Exhibit 2.3
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of
February 27, 1998, is made by and between Corus Investment Ltd., a Bahamas
corporation (the "Pledgor"), and Oryx Technology Corp., a Delaware corporation
(the "Pledgee").
RECITALS
A. The Pledgor, Pledgee and Oryx Instruments and Materials
Corporation (the "Pledged Share Issuer") have entered into a Stock Purchase and
Reorganization Agreement dated of even date herewith (the "Reorganization
Agreement"), pursuant to which the Pledged Share Issuer has agreed to pay the
Pledgee the sum of One Million Dollars ($1,000,000) pursuant to a promissory
note of even date herewith (the "Note") issued as partial consideration for the
redemption of eight million (8,000,000) shares of the Pledged Share Issuer's
Class A Common Stock from Pledgee, and a Stockholders Agreement of even date
herewith (the "Stockholders Agreement")
B. In order to secure the obligations of the Pledged Share
Issuer under the Reorganization Agreement, the Pledgor and Pledgee have agreed
to enter into this Pledge Agreement.
NOW, THEREFORE, in order to induce the Pledgee to enter into
the Reorganization Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Pledgor hereby
agrees, for the benefit of the Pledgee, as follows:
ARTICLE I
DEFINITIONS
Certain Terms. The following terms when used in this Pledge Agreement,
including its preamble and recitals, shall have the following meanings:
"Distributions" means all cash dividends, cash distributions,
stock dividends, liquidating dividends, shares of stock resulting from (or in
connection with the exercise of) stock splits, reclassifications, warrants,
options, non-cash dividends, mergers, consolidations, and all other
distributions (whether similar or dissimilar to the foregoing) on or with
respect to any Pledged Shares or other shares of capital stock or other equity
securities constituting Pledged Collateral, but shall not include Dividends.
"Event of Default" means: (i) Pledged Share Issuer has failed
to pay any installment of principal under the Note within five (5) business days
after it has become due or the Note is otherwise in default and Pledgee has
given Pledgor written notice that such a default has occurred; (ii) Pledgor or
the Pledged Share Issuer has failed to perform any of its material obligations
under the Reorganization Agreement or the Stockholders Agreement and has failed
to correct such default within ten (10) business days after Pledgee has given
Pledgor or the Pledged Share Issuer, as the case may be, written notice thereof;
or (iii) Pledgor or the Pledged Share Issuer shall file a voluntary action in
bankruptcy or seek similar relief pursuant to a court action or an involuntary
bankruptcy petition shall be filed against either of them and not discharged
within sixty (60) days and Pledgor shall not have within five (5) business days
within such event assumed Pledged Share Issuer's obligations under the
Promissory Note and demonstrated to the reasonable satisfaction of the holder
that Corus is financially capable of honoring such obligations.
"Pledge Agreement" is defined in the preamble hereto.
"Pledged Collateral" is defined in Section 2.1.
"Pledged Share Issuer" means Oryx Instruments and Materials
Corporation, a Delaware corporation.
"Pledged Shares" means the eight million (8,000,000) shares of
the Pledged Share Issuer's Class A Common Stock issued to the Pledgor pursuant
to the Reorganization Agreement, and all other shares of capital stock or other
equity securities of the Pledged Share Issuer issued to the Pledgor from time to
time as defined in Section 2.1 below.
"Pledgor" is defined in the preamble hereto.
"Reorganization Agreement" is defined in paragraph A of the
Recitals hereto.
"Stockholders Agreement" is defined in paragraph A of the
Recitals hereto.
"UCC" means the California Uniform Commercial Code.
1.2 Reorganization Agreement Definitions Unless otherwise defined
herein or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the
Reorganization Agreement.
ARTICLE II
PLEDGE
2.1 Guaranty of Obligation and Grant of Security Interest. The Pledgor
hereby guarantees the obligations of the Pledged Share Issuer to pay all amounts
that may become due from the Pledge Share Issuer to Pledgee under the
Reorganization Agreement (the "Obligations"). Under the terms of this guaranty,
Pledgee shall have recourse against Pledgor only to the Pledged Collateral, as
defined below, and to no other assets of Pledgor under any circumstances.
