EXHIBIT 10.10
PLEDGE AND SECURITY AGREEMENT
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THIS PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT"), dated as of this 26th day
of January, 2005, is made by Adsero Corp., a Delaware corporation ("PLEDGOR"),
having an office at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxx, Xxxxxx X0X
0X0, to and for the benefit of Barrington Bank International Limited, a Bahamian
banking company, having an office at Xxxxxxxxxx Xxxxx, XX Xxx X0000, 0xx Xxxxx,
Xxxxxx, Xxxxxxx (hereinafter, "SECURED PARTY").
W I T N E S S E T H:
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WHEREAS, Secured Party, as lender, and Teckn-O-Laser Company, a Nova
Scotia unlimited liability company ("BORROWER") are among the parties to that
certain Loan Agreement dated as of the date hereof (as the same may be amended,
restated, supplemented or otherwise modified, the "LOAN AGREEMENT"), pursuant to
which, inter alia, Secured Party is lending Cdn.$2,000,000 to Borrower;
WHEREAS, Pledgor is among the parties providing Secured Party with that
certain joint and several Guaranty dated as of the date hereof (the "Guaranty")
as security for the timely performance by Borrower of its obligations under the
Loan Agreement;
WHEREAS, upon the completion of the transactions described in that
certain Funding and Payoff Agreement dated as of the date hereof by and among,
inter alia, Pledgor and Secured Party, Pledgor will indirectly own a majority
interest in Borrower and will receive significant benefits from Borrower's
entering into the Loan Agreement; and
WHEREAS, as a condition to Secured Party's agreement to enter into the
Loan Agreement and provide the funding described therein, Secured Party has
required that Pledgor pledge the Collateral (as defined below) as security for
Pledgor's performance of its obligations under the Guaranty;
NOW, THEREFORE, in consideration of the sum of $10.00 and for other
good and valuable consideration received by Pledgor, the receipt and sufficiency
of which are hereby acknowledged, Pledgor, intending to be legally bound hereby,
covenants and agrees as follows:
1. Certain Definitions. Capitalized terms not defined herein shall have
the meanings ascribed thereto in the Loan Agreement. In addition to the words
and terms defined in the Loan Agreement and elsewhere in this Agreement, the
following words and terms shall have the respective meanings set forth below:
(a) "COLLATERAL" shall mean, collectively, the Ownership
Interests and Proceeds.
(b) "EQUITY HOLDER" means a direct or indirect legal or
beneficial owner of an Equity Interest.
(c) "EQUITY INTEREST" means (i) in the case of a corporation,
shares of stock (and status as a stockholder), (ii) in the case of a
general or limited partnership, a partnership interest (including
status as a partner), (iii) in the case of a limited liability company,
membership units or interests (and status as a member) and (iv) in the
case of any other Person other than an individual, the comparable
interests therein.
(d) "ISSUER" means a Person issuing Equity Interests.
(e) "OWNERSHIP INTEREST" of Pledgor shall mean Pledgor's
Equity Interest, and all other right, title and interest in any Issuer,
including those entities described on Schedule 1(b) (as amended from
time to time), together with (1) all dividends, proceeds, rents,
income, increase, profits and related rights, all sums or distributions
(whether made in cash, tangible or intangible
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property of any kind or character, or otherwise) due or to become due
to Pledgor, including all profits and income, and the accounts thereof,
all surplus and capital, and the accounts thereof, (2) all rights, if
any, in specific property of an Issuer, (3) the rights, if any, but not
the duty, to participate in the management and administration of an
Issuer's business and affairs, to require any information and account
of such Issuer's transactions and all other matters relating to the
business and financial condition of such Issuer, to inspect the books
and records of such Issuer, including federal, state and local income
tax returns, and to receive all allocations of loss, deduction, credit
and other tax benefits allocable to Pledgor from such Issuer, and (4)
any and all other rights, title and interest of Pledgor in each any
such Issuer and under such Issuer's organizational documents, in each
case whether now existing or hereafter acquired or created, together
with all products, proceeds, substitutions and additions of or to any
of the foregoing.
(f) "OBLIGATIONS" shall have the meaning set forth in Section
2 hereof.
(g) "PLEDGOR OBLIGATIONS" shall have the meaning set forth in
Section 2 hereof.
(h) "PROCEEDS" shall mean all consideration received when an
Ownership Interest and/or proceeds thereof are sold, exchanged,
collected or otherwise disposed of, both cash and non-cash, and
(without duplication of the definition of Ownership Interest) all
payments, dividends or distributions paid or payable on account of the
Ownership Interest.
2. Security. As security for the full and timely payment and/or
performance, as applicable, of the obligations and liabilities of Pledgor under
the Guaranty (collectively, the "OBLIGATIONS") and all other obligations of
Pledgor contained herein (collectively with the Obligations, the "PLEDGOR
OBLIGATIONS") in accordance with the respective terms thereof, Pledgor agrees
that Secured Party shall have, and hereby pledges, grants to and creates in
favor of Secured Party, a first-priority security interest, under the Uniform
Commercial Code as enacted in the State of New York (as amended from time to
time, the "CODE"), in and to all of Pledgor's right, title and interest, whether
now existing or hereafter arising, created or acquired in, to and under the
Collateral. In connection with the granting of such a security interest, Pledgor
hereby collaterally assigns, transfers and sets over unto Secured Party all of
Pledgor's right, title and interest, whether now existing or hereafter arising,
created or acquired in, to and under the Collateral.
3. Limitations on Secured Party's Obligations under the Organizational
Documents of Issuer. Pledgor acknowledges and agrees that this Agreement shall
not in any way obligate Secured Party Secured Party or any of its successors and
assigns to perform any of the now-existing or hereafter accruing obligations of
Pledgor under the organizational documents of any Issuer, and Pledgor agrees to
perform any and all obligations (including the payment of any and all
liabilities or assessments) of Pledgor thereunder, whether heretofore or
hereafter accruing or arising, all with the same effect as though this Agreement
had not been executed or delivered by Pledgor.
4. Provisions Applicable to the Collateral. The parties agree that, at
all times during the term of this Agreement, the following provisions shall be
applicable to the Collateral:
(a) Pledgor shall keep accurate and complete books and records
concerning the Collateral owned by it.
(b) Pledgor shall deliver to Secured Party any document,
instrument or security evidencing the Collateral and transfer powers
executed in blank. Secured Party shall have the right to appoint one or
more agents for the purpose of retaining physical possession of the
certificates representing or evidencing the Collateral, which may be
held (in the discretion of Secured Party) in the name of the Pledgor,
endorsed or assigned in blank or in favor of Secured Party, or any
nominee or nominees of Secured Party or any agent appointed by Secured
Party.
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(c) Secured Party shall have the right to review the books and
records of Pledgor pertaining to the Collateral and to copy the same
and make excerpts therefrom during normal business hours and at
reasonable intervals and upon reasonable notice.
(d) Promptly upon request of Secured Party from time to time,
Pledgor shall furnish Secured Party with information concerning the
Collateral as Secured Party may request, including copies of all
notices and communications with respect to each Issuer or its
properties, assets, operations or business which may be sent by Pledgor
to, or received by Pledgor from, such Issuer or any other Equity
Holders of any such Issuer.
(e) Prior to the occurrence of any Event of Default, Pledgor
shall have the right to exercise all voting, consent and other rights
under or pertaining to the Collateral owned by it pursuant to the
organizational documents of the applicable Issuer so long as such
rights are exercised in a manner that does not cause an Event of
Default.
(f) Pledgor shall provide Secured Party with certified copies
of its organizational documents. Pledgor shall not authorize or consent
to any amendment, revision or modification of its organizational
documents or the organizational documents of an Issuer that would
adversely affect Secured Party without first obtaining the written
consent of Secured Party, including any amendment that would (i) remove
any representative of an Issuer from management, (ii) limit, commence
or otherwise change the control and authority of Pledgor over the
management and operation of an Issuer, or (iii) except as expressly
permitted by the Loan Agreement, allow the admission of new or
substitute Equity Holders or the issuance of additional Equity
Interests in any Issuer.
(g) Except as may be permitted under the Loan Agreement,
neither Pledgor, Borrower nor any other Issuer shall permit, without
the prior written consent of Secured Party any other transaction that
would have the effect of diluting Pledgor's Ownership Interest in an
Issuer.
(h) Pledgor shall not wind up, liquidate or dissolve, or enter
into any transaction of reorganization, consolidation, amalgamation or
merger, and shall not cause or consent to any such act by an Issuer.
(i) Pledgor has and shall continue to have good and marketable
title to the Collateral from time to time owned or acquired by it, free
and clear of all Liens, except the security interest granted hereunder
and as permitted under the Loan Agreement. Pledgor shall defend such
title against the claims and demands of all Persons whomsoever.
(j) Pledgor shall not, without the prior written consent of
Secured Party, directly or indirectly (except as expressly permitted by
the Loan Agreement): (i) borrow against the Collateral owned by it
other than pursuant to the Loan Documents, (ii) create, incur, assume
or suffer to exist any Lien with respect to any of the Collateral owned
by it, except the security interest granted hereunder, (iii) sell,
transfer, assign or otherwise dispose of any of the Collateral owned by
it, (iv) permit any direct or indirect sale, transfer, assignment or
other disposition of any Equity Interest in an Issuer or in any Equity
Holder of an Issuer or permit the admission of new or substitute Equity
Holders in an Issuer or in any Equity Holder of an Issuer, (v) permit
any levy or attachment to be made against any of the Collateral owned
by it except any levy or attachment relating to the Loan Documents, or
(vi) permit any financing statement to be on file with respect to any
of the Collateral owned by it, except financing statements in favor of
Secured Party.
(k) Pledgor shall faithfully preserve and protect Secured
Party's security interest in the Collateral owned by it and shall, at
its own cost and expense, cause said security interest to be perfected
and to continue to be perfected, and for such purpose Pledgor shall
from time to time at the request of Secured Party execute and file or
record, or cause to be filed or recorded, or
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authorize the filing and recording of, such instruments, documents and
notices, including financing statements, amendments and continuation
statements with respect thereto, as Secured Party may deem necessary or
advisable from time to time in order to perfect and to continue as
perfected said security interest. Pledgor shall do all such other acts
and things and execute and deliver all such other instruments and
documents, including further security agreements, pledges and
assignments, as Secured Party may deem necessary or advisable from time
to time in order to perfect, preserve and continue as perfected the
priority of said security interest as a security interest in the
Collateral prior to the rights of all other Persons therein or thereto
(subject to liens permitted under the Loan Agreement). Pledgor,
Borrower and each other Issuer that from time to time may execute an
acknowledgement in the form attached hereto hereby agree that Borrower
and each such other Issuer shall follow all good faith instructions of
Secured Party with respect to the Collateral, including with respect to
the delivery of Proceeds and/or the sale, transfer, assignment,
conveyance or other disposition of the Collateral, and that this
provision is intended to cede "CONTROL" of the Collateral for purposes
of the Code to the extent that the term "control" applies to collateral
of the same type as the Collateral.
(l) Pledgor does hereby irrevocably constitute and appoint
Secured Party its true and lawful attorney, coupled with the interest
created hereby, with full power of substitution, for it and in its
name, place and stead, to ask, demand, collect, receive, receipt for,
xxx for, compound and give acquittance for any and all sums or
properties that may be or become due, payable or distributable in
connection with or with respect to the Collateral owned by it, with
full power to settle, adjust or compromise any claim thereunder or
therefor as fully as Pledgor could do, and to endorse or sign the name
of Pledgor on all negotiable instruments and any other commercial paper
given in payment or in part payment thereof, and all documents of
satisfaction, discharge or receipt required or requested in connection
therewith, and in its discretion to file any claim or take any other
action or proceeding, either in its own name or in the name of Pledgor,
or otherwise, that Secured Party may deem necessary or appropriate to
collect or otherwise realize upon any and all of such Collateral, or
which may be necessary or appropriate to protect and preserve the
right, title and interest of Secured Party in and to such Collateral
and the security intended to be afforded hereby.
5. Representations and Warranties. In addition to, and not in
diminution of, the representations and warranties related to Pledgor that are
set forth in the Loan Agreement and the Guaranty, all of which are hereby
incorporated herein by reference, Pledgor hereby represents and warrants to
Secured Party as follows:
(a) Pledgor has good, valid and marketable title to the
Collateral set forth on Schedule 1(b) as being owned by Pledgor, free
and clear of all Liens (other than liens permitted under the Loan
Agreement). Schedule 1(b) hereto is true, correct and complete in all
respects.
(b) This Agreement and the pledge and delivery of the
Collateral to Secured Party, together with stock powers or other
instruments executed in blank, creates a duly perfected security
interest in the Collateral owned by Pledgor in Secured Party's favor
and no financing statement, mortgage or security agreement covering any
of the Collateral other than in respect of Secured Party is on file in
any public office, other than those covering Permitted Liens.
