PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "Agreement") is made and entered into as
of the 28th day of June, 1996, by and between Xxx X. Xxxxx, an individual
("Pledgor"), and the Trustees of the Cheyne Walk Trust (collectively, "Secured
Party"), and is made with reference to the following facts:
A. Secured Party has made a loan ("Loan") to Pledgor in the
original principal amount of $100,000, as evidenced by that certain Secured
Promissory Note, of even date herewith, in the original principal amount of
$100,000, together with interest at the rate described therein, made by Pledgor
to the order of Secured Party (the "Note").
B. Pledgor is the owner of certain issued and outstanding
American Depository Shares of Getty Communications plc, a public limited company
incorporated under the laws of England and Wales (the "Corporation").
C. It is a condition precedent to the making of the Loan by
Secured Party pursuant to the Note that Pledgor shall have made the pledge
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and agreements hereinafter contained, the parties hereto hereby agree
as follows:
1. GRANT OF SECURITY INTEREST.
1.1 PLEDGE. As security for the obligations specified in
Section 2 hereof, Pledgor hereby pledges, assigns, transfers and grants to
Secured Party and Secured Party's successors, endorsees and assignees a security
interest in and to (a) those certain 10,000 American Depositary Shares (each
representing two Class A Ordinary Shares, nominal value one xxxxx each) of the
Corporation owned by Pledgor ("ADSs") more fully described on Exhibit "A"
hereto, (b) all additional shares of the capital stock of any class of the
Corporation and, subject to the provisions of Section 7 hereof, any other
monies, securities, rights and property issued or received in exchange therefor
or with respect thereto, including, but not limited to, any cash dividends or
distributions, any shares that may be issued to Pledgor as a stock dividend and
any securities, rights or other property which Pledgor may hereafter receive or
be entitled to receive in exchange therefor, whether upon a merger,
reorganization, consolidation, stock split or reclassification, or otherwise;
and (c) any and all additions and substitutions thereto and therefor and the
proceeds of any of the foregoing (collectively the "Collateral"). The inclusion
of "proceeds" as a component of the Collateral shall not be deemed a consent by
Secured Party to any sale or disposition of all or any part of the Collateral.
1.2 DELIVERY. In furtherance of the pledge, assignment,
transfer and grant of the security interest referred to in Section 1.1 hereof,
Pledgor shall (a) deliver to The Chase Manhattan Bank, N.A., at 1211 Avenue of
the Americas, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: G. Xxxxxx Xxxxx,
as agent for Secured Party ("Chase"), concurrently with the execution hereof,
all of the American Depositary Receipts evidencing the ADSs, certificates or
instruments representing the Collateral, stamped or marked as Secured Party may
require, together with duly executed or endorsed blank stock powers (in the form
of that attached hereto as Exhibit "A") and proxies or such other instruments of
assignment or transfer relating thereto as Secured party may require, and (b)
deliver to Chase, as soon as possible after receipt thereof, certificates and
other indicia of ownership representing any securities or other instruments
referred to in Section 1.1(b) hereof, stamped or marked as Secured Party may
require, together with duly executed or endorsed blank stock powers or such
other instruments of assignment or transfer relating thereto as Secured Party
may require. Secured Party shall have the right, at any time in its discretion
upon prior notice to Pledgor, to transfer to or to register in the name of
Secured Party or any of its nominees any or all of the Collateral, subject only
to the rights of Pledgor specified in Section 7 hereof. Secured Party shall
also have the right, at any time and from time to time, to appoint another agent
or agents for the purpose of retaining physical possession of the Collateral.
Secured Party shall have the right at any time to exchange certificates or
instruments representing or evidencing any of the Collateral for certificates or
instruments of smaller or larger denominations.