Pledgor pledges, assigns, and hypothecates, transfers, and delivers to the
Pledgee and hereby grants to the Pledgee, for Pledgee's benefit, a continuing
security interest in, all of the Pledgor's right, title, and interest in and to
the following, whether now or hereafter existing or acquired (the "Pledged
Collateral"):
(a) the Pledged Shares as are identified in Attachment 1 hereto;
(b) all Distributions, interest, and other payments and rights with
respect to any Pledged Shares;
(c) all certificates, instruments or other writings
representing or evidencing the Pledged Shares; and
(d) all proceeds of any of the foregoing.
Delivery of Pledged Collateral. All certificates, instruments or other writings
representing or evidencing any Pledged Collateral, including all Pledged Shares,
shall be delivered to and held by or on behalf of the Pledgee pursuant hereto,
shall be in suitable form for transfer by delivery, and shall be accompanied by
all necessary instruments of transfer or assignment, duly executed in blank, all
in form and substance satisfactory to the Pledgee. The Pledgee shall have the
right, at any time when an Event of Default exists, after having given written
notice to the Pledgor, to transfer to or to register in its name or the name of
any of its nominees any or all of the Pledged Shares, subject only to the
provisions of Section 4.4. In addition, the Pledgee shall have the right at any
time to exchange certificates, instruments or other writings representing or
evidencing Pledged Shares for certificates, instruments or other writings of
smaller or larger denominations.
Continuing Security Interest. This Pledge Agreement shall create a continuing
security interest in the Pledged Collateral and shall:
(e) remain in full force and effect until payment in full of the
Obligations;
(f) be binding upon the Pledgor and its successors, transferees, and
assigns, and
(g) inure, together with the rights and remedies of the Pledgee
hereunder, to the benefit of the Pledgee and its successors and
assigns. Upon the payment in full of the Obligations, the security
interest granted herein shall terminate and all rights to the
Pledged Collateral shall revert to the Pledgor. Upon any such
termination, the Pledgee will, at the Pledgor's sole expense,
deliver to the Pledgor, without any representations, warranties or
recourse of any kind whatsoever, all certificates representing or
evidencing all Pledged Shares, together with all other Pledged
Collateral held by the Pledgee hereunder, and execute and deliver
to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Pledgor, relying on the representations and warrantees of
the Pledgee and the Pledged Share Issuer in the Reorganization Agreement,
represents and warrants to the Pledgee as follows:
Ownership, No Liens, etc. The Pledgor is the record legal and beneficial owner
of, and has good and marketable title to (and has full right and authority to
pledge and assign) such Pledged Collateral, free and clear of any Lien.
Valid Security Interest. Upon the delivery of the stock certificates evidencing
such Pledged Collateral to the Pledgee, this Pledge Agreement will be effective
to create, as security for the Obligations, a valid, perfected, first priority
security interest in such Pledged Collateral.
Authorization. Pledgor is a corporation duly organized, validly existing and in
good standing under the laws of Bahamas and has all requisite corporate power
and authority to execute and perform its obligations under this Agreement.
Pledgor is duly authorized to execute this Agreement and this Agreement
constitutes the legal, valid and binding obligation of Pledgor and is
enforceable in accordance with its terms.
ARTICLE IV
COVENANTS
Protect Collateral; Further Assurances, etc. The Pledgor agrees that it will not
(i) sell, assign, transfer, surrender or otherwise dispose of, or grant any
option, warrant or other right or interest with respect to, any of the Pledged
Collateral, (ii) directly or indirectly create incur, assume or suffer to exist
any Lien upon or with respect to any of the Pledged Collateral, except for the
Lien created by this Pledge Agreement. The Pledgor will defend the security
interest herein granted unto the Pledgee in and to the Pledged Collateral
against the claims and demands of all Persons whomsoever.
Stock Powers, etc. The Pledgor agrees that all Pledged Shares (and all other
shares of capital stock or other equity securities constituting Pledged
Collateral) delivered by the Pledgor pursuant to this Pledge Agreement will be
accompanied by duly executed undated blank stock powers, or other equivalent
instruments of transfer acceptable to the Pledgee. The Pledgor will, from time
to time upon the request of the Pledgee, promptly deliver to the Pledgee such
stock powers, instruments, and similar documents, satisfactory in form and
substance to the Pledgee, with respect to the Pledged Collateral as the Pledgee
may reasonably request and will, from time to time upon the request of the
Pledgee when an Event of Default exists, promptly transfer any Pledged Shares or
other shares of common stock or other equity securities constituting Pledged
Collateral into the name of any nominee designated by the Pledgee.
