EXHIBIT 10(qq)
PLEDGE AGREEMENT
PLEDGE AGREEMENT ("Pledge Agreement") made as of the 16th day of June, 1997,
between Xxxxxx X. Xxxxx ("Pledgor"), and CompuCom Systems, Inc., a Delaware
corporation ("Secured Party").
1. Definitions. In addition to the terms defined elsewhere in this Pledge
Agreement, the following terms shall have the following meanings for
purposes of this Pledge Agreement:
(a) The term "Event of Default" shall have the meaning ascribed thereto in
Section 9 of this Pledge Agreement.
(b) The term "Note" means and includes that certain Note, dated of even
date herewith, in the original principal amount of $661,251.00, which
Pledgor has executed, or is the process of executing payable to the
order of Secured Party, together with any and all concurrent or
subsequent extensions, amendments, or modifications thereto.
(c) The term "Obligations" means and includes all obligations of Pledgor
to Secured Party pursuant to the terms of the Note and this Pledge
Agreement.
(d) The term "Pledged Shares" means shares of common stock, par value $.01
per share, of Secured Party being purchased by Pledgor with a portion
of the proceeds of the Note pursuant to that certain Stock Option
Agreement dated July 14, 1987 between Machine Vision International
Corporation, a Michigan corporation and predecessor in interest of the
Company, between Pledgor and Secured Party.
2. Pledge. Upon the terms hereof, Pledgor hereby pledges and grants to
Secured Party a lien on and security interest (the "Security Interest") in
and to all of the following instruments and property of Pledgor (all of the
following being herein sometimes called the "Collateral"):
(a) The pledged shares together with all certificates,options, rights or
other distributions issued as an addition to, in substitution or in
exchange for, or on account of, any such shares (collectively, the
"Stock");
(b) All securities and other property, rights or interests of any
description at any time issued or issuable as an addition to, in
substitution or exchange for, with respect
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to, incident to or in lieu of such shares described in Section 2(a)
hereof or with respect to, incident to or in lieu of the Collateral
(i) due to any dividend, stock-split, stock dividend or distribution
on dissolution, on partial or total liquidation, or other corporate
reorganization or for any other reason; (ii) in connection with a
reduction of capital, capital surplus or paid-in surplus; or (iii) in
connection with any spin-off, split-off, reclassification,
readjustment, merger, consolidation, sale of assets, combination of
shares or any other plan of distribution affecting the companies which
have issued the shares described in Section 2(a) hereof;
(c) Any and all proceeds, monies, income and benefits arising from or by
virtue of, and all dividends and distributions (cash or otherwise)
payable and/or distributable with respect to, all or any of the shares
or other securities and rights and interests described in clauses (a)
through (c) of this Section 2.
3. Obligations Secured. This Pledge Agreement and the Security Interest
granted hereby secure the prompt satisfaction of the Obligations.
4. Warranties. Pledgor represents and warrants that each of the following
statements is true and correct: (a) Pledgor is the legal and beneficial
owner of the Stock; (b) the Collateral is owned by Pledgor free of any
pledge, mortgage, hypothecation, lien, charge, encumbrance or security
interest or purchase right or option on the part of any third person in
such Collateral, except the Security Interest; (c) Pledgor has the full
power, authority and legal right to transfer and pledge the Collateral free
of any encumbrances and without obtaining the consent of any other person
or entity; and (d) upon delivery of the Collateral to Secured Party, this
Pledge Agreement will create a valid and perfected first priority lien
upon, and security interest in, the Collateral and the proceeds thereof,
securing the payment of the Obligations. The delivery at any time by
Pledgor to Secured Party of Collateral shall constitute a representation
and warranty by Pledgor under this Pledge Agreement that, with respect to
the Collateral and each item thereof, Pledgor is the owner of the
Collateral and the matters heretofore warranted in clauses (a) through (d)
of this Section 4 are true and correct.
5. Covenants. Pledgor covenants to do or not to do, as the case may be, each
of the following; provided, however, in the case of a negative covenant,
Pledgor will not undertake any of the proscribed activities without the
prior written consent of Secured Party: (a) from time to time to do all
other acts or things as Secured Party may reasonably request in order more
fully to evidence and perfect the Security Interest; (b) after the
occurrence of an Event of Default, to promptly pay to Secured Party the
amount of all court costs and reasonable attorneys' fees incurred by
Secured Party hereunder; and (c) except as otherwise provided herein, to
promptly deliver to Secured Party, in the exact form received, all
securities and other property described in Section 2(b) and Section 2(c)
hereof which come into the possession, custody or control of Pledgor.