1.3 ADDITIONAL COLLATERAL RECEIVED BY PLEDGOR. Subject to
the provisions of Section 7 hereof, any money, securities or other property
hereafter received by Pledgor in respect of or in exchange or substitution for
any of the Collateral, and any additional shares of the capital stock or
securities of the Corporation of whatever class or nature, shall be, and shall
be deemed to have been, received by Pledgor as trustee for Secured Party, and
Pledgor shall pay and deliver all such sums, securities and other property over
to Secured Party immediately, without demand or notice. The same shall then be
held as Collateral by Secured Party as security for the obligations secured
hereby or, in the case of money but subject to the provisions of Section 7.2
hereof, applied to the indebtedness and obligations secured hereby as provided
in Section 12 hereof.
1.4 UNCERTIFICATED SECURITIES. Notwithstanding anything to
the contrary contained in Sections 1.1, 1.2 and 1.3 hereof, if any of the
Collateral (whether now owned or hereafter acquired) is evidenced by an
uncertificated security, Pledgor shall promptly notify Secured Party thereof and
shall promptly take all actions required to perfect the security interest of
Secured Party therein under applicable law (including, in any event, under
Sections 8313 and 8321 of the Uniform Commercial Code of the State of California
(the "UCC")). Pledgor further agrees to take such actions as Secured Party
deems necessary or desirable to effect the foregoing and to permit Secured Party
to exercise any of its rights and remedies hereunder.
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1.5 SPOUSAL CONSENT. Pledgor acknowledges that by this
Agreement Pledgor is also granting to Secured Party a security interest in the
entire community property interest, if any, of Pledgor's spouse in and to the
Collateral. Concurrently herewith, Pledgor shall cause his spouse to execute
and deliver to Secured Party a Spousal Consent in the form of that attached
hereto as Exhibit "B".
1.6 DUTIES AND RIGHTS OF SECURED PARTY. Pledgor agrees
that neither Secured Party nor Chase shall have any liability of any kind or
nature whatsoever with respect to the Collateral, other than to hold, release or
dispose of the same in accordance with the terms and provisions of this
Agreement. With respect to each particular item of Collateral, the security
interest herein granted shall attach immediately upon Pledgor's execution hereof
or as soon as Pledgor acquires rights in and to such item of Collateral,
whichever is later.
2. OBLIGATIONS TO BE SECURED. Whether or not recovery upon any
of the following secured obligations (the "Secured Obligations") is now or
hereafter becomes barred by any statute of limitations or is now or hereafter
becomes otherwise unenforceable, the security interests herein granted shall
secure (a) the prompt and complete payment and performance of all of the
obligations now or hereafter arising under the Note (including the payment of
amounts which would becomes due but for the operation of the automatic stay
under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a) and
interest which, but for the filing of a petition in bankruptcy, would accrue on
such obligations); and (b) the payment and reimbursement of all sums and
expenses, including, without limitation, reasonable attorneys' fees (including
allocated costs of internal counsel), court costs and collection, legal and
receivers' expenses, advanced or incurred by Secured Party in connection with
the perfection and protection of the security interest herein granted, the
preservation or disposition of the Collateral, or any part thereof, or the
enforcement by Secured Party of any of the foregoing obligations of Pledgor or
any guarantor thereof to Secured Party whether upon default by Pledgor or any
such guarantor or otherwise.
3. REPRESENTATIONS AND WARRANTIES OF PLEDGOR. Pledgor hereby
represents and warrants to Secured Party THAT:
3.1. VALIDITY OF COLLATERAL/TITLE TO COLLATERAL. The
Collateral has been duly authorized and validly issued, is fully paid and
nonassessable and has been issued in compliance in all material respects with
all applicable federal and state securities laws. Except for the community
property interest of Pledgor's spouse, if any, Pledgor is the sole legal and
beneficial owner of the Collateral, and, except for the security interests
granted to Secured Party herein and the community property interest of Pledgor's
spouse, if any, Pledgor has good and marketable title to all and every part of
the Collateral, free and clear of any security interest, lien, pledge,
encumbrance, option, conditional sale contract, lease or other title retention
agreement, or any other adverse claim of any nature whatsoever (collectively,
"Lien").