(c) There is no contract or agreement in effect with respect
to Pledgor and Issuer listed on Schedule 1(b) that would in any manner
impair or prohibit the terms of this Agreement or the assignment of the
Collateral as provided hereunder.
(d) Pledgor's jurisdiction of organization, principal place of
business, business entity type and chief executive office are as set
forth in the introductory paragraph of this Agreement.
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The representations and warranties set forth in this Section 5
shall survive the execution, delivery and performance of this Agreement until
the date on which all of the Obligations under the Loan Documents have been
indefeasibly paid and performed in full.
6. Remedies.
(a) In the event that any Event of Default shall occur, then
and in such event, Secured Party shall have such rights and remedies in
respect to the Collateral or any part thereof as are provided for
secured parties by the Code and such other rights and remedies in
respect thereof which it may have at law or in equity or under this
Agreement, including the right to acquire Pledgor's Equity Interests in
any or all Issuers pursuant to an assignment of such Equity Interests,
and, in such event, the party acquiring same shall have the right, but
not the obligation, to be admitted as an Equity Holder in each
applicable Issuer, with respect to each such Equity Interest, and the
right to take possession of the same and to sell all or any portion of
the Collateral at public or private sale, after ten (10) days prior
written notice (which is hereby acknowledged to be a commercially
reasonable time period), at such place or places and at such time or
times and in such manner and upon such terms, whether for cash or on
credit, as Secured Party may determine, as if all Pledgor Obligations
were immediately due and payable.
(b) No single or partial exercise by Secured Party of any
right, remedy, or power hereunder or under the Guaranty, or under any
other document or agreement executed in connection herewith or
therewith, shall preclude any other or future exercise of any other
right, remedy or power. No right, power or remedy of Secured Party as
provided hereunder or under the Guaranty or the Loan Agreement or any
other Loan Document is intended to be exclusive of any other right,
power, or remedy of Secured Party, but each and every such right, power
and remedy shall be cumulative and concurrent and in addition to any
other right, power or remedy available to Secured Party now or
hereafter existing at law or in equity and may be pursued separately,
successively or together against Pledgor or any endorser, co-maker,
surety or guarantor of the Pledgor Obligations, or any one or more of
them, at the discretion of Secured Party. The delay or failure of
Secured Party to exercise any such right, power or remedy shall in no
event be construed as a waiver or release thereof.
(c) Upon any sale of any of the Collateral, subject to
applicable law, (i) Secured Party may bid for the Collateral being sold
and, upon compliance with the terms of sale, may hold, retain and
possess and dispose of such Collateral in its own absolute right
without further accountability and may, in paying the purchase money
therefor, discharge a portion of the Pledgor Obligations in an amount
equal to such purchase price in lieu of cash in payment of the amount
that shall be payable thereon; (ii) Secured Party may make and deliver
to the purchaser or purchasers a good and sufficient instrument of
assignment and transfer of the Collateral sold; (iii) if so requested
by Secured Party or by any purchaser, Pledgor shall ratify and confirm
any such sale or transfer by executing and delivering to Secured Party
or such purchaser all bills of sale, instruments of assignment and
transfer and releases as may be designated in any such request; (iv)
all right, title, interest, claim and demand whatsoever, either at law
or in equity or otherwise, of Pledgor of, in and to the Collateral so
sold shall be divested and such sale shall be a perpetual bar both at
law and in equity against Pledgor, its successors and assigns, and
against any and all Persons claiming or who may claim the property sold
or any part thereof from, through or under Pledgor, its successors or
assigns, or such Persons; and (v) the receipt of Secured Party shall be
a sufficient discharge to the purchaser or purchasers at such sale for
his, its or their purchase money, and such purchaser or purchasers, and
his, its or their successors and assigns, shall not, after paying such
purchase money and receiving such receipt of Secured Party, be
obligated to see to the application of such purchase money or be in any
way answerable for any loss, misapplication or non-application thereof.
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(d) After notice of an Event of Default has been given to
Pledgor, Pledgor shall cause all Proceeds collected by it to be
delivered to Secured Party forthwith upon receipt, in the original form
in which received, bearing such endorsements or assignments by Pledgor
as may be necessary to permit collection thereof by Secured Party and
for such purpose Pledgor hereby irrevocably authorizes and empowers
Secured Party, its officers, employees and authorized agents to endorse
and sign the name of Pledgor on all checks, drafts, money orders or
other media of payments so delivered and such endorsements or
assignments shall, for all purposes, be deemed to have been made by
Pledgor prior to any endorsement or assignment thereof by Secured
Party. Secured Party may use any convenient or customary means for the
purpose of collecting such checks, drafts, money orders or other media
of payment. Each Issuer is hereby directed to deliver Proceeds in
accordance herewith.
