Exhibit 7
BORROWER PLEDGE AGREEMENT
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THIS PLEDGE AGREEMENT (this "AGREEMENT") dated as of
December 30, 1997 by ZEPHYROS ACQUISITION CORPORATION, a Delaware
corporation (in its capacity as pledgor under the terms of this
Agreement, "PLEDGOR"), in favor of XXXXXX FINANCIAL, INC., a
Delaware corporation, as agent ("AGENT") for the benefit of
Lenders (defined below).
W I T N E S S E T H:
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WHEREAS, Pledgor legally and beneficially owns all of the
issued and outstanding shares of capital stock of each of the
Persons identified on Schedule I hereto (collectively,
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"SUBSIDIARIES"), all of which shares of stock are described on
Schedule I;
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WHEREAS, Pledgor, upon consummation of (x) the Tender Offer
pursuant to the Tender Offer Documents, or (y) any Open Market
Purchases, shall legally and beneficially own all of the issued
and outstanding shares of capital stock of Target (defined
below), all of which shares of stock are identified on Schedule
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I.
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WHEREAS, Pledgor, as Borrower, is entering into that certain
Tender Offer Loan Agreement, dated as of the date hereof with
Xxxx International Holdings, Inc., Agent and certain financial
institutions from time to time party thereto (collectively,
"LENDERS") (as it may be amended, restated, supplemented or
otherwise modified and in effect from time to time, the "LOAN
AGREEMENT") providing for loans and other financial
accommodations to be made by Lenders to Pledgor;
WHEREAS, Pledgor desires to incur such loans pursuant to the
Agreement for the purpose of financing (x) the purchase price of
all of the issued and outstanding shares of common stock of
Deflecta-Shield Corporation, a Delaware corporation ("TARGET"),
tendered pursuant to the Tender Offer Documents or (y) any Open
Market Purchases;
WHEREAS, it is a condition precedent to the making of loans
and the availability of other financial accommodations under the
Loan Agreement that Pledgor shall have pledged to Agent, on
behalf of Lenders, all of the present and future capital stock of
Subsidiaries now or hereafter owned by Pledgor; and
WHEREAS, Pledgor desires to execute this Agreement to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the premises and in
order to induce Lenders to make loans and provide other financial
accommodations under the Loan Agreement, Pledgor hereby agrees
with Agent for its benefit and the benefit of Lenders as follows:
Section 1. Defined Terms. Unless otherwise defined
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herein, all capitalized terms used herein shall have the
respective meanings ascribed thereto in the Loan Agreement.
Terms defined in the UCC which are not otherwise defined in this
Agreement or in the Loan Agreement are used in this Agreement as
defined in the UCC as in effect on the date hereof.
Section 2. Pledge. Pledgor hereby pledges, assigns,
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hypothecates, transfers, delivers and grants to Agent, on behalf
of Lenders, a first lien on and first security interest in all of
the capital stock of each Subsidiary owned by such Pledgor
(collectively the "PLEDGED SHARES"), all other property hereafter
delivered to, or in the possession or in the custody of, Pledgor
in substitution for or in addition to the Pledged Shares and in
all proceeds thereof, as collateral security for (i) the prompt
and complete payment when due (whether at the stated maturity, by
acceleration or otherwise) and performance of all Obligations,
regardless of whether the Loan Agreement or any other Loan
Document shall have terminated, and (ii) the due and punctual
payment and performance by Pledgor of its obligations and
liabilities under, arising out of or in connection with this
Agreement, the Loan Agreement and all other Loan Documents to
which Pledgor is a party (all of the foregoing being referred to
hereinafter collectively as the "LIABILITIES").
All of the capital stock of the Subsidiaries tendered
and purchased pursuant to the Tender Offer shall be held by the
Depositary Agent and the Transfer Agent and subsequently
delivered to Agent in accordance with the terms of the Depositary
Agreement.
All such capital stock are represented by the stock
certificate(s) listed on Schedule I hereto, which stock
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certificates, with undated stock powers duly executed in blank by
Pledgor, shall be delivered forthwith to Agent. Agent shall
maintain possession and custody of the certificate(s)
representing the Pledged Shares.