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3.2 PRIORITY. Upon the execution and delivery of this
Agreement by Pledgor and Secured Party's taking possession of the Collateral,
Secured Party shall have perfected security interests in and to the Collateral
having first priority for the full amount of all of the Secured Obligations.
3.3 NO DEFAULT OR REQUIRED CONSENT. Neither the execution
or delivery of this Agreement by Pledgor nor the effectuation by Secured Party
of any of its rights or remedies herein, whether upon default or otherwise, will
result in a breach of or constitute a default under any agreement or instrument
to which Pledgor is a party, or violate any law or any rule or regulation of any
administrative agency or any order, writ, injunction or decree of any court or
administrative agency, nor does any of the foregoing require the consent of any
person, entity or governmental agency or any notice or filing with any
governmental or regulatory body (except as may be required in connection with
any sale or disposition of the Collateral by laws affecting the offering and
sale of securities generally).
3.4 NO LITIGATION. There is no action, legal,
administrative or other proceeding pending or threatened against Pledgor's title
to or interest in the Collateral or against Pledgor's pledge of the Collateral
hereunder, nor does Pledgor know of any basis for the assertion of any such
claim.
4. AFFIRMATIVE COVENANTS.
Pledgor covenants that until such time as all of the Secured
Obligations are indefeasibly paid or satisfied in full, unless Secured Party
shall otherwise consent in writing:
4.1 PROTECTION OF SECURITY AND LEGAL PROCEEDINGS. Pledgor
shall, at its own expense, take any and all actions necessary to preserve,
protect and defend the security interest of Secured Party in the Collateral and
the perfection and priority thereof against any and all adverse claims,
including appearing in and defending any and all actions and proceedings which
purport to affect any of the foregoing; promptly reimburse Secured Party for any
and all sums, including costs, expenses and reasonable attorney's fees, which
Secured Party may pay or incur in defending, protecting or enforcing its
security interest in the Collateral or the perfection or priority thereof, or in
discharging any prior or subsequent Lien or adverse claim against the Collateral
or any part thereof, or by reason of becoming or being made a party to or
intervening in any action or proceeding affecting the Collateral or the rights
of Secured Party therein, all of which actions Pledgor hereby agrees that
Secured Party shall have the right to take in its sole and absolute discretion.
4.2 AUTHORIZED SALE. Pledgor shall keep the proceeds of
any collection, sale or disposition of any Collateral authorized by Secured
Party separate form Pledgor's other property and, until otherwise notified by
Secured Party, shall enforce all of Pledgor's rights with respect to any such
collection, sale or disposition, maintain accurate and
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complete records thereof and promptly deliver to Secured Party the proceeds
thereof as and when received.
4.3 INSPECTION. Pledgor shall give Secured Party such
information as may be requested concerning the Collateral and permit Secured
Party and its agents and representatives to enter upon any premises upon which
Pledgor's records concerning the Collateral or the Corporation are located for
the purpose of inspecting and auditing the same.
4.4 AUTHORITY OF SECURED PARTY. With respect to any
Collateral, Pledgor hereby consents and agrees that the Corporation shall be
entitled to accept the provisions of this Security Agreement as conclusive
evidence of the right of Secured Party to effect any transfer or exercise any
right hereunder or with respect to any such Collateral, notwithstanding any
other notice or direction to the contrary heretofore or hereafter given by
Pledgor or any other person to the Corporation or to any registrar, transfer
agent or trustee thereof.
4.5 FURTHER ASSURANCES. Pledgor shall from time to time
make, execute, acknowledge and deliver all such further documents, instruments
and assurances and take such further acts as may be requested by Secured Party
to perfect or preserve the security interest created by and to carry out the
intent of this Agreement. Without limiting the generality of the foregoing,
Pledgor shall, upon request of Secured party, execute and deliver to Secured
Party such financing statements and security agreements, in form and substance
satisfactory to Secured Party, as Secured party may require to effect and
perfect Secured party's security interest in the Collateral, including any
distributions or dividends paid in property other than cash or cash equivalents.
