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Exhibit 10.2
PLEDGE AGREEMENT
This Agreement is executed effective October 13, 1998 between SVI HOLDINGS,
INC., a Nevada corporation, having an address for notices at 0000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xx Xxxxx, XX 00000 ("SVI" or "Pledgee") and SOFTLINE LIMITED,
a South African corporation, having an address for notices at 00 Xxxxxxxx
Xxxxxxxx, Xxxxxxxx Extension 13, Xxxxxxx 0000, Xxxxx Xxxxxx ("Pledgor"), who
agree as follows:
1. RECITAL. This Agreement is made with reference to the following
recital of essential facts:
1.a. Pledgor has executed a Promissory Note dated October 13,
1998 in the amount of $5,215,500.00 (the "Note") in favor of Pledgee.
1.b. In order to secure Pledgor's payment obligations under the
Note, Pledgor has agreed to pledge to Pledgee one million (1,000,000) shares of
common stock (the "Shares") held by Pledgor in SVI.
2. GRANT OF SECURITY INTEREST. To secure Pledgor's payment obligations
to Pledgee under the Note, Pledgor pledges, assigns and grants to Pledgee a
security interest in (a) the Shares and (b) all stock or cash dividends,
substitutions, and shares issued pursuant to any merger or reorganization, or
any other proceeds of such Shares as defined in Section 9306 of the California
Uniform Commercial Code.
3. DELIVERY OF SHARES. Upon Pledgor's execution of this Pledge
Agreement, Pledgor shall concurrently validly endorse the share certificate(s)
evidencing the Shares in blank and deliver such certificate(s) to Xxxxxx X.
Xxxxx, Esq., of Xxxxxxx Xxxx Seidenwurm & Xxxxx (the "Pledgeholder").
Pledgeholder shall retain such certificate(s) to secure Pledgor's obligations to
Pledgee under this Agreement.
4. TERMS OF PLEDGE. The Shares shall be held by Pledgeholder in pledge
subject to the terms and conditions of this Agreement. As long as no default
exists as described in Paragraph 8 below, Pledgor shall have the right at all
times to vote such Shares on any and all matters. Pledgor and Pledgee shall
indemnify Pledgeholder and hold him harmless from any loss, expense or damage he
may incur by virtue of his role as Pledgeholder, except for any breach of duty
or negligence of Pledgeholder.
5. PLEDGOR'S REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants that the following are true and accurate:
5.1. LEGAL POWER, RIGHT AND AUTHORITY. As of the date of this
Agreement, Pledgor has the legal power, right and authority to enter into this
Agreement.
5.2. ACTION. As of the date of this Agreement, all requisite
corporate actions have been taken by Pledgor in connection with entering into
this Agreement and the consummation of the transactions contemplated by this
Agreement.
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5.3. INDIVIDUAL EXECUTING. The individual executing this
Agreement on behalf of Pledgor has the legal power, right, and actual authority
to bind Pledgor to the terms and conditions of this Agreement.
5.4. GOVERNMENTAL APPROVAL. Pledgor has obtained all permits,
approvals, licenses and other governmental consent necessary or desirable in
connection with the loan evidenced by the Note and the repayment of all
indebtedness evidenced by this Note. Such representation and warranty regarding
permits, approvals, licenses and governmental consent is intended to include,
without limitation, all necessary approval by the South African Exchange Control
to repay the principal and accrued interest on the Note on or before December
29, 1998.
5.5. NO CONFLICT. The loan evidenced by the Note does not
violate or breach any agreement, license, permit, judgment, decree, order,
statute, ordinance, rule or regulation to which maker, or any of its assets are
subject or bound. Maker is not subject to any agreement, license, permit,
judgment, decree, order, statute, ordinance, rule or regulation that would
impair the power of Maker to enter into and carry out the undertakings required
under the Note. The Note does not violate, conflict with, result in the breach
of, or constitute a default under any Applicable Laws. The term "Applicable
Laws" means all applicable constitutional, legislative, judicial and
administrative provisions, statutes, regulations, decisions, rulings, orders,
ordinances and other laws of the State of California, the United States of
America, and South Africa.
6. NEGATIVE COVENANTS. Until all obligations secured by this Pledge
Agreement shall have been fully and finally performed, Pledgor shall not without
the prior written consent of Pledgee: (a) create or suffer to exist any further
security interest in the Shares; or (b) sell or otherwise dispose of the Shares.
7. AFFIRMATIVE COVENANTS. Until all obligations secured by this
Agreement shall have been fully and finally performed, Pledgor shall pay when
due all taxes, assessments, and liens, if any, upon the Shares. Pledgor may
withhold any such payment or may elect to contest any lien if Pledgor is in good
faith conducting appropriate proceedings to contest the obligation to pay, so
long as Pledgee's interest in the Shares is not jeopardized. In any such
contest, Pledgor shall represent itself and Pledgee and shall satisfy any final
adverse judgment before enforcement against the Shares. Pledgor shall name
Pledgee as an additional obligee under any surety bond furnished in the contest
proceedings.