(e) Secured Party shall have the right at any time after an
Event of Default has occurred (i) to take over and direct collection of
the Collateral, (ii) to take control of the Collateral, including
exercising all voting, consent and other rights under or pertaining to
the Collateral and (iii) to transfer all or any part of the Collateral
into the name of Secured Party or its nominee.
(f) To the extent that it may lawfully do so, Pledgor agrees
that it will not at any time insist upon, or plead, in any manner
whatsoever claim or take benefit or advantage of, any appraisement,
valuation, stay, extension or redemption laws, or any law permitting it
to direct the order in which the Collateral or any part thereof shall
be sold, now or at any time hereafter in force, which may delay,
prevent or otherwise affect the performance or enforcement of this
Agreement or the Pledgor Obligations, and Pledgor hereby expressly
waives all benefit or advantage of any such laws and covenants that it
shall not hinder, delay or impede the execution or any power granted or
delegated to Secured Party in this Agreement, but will suffer and
permit the execution of every such power as though no such laws were in
force.
(g) Pledgor understands that compliance with Federal or state
securities laws (including the U.S. Securities Act of 1933, as amended)
may limit the course of conduct of Secured Party if Secured Party were
to attempt to dispose of all or any part of the Collateral and may also
limit the extent to which or the manner in which any subsequent
transferee of the Collateral may dispose of the same. Pledgor agrees
that in any sale of any of the Collateral, Secured Party is hereby
authorized to comply with any such limitation or restriction in
connection with such sale as it may be advised by counsel is necessary
in order to (i) avoid any violation of applicable law (including
compliance with such procedures as may restrict the number of
prospective bidders and purchasers and/or further restrict such
prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing for their own account for investment and
not with a view to the distribution or resale of such Collateral) or
(ii) obtain any required approval of the sale or of the purchaser by
any governmental authority. Pledgor further agrees that such compliance
shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, and that Secured Party
shall not be liable or accountable to Pledgor for any discount allowed
by reason of the fact that the Collateral is sold in compliance with
any such limitation or restriction.
(h) Secured Party shall be under no obligation to delay a sale
or disposition of any of the Collateral to permit Borrower and/or the
Equity Holder of such Collateral to register it for public sale under
the U.S. Securities Act of 1933, as amended, or under any applicable
state securities or blue-sky laws, provided that no such sale or
disposition shall be in violation of applicable securities laws.
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(i) The proceeds of any sale of all or any portion of the
Collateral shall be applied by Secured Party as set forth in the Loan
Agreement with respect to proceeds of payments received thereunder.
7. Proceeds. If any Distributions (as defined below) are permitted
pursuant to the Loan Agreement, all payments and Distributions on account of the
Collateral and all other Proceeds may be paid to the respective Equity Holder.
If a Distribution would not be in compliance with the Loan Agreement, Pledgor
shall take all such action necessary to ensure that any such Distributions are
made directly to Secured Party (provided that this shall not cure any Default
generated by such Distribution). All sums paid to Secured Party hereunder shall
be applied by Secured Party to the Pledgor Obligations as set forth in Section
6(i). For purposes hereof, "Distributions" shall include any and all payments
made by an Issuer to the Pledgor, including (a) distributions of Proceeds, (b)
payments and distributions that result from any financing or refinancing of any
real or personal property or from the sale, disposition, taking or loss
(including the proceeds from any eminent domain proceeding or conveyance in lieu
thereof or from casualty insurance) of any property owned by an Issuer) and/or
(c) any payments on account of any intercompany obligations between Pledgor and
any Issuer.
8. Limitation on Liability of Secured Party. Neither Secured Party nor
any of its officers, directors, employees, agents or counsel shall be liable for
any action taken or omitted to be taken by it or them hereunder or in connection
herewith, except for its or their gross negligence or willful misconduct.
Pledgor shall at its own expense, and does hereby agree to, protect, indemnify,
reimburse, defend and hold harmless Secured Party and its directors, officers
and other Affiliates, agents, employees, attorneys, successors and assigns
(collectively, including Secured Party, the "Indemnified Parties") from and
against any and all liabilities (including strict liability), losses, suits,
proceedings, settlements, judgments, orders, penalties, fines, liens,
assessments, claims, demands, damages, injuries, obligations, costs,
disbursements, expenses or fees, of any kind or nature (including reasonable
attorneys' fees and expenses paid or incurred in connection therewith) arising
out of or by reason of any breach or violation by Pledgor of this Agreement.
