EXHIBIT 10.78
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, (the "Agreement"), is made and entered into in
Dallas County, Texas on this the 30/th/ day of September 1999, by and between
Polyphase Instrument Acquisition Corporation, a Pennsylvania corporation with
its principal place of business at 000 Xxxxxxxx Xxxxx Xxxx Xxxxxxxxxx,
Xxxxxxxxxxxx 00000 (hereinafter the "Pledgor"), and Polyphase Corporation a
corporation duly authorized and existing pursuant to the state of Nevada
(hereinafter the "Secured Party").
W I T N E S S E T H:
WHEREAS, Pledgor is indebted to the Secured Party pursuant to that certain
Subordinated Promissory Note dated of even date herewith in the original
principal amount of ONE MILLION DOLLARS ($1,000,000) and being due and payable
as therein provided (hereinafter the "Note"); and
WHEREAS, as a material inducement to the Secured Party to loan Pledgor the
sum of ONE MILLION DOLLARS ($1,000,000), pursuant to the terms and conditions
set forth in the Note and the Stock Purchase Agreement dated the date hereof
(the "Stock Purchase Agreement") between Maker and Payee, Pledgor has agreed to
pledge 20,000 shares of the common stock, (hereinafter the "Pledged Shares"),
one dollar par value, of Polyphase Instrument Co., (hereinafter "PIC"), a
corporation duly authorized and existing pursuant to the laws of the
Commonwealth of Pennsylvania with its principal place of business at 000
Xxxxxxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxxxxxxxxxxx 00000, to the Secured Party to
secure payment of the indebtedness evidenced by the Note;
WHEREAS, the Pledged Shares represent all of the shares purchased by
Pledgor from the Secured Party on even date herewith pursuant to the Stock
Purchase Agreement;
WHEREAS, the Secured Party has required that the Pledged Collateral (as
hereinafter defined) act as security for the payment and performance of any and
all obligations of Pledgor to the Secured Party under the Note and this
Agreement;
WHEREAS, Pledgor has deemed it to be in Pledgor's best interest to pledge
the Pledged Collateral to the Secured Party as security for the payment by
Pledgor of the indebtedness evidenced by the Note; and
WHEREAS, the parties desire to set forth in writing their agreement as to
the administration and disposition of the Pledged Collateral and certain other
matters as set forth herein;
NOW, THEREFORE, for and in consideration of the above stated premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confessed, the parties hereby agree as follows:
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1. Pledge. As collateral security for the payment and performance of the
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Obligations (as defined in Section 2 hereof) of Pledgor, Pledgor hereby pledges
to the Secured Party, and grants, transfers, assigns and hypothecates to the
Secured Party a continuing security interest in, the following property owned by
Pledgor (hereinafter the "Pledged Collateral"):
(a). Pledged Shares. The Pledged Shares and the certificates
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representing the Pledged Shares;
(b). Dividends and Proceeds. All dividends, (except as permitted
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under the Guaranty), cash, products, proceeds, securities, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Shares, including, but not limited to, all distributions or payments
in partial or complete liquidation or redemption of the Pledged
Shares; and
(c). Additional Shares. All additional shares of stock of PIC from
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time to time hereafter acquired by Pledgor arising from the Pledged
Shares as a result of any reclassification, readjustment, stock split,
stock dividend, or reorganization and the certificates representing
such additional shares, and all dividends, cash, products, proceeds,
securities instruments and other property from time to time received,
receivable or otherwise distributed in respect of or exchange for any
or all of such shares.
2. Security for Obligations. This Agreement secures the payment and
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performance of (i) all obligations of Pledgor to the Secured Party now or
hereafter existing under the Note whether for indebtedness (principal and
interest), fees, damages, expenses or otherwise, and whether evidenced by any
instrument, agreement or book account, and (ii) all obligations of Pledgor to
the Secured Party now or hereafter existing under this Agreement, regardless of
whether the amounts referred to in clause (i) or (ii) above are due or to become
due, direct or indirect, primary or secondary, joint, several, or joint and
several, or fixed or contingent obligations of Pledgor. All of such obligations
are collectively referred to herein as the "Obligations."
3. Delivery of Pledged Collateral. The Pledged Collateral is subject to
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an existing first priority lien in favor of the holder of the Senior
Indebtedness (as that term is defined in the Stock Purchase Agreement) (the
"Priority Lien"). Pledgor is not currently in possession of the Pledged
Collateral. Upon the retirement of the Senior Indebtedness, Pledgor shall
immediately deliver and deposit with the Secured Party the stock certificate or
certificates or other instruments evidencing the Pledged Collateral owned by
Pledgor, along with such assignments, financing statements, endorsements, and/or
transfer powers duly executed by Pledgor in blank as will enable the Secured
Party after an Event of Default (as hereafter defined) to register the Pledged
Collateral in the Secured Party's name or in the name of the Secured Party's
nominee in the appropriate record books until such time as the Obligations of
Pledgor to the Secured Party have been discharged. All of the foregoing
documents shall be in form and
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substance satisfactory to the Secured Party. The Secured Party shall return the
Pledged Collateral to Pledgor upon payment in full of the Obligations.
4. Further Assurances and Documentation. Pledgor agrees that at any time
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and from time to time, at the expense of Pledgor, Pledgor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Secured Party may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Secured Party to exercise and
enforce the Secured Party's rights and remedies hereunder with respect to any
Pledged Collateral.
5. Representations and Warranties. Pledgor represents and warrants to
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the Secured Party as follows:
(a). Authorization. The execution, delivery, and performance of this
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Agreement are within Pledgor's powers and are not in contravention of
any applicable law;
(b). Absence of Conflicts. Except for the Senior Indebtedness (as
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that term is defined in the Stock Purchase Agreement), Pledgor is not
obligated under any contract or agreement, which materially or
adversely affects Pledgor's properties or assets, or Pledgor's
financial condition, and neither the execution nor delivery of this
Agreement nor the consummation of any transaction contemplated hereby
will conflict with or result in any breach of the terms, conditions,
or provisions of, or constitute a default under any agreement or
instrument relative thereto to which Pledgor is subject;
(c). Authorized Shares. The Pledged Shares have been duly authorized
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and validly issued and are fully paid and non-assessable;
(d). Unencumbered Title to Pledged Collateral. Pledgor is the legal
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and beneficial owner of the Pledged Collateral owned by Pledgor free
and clear of any lien, security interest, option or other charge or
encumbrance whatsoever except for the Priority Lien and the security
interest created by this Agreement and except for restrictions imposed
upon the transferability of unregistered stock by the Securities Act
of 1933, as amended. Until such time as the Obligations have been
paid in full, Pledgor, at Pledgor's sole expense, will keep the
Pledged Collateral free from other liens, security interests,
encumbrances or claims (other than those arising with respect to the
Senior Indebtedness); and Pledgor will defend the Pledged Collateral
against the claims and demands of all persons claiming the Pledged
Collateral or any part thereof or interest therein (other than those
arising with respect to the Senior Indebtedness);
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(e). Perfected Security Interest. The pledge of the Pledged Shares
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pursuant to this Agreement creates a valid and perfected security
interest in the Pledged Collateral, securing the payment of the
Obligations;
(f). No Approval Required. No authorization, approval, or other
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action by, and no notice to or filing with, any governmental authority
or regulatory body is required either (i) for the pledge by Pledgor of
the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by Pledgor or
(ii) for the exercise by the Secured Party of the rights provided for
in this Agreement or the remedies in respect of the Pledged Collateral
pursuant to this Agreement (except as may be required in connection
with such disposition by laws affecting the offering and sale or
securities generally); and
(g). Accurate Information. All information contained in statements
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furnished or to be furnished to the Secured Party by or on behalf of
Pledgor in connection with the Pledged Collateral or the Obligations
is complete and accurate in all material respects.
6. Expenses. Pledgor will upon demand pay to the Secured Party the
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amount of any and all reasonable expenses, including the reasonable fees and
expenses of the Secured Party's counsel and of any experts and agents, which the
Secured Party may incur after the occurrence of an Event of Default (as
hereinafter defined) in connection with (i) the custody or preservation of, or
the sale of, collection from, or other realization upon, any of the Pledged
Collateral, or (ii) the exercise or enforcement of any of the rights of the
Secured Party hereunder.
