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EXHIBIT 10.31
BORROWER PLEDGE AGREEMENT
THIS BORROWER PLEDGE AGREEMENT (this "Pledge Agreement",) is entered
into as of February 26, 1997 (the "Effective Date",), by and between INTELECT
SYSTEMS CORP., a Delaware corporation ("Pledgor"), and ST. XXXXX CAPITAL CORP.,
a Delaware corporation, ("Secured Party").
RECITALS
Pursuant to the terms, and subject to the conditions, set forth in
that certain Floating Rate Promissory Note (the "Note",) dated the Effective
Date issued by Pledgor and Intelect Communications Systems Limited, a
corporation organized under the laws of Bermuda ("ICSL" and together with
Pledgor, the "Makers") payable to the order of Secured Party in the original
principal sum of $2,500,000, Secured Party has agreed to advance funds to the
Makers.
ICSL owns one hundred percent (100%) of the issued and outstanding
capital stock of Pledgor and will derive both direct and indirect benefit from
the issuance and sale of the Note to the Purchaser.
It is a condition to the agreement of Secured Party to advance such
funds and to consummate the transactions contemplated by the Note that this
Pledge Agreement shall have been executed and delivered by Pledgor and shall be
in full force and effect.
NOW, THEREFORE, in order to induce, and in consideration of, the
execution and delivery of the Note, the advancement of funds under the Note by
Secured Party and the consummation of the transactions contemplated by the
Note, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Pledgor, Pledgor hereby
covenants and agrees with Secured Party as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. As used in this Pledge Agreement, the
following terms or phrases have the respective meanings set forth below or in
the Section following such term:
"Collateral" means the aggregate of:
(a) 1,100 shares of the common capital stock of DNA, evidenced
by Certificate Number 8, and any other shares of the common capital
stock of DNA now owned or hereafter acquired by Pledgor (such shares
of stock referred to in this subsection 1.1(a) are hereinafter
sometimes referred to as the "DNA Shares").
(b) (i) the certificates or instruments, if any, representing
the DNA Shares, (ii) all dividends (cash, stock or otherwise), cash,
instruments, rights to subscribe, purchase or sell and all other
rights and property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such securities, (iii) all replacements, additions to and
substitutions for any of the property referred to in this definition,
including, without limitation, claims against third parties, (iv) the
proceeds, interest, profits and other income of or on any of the
property referred to in this definition, and (v) all books and records
relating to any of the property referred to in this definition.
"DNA" means DNA Enterprises, Inc., a Texas corporation and a
wholly-owned Subsidiary of Pledgor.
"DNA Shares" has the meaning assigned that term in the definition of
Collateral above.
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"Effective Date" has the meaning given that term in the introduction
to this Pledge Agreement.
"ICSL" has the meaning given that term in the first Recital to this
Pledge Agreement.
"Makers" has the meaning given that term in the first Recital to this
Pledge Agreement.
"Note" has the meaning given that term in the first Recital to this
Pledge Agreement.
"Obligations" means the aggregate of:
(1) the indebtedness evidenced by the Note;
(2) all sums advanced and costs and expenses incurred by
Secured Party in accordance with the Note, this Pledge Agreement and
the other Transaction Documents, including, without limitation, all
reasonable legal, accounting, consulting or like fees, made and
incurred in connection with the Obligations described in clause (1)
above or any part thereof, any renewal, extension, or modification of,
or substitution for, the foregoing Obligations or any part thereof, or
the acquisition, perfection or maintenance and preservation of the
security for the Obligations, whether such advances, costs, or
expenses shall have been made and incurred at the request of Pledgor
or Secured Party,
(3) all other obligations of Pledgor or ICSL pursuant to
the Note and the other Transaction Documents; and
(4) any and all extensions and renewals of, substitutions
for, or modifications or amendments of any of the foregoing
Obligations or any part thereof.
"Pledge Agreement" means this Borrower Pledge Agreement dated as of
the Effective Date, between Pledgor and Secured Party, as said agreement may be
amended, modified, supplemented, and/or extended from time to time.
"Pledged Securities" means all of the securities and other property
(whether or not the same constitutes a "security" under the UCC) referred to in
the definition of "Collateral" above, and all additional securities (as that
term is defined in the UCC), if any, constituting Collateral under this Pledge
Agreement.
"Pledgor" has the meaning given that term in the introduction to this
Pledge Agreement.
"Proceeds" means whatever is received upon the sale, exchange,
collection, or other disposition of the Collateral and insurance payable or
damages or other payments by reason of loss or damage to the Collateral.
"Secured Party" has the meaning given that term in the introduction to
this Pledge Agreement.
"Security Interest" has the meaning assigned to that term in
Section 2.1.
"UCC" means the Uniform Commercial Code as in effect in any
jurisdiction applicable.
1.2 Other Definitions. Other capitalized terms used herein have
the meanings given them herein or in the Note.
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SECTION 2. CREATION OF SECURITY INTEREST
2.1 Creation of Security Interest. In consideration of Secured
Party's advancing or extending the funds or credit constituting the Obligations
(including the indebtedness evidenced by the Note), as a condition to such
advances and extensions, in consideration of the mutual covenants contained
herein, and for the purpose of securing the payment and performance of the
Obligations, Pledgor hereby grants to Secured Party a continuing security
interest in and to all Collateral, including in all Proceeds (the "Security
Interest").
2.2 Proceeds. Except as otherwise permitted herein, the security
interest of Secured Party hereunder in the Proceeds shall not be construed to
mean that Secured Party consents to the sale or other disposition of any part
of the Collateral.
