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EXHIBIT 10.1
NOTE AND PLEDGE AGREEMENT
NOTE AND PLEDGE AGREEMENT, dated as of September 5, 1996 between Xxxxx
X. Xxxxxx (the "Maker") and HOLOPAK TECHNOLOGIES, INC., a Delaware corporation
(the "Payee").
PRELIMINARY STATEMENT
The Maker has purchased 10,500 shares of the common stock, par value
$0.01 per share, of the Payee (the "Shares"). The Maker has the right to
purchase the Shares by delivering this Note and Pledge Agreement whereby the
Maker promises, among other things, to pay the principal amount of $20,000 (the
"Note") as partial payment of the purchase price of the Shares and to pledge to
the Payee the Shares to secure the payment of the purchase price of the Shares
(the "Pledge"). Under the terms of the Pledge, the Payee shall continue to hold
the Pledged Securities (as defined below) until the termination of this Note and
Pledge Agreement.
NOW, THEREFORE, to induce the Payee to make a loan under this Note and
Pledge Agreement and in consideration of the mutual covenants contained herein,
the parties hereto, each intending to be legally bound hereby, covenant and
agree as follows:
A. Promissory Note.
1. Terms. FOR VALUE RECEIVED, and intending to be legally bound, the
Maker hereby promises to pay, in lawful money of the United States of America,
which shall be legal tender for payment of public and private debts, without
demand, defalcation, set off or deduction, to the order of Payee, at the address
of the Payee, 0 Xxxxxxx Xxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000 or at such other
place as the holder hereof shall from time to time designate in writing, the
principal amount of Twenty thousand dollars ($20,000.00), with interest on the
unpaid principal balance from the date of this Note until paid at the annual
rate of five percent (5%), calculated on the basis of a 360-day year consisting
of twelve 30-day months. The principal amount and accrued interest shall be due
and payable on the fifth anniversary of the date hereof.
2. Prepayment. The Maker may prepay at any time all or part of the
outstanding principal balance hereof without penalty at any time, provided that
when making such prepayment the Maker pays all interest then accrued and all
other sums then due hereunder. Partial prepayments shall be applied to reduce
the principal indebtedness evidenced hereby, the amortization of the remaining
principal to be revised appropriately.
3. Default Interest. All sums not paid when due shall bear interest
between the due date until the payment date at the rate that is five percent
(5%) over the above-specified interest rate on the principal of this Note, or if
such rate is usurious, the highest legal rate (the rate so determined is herein
called the "Default Rate").
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4. Deferral. All sums due under this Note may be deferred to the extent
necessary (based on an opinion of counsel to the Maker that us acceptable to the
Payee) to avoid any violation of applicable rules and regulations of the
Securities and Exchange Commission, the National Association of Securities
Dealers, Inc. and any other regulatory authority and also to avoid any violation
of the Delaware General Corporation Law that would result from repayment. Any
amount deferred hereunder shall bear interest at the Default Rate, with such
interest payable quarterly.
5. Default.
a. The Maker shall be in default hereunder upon the occurrence
of any of the following events: (i) if the Maker fails to pay any interest or
principal or any other sum due hereunder on the applicable due date therefor;
(ii) if any representation or warranty now or hereafter made by the Maker or in
connection with the debt evidenced by this Note or the Pledge is false or
incorrect in any material respect and is not cured within 30 days of notice
thereof; or (iii) the occurrence of any default under the Pledge (an "Event of
Default").
b. Upon the occurrence of an Event of Default by the Maker,
which shall be continuing, the entire unpaid principal indebtedness of this
Note, together with all interest accrued at the above specified rate until the
date of such default and thereafter at the Default Rate, together with all other
charges provided for herein, shall at the option of the holder of this Note,
become due and payable immediately.
c. Any right or remedy granted herein or in the Pledge is
separate, distinct and cumulative and not exclusive of any other right or remedy
granted herein or in the Pledge or provided by law or equity, and may be
exercised concurrently, independently or successively by the holder hereof in
such holder's discretion. Any forbearance on the part of any holder in
exercising any such right or remedy shall not be a waiver of or preclude the
exercise of any such right or remedy. The holder hereof shall not be deemed by
any act or omission to have waived any such right or remedy or any default by
the Maker hereunder or under the Pledge unless such waiver is in writing and
signed by the holder, and then only to the extent specifically set forth in the
writing. Any such waiver shall not be construed as a continuing waiver or as a
bar to or waiver of any right or remedy with respect to any other default by the
Maker.
d. The Maker agrees to pay on demand all costs of collection,
including without limitation reasonable attorneys' fees, incurred by the holder
hereof with respect to any default by the Maker hereunder. Such amounts, until
paid by the Maker, shall be added to the principal hereof, bear interest at the
Default Rate and be secured by the Pledge.