7. Voting Rights and Dividends.
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(a). Rights Prior to Default. So long as no Event of Default shall
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have occurred and be continuing:
(i). Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral
or any part thereof for any purpose not inconsistent with the
terms of this Agreement; provided, however, Pledgor may not
exercise such voting rights so as to (a) dilute the Secured
Party's ownership percentage represented by the Pledged
Collateral and Secured Party shall not be required to exercise
preemptive rights; or (b) other than in the ordinary course of
business, impair the value of the Pledged Collateral; and
(ii). Pledgor shall be entitled to receive and retain any and all
dividends and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
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A. dividends and interest paid or payable other than cash
in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Collateral;
B. dividends and other distributions paid or payable in
cash in respect of any Pledged Collateral in connection with
a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in-surplus, and
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C. cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral
shall be forthwith delivered to the Secured Party to hold
as, pledged Collateral and shall, if received by Pledgor,
be received in trust for the benefit of the Secured Party
and the holders of the Senior Indebtedness, be segregated
from the other property or funds of Pledgor, and, upon
retirement of the Senior Indebtedness, be forthwith
delivered to the Secured Party as Pledged Collateral in
the same form as so received (with any necessary
endorsements). Pledgor shall promptly notify the Secured
Party of the occurrence of any of the above matters upon
the occurrence thereof; and
(iii). The Secured Party shall execute and deliver (or cause to
be executed and delivered) to Pledgor all such proxies and other
instruments as Pledgor may reasonably request for the purpose of
enabling Pledgor to exercise voting and other rights which
Pledgor is entitled to exercise pursuant to paragraph (i) above
and to receive the dividends or interest payments which Pledgor
is authorized to receive and retain pursuant to paragraph (ii)
above.
(b). Rights Upon Default. Upon the occurrence and during the
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continuance of an Event of Default:
(i). All rights of Pledgor to exercise the voting and other
consensual rights which Pledgor would otherwise be entitled to
exercise pursuant to Section 7(a)(i) and to receive the dividends
and interest payments which Pledgor would otherwise be authorized
to receive and retain pursuant to Section 7(a)(ii) shall cease,
and all such rights shall thereupon become vested in the Secured
Party who shall thereupon have the sole right to exercise such
voting and other consensual rights and to receive and hold as
Pledged Collateral such dividends and interest payments;
(ii). All dividends and interest payments which are received by
Pledgor contrary to the provisions or paragraph (i) of this
Section 7(b) shall be received in trust for the benefit of the
Secured Party and the holders of the Senior Indebtedness, shall
be segregated from other funds of' Pledgor and, upon retirement
of the Senior Indebtedness, shall be forthwith paid over to the
Secured Party as Pledged Collateral in the same form as so
received (with any necessary endorsements).
8. Events of Default. The occurrence of any one or more of the following
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events shall constitute an Event of Default hereunder:
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(a). Default Under Note. An Event of Default shall have occurred
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under the Note;
(b). Insolvency. Pledgor shall admit in writing Pledgor's inability
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to pay Pledgor's debts, or shall make a general assignment of
Pledgor's assets or property rights for the benefit of Pledgor's
creditors; or any proceeding shall be instituted by or against Pledgor
seeking to adjudicate Pledgor a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of Pledgor or
Pledgor's debts under any law relating to bankruptcy, insolvency or
reorganization or release of debtors, or seeking appointment of a
receiver, custodian, trustee, or other similar official for Pledgor or
for any substantial part of the property of Pledgor, and in the case
of any such proceeding instituted against Pledgor shall remain
undismissed for a period of' ninety (90) days;
(c). Falsity of Representation. Any warranty, representation or
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statement made by Pledgor in this Agreement shall prove to have been
false in any material respect when made ; or
(d). Levy Against Collateral. The levy against the Pledged
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Collateral, or any part hereof, of any execution, attachment,
sequestration or other writ, which shall remain undismissed for a
period of sixty (60) days.
