STOCK PLEDGE AGREEMENT
February 19, 1999
To: THE CIT GROUP/BUSINESS CREDIT, INC.
Address: 00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
RE: XXXXX ELECTROSTATIC, INC. (THE "COMPANY")
Ladies and Gentlemen:
Reference is made to a certain Financing Agreement of even date herewith (the
"Financing Agreement") between you and the Company. Capitalized terms used in
this Stock Pledge Agreement and defined in the Financing Agreement shall have
the same meanings as set forth in the Financing Agreement unless otherwise
specifically defined herein. As security for the full and indefeasible payment
and performance when due of all now existing and future Obligations, as well as
all liabilities and obligations of the undersigned ("Pledgor") to you under the
Guaranty Agreement of even date herewith executed by Pledgor and delivered to
you (collectively, the "Secured Obligations"), Pledgor hereby pledges, assigns,
transfers, delivers and sets over to you all of its right, title and interest in
and to the capital stock of the Company evidenced by the certificates described
on SCHEDULE 1 attached hereto and made a part hereof (the "Securities").
This pledge includes all right, title and interest in and to, and a continuing
lien upon and security interest in, all of said Securities together with any and
all rights, coupons, warrants or rights to subscribe, options, dividends,
liquidating dividends, splits, dividends paid in stock, dividends paid in
Securities, new or reclassified Securities, or any other property which Pledgor
is or may hereafter become entitled to receive on account of such Securities,
any and all substitutions, additions or replacements thereof, and any and all
proceeds thereof (all collectively hereinafter referred to as the "Pledged
Collateral").
This Stock Pledge Agreement is executed as an inducement to you to make loans
and other financial accommodations to the Company under the Financing Agreement,
and is executed in consideration of your doing any of the foregoing. Pledgor
agrees that any of the foregoing shall be deemed to be made by you in
consideration of and in reliance upon the execution of this Stock Pledge
Agreement.
Pledgor shall be in default under this Pledge Agreement upon the occurrence of
any Event of Default under the Financing Agreement or the Guaranty Agreement
(any such Event of Default shall be referred to hereinafter as an "Event of
Default").
Upon the occurrence of any such Event of Default, then at any time thereafter
upon ten (10) days prior notice to Pledgor, you may, without demand of
performance, advertisement or notice of intention to sell, or of the time or
place of sale, and without notice to redeem, or other notice or demand
whatsoever to or upon Pledgor (all and each of which demands, advertisements
and/or notices are hereby expressly waived), forthwith or at any time or times
thereafter, transfer to and/or register in your name, or the name of your
nominee, any or all of the Pledged Collateral and/or collect, receive,
appropriate and realize upon said Pledged Collateral. In addition, and also
without any of the aforesaid demands, advertisements, and/or notices, upon the
occurrence of any Event of Default as defined herein, you may sell, assign,
transfer and deliver the whole or any part of the Pledged Collateral then held
by you under this Stock Pledge Agreement or subject to this Stock Pledge
Agreement in one or more parcels, at public or private sale or sales, at any
Exchange Broker's Board, at your office or elsewhere, on such terms and
conditions, and at such prices as you may deem advisable, for cash, upon credit,
or for future delivery, with the right on your part to become the purchaser
thereof at any such sale or sales, free and clear of any right to equity of
redemption (which right or equity is hereby expressly waived and released). Any
notice of sale, disposition, or other intended action by you required by
applicable law and sent to Pledgor at least ten (10) days prior to such action
shall constitute reasonable notice to Pledgor.
Net proceeds of any such disposition as aforesaid, after deduction all costs,
including reasonable attorney's fees and expenses of every kind incurred
therein, shall be applied to the payment in whole or in part, in such order as
you may elect, of any of the Secured Obligations, whether then due or not due.
You agree to pay over and return any remaining balance to the Company or
Pledgor, or to any person entitled thereto, upon proper demand being made
therefor, and if there be any deficiency, the Company shall continue to be fully
liable for same.
Further, you are hereby expressly granted the right and irrevocable proxy, in
the event of the happening of any Event of Default (as defined herein), and on
ten (10) days prior notice to Pledgor, to transfer to yourself or to your
nominee any or all of the Pledged Collateral or to register same in your name on
the books of the Company; to receive cash dividends, coupons and income thereon
and to hold the same as additional collateral security hereunder, or to apply it
against the Secured Obligations and to exercise any voting rights with respect
to said Collateral for any purposes as you in your discretion deem advisable,
and to otherwise exercise as to such Pledged Collateral, all rights, powers and
remedies as the owner thereof.