2.3 Transfer of Collateral. All certificates or instruments
representing or evidencing the Pledged Securities shall be delivered to and
held pursuant hereto by Secured Party or a person or entity designated by
Secured Party and shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed instruments of transfer or assignment in blank.
Notwithstanding the preceding sentence, at Secured Party's discretion all
Pledged Securities must be delivered or transferred as set forth in Section
8-301(a) of the UCC.
SECTION 3. PLEDGOR'S REPRESENTATIONS, WARRANTIES, AND COVENANTS
3.1 Recording and Filing. Pledgor shall pay all costs of filing,
registering, and recording this and every other instrument in addition or
supplemental hereto and all financing statements Secured Party may reasonably
require, in such offices and places and at such times and as often as may be,
in the judgment of Secured Party, necessary to create, perfect, preserve,
protect, and renew the Lien hereof on and in the Collateral, and otherwise do
and perform all matters or things necessary or expedient to be done or observed
by reason of any law or regulation of any applicable jurisdiction or any other
competent authority for the purpose of effectively creating, perfecting,
preserving, protecting, maintaining, and renewing the Lien hereof in and on the
Collateral and the priority thereof. Pledgor shall also pay the costs of
obtaining reports from appropriate filing offices concerning Lien filings in
respect of any of the Collateral. A carbon, photographic, or other
reproduction of this Pledge Agreement or of any financing statement relating
hereto shall be sufficient as a financing statement.
3.2 Secured Party's Right to Perform Pledgor's Obligations;
Further Assurances. Pledgor agrees that, if Pledgor fails to perform any act
that Pledgor is required to perform under this instrument, Secured Party may,
but shall not be obligated to, perform or cause to be performed such act.
Accordingly, to the extent permitted by law, Pledgor hereby authorizes Secured
Party to execute and file financing statements and continuation statements
without Pledgor's signature thereon. Any expense incurred by Secured Party in
taking action in accordance with the preceding two sentences shall be a demand
obligation owing by Pledgor to Secured Party, shall bear interest in accordance
with Section 6.14, and shall be a part of the Obligations, and Secured Party
shall be subrogated to all of the rights of the party receiving the benefit of
such performance. The undertaking of such performance by Secured Party as
aforesaid shall not obligate such Person to continue such performance or to
engage in such performance or performance of any other act in the future, shall
not relieve Pledgor from the observance or performance of any covenant,
warranty, or agreement contained in this instrument or constitute a waiver of
default hereunder, and shall not affect the right of Secured Party to
accelerate the payment of all indebtedness and other sums secured hereby or to
resort to any other of its rights, powers, or remedies hereunder or under
applicable law. In the event Secured Party undertakes any such action, it
shall have liability to Pledgor only upon a showing of its bad faith, gross
negligence or willful misconduct (BUT SPECIFICALLY EXCLUDING ITS ORDINARY OR
PARTIAL NEGLIGENCE), and in all events no party other than the acting party
shall be liable to Pledgor. Pledgor will from time to time (a) sign, execute,
deliver, and file, alone or with Secured Party, all
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further financing statements, security agreements, or other documents that are
reasonably necessary; (b) procure any instruments or documents as may be
reasonably requested by Secured Party, and (c) take all further action that may
be reasonably necessary, or that Secured Party may reasonably request, to
confirm, perfect, preserve, and protect the security interests intended to be
granted hereby.
3.3 Defense of Claims. Pledgor will preserve, warrant, and defend
the Security Interest created hereby in the Collateral against the claims of
all Persons whomsoever; will maintain and preserve such Security Interest at
all times as contemplated by the Transaction Documents; and will not do or
suffer any matter or thing whereby such Security Interest might or could be
impaired. Pledgor shall promptly notify Secured Party in writing of the
commencement of any legal proceedings affecting Secured Party's interest in the
Collateral, or any part thereof, and shall take such action, employing
attorneys reasonably acceptable to Secured Party, as may be necessary to
preserve Pledgor's and Secured Party's rights affected thereby, and should
Pledgor fail or refuse to take any such action, Secured Party may take the
action on behalf of and in the name of Pledgor and at Pledgor's expense.
Moreover, Secured Party may take independent action in connection therewith as
it may in its sole discretion deem proper, and Pledgor hereby agrees to make
reimbursement for all reasonable sums advanced and all reasonable expenses
incurred in such actions plus interest in accordance with Section 6.14.
3.4 Corporate Identity. (a) Pledgor will maintain (i) the
location of its places of business and its primary corporate office and (ii)
the locations where it keeps or holds records relating to the Collateral at the
locations at which the same are located as of the date of this Pledge Agreement
or at locations other than those specified above if, prior to such relocation,
Secured Party shall have given Pledgor written notice thereof. Pledgor shall
not in any event change the location of any Collateral if such change would
cause the Security Interest in such Collateral to lapse or cease to be
perfected.
(b) Pledgor, to the extent not otherwise restricted in the Note, will
not change its name, identity or form of organization in any manner unless it
shall have given prior written notice to Secured Party. On any such change,
Pledgor will execute and file such financing statements or other documents as
may be reasonably requested by Secured Party to maintain the perfection of its
Security Interest in the Collateral.
3.5 Pledged Securities. The Pledged Securities have been duly
authorized and validly issued, and are fully paid and non-assessable. The
Pledged Securities constitute 100% of the issued and outstanding common stock
of DNA. No other person or entity has any interest in or rights to acquire any
interest in DNA.
3.6 First Priority Security Interest. The pledge of Pledged
Securities pursuant to this Pledge Agreement creates a valid and perfected
first priority security interest in the Collateral, enforceable against Pