EXHIBIT 10.19
SECOND AMENDMENT TO BORROWER PLEDGE AGREEMENT
This Second Amendment to Borrower Pledge Agreement (this "SECOND
AMENDMENT") dated as of April 24, 1997, is made and entered into by and between
INTELECT SYSTEMS CORP., a Delaware corporation ("PLEDGOR"), and ST. XXXXX
CAPITAL CORP., a Delaware corporation, ("SECURED PARTY").
W I T N E S S E T H:
WHEREAS, the Pledgor and the Secured Party executed that certain Floating
Rate Promissory Note dated as of February 26, 1997, issued by Pledgor and
Intelect Communications Systems Limited, a corporation organized under the laws
of Bermuda ("ICSL" and together with Pledgor, the "MAKERS") payable to the order
of Secured Party in the original principal sum of $2,500,000 (the "ORIGINAL
NOTE"); and
WHEREAS, as collateral for the indebtedness evidenced by the Original
Note, the Pledgor entered into that certain Borrower Pledge Agreement dated as
of February 26, 1997, in favor of the Secured Party (the "PLEDGE AGREEMENT"),
wherein the Pledgor granted to the Secured Party a security interest in, INTER
ALIA, 1,100 shares of the common capital stock of DNA Enterprises, Inc., a Texas
corporation and a wholly-owned Subsidiary of Pledgor ("DNA"), evidenced by
Certificate Number 8, and any other shares of the common capital stock of DNA
now owned or hereafter acquired by Pledgor (the "DNA SHARES"), and all proceeds
of any and all of the foregoing (as such terms are defined therein);
WHEREAS, on March 27, 1997, the Pledgor, ICSL and the Secured Party
entered that certain Amended and Restated Floating Rate Promissory Note dated as
of February 26, 1997, amending and, as so amended, restating the Original Note
to increase the Commitment from $2,500,000 to $5,000,000 (the "AMENDED AND
RESTATED NOTE") and contemporaneously Pledgor and Secured Party executed a First
Amendment to Borrower Pledge Agreement ("First Amendment") effecting certain
amendments to the Pledge Agreement; and
WHEREAS, on April 24, 1997, the Pledgor, ICSL and the Secured Party
entered that certain Second Amended and Restated Floating Rate Promissory Note
dated as of February 26, 1997, amending and, as so amended, restating the
Original Note to increase the Commitment from $5,000,000 to $6,000,000 (the
"SECOND AMENDED AND RESTATED NOTE"); and
WHEREAS, in connection with the entering into of the Second Amended and
Restated Note, the parties hereto wish to effect certain amendments to the
Pledge Agreement;
WHEREAS, it is a condition precedent to the effectiveness of the Second
Amended and Restated Note that this Second Amendment be executed and delivered
by the parties hereto; and
WHEREAS, the parties hereto desire to execute and deliver this Second
Amendment for the reasons described above and to satisfy the condition precedent
referenced in the immediately preceding paragraph.
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NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, and of the representations and warranties herein set forth and for
other good and valuable consideration, the parties hereto do hereby agree as
follows:
SECTION 1. Capitalized terms used herein and not defined herein which are
defined in the Amended and Restated Note shall have the meanings therein
ascribed to them. The term "NOTE" as used in the Pledge Agreement or any other
documents executed in connection therewith or any other instrument, document or
writing furnished to the Secured Party in connection therewith shall mean the
Second Amended and Restated Note. From and after the date hereof, all references
in the Second Amended and Restated Note or in any other Transaction Document to
the Pledge Agreement shall be deemed to be references to the Pledge Agreement as
effected and amended hereby. The term "OBLIGATIONS" as used in the Pledge
Agreement or in any other Transaction Document shall include, without
limitation, all obligations, liabilities and indebtedness of every nature of the
Pledgor and ICSL from time to time owing to the Secured Party under the
$6,000,000 Second Amended and Restated Note and any other Transaction Document.
SECTION 2. In order to secure the prompt and unconditional payment and
performance of the Obligations, including without limitation, all obligations,
liabilities and indebtedness of every nature of the Pledgor and ICSL from time
to time owing to the Secured Party under the $6,000,000 Second Amended and
Restated Note, the Pledgor hereby grants to the Secured Party a continuing
security interest in and to all of the following properties (the "COLLATERAL"):
(a) 1,100 shares of the common capital stock of DNA, evidenced by
Certificate Number 8, and any other shares of the common capital stock of
DNA now owned or hereafter acquired by Pledgor (such shares of stock
referred to in this subsection 1.1(a) are hereinafter sometimes referred
to as the "DNA SHARES");
(b) (i) the certificates or instruments, if any, representing the
DNA Shares, (ii) all dividends (cash, stock or otherwise), cash,
instruments, rights to subscribe, purchase or sell and all other rights
and property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
securities, (iii) all replacements, additions to and substitutions for any
of the property referred to in this definition, including, without
limitation, claims against third parties, (iv) the proceeds, interest,
profits and other income of or on any of the property referred to in this
definition, and (v) all books and records relating to any of the property
referred to in this definition; and
(c) all proceeds as such term is defined in Section 9.306(a) of the
Uniform Commercial Code and, in any event, shall include, without
limitation, all dividends or other income from the Collateral, collections
thereon or distributions, liquidation payments or redemption payments with
respect thereto, and any and all rights, titles, interests, privileges,
benefits and preferences appertaining or incidental to the Collateral.
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SECTION 3. The representations and warranties of the Pledgor contained in
Section 3 of the Pledge Agreement are true and correct in all respects and as of
the date hereof as though made on and as of the date hereof.
SECTION 4. Each party hereto represents and warrants that this Second
Amendment has been duly authorized by it and has been duly executed and
delivered on its behalf, and the Pledge Agreement, after giving effect to the
First Amendment and this Second Amendment, constitutes a valid and legally
binding agreement of such party enforceable against such party in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency or other similar laws of general application relating to or affecting
the enforcement of creditors' rights.
SECTION 5. This Second Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provisions, of the
Pledge Agreement, except as expressly amended. The Pledge Agreement, as amended
by the First Amendment and hereby, and all rights and powers created thereby or
thereunder are in all respects ratified and confirmed and shall remain in full
force and effect.
SECTION 6. This Second Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which counterparts when executed and delivered shall be an original, but all
of which shall constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Pledgor and the Secured Party.
SECTION 8. THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.
SECTION 9. Section headings in this Second Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Second Amendment to be duly executed and delivered as of the date first
above written.
Pledgor: INTELECT SYSTEMS CORPORATION
Address:
0000 Xxxxxxxxx Xxxxx By: /s/ XXXXXX X. XXXXXXXX
Xxxxxxxxxx, Xxxxx 00000 Name: Xxxxxx X. Xxxxxxxx
Title: President and CEO
SECURED PARTY: ST. XXXXX CAPITAL CORP.
Address:
0000 Xxxx Xxx Xxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx
Suite 2030 Name: Xxxxxxx X. Xxxxxxxxxx
Xxxxxxx, Xxxxx 00000 Title: CEO
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THIRD AMENDMENT TO BORROWER PLEDGE AGREEMENT
This Third Amendment to Borrower Pledge Agreement (this "Third
Amendment") dated as of May 8, 1997, is made and entered into by and between
INTELECT SYSTEMS CORP., a Delaware corporation ("PLEDGOR"), and ST. XXXXX
CAPITAL CORP., a Delaware corporation ("SECURED PARTY").
W I T N E S S E T H:
WHEREAS, the Pledgor and the Secured Party executed that certain Floating
Rate Promissory Note dated as of February 26, 1997, issued by Pledgor and
Intelect Communications Systems Limited, a corporation organized under the laws
of Bermuda ("ICSL" and together with Pledgor, the "MAKERS") payable to the order
of Secured Party in the original principal sum of $2,500,000 (the "ORIGINAL
NOTE");
WHEREAS, as collateral for the indebtedness evidenced by the Original
Note, the Pledgor entered into that certain Borrower Pledge Agreement dated as
of February 26, 1997, in favor of the Secured Party (the "Pledge Agreement"),
wherein Pledgor granted to the Secured Party a security interest in, INTER ALIA,
1,100 shares of the common capital stock of DNA Enterprises, Inc., a Texas
corporation and a wholly-owned Subsidiary of Pledgor ("DNA"), evidenced by
Certificate Number 8, and any other shares of the common capital stock of DNA
now owned or hereafter acquired by Pledgor or any of its affiliates (the "DNA
SHARES"), and all proceeds of any and all of the foregoing (as such terms are
defined therein);
WHEREAS, on March 27, 1997, the Makers and the Secured Party entered that
certain Amended and Restated Floating Rate Promissory Note dated as of February
26, 1997, amending and, as so amended, restating the Original Note to increase
the Commitment from $2,500,000 to $5,000,000 (the "Amended and Restated Note");
and contemporaneously Pledgor and Secured Party executed a First Amendment to
Borrower Pledge Agreement ("First Amendment") effecting certain amendments to
the Pledge Agreement;
WHEREAS, on April 24, 1997, the Pledgor, ICSL and the Secured Party
entered that certain Second Amended and Restated Floating Rate Promissory Note
dated as of February 26, 1997, amending and, as so amended, restating the
Original Note, as amended by the Amended and Restated Note, to increase the
Commitment from $5,000,000 to $6,000,000 (the "Second Amended and Restated
Note");
WHEREAS, in connection with the entering into of the Second Amended and
Restated Note, the parties hereto contemporaneously effected certain amendments
to the Pledge Agreement pursuant to that certain Second Amendment to Borrower
Pledge Agreement (the "Second Amendment");
WHEREAS, as of the date hereof, The Coastal Corporation Second Pension
Trust ("Coastal"), is loaning Makers $5,000,000 pursuant to that certain
Floating Rate Promissory Note (the "Coastal Note");
WHEREAS, Coastal desires to obtain as collateral for its loan to Makers a
security interest in, among other matters, the DNA Shares;
WHEREAS, the Secured Party is willing to share its security interest in
the DNA Shares, provided that Pledgor grants Secured Party a security interest
in INTER ALIA, 500 shares of the common
capital stock of Intelect Visual Communications Corp., a Delaware corporation
and wholly-owned subsidiary of Pledgor ("IVC"), evidenced by Certificate Number
1, and any other shares of common capital stock of IVC now owned or hereafter
acquired by Pledgor or any of its affiliates (the "IVC Shares"), 1,000 shares of
common capital stock of Intelect Network Technologies Company, a Nevada
corporation and wholly-owned subsidiary of Pledgor ("INT"), represented by
Certificate Number 1, and any other shares of common capital stock of INT now
owned or hereafter acquired by Pledgor or any of its affiliates, and all
proceeds of any and all of the foregoing (as such terms are defined therein);
WHEREAS, it is a condition precedent to the execution, delivery and
performance of the Coastal Note that this Third Amendment be executed and
delivered by the parties hereto; and
WHEREAS, the parties hereto desire to execute and deliver this Third
Amendment for the reasons described above and to satisfy the condition precedent
referenced in the immediately preceding paragraph.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, and of the representations and warranties herein set forth and for
other good and valuable consideration, the parties hereto do hereby agree as
follows:
SECTION 1. Capitalized terms used herein and not defined herein which are
defined in the Second Amended and Restated Note shall have the meanings therein
ascribed to them. The term "Note" as used in the Pledge Agreement or any other
documents executed in connection therewith or any other instrument, document or
writing furnished to the Secured Party in connection therewith shall mean the
Second Amended and Restated Note. From and after the date hereof, all references
in the Second Amended and Restated Note or in any other Transaction Document to
the Pledge Agreement shall be deemed to be references to the Pledge Agreement as
previously amended and as effected and amended hereby. The term "Obligations" as
used in the Pledge Agreement or in any other Transaction Document shall include,
without limitation, all obligations, liabilities and indebtedness of every
nature of the Pledgor and ICSL from time to time owing to the Secured Party
under the Second Amended and Restated Note and any other Transaction Document.