Pledgor hereby represents and warrants that the Pledged Collateral is owned by
Pledgor absolutely, and is free and clear of all liens and encumbrances except
for the pledge in your favor; that there are no restrictions upon the pledge or
transfer of any of the Pledged Collateral; that Pledgor has full right to pledge
and transfer the same in accordance with the terms and conditions of this Stock
Pledge Agreement without the consent of any other person, firm, entity or
corporation and without the need to notify the Company and/or obtain its consent
to the pledge; and that said Pledged Collateral is not subject to any
assessment. Pledgor agrees to defend its title to the Pledged Collateral at its
own cost
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and expense, and to pay, satisfy and discharge and any all assessments, liens
or charges now or thereafter placed upon the Pledged Collateral.
In the event that it becomes necessary to comply with any Federal or State law
or regulation or to make or file any registration thereunder in order for you to
exercise any of your rights hereunder, Pledgor expressly agrees to do or will
cause to be done all acts and prepare and execute all documents necessary to
affect such compliance or registration, and to bear all reasonable costs in
connection therewith. Pledgor agrees to indemnify and to hold you harmless from
and against any claim or liability; and to hold you harmless from and against
any claim or liability caused by (i) any untrue statement of material fact, or
omission to state a material fact (as required in any registration or
prospectus) or (ii) a failure to register or comply with any such law or
regulation.
Pledgor recognizes that you may be unable to effect a public sale of any or all
of the Collateral, by reason of certain prohibitions contained in the Securities
Act of 1933 and applicable state securities law or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers which will be obligated to agree, among other things, to acquire
such Securities for their own account for investment and not with a view to the
distribution or resale thereof. Pledgor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable to you than if
such sale were a public sale and agrees that such circumstances shall not, in
and of themselves, result in a determination that such sale was not made in a
commercially reasonable manner. You shall be under no obligation to delay a
sale of any of the Pledged Collateral for the period of time necessary to permit
the issuer to register such securities for public sale under the Securities Act
of 1933, or under applicable state securities laws, even if the issuer agrees to
do so.
The Company affirms and certifies that the obligations of Pledgor to you under
the Guaranty Agreement were not, and will not be, incurred for the purpose of
providing credit to the Company or Pledgor for purchasing or trading in
registered equity securities or other marketable securities.
Pledgor hereby agrees at your request to execute all necessary stock powers in
blank, to have the signatures on said powers guaranteed, to execute a letter or
other form confirming that the Pledged Collateral is not being pledged to you
for the purpose of providing the Company or Pledgor with any credit for
purchasing or trading in registered equity securities or other marketable
securities, and to execute any further documents or papers whatsoever in order
to carry out the intent and purpose of this Stock Pledge Agreement.
The pledge provided for herein shall be in addition to, and shall not be deemed
to affect, modify or limit any other rights, collateral, agreements or security
which you may now or hereafter hold whether granted or given to you by Pledgor
or by any other person, firm or corporation.
It is understood and agreed that the rights and remedies herein enumerated are
not intended to be exhaustive but are in addition to any other rights or
remedies at law or in equity. You shall have the absolute right in your sole
discretion to determine the order in which your rights and remedies are
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to be exercised, and your exercise of any right or remedy shall not preclude
the exercise of any other rights or remedies or be deemed to be a waiver
thereof. No act of forbearance, or agreement to forebear the enforcement of,
or extension of the date of maturity of, any Obligation, shall in any way
constitute a release of, or a waiver or relinquishment of any of your rights
or remedies.
This Stock Pledge Agreement is to be governed by the laws of the State of
Illinois and shall be binding on the heirs, administrators, executors,
successors and assigns of Pledgor, and shall inure to the benefit of you and
your successors and assigns.
Very truly yours,
BINKS XXXXX CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Title: VP and Chief Financial Officer
--------------------------------
Accepted this ___ day of October, 1998:
THE CIT GROUP/BUSINESS CREDIT, INC.
By: Xxxxxxx Xxxx
-----------------------------
Title: Vice President
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SCHEDULE 1 TO STOCK PLEDGE AGREEMENT BETWEEN BINKS XXXXX CORPORATION
AND
THE CIT GROUP/BUSINESS CREDIT, INC. AND
Issuer Certificate # # of Shares
------ ------------- ------------
Xxxxx Electrostatic, Inc. 1 1,000
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