EXHIBIT 4.07
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT") is executed as of
the 12th day of June, 1997 by AMERICAN MEDICAL TECHNOLOGIES, INC., a Delaware
corporation d/b/a AMT INDUSTRIES, INC. ("PLEDGOR"), in favor of TEXAS COMMERCE
BANK NATIONAL ASSOCIATION, a national banking association ("PLEDGEE").
RECITALS:
A. Tidel Engineering, Inc., a Texas corporation (the "ISSUER") and Pledgee
have entered into that certain Credit Agreement dated of even date herewith (as
amended, modified or supplemented from time to time, the "LOAN AGREEMENT"),
pursuant to which Pledgee has agreed to make available to Issuer a credit
facility subject to the terms and conditions contained therein.
B. Pledgor is the legal, record and beneficial owner of 90,100 shares of
the issued and outstanding common stock, $0.01 par value of Issuer, evidenced by
Tidel Engineering, Inc. common stock certificate no. 5, registered in the name
of Pledgor, a copy of which certificate is attached hereto as SCHEDULE 1 (the
"INITIAL PLEDGED STOCK").
C. It is a condition precedent to the obligations of Pledgee under the
Loan Agreement that Pledgor shall have executed and delivered this Agreement to
Pledgee.
D. Pledgor, by virtue of its ownership of the Initial Pledged Stock, deems
it to be in its best interest, based on sound judgment, in that valuable
benefits will be derived by the Pledgor by virtue of the Loans, to execute and
deliver to Pledgee this Agreement.
E. In consideration of these premises and in order to induce Pledgee to
extend the credit pursuant to the Loan Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Pledgor and Pledgee hereby agree as follows:
AGREEMENTS:
1. DEFINED TERMS. Unless otherwise defined herein, terms defined in the
Loan Agreement shall have such defined meanings when used herein.
2. PLEDGE. The Pledgor hereby pledges, assigns, hypothecates, transfers
and delivers to the Pledgee, and hereby grants to Pledgee a first lien on, and
security interest in, (a) the Initial Pledged Stock, (b) all shares of stock,
common or preferred, options, interests, participations, and other equivalents,
warrants, convertible debentures and all agreements, instruments and documents
convertible, in whole or part, into any one or more of the foregoing
(collectively, "Stock") of the Issuer which Pledgor shall, from time to time,
become entitled to receive or shall
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receive as set forth in SECTION 3 hereof (together with any Stock options or
rights received pursuant to SECTION 3 hereof, the "ADDITIONAL PLEDGED STOCK";
the Additional Pledged Stock and the Initial Pledged Stock being sometimes
hereinafter referred to as the "PLEDGED STOCK"), (c) all other Collateral (as
defined in SECTION 4 hereof) as may be pledged to Pledgee at any time and from
time to time hereunder and (d) all proceeds thereof, together with appropriate
undated stock powers duly executed in blank, as collateral security for (i) the
due and punctual payment and performance by Pledgor of its obligations,
covenants, agreements and liabilities, absolute or contingent, liquidated or
unliquidated, now existing or hereinafter incurred under, arising out of or in
connection with this Agreement, (ii) the prompt and complete payment when due
(whether at the stated due date, by acceleration or otherwise) of the unpaid
principal of and interest on the Note issued to evidence the Loans made by
Pledgee to Issuer pursuant to the Loan Agreement as well as collection costs
therefor, and (iii) the due and punctual payment and performance by Issuer of
all Obligations (as defined in the Loan Agreement) to Pledgee, absolute or
contingent, liquidated or unliquidated, now existing or hereinafter incurred
(all the foregoing being hereinafter called the "OBLIGATIONS").