Section 3. Representations and Warranties of Pledgor.
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Pledgor represents and warrants to Agent and Lenders that:
(a) Schedule I sets forth with respect to Pledgor (i)
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the authorized capital stock of each Subsidiary (to the knowledge
of the Pledgor with respect to the authorized capital stock of
the Target and its Subsidiaries (as such term is defined in the
Loan Agreement)), (ii) the number of shares of capital stock of
each Subsidiary (to the knowledge of the Pledgor with respect to
the authorized capital stock of the Target and its Subsidiaries
(as such term is defined in the Loan Agreement)) that are issued
and outstanding as of the date hereof and (iii) the number of
shares of capital stock of each Subsidiary (to the knowledge of
the Pledgor with respect to the authorized capital stock of the
Target and its Subsidiaries (as such term is defined in the Loan
Agreement)) held in its treasury.
Pledgor is the record and beneficial owner of, and has
good and marketable title to, the Pledged Shares, and such shares
are and will remain free and clear of all pledges, liens,
security interests and other encumbrances and restrictions
whatsoever, except the liens and security interests created by
this Agreement;
(b) Pledgor has full power, authority and legal right
to execute the pledge provided for herein and to pledge the
Pledged Shares to Agent, on behalf of Lenders;
(c) This Agreement has been duly authorized, executed
and delivered by Pledgor and constitutes a legal, valid and
binding obligation of Pledgor enforceable in accordance with
terms;
(d) There are no outstanding options, warrants or
other agreements with respect to the Pledged Shares and there are
no outstanding options, warrants or other agreements with respect
to any other shares of capital stock of any Subsidiary except, in
each case, as set forth in Schedule 3(d) hereto;
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(e) The Pledged Shares have been duly and validly
authorized and issued, are fully paid and non-assessable and
represent all of the issued and outstanding shares of the capital
stock of each Subsidiary;
(f) No consent, approval or authorization of or
designation or filing with any governmental authority on the part
of Pledgor is required in connection with the pledge and security
interest granted under this Agreement except as set forth on
Schedule 3(f) hereto;
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(g) The execution, delivery and performance of this
Agreement will not violate any provision of any applicable law or
regulation or of any order, judgment, writ, award or decree of
any court, arbitrator or governmental authority, domestic or
foreign, or of the charter or by-laws of Pledgor or any
Subsidiary or of any securities issued by Pledgor or any
Subsidiaries or of any mortgage, indenture, lease, contract, or
other material agreement, instrument or undertaking to which
Pledgor or any Subsidiary is a party or which purports to be
binding upon Pledgor or any Subsidiary or upon any of its assets,
and will not result in the creation or imposition of any lien,
charge or encumbrance on or security interest in any of the
assets of Pledgor or any Subsidiary except as contemplated by
this Agreement;
(h) The pledge and assignment to Agent, on behalf of
Lenders, of the Pledged Shares pursuant to this Agreement creates
a valid first lien on and a first perfected security interest in
the Pledged Shares and the proceeds thereof in favor of Agent, on
behalf of Lenders, subject to no prior pledge, lien, mortgage,
hypothecation, security interest, charge, option or encumbrance
or to any agreement purporting to grant to any third party a
security interest in the property or assets of any Pledgor which
would include the Pledged Shares. Pledgor covenants and agrees
that it will defend Agent's right, title and security interest in
and to the Pledged Shares and the proceeds thereof against the
claims and demands of all persons whomsoever; and
(i) All information heretofore, herein or hereafter
supplied to Agent by or on behalf of Pledgor with respect to the
Pledged Shares is and will be accurate and complete in all
material respects, taking into account any amendments to
Schedules as a result of any disclosures made by Pledgor to Agent
after the Closing Date and approved by Agent.