Pledgor further
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covenants and agrees that, without the prior written consent of Secured
Party, Pledgor shall not assign or transfer Pledgor's rights in the
Collateral, or create any other lien or security in or otherwise encumber
any of the Collateral, or permit any of the Collateral to ever be or become
subject to any lien, attachment, execution, sequestration, other legal or
equitable process, or any lien or encumbrance of any kind. Notwithstanding
anything contained in the preceding sentence to the contrary, Pledgor shall
be free to sell the Stock provided that Pledgor complies with all
applicable laws in effecting such sale and in the event of any such sale
the shares of Stock will be released from the Security Interest created
pursuant to this Pledge Agreement upon repayment to Secured Party of the
prorata loan amount attributable to such shares set forth in the Term Note
(appropriately adjusted to reflect stock splits, subdivisions, combinations
and similar transactions), in cash, for each share of Stock sold. All
assignments and endorsements by Pledgor shall be in such form and substance
as may be satisfactory to Secured Party. Should any covenant, duty or
agreement of Pledgor fail to be performed in accordance with its terms
hereunder, Secured Party may, but shall never be obligated to, perform or
attempt to perform such covenant, duty or agreement on behalf of Pledgor,
and any amount expended by Secured Party in such performance or attempted
performance shall become part of the Obligations, except to the extent
prohibited by applicable law, and Pledgor agrees to pay such amount
promptly to Secured Party.
6. Adjustments and Distributions Concerning Collateral. Should the Collateral,
or any part hereof, ever be converted in any manner by its issuer into
another type of property or any money or other proceeds ever be paid or
delivered to Pledgor as a result of Pledgor's rights in the Collateral,
then in any such event (except as provided in Section 7 hereof), all such
property, money and other proceeds shall immediately be and become part of
the Collateral, and Pledgor covenants to forthwith pay and deliver all such
property, money or other proceeds so received to Secured Party; and, if
Secured Party deems it necessary and so requests, to endorse properly or
assign any and all such other proceeds to Secured Party and to deliver to
Secured Party and all such other proceeds which require perfection by
possession under the Uniform Commercial Code of the State of Texas or other
appropriate jurisdiction (the "UCC"). With respect to any of such property
of a kind requiring an additional security agreement, financing statement
or other writing to perfect a security interest therein in favor of Secured
Party, Pledgor will forthwith execute and deliver to Secured Party whatever
Secured Party shall deem necessary or proper for such purpose.
7. Cash Dividends and Voting Rights. Unless an Event of Default has occurred
and shall not have been waived by Secured Party, Pledgor is entitled (a) to
exercise all voting rights with respect to the Collateral and (b) to
receive for his own use cash dividends on the Collateral. Upon the
occurrence of an Event of Default, Secured Party may exercise all voting
rights with respect to the Collateral subject to all applicable rules and
regulations
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and may require any such cash dividends to be delivered to Secured Party as
additional Collateral hereunder or applied toward the satisfaction of the
Obligations.
8. Registration of Collateral in Name of Secured Party. Upon the occurrence
of an Event of Default, Secured Party, at its option, may have any or all
of the Collateral registered in its name or that of its nominee.
Immediately and without further notice, upon the occurrence of an Event of
Default, whether or not the Collateral has been registered in the name of
Secured Party or its nominee, Secured Party or its nominee shall have, with
respect to the Collateral, the right to exercise all voting rights and all
conversion, exchange, subscription or other rights, privileges or options
pertaining thereto including, without limitation, the right to exchange any
or all of the Collateral upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof, or upon the
exercise by such issuer of any right, privilege, or option pertaining to
any of the Collateral, and, in connection therewith, to deliver any of the
Collateral to any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine, all
without liability except to account for property actually received by it;
but Secured Party 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, delay in doing so, or depreciation in the value of the Collateral
by reason of doing so. Thereafter, at such time as (a) all Events of
Defaults have been cured, and (b) there exists no condition, event or act
which, with the giving of notice or lapse of time, or both, would
constitute an Event of Default, then the right to exercise all voting
rights with respect to the Collateral shall revert to Pledgor.
9. Events of Default. The occurrence of any one or more of the following
shall constitute an Event of Default: (a) the failure of Pledgor to make
timely payment of any portion of the principal or interest of the Note or
any portion of the Obligations when due subject to any applicable cure
periods: (b) the failure of Pledgor to perform fully, faithfully and
promptly any material agreements, covenants and conditions contained in
this Pledge Agreement; (c) the levy against the Collateral, or any
substantial part thereof, or any execution, attachment, sequestration,
distraint warrant or other like or similar writ or the attachment to the
Collateral of any lien other than the Security Interest; (d) the entry of a
decree or order for relief by a court having jurisdiction in the premises
in respect of Pledgor in an involuntary case under the United States
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law, or appointing
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of Pledgor or of any substantial part of Pledgor's
property, or ordering the winding-up or liquidation of the affairs of
Pledgor and the continuance of any such decree or order unstayed and in
effect for a period of thirty (30) consecutive days; or (e) the
commencement by Pledgor of a voluntary case under the United States
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or
the consent, by
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Pledgor to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of Pledgor for any substantial part of Pledgor's property, or the
making by Pledgor of any assignment for the benefit of creditors, or the
inability of Pledgor generally to pay his debts as such debts become due,
or the taking of any action by Pledgor in furtherance of any of the
foregoing.
10. Remedies. Upon the occurrence of an Event of Default, Secured Party may
then exercise any and all rights to which it is entitled under the UCC or
otherwise. Pledgor hereby grants to Secured Party an irrevocable proxy
coupled with an interest to exercise as to such Collateral, upon the
occurrence of an Event of Default, all rights, powers and remedies of an
owner and all of the rights, powers and remedies hereinabove set forth, the
proxy herein granted to exist until all of the Obligations have been paid
and performed in full.
11. Application of Proceeds. The proceeds of any disposition of the Collateral
or other action by Secured Party shall be applied (a) first, to the cost
and expenses incurred in connection therewith or incidental thereto or to
the care or safekeeping of any of the Collateral or in any way relating to
the rights of Secured Party hereunder, including reasonable attorneys' fees
and legal expenses; (b) then, to the satisfaction of the Obligations in
such order and to such portions as Secured Party may elect; (c) then, to
the payment of any other amounts required by applicable law; and (d) then,
to Pledgor to the extent of any surplus proceeds. Secured Party shall be
under no duty to exercise or to withhold the exercise of any of the rights,
powers, privileges and options expressly or implicitly granted to Secured
Party in this Pledge Agreement, and shall not be responsible for any
failure to do so or delay in so doing.
12. Notification of Sale. Reasonable notification of the time and place of any
public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is
to be made, shall be sent to Pledgor and to any other person entitled under
the UCC to notice; provided that if any of the Collateral threatens to
decline speedily in value or is of the type customarily sold on a
recognized market, Secured Party may sell or otherwise dispose of the
Collateral without notification, advertisement, or other notice of any
kind. It is agreed that notice sent or given not less than five (5)
calendar days prior to the taking of the action to which the notice relates
is reasonable notification and notice for the purposes of this paragraph.
13. Satisfaction of Obligations and Release of Collateral. Upon the
satisfaction in full of the Obligations, and the satisfaction of all
additional costs and expenses of Secured Party as provided herein, this
Pledge Agreement shall terminate, and Secured Party shall deliver to
Pledgor, at Pledgor's expense, such of the Collateral as shall not have
been sold or otherwise applied pursuant to this Pledge Agreement which
Secured Party shall have in its possession. In addition and
notwithstanding any provision contained in this Pledge
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Agreement to the contrary, Pledgor shall be entitled to obtain the release
of shares of Stock from the Security Interest created hereby by paying to
Secured Party the per share Purchase Price set forth in the Purchase
Agreement (appropriately adjusted to reflect stock splits, subdivisions,
combinations and similar transactions), in cash, for each share of Stock
which Pledgor desires be released from the terms hereof and upon receipt of
such payment, Secured Party will promptly release the applicable number of
shares of Stock to Pledgor subject, where applicable, to the terms of the
Purchase Option in the Purchase Agreement.
14. Notices. Any notice required or permitted by this Pledge Agreement shall
be deemed to have been given or made when deposited with a reputable
overnight delivery service, such as Federal Express, or in the United
States Mail, postage prepaid, certified mail, return receipt requested,
addressed to the parties at the addresses set forth opposite their
respective signatures below, or, if hand delivered, upon actual receipt.
15. Duties of Secured Party. Secured Party's duty with respect to any
Collateral now or hereafter in the possession of Secured Party is solely to
use reasonable care in the custody and preservation of the Collateral.
Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral if the Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property, it being understood that Secured Party shall not have any
responsibility for ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to
any Collateral or for informing Pledgor of such matters whether or not
Secured Party has or is deemed to have any knowledge of such matters.
Secured Party shall not be required to take any steps necessary to preserve
any rights in the Collateral against prior parties or to protect, perfect,
preserve or maintain any security interest given to secure the Collateral,
nor to invest any cash constituting Collateral in any account or security
or otherwise.
16. Indemnification. Pledgor hereby agrees to indemnify and to hold Secured
Party harmless from and against any loss (excluding any loss attributable
to a diminution in the value of the Stock), claim, demand or expense
(including attorneys' fees) by reason, or in any manner related to, the
Collateral, including any such claim as may arise by reason of any alleged
breach of warranty concerning the Collateral, by reason of the failure of
Pledgor to comply with any applicable state, federal or foreign statute,
rule, regulation, order or decree, or by reason of Secured Party's efforts
to enforce payment of the Obligations, including expenses incurred in
satisfying any applicable securities laws.
17. Expenses. Pledgor will upon demand pay to Secured Party the amount of any
and all reasonable expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, which Secured Party may incur in
connection with the custody or preservation of, or the sale of, collection
from or other realization upon, any of the
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Collateral, the exercise or enforcement of any of the rights of Secured
Party hereunder, or the failure by Pledgor to perform or observe any of the
provisions hereof.
18. Security Interest Absolute. All rights of Secured Party and the pledge and
Security Interest hereunder, and all obligations of Pledgor hereunder,
shall be absolute and unconditional in all respects and shall not be
released, diminished, impaired, or affected for any reason, including
without limitation the occurrence of any one or more of the following
events: (a) the taking or accepting of any other security or assurance for
any or all of the Obligations; (b) any change in the time, manner or place
of payment of, or in any other term of, all or any of the Obligations; (c)
any exchange, release, subordination, surrender, loss or nonperfection of
any other collateral at any time existing in connection with any or all of
the Obligations, or any release or amendment or waiver of or consent to
departure from any guaranty, or other security, for all or any of the
Obligations; (d) any neglect, delay, omission, failure, or refusal of
Secured Party to take or prosecute any action in connection with this
Pledge Agreement: (e) the insolvency or bankruptcy of Pledgor: or (f) any
other circumstance which might otherwise constitute a defense available to
a discharge of Pledgor in respect of the Obligations of Pledgor in respect
of this Pledge Agreement.
19. Waivers. Except as otherwise required by the terms hereof or by applicable
law, Pledgor hereby waives all notices, including but not limited to
demand, presentment for payment, notice of nonpayment, protest, notice of
protest, notice of Intent to accelerate, notice of acceleration and all
other notices.
20. Remedies Cumulative. The rights and remedies provided herein are
cumulative and are in addition to and not exclusive of any rights or
remedies provided by law, including, but without limitation, the rights and
remedies of a secured party under the UCC.
21. Amendment. This Pledge Agreement may be amended only by written instrument
signed by all parties.
22. Invalidity of Any Provision. The invalidity of any one or more phrases,
sentences, clauses, paragraphs or sections hereof shall not affect the
remaining portions of the Pledge Agreement, all of which are being inserted
conditionally on its being held legally valid. In the event that any one
or more of the phrases, sentences, clauses, paragraphs or sections
contained herein should be invalid, or should operate to render this Pledge
Agreement invalid, then this Pledge Agreement shall be construed as if such
invalid phrase or phrases, sentence or sentences, clause or clauses,
paragraph or paragraphs, or section or sections had not been inserted.
23. Assignment. This Pledge Agreement shall apply to, inure to the benefit of
and be binding upon and enforceable against the parties hereto and their
respective legal representatives,
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successors and assigns, except that the rights and obligations of Pledgor
contained herein shall not be assignable.
24. Governing Law. The substantive laws of the State of Texas shall govern the
validity, construction, enforcement and interpretation of this Pledge
Agreement, unless the laws of another state or jurisdiction require the
application of the laws of such state or jurisdiction. This Pledge
Agreement is performable in Dallas County, Texas.
IN WITNESS WHEREOF, the parties have executed this Pledge Agreement as of
the date and year first above written.
/s/ XXXXXX X. XXXXX
-------------------------------------------
Xxxxxx X. Xxxxx
Address:
SECURED PARTY:
Address: COMPUCOM SYSTEMS, INC.
0000 Xxxxxx Xxxx By: /s/ X. XXXXXX XXXXX
Xxxxxx, Xxxxx 00000 ----------------------------------------
Its: Sr. VP Finance, CFO
Stock Pledge Agreement - Page 8
