Exhibit 10.21
PLEDGE AGREEMENT
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THIS PLEDGE AGREEMENT (this "Agreement") made as of this 28th day of
March, 2002, is by and between XXXXXX ELECTRONICS CORPORATION, a New York
corporation, having its principal place of business and chief executive office
at 00 Xxxxxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 ("Pledgor"), and HFTP
INVESTMENT L.L.C., having an office at c/o Promethean Asset Management, L.L.C.,
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Pledgee").
RECITALS:
WHEREAS, Pledgor and Pledgee are parties to that certain Securities
Purchase Agreement, dated as of October 5, 2000 (as the same may be amended,
restated, supplemented or otherwise modified and in effect from time to time,
the "Securities Purchase Agreement"), pursuant to which the Pledgee purchased
from Pledgor shares of the Pledgor's Series C Convertible Preferred Stock (the
"Series C Preferred Stock"), which are convertible into shares of the Pledgor's
common stock, par value $.50 per share (the "Common Stock") (as converted, the
"Conversion Shares"), in accordance with the terms of the Pledgor's Certificate
of Amendment of the Certificate of Incorporation of Pledgor for the Series C
Preferred Stock, as filed with the Secretary of State of the State of New York
on October 6, 2000 (the "Certificate of Amendment");
WHEREAS, Pledgee is the holder of that number of shares of the Series C
Preferred Stock (each individually, a "Preferred Share" and, collectively, the
"Preferred Shares") set forth opposite its name on the Schedule of Investors, a
schedule to the Acknowledgment Agreement described below;
WHEREAS, a Triggering Event (as defined in the Certificate of
Amendment) has occurred, and, upon the terms and conditions set forth in that
certain Acknowledgment and Agreement between the Pledgor and Pledgee, dated as
of the date hereof (as the same may be amended, restated, supplemented or
otherwise modified and in effect from time to time, the "Acknowledgement
Agreement"), Pledgor and Pledgee each desire to enter into that certain Waiver
Agreement dated as of the date hereof (as the same may be amended, restated,
supplemented or otherwise modified and in effect from time to time, the "Waiver
Agreement") and that certain Security Agreement dated as of the date (as the
same may be amended, restated, supplemented or otherwise modified and in effect
from time to time, the "Security Agreement"; this Agreement, the Waiver
Agreement, the Acknowledgment Agreement, the Security Agreement, the Series C
Preferred Stock and the Certificate of Amendment are herein referred to
collectively as, the "Transaction Documents");
WHEREAS, Pledgor is the legal and beneficial owner of all of the issued
and outstanding capital stock of each domestic issuer (individually, a "Domestic
Subsidiary" and collectively, the "Domestic Subsidiaries") and each foreign
issuer (individually, a "Foreign Subsidiary" and collectively, the "Foreign
Subsidiaries") as more fully described on Exhibit A attached hereto (the
Domestic Subsidiaries and Foreign Subsidiaries are each individually referred to
herein as a "Subsidiary" and collectively as the "Subsidiaries").
WHEREAS, Pledgor wishes to grant security and assurance to Pledgee, in
order to secure the payment and performance of the Secured Obligations (as such
term is defined in the Security Agreement), and to that effect to pledge to
Pledgee all of the present and future capital stock or similar equity interest,
whether certificated or uncertificated, of each Subsidiary owned by Pledgor;
NOW, THEREFORE, in consideration of the foregoing and in order to
induce Pledgee to enter into the Acknowledgment Agreement and the Waiver
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Pledgor hereby agrees with
Pledgee, as follows:
I. Defined Terms. Unless otherwise defined herein, all
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capitalized terms used herein shall have the meanings given to such terms in the
Acknowledgment Agreement and the Waiver Agreement. Terms defined in the New York
Uniform Commercial Code which are not otherwise defined in this Agreement are
used in this Agreement as defined in the New York Uniform Commercial Code as in
effect on the date hereof.