9. Remedies Upon Default.
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(a). Remedies. Upon the occurrence of an Event of Default, and in
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addition to any and all other rights and remedies which the Secured
Party may then have hereunder, or under the Texas Business and
Commerce Code (the "Code"), or otherwise, the Secured Party may at the
Secured Party's option (i) declare the entire unpaid balance of
principal of, and all accrued interest on, the Obligations immediately
due and payable without demand, presentment, notice of default, notice
of intent to accelerate or notice of acceleration of maturity, all of
which are hereby expressly waived; (ii) notify any person obligated on
any of the Pledged Collateral of the security interest of the Secured
Party therein and request such person to make payment directly to the
Secured Party, (iii) demand, xxx for, collect or otherwise reduce the
Secured Party's claims to judgment, foreclose or otherwise enforce the
Secured Party's security interest through judicial procedure or make
any settlement or compromise the Secured Party deems desirable with
respect to any of the Pledged Collateral; (iv) after notification
expressly provided for herein sell or otherwise dispose of, at the
office of the Secured Party, or elsewhere, as chosen by the Secured
Party, all or any part of the Pledged Collateral, and any such sale or
other disposition may be as a unit or in parcels, by public or private
proceedings, and by way of one or more contracts (it being agreed that
the sale of any part of the Pledged Collateral shall not exhaust
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the power of sale granted hereunder, but sales may be made from time
to time until all of the Pledged Collateral has been sold or until the
Obligations have been paid in full) and at such sale it shall not be
necessary to exhibit the Pledged Collateral; (v) at the Secured
Party's discretion, retain the Pledged Collateral in satisfaction of
the Obligations whenever the circumstances are such that the Secured
Party is entitled to do so under the Code; (vi) apply by appropriate
judicial proceedings for appointment of a receiver for the Pledged
Collateral, or any part thereof, (vii) purchase the Pledged Collateral
at any public sale; (viii) purchase the Pledged Collateral at any
private sale; and/or (ix) exercise the rights set forth in Section
7(b) hereof. The foregoing remedies shall be cumulative and except for
the provisions of Section 9(a)(v) above without prejudice to the
Secured Party's right to recover any deficiency including reasonable
attorneys' fees and costs permitted by this Agreement.
(b). Sale of Pledged Collateral. The Secured Party is authorized, at
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any sale of the Pledged Collateral, if the Secured Party deems it
advisable, to restrict the prospective bidders or purchasers to those
persons who will represent and agree that they are purchasing for
their own account, for investment, and not with a view to distribution
or sale of any of the Pledged Collateral. Upon any such sale, the
Secured Party shall have the right to deliver, assign, and transfer to
the purchaser thereof the Pledged Collateral so sold. Each purchaser
at any such sale shall hold the property sold absolutely, free from
any claim or right of whatsoever kind. The Secured Party may, without
notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or
place to which the same may be so adjourned. In case of' any sale of
all or any part of the Pledged Collateral on credit or for future
delivery, the Pledged Collateral so sold may be retained by the
Secured Party until the selling price is paid by the purchaser
thereof, but the Secured Party shall not incur any liability in case
of the failure of such purchaser to take up and pay such selling
price, and such Pledged Collateral may again be sold upon like notice.
The Secured Party may also, at the Secured Party's discretion, proceed
by a suit or suits at law, or in equity to foreclose the pledge and
sell the Pledged Collateral, or any portion thereof, under a judgment
or decree of a court or courts of competent jurisdiction. If any
consent, approval or authorization of any state, municipal or other
governmental department, agency or authority should be necessary to
effectuate any sale or other disposition of the Pledged Collateral, or
any part thereof, Pledgor will execute all such applications and other
instruments as may be required in connection with securing any such
consent, approval or authorization, and will otherwise use its best
efforts to secure the same.
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(c). Notification. Reasonable notification of the time and place of
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any public sale of the Pledged Collateral, or any reasonable
notification of the time after which any private sale or other
intended disposition of the Pledged Collateral is to be made, shall be
sent to Pledgor and to any other person entitled under the Code to
notice. It is agreed that notice sent or given not less than ten (10)
calendar days prior to the taking of the action to which the notice
relates is reasonable notification and notice for the purpose of this
Agreement. Notice shall be deemed to be sent when it is deposited in
the United States Mail, return receipt requested, bearing the proper
postage and addressed to the Pledgor and/or any other person entitled
to receive notice, at their last known address according to the
records of the Secured Party.
