NEGATIVE PLEDGE AGREEMENT
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THIS NEGATIVE PLEDGE AGREEMENT (hereinafter "Agreement") is made this 16th
day of February, 2006, by and among THE ESTATE OF XXXXXXXXX X. XXXXXX a/k/a XXXX
X. XXXXXX a/k/a XXXX XXXXXX, DECEASED (hereinafter "Estate" or "Lender") and
XXXX X. XXXXXX ("Jaindl").
WITNESSETH
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WHEREAS, Xxxxxxxxx X. Xxxxxx has heretofore provided a loan to Jaindl
Associates, L.P. (hereinafter the "Partnership") in the original principal
amount of $4,493,812, the current principal balance being $4,421,297.98
(hereinafter the "Loan"), pursuant to the terms and conditions of that certain
Promissory Note dated March 1, 2004 executed by the Partnership in favor of
Xxxxxxxx X. Xxxxxx (hereinafter the "Note"); and
WHEREAS, Xxxxxxxxx X. Xxxxxx died on March 29, 2004, and Letters
Testamentary were duly issued by the Register of Xxxxx of Lehigh County on April
6, 2004 appointing Xxxxx X. Xxxxxx, Xxxx X. Xxxxxx and Xxxx X. Xxxxxxx as
Co-Executors (collectively, "the Co-Executors"); and
WHEREAS, on November 30, 2005, the Co-Executors called the Note to be paid
in accordance with its terms so that the payments under the Note would be due on
or before November 30, 2006; and
WHEREAS, pursuant to that certain Agreement for the Transfer/Assignment of
Partnership Interests of even date herewith, common stock of American Bank,
Incorporated has been distributed by the Partnership to its general and limited
partners; and
WHEREAS, as a result of the above, and when Jaindl becomes the sole
remaining general partner of the Partnership, the assets of the Partnership are
significantly reduced; and
WHEREAS, because of his role as general partner of the Partnership, Jaindl
has agreed to enter into this Agreement; and
WHEREAS, Xxxxxx has agreed to execute this Agreement with respect to
760,000 shares of common stock of American Bank, Incorporated which he has
received as part of the distribution from the Partnership and which he now owns
individually (the "Covenanted Stock").
NOW, THEREFORE, in consideration of the promises and the covenants set
forth herein, the parties hereto incorporate the foregoing recitals as a
material part hereof, and intending to be legally bound hereby, agree as
follows:
1. Negative Pledge. Jaindl represents, warrants, covenants, promises and
agrees that he has not and shall not sell, transfer, pledge, encumber, assign or
grant a security interest in the Covenanted Stock (the "Negative Pledge") until
all principal, interest, other fees, charges and other sums owing under the Note
(the "Obligations") have been paid in full.
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2. Delivery of Covenanted Stock. All certificates evidencing the Covenanted
Stock shall be delivered to and held by Xxxx X. Xxxxxxx, in his capacity as
Co-Executor of the Estate and by and on behalf of the Estate ("Lisicky").
Lisicky shall hold the Covenanted Stock certificates until such time as the
Obligations of the Partnership under the Note have been fully discharged, and
when the Obligations of the Partnership under the Note have been fully
discharged, then Lisicky shall immediately deliver the Covenanted Stock to
Jaindl. Under no circumstances shall the Covenanted Stock be deemed pledged,
posted or delivered as collateral for any obligation of the Partnership and/or
Jaindl under the Note. THIS IS NOT A SECURITY AGREEMENT, and it is agreed the
Estate does not have any type of lien against the Covenanted Stock (whether by
common law or otherwise), and the Estate shall at no time claim or contend that
it has a lien against the Covenanted Stock. Xxxxxx'x only obligations under this
Agreement are set forth in this Agreement.
3. Representation and Warranties. Jaindl represents and warrants to the
Estate as follows:
(a) Xxxxxx is the sole holder of record and the sole owner of the
Covenanted Stock, free and clear of any lien, encumbrance, pledge , assignment,
agreement and/or security interest thereon or affecting title or ownership
thereof, excepting only the encumbrance created by this Agreement.
(b) All of the Covenanted Stock has been duly authorized, validly
issued, and is fully paid for and non-assessable.
(c) Jaindl has the full right, power and authority to enter into this
Agreement and more specifically to encumber the Covenanted Stock by the Negative
Pledge.
(d) None of the Covenanted Stock has been issued or transferred in
violation of any securities registration, securities disclosure, or securities
laws or regulations of any jurisdiction to which such Covenanted Stock may be
subject.
(e) No consent, approval, authorization or other action by any
governmental authority or any person is required for entry into this Agreement
and imposing the Negative Pledge on the Covenanted Stock.
(f) The Covenanted Stock is owned by Jaindl and is represented by the
stock certificate numbers set forth on Exhibit "A" hereto.
(g) There are not options, warrants, calls, charges or commitments of
any type or character whatsoever relating to the Covenanted Stock.