Section 4. Stock Dividends, Distributions, etc. If,
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while this Agreement is in effect, Pledgor shall become entitled
to receive or shall receive any stock certificate (including,
without limitation, any certificate representing a stock dividend
or a stock distribution in connection with any reclassification,
increase or reduction of capital, or issued in connection with
any reorganization), or any options or rights, whether as an
addition to, in substitution for, or in exchange for any of the
Pledged Shares, or otherwise, Pledgor agrees to accept the same
as Agent's agent and to hold the same in trust for Agent, on
behalf of Lenders, and to deliver the same forthwith to the
Depository, on behalf of Agent, in the exact form received, with
the endorsement of Pledgor when necessary and/or appropriate
undated stock powers duly executed in blank, to be held by Agent,
on behalf of Lenders, subject to the terms hereof as additional
collateral security for the Liabilities. In case any
distribution of capital shall be made on or in respect of the
Pledged Shares or any property shall be distributed upon or with
respect to the Pledged Shares pursuant to the recapitalization or
reclassification of the capital of the issuer thereof or pursuant
to the reorganization thereof, the property so distributed shall
be delivered to Agent to be held by it as additional collateral
security for the Liabilities. All sums of money and property so
paid or distributed in respect of the Pledged Shares which are
received by Pledgor shall, until paid or delivered to Agent, be
held by Pledgor in trust as additional collateral security for
the Liabilities.
Section 5. Administration of Security. The following
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provisions shall govern the administration of the Pledged Shares:
(a) So long as no Event of Default has occurred and is
continuing, Pledgor shall be entitled (subject to the other
provisions hereof, including, without limitation, Section 8
below) to (i) vote or consent with respect to the Pledged Shares
in any manner not inconsistent with this Agreement, the Loan
Agreement, any other Loan Document, or any note, document or
instrument delivered or to be delivered pursuant to or in
connection with the transactions contemplated by the foregoing,
and (ii) receive cash dividends or other distributions in the
ordinary course made in respect of the Pledged Shares. Pledgor
hereby grants to Agent or its nominee, on behalf of Lenders, an
irrevocable proxy to exercise all voting and corporate rights
relating to the Pledged Shares in any instance effective upon the
occurrence and during the continuance of an Event of Default.
After the occurrence and during the continuance of an Event of
Default and upon the request of Agent, Pledgor agrees to deliver
to Agent, on behalf of Lenders, such further evidence of such
irrevocable proxy or such further irrevocable proxies to vote the
Pledged Shares as Agent may request.
(b) Upon the occurrence and during the continuance of
an Event of Default, in the event that Pledgor, as record and
beneficial owner of the Pledged Shares, shall have received or
shall have become entitled to receive, any cash dividends or
other distributions in the ordinary course, Pledgor shall deliver
to Agent, on behalf of Lenders, and Agent shall be entitled to
receive and retain, all such cash or other distributions as
additional security for the Liabilities.
(c) Subject to any sale or other disposition by Agent
of the Pledged Shares or other property pursuant to this
Agreement, the Pledged Shares and any other property then held as
part of the Pledged Shares in accordance with the provisions of
this Agreement shall be delivered to Pledgor upon indefeasible
full payment, satisfaction and termination of all of the
Liabilities, the termination of the lien and security interest
hereby granted pursuant to Section 14 hereof and the termination
of the Commitments under the Loan Agreement.
Section 6. Rights of Agent. Neither Agent nor Lenders
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shall be liable for failure to collect or realize upon the
Obligations or any collateral security or guaranty therefor, or
any part thereof, or for any delay in so doing, nor shall Agent
or Lenders be under any obligation to take any action whatsoever
with regard thereto. Any or all of the Pledged Shares hereunder
may, if an Event of Default has occurred and is continuing, with
reasonably prompt subsequent notice to Pledgor, be registered in
the name of Agent or its nominee, on behalf of Lenders, and Agent
or its nominee, on behalf of Lenders, may thereafter, without
notice, exercise all voting and corporate rights at any meeting
with respect to Subsidiaries and exercise any and all rights of
conversion, exchange, subscription or any other rights,
privileges or options pertaining to any of the Pledged Shares as
if it were the absolute owner thereof, including, without
limitation, the right to vote in favor of, and to exchange at its
discretion any and all of the Pledged Shares upon, the merger,
consolidation, reorganization, recapitalization or other
readjustment with respect to Subsidiaries or upon the exercise by
Pledgor or Agent, on behalf of Lenders, of any right, privilege
or option pertaining to any of the Pledged Shares, and in
connection therewith, to deposit and deliver any and all of the
Pledged Shares with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and
conditions as Agent may determine, all without liability except
to account for property actually received by Agent, on behalf of
Lenders, but Agent shall have no duty to exercise any of the
aforesaid rights, privileges or options and shall not be
responsible for any failure to do so or delay in so doing.