5. NEGATIVE COVENANTS. Pledgor covenants that until such time as
all of the Secured obligations are indefeasibly paid or satisfied in full,
without the prior written consent of Secured Party, it shall not directly or
indirectly, whether voluntarily, involuntarily, by operation of law or otherwise
(a) exchange, lease, lend, sell, encumber or dispose of the Collateral or any
part thereof, or any of Pledgor's rights therein, or grant any option with
respect thereto, nor (b) cause, suffer or permit the Collateral to be affected
by any Lien of any kind or nature whatsoever, other than the Lien of Secured
Party created hereby.
6. ADDITIONAL COVENANTS OF PLEDGOR.
6.1 PRESERVATION OF COLLATERAL. In case of any failure of
Pledgor to keep the Collateral free from Liens or adverse claims, or to pay
taxes on or in respect thereof, or fully and punctually to keep and perform any
other covenant hereof, then Secured Party may (but shall not be required to) pay
or contest or settle such taxes, Liens or adverse claims, or any judgments based
thereon, take any action to preserve any rights of or against any prior or other
parties in connection with the Collateral, exercise any voting rights or
managerial rights with respect to any Collateral, make or give any presentments,
demands for
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performance, notices of nonperformance, protests, notices of protests, notices
of dishonor or notices of any other nature whatsoever in connection with the
Collateral or the Secured Obligations, or otherwise make good any other
aforesaid failure of Pledgor. Pledgor shall promptly reimburse Secured party
for any sums paid or advanced by Secured Party for any such purpose, together
with interest at the rate specified in the Note from the date of any such
advance to the date of reimbursement.
6.2 ATTORNEY-IN-FACT. Pledgor hereby appoints Secured
Party as his attorney-in-fact with full power of substitution, to do any and all
acts which Pledgor is obligated by this Agreement to do and for the purpose of
carrying out the purposes of this Agreement and taking any action and executing
any instruments which Secured Party may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of
the foregoing Secured Party shall have the right and power to receive, endorse
and collect all checks made payable to Pledgor representing any payment or
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same, and to execute and deliver as such attorney-in-fact on
behalf of Pledgor all necessary instruments of sale, assignment, lease and
transfer of the Collateral, and any part thereof, sold, leased or otherwise
disposed of pursuant to this Agreement.
7. RIGHTS INCIDENT TO COLLATERAL.
7.1 IRREVOCABLE PROXY/VOTING RIGHTS. Pledgor hereby
irrevocably appoints Secured Party as Pledgor's proxy holder with respect to the
Collateral with full power and authority to vote, give consents, ratifications
and waivers and otherwise act with respect to such Collateral on behalf of
Pledgor, PROVIDED that this proxy shall be operative only upon the occurrence of
an Event of Default (as defined in Section 8) hereunder. This proxy shall be
irrevocable for so long as any Secured Obligation remains outstanding. Until
such time, if any, as an Event of Default occurs, Pledgor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Collateral or any part thereof for any purpose not inconsistent with the terms
of this Agreement. In order to evidence the provisions of this Section 7.1,
Pledgor shall execute and deliver to Secured Party an Irrevocable Proxy in the
form of that attached hereto as Exhibit "C".