9. Miscellaneous.
(a) Headings. The headings in this Agreement are for
convenience of reference only and are not part of the substance of this
Agreement.
(b) Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon either
party hereto or any other Person shall be given and shall be effective
as provided in the Guaranty.
(c) Successors and Assigns. This Agreement is for the benefit
of Secured Party and Secured Party's successors and assigns, and in the
event of a permitted assignment by Secured Party of the Obligations or
the Pledgor Obligations, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the Obligations so assigned, may
be transferred with such Obligations or Pledgor Obligations. Pledgor
waives notice of any transfer or assignment of the Obligations or
Pledgor Obligations, or any part thereof, and agrees that failure to
give notice will not affect the liabilities of Pledgor hereunder. This
Agreement is binding not only on Pledgor, but also on its successors
and assigns; provided, however, that Pledgor shall not assign or
subject to any lien any interest of Pledgor hereunder without the prior
consent of Secured Party.
(d) Modification. No agreement unless in writing and signed by
an authorized officer of Secured Party and Pledgor and no course of
dealing between the parties hereto shall be effective to change, waive,
terminate, modify, discharge, or release in whole or in part any
provision of this Agreement.
(e) No Waiver. No waiver of any rights or powers of Secured
Party or consent by it shall be valid unless in writing signed by an
authorized officer of Secured Party and then such
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waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. Any waiver by Secured Party
of any provision of this Agreement or the Guaranty or any other
document or instrument delivered by Pledgor to Secured Party
(collectively, the "Pledgor Documents") or of any right, remedy or
option hereunder shall not be controlling, nor shall it prevent or
estop Secured Party from thereafter enforcing such provision, right,
remedy or option, and the failure or refusal of Secured Party to insist
in any one or more instances upon the strict performance of any of the
terms or provisions of the Pledgor Documents by Pledgor shall not be
construed as a waiver or relinquishment for the future of any such term
or provision, but the same shall continue in full force and effect, it
being understood and agreed that Secured Party's remedies and options
under the Pledgor Documents are and shall be cumulative and are in
addition to all other rights, remedies and options of Secured Party in
law or in equity or under the Guaranty or the Loan Agreement or
otherwise. The failure or delay of Secured Party to avail itself of any
of its rights, remedies and powers shall not be construed or deemed to
be a waiver thereof.
(f) Continuing Agreement. This Agreement and all of Pledgor's
representations, warranties and covenants herein and therein, Secured
Party's security interest in the Collateral and all of the rights,
powers and remedies of Secured Party hereunder shall continue in full
force and effect until the date on which all of the Obligations and
Pledgor Obligations have been indefeasibly paid to and performed in
full in favor of Secured Party. All provisions herein providing for the
indemnification of Secured Party and other Persons, for the repayment
by Pledgor of costs and expenses incurred by Secured Party, and any
other provisions specified herein to survive, shall survive the closing
of the transactions described in the recitals hereto until the
indefeasible payment in full of the Pledgor Obligations.
(g) Further Assurances. Pledgor, at Pledgor's sole expense,
will promptly execute and deliver to Secured Party upon Secured Party's
request all such other and further documents, agreements, and
instruments reasonably necessary for compliance with or accomplishment
of the agreements of Pledgor under this Agreement.
(h) Submission to Jurisdiction, Service of Process, Waiver of
Jury Trial.
i. All disputes arising out of or relating to
this Agreement and all actions to enforce
this Agreement shall be adjudicated in the
State courts of New York or the federal
courts sitting in the City of New York, or
the courts of the District of Montreal and
Province of Quebec (and for purposes of any
action in Canada, Section 2(k) in Schedule I
of the Loan Agreement is hereby incorporated
herein by reference) and Pledgor and (by its
acceptance hereof) Secured Party each hereby
irrevocably submits to the jurisdiction of
such courts in any suit, action or
proceeding arising out of or relating to
this Agreement or in any action to enforce
this Agreement. So far as is permitted under
applicable law, this consent to personal
jurisdiction shall be self-operative and no
further instrument or action, other than
service of process in one of the manners
specified in this section, or as otherwise
permitted by law, shall be necessary in
order to confer jurisdiction over Pledgor
and/or Secured Party in any such court.