(d). Application of Proceeds. Upon the occurrence of an Event of
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Default or maturity of any instrument evidencing the Obligations or
any part thereof whether such maturity be by such terms of such
instruments or through the exercise of any power of acceleration, the
Secured Party is authorized and empowered to apply any and all funds
realized from the sale of the Pledged Collateral not previously
credited against the Obligations first toward the payment of the
costs, charges and expenses, if any, incurred in the collection of
such funds hereunder, and then toward the payment of the Obligations,
and shall pay any balance remaining to the Pledgor in accordance with
the written instructions executed by such Pledgor or as prescribed by
the Code.
10. Secured Party Appointed Attorney-in-Fact. Pledgor hereby irrevocably
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appoints the Secured Party as Pledgor's attorney-in-fact, with full authority in
the place and stead of Pledgor and in the name of Pledgor or otherwise, from
time to time in the Secured Party's discretion after the occurrence of an Event
of Default to take any action and to execute any instrument which the Secured
Party may deem necessary or advisable to accomplish the purpose of this
Agreement, including, without limitation, (i) the right and power to execute and
deliver any and all powers and other instruments, documents, certificates and
agreements necessary or appropriate to transfer ownership of the Pledged
Collateral, and (ii) the right and power to receive, endorse and collect all
checks and other instruments made payable to Pledgor representing any dividend,
interest payment or other distribution in respect of the Pledged Collateral or
any part thereof and to give full acquittance for the same. The foregoing
appointment of the Secured Party as Pledgor's attorney-in-fact is irrevocable
and is coupled with an interest.
11. Certain Rights Before and After a Default.
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(a). Secured Party May Perform. If Pledgor fails to perform any
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agreement contained herein, the Secured Party may perform, or cause
performance of, such agreement, and the expenses of the Secured Party
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incurred in connection therewith shall be payable by Pledgor pursuant
to the provisions of Section 6 hereof.
(b). Notification of Issuer. The Secured Party shall have the right
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to notify the issuer of the Pledged Collateral that the Pledged
Collateral has been pledged.
12. Substitution of Collateral. Pledgor may substitute collateral for the
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Pledged Collateral provided each of the following, condition is satisfied: (i)
the substituted collateral has a fair market value equal to or greater than the
then unpaid principal balance and accrued interest on the Note, (ii) the
substituted collateral is not subject to any liens, encumbrances or other
restrictions other than a security interest in favor of the Secured Party, (iii)
the substituted collateral consists of marketable and registered securities, a
certificate of deposit, or other property acceptable to the Secured Party, (iv)
the Secured Party will have a security interest in the substituted collateral
with a priority equivalent to the priority of Secured Party's security interest
in the Pledged Collateral, and (v) the Secured Party consents to the receipt and
substitution of the substituted collateral and Pledgor executes and delivers all
documents and instruments necessary to grant the Secured Party a security
interest in the substituted collateral with a priority equivalent to the
priority of Secured Party's security interest in the Pledged Collateral.
13. Surrender of Collateral. The Secured Party may surrender, release,
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exchange or alter any collateral or security for the Obligations without
effecting the liability of Pledgor under this Agreement, and this Agreement
shall continue effective notwithstanding any legal disability of Pledgor to
incur any indebtedness or obligation incurred to the Secured Party.
14. General Provisions.
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(a). Further Assurances. The parties agree (a) to furnish upon
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request to each other such further information, (b) to execute and
deliver to each other such other documents, and (c) to do such other
acts and things, all as the other party may reasonably request for the
purpose of carrying out the intent of this Agreement and the documents
referred to in this Agreement.
(b). Severability. If any provision of this Agreement is held invalid
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or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect.
Any provision of this Agreement held invalid or unenforceable only in
part or degree will remain in full force and effect to the extent not
held invalid or unenforceable.
(c). Section Headings, Construction. The headings of Sections in this
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Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or
"Sections"
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refer to the corresponding Section or Sections of this Agreement. All
words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or
terms.
(d). Presumption Against Scrivener. Each party waives the presumption
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that this Agreement is presumed to be in favor of the party that did
not prepare it, in case of a dispute as to interpretation.