3. STOCK DIVIDENDS, DISTRIBUTIONS, ETC. If, while this Agreement is in
effect, the Pledgor shall become entitled to receive or shall receive any Stock
certificate (including, without limitation, any certificate representing a Stock
dividend or a distribution in connection with any reclassification, increase or
reduction of capital, or issued in connection with any reorganization), option
or rights, whether as an addition to, in substitution of, or in exchange for any
shares of any Pledged Stock, or otherwise, the Pledgor agrees to accept the same
as Pledgee's agent and to hold the same in trust on behalf of and for the
benefit of the Pledgee segregated from the other assets of the Pledgor and to
deliver the same forthwith to the Pledgee, in the exact form received, with the
endorsement of the Pledgor, when necessary and/or appropriate, to undated stock
powers, duly executed in blank, to be held by the Pledgee, subject to the terms
hereof, as additional collateral security for the Obligations, and such other
documents as the Pledgee shall reasonably request in order to perfect the
Pledgee's security interest therein. Any sums paid upon or in respect of the
Pledged Stock upon the liquidation or dissolution of Issuer shall be paid over
to the Pledgee, to be held by it in trust as additional collateral security for
the Obligations; and in case any distribution of capital shall be made on or in
respect of the Pledged Stock or any property shall be distributed upon or with
respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of Issuer or pursuant to the reorganization
thereof, the property so distributed shall be delivered to the Pledgee, to be
held by it as additional collateral security for the Obligations. All sums of
money and property so paid or distributed in respect of the Pledged Stock which
are received by the Pledgor shall, until paid or delivered to the Pledgee, be
held by the Pledgor in trust, segregated from the other assets of the Pledgor,
as additional collateral security for the Obligations.
4. COLLATERAL. The Pledged Stock and all other property at any time and
from time to time pledged to Pledgee hereunder (whether described in SCHEDULE L
hereof or not) and all income therefrom and proceeds thereof, are herein
collectively sometimes called the "COLLATERAL".
5. RECORD OWNERSHIP OF PLEDGED STOCK. Whether or not an Event of Default
has occurred and is continuing, Pledgee at any time may have the Pledged Stock
registered in its
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name, or in the name of its nominee or nominees, as pledgee; and, as to any
Pledged Stock so registered, Pledgee shall execute and deliver (or cause to be
executed and delivered) to Pledgor all such proxies, powers of attorney,
dividend coupons or orders, and other documents as Pledgor may reasonably
request for the purpose of enabling Pledgor to exercise the voting rights and
powers which it is entitled to exercise under this Agreement and to receive the
dividends and other payments in respect of the Pledged Stock which it is
authorized to receive and retain under this Agreement and the Loan Agreement.
6. VOTING OF PLEDGED STOCK. As long as an Event of Default has not
occurred and is not continuing, Pledgor shall be entitled to exercise all voting
rights pertaining to the Pledged Stock; provided, however, that no vote shall be
cast or consent, waiver or ratification given or action taken which would impair
the Collateral or violate any provision of this Agreement, the Loan Agreement or
the Loan Documents. After the occurrence and during the continuance of an Event
of Default, the right to vote the Pledged Stock and all other corporate rights
pertaining to the Pledged Stock shall be vested exclusively in Pledgee,
including any and all rights of conversion, exchange, subscription or any other
rights, privileges or options pertaining to any shares of the Pledged Stock as
if Pledgee were the absolute owner thereof, including, without limitation, the
right to exchange at its discretion any and all of the Pledged Stock upon the
merger, consolidation, reorganization, recapitalization or other readjustment of
Issuer or upon the exercise by Issuer or the Pledgee of any right, privilege or
option pertaining to any shares of the Pledged Stock, and in connection
therewith, to deposit and deliver any and all of the Pledged Stock with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as it may determine, all without liability except to
account for property actually received by it, but the Pledgee shall have no duty
to exercise any of the aforesaid rights, privileges or options or be responsible
for any failure to do so or delay in so doing. To this end, Pledgor hereby
irrevocably constitutes and appoints Pledgee the proxy and attorney-in-fact of
Pledgor, with full power of substitution, to vote, and to act with respect to,
the Pledged Stock standing in the name of Pledgor or with respect to which
Pledgor is entitled to vote and act, subject to the understanding that such
proxy may not be exercised unless an Event of Default has occurred and is
continuing. The proxy herein granted is coupled with an interest, is
irrevocable, and shall continue until the Obligations have been paid and
performed in full.