ii. Provided that service of process is effected
upon Pledgor or Secured Party in one of the
manners hereafter specified or as otherwise
permitted by law, Pledgor and (by its
acceptance hereof) Secured Party irrevocably
waives, to the fullest extent permitted by
law, and agrees not to assert, by
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way of motion, as a defense or otherwise (i)
any objection which it may have or may
hereafter have to the laying of the venue of
any such suit, action or proceeding brought
in any court which is mentioned in this
section or (ii) any claim that any such
suit, action or proceeding brought in such a
court has been brought in an inconvenient
forum. Provided that service of process is
effected upon Pledgor in one of the manners
specified in this section or as otherwise
permitted by law, Pledgor agrees that any
final judgment from which Pledgor has not or
may not appeal or further appeal in any such
suit, action or proceeding brought in such a
court shall be conclusive and binding upon
Pledgor and may, so far as is permitted
under the applicable law, be enforced in any
domestic or foreign courts to the
jurisdiction of which Pledgor is subject.
iii. Pledgor and (by its acceptance hereof)
Secured Party hereby consents to process
being served in any suit, action or
proceeding relating to this Agreement either
by (i) the mailing of a copy thereof by
registered or certified mail, postage
prepaid, return receipt requested, to
Pledgor and Secured Party, as applicable, at
the address referenced in Section 9(b)
hereof or (ii) personal delivery of a copy
thereof to Pledgor and Secured Party, as
applicable, on a Business Day at the address
referenced in Section 9(b) hereof.
iv. Nothing in this Section shall affect the
right of Secured Party or Pledgor to serve
process in any manner permitted by law or
limit the right of Secured Party pursuant to
applicable law to bring proceedings against
the other in the courts of any jurisdiction
or jurisdictions.
V. PLEDGOR AND, BY ITS ACCEPTANCE HEREOF,
SECURED PARTY HEREBY IRREVOCABLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
(i) Interpretation. References to articles, sections and
schedules are, unless specified otherwise, references to articles,
sections and exhibits of this Agreement. Words of any gender shall
include each other gender. Words in the singular shall include the
plural and words in the plural shall include the singular. The words
"herein", "hereof", "hereunder" and other similar compounds of the word
"here" shall refer to the entire Agreement and not to any particular
provision or section. The words "include", "includes" and "including"
shall be interpreted as if followed by the words "without limitation".
The word "or" is not exclusive and the use of the word "and" may be
conjunctive or disjunctive in the sole and absolute discretion of
Secured Party. The captions of articles, sections and subsections of
this Agreement are for convenient reference only, and shall not affect
the construction or interpretation of any of the terms and provisions
set forth herein.
(j) Waiver of Notice. Pledgor hereby waives notice of
acceptance of this Agreement, notice of nonpayment of the Pledgor
Obligations, demand, presentment, protest and notice thereof with
respect to any and all instruments, notice of Collateral received or
delivered, or any other action taken in reliance hereon and all other
demands and notices of any description, except such as are expressly
provided for herein or which by applicable law may not be waived
9
on the date hereof. All other waivers set forth in Section 9 of the
Guaranty are hereby incorporated herein by reference.
(k) Reimbursement. Without duplication of any obligations
under any Loan Document, Pledgor shall, or shall cause its Affiliates
to, pay or reimburse Secured Party for all fees, costs and expenses
paid or incurred by Secured Party in connection with the preparation,
negotiation and enforcement hereof.
(l) Governing Law. This Agreement shall be deemed to be a
contract under the Laws of the State of New York, without regard for
choice of laws principles, except as set forth in Section 5-1401 of the
New York General Obligations Law. If an action under this Agreement is
brought in Canada, as described in Section 9(h)i above, Pledgor agrees
to acknowledge that New York law governs.
[Signature Page is next]
10
[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]
IN WITNESS WHEREOF, Pledgor, by its officer thereunto duly authorized,
has executed and delivered this Agreement as of the day and year first above
written.
ADSERO CORP.
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
Title:
11
ACKNOWLEDGEMENT OF TECKNOLASER USA INC.
Capitalized terms used in this Acknowledgement without definition have
the meanings ascribed to them in the Pledge and Security Agreement by Adsero
Corp., a Delaware corporation, in favor of Barrington Bank International
Limited, as secured party (the "Pledge Agreement").