(e). Representation by Counsel. Each party acknowledges that it has
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had the opportunity to be represented by separate independent counsel
in the negotiation of this Agreement, that any such respective
attorneys were of its own choosing. The parties warrant and represent
that they have consulted with their counsel concerning the execution,
the meaning and the import of this Agreement, and each has read this
Agreement and fully understands the terms hereof as signified by their
signatures below, and are executing the same of their own free will
for the purposes and consideration herein expressed. The parties
warrant and represent that they have had sufficient time to consider
whether to enter into this Agreement and that they are relying solely
on their own judgment and the advice of their own counsel in deciding
to execute this Agreement.
(f). Counterparts. This Agreement may be executed by the parties
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hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument. Each counterpart may
consist of a number of copies hereof each signed by less than all, but
together signed by all of the parties hereto.
(g). Choice of Law and Venue. THIS AGREEMENT SHALL BE GOVERNED BY AND
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CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. HOWEVER,
ANY LITIGATION, SPECIAL PROCEEDING OR OTHER PROCEEDING AS BETWEEN THE
PARTIES THAT MAY BE BROUGHT, OR ARISE OUT OF, IN CONNECTION WITH OR BY
REASON OF THIS AGREEMENT SHALL BE BROUGHT IN THE APPLICABLE FEDERAL OR
STATE COURT LOCATED IN DALLAS COUNTY, TEXAS., WHICH COURTS SHALL BE
THE EXCLUSIVE COURTS OF JURISDICTION AND VENUE.
(h). Notices. Any notices or other communications required or
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permitted hereunder shall be sufficiently given if delivered in
writing personally or sent by registered or certified mail, postage
prepaid, addressed to the parties as follows:
if to Pledgor:
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Polyphase Instrument Acquisition Corporation
000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esquire
Xxxxxxxx Ingersoll Professional Corporation
Eleven Xxxx Xxxxxx, 00xx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
if to Secured Party:
Polyphase Corporation
0000 Xxxxxxxx, Xxxxx X
Xxxxxxx, Xxxxx 00000
Attention: President
Facsimile: 000-000-0000
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with a copy to:
Xxxxxx X. Xxxxx, Xx.
Law Offices of Xxxxxx X. Xxxxx, Xx.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile No.: 000-000-0000
Each party hereto may change such party's address for notice hereunder
by furnishing such new address in writing to the other parties hereto
in accordance with the provisions of this Section. All notices
hereunder shall be deemed to have been given as of the date so
delivered, if delivered in person, or three (3) days after a written
document containing such notice, properly addressed and with postage
prepaid, is deposited in a receptacle maintained by the United States
Postal Service for such purpose.
(i). Continuing Security Interest This Agreement shall create a
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continuing security interest in the Pledged Collateral and shall
remain in full force and effect until payment in full of the
Obligations.
(j). Nonwaiver. Unless otherwise expressly provided herein, no waiver
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by the Secured Party of any provision hereof shall be deemed to have
been made unless expressed in writing and signed by the Secured Party.
No delay or omission in the exercise of any right or remedy accruing
to the Secured Party upon any breach under this Agreement shall impair
such right or remedy or be construed as a waiver of any such breach
theretofore or thereafter occurring. The waiver by the Secured Party
of any breach of any term, covenant or condition herein stated shall
not be deemed to be a waiver of any other breach, or of a subsequent
breach of the same or any other term, covenant or condition herein
contained.
(k). Entire Agreement. This Agreement sets forth the entire
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understanding of the parties with respect to the Pledged Collateral
and supersedes all prior or contemporaneous representations,
understandings and agreements, oral. or written, made between the
parties effecting the, subject matter hereof, and all such prior or
contemporaneous representations, understandings and agreements are
hereby terminated.
(l). Parties Bound. This Agreement shall be binding upon and inure to
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the benefit of the parties and their respective successors, assigns,
heirs, and personal representatives.
(m). Subordination. Notwithstanding any provision in this Agreement
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to the contrary, the security interest of Secured Party in the Pledged
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Collateral is subordinated and subject in right to the security
interest of the holders of the Senior Indebtedness in the Pledged
Collateral.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
PLEDGOR:
POLYPHASE INSTRUMENT ACQUISITION CORPORATION
____________________________________________
By: Xxx X. Xxxxxxxxx
Its: President
SECURED PARTY:
POLYPHASE CORPORATION
____________________________________________
By: Xxxxx Xxxxx
Its: President
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