SECTION 2. In order to secure the prompt and unconditional payment and
performance of the Obligations, including without limitation, all obligations,
liabilities and indebtedness of every nature of the Pledgor and ICSL from time
to time owing to the Secured Party under the Second Amended and Restated Note,
the Pledgor hereby grants to the Secured Party a continuing security interest in
and to all of the following properties by amending the definition of the term
"Collateral" set forth in the Pledge Agreement to read in its entirety as
follows:
(a) the DNA Shares, the IVC Shares and the INT Shares (such shares
of stock referred to in this subsection 1.1(a) are hereinafter sometimes
referred to as the "DNA SHARES", the "IVC SHARES" and the "INT SHARES",
respectively);
(b) (i) the certificates or instruments, if any, representing the
DNA Shares, the IVC Shares and the INT Shares, respectively, (ii) all
dividends (cash, stock or otherwise), cash, instruments, rights to
subscribe, purchase or sell and all other rights and property from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such securities, (iii) all replacements,
additions to and substitutions for any of the property referred to in this
definition, including, without limitation, claims against third parties,
(iv) the
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proceeds, interest, profits and other income of or on any of the property
referred to in this definition, and (v) all books and records relating to
any of the property referred to in this definition; and
(c) all proceeds as such term is defined in Section 9.306(a) of the
Uniform Commercial Code and, in any event, shall include, without
limitation, all dividends or other income from the Collateral, collections
thereon or distributions, liquidation payments or redemption payments with
respect thereto, and any and all rights, titles, interests, privileges,
benefits and preferences appertaining or incidental to the Collateral.
SECTION 3. The definition of "Pledged Securities" in the Pledge Agreement
is hereby amended to read in its entirety as follows:
"PLEDGED SECURITIES" means all of the following securities and all
additional securities (as that term is defined in the UCC), if any,
constituting Collateral under this Pledge Agreement, including:
(1) All of the issued and outstanding shares of common capital
stock of DNA Enterprises, Inc., consisting of 1,100 shares,
evidenced by Certificate Number 8, and any other shares of
common stock of DNA now owned or hereafter acquired by Pledgor
or any of its affiliates (such shares of stock referred to in
this subsection 1.1(a) are hereinafter sometimes referred to
as the "DNA Shares".
(2) All of the issued and outstanding shares of common capital
stock of Intelect Visual Communications Corporation,
consisting of 500 shares, evidenced by Certificate Number 1,
and any other shares of the common capital stock of IVC now
owned or hereafter acquired by Pledgor or any of its
affiliates (such shares of stock referred to in this
subsection 1.1(a) are hereinafter sometimes referred to as the
"IVC Shares".
(3) All of the issued and outstanding shares of common capital
stock of Intelect Network Technologies, Inc., consisting of
1,000 shares of common capital stock, evidenced by Certificate
Number 1, and any other shares of the common capital stock of
INT now owned or hereafter acquired by Pledgor or any of its
affiliates (such shares of stock referred to in this
subsection 1.1(a) are hereinafter sometimes referred to as the
"INT Shares".
SECTION 4. The representations and warranties of the Pledgor contained in
Section 3 of the Pledge Agreement are true and correct in all respects and as of
the date hereof as though made on and as of the date hereof.
SECTION 5. Each party hereto represents and warrants that this Third
Amendment has been duly authorized by it and has been duly executed and
delivered on its behalf, and the Pledge Agreement, after giving effect to the
First Amendment, the Second Amendment and this Third Amendment, constitutes a
valid and legally binding agreement of such party enforceable against such party
in
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accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other similar laws of general application relating to
or affecting the enforcement of creditors' rights.
SECTION 6. This Third Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provisions, of the
Pledge Agreement, except as expressly amended. The Pledge Agreement, as amended
by the First Amendment, the Second Amendment and hereby, and all rights and
powers created thereby or thereunder are in all respects ratified and confirmed
and shall remain in full force and effect.
SECTION 7. This Third Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which counterparts when executed and delivered shall be an original, but all
of which shall constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Pledgor and the Secured Party.
SECTION 8. THIS THIRD AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.
SECTION 9. Section headings in this Third Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Third Amendment to be duly executed and delivered as of the date first
above written.
Pledgor: INTELECT SYSTEMS CORPORATION
Address:
0000 Xxxxxxxxx Xxxxx By: /s/ XXXXXX X. XXXXXXXX
Xxxxxxxxxx, Xxxxx 00000 Name: Xxxxxx X. Xxxxxxxx
Title: President and CEO
SECURED PARTY: ST. XXXXX CAPITAL CORP.
Address:
0000 Xxxx Xxx Xxxx By: /s/ SIGNATURE ILLEGIBLE
Suite 2030 Name:
Xxxxxxx, Xxxxx 00000 Title: CEO
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