Exhibit 10.24
PLEDGE AGREEMENT
PLEDGE AGREEMENT (this "Agreement") dated July 31, 1997, made by
Xxxxxx XxXxxxxx (the "Pledgor") to Princeton Video Image, Inc., a New
Jersey corporation ("PVI" or the "Pledgee").
PRELIMINARY STATEMENTS
A. Pursuant to the exercise of a warrant dated July 31, 1992 (the
"Warrant"), the Pledgor has, as of the date hereof, purchased 36,000 shares
of common stock of PVI, all of which shares (the "Pledged Shares") are
pledged pursuant to this Agreement.
B. In connection with the exercise of the Warrant, the Pledgor has
executed a Promissory Note of even date herewith (the "Note," all defined
terms utilized herein and not otherwise defined herein having the meaning
ascribed thereto in the Note) in the principal amount of $180,000.00
payable to the Pledgee. Under the terms of the Note and to induce the
Pledgee to extend credit to the Pledgor, the Pledgor shall have made the
pledge contemplated by this Agreement.
NOW THEREFORE, in consideration of the premises and in order to induce
the Pledgee to extend credit under the Note, the Pledgor hereby agrees with
the Pledgee as follows:
SECTION 1. Pledge. The Pledgor hereby pledges, hypothecates,
assigns, transfers and conveys to the Pledgee and grants to the Pledgee a
security interest in and to, the following (the "Pledged Collateral"):
(i) all right, title and interest in and to the Pledged Shares
and the certificates representing the Pledged Shares, and all dividends,
cash, 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; and
(ii) all right, title and interest in and to all additional
shares of stock of PVI arising out of a recapitalization or stock split
relating to the Pledged Shares and the certificates representing such
additional shares, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such stock.
SECTION 2. Security for Obligations. This Agreement secures the
due and punctual payment or performance, whether at stated maturity, by
acceleration or otherwise, of all obligations of the Pledgor now or
hereafter existing under the Note and this Agreement (all such obligations
of the Pledgor or any other obligor being the "Pledge Obligations").
SECTION 3. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged
Collateral of the Pledgor have been delivered to the Pledgee and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Pledgee. The Pledgee shall have the right, at
any time in its discretion and without notice to the Pledgor, to transfer to
or to register in the name of the Pledgee or any of its nominees any or all
of the Pledged Collateral of the Pledgor. In addition, the Pledgee shall
have the right at any time to exchange certificates representing or
evidencing Pledged Collateral of the Pledgor for certificates of smaller or
larger denominations.
SECTION 4. Representations and Warranties. The Pledgor represents
and warrants as follows:
(a) The Pledgor is the legal and beneficial owner of the Pledged
Shares free and clear of any lien, security interest, option or other
charge or encumbrance except for the security interest created by this
Agreement and the agreements contemplated hereby.
(b) The Pledgor has full power and authority to make the pledge
of the Pledged Shares.
(c) This Agreement has been executed and delivered by the
Pledgor and constitutes a valid and binding agreement of the Pledgor.
(d) The pledge of the Pledged Shares pursuant to this Agreement
creates an enforceable, valid and perfected security interest in the
Pledged Collateral, securing the payment and performance of the Pledge
Obligations.
(e) No authorization, approval, or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required either (i) for the pledge by the Pledgor of the Pledged Collateral
pursuant to this Agreement or for the execution, delivery or performance of
this Agreement by the Pledgor, or (ii) for the exercise by the Pledgee of
the voting or other 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 of securities generally).
SECTION 5. Further Assurances. The Pledgor agrees that at any time
and from time to time, at the expense of the Pledgee, the 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 Pledgee
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Pledgee to
exercise and
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enforce its rights and remedies hereunder with respect to any Pledged
Collateral.
SECTION 6. Voting Rights; Distributions; Etc.