II. Pledge. Pledgor hereby pledges, assigns, hypothecates and
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grants to Pledgee a first lien on and security interest in (a) all of the
capital stock of each Domestic Subsidiary, whether certificated or
uncertificated, now owned or hereafter acquired by Pledgor (the "Domestic
Pledged Shares"), (b) sixty-five percent (65%) of all of the capital stock or
similar equity interest of each Foreign Subsidiary, whether certificated or
uncertificated, now owned or hereafter acquired by Pledgor (the "Foreign Pledged
Shares"; the Domestic Pledged Shares and the Foreign Pledged Shares are referred
to herein collectively as, the "Pledged Shares"), (c) all other property
hereafter delivered to Pledgor in connection with the Pledged Shares, (d) any
other property of Pledgor, as described in Section 4 below, hereafter delivered
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to, or in the possession or custody of, Pledgee, and (e) any and all proceeds
thereof (all such property being hereinafter referred to collectively as the
"Collateral"), as collateral security for (i) the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of all of the Secured Obligations and (ii) the due and punctual
payment and performance by Pledgor of its obligations and liabilities under,
arising out of, or in connection with any of the Transaction Documents,
including, without limitation, any taxes and expenses payable pursuant to
Section 19 hereof and the payment of the Triggering Event Redemption Price or
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any other amounts with respect to the Series C Preferred Stock and the
Certificate of Amendment (all of the foregoing being hereinafter referred to
collectively as the "Liabilities").
III. Representations and Warranties of Pledgor. Pledgor represents
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and warrants to Pledgee that as of the Closing Date:
(a) Pledgor is the record and beneficial owner of, and
has good and marketable title to, the Pledged Shares, and the Collateral is free
and clear of all Liens except the Liens created by this Agreement. Exhibit A
sets forth (i) the authorized capital stock of each Subsidiary, (ii) the number
of shares of capital stock of each Subsidiary that are issued and outstanding as
of the date hereof, and (iii) the number of shares of capital stock of each
Subsidiary held in its treasury;
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(b) Pledgor has full power, authority and legal right to
execute the pledge provided for herein and to pledge the Collateral to Pledgee;
(c) this Agreement has been duly authorized, executed and
delivered by Pledgor and constitutes a legal, valid and binding obligation of
Pledgor enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditor rights and general principles of equity;
(d) Pledgor holds no options, warrants or other
agreements with respect to the issuance of additional shares of capital stock of
any Subsidiary and, to the best of Pledgor's knowledge, no options, warrants or
other agreements with respect to issuance of additional shares of capital stock
of any Subsidiary exist;
(e) the Foreign Pledged Shares have been duly and validly
authorized and issued, are fully paid and non-assessable and represent
sixty-five percent (65%) of the issued and outstanding shares of capital stock
of each Foreign Subsidiary;
(f) the Domestic Pledged Shares have been duly and
validly authorized and issued, are fully paid and non-assessable and represent
one hundred percent (100%) of the issued and outstanding shares of capital stock
of each Domestic Subsidiary;
(g) no consent, approval or authorization of or
designation or filing with any federal, state or other governmental authority or
regulatory body on the part of Pledgor is required in connection with the
execution, delivery and performance of this Agreement, the granting of Liens in
the Collateral by Pledgor or the exercise by Pledgee of the voting and other
rights provided for in this Agreement;
(h) the execution, delivery and performance of this
Agreement by Pledgor will not violate any provision of (i) any applicable law or
regulation, (ii) any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, (iii) the charter or
by-laws of Pledgor, (iv) any securities issued by Pledgor, or (v) any mortgage,
indenture, lease, contract, or other agreement, instrument or undertaking to
which Pledgor is a party or which purports to be binding upon Pledgor or upon
any of its assets, and will not result in the creation or imposition of any Lien
on any of the assets of Pledgor except as contemplated by this Agreement; and
(i) the pledge and assignment of the Collateral creates a
valid first Lien on the Collateral in favor of Pledgee, subject to no Liens nor
to any agreement purporting to grant to any third party any Liens in the
property or assets of Pledgor which would include the Collateral. Pledgor
covenants and agrees that it will defend all of the right, title and interest of
Pledgee in and to the Collateral, for the benefit of Pledgee, against the claims
and demands of all persons whomsoever.