7. LIMITATIONS ON PLEDGEE'S OBLIGATIONS. The Pledgee shall not be liable
for failure to collect or realize upon the Obligations or any collateral
security or guarantee therefor, or any part thereof, or for any delay in so
doing nor shall the Pledgee be under any obligation to take any action
whatsoever with regard thereto.
8. THE PLEDGEE'S APPOINTMENT AS ATTORNEY-IN-FACT. (a) In addition to, and
without limiting the scope of any other provision in this Agreement, the Pledgor
hereby irrevocably constitutes and appoints the Pledgee and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Pledgor and in the name of the Pledgor or in its own name, from
time to time in the Pledgee's discretion, for the purpose of carrying out the
actions and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement and, without
limiting the generality of the foregoing, hereby gives the Pledgee the
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power and right, on behalf of the Pledgor, without notice to or assent by the
Pledgor to do the following upon the occurrence and during the continuance of an
Event of Default: (i) to ask, demand, collect, receive and give acquittances and
receipts for any and all monies due and to become due under the Collateral; (ii)
in the name of the Pledgor or its own name or otherwise, to take possession of
and endorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under the Collateral; (iii) to file
any claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Pledgee for the purpose of
collecting any and all such moneys due under the Collateral whenever payable;
(iv) to pay or discharge taxes, liens, security interests or other encumbrances
levied or placed on or threatened against the Collateral; (v) to direct any
party liable for any payment under the Collateral to make payment of any and all
moneys due and to become due thereunder directly to the Pledgee or as the
Pledgee shall direct; (vi) to receive payment of and receipt for any and all
moneys, claims and other amounts due and to become due at any time in respect of
or arising out of any Collateral; (vii) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce any
other right in respect of the Collateral; (viii) to defend any suit, action or
proceeding brought against the Pledgor with respect to any Collateral; (ix) to
settle, compromise or adjust any suit, action or proceeding described above and,
in connection therewith, to give such discharges or releases as the Pledgee may
deem appropriate; (x) exercise voting rights attributable to the Pledged Stock
pursuant to SECTION 6; and (xi) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Pledgee were the absolute owner thereof for all
purposes, and to do, at the Pledgee's option and the Pledgor's expense, at any
time, or from time to time, all acts and things which the Pledgee deems
necessary to protect, preserve or realize upon the Collateral and the Pledgee's
security interest therein, in order to effect the intent of this Agreement, all
as fully and effectively as the Pledgor might do.
The Pledgor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
(b) The powers conferred on the Pledgee hereunder are solely to
protect its interests in the Collateral and shall not impose any duty upon it to
exercise any such powers. Pledgee shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and neither it nor
any of its officers, directors, employees or agents shall be responsible to the
Pledgor for any act or failure to act.
(c) The Pledgor also authorizes the Pledgee, at any time and from
time to time, to execute, in connection with any sale of the Collateral, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
9. PERFORMANCE BY THE PLEDGEE OF THE PLEDGOR'S OBLIGATIONS. If the Pledgor
fails to perform or comply with any of its agreements contained herein and the
Pledgee, as provided for by the terms of this Agreement, shall itself perform or
comply, or otherwise cause performance or compliance, with such agreement, then
the expenses of the Pledgee incurred in connection with such performance or
compliance, together with interest thereon to accrue at a rate of interest
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equal to the Highest Lawful Rate from the date such expenses are incurred, shall
be payable by the Pledgor to the Pledgee on demand and shall constitute
Obligations secured hereby.
10. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement:
(a) The Pledgor shall fail to pay its Obligations when due;
(b) Any representation, warranty or statement made or deemed made by
the Pledgor herein or in connection herewith shall prove to have been incorrect
or untrue in any material respect on or as of the date made or deemed made;
(c) The Pledgor shall default in the observance or performance of
any term, covenant, or agreement contained herein; or
(d) An Event of Default (subject to any applicable cure period), as
such term is defined in the Loan Agreement, shall occur and be continuing.