7.2 RIGHTS TO DISTRIBUTIONS - NO DEFAULT. So long as no
Event of Default occurs, Pledgor may receive and retain for his own uses all
distributions made in the ordinary course in cash or cash equivalents in respect
of any of the Collateral. However, Pledgor shall cause the Corporation to pay
directly to Secured Party (a) one hundred percent (100%) of all distributions
made other than in cash or cash equivalents in respect of all Collateral, and
(b) one hundred percent (100%) of all distributions of cash or cash equivalents
made in respect of any Collateral in connection with a partial or total
liquidation or dissolution of the Corporation or in connection with a reduction
of capital, capital surplus or paid-in-surplus thereof, whether such
distributions be made by way of dividend, interest, distribution
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or otherwise. Distributions received under (a) above shall be retained by
Secured Party as Collateral; distributions received by Secured under (b) above
shall be applied by Secured party against the Secured Obligations in the manner
specified in Section 12 hereof.
7.3 RIGHTS TO DISTRIBUTION - EVENT OF DEFAULT. So long as
an Event of Default has occurred, at the option of Secured Party, all rights of
Pledgor to receive any distributions which it would otherwise be authorized to
receive and retain pursuant to Section 7.2 above shall cease, and all such
rights shall thereupon become vested in Secured Party. Secured Party shall
thereafter have the sole right to receive, and Pledgor shall cause the
Corporation to pay directly to Secured party, one hundred percent (100%) of all
distributions, whether in cash, cash equivalents or otherwise, which may be held
and/or applied by Secured Party against the Secured Obligations in such order
and manner as Secured Party, in its sole and absolute discretion, determines.
7.4 DISTRIBUTIONS HELD IN TRUST. All distributions from
the Corporation which are received by Pledgor contrary to the provisions of this
Agreement shall be received in trust for the benefit of Secured Party, shall be
segregated form other funds of Pledgor, and shall forthwith be paid over to
Secured party as pledged Collateral in the same form as so received (with any
necessary endorsements).
8. EVENT OF DEFAULT. The occurrence of any event of default
under the Note shall constitute an event of default ("Event of Default")
hereunder (giving effect to any grace periods and notification requirement set
forth in the Note).
9. REMEDIES OF SECURED PARTY. Upon the occurrence of any Event
of Default hereunder, then in addition to all other rights and remedies of
Secured Party under the Note or at law or in equity, upon the occurrence of such
Event of Default or at any time thereafter, Secured Party may exercise any and
all of the following rights and remedies, all of which shall be cumulative and
not mutually exclusive.
9.1 NOTIFICATION TO CORPORATION. Secured Party may notify
the Corporation of Secured Party's interest in the Collateral and instruct the
Corporation to make one hundred percent (100%) of all distributions in respect
of the Collateral directly to Secured Party or to Chase.
9.2 HANDLING OF FUNDS. Secured Party may require Pledgor
to hold in trust for Secured Party all distributions received by Pledgor without
commingling them with any other funds, and Secured Party may require Pledgor
either to turn over to Secured Party in the form received all checks, drafts,
cash and other remittances with any necessary endorsements, or to deposit them
immediately in a separate account maintained by or on behalf of Secured party.
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9.3 COMPROMISE OF CLAIMS. Secured Party may (a) settle and
adjust all disputes and claims directly with the Corporation with respect to any
distributions; (b) consent form time to time to the acceptance of security or
additional or substituted security of any kind for any obligation of the
Corporation or to the release, surrender or alteration of any such security; and
(c) deal as aforesaid or in any other manner with the Corporation with respect
to any distributions.
9.4 OTHER RIGHTS AND REMEDIES. Secured Party may pursue
and enforce all of the rights and remedies provided in this Agreement or
provided to secured parties at law or in equity, including, without limitation,
the provisions of the UCC, as amended. Without limiting the generality of the
foregoing, Secured Party may dispose of the Collateral or retain it in
satisfaction of the Secured Obligations and Secured Party may obtain specific
performance of any obligation of Pledgor contained herein without the necessity
of posting bond or proving that money damages are an inadequate remedy.
9.5 VOTING RIGHTS. Secured Party may exercise the voting
and consensual rights and powers, if any, which Pledgor is entitled to exercise
prior to any Event of Default pursuant to Section 7 hereof.