IV. Dividends, Distributions, etc. Subject to Article V, if, while
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this Agreement is in effect, Pledgor shall become entitled to receive or shall
receive any stock certificate (including, without limitation, any certificate
representing a stock dividend or a stock distribution in
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connection with any reclassification, increase or reduction of capital, or
issued in connection with any reorganization, merger or consolidation), or any
options or rights, whether as an addition to, in substitution for, or in
exchange for any of the Pledged Shares, Pledgor agrees to accept the same as
Pledgee's agent and to hold the same in trust for Pledgee, and to deliver the
same forthwith to Pledgee in the exact form received, with the indorsement of
Pledgor when necessary and/or appropriate undated stock powers duly executed in
blank, to be held by Pledgee as additional collateral security for the
Liabilities. In case any distribution of capital shall be made to Pledgor on or
in respect of the Pledged Shares or any property shall be distributed to Pledgor
upon or with respect to the Pledged Shares pursuant to the recapitalization or
reclassification of the capital of the issuer thereof or pursuant to the
reorganization, merger or consolidation thereof, the property so distributed
shall be delivered by Pledgor to Pledgee to be held by Pledgee as additional
collateral security for the Liabilities. Other than as set forth in the
preceding sentence, all sums of money and property so paid or distributed in
respect of the Pledged Shares which are received by Pledgor shall, until paid or
delivered to Pledgee, be held by Pledgor in trust as additional collateral
security for the Liabilities. Provided, however, Pledgor shall not accept on
behalf of Pledgee any such dividends or distributions from a Foreign Subsidiary
in the form of stock or other equity interests if the effect of such acceptance
would increase Pledgee's equity holdings in such Foreign Subsidiary above
sixty-five percent (65%) of the issued and outstanding capital stock of such
Foreign Subsidiary.
V. Administration of Security. The following provisions shall
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govern the administration of the Pledged Shares:
(a) Pledgor shall be entitled (subject to the other
provisions hereof) (i) so long as no material violation of the terms of any of
the Transaction Documents has occurred, to vote or consent with respect to the
Pledged Shares and to otherwise exercise the incidents of ownership thereof in
any manner not inconsistent with the Transaction Documents; and (ii) to receive
cash dividends or other distributions in the ordinary course made in respect of
the Pledged Shares. Pledgor hereby grants to Pledgee or its nominee, the right
to exercise all voting and corporate rights relating to the Pledged Shares in
any instance, including, without limitation, to approve any merger involving any
Subsidiary as a constituent corporation, which proxy shall be exercisable
immediately upon the occurrence of a material violation of the terms of any of
the Transaction Documents. After the occurrence of a material violation of the
terms of any Transaction Document and upon request of Pledgee, Pledgor agrees to
deliver to Pledgee such further evidence of such irrevocable proxy or such
further irrevocable proxies to vote the Pledged Shares as Pledgee may request.
(b) Upon the occurrence of a material violation of the
terms of any Transaction Document, in the event that Pledgor, as record and
beneficial owner of the Pledged Shares, shall have received or shall have become
entitled to receive any cash dividends or other distributions in the ordinary
course, Pledgor shall deliver to Pledgee, and Pledgee shall be entitled to
receive and retain, all such cash or other distributions as additional
collateral security for the Liabilities; provided, however, that upon such
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violation being cured, Pledgee shall return to Pledgor such portion of any such
cash dividends or other distributions received and retained by Pledgee as have
not been applied to cure such violation.
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(c) Subject to any sale or other disposition by Pledgee
of the Pledged Shares or other property pursuant to this Agreement, upon full
payment, satisfaction and termination of all of the Liabilities and the
termination pursuant to Section 16 hereof of the Liens hereby granted, the
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Pledged Shares and any other property then held as part of the collateral
security for the Liabilities in accordance with the provisions of this Agreement
shall be returned to Pledgor.