11. REMEDIES. (a) Upon the occurrence and during the continuance of any
Event of Default, and at any time thereafter, the Pledgee may declare all of the
Obligations or any part thereof immediately due and payable and, without demand
of performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
the Pledgor or any other person (all and each of which demands, advertisements
and/or notices are hereby expressly waived), may forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, assign, give option or options to purchase, contract to sell or
otherwise dispose of and deliver said Collateral, or any part thereof, in one or
more parcels at public or private sale or sales, at any exchange, broker's board
or at the Pledgee's offices or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk, with the right to
the Pledgee upon any such sale or sales, public or private, to purchase the
whole or any part of said Collateral so sold, free of any right or equity of
redemption in the Pledgor, which right or equity is hereby expressly waived or
released. The Pledgee shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to
the care, safekeeping or otherwise of any and all of the Collateral or in any
way relating to the rights of the Pledgee hereunder, including reasonable
attorneys' fees and legal expenses, to the payment in whole or in part of the
Obligations in such order as the Pledgee may elect, the Pledgor remaining liable
for any deficiency remaining unpaid after such application, and only after so
applying such net proceeds and after the payment by the Pledgee of any amount
required by any provision of law, including, without limitation, Section 9-504
(a) (3) of the Uniform Commercial Code of the State of Texas (the "Code"), need
the Pledgee account for the surplus, if any, to the Pledgor. The Pledgor agrees
that, to the extent permitted by law, the Pledgee need not give more than ten
(10) days' notice of the time and place of any public sale or of the time after
which a private sale or other intended disposition is to take place and that
such notice is reasonable notification of such matters. No notification need be
given to the Pledgor if it
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has signed after default a statement renouncing or modifying any right to
notification of sale or other intended disposition. IN ADDITION TO THE RIGHTS
AND REMEDIES GRANTED TO IT IN THIS AGREEMENT AND IN ANY OTHER INSTRUMENT OR
AGREEMENT SECURING, EVIDENCING OR RELATING TO ANY OF THE OBLIGATIONS, THE
PLEDGEE SHALL HAVE ALL THE RIGHTS AND REMEDIES OF A SECURED PARTY UNDER THE
CODE. All waivers by the Pledgor of rights (including rights to notice) and all
rights and remedies afforded the Pledgor herein, and all other provisions of
this Agreement, are expressly made subject to any applicable mandatory
provisions of law limiting, or imposing conditions (including conditions as to
reasonableness) upon such waivers of the effectiveness thereof or any such
rights and remedies. Any sale or other disposition of the Collateral shall be in
compliance with all provisions of law (including applicable securities laws, and
regulations and applicable provisions of the Code).
(b) If Pledgee shall determine to exercise its right to sell any or
all of the Pledged Stock pursuant to this SECTION 11 hereof, and if in the
opinion of counsel for Pledgee it is advisable to have the Pledged Stock, or
that portion thereof to be sold, registered under the provisions of the
Securities Act of 1933, as amended (the "Securities Act"), the Pledgor will
cause the Issuer of such Pledged Stock to execute and deliver, and cause the
directors and officers thereof to execute and deliver, all at the Pledgor's
expense, all such instruments and documents, and to do or cause to be done all
such other acts and things as may be necessary to register the Pledged Stock, or
that portion thereof to be sold, under the provisions of the Securities Act and
to cause the registration statement relating thereto to become effective and to
remain effective for a period of 180 days from the date of the first public
offering of the Pledged Stock, or that portion thereof to be sold, and to make
all amendments thereto and/or to the related prospectus which are necessary, all
in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. The
Pledgor agrees to cause each Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any jurisdiction which Pledgee shall designate
and to cause Issuer 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.
(c) The Pledgor recognizes that the Pledgee may be unable to effect
a public sale of any or all the Pledged Stock by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, but may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire such
securities for their own account for investment and not with a view to the
distribution or resale thereof. The Pledgor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. Pledgee shall be under no obligation
to delay a sale of any of the Pledged Stock for the period of time necessary to
permit the Issuer of such securities to register such securities for public sale
under the Securities Act, or under applicable state securities laws, even if the
Issuer would agree to do so.