Section 7. Remedies. Upon the occurrence and during the
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continuance of an Event of Default, Agent without demand of
performance or other demand, advertisement or notice of any kind
(except the notice specified below of time and place of public or
private sale) to or upon Pledgor or any other person (all and
each of which demands, advertisements and/or notices are hereby
expressly waived), may forthwith collect, receive, appropriate
and realize upon the Pledged Shares, or any part thereof, and/or
may forthwith sell, assign, give an option or options to
purchase, contract to sell or otherwise dispose of (including the
disposition by merger) and deliver said Pledged Shares, or any
part thereof, in one or more portions at public or private sale
or sales or transactions, at any exchange, broker's board or at
any of Agent's offices or elsewhere upon such terms and
conditions as Agent may deem advisable and at such prices as it
may deem best, for any combination of cash and/or securities or
other property or on credit or for future delivery without
assumption of any credit risk, with the right to Agent upon any
such sale or sales, public or private, to purchase the whole or
any part of said Pledged Shares so sold, free of any right or
equity of redemption in Pledgor, which right or equity is hereby
expressly waived or released. Agent shall apply the net proceeds
of any such collection, recovery, receipt, appropriation,
realization, sale or disposition, after deducting all reasonable
costs and expenses of every kind incurred therein or incidental
to the safekeeping of any and all of the Pledged Shares or in any
way relating to the rights of Agent or Lenders hereunder,
including reasonable attorneys' fees and legal expenses, to the
payment, in whole or in part, of the Obligations incurred under
or pursuant to the Loan Agreement in such order as is in
accordance with the terms of the Loan Agreement or, if no such
order shall be specified, in such order as Agent may elect.
Pledgor shall remain liable for any deficiency remaining unpaid
after such application. Only after so paying over such net
proceeds and after the payment by Agent of any other amount
required by any provision of law, including, without limitation,
Section 9-504(1)(c) of the UCC, need Agent account for the
surplus, if any, to Pledgor. Pledgor agrees that Agent need not
give more than ten days' notice of the time and place of any
public sale or of the time after which a private sale or other
intended disposition is to take place and that such notice is
reasonable notification of such matters. No notification need be
given to Pledgor if Pledgor has signed after the occurrence of an
Event of Default under the Loan Agreement a statement renouncing
or modifying any right to notification of sale or other intended
disposition. In addition to the rights and remedies granted to
Agent in this Agreement and in any other instrument or agreement
securing, evidencing or relating to any of the Liabilities, Agent
and Lenders shall have all the rights and remedies of a secured
party under the UCC and under any other applicable law. Pledgor
further agrees to waive and agrees not to assert any rights or
privileges which it may acquire under Section 9-112 of the UCC
(other than the right to receive surplus, if any, in accordance
with the foregoing terms of this subsection 7) and Pledgor shall
be liable for the deficiency if the proceeds of any sale or other
disposition of the Pledged Shares are insufficient to pay all
amounts to which Agent and Lenders are entitled, and the
reasonable fees of any attorneys employed by Agent and Lenders to
collect such deficiency and any other costs and expenses incurred
in connection therewith.
Section 8. No Disposition, etc. Without the prior
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written consent of Agent, Pledgor agrees not to sell, assign,
transfer, exchange, or otherwise dispose of (except as expressly
permitted by the Loan Agreement), or grant any option with
respect to, the Pledged Shares, nor will Pledgor create, incur or
permit to exist any pledge, lien, mortgage, hypothecation,
security interest, charge, option or any other encumbrance with
respect to any of the Pledged Shares, or any interest therein, or
any proceeds thereof, except for the lien and security interest
provided for by this Agreement. Without the prior written
consent of Agent, except as expressly specified in accordance
with the terms and conditions of the Loan Agreement, Pledgor
agrees not to vote to enable, and not to otherwise permit,
Subsidiaries to (i) issue any stock or other securities of any
nature in addition to or in exchange or substitution for the
Pledged Shares, or (ii) dissolve, liquidate, retire any of their
capital stock, reduce their capital or merge or consolidate with
any other Person.