VI. Rights of Pledgee. Pledgee shall not be liable for any failure
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to collect or realize upon the Liabilities or any collateral security or
guaranty therefor, or any part thereof, or for any delay in so doing, nor shall
Pledgee be under any obligation to take any action whatsoever with regard
thereto. Any or all of the Collateral held by Pledgee hereunder may, if any
material violation of the terms of any Transaction Documents has occurred,
without notice, be registered in the name of Pledgee or its nominee, and Pledgee
or its nominee may thereafter without notice exercise all voting and corporate
rights at any meeting with respect to any Subsidiary and exercise any and all
rights of conversion, exchange, subscription or any other rights, privileges or
options pertaining to any of the Pledged Shares, for the benefit of Pledgee, as
if Pledgee or its nominee were the absolute owner thereof, including, without
limitation, the right to vote in favor of, and to exchange at its discretion any
and all of the Collateral upon the merger, consolidation, reorganization,
recapitalization or other readjustment with respect to any Subsidiary or upon
the exercise by any Subsidiary or Pledgee, of any right, privilege or option
pertaining to any of the Collateral, and in connection therewith, to deposit and
deliver any and all of the Collateral with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
Pledgee may determine, all without liability except to account for property
actually received by Pledgee, but Pledgee shall have no duty to exercise any of
the aforesaid rights, privileges or options and shall not be responsible for any
failure to do so or delay in so doing.
VII. Remedies. Upon the occurrence of a material violation of the
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terms of any Transaction Document, Pledgee, without demand of performance or
other demand, advertisement or notice of any kind (except the notice specified
below of time and place of public or private sale) to or upon Pledgor or any
other Person (all and each of which demands, advertisements and/or notices are
hereby expressly waived), may forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give an option or options to purchase, contract to sell or otherwise
dispose of (including any disposition in connection with a merger of any
Subsidiary) and deliver the Collateral, or any part thereof, in one or more
portions at public or private sale or sales or transactions, at any exchange,
broker's board or at any of Pledgee's offices or elsewhere upon such terms and
conditions as Pledgee may deem advisable and at such prices as it may deem best,
for any combination of cash and/or securities or other property or on credit or
for future delivery without assumption of any credit risk, with the right to
Pledgee upon any such sale or sales, public or private (to the extent permitted
by law), to purchase, the whole or any part of the Collateral so sold free of
any right or equity of redemption in Pledgor, which right or equity of
redemption Pledgor hereby expressly waives and releases to the extent permitted
by law. Pledgee shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization, sale or disposition, after deducting all
costs and expenses of every kind incurred therein or incidental to the
safekeeping or otherwise of any and all of the Collateral or in any way relating
to the rights of Pledgee hereunder, including reasonable attorneys' fees and
expenses, to the payment, in whole or in part, of the Liabilities in such order
(unless a court of competent jurisdiction shall otherwise
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direct) as Pledgee may elect. Pledgor shall remain liable for any deficiency
remaining unpaid after such application. Only after so paying over such net
proceeds and after the payment by Pledgee of any other amount required by any
provision of law, including, without limitation, Section 9-608(a)(1)(c) of the
Uniform Commercial Code, need Pledgee account for the surplus, if any, to
Pledgor. Pledgor agrees that Pledgee need not give more than ten days' notice of
the time and place of any public sale or of the time after which a private sale
or other intended disposition is to take place and that such notice shall
constitute commercially reasonable notification of such matters. No notification
need be given to Pledgor if Pledgor has signed after default a statement
renouncing any right to notification of sale or other intended disposition. In
addition to the rights and remedies granted to Pledgee in this Agreement and in
any of the other Transaction Documents, Pledgee shall have all the rights and
remedies of secured parties under the Uniform Commercial Code of the State of
New York and under any other applicable law.
VIII. No Disposition, Liens, etc. Without the prior written consent
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of Pledgee, Pledgor agrees that it will not sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, any of the
Collateral, nor create, incur or permit to exist any Lien on any of the
Collateral, or any interest therein, or any proceeds thereof, except for the
Liens granted pursuant to this Agreement. Without the prior written consent of
Pledgee, Pledgor agrees that it will not vote to enable, and will not otherwise
permit any Subsidiary to (a) issue any stock or other securities of any nature
in addition to or in exchange or substitution for the Pledged Shares or (b)
dissolve, liquidate, retire any of its capital stock, reduce its capital or
merge or consolidate with any other Person.