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(d) The Pledgor further agrees to do or cause to be done all such
other acts and things as may be necessary to make such sale or sales of any
portion of all of the Pledged Stock valid and binding and in compliance with any
and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sale or sales, all at the
Pledgor's expense. The Pledgor further agrees that a breach of any of the
covenants contained in this SECTION 11 will cause irreparable injury to Pledgee,
that Pledgee has no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this paragraph
shall be specifically enforceable against the Pledgor and the Pledgor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no default of the
covenants, terms or conditions of the Loan Agreement has occurred. The Pledgor
further acknowledges the impossibility of ascertaining the amount of damages
which would be suffered by Pledgee by reason of a breach of any such covenants
and, consequently, agrees that, if Pledgee shall xxx for damages for breach,
Pledgor shall pay, as liquidated damages and not as a penalty, an amount equal
to the value of the Pledged Stock on the date Pledgee shall demand compliance
with this paragraph, but in no event to exceed the amount of the Obligations.
12. WAIVER OF SUBROGATION. Notwithstanding anything to the contrary in
this Agreement, unless and until the Obligations have been indefeasibly paid and
performed in full, the Pledgor hereby irrevocably waives all rights Pledgor may
have at law or in equity (including, without limitation, any law subrogating the
Pledgor to the rights of the Pledgee) to seek contribution, indemnification, or
any other form of reimbursement from the Issuer, any other guarantor or pledgor,
or any other person now or hereafter primarily or secondarily liable for any
obligations of the Issuer to the Pledgee, for any disbursement made by the
Pledgor under or in connection with this Agreement or otherwise. The Pledgor
further agrees that, to the extent that the waiver of any such subrogation,
contribution, reimbursement, indemnity or otherwise is found to be void or
voidable for any reason, any such rights which the Pledgor may have shall be
junior and subordinate in all respects to the rights of the Pledgee against the
Issuer.
13. ACTIONS BY PLEDGEE. No action that the Pledgee may take or omit to
take in connection with the Loan Agreement or any of the Loan Documents, any
indebtedness owing by Issuer to the Pledgee (including, without limitation,
renewals, extensions, modifications and increases thereof), or any security for
the payment of any indebtedness of Issuer to the Pledgee, or for the performance
of any obligation or undertaking of Issuer, nor any course of dealing with
Issuer or any other Person, shall release the Pledgor from his obligations
hereunder, affect this Agreement in any way, or afford the Pledgor any recourse
against the Pledgee. By way of example, but not in limitation of the foregoing,
the Pledgor hereby expressly agrees that the Pledgee may, from time to time,
without notice to the Pledgor:
(a) sell, assign, transfer or grant participations in the Loans
and/or any right held by the Pledgee pursuant to or in connection with the Loan
Agreement and the Loan Documents;
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(b) amend, change, or modify, in whole or in part, any documents or
instruments evidencing, securing or relating to any indebtedness or undertaking
of Issuer to the Pledgee;
(c) accelerate, change, extend, or renew the time for payment of the
Notes or any other indebtedness arising under any documents or instruments
evidencing, securing or relating to any indebtedness or undertaking of Issuer to
the Pledgee;
(d) compromise or settle any amount due or owing, or claimed to be
due or owing, under the Notes or under any documents or instruments evidencing,
securing or relating to any indebtedness or undertaking of Issuer to the
Pledgee;
(e) surrender, release, or subordinate any or all security for any
indebtedness or undertaking of Issuer to the Pledgee or accept additional or
substituted security therefor;
(f) release any guarantor or pledgor of any indebtedness or
undertaking of the Issuer to the Pledgee, or substitute or add additional
guarantors or pledgors; and
(g) apply collateral securing the Notes to other indebtedness also
secured by such collateral.
The provisions of this Agreement shall extend and be applicable to all renewals,
increases, amendments, extensions, modifications of and substitutions for the
Loan Agreement and the Loan Documents, and all references herein to the Loan
Agreement and the Loan Documents shall be deemed to include any renewal,
increase, extension, amendment or modification thereof or substitution therefor.