10. FURTHER REMEDIES.
10.1 DEMANDS, NOTICES, ETC.; COMMERCIALLY REASONABLE SALE.
All demands of performance, advertisements, notices of sale or retention, as
well as the presence of the Collateral at any sale and the constructive
possession of the Collateral by the person and conducting any sale, except only
as provided by Section 9504(3) of the UCC, are hereby specifically waived by
Pledgor. With respect to any Collateral consisting of securities, and whether
or not any of such Collateral has been effectively registered under the federal
Securities Act of 1933 (the "Securities Act") or other applicable laws, Secured
Party may, in its sole and absolute discretion, sell all or any part of such
Collateral at private sale in such manner and under such circumstances as
Secured Party may deem necessary or advisable in order that the sale may be
lawfully conducted. There may be other legal restrictions or limitations
affecting Secured Party in any attempt to dispose of all or any part of the
Collateral under applicable state "Blue Sky" laws or other state securities laws
or similar laws analogous in purpose or effect.
10.2 INFORMATION AS TO COMPLIANCE WITH LAW. If Secured
Party determines to exercise its right to sell any or all of the Collateral,
upon written request, Pledgor shall and shall cause each issuer of any
Collateral to be sold hereunder from time to time to furnish to Secured Party
all such information as Secured Party may request in order to determine the
number of shares and other instruments included in the Collateral which may be
sold by Secured Party as exempt transactions under the Securities Act and the
rules of the Securities and Exchange Commission thereunder, as the same are form
time to time in effect.
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10.3 FURTHER ASSURANCES. Pledgor further agrees to use its
best efforts to do or cause to be done all such other acts as may be necessary
to make any sale or sales of all or any portion of the Collateral pursuant to
Sections 10.1 and 10.2 hereof valid and binding and in compliance with any and
all applicable requirements of law.
11. RECEIPTS OF SALE. The receipt or receipts of any person
conducting as sale of any of any of the Collateral pursuant to this Agreement
for the purchase money paid at such sale shall be a sufficient discharge
therefor to any purchaser of the Collateral or any part thereof, and no such
purchaser, after paying such purchase money and receiving such receipt, shall be
bound to see to the application of such purchase money for any purpose of this
Agreement, or shall be bound to inquire as to the authorization, necessity,
expediency or regularity of such sale.
12. APPLICATION OF PROCEEDS. All sums received or collected by
Secured Party, whether before or after default, on or on account of the
Collateral, including, without limitation, the proceeds of any sale or
disposition thereof shall be applied to the installments of the Secured
Obligations, to the payment of any advances, charges, costs and expenses
incurred or paid by Secured Party and secured hereby, and to the payment of any
and all other obligations secured hereby, all in such order and manner as
Secured Party in its sole discretion determines. After such application and
after payment by Secured Party of any other amount required by law, including,
without limitation Section 9504(1)(c) of the UCC, Secured Party shall pay any
balance to Pledgor or to the person or persons entitled thereto upon proper
demand being made therefor, and in like manner, Pledgor shall pay to Secured
Party, without demand, whatever amount of the Secured Obligations remains unpaid
after the Collateral has been sold and the proceeds applied as aforesaid,
together with interest thereon from the date of demand at the rate specified in
the Note, which interest shall also constitute a part of the Secured
Obligations.
13. RETURN OF COLLATERAL. Subject to any duty imposed by law or
otherwise to the holder of any subordinate Lien on the Collateral known to
Secured Party, and subject to the direction of a court of competent
jurisdiction, upon the payment in full of the Secured Obligations, Pledgor shall
be entitled to return of the Collateral in the possession of Secured Party;
PROVIDED, HOWEVER that Secured Party shall not be obligated to return to Pledgor
or deliver to the holder of any subordinate Lien any such Collateral until it is
satisfied that all amounts with respect to the Secured Obligations are no longer
subject to being recaptured under applicable bankruptcy or insolvency laws or
otherwise. The return of Collateral, however effected, shall be without
recourse to Secured Party and Secured Party shall be entitled to receive
appropriate documentation to such effect. The return of Collateral shall be
effected without representation or warranty and shall not entitle Pledgor to any
right to any endorsement.