IX. Certificates/Legends. If, while this Agreement is in effect,
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any Pledged Shares become certificated (i) Pledgor shall immediately deliver
such certificates to Pledgee, and (ii) Pledgor agrees that it shall cause all
Pledged Shares so evidenced by certificates to bear the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THAT
CERTAIN PLEDGE AGREEMENT BETWEEN XXXXXX ELECTRONICS CORPORATION AND HFTP
INVESTMENT L.L.C., INCLUDING, WITHOUT LIMITATION, LIMITATIONS ON THE
RIGHTS/ABILITY OF ANY HOLDER (INCLUDING ANY SUCCESSOR HOLDER) HEREOF TO VOTE,
SELL, PLEDGE, HYPOTHECATE OR OTHERWISE TRANSFER THE SHARES REPRESENTED BY THIS
CERTIFICATE, AND REFERENCE IS HEREBY MADE TO SUCH PLEDGE AGREEMENT FOR A FULL
STATEMENT OF SUCH TERMS. A COPY OF THE PLEDGE AGREEMENT IS AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED BY THE
COMPANY TO THE HOLDER HEREOF AT NO COST UPON WRITTEN REQUEST.
X. Sale of Pledged Interests. (a) Pledgor acknowledges that
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Pledgee may be unable to effect a public sale or disposition (including, without
limitation, any disposition in connection with a merger of Subsidiary) of any or
all the Collateral by reason of certain prohibitions contained in the Securities
Act of 1933, as amended (the "Securities Act"), and applicable state securities
laws, but may be compelled to resort to one or more private sales or
dispositions thereof to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire such securities for their own account for
investment and not with a view to the
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distribution or resale thereof. Pledgor acknowledges that any such private sale
or disposition may result in prices and other terms (including the terms of any
securities or other property received in connection therewith) less favorable to
the seller than if such sale or disposition were a public sale or disposition
and, notwithstanding such circumstances, Pledgor agrees that any such private
sale or disposition shall be deemed to be effected in a commercially reasonable
manner. Pledgee shall be under no obligation to delay a sale or disposition of
any of the Collateral in order to permit Pledgor or any Subsidiary to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if Pledgor or such Subsidiary would agree to do so.
(b) Pledgor further agrees to do or cause to be done all
such other acts and things as may be necessary to make any sale or other
disposition of all or any portion of the Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales or dispositions, all at Pledgor's expense. Pledgor
further agrees that a breach of any of the covenants contained in Sections 4,
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5(b), 8, 10 and 11 of this Agreement will cause irreparable injury to Pledgee,
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that Pledgee does not have an adequate remedy at law in respect of such breach
and, as a consequence, agrees, without limiting the right of Pledgee to seek and
obtain specific performance of other obligations of Pledgor contained in this
Agreement, that each and every covenant referenced above shall be specifically
enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants except
for a defense that no violation of the Transaction Documents has occurred.
(c) Pledgor further agrees to indemnify and hold harmless
Pledgee and its successors and assigns, officers, directors, employees and
agents, and any Person in control of any thereof, from and against any loss,
liability, claim, damage and expense, including, without limitation, reasonable
attorneys' fees and expenses (in this paragraph collectively called the
"Indemnified Liabilities"), under federal and state securities laws or otherwise
insofar as such loss, liability, claim, damage or expense (i) arises out of or
is based upon any untrue statement or alleged untrue statement of a material
fact contained in any registration statement, prospectus or offering memorandum,
any preliminary prospectus or preliminary offering memorandum, any amendment or
supplement to any thereof or any other writing prepared in connection with the
offer, sale or resale of all or any portion of the Collateral (collectively, the
"Disclosure Documents") unless such untrue statement of material fact was
provided by Pledgee specifically for inclusion therein, or (ii) arises out of or
is based upon any omission or alleged omission to state a material fact required
to be stated or necessary to make the statements in any of the Disclosure
Documents not misleading, such indemnification to remain operative regardless of
any investigation made by or on behalf of Pledgee and its respective successors
and assigns, officers, directors, employees and agents, or any Person in control
of any thereof. In connection with a public sale or other distribution, Pledgor
shall provide customary indemnification to any underwriters and their respective
successors and assigns, officers and directors, and each Person who controls any
such underwriter (within the meaning of the Securities Act). If and to the
extent that any of the foregoing undertakings in this paragraph may be
unenforceable for any reason, Pledgor agrees to make the maximum contribution to
the payment and satisfaction of
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each of the Indemnified Liabilities which is permissible under applicable law.