14. NO IMPAIRMENT. The obligations, guaranties, undertakings, covenants,
agreements and duties of the Pledgor under this Agreement shall not be affected
or impaired by any of the following, although without notice to or consent of
the Pledgor:
(a) any failure, omission or delay on the part of the Pledgee (i) to
enforce, assert or exercise any right, power or remedy conferred on the Pledgee
by the provisions of the Loan Agreement and the Loan Documents or otherwise
inuring to the holders of the rights of the Pledgee under the Loan Agreement and
the Loan Documents, or (ii) to make demand first upon Issuer or to proceed
against Issuer;
(b) the voluntary or involuntary liquidation, dissolution, sale of
all or substantially all assets, marshalling of assets or liabilities,
receivership, conservatorship, assignment for the benefit of creditors,
insolvency, bankruptcy, reorganization, arrangement, composition or other
proceedings under laws for the protection of debtors affecting Issuer or any of
the assets of Issuer, or any discharge from liability or rejection of burdensome
contracts or obligations in the course of or resulting from any such
proceedings;
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(c) the release, by operation of law or otherwise, of Issuer or any
guarantor from any obligation under the Loan Agreement or any of the Loan
Documents;
(d) the invalidity, deficiency, illegality or unenforceability of
the Loan Agreement and the Loan Documents, in whole or in part, or of any of the
provisions thereof, or failure to perfect or maintain perfection of any
security, or any defense or excuse for failure to perform on account of force
majeure, act of God, casualty, impossibility, impracticability, or other defense
or excuse whatsoever; or
(e) without limiting the foregoing, any fact or event (whether or
not similar to any of the foregoing) which in the absence of this provision
would or might constitute or afford a legal or equitable discharge or release of
or defense to a guarantor or surety.
None of the foregoing shall be a defense to this Agreement, and this Agreement
is a primary obligation of the Pledgor.
15. OTHER PLEDGORS OR GUARANTORS. The liabilities and obligations of the
Pledgor hereunder shall not be reduced or limited by reason of any guaranty or
pledge executed in favor of the Pledgee by any other Person, and this Agreement
shall be enforceable against the Pledgor without regard to any such guaranty or
pledge.
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR. The Pledgor
represents and warrants that (a) it is the legal, record and beneficial owner
of, and has good and, subject to applicable securities laws described in SECTION
11 hereof, marketable title to, the Initial Pledged Stock, subject to no pledge,
lien, mortgage, hypothecation, security interest, charge, option, voting proxy
or other encumbrance whatsoever, except the existing lien and security interest
created by this Agreement; (b) it is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has full
power, authority and legal right to pledge the Initial Pledged Stock pursuant to
this Agreement; (c) this Agreement has been duly authorized, executed and
delivered by Pledgor and constitutes a legal, valid and binding obligation of
the Pledgor, and is enforceable in accordance with its terms; (d) no consent of
any other party (including, without limitation, the stockholders or creditors of
the Pledgor) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any Governmental Authority, domestic or foreign, is required to be obtained by
the Pledgor or the Pledgee in connection with the execution, delivery or
performance of this Agreement or the pledge of such shares hereunder, in each
case which has not been obtained or made, as the case may be, and is not in full
force and effect; (e) the execution, delivery and performance of this Agreement
will not violate any provision of any applicable law, or of any mortgage,
indenture, lease, contract, or other agreement, instrument or undertaking to
which Pledgor is a party or which purports to be binding upon Pledgor or upon
any of its assets and will not result in the creation or imposition of any lien,
charge or encumbrance on or security interest in any of the assets of Pledgor
except as contemplated by this Agreement or the Loan Agreement; (f) all the
shares of the Initial Pledged Stock have been duly and validly issued, are fully
paid and non-assessable and have not been issued in violation of any preemptive
or other rights of any person; (g) the Pledgor has not created any options,
warrants, rights, calls,
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commitments, plans, contracts or other agreements of any character, which
provide for the purchase, issuance or transfer of any shares of capital stock of
Issuer pledged hereby; and (h) the pledge, assignment and delivery of such
Initial Pledged Stock pursuant to this Agreement constitutes and, provided
Pledgee retains possession of the Initial Pledged Stock, at all times
(disregarding, however the effects of the change in any law relating to the
pledge of stock generally) will constitute a valid first lien on and a first
perfected security interest in such shares of the Initial Pledged Stock, and the
proceeds thereof, subject to no prior Lien, or to any agreement purporting to
grant to any third party other than Pledgee a security interest in the property
or assets of the Pledgor which would include the Initial Pledged Stock. Pledgor
covenants and agrees that at its expense it will defend the right, title and
security interest of the Pledgee in and to the Pledged Stock and the proceeds
thereof against the claims and demands of all persons whomsoever; and covenants
and agrees that he will have like title to and right to pledge any other
property at any time hereafter pledged to the Pledgee as Collateral hereunder
and will likewise defend the right of the Pledgee thereto and security interest
therein.