14. OBTAINING OF REQUIRED APPROVALS. To the extent the exercise
by Secured Party of any remedy afforded herein requires the consent or approval
of any governmental
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agency or regulatory body, the right of Secured Party to exercise such remedy
shall be conditioned upon receipt by Secured Party of such consent or approval.
In furtherance of the exercise by Secured Party of the power of sale granted to
it herein, Pledgor agrees that, upon request of Secured Party and without
expense to Secured Party, Pledgor shall use his best efforts to obtain all
necessary approvals from all applicable foreign, federal, state and local
governmental agencies, authorities and instrumentalities for the sale by Secured
Party of the Collateral, or any part thereof.
15. CUMULATIVE RIGHTS, NO WAIVER. The several rights and remedies
of Secured Party hereunder or referred to herein shall, to the full extent
permitted by law, be construed as cumulative, and no one of them is exclusive of
the others. No delay or omission of Secured Party in exercising any right or
remedy created by, connected with or provided in this Agreement or arising from
any event of default hereunder shall be construed as or deemed to be an
acquiescence therein or a waiver of such default or a waiver of or limitation
upon the right of Secured Party to exercise, at any time and from time to time
thereafter, any right or remedy under this Agreement. No waiver of any breach
of any of the covenants or conditions of this Agreement shall be construed to be
a waiver of or acquiescence in or consent to any preceding or subsequent breach
of the name of any other condition or covenant. In the event of any default
hereunder, Secured Party may maintain an action hereon and may maintain
successive actions for each other default. The rights of Secured Party
hereunder shall not be exhausted by its exercise of any of its rights and
remedies or by any such action or by any member of successive actions until and
unless all indebtedness secured hereby has been paid in full.
16. SECURED PARTY'S POSSESSION OF COLLATERAL. Secured Party's
sole duty with respect to the Collateral in its possession shall be to use
reasonable care in the custody and preservation thereof. Secured Party shall be
deemed to have exercised reasonably care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which Secured Party accords its own property. Under
no circumstances shall Secured Party be responsible for any injury or loss to
the Collateral, or any part thereof, arising from theft, acts of God, flood,
fire or from any other cause beyond its reasonable control.
17. INDEMNIFICATION. Secured Party shall incur no liability if
any action taken by Secured Party or on Secured Party's behalf in good faith
pursuant to any provision of this Agreement shall prove to be in whole or in
part inadequate or invalid and Pledgor agrees to indemnify, defend and hold
Secured Party, and its trustees and their respective officers, directors,
shareholders, employees, agents and attorneys free and harmless from and against
any loss, liability, claim or damage, including without limitation, all
reasonable attorneys' fees and court costs incurred (a) in connection with any
such action or actions, and (b) in respect of any claims or allegations of third
parties arising out of Pledgor's use and ownership of the Collateral or Secured
Party's possession of the Collateral or its security interest therein.
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18. ASSIGNMENT OF OBLIGATIONS. Upon prior notice to Pledgor,
Secured Party may transfer or negotiate any Secured Obligation and upon such
transfer or negotiation Secured Party may transfer therewith all or any part of
the Collateral. Thereupon Secured Party shall be wholly discharged from all
liability and responsibility with respect to the Collateral so transferred.
With respect to any indebtedness or Collateral not so transferred, Secured Party
shall retain all of its rights hereunder.