The obligations of Pledgor under this paragraph (c) shall survive the
termination of this Agreement.
(d) Pledgor further agrees to waive any and all rights of
subrogation it may have against any Subsidiary upon the sale or other
disposition of all or any portion of the Collateral by Pledgee.
XI. Further Assurances. Pledgor agrees that at any time and from
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time to time upon the written request of Pledgee, Pledgor will execute and
deliver all stock powers, financing statements and other documents and do such
further acts and things as Pledgee may reasonably request consistent with the
provisions hereof in order to effect the purposes of this Agreement. If at any
time the pledge of more than two-thirds of the equity of any Foreign Subsidiary
would not result in adverse tax consequences to Pledgor (including as a result
of a change in the tax laws and regulations of the United States), than Pledgor
shall promptly pledge the maximum amount of equity interests which may be
pledged by it without causing such an adverse tax consequence.
XII. Severability. Any provision of this Agreement which is
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prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
XIII. No Waiver; Cumulative Remedies. Pledgee shall not by any act,
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delay, omission or otherwise be deemed to have waived any of its remedies
hereunder, and no waiver by Pledgee shall be valid unless in writing and signed
by Pledgee, and then only to the extent therein set forth. A waiver by Pledgee
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which Pledgee would otherwise have on any subsequent
occasion. No course of dealing between Pledgor and Pledgee and no failure to
exercise, nor any delay by Pledgee in exercising any right, power or privilege
hereunder or under any Transaction Document, shall impair such right or remedy
or operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights or remedies provided by law.
XIV. Successors and Assigns. This Agreement and all obligations of
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Pledgor hereunder shall be binding upon the successors and assigns of Pledgor,
and shall, together with the rights and remedies of Pledgee hereunder, inure to
the benefit of Pledgee and its successors and assigns, except that Pledgor shall
not have the right to assign its rights or obligations under this Agreement or
any interest herein without the prior written consent of Pledgee.
XV. Applicable Law. THE VALIDITY, INTERPRETATION AND ENFORCEMENT
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OF THIS AGREEMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND
DECISIONS OF THE STATE OF NEW YORK.
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XVI. Termination. This Agreement and the Liens granted hereunder
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shall terminate upon the full and complete performance and satisfaction of the
Liabilities.
XVII. Possession of Collateral. Beyond the exercise of reasonable
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care to assure the safe custody of the Collateral in the physical possession of
Pledgee pursuant hereto, neither Pledgee nor any nominee of Pledgee, shall have
any duty or liability to collect any sums due in respect of the Collateral or to
protect, preserve or exercise any rights pertaining to the Collateral, and
Pledgee and any nominee of Pledgee shall be relieved of all responsibility for
any portion of the Collateral surrendered to Pledgor.
XVIII. Survival of Representations. All representations and
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warranties of Pledgor contained in this Agreement shall survive the execution
and delivery of this Agreement.
XIX. Taxes and Expenses. Pledgor will upon demand pay to Pledgee,
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(a) any taxes (excluding income taxes, franchise taxes or other taxes levied on
gross earnings, profits or the like) payable or ruled payable by any federal,
state or other governmental authority in respect of this Agreement, together
with interest and penalties, if any, and (b) all expenses, including the
reasonable fees and expenses of attorneys, accountants, consultants or other
experts and agents that Pledgee may retain in connection with (i) the custody,
preservation or sale of, collection from, or other realization upon, any of the
Collateral, (ii) the exercise or enforcement of any of the rights and remedies
of Pledgee hereunder or (iii) the failure of Pledgor to perform or observe any
of the provisions hereof.