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B. Pledge Agreement.
1. Pledge of Stock. As collateral security for the punctual payment and
performance of all existing and future indebtedness, obligations and other
liabilities, absolute or contingent, direct or indirect, primary or secondary,
of the Maker to the Payee of any nature whatsoever under this Note and Pledge
Agreement (all of such indebtedness, obligations and liabilities of the Maker
being hereinafter sometimes referred to collectively as the "Obligations"), the
Maker hereby deposits with and pledges and hypothecates to the Payee for its
benefit and grants to the Payee for its benefit arid agrees that the Payee shall
have a first security interest in and pledge of, the number of shares of Shares
(the "Pledged Securities") of the Payee set forth below:
Class of Security Certificate Number(s) Number of Shares Pledged
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Common Stock 10,500
2. Representations and Warranties of the Maker. The Maker represents and
warrants to and agrees with Payee as follows:
a. The Pledged Securities have been duly and validly pledged
hereunder in accordance with all applicable laws, and the Maker warrants and
covenants to defend the Payee's right, security interest and special property in
and to the Pledged Securities against the claims and demands of all persons
whomsoever. Except for the security interest created hereby in favor of the
Payee, the Maker is the exclusive legal and equitable owner of, and has good
title to, all of the Pledged Securities identified in Section 1 as being owned
by the Maker, free and clear of all claims, liens, security interests and other
encumbrances, and the Maker has the unqualified legal right to pledge the same
hereunder. The security interest created hereby or intended so to be represents
a valid, perfected first lien on and security interest in all of the Pledged
Securities, and such security interest is superior and prior in right to the
rights of all third persons. The parties acknowledge that no filings or
recordings (including without limitation filings under the Uniform Commercial
Code) are necessary to be made under present law in order to perfect, protect
and preserve the security interest of the Payee in the Pledged Securities
created by this Note and Pledge Agreement or intended so to be. Notwithstanding
the foregoing, the Maker makes no representations or warranties hereunder
regarding any claims, liens, security interests or encumbrances created by or in
favor of the Payee.
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b. The Maker and his representatives, successors and assigns,
hereby irrevocably waive and release all preemptive, first-refusal and other
similar rights of the Maker to purchase any or all of the Pledged Securities
upon any sale thereof by the Payee hereunder, whether such right to purchase
arises under the Certificate of Incorporation or any By-law of the Payee, by
agreement, by operation of law or otherwise.
c. All of the foregoing representations, warranties and
agreements shall survive the execution and delivery of this Note and Pledge
Agreement and the making of the loan hereunder.
3. Representations and Warranties of the Payee. The Payee represents and
warrants to the Maker that the Payee is transferring to the Maker good title to
all of the Pledged Securities identified in Section 1, free and clear of all
claims, liens, security interests and other encumbrances, and that the Payee has
the unqualified legal right to transfer the same to the Maker.
4. Reservation of Voting Rights. Upon the occurrence of an Event of
Default that shall be continuing, the Payee shall, after a formal declaration of
such default delivered to the Maker in accordance with the notice provisions of
Section 9(e) of the Officer Subscription Agreement (but not before), be entitled
to exercise any and all voting power with respect to the Pledged Securities. At
all other times, the Maker shall be entitled to exercise as it deems
appropriate, but in a manner consistent with the provisions of this Note and
Pledge Agreement, all voting power with respect to the Pledged Securities.
5. Additional Collateral Security. If upon the bankruptcy of the Maker
any sum shall be paid upon or with respect to any of the Pledged Securities,
such sum shall be paid over to the Payee to be held by the Payee as additional
collateral security for satisfaction of the Obligations, or in the case of any
cash amount paid over, the Maker may at its option elect to reduce the
Obligations with such payment. If any stock dividend shall be declared on any of
the Pledged Securities, or any shares of stock or fractions thereof shall be
issued pursuant to any stock split involving any of the Pledged Securities, or
any distribution of capital shall be made on any of the Pledged Securities, or
any property shall be distributed upon or with respect to the Pledged Securities
pursuant to any recapitalization or reclassification of the capital of the Payee
or pursuant to a reorganization thereof, the shares or other property so
distributed shall be delivered to the Payee to be held by it in pledge as
additional collateral security for the Obligations.
