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Exhibit 10.7
AGREEMENT OF COLLATERAL
AGREEMENT made March ___ 1997, between Xxxxxxx Xxxxxx, whose address
is: 0000 Xxxxx Xxxxx Xxxxxx, Xxxx, Xxxx 00000, Xxxx Xxxxxxx, whose address is
0000 Xxxxx Xxxxx Xxxxxx, Xxxx, Xxxx 00000 (individually the "Pledgor" and
together the "Pledgors"), and HiTek Carpet Care, Inc., a Nevada corporation,
0000 Xxxxx Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxx 0, Xxxxx 000, Xxxxxxxxx, Xxxxxx 00000
(the "Pledgee").
RECITALS
At the time of the execution of this Agreement the Pledgee loaned
Venturi Technologies, Inc., a Texas corporation (the "Borrower"), $100,000,
evidenced by the promissory note of the Borrower for such amount,
To induce the Pledgee to make the loan, the Pledgors have agreed to
pledge certain stock with the Pledgee as security for the Borrower's repayment
of the loan,
It is therefore agreed,
1. Pledge. In consideration of the sum of $100,000 loaned to the
Borrower by the Pledgee, receipt of which is acknowledged, the Pledgors hereby
grant a security interest to the Pledgee in instruments of the following
description: 1,214,500 common shares of Venturi Technologies, Inc., a Texas
corporation, represented by certificates numbered 1 and 2, duly endorsed in
blank and herewith delivered to Xxx X. Xxxxxx (the "Escrow Agent"). The Pledgors
hereby appoint the Escrow Agent his attorney to arrange for the transfer of the
pledged shares on the books of Venturi Technologies, Inc., a Texas corporation,
to the name of the Pledgee. The Escrow Agent shall hold the pledged shares as
security for the repayment of the loan, and shall not encumber or dispose of the
shares except in accordance with the provisions of paragraph 8 of this
Agreement.
2. Dividends. During the term of this pledge, all dividends and other
amounts received by the Pledgee as a result of its record ownership of the
pledged shares shall be applied by it to the payment of the principal and
interest on the loan.
3. Voting rights. During the term of this pledge, and so long as the
Pledgors are not in default in the performance of any of the terms of this
Agreement or the Borrower is not in default in the payment of the principal or
interest of the loan, each Pledgor shall have the right to vote his pledged
shares on all corporate questions, and the Pledgee shall execute due and timely
proxies in favor of each Pledgor to this end.
4. Representations. Each Pledgor warrants and represents that there are
no restrictions upon the transfer of any of his pledged shares, other than may
appear on the face of the certificates, and that the Pledgor has the right to
transfer such shares free of any encumbrances and without obtaining the consents
of the other shareholders.
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5. Adjustments. In the event that, during the term of this pledge, any
share dividend, reclassification, readjustment, or other change is declared or
made in the capital structure of the company which has issued the pledged
shares, all new, substituted, and additional shares, or other securities, issued
by reason of any such change shall be held by the Pledgee under the terms of
this Agreement in the same manner as the shares originally pledged hereunder.
6. Warrants and rights. In the event that during the term of this
pledge, subscription warrants or any other rights or options shall be issued in
connection with the pledged shares, such warrants, rights, and options shall be
immediately assigned by the Pledgee to the appropriate Pledgor, and if exercised
by the Pledgor all new shares or other securities so acquired by the Pledgor
shall be immediately assigned to the Pledgee to be held under the terms of this
Agreement in the same manner as the shares originally pledged hereunder.
7. Payment of loan. Upon payment by the Borrower at maturity of the
principal and interest of the loan, less amounts theretofore received and
applied by the Pledgee in reduction thereof, the Pledgee shall direct the Escrow
Agent to transfer to the appropriate Pledgor all the pledged shares and all
rights received by the Pledgee as a result of his record ownership thereof.
8. Extension to Repay loan. While there has been discussion and limited
due diligence on the part of HiTek regarding the feasibility and benefits of
acquiring Venturi, HiTek and Venturi acknowledge that no agreements or letters
of intent have been entered into with respect to an acquisition or merger. In
the event HiTek determines that it is not in the best interest of its
shareholders after due diligence to acquire Venturi by merger or stock exchange,
HiTek shall xxxxx Xxxxxxx a 9 month extension within which to repay the $100,000
loan.
9. Default. In the event that the Pledgor or Pledgors default in the
performance of any of the terms of this Agreement, or the Borrower defaults in
the payment at maturity of the principal or interest of the loan, the Escrow
Agent shall automatically turn over to Pledgee all shares pledged hereunder and
such shares shall be the sole property of the Pledgee.
In witness whereof the parties have executed this Agreement. This
document may be executed in one or more counterparts, each of which shall be
deemed to be an original, and all of which together shall constitute a single
Agreement.
PLEDGEE:
HiTek Carpet Care, Inc.
a Nevada corporation
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx, President
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PLEDGOR(S):
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Xxxxxxx Xxxxxx
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Xxxx Xxxxxxx
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