Continuous Pledge. The Pledgor will, at all times, keep pledged to the Pledgee
pursuant hereto and deliver to Pledgee all other shares of capital stock or
other equity securities constituting Pledged Collateral, all Distributions with
respect thereto, and all other securities, instruments, proceeds, and rights
from time to time received by or distributable to the Pledgor in respect of any
Pledged Collateral.
Voting Rights; Distributions, etc. The Pledgor agrees:
(h) promptly upon receipt thereof by the Pledgor and without any
request therefor by the Pledgee or any other Person, to deliver to
the Pledgee, all Distributions, and proceeds of the Pledged
Collateral, all of which shall be held by the Pledgee as
additional Pledged Collateral; and
(i) while any Event of Default exists and the Pledgee has notified the
Pledgor of the Pledgee's intention to exercise its voting power
under this Section 4.4(b):
(i) the Pledgee may exercise (to the exclusion of the Pledgor)
the voting power and all other incidental rights of ownership
with respect to any Pledged Shares or other shares of capital
stock or other equity securities interests constituting
Pledged Collateral and the Pledgor hereby grants the Pledgee
an irrevocable proxy, coupled with an interest exercisable
under such circumstances, to vote the Pledged Shares and such
other Pledged Collateral; and
(ii) promptly to deliver to the Pledgee such additional proxies
and other documents as may be necessary to allow the Pledgee
to exercise such voting power. The Pledgee agrees that unless
an Event of Default exists and the Pledgee shall have given
the notice referred to in Section 4.4(b), the Pledgor shall
have the exclusive voting power with respect to any shares of
capital stock or other equity securities (including any of
the Pledged Shares) constituting Pledged Collateral, and the
Pledgee shall, upon the written request of the Pledgor,
promptly deliver such proxies and other documents, if any, as
shall be reasonably requested by the Pledgor which are
necessary to allow the Pledgor to exercise voting power with
respect to any such share of capital stock or other equity
securities (including any of the Pledged Shares) constituting
Pledged Collateral.
ARTICLE V
THE PLEDGEE
Pledgee Appointed Attorney-in-Fact. The Pledgor hereby irrevocably appoints the
Pledgee the Pledgor's attorney-in-fact, with full authority in the place and
stead of the Pledgor and in the name of the Pledgor or otherwise, from time to
time in the Pledgee's discretion after an Event of Default exists, to take any
action and to execute any instrument which the Pledgee may deem necessary or
advisable to accomplish the purposes of this Pledge Agreement including, without
limitation,
(j) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Pledged
Collateral;
(k) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with
clause (a) above;
(l) to file any claims or take any action or institute any
proceedings which may be deemed necessary or desirable for
the collection of any of the Pledged Collateral or otherwise
to enforce the rights of the Pledgee with respect to any of
the Pledged Collateral;
(m) to perform the affirmative obligations of the Pledgor
hereunder (including all obligations of the Pledgor pursuant
to Section 4.1);
(n) to execute and deliver for and on behalf of the Pledgor any
and all instruments, documents, agreements, and other
writings necessary or advisable for the exercise on behalf of
the Pledgor of any rights, benefits or options created or
existing under or pursuant to the Pledged Collateral; and
(o) to execute endorsements, assignments or other instruments of
conveyance and transfer.
The Pledgor hereby acknowledges, consents, and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest,
which power of attorney shall remain in full force and effect until this Pledge
Agreement is terminated and the security interests created hereby are released
in accordance with the terms hereof.
Pledgee May Perform. If the Pledgor fails to perform any agreement contained
herein, the Pledgee may perform, or cause performance of, such agreement, and
the expenses of such Person incurred in connection therewith shall be payable by
the Pledgor pursuant to Section 6.4.
ARTICLE VI
REMEDIES
Certain Remedies. Upon the occurrence of any Event of Default:
(p) The Pledgee may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a
secured party on default under the UCC (whether or not the UCC
applies to the affected Pledged Collateral) and also may, without
notice except as specified below, sell the Pledged Collateral or
any part thereof at public or private sale, at any of the
Pledgee's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Pledgee may deem
commercially reasonable.