8. EVENTS OF DEFAULT. Pledgor shall be in default under this Agreement
upon the occurrence of any of the following events:
8.a. Pledgor's breach of this Agreement, which breach is not
cured within 5 days of written notice to Pledgor of such breach.
8.b. Any amount due under the Note is not received by Pledgee on
its due date.
8.c. Any actual or attempted disposition of the Shares in
violation of this Agreement.
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8.d. The making by Pledgor of any general arrangement or
assignment for the benefit of creditors; Pledgor becoming bankrupt, insolvent or
a "debtor" as defined in 11 U.S.C. Section 101, or any successor statute or
similar statute or law in South Africa (unless, in the case of a petition filed
against Pledgor, such petition is dismissed within 30 days after its original
filing); the appointing of a trustee or receiver to take possession of
substantially all of Pledgor's assets (unless possession is restored to Pledgor
within 30 days after such taking); or the attachment, execution or judicial
seizure of substantially all of Pledgor's assets (unless such attachment,
execution or judicial seizure is discharged within 30 days after such
attachment, execution or judicial seizure).
9. RIGHTS OF PLEDGEE UPON DEFAULT. Should a default occur under
Paragraph 8 above (a "Default"), Pledgee shall give Pledgeholder written notice
and full details of such Default. Immediately following the receipt of such
written notice of Default, Pledgeholder may exercise any of the following
remedies with regard to the Shares on behalf of Pledgee:
9.a. Vote, grant proxies, attend shareholder meetings, nominate
and elect directors, receive dividends and other distributions to shareholders,
and otherwise exercise any rights attributable to the Shares.
9.b. Cause the Shares to be transferred to Pledgee on the books
of Pledgor, in accordance with the stock transfer form executed by Pledgor in
connection with the delivery of the Shares.
9.c. Cause the Shares to be sold at public or private sale (a
"Sale"). Proceeds from such Sale, net of reasonable expenses of sale including
attorney's fees and legal expenses incurred by the Pledgeholder, sufficient to
cure the Default, shall be forwarded to Pledgee. Any proceeds in excess of the
amount sufficient to cure the Default shall be immediately forwarded to Pledgor.
If Pledgee instructs Pledgeholder to sell the Shares and if the net proceeds of
such Sale are insufficient to cure the Default, Pledgee may exercise any other
rights and remedies afforded to secured parties under the California Uniform
Commercial Code, or otherwise in law or equity. All such rights and remedies
shall be cumulative and may be exercised singularly or concurrently.
Notwithstanding the foregoing, Pledgee acknowledges that in
the event of a non-monetary default described in Paragraph 8.1 above, Pledgee
must liquidate its damages by a judicial determination before the Sale shall
occur. Notwithstanding the foregoing, if Pledgor cures any Default prior to the
Sale, Pledgeholder shall cause the Sale not to occur.
10. CONFLICTING DEMANDS. If conflicting demands are made upon
Pledgeholder, he shall have the right (a) to file an action in interpleader with
a court of competent jurisdiction, and (b) to be reimbursed by Pledgor and/or
Pledgee for any and all costs, expenses and attorneys' fees reasonably incurred
in connection with such action as determined by such court, except to the extent
of any breach of duty or negligence of Pledgeholder.
11. RETURN OF SHARES/NOTE. Upon Pledgor's performance of all of its
obligations under this Agreement and the Note, Pledgeholder shall return the
Shares to Pledgor and the Note marked "PAID."
12. REPRESENTATIONS AND WARRANTIES OF PLEDGOR. Pledgor represents and
warrants to Pledgee that except for the security interest created by this
Agreement, no person or entity has any right, title, interest, or claim in or to
the Shares or any part of the Shares.
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13. GOVERNING LAW. This Agreement is governed by and construed in
accordance with the laws of the State of California, irrespective of
California's choice-of-law principles.
14. FURTHER ASSURANCES. Each party to this Agreement shall execute and
deliver all instruments and documents and take all actions as may be reasonably
required or appropriate to carry out the purposes of this Agreement.
15. VENUE AND JURISDICTION. All actions and proceedings arising in
connection with this Agreement must be tried and litigated exclusively in the
State and Federal courts located in the County of San Diego, State of
California, which courts have personal jurisdiction and venue over each of the
parties to this Agreement for the purpose of adjudicating all matters arising
out of or related to this Agreement. Each party authorizes and accepts service
of process sufficient for personal jurisdiction in any action against it as
contemplated by this paragraph by registered or certified mail, return receipt
requested, postage prepaid, to its address for the giving of notices set forth
in this Agreement.
16. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which is deemed an original
and all of which together constitute one document.
17. TIME OF ESSENCE. Time and strict and punctual performance are of
the essence with respect to each provision of this Agreement.
18. ATTORNEY'S FEES. The prevailing party(ies) in any litigation,
arbitration, mediation, bankruptcy, insolvency or other proceeding
("Proceeding") relating to the enforcement or interpretation of this Agreement
may recover from the unsuccessful party(ies) all costs, expenses, and actual
attorney's fees (including expert witness and other consultants' fees and costs)
relating to or arising out of (a) the Proceeding (whether or not the Proceeding
proceeds to judgment), and (b) any post-judgment or post-award proceeding
including, without limitation, one to enforce or collect any judgment or award
resulting from the Proceeding. All such judgments and awards shall contain a
specific provision for the recovery of all such subsequently incurred costs,
expenses, and actual attorney's fees.