6. Remedies in General. Upon the occurrence of an Event of Default that
shall be continuing, the Payee shall have, without obligation to resort to other
security or to seek recourse against any guarantor or other party secondarily
liable, the right at any time and from time to time to sell, resell, assign and
deliver, in the Payee's discretion, all or any of the Pledged Securities, in one
or more parcels at the same or different times, and all right, title, interest,
claim and demand therein and right of redemption thereof, at public or
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private sale, subject to the restrictions, if any, set forth in Section 7
hereof, for cash, upon credit or for immediate or future delivery, and at such
price or prices and on such terms as the Payee may determine, the Maker hereby
agreeing that upon any such sale any and all equity and right of redemption
shall be automatically waived and released without any further action on the
part of the Maker, and in connection therewith the Payee may grant options, all
without any demand, advertisement or notice, all of which are hereby expressly
waived. In the event of any such sale, the Payee shall, at least 15 days before
the sale, give the Maker notice of its intention to sell, which notice the Maker
acknowledges is reasonable. Upon each such sale, the Payee and the Maker may
purchase all or any of the Pledged Securities being sold, free of any equity or
right of redemption. The proceeds of each such sale shall be applied to the
payment of all costs and expenses of every kind for sale or delivery, including
reasonable compensation to the agents and attorneys of the Payee, and all other
expenses, liabilities and advances made or incurred by the Payee in connection
therewith, and after deducting such costs and expenses from the proceeds of
sale, the Payee shall apply any residue to the payment of the Obligations in
such order as the Payee may deem fit, the Maker remaining liable for any
deficiency. The balance, if any, remaining after payment in full of the
Obligations shall be paid over to the Maker.
7. Right to Execute Endorsements. The Payee shall have the right, for
and in the name, place and stead of the Maker and acting as its attorney-in-fact
if necessary, to execute endorsements, assignments and other instruments of
conveyance or transfer with respect to all or any of the Pledged Securities
whenever any such execution is required or permitted hereunder.
C. Remedies, Termination, Waiver and Miscellaneous.
1. Remedies Cumulative; Indemnities, etc. The rights, powers and
remedies provided herein in favor of the Payee shall not be deemed exclusive,
but shall be cumulative, and shall be in addition to all other rights and
remedies in favor of the Payee existing at law or in equity, including without
limitation all of the rights, powers and remedies available to a secured
creditor under the Uniform Commercial Code as in effect in Delaware or any other
appropriate jurisdiction. The Maker shall indemnify and save harmless the Payee
from and against any and all liabilities, losses and damages that any of them
may incur in the exercise or performance of any of its or their rights, powers
or remedies set forth herein, provided, however, that the Maker shall have no
obligation to indemnify any such indemnitee against any liability, loss or
damage resulting from such indemnitee's own gross negligence or bad faith.
2. No Waiver; Amendments. No delay on the part of the Payee in
exercising any of its options, powers or rights, and no partial or single
exercise thereof, shall constitute a waiver thereof or of any other option,
power or right. None of the terms and conditions of this Note and Pledge
Agreement may be amended, modified or waived orally but only in a writing signed
by the Payee and the Maker.
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3. Termination of Agreement; Return of Collateral. Upon the full payment
and performance of all of the Obligations, this Note and Pledge Agreement shall
expire and the Maker (except to the extent otherwise contemplated hereby) shall
be entitled to the return of all of the Pledged Securities and other property
arid cash held in pledge hereunder that have not been used or applied to the
payment of the Obligations.
4. Further Assurances; Immunities, etc. With respect to the Pledged
Securities and any security interest of the Payee, the Maker shall file, record,
make, execute and deliver all such acts, deeds, things, notices and instruments
as may be necessary or desirable in the opinion of the Payee in order to vest
more fully in and assure to the Payee the security interest in the Pledged
Securities created hereby or intended so to be and the enforcement and
realization of all of the benefits of the rights, remedies and powers of the
Payee hereunder relating to the Pledged Securities. Without limiting the
generality of the foregoing, if at any time hereafter, whether or not due to any
change in circumstances (including without limitation any change in applicable
law or any decision hereafter made by a court construing any applicable law), it
is, in the opinion of counsel for the Payee, necessary or desirable to file or
record this Note and Pledge Agreement or any financing statement or other
instrument relating hereto, the Maker shall pay all fees, costs and expenses of
such recording or filing and execute and deliver any instruments that the Payee
may deem necessary or appropriate to make such filing or recording effective.
The Maker hereby irrevocably appoints the Payee the attorney-in-fact of the
Maker to perform, in the name of the Maker or the Payee or otherwise, any and
all acts, including without limitation the signing and filing of financing
statements and amendments thereto, that the Payee may deem necessary or
appropriate to effect and continue the security interests created hereby or
intended so to be or otherwise to preserve and protect the Pledged Securities
and the security interest of the Payee therein, but nothing herein contained or
otherwise shall require the Payee to take any such action. The duty of the Payee
in respect of the Pledged Securities shall be strictly confined to one of
reasonable care in the custody of the certificates therefor so long as they are
in the custody of the Payee. Without limiting the generality of the preceding
sentence, the Payee shall not be under any duty to anyone to send any notices,
perform any services, vote, exercise any options or elections with respect to,
pay any taxes or charges associated with' or otherwise take any action of any
kind with respect to, any of the Pledged Securities.