19. MISCELLANEOUS.
19.1 ATTORNEYS' FEES. Pledgor shall pay promptly to Secured
Party upon demand, reasonable attorney's fees (including allocated costs of
internal counsel) and all costs and other expenses paid or incurred by Secured
Party in collecting or compromising any Secured Obligation or in enforcing or
exercising its rights or remedies created by, connected with or provided in this
Agreement, whether or not suit is filed, expressly including, without
limitation, all costs, reasonable attorney's fees and expenses incurred by
Secured Party in connection with any insolvency, bankruptcy, reorganization,
arrangement or similar proceeding involving Pledgor or any other person that in
any way affects the exercise by Secured Party of its rights hereunder, and the
proceeds of disposition of any or all of the Collateral shall be applied to the
payment of such attorney's fees, costs and other expenses as provided herein.
19.2 NOTICES. All notices, demands and requests of any kind
which either party may be required or may desire to serve upon the other party
hereto in connection with this Agreement shall be in writing and either (a)
delivered in person, (b) transmitted by telex, facsimile or telecopy (provided
that any notice so given is also mailed as provided herein), (c) delivered by
Federal Express-Registered Trademark- or other similar nationally recognized
express commercial delivery services or (d) mailed by certified mail, postage
prepaid, return receipt requested, and addressed as follows:
If to Secured Party: The Cheyne Walk Trust
0000 Xxxxxxxxx Xxx, #000
Xxxx, Xxxxxx 00000-0000
Facsimile: (000) 000-0000
If to Pledgor: Xxx X. Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxx, Xxxxxx 00000
Each such communication or notice shall be effective (i) if given by telex,
facsimile or telecopy, when transmitted, (ii) if given by mail, seven (7) days
after such communication is deposited in the mail and addressed as aforesaid,
(iii) if given by Federal Express-Registered Trademark- or similar commercial
delivery service, three (3) business days after such communication is deposited
with such service and addressed as aforesaid, and (iv) if given by any other
means, when
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actually delivered at such address. Either party shall have the right to change
the person and/or address to which notices hereunder shall be given, by notice
to the other party in the manner set forth above.
19.3 REVIVAL OF SECURITY INTERESTS. Secured Party's rights
and security interests hereunder shall be reinstated and revived, and the
enforceability of this Agreement shall continue, with respect to any amount at
any time paid on account of the Secured Obligations which thereafter shall be
required to be restored or returned by Secured Party upon the bankruptcy,
insolvency or reorganization of Pledgor, the Corporation or any other person,
all as though such amount had not been paid.
19.4 AMENDMENT; WAIVER. This Agreement may not be altered
or amended except by the written agreement of the parties hereto. No provision
of this Agreement or right of Secured Party hereunder can be waived nor can
Pledgor be released from its obligations hereunder except by a writing duly
executed by Secured Party.
19.5 SEVERABILITY. Should any one or more provisions of
this Agreement be determined to be illegal or unenforceable, all other
provisions of this Agreement nevertheless shall be effective.
19.6 TERMINOLOGY. Where the context or construction
requires, all words applied in the plural shall be deemed to have been used in
the singular and vice versa, and the neuter shall include the masculine and
feminine. All terms used herein shall have the same meaning as in the provisions
of the UCC, as amended.
19.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
19.8 APPLICABLE LAW. This Agreement is to be governed by
and construed in accordance with the laws of the State of California.
19.9 TRIAL BY JURY. PLEDGOR HEREBY WAIVES, AND COVENANTS
THAT HE WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY
RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT TO ANY ISSUE, CLAIM, DEMAND,
ACTION OR CAUSE OR ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE
SUBJECT MATTER HEREOF, ANY DOCUMENT RELATING HERETO OR ANY SECURED OBLIGATION,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR
IN TORT OR OTHERWISE.
IN WITNESS WHEREOF, the parties herein have executed this
Agreement the day and year first above written.
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"PLEDGOR":
/s/ Xxx X. Xxxxx
-------------------------------------------
Xxx X. Xxxxx
"SECURED PARTY":
The Trustees of the Cheyne Walk Trust
By: /s/ Xxx X. Xxxxx
--------------------------------------
Xxx X. Xxxxx, Chief Operating Officer
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