(a) So long as no Event of Default (as defined in the Note) in
any of the Pledge Obligations shall have occurred and be continuing, the
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 or the
Note or any other document or instrument relating to the transactions
contemplated hereby and thereby, and the Pledgee shall execute and deliver
(or cause to be executed and delivered) to the Pledgor all such proxies and
other instruments as such Pledgor may reasonably request for the purpose of
enabling such Pledgor to exercise the voting and other rights which he is
entitled to exercise pursuant to this Section 6(a); provided, however, that
the Pledgor shall not exercise or refrain from exercising any such right
if, in the judgment of the Pledgee, such action could have a material
adverse effect on the value of the Pledged Collateral or any part thereof;
and provided, further, that the Pledgor shall give the Pledgee at least
five (5) days' written notice of the manner in which he intends to
exercise, or the reasons for refraining from exercising, any such right.
(b) Upon the occurrence and during the continuance of any Event
of Default, all rights of the Pledgor to exercise the voting and other
consensual rights which he would otherwise be entitled to exercise pursuant
to Section 6(a) shall cease, and all such rights shall thereupon become
vested in the Pledgee, who shall thereupon have the right to exercise such
voting and other consensual rights, except to the extent the exercise of
such rights is prohibited by applicable law.
SECTION 7. Transfer and Other Liens; Additional Shares.
(a) The Pledgor agrees that he will not (i) sell or otherwise
dispose of, or grant any option with respect to, any of the Pledged
Collateral, or (ii) create or permit to exist any lien, security interest,
or other charge or encumbrance upon or with respect to any of the Pledged
Collateral, except for the security interest under this Agreement.
(b) The Pledgor agrees that he will (i) cause the issuer of the
Pledged Collateral not to issue any stock or other securities in
substitution for the Pledged Collateral issued by the issuer, except to the
Pledgor and (ii) pledge hereunder, immediately upon his acquisition
(directly or indirectly) thereof, any and all of such shares of stock or
other securities.
SECTION 8. Pledgee Appointed Attorney-in-Fact. The Pledgor hereby
appoints the Pledgee the Pledgor's attorney-in-fact,
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with full authority in the place and stead of the Pledgor and in the name of
the Pledgor or otherwise, from time to time in the Pledgee's discretion to
take any action and to execute any instrument which the Pledgee may deem
necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, to receive, endorse and collect all
instruments made payable to the Pledgor representing any dividend or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same.
SECTION 9. Pledgee May Perform. If the Pledgor fails to perform
any agreement contained herein, the Pledgee may itself perform, or cause
performance of, such agreement.
SECTION 10. Reasonable Care. The Pledgee shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession, if any, if such Pledged Collateral is
accorded treatment substantially equal to that which the Pledgee accords
its own property, it being understood that the Pledgee shall not have
responsibility for (i) ascertaining or taking action with respect to
shareholder or other rights, including without limitation, voting rights,
calls, conversions, exchanges, tenders or other matters relative to any
Pledged Collateral of the Pledgor, whether or not the Pledgee has or is
deemed to have knowledge of such matters, or (ii) taking any necessary
steps to preserve rights against any parties with respect to any Pledged
Collateral of the Pledgor.
SECTION 11. Remedy Upon Default.
(a) If any Event of Default shall have occurred and be
continuing, the Pledgee's sole remedy shall be to (i) sell, without notice
except as specified below, the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange, broker's
board or elsewhere, for cash, on credit or for future delivery, and upon
such other terms as the Pledgee, in its sole discretion, may deem
commercially reasonable, and (ii) apply the proceeds from such sale to the
payment of the unpaid principal of the Note and the interest accrued
thereon. In order to enable the Pledgee to exercise the remedy set forth
in this Section 11, the Pledgor has executed and delivered the Common Stock
Power attached hereto which the Pledgee will hold as additional Pledged
Collateral. The Pledgor agrees that, to the extent notice of sale shall be
required by law, at least twenty (20) days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. The Pledgee shall
not be obligated to make any sale of Pledged Collateral of the Pledgor
regardless of notice of sale having been given. The Pledgee may adjourn
any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
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(b) The Pledgor's liability to pay the Note is limited to the
value of the Pledged Collateral. In no event shall the Pledgor be
personally liable for any deficiency resulting from the sale of the Pledged
Collateral, nor shall any action or proceeding in any event be brought by
the Pledgee against the Pledgor to recover a personal judgment against him
upon this Agreement or upon the Note. Any surplus proceeds from the sale
of the Pledged Collateral remaining after payment in full of the Note shall
be paid over to the Pledgor.