(q) The Pledgee may:
(i) endorse any checks, drafts, or other writings in the
Pledgor's name to allow collection of the Pledged Collateral,
(ii) take control of any proceeds of the Pledged Collateral, and
(iii)execute (in the name, place, and stead of the Pledgor)
endorsements, assignments, stock powers, and other
instruments of conveyance or transfer with respect to all or
any of the Pledged Collateral.
Compliance with Restrictions. If any consent, approval or authorization of any
state, municipal or other governmental department, agency or authority shall be
necessary to effectuate any sale or other disposition of the Pledged Collateral,
or any part thereof, the Pledgor shall execute such applications and other
instruments as may be required in connection with securing any such consent,
approval or authorization, and will otherwise use its best efforts to secure the
same.
Application of Proceeds. All cash proceeds received by the Pledgee in respect of
any sale of, collection from, or other realization upon, all or any part of the
Pledged Collateral shall be applied to the Obligations then due and payable as
provided in the Reorganization Agreement.
Indemnity and Expenses. The Pledgor hereby indemnifies and holds harmless the
Pledgee from and against any and all claims, losses, and liabilities arising out
of or resulting from this Pledge Agreement (including enforcement of this Pledge
Agreement), except claims, losses, or liabilities resulting from the gross
negligence or willful misconduct of the Pledgee. Upon demand, the Pledgor will
pay to the Pledgee the amount of any and all expenses including reasonable
attorney costs (whether related to a suit or action or any reviews of or appeals
from a judgment or decree therein or in connection with non-judicial action),
which the Pledgee may incur in connection with: (r) the custody, preservation,
use or operation of, or the sale of, collection from, or other realization upon,
any of the Pledged Collateral;
(s) the exercise or enforcement of any of the rights of the Pledgee
hereunder; or
(t) the failure by the Pledgor to perform or observe any of the
provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Security Interest Absolute. All rights of the Pledgee and security
interests hereunder, and all of the obligations of the Pledgor hereunder,
shall be absolute and unconditional, irrespective of:
(u) any lack of validity or enforceability of the Reorganization
Agreement, stockholders Agreement or any other agreement or
instrument relating thereto;
(v) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the
Stockholders Agreement or the Reorganization Agreement;
(w) any exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Obligations; or
(x) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, the Pledgor.
Amendments. No amendment to or waiver of any provision of this Pledge Agreement
and no consent to any departure by the Pledgor herefrom shall in any event be
effective unless the same shall be in writing and signed by the Pledgee, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which it is given.
Notices. All notices and other communications provided hereunder shall be in
writing and addressed, delivered or transmitted to such party at its address or
facsimile number set forth below its signature on this Pledge Agreement or at
such other address or facsimile number as may be designated by such party in a
notice to the other party. Any notice, if mailed and properly addressed
certified registered mail postage pre-paid or if properly addressed and sent by
prepaid courier service, shall be deemed given when received; any notice,
transmitted by facsimile shall be deemed given when transmitted provided it is
followed up by one of the other two means of notice as aforesaid.
No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Pledgee, any right, remedy, power, or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.
Successors and Assigns. The provisions of this Pledge Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Pledgor may not assign or transfer any
of its rights or obligations under this Pledge Agreement without the prior
written consent of the Pledgee.
Counterparts. This Pledge Agreement may be executed in any number of separate
counterparts, each of which, when so executed, shall be deemed an original, and
all of said counterparts taken together shall be deemed to constitute but one
and the same instrument.
Severability. The illegality or unenforceability of any provision of this Pledge
Agreement or any instrument or agreement required hereunder shall not in any way
affect or impair the legality or enforceability of the remaining provisions of
this Pledge Agreement or any instrument or agreement required hereunder.
Governing Law. This Pledge Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, without giving effect to
conflict of law principles.
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused
this Pledge Agreement to be duly executed and delivered by their duly authorized
officers as of the day and year first above written.
Corus Investment Ltd., a Bahamas corporation, as Pledgor
By:
Its:
Oryx Technology Corp., a Delaware corporation as Pledgee
By:
Its:
Schedule 1
to
Pledge Agreement
Pledged Shares
No. of
Shares
Issuer Pledged
Oryx Instruments and Materials Corporation-- 8,000,000
20,000,000 shares of Class A Common Stock Shares
authorized