17. NO DISPOSITION. ETC. Without the prior written consent of the Pledgee,
Pledgor agrees that it will not sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, nor will it
create, incur or permit to exist any pledge, lien, mortgage, hypothecation,
security interest, charge, option or any other encumbrance with respect to any
of the Collateral, or any interest therein, or any proceeds thereof, except for
the lien and security interest provided for by this Agreement and except as
permitted by this Agreement or by the Loan Agreement. Without the prior written
consent of the Pledgee, the Pledgor agrees that it will not vote to enable
Issuer to issue or sell any stock or other securities of any nature in addition
to or in exchange or substitution for the Pledged Stock or grant or issue any
options, warrants, or rights of any kind to acquire, or securities convertible
into, shares of Issuer's stock.
18. FURTHER ASSURANCES. Pledgor agrees that at any time and from time to
time upon the written request of the Pledgee, the Pledgor will execute and
deliver such further documents and do such further acts and things which are
necessary in the reasonable judgment of the Pledgee to effect the purpose of
this Agreement or to obtain, maintain and perfect the security interest granted
under this Agreement in any applicable jurisdiction, and any expense of Pledgee
so incurred shall be a part of the Obligations.
19. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
20. NO WAIVER; CUMULATIVE REMEDIES. The Pledgee shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder and no waiver shall be valid unless in writing, signed by the
Pledgee, and then only to the extent therein set forth. A waiver by the Pledgee
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which Pledgee would otherwise have on any future
occasion. No failure to exercise nor any delay in exercising on the part of the
Pledgee, any
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right, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights or remedies provided by law.
21. WAIVERS, AMENDMENTS, ENTIRETY. None of the terms or provisions of this
Agreement may be waived, altered, modified or amended except by an instrument in
writing, duly executed by the Pledgee. This Agreement and all obligations of the
Pledgor hereunder shall be binding upon the successors and assigns of the
Pledgor, and shall, together with the rights and remedies of Pledgee hereunder,
inure to the benefit of Pledgee and its successors and assigns. THIS AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
22. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND BE CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS WITHOUT
GIVING EFFECT TO THE CHOICE OF LAWS RULES THEREOF. THE CERTIFICATES REPRESENTING
THE PLEDGED STOCK SHALL BE DELIVERED TO PLEDGOR IN THE STATE OF TEXAS.
23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
24. REINSTATEMENT. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against the
Pledgor or Issuer for liquidation or reorganization, should the Pledgor or
Issuer become insolvent or make an assignment for the benefit of creditors or
should a receiver or trustee be appointed for all or any significant part of the
Pledgor's assets or the assets of Issuer and shall continue to be effective or
be reinstated, as the case may be, if at any time payment and performance of the
Obligations, or any part thereof is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Obligations, whether as a "voidable preference", "fraudulent conveyance", or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount and not so rescinded, reduced, restored or returned.
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IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly executed
and delivered as of the day and year first above written.
AMERICAN MEDICAL TECHNOLOGIES,
INC., d/b/a AMT Industries, Inc.
By: /S/ XXXXX X. XXXX
Its: Chairman of the Board
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