Section 9. Sale of Pledged Shares.
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(a) Pledgor recognizes that Agent may be unable to
effect a public sale or disposition of any or all the Pledged
Shares by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the "ACT"), and applicable
state securities laws, but may be compelled to resort to one or
more private sales or dispositions thereof to a restricted group
of purchasers who will be obliged 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 or
disposition may result in prices and other terms (including the
terms of any securities or other property received in connection
therewith) less favorable to the seller than if such sale or
disposition were a public sale or disposition and,
notwithstanding such circumstances, agrees that any such private
sale or disposition shall be deemed to be reasonable and affected
in a commercially reasonable manner. Agent and Lenders shall be
under no obligation to delay a sale or disposition of any of the
Pledged Shares in order to permit Pledgor or Subsidiaries to
register such securities for public sale under the Act, or under
applicable state securities laws, even if Pledgor or Subsidiaries
would agree to do so.
(b) Pledgor further agrees to do or cause to be done
all such other acts and things as may be necessary to make such
sale or sales or dispositions of any portion or all of the
Pledged Shares valid and binding and in compliance with any and
all applicable laws, regulations, orders, writs, injunctions,
decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having
jurisdiction over any such sale or sales or dispositions, all at
Pledgor's expense. Pledgor further agrees that a breach of any
of the covenants contained in Sections 2, 4, 5(b), 8, 9 or 10
hereof will cause irreparable injury to Agent and Lenders, that
Agent and Lenders have no adequate remedy at law in respect of
such breach and, as a consequence, agrees, without limiting the
right of Agent to seek and obtain specific performance of other
obligations of Pledgor contained in this Agreement, that each and
every covenant referenced above shall be specifically enforceable
against Pledgor, and Pledgor hereby waives and agrees not to
assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has
occurred under the Loan Agreement.
(c) Pledgor further agrees to indemnify and hold
harmless Agent, each of its successors and assigns, officers,
directors, employees and agents, and any Person in control of any
thereof, from and against any loss, liability, claim, damage and
expense, including, without limitation, reasonable counsel fees
(in this Section 9(c) collectively called the "INDEMNIFIED
LIABILITIES"), under federal and state securities laws or
otherwise insofar as such loss, liability, claim, damage or
expense (i) arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in any
registration statement, prospectus or offering memorandum or in
any preliminary prospectus or preliminary offering memorandum or
in any amendment or supplement to any of the foregoing or in any
other writing prepared in connection with the offer, sale or
resale of all or any portion of the Pledged Shares unless such
untrue statement of material fact was provided by Agent
specifically for inclusion therein, or (ii) arises out of or is
based upon any omission or alleged omission to state therein a
material fact required to be stated or necessary to make the
statements therein not misleading, such indemnification to remain
operative regardless of any investigation made by or on behalf of
Agent or any successor thereof, or any Person in control of any
thereof. In connection with a public sale or other distribution,
Pledgor will provide customary indemnification to any
underwriters, its successors and assigns, its officers and
directors and each Person who controls any such underwriter
(within the meaning of the Act). If and to the extent that the
foregoing undertakings in this Section 9(c) may be unenforceable
for any reason, Pledgor agrees to make maximum contribution to
the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The
obligations of Pledgor under this Section 9(c) shall survive any
termination of this Agreement.
(d) Pledgor further agrees to waive any and all rights
of subrogation it may have against Subsidiaries upon the sale or
sales or dispositions by Agent of any portion of, or all of, the
Pledged Shares.