XX. Pledgee Appointed Attorney-In-Fact. Pledgor hereby irrevocably
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appoints Pledgee 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 Pledgee's discretion, to take any action and to execute any instrument that
Pledgee deems reasonably necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, to receive, endorse and collect
all instruments made payable to Pledgor representing any dividend, interest
payment or other distribution in respect of the Collateral and to give full
discharge for the same, when and to the extent permitted by this Agreement.
XXI. Notices. Unless otherwise specifically provided herein, any
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notice or other communication required or permitted to be given shall be in
writing addressed to the respective party as set forth below and may be
personally served, telecopied, telexed or sent by overnight courier service or
United States mail certified or registered and shall be deemed to have been
given (a) if delivered in person, when delivered; (b) if delivered by telecopy
or telex, on the date of transmission if transmitted on a Business Day before
4:00 p.m. (Chicago time) or, if not, on the next succeeding Business Day; (c) if
delivered by overnight courier, two Business Days after delivery to such courier
properly addressed; or (d) if by United States mail, four Business Days after
deposit in the United States mail, postage prepaid and properly addressed.
Notices shall be addressed as follows:
(a) If to Pledgor: Xxxxxx Electronics Corporation
00 Xxxxxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
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ATTN: President, Chief Operating Officer
Telecopy: (000) 000-0000
(b) If to Pledgee: HFTP Investment L.L.C.
c/o Promethean Asset Management, L.L.C.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
or in any case, to such other address as the party addressed shall have
previously designated by written notice to the serving party, given in
accordance with this Section 21. A notice not given as provided above shall, if
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it is in writing, be deemed given if and when actually received by the party to
whom given.
XXII. Changes in Writing. No amendment, modification, termination or
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waiver of any provision of this Agreement or consent to any departure by Pledgor
therefrom, shall in any event be effective without the written concurrence of
Pledgee and Pledgor, and then only to the extent specifically set forth in such
writing.
XXIII. Headings. Section and subsection headings in this Agreement
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are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
XXIV. Counterparts. This Agreement may be executed in any number of
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counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. A counterpart executed via facsimile shall for all
purposes be deemed to constitute an original counterpart.
XXV. Entire Agreement. This Agreement embodies the entire agreement
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and understanding among Pledgor and Pledgee and supersedes all prior oral and
written agreements and understandings among Pledgor and Pledgee relating to the
subject matter hereof.
XXVI. CONSENT OF JURISDICTION. PLEDGOR HEREBY CONSENTS TO THE
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JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN XXX XXXX XX XXX XXXX,
XXXXX XX XXX XXXX AND IRREVOCABLY AGREES THAT, SUBJECT TO PLEDGEE'S ELECTION,
ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER TRANSACTION DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. PLEDGOR EXPRESSLY
SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS. PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON
PLEDGOR BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
PLEDGOR, AT THE ADDRESS SET FORTH ABOVE AND SERVICE SO MADE SHALL BE COMPLETE
TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
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XXVII. WAIVER OF JURY TRIAL. PLEDGOR AND PLEDGEE HEREBY WAIVE THEIR
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RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. PLEDGOR AND PLEDGEE
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT
AND THE OTHER TRANSACTION DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE
WAIVER IN THEIR RELATED FUTURE DEALINGS. PLEDGOR AND PLEDGEE WARRANT AND
REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS.
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signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the date first above written.
PLEDGOR:
XXXXXX ELECTRONICS CORPORATION
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
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Title: Chief Financial Officer and
Corporate Secretary
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PLEDGEE:
HFTP INVESTMENT L.L.C.
By: /s/ Xxxxx X. X'Xxxxx, Xx.
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Name: Xxxxx X. X'Xxxxx, Xx.
--------------------------------
Title: Managing Member
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EXHIBIT A
to Pledge Agreement
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DESCRIPTION OF DOMESTIC PLEDGED SHARES
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DESCRIPTION OF FOREIGN PLEDGED SHARES
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