SECTION 12. Security Interest Absolute. All rights of the Pledgee
and security interests hereunder, and all obligations of the Pledgor
hereunder shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Note
or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Pledge Obligations, or any
other amendment or waiver or any consent to any departure from the Note or
any other agreement or document relating thereto; or
(iii) any exchange, release or non-perfection of any
other collateral, for all or any of the Pledge Obligations.
SECTION 13. Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Pledgee, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given.
SECTION 14. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including facsimile
transmission and telegraphic communication) and, if to the Pledgor, mailed,
transmitted, telegraphed or delivered to him at 000 Xxxxxxxx-Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, and if to the Pledgee, mailed,
transmitted, telegraphed or delivered to it at 00 Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxx, Xxx Xxxxxx 00000, with a copy to Xxxxxxx X. Xxxxx, Esquire,
Smith, Stratton, Wise, Xxxxx & Xxxxxxx, 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx,
Xxx Xxxxxx 00000, or as to any party at such other address as shall be
designated by such party in a written notice to each other party complying
as to delivery with the terms of this Section 14. All such notices and
other communications shall, when mailed, transmitted or telegraphed, be
effective when deposited in the mails, confirmed by return facsimile
transmission or delivered to the telegraph company, respectively, addressed
as aforesaid.
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SECTION 15. Continuing Security Interest; Transfer of Note; Release
of Security Interest.
(a) This Agreement shall create a continuing security interest
in the Pledged Collateral of the Pledgor and shall (i) remain in full force
and effect until payment in full of the Pledge Obligations, (ii) be binding
upon the Pledgor, his successors and assigns, and (iii) inure, together
with the rights and remedies of the Pledgee, to the benefit of the Pledgee
and its respective successors, transferees and assigns. Without limiting
the generality of the foregoing clause (iii), the Pledgee may assign or
otherwise transfer the Note (or other instrument of indebtedness of the
Pledgor) held by it or any interest therein, or grant any participation in
its rights or obligations under the Note, subject to the provisions of the
Note, to any other person, and such other person shall thereupon become
vested with all the rights in respect thereof granted to the Pledgee herein
or otherwise.
(b) Upon the payment in full of the Pledge Obligations, the
Pledgor shall be entitled to the return of such of the Pledged Collateral
of the Pledgor as shall not have been sold or otherwise applied pursuant to
the terms of this Agreement and the Pledgee agrees promptly to return to
the Pledgor such Pledged Collateral.
SECTION 16. Severability. If any term or provision of this
Agreement is held to be illegal, invalid or unenforceable by any court of
competent jurisdiction, then such illegal, invalid or unenforceable term or
provision shall be severed from this Agreement, and the remainder of this
Agreement shall continue in full force and effect as if such illegal,
invalid or unenforceable term or provision had never been a part hereof.
SECTION 17. Governing Law; Terms. This Agreement shall be governed
by, construed and interpreted in accordance with the laws of the State of
New Jersey, without regard to the law of conflicts.
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IN WITNESS WHEREOF, the Pledgor has duly executed and delivered this
Pledge Agreement as of the date first written above.
/s/ Xxxxxx XxXxxxxx
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Xxxxxx XxXxxxxx
ACCEPTED AND AGREED TO
AS OF THE DATE HEREOF
PRINCETON VIDEO IMAGE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
and President
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COMMON STOCK POWER
Xxxxx F Xxxxxxxx (the "Transferor") does hereby assign and
transfer unto the following persons the number set forth opposite each
person's name of his shares of the Common Capital Stock of Princeton Video
Image, Inc., standing in his own name on the books of said Corporation
represented by Certificate No. _____ herewith:
Assign and transfer to Number of Shares
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Princeton Video Image, Inc. 36,000
The Transferor does hereby irrevocably constitute and appoint Smith,
Stratton, Wise, Xxxxx & Xxxxxxx his attorney to transfer said stock on the
books of the Corporation with full power of substitution in the premises.
Dated: July 31, 1997
/s/ Xxxxxx XxXxxxxx
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Xxxxxx XxXxxxxx
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