Section 10. Further Assurances. Pledgor agrees that at
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any time and from time to time, upon the written request of
Agent, Pledgor shall execute and deliver all stock powers,
irrevocable proxies, financing statements and such further
documents and do such further acts and things as Agent may
reasonably request consistent with the provisions hereof in order
to effect the purposes of this Agreement.
Section 11. Severability. Any provision of this
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Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
Section 12. No Waiver; Cumulative Remedies. Agent shall
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not by any act, delay, omission or otherwise be deemed to have
waived any of its remedies hereunder, and no waiver by Agent
shall be valid unless in writing and signed by Agent and then
only to the extent therein set forth. A waiver by Agent of any
right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which Agent would
otherwise have on any further occasion. No course of dealing
between Pledgor and Agent and no failure to exercise, nor any
delay in exercising on the part of Agent any right, power or
privilege hereunder or under the Loan Documents shall impair such
right or remedy or operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
Section 13. Successors. This Agreement and all
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obligations of Pledgor hereunder shall be binding upon the
successors and assigns of Pledgor, and shall, together with the
rights and remedies of Agent and Lenders hereunder, inure to the
benefit of Pledgor, Lenders and Agent and its successors and
assigns, except that Pledgor shall not have any right to assign
its rights or obligations under this Agreement or any interest
herein without the prior written consent of Agent.
Section 14. Termination. This Agreement and the liens
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and security interests granted hereunder shall terminate upon
full and complete performance, indefeasible payment in full and
satisfaction of the Liabilities and termination of the
Commitments under the Loan Agreement, and with reasonable
promptness, upon such full and complete performance, satisfaction
and termination, Agent shall surrender the certificates
evidencing the Pledged Shares to Pledgor and take such other
action as Pledgor may reasonably request to evidence the
termination of this Agreement, all at the sole cost and expense
of Pledgor.
Section 15. Possession of Pledged Shares. Beyond the
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exercise of reasonable care to assure the safe custody of the
Pledged Shares in the physical possession of the Depository or
Agent pursuant hereto, neither Agent nor any nominee of Agent
shall have any duty or liability to collect any sums due in
respect thereof or to protect, preserve or exercise any rights
pertaining thereto, and shall be relieved of all responsibility
for the Pledged Shares upon surrendering them to Pledgor.
Section 16. Survival of Representations. All
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representations and warranties of Pledgor contained in this
Agreement shall survive the execution and delivery of this
Agreement.
Section 17. Taxes and Expenses. Pledgor will upon demand
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pay to Agent all fees, costs and expenses (including reasonable
attorneys' fees, reasonably allocated costs of internal counsel
and fees of accountants and other professionals retained by
Agent) incurred by Agent in connection with (i) the review,
negotiation, preparation, documentation, execution and admin-
istration hereof, and (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the
Pledged Shares. Pledgor will upon demand pay to Agent all fees,
costs and expenses (including attorneys' fees, allocated costs of
internal counsel and fees of accountants and other professionals
retained by Agent) incurred by Agent in connection with (i) the
exercise or enforcement of any of the rights of Agent hereunder,
and (ii) the failure of Pledgor to perform or observe any of the
provisions hereof.
Section 18. Agent Appointed Attorney-In-Fact. Pledgor
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hereby irrevocably appoints Agent as its attorney-in-fact,
effective upon the occurrence and during the continuance of an
Event of Default, with full authority in the place and stead of
Pledgor and in the name of Pledgor or otherwise, from time to
time in Agent's discretion, to take any action and to execute any
instrument that Agent deems reasonably necessary or advisable to
accomplish the purposes of this Agreement, including, without
limitation, to receive, endorse and collect all instruments made
payable to Pledgor representing any dividend, interest payment or
other distribution in respect of the Pledged Shares or any part
thereof and to give full discharge for the same, when and to the
extent permitted by this Agreement.
Section 19. Notices. Unless otherwise provided
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specifically herein, all notices, approvals, requests, demands
and other communications hereunder shall be given in writing
addressed to the respective party in accordance with the terms of
the Loan Agreement.
Section 20. Applicable Law. THIS AGREEMENT SHALL BE
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GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Section 21. Consent to Jurisdiction and Service of
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Process. PLEDGOR AGREES THAT, SUBJECT TO AGENT'S ELECTION, ANY
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ACTION OR PROCEEDING TO ENFORCE OR ARISING OUT OF THIS AGREEMENT
MAY BE COMMENCED IN ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
COUNTY OF NEW YORK, STATE OF NEW YORK, AND PLEDGOR WAIVES
PERSONAL SERVICE OF PROCESS AND AGREES THAT A SUMMONS AND
COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN ANY SUCH COURT
SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION
IF SERVED BY MESSENGER OR REGISTERED MAIL TO IT AND, IF BY
REGISTERED MAIL, SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
FOUR (4) BUSINESS DAYS AFTER THE SAME SHALL HAVE BEEN POSTED, OR
AS OTHERWISE PROVIDED BY THE LAWS OF NEW YORK OR THE UNITED
STATES.
Section 22. Waiver of Jury Trial. PLEDGOR, AGENT AND
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EACH LENDER ACKNOWLEDGES THAT THE TIME AND EXPENSE REQUIRED FOR
TRIAL BY JURY EXCEED THE TIME AND EXPENSE REQUIRED FOR A BENCH
TRIAL AND HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, TRIAL BY
JURY. PLEDGOR HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
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CONVENIENS, ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
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HEREUNDER, AND WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH
BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF AGENT OR
LENDERS.
Section 23. Changes in Writing. No amendment,
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modification, termination or waiver of any provision of this
Agreement or consent to any departure by Pledgor therefrom, shall
in any event be effective without the written agreement of Agent
and Pledgor, and then only to the extent specifically set forth
in such writing.
Section 24. Headings. Section and subsection headings in
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this Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for any
other purpose or be given any substantive effect.
Section 25. Counterparts. This Agreement may be executed
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in any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
Section 26. Entire Agreement. This Agreement embodies
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the entire agreement and understanding between Pledgor and Agent
with respect to the subject matter hereof and supersedes all
prior oral and written agreements and understandings between
Pledgor and Agent relating to the subject matter hereof.
[Signature page to follow]
IN WITNESS WHEREOF, the undersigned has caused this Pledge
Agreement to be duly executed and delivered by their duly
authorized officers as of the date first above written.
ZEPHYROS ACQUISITION CORPORATION
By: /s/ Xxx X. Xxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of Directors
Agreed to and Acknowledged:
XXXXXX FINANCIAL, INC.,
as Agent
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK)
I, Xxxxxx Xxxxxx, a Notary Public in and for said
-------------
County, in the State aforesaid, DO HEREBY CERTIFY that
Xxx X. Xxxxxxxx, personally known to me to be a
---------------
Chairman of the Board, the person who executed the foregoing
---------------------
instrument, who being by me duly sworn, did depose and say he is
a Chairman of the Board of each such corporation described in
---------------------
and which executed the foregoing instrument; that said instrument
is signed on behalf of each such corporation by order its Board
of Directors; and that he acknowledged said instrument to be the
free act and deed of each such corporation.
GIVEN under my hand and notarial seal this 30 day of
---
December, 1997.
/s/ Xxxxxx Xxxxxx
--------------------------------
Notary Public
My commission expires:
________________________________
XXXXXX XXXXXX
Notary Public, State of New York
No. 00-0000000
Qualified in Kings County
Certificate Filed in New York County
Commission Expires Nov. 30, 1999
SCHEDULE I
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PLEDGED SHARES
--------------
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: :
: AUTHORIZED ISSUED AND NO. OF :
: PLEDGED CAPITAL OUTSTANDING TREASURY :
: ENTITY STOCK STOCK SHARES PLEDGOR :
: ------- ---------- ----------- -------- ------- :
: :
: Deflecta- 20,000,000 4,742,411 None Zephyros :
: Shield common stock common stock Acquisition :
: Corporation 2,500,000 Corporation :
: preferred stock :
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SCHEDULE 3(d)
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OPTIONS, WARRANTS AND AGREEMENTS
--------------------------------
SCHEDULE 3(f)
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CONSENTS, APPROVALS AND AUTHORIZATIONS
--------------------------------------