5. Transfers of Interest. Upon any assignment or other transfer by the
Payee of any of the Obligations, the Payee may transfer its interest in the
Pledged Securities, or any part thereof, to the assignee or transferee, who
shall thereupon become vested with all the rights, remedies, powers, security
interests and liens herein granted to the Payee in respect of the Pledged
Securities or the transferred part thereof, subject, however, to the
restrictions contained herein.
6. Expenses. The Pledged Securities secure, and the Maker shall pay on
demand, all reasonable expenses (including but not limited to reasonable
attorneys' fees and costs for legal services, costs of insurance and payments of
taxes or other charges) of,
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or incidental to, the custody, care, sale or realization on any of the Pledged
Securities or in any way relating to the enforcement or protection of the rights
of the Payee hereunder.
7. Notices. All notices, requests, demands, directions, declarations and
other communications provided for herein shall be in writing and shall be deemed
effectively given (a) upon personal delivery to the party to be notified, (b)
three days after notice shall be deposited with the United States Post Office,
by registered or certified mail, postage prepaid and addressed to the party to
be notified (i) if to the Maker, at the address specified for such party on the
signature page hereof, and (ii) if to the Payee at 0 Xxxxxxx Xxxx, Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000, or (c) upon confirmation that notice shall have
been received by fax at the fax number specified for such party with its
address. Any party may change its address or fax number for notice purposes by
giving advance notice hereunder to the other party in accordance with this
Section 7.
8. Governing Law; Consent to Jurisdiction, etc. This Agreement and the
rights and obligations of the parties hereunder shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware. The
Maker and the Payee hereby consent to the jurisdiction of the courts of the
State of Delaware in any action or proceeding that may be brought against the
Maker or the Payee under or in connection with this Note and Pledge Agreement or
any of the transactions contemplated hereby or to enforce any undertaking
contained herein, and if any such action or proceeding shall be brought against
such party, it shall not raise any objection to such jurisdiction or to the
laying of the venue thereof in the City of Wilmington. Service of process in any
such action or proceeding may be duly effected upon the Maker or the Payee by
service in accordance with the provisions of the Uniform Interstate and
International Procedure Act as in effect in New Jersey.
9. Certain Waivers; Integration, etc.
a. The Maker waives presentment for payment, demand, notice of
nonpayment, notice of protest, protest and notice of dishonor of this Note, and
all other notices in connection with tile Pledge and the delivery, acceptance,
performance, default or enforcement of the payment of this Note. The Maker
further waives presentment for payment, protest, dishonor and notice of dishonor
and of protest with respect to this Note and Pledge Agreement.
b. The Maker hereby waives any and all present and future laws
and rules of court exempting any of the Pledged Securities or any other
property, real or personal, or any of the proceeds arising from any sale of such
property, from attachment, levy, sale or execution, or providing for any stay of
execution, appraisement, exemption from civil process or extension of time for
payment.
c. This instrument states the entire agreement of the parties
concerning the subject matter hereof, and it is acknowledged that there are no
customs, usages,
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representations, or assurances referring to the subject matter, and no
inducements leading to the execution or delivery hereof, other than those
expressed herein.
10. Miscellaneous. This Note and Pledge Agreement shall bind and inure
to the benefit of the Maker and the Payee and their respective heirs, executors,
administrators, personal representatives, successors and assigns, except that
the Maker shall not have the right to assign any of the Maker's rights hereunder
or interests herein without the written consent of the Payee. No persons other
than the Maker and the Payee and the respective assignees of the Payee are
intended to be benefited hereby or shall have any rights hereunder, as
third-party beneficiaries or otherwise. The Maker acknowledges that this Note
and Pledge Agreement and the obligations of the Maker hereunder and the security
interest created or intended to be created hereby have constituted, and were
intended by the Maker to constitute, a material inducement to the Payee to enter
into this Note and Pledge Agreement and make the loan contemplated hereby,
knowing that the Payee will rely upon this Agreement. The Maker intends this to
be a sealed instrument and to be legally bound hereby. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, and all such counterparts shall together constitute but one and the
same instrument. Any provision of this Note and Pledge 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
affecting the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of such provision in any other jurisdiction.
Words of any gender herein shall include any other
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genders, and the singular shall include the plural and vice versa, whenever the
same is necessary to produce a fair and meaningful construction.
IN WITNESS WHEREOF, the Maker has executed this Note and Pledge
Agreement, or has caused the same to be executed in its name, under seal and
intending to be legally bound as of the day and year first written above.
MAKER
/s/ Xxxxx X. Xxxxxx
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Name: XXXXX X. XXXXXX
000 XXXXXXXXXX-XXXXXXXXXX XXXX
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XXXXXXXXXXXX XX 00000
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Address
HOLOPAK TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name:
Title:
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