19. MODIFICATION. This Agreement may be modified only by a contract in
writing executed by the party to this Agreement against whom enforcement of the
modification is sought.
20. HEADINGS. The paragraph headings in this Agreement: (a) are
included only for convenience, (b) do not in any manner modify or limit any of
the provisions of this Agreement, and (c) may not be used in the interpretation
of this Agreement.
21. PRIOR UNDERSTANDINGS. This Agreement and all documents specifically
referred to and executed in connection with this Agreement: (a) contain the
entire and final agreement of the parties to this Agreement with respect to the
subject matter of this Agreement, and (b) supersede all negotiations,
stipulations, understandings, agreements, representations and warranties, if
any, with respect to such subject matter, which precede or accompany the
execution of this Agreement.
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22. INTERPRETATION. Whenever the context so requires in this Agreement,
all words used in the singular may include the plural (and vice versa) and the
word "person" includes a natural person, a corporation, a firm, a partnership, a
joint venture, a trust, an estate or any other entity. The terms "includes" and
"including" do not imply any limitation. For purposes of this Agreement, the
term "day" means any calendar day and the term "business day" means any calendar
day other than a Saturday, Sunday or any other day designated as a holiday under
California Government Code Sections 6700-6701. Any act permitted or required to
be performed under this Agreement upon a particular day which is not a business
day may be performed on the next business day with the same effect as if it had
been performed upon the day appointed. No remedy or election under this
Agreement is exclusive, but rather, to the extent permitted by applicable law,
each such remedy and election is cumulative with all other remedies at law or in
equity.
23. PARTIAL INVALIDITY. Each provision of this Agreement is valid and
enforceable to the fullest extent permitted by law. If any provision of this
Agreement (or the application of such provision to any person or circumstance)
is or becomes invalid or unenforceable, the remainder of this Agreement, and the
application of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, are not affected by such invalidity
or unenforceability unless such provision or the application of such provision
is essential to this Agreement.
24. SUCCESSORS-IN-INTEREST AND ASSIGNS. Pledgor may not voluntarily or
by operation of law assign, hypothecate, delegate or otherwise transfer or
encumber all or any part of its rights, duties or other interests in this
Agreement without the prior written consent of Pledgee, which consent may be
withheld in Pledgee's sole and absolute discretion. Any such transfer in
violation of this paragraph is void. Subject to the foregoing and any other
restrictions on transferability contained in this Agreement, this Agreement is
binding upon and inures to the benefit of the successors-in-interest and assigns
of each party to this Agreement.
25. NOTICES. All notices or other communications required or permitted
to be given to a party to this Agreement shall be in writing and shall be
personally delivered, sent by certified mail, postage prepaid, return receipt
requested, or sent by an overnight express courier service that provides written
confirmation of delivery, to such party at its address as set forth above in the
introductory Paragraph of this Agreement. Each such notice or other
communication shall be deemed given, delivered and received upon its actual
receipt, except that if it is sent by mail in accordance with this Paragraph,
then it shall be deemed given, delivered and received three days after the date
such notice or other communication is deposited with the United States Postal
Service in accordance with this Paragraph. Any party to this Agreement may give
a notice of a change of its address to the other party(ies) to this Agreement.
Notice to Pledgeholder shall be to Xxxxxx X. Xxxxx, Esq., Xxxxxxx Xxxx
Seidenwurm & Xxxxx, 000 X Xxxxxx, Xxxxx 0000, Xxx Xxxxx, XX 00000.
26. WAIVER. Any waiver of a default or provision under this Agreement
must be in writing. No such waiver constitutes a waiver of any other default or
provision concerning the same or any other provision of this Agreement. No delay
or omission by a party in the exercise of any of its rights or remedies
constitutes a waiver of (or otherwise impairs) such right or remedy. A consent
to or approval of an act does not waive or render unnecessary the consent to or
approval of any other or subsequent act.
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27. DRAFTING AMBIGUITIES. Each party to this Agreement and its legal
counsel have reviewed and revised this Agreement. The rule of construction that
ambiguities are to be resolved against the drafting party or in favor of the
party receiving a particular benefit under an agreement may not be employed in
the interpretation of this Agreement or any amendment to this Agreement.
28. SURVIVAL. The covenants, conditions, representations and warranties
of this Agreement shall
survive the execution of this Agreement.
SVI HOLDINGS, INC., a Nevada corporation
By: /s Xxxxx X. Xxxxxxxxx
--------------------------------
SOFTLINE LIMITED, a South African corporation
By: /s/ Xxxxxx Xxxxx
--------------------------------
I ACCEPT THE OBLIGATIONS IMPOSED UPON ME UNDER THIS PLEDGE
AGREEMENT:
-----------------------------------------
Xxxxxx X. Xxxxx, Esq., Pledgeholder