(h) This Agreement has been duly authorized, executed and delivered by
Jaindl and constitutes a legal, valid and binding obligation of Jaindl
enforceable against Jaindl in accordance with its terms.
The representation and warranties set forth in this Agreement shall survive
execution and delivery of this Agreement and delivery of the Covenanted Stock to
Lisicky, but shall be deemed having been made only on the date hereof.
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4. Termination. Immediately following the wiring of funds or certified
check evidencing the payment of the Obligations under the Note, the Lender shall
deliver to Jaindl the share certificates for the Covenanted Stock subject to
this Agreement, and all of Xxxxxx'x obligations hereunder shall at such time
terminate.
5. Miscellaneous.
(a) The Lender may execute any of its duties hereunder by or through
agents and shall be entitled to advice of counsel, at its expense, not Xxxxxx'x,
concerning all matters pertaining to its duties hereunder.
(b) Following an Event of Default under the Note, Jaindl agrees to
promptly reimburse the Lender for actual out-of-pocket expenses, including,
without limitation, reasonable counsel fees, incurred by the Lender in
connection with the enforcement of this Agreement.
(c) Neither the Lender, nor any of its Co-Executors, agents or counsel
shall be liable for any action lawfully taken or omitted to be taken by it or
them hereunder or in connection herewith, except for (a) a breach or default by
the Lender under this Agreement, or (b) its or their own gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
(d) THIS AGREEMENT SHALL BE BINDING UPON JAINDL AND HIS HEIRS,
SUCCESSORS AND ASSIGNS (INCLUDING A DEBTOR-IN-POSSESSION ON BEHALF OF JAINDL),
AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, THE LENDER (BUT IS NOT
ASSIGNABLE BY LENDER), AND SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE, AND NONE OF THE TERMS OR PROVISIONS
OF THIS AGREEMENT MAY BE WAIVED, ALTERED, MODIFIED OR AMENDED EXCEPT IN WRITING
DULY SIGNED FOR AND ON BEHALF OF THE LENDER AND JAINDL.
6. Severability. If for any reason any provision or provisions hereof are
determined to be invalid and contrary to any existing law or future law, such
invalidity shall not impair the operation of or effect those portions of this
Agreement which are valid.
7. Notices. All notices, statements, requests, demands, consents, and other
communications (each referred to herein as "Notice") permitted or desired to be
made relative to this Agreement shall be given by one of the methods described
in this paragraph. Notice shall be effective and deemed to have been received as
follows: when actually received by any method including hand-delivery and
facsimile; one day after deposit for overnight delivery with a nationally
recognized courier requiring a signature for receipt; two days following deposit
with the U.S. Postal Service, postage prepaid, certified mail. All notices shall
be directed to the parties at the addresses shown in this Agreement. Any party
may change its address for Notices under this Agreement by giving written notice
in like manner to the other party(ies), specifying that the purpose of the
Notice is to change the party's address.
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Estate:
Estate of Xxxxxxxxx X. Xxxxxx a/k/a Xxxx X. Xxxxxx
a/k/a Xxxx Xxxxxx, Deceased
c/o Xxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Estate of Xxxxxxxxx X. Xxxxxx a/k/a Xxxx X. Xxxxxx
a/k/a Xxxx Xxxxxx, Deceased
c/o Xxxx X. Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
With a copy to:
Xxxxxxx & Xxx
000 Xxxxxxxx Xxxx, Xxxxx 000
P. O. Xxx 00000
Xxxxxx Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Xxxxxx:
Xxxx X. Xxxxxx
American Bank
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
With a copy to:
Law Offices of Xxxxx X. Xxxxxxx
Mill Run Office Center
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
8. Binding Effect. This Agreement shall be binding upon, and for the
benefit of, the parties hereto, and, where applicable, their respective personal
representatives, beneficiaries, heirs, successors and/or assigns.
9. Section Titles. The section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
10. Governing Law. It is agreed that this Agreement was executed in Lehigh
County, Pennsylvania and that this Assignment is to be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania without regard
to conflict of laws principles.
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11. Counterparts. This Assignment may be executed in any number of separate
counterparts by one or more of the parties hereto and all of said counterparts
taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
/s/ Xxxxxx Xxxxx /s/ Xxxx X. Xxxxxx
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Witness Xxxx X. Xxxxxx
"Jaindl"
ESTATE OF XXXXXXXXX X. XXXXXX a/k/a
XXXX X. XXXXXX a/k/a XXXX X. XXXXXX,
DECEASED
/s/ Xxxxxx Xxxxx /s/ Xxxx X. Xxxxxx
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Witness Xxxx X. Xxxxxx, Co-Executor
/s/ Xxxxxx Xxxxx /s/ Xxxxx X. Xxxxxx
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Witness Xxxxx X. Xxxxxx, Co-Executor
/s/ Xxxxxx Xxxxx /s/ Xxxx X. Xxxxxxx
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Witness Xxxx X. Xxxxxxx, Co-Executive
"Estate"
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