The undersigned, a Delaware corporation (hereinafter, "Issuer"), hereby
acknowledges, and approves as complying with the provisions of its
organizational documents, (a) the grant by Pledgor to Secured Party of a
security interest in the Collateral described in the Pledge Agreement, (b) the
assignment and transfer of the Collateral (including without limitation
Pledgor's status as an Equity Holder) to Secured Party in accordance with the
provisions of the Pledge Agreement, and (c) any further assignment of the
Collateral by Secured Party in realization thereon. The undersigned has marked
its register of Equity Holders to reflect such grant. The undersigned hereby
agrees to admit any transferee of the Collateral as a stockholder with all of
the rights and privileges appurtenant thereto.
The undersigned hereby acknowledges the terms applicable to it
contained in the Pledge Agreement and agrees to comply with such terms
(including without limitation as set forth in Sections 6(d) and (e)) and to do
(or refrain from doing, as applicable) all such acts so as to enable Secured
Party to enforce the rights granted in the Pledge Agreement by Pledgor.
DATED the 26th day of January, 2005.
TECKNOLASER USA INC.
By: /s/ Xxxx Xxxxxxxx
-----------------
Name: Xxxx Xxxxxxxx
Title:
12
ACKNOWLEDGEMENT OF YAC CORP.
Capitalized terms used in this Acknowledgement without definition have
the meanings ascribed to them in the Pledge and Security Agreement by Adsero
Corp., a Delaware corporation, in favor of Barrington Bank International
Limited, as secured party (the "Pledge Agreement").
The undersigned, a Delaware corporation (hereinafter, "Issuer"), hereby
acknowledges, and approves as complying with the provisions of its
organizational documents, (a) the grant by Pledgor to Secured Party of a
security interest in the Collateral described in the Pledge Agreement, (b) the
assignment and transfer of the Collateral (including without limitation
Pledgor's status as an Equity Holder) to Secured Party in accordance with the
provisions of the Pledge Agreement, and (c) any further assignment of the
Collateral by Secured Party in realization thereon. The undersigned has marked
its register of Equity Holders to reflect such grant. The undersigned hereby
agrees to admit any transferee of the Collateral as a stockholder with all of
the rights and privileges appurtenant thereto.
The undersigned hereby acknowledges the terms applicable to it
contained in the Pledge Agreement and agrees to comply with such terms
(including without limitation as set forth in Sections 6(d) and (e)) and to do
(or refrain from doing, as applicable) all such acts so as to enable Secured
Party to enforce the rights granted in the Pledge Agreement by Pledgor. In
furtherance of the preceding sentence, the Issuer will comply with instructions
originated by Lender without further consent by the Pledgor.
DATED the 26th day of January, 2005.
YAC CORP.
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
Title:
13
SCHEDULE 1(b)
EQUITY INTERESTS
Total Authorized Capital Owned by Other Persons
Capital/ Description Equity Interests ------------------------------
Issuer of Interests Owned by Pledgor Owner Capital Owned
-------------------- -------------------- -------------------- ------- -------------
YAC CORP. 10,000,000 shares of 2,101,000 shares of None N/A
common stock,$.001 common stock
par value
-------------------- -------------------- -------------------- ------- -------------
Tecknolaser USA Inc. 1,500 shares of 100 shares of common None N/A
common stock, no par stock
value
-------------------- -------------------- -------------------- ------- -------------
14
STOCK TRANSFER POWER
For value received, the undersigned, Adsero Corp. a Delaware corporation, hereby
sells, transfers and assigns to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
all of its right, title and interest in and to _________ shares of the
___________________________ stock in Tecknolaser USA Inc., a Delaware
corporation (the "Company"), evidenced by share certificate No(s). __________.
The undersigned hereby appoints
________________________________________________________________________________
as its attorney-in-fact (with full power of substitution in the premises) to
record such transfer in the books and records of the Company.
Dated _______________________, 200___
ADSERO CORP.
By: _____________________________
Name:
Title:
15
STOCK TRANSFER POWER
For value received, the undersigned, Adsero Corp. a Delaware corporation, hereby
sells, transfers and assigns to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
all of its right, title and interest in and to _________ shares of the
___________________________ stock in YAC CORP., a Delaware corporation (the
"Company"), evidenced by share certificate No(s). __________.
The undersigned hereby appoints
________________________________________________________________________________
as its attorney-in-fact (with full power of substitution in the premises) to
record such transfer in the books and records of the Company.
Dated _______________________, 200___
ADSERO CORP.
By: _____________________________
Name:
Title:
16
