the giving of a Disposition
Notice and so long as the same has not been withdrawn by the
Demanding Party receives the written authorization of the
Non-Demanding Party to comply with the Disposition Notice, the
Pledge Holder shall promptly thereafter carry out the
Authorized Pledge Holder Action set forth in the Disposition
Notice.
(c) If the Pledge Holder receives a timely Objection Notice as
provided for in Section 4(b), the Pledge Holder shall continue
to hold All ATI Patents and/or the Pledged Stock until one of
the following occurs: (i) the Pledge Holder receives the
written authorization of the Non-Demanding Party to carry out
the Authorized Pledge Holder Action set forth in the
Disposition Notice, in which case the Pledge Holder shall
promptly thereafter carry out the Authorized Pledge Holder
Action so set forth; (ii) the Pledge Holder receives written
notice from LTDN and ATI jointly directing that the Pledge
Holder take an Authorized Pledge Holder Action with respect to
All ATI Patents and/or the Pledged Stock or make some other
disposition of the Pledged Stock, in which case Pledge Holder
shall promptly thereafter comply with such direction; (iii)
arbitration or litigation arises between ATI and LTDN with
respect to the disposition of All ATI Patents and/or the
Pledged Stock, in which event the Pledge Holder may deposit
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the ATI Patents and/or the Pledged Stock with the arbitral
panel or court in which such arbitration or litigation is
pending and shall in any event dispose of the ATI Patents
and/or the Pledged Stock only as directed pursuant to a final
judgment entered on an arbitral award or of a court of
competent jurisdiction, after expiration of any applicable
appeal periods; or (iv) the Pledge Holder takes such
affirmative steps as the Pledge Holder elects in order to
terminate Pledge Holder's duties hereunder, as contemplated by
Section 6(b) and/or 6(g).
(d) Notwithstanding Sections 4(b) and 4(c), in the event that (i)
any LTDN Notice relates to the failure of ATI to timely pay
any regularly scheduled installment of principal and interest
under the Notes, or any portion thereof in excess of $5,000;
(ii) the Pledge Holder determines that such installment or any
portion thereof in excess of $5,000, has not been paid when
due; and (iii) the Pledge Holder has not received and, within
15 days after the giving of such Notice, time being of the
essence for purposes of the foregoing time limitation, does
not receive, singly or in combination, (A) evidence that such
installment or portion thereof has been paid in full; (B) a
copy of the written agreement of LTDN, authorizing ATI to
withhold the amount unpaid under the Notes; or (C) a notarized
executed statement by LTDN that the merger with or acquisition
of ATI has been consummated, the Pledge Holder shall promptly
thereafter carry out the Pledge Holder Action set forth in
such Notice. In the event that the Pledge Holder receives,
singly or in combination, the items referred to in (A) through
(C) above on or before such 15th day, time being of the
essence for purposes of the foregoing time limitation, the
Notice referred to above shall be void and the Pledge Holder
shall not take any action requested therein.
(e) In connection with any Disposition Notice given to the Pledge
Holder, whether by ATI pursuant to Section 2(b) or by LTDN
pursuant to Section 4(a) or Section 4(d), the Pledge Holder
shall not take any Authorized Pledge Holder Action requested
therein until all relevant notice and/or appeal periods
contemplated by this Section 4 have expired and until
expressly required to do so by the applicable provisions of
this Section 4. In addition, in connection with any such
Disposition Notice, the Pledge Holder shall not be required to
take any action other than an Authorized Pledge Holder Action,
i.e., in the case of a Disposition Notice from ATI pursuant to
Section 2(b), to deliver any ATI Patents to ATI or the Pledged
Stock to ATI, or in the case of such Notice pursuant to
Section 4(a) or Section 4(d), to vote the Pledged Stock or to
execute and deliver proxies and other instruments as
contemplated by Section 4(a)(i) and/or to dispose of the
Pledged Stock as contemplated by Sections 4(a)(ii) and 5, and
in each case only as expressly requested by such Notice.
(f) In the event that the Pledge Holder receives at any time the
joint written notice of ATI and LTDN directing the Pledge
Holder to take any action with respect to the ATI Patents or
the Pledged Stock, the Pledge Holder shall promptly comply
with such request; provided, that in connection therewith, the
Pledge Holder shall not be required to take any action other
than (i) an Authorized Pledge Holder Action or (ii) delivery
of All ATI Patents and the Pledged Stock to the person or
persons specified in such notice.
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(g) Each LTDN Notice, and each action taken by the Pledge Holder
in accordance with this Agreement, shall be binding on LTDN,
except as otherwise agreed between ATI and LTDN with respect
to LTDN's rights hereunder.
5. REMEDIES.
(a) So long as a Pledge Default is continuing, LTDN shall have the
right, by giving its Notice delivered to the Pledge Holder, to
direct the Pledge Holder to sell, assign and deliver all or
any part of the ATI Patents or the Pledged Stock, and all
right, title and interest therein, for its own benefit, free
of any right of redemption after sale, for cash, upon credit
or for future delivery, on the terms and subject to the
conditions hereinafter set forth, and to exercise any other
remedy with respect to All ATI Patents and the Pledged Stock
which is granted to a secured party under the Uniform
Commercial Code of New York. If any of the ATI Patents and the
Pledged Stock are sold upon credit or for future delivery,
neither the Pledge Holder, nor LTDN shall be liable for the
failure of the buyer to purchase or to pay for the same and,
in the event of any such failure, LTDN may direct the Pledge
Holder to resell such ATI Patents or the Pledged Stock, and
may retain a security interest in any of the ATI Patents or
the Pledged Stock in connection with any such sale or resale.
In connection with any such sale, the Pledge Holder shall have
the right, for and in the name, place and stead of ATI to
execute and deliver to the appropriate persons endorsements,
assignments or other instruments of conveyance or transfer
with respect to all or any of the ATI Patents and/or the
Pledged Stock. All sales of the ATI Patents and/or the Pledged
Stock by the Pledge Holder pursuant to this Agreement shall be
conducted in a commercially reasonable manner.
(b) In the case of all sales, public or private, of any ATI
Patents or the Pledged Stock, ATI shall be liable for all
costs and expenses reasonably incurred for sale or delivery,
including brokers' and attorneys' fees and disbursements, and
after deducting such costs and expenses from the proceeds of
sale, the Pledge Holder shall apply any residue to the payment
of the Note Obligations. The balance, if any, remaining after
payment in full of the Notes shall be paid to ATI. ATI shall
remain liable for any deficiencies.
(c) The Pledge Holder shall give ATI at least ten business days'
prior notice of the time and place of any public or private
sale, which notice shall be deemed reasonable. All other
demands, advertisements and notices are hereby waived. Upon
each private sale of any or all of the ATI Patents and/or the
Pledged Stock and upon each public sale, LTDN may themselves
purchase all or any of the ATI Patents or the Pledged Stock
being sold, free from any equity in the ATI Patents or the
Pledged Stock or right of redemption after sale.
(d) ATI recognizes that the Pledge Holder may be unable to effect
a public sale of all or part of the Pledged Stock by reason of
certain prohibitions contained in the Securities Act of 1933,
as amended, but may be compelled to resort to one or more
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private sales to a restricted group of buyers who will be
obligated to agree, among other things, to acquire such
Pledged Stock for their own account, for investment and not
with a view to or in connection with the distribution thereof.
ATI acknowledges that private sales so made may be at prices
and on other terms less favorable to him and LTDN than if such
Pledged Stock were sold at public sales.
6. CONCERNING PLEDGE HOLDER. The acceptance by the Pledge Holder
of its duties under this Agreement is subject to the following
terms and conditions, which shall govern and control with
respect to the Pledge Holder's rights, duties, liabilities and
immunities:
(a) The obligations of the Pledge Holder shall be determined in
accordance with this Agreement and the Pledge Holder shall
have no duties or obligations other than those expressly
provided for in this Agreement or in any other agreement
involving the parties hereto to which the Pledge Holder is a
party. This Agreement shall not be deemed to create a
fiduciary relationship between the parties hereto under state
or federal law. The Pledge Holder shall not be responsible in
any manner for the validity or sufficiency of any property
delivered hereunder, or for the value or collectability of any
note, check or other instrument so delivered, or for any
representations made or obligations assumed by any party other
than the Pledge Holder. Nothing herein contained shall be
deemed to obligate the Pledge Holder to deliver any cash,
instruments, documents or any other property referred to
herein, unless the same shall have first been received by the
Pledge Holder pursuant to this Agreement. The Pledge Holder
shall not be liable for any action taken or omitted hereunder
except in the case of its gross negligence or willful
misconduct, nor shall it be liable for the default or
misconduct of any employee, agent or attorney appointed by it
who shall have been selected with reasonable care, except to
the extent that such liability is covered by fidelity or
similar insurance. The Pledge Holder shall not be liable for
damage resulting from the acts or omissions or failures to
perform of any third party, including the failure of any means
of communication, the closing of or other unavailability of a
bank or trust company, loss of any document in the mails, or
the failure of any delivery service to deliver as instructed.
(b) In the event that the Pledge Holder shall be uncertain as to
its duties or rights hereunder or shall receive instructions
which in its opinion are in conflict with any provisions of
this Agreement, it shall be entitled to hold All ATI Patents
and/or the Pledged Stock pending the resolution of any such
controversy by arbitration as contemplated by Section 14 and a
final judgment entered by a court of a competent jurisdiction
on any resulting award, after expiration of all relevant
periods for appeal; or the Pledge Holder, at its option, may
commence an arbitration pursuant to Section 14 to which the
parties hereto are joined with respect to the proper
deposition of All ATI Patents and/or the Pledged Stock, and
may abide by the result of any final judgment entered by a
court of a competent jurisdiction on any resulting arbitral
award, after expiration of all relevant periods for appeal.
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(c) The Pledge Holder may assume, and shall be fully protected in
assuming, that any certificate, document, instrument or
communication received by it under this Agreement and believed
by it to be genuine is from the party purporting to send it
and is genuine in all respects and does not violate any law or
administrative rule or regulation and that any person giving
such communication has been duly authorized to do so.
(d) The compensation to which the Pledge Holder is entitled shall
be paid by LTDN in accordance with its normal time charges.
The Pledge Holder shall have a lien against any funds or
properties in its possession of which LTDN are the sole
beneficial owners, including any funds received by it on its
capacity as Pledge Holder, for the unpaid amount of any
compensation due it and, in its discretion, it may withdraw
the same from such funds or properties. The Pledge Holder
shall notify LTDN of any such withdrawal, but failure to give
such notice shall not invalidate the exercise by the Pledge
Holder of its rights hereunder.
(e) The Pledge Holder may consult legal counsel and other
professional advisors who may, but need not, be its counsel or
advisor, or counsel or advisor to any party having interest in
or connection with All ATI Patents and/or the Pledged Stock,
with respect to the meaning and construction of this Agreement
or its powers, obligations, and conduct hereunder. The Pledge
Holder shall be entitled to reasonable reimbursement for such
legal counsel's and other professional advisors' fees. The
Pledge Holder shall not be liable for the consequences of, and
shall be fully protected in acting pursuant to or relying
upon, the advice of such legal counsel or advisors.
(f) In the event a claim is asserted by any person or persons
against the Pledge Holder, its partners, or agents,
(hereinafter referred to as Indemnities) where the Indemnities
acted in good faith in reliance on directions or
communications of the parties in interest under this Agreement
or in the event the Indemnities are involved in litigation in
connection with any matter arising under this Agreement, the
Indemnities shall be indemnified by the parties in interest
under this Agreement against any liability imposed against
them as a result thereof or incurred for any reason arising
out of this Agreement or the matters referred to herein, other
than the gross negligence or willful misconduct of the
Indemnities, and shall be reimbursed by the parties in
interest for all expenses, including legal fees and expenses,
incurred in connection therewith unless such litigation or
claim asserted against any Indemnities results in a
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determination that there has been or that such Indemnities'
actions or failures to act hereunder constituted gross
negligence or willful misconduct, in which case, any
Indemnities against whom such determination is made shall not
be entitled to indemnification hereunder. The Indemnities
acting in good faith shall not be liable for any action,
omission, information or recommendation in connection with
this Agreement, except in the case of the Indemnities' gross
negligence, willful misconduct or knowing violation of any
applicable statute; PROVIDED, HOWEVER, that this limitation
shall not relieve the Indemnities from any liability for any
responsibility, obligation or duty which the Indemnities may
have under this Agreement. There shall be included in the
loss, liability, cost, damage and expense against which the
Indemnities are indemnified hereunder, all sums which the
Indemnities may pay in settlement of any such claim; provided
the Indemnities first obtain the written consent of ATI and
LTDN to such settlement. If the indemnification provided for
in this Section 6(f) is applicable, but for any reason is held
to be unavailable, the parties in interest shall contribute
such amounts as are just and equitable to the aggregate of any
and all losses, liability, costs, damages and expenses,
including reasonable counsel's fees and expenses, actually
incurred by the intended Indemnities as a result of or in
connection with, and any amount paid in settlement of, any
action, claim or proceeding arising out of or relating in any
way to any acts or omissions of the parties in interest under
this Agreement.
(g) The Pledge Holder may at any time resign hereunder by giving
written notice of its resignation to ATI and LTDN at least 30
calendar days prior to the date specified for such resignation
to take effect, and upon the effective date of such
resignation, all the ATI Patents and the Pledged Stock held by
it shall be delivered by it to a successor pledge holder
jointly designated in writing by ATI and LTDN whereupon all
obligations of the Pledge Holder hereunder shall cease and
terminate. If no successor is appointed, the Pledge Holder's
sole responsibility shall be to keep safely all the ATI
Patents and the Pledged Stock held by it and to deliver the
same to a person designated by the ATI and LTDN to or in
accordance with the directions of a final order or judgment of
a court of competent jurisdiction, after expiration of any
periods for appeal; provided, however, that the Pledge Holder
shall be under no duty to give the property then held by it
any greater degree of care than it gives to its own similar
property.
7. COMMUNICATIONS. All notices, consents and other communications
given or required under this Agreement shall be in writing and
shall be deemed to have been duly given when delivered by
Federal Express or a similar overnight courier to, or five
business days after being deposited in the United States mails
and mailed by prepaid registered or certified mail addressed
to, the party for whom intended, at the address for such party
set forth below, or to such other address as may be furnished
by such party by notice in the manner provided herein;
PROVIDED, HOWEVER, that any notice of change of address shall
be effective only upon receipt.
If to LTDN:
LTD Network Inc.
Level II Atrium Tower
000 Xxxxxxx Xx.
Xxxxxxxxx
Xxx 0000
Xxxxxxxxx
Attention: Xxxxx Xxxxxxxx, Chairman & CEO
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With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx, Xxxx & Xxxxxxx
000 Xxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
If to ATI and its subsidiaries:
Advanced Technology Industries Inc.
00 Xxxxxxxxxxxxxx
Xxxxxx, Xxxxxxx 10117
Attention: Xxxx X. Xxxxxxxxx, President
If to the Pledge Holder:
Xxxxxxx X. Xxxxxxx Esq.
Xxxxxxx, Xxxx & Xxxxxxx
as indicated above
No notice shall be binding on the Pledge Holder unless actually
received by it. Each party giving any notice or other
communication under this Agreement shall take reasonable steps,
such as telephoning to confirm receipt, to assure that the
parties to which it is addressed are available to receive it
and have received it.
8. ENTIRE AGREEMENT. This Agreement, together with the Notes,
sets forth the entire understanding of the parties hereto to
date with respect to its subject matter, merges and supersedes
all prior and contemporaneous understandings with respect to
its subject matter and may not be waived or modified, in whole
or in part, except by a writing signed by the parties hereto,
in the event that the duties or obligations of the Pledge
Holder are altered thereby, by the P1edge Holder. No waiver of
any provision of this Agreement in any instance shall be
deemed to be a waiver of the same or any other provision in
any other instance. Failure of any party to enforce any
provision of this Agreement shall not be construed as a waiver
of its or his rights under such or any other provision.
However, this Agreement anticipates the execution of other
agreements in the future necessary to complete the merger or
acquisition between ATI and LTDN, should that transaction
occur, and shall be subject to them if it transpires.
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9. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
enforceable against and inure to the benefit of the parties
hereto and their respective heirs, administrators, executors,
personal representatives, successors and assigns, and nothing
herein is intended to confer any right, remedy or benefit upon
any other person. Except as provided in Section 6 with respect
to the Pledge Holder, this Agreement and any rights hereunder
may not be assigned by any party hereto.
10. GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and fully to
be performed in such State, without giving effect to conflicts
of law principles.
11. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
12. CONSTRUCTION. Headings contained in this Agreement are for
convenience only and shall not be used in the interpretation
of this Agreement. References herein to Sections are to the
sections of this Agreement. As used herein, the singular
includes the plural, and the masculine, feminine and neuter
gender each includes the others where the context so
indicates.
13. SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable by a court of competent jurisdiction,
this Agreement shall be interpreted and enforceable as if such
provision were severed or limited, but only to the extent
necessary to render such provision and this Agreement
enforceable.
14. ARBITRATION. All disputes, controversies or differences which
may arise between the parties hereto or in connection with
this Agreement, or the breach hereof, which cannot be resolved
after good faith attempts to reach an amicable solution, shall
be finally settled by arbitration before the American
Arbitration Association according to its current rules and
procedures. In that case ATI and LTDN each shall appoint an
arbitrator and the two appointed arbitrators shall appoint a
third arbitrator to hear and determine the dispute. Each party
to the arbitration shall bear its own counsel fees and
expenses and shall equally bear such other costs. The Pledge
Holder hereby irrevocably submits itself to the jurisdiction
of any federal or state court sitting in New York, New York,
hereby waives any and all objections it may have with respect
to the jurisdiction of such forum or the inconvenience of such
forum or venue, but only as a stakeholder for the purpose of
determining the proper disposition of All ATI Patents and/or
the Pledged Stock and only for the purpose of the entry,
enforcement of judgment on and/or appeal of the arbitrators'
award, and consents that any service of process, notice of
motion or other application to any of said courts in
connection therewith, and any related papers, may be served on
the party and at the location given in Section 7 either by
registered or certified mail, return receipt requested, by
personal service, or in such other manner as may be
permissible under the rules of the applicable court.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first set forth above.
ADVANCED TECHNOLOGY
LTD NETWORK INC. INDUSTRIES, INC.
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------- -------------------------------
Xxxxx Xxxxxxxx Xxxx X. Xxxxxxxxx
Chairman & CEO President
XXXXXXX XXXX & XXXXXXX, as RESEAL, LTD
Pledge Holder
By: By:
--------------------------------- -------------------------------
Partner President
CETONI GMBH
By:
-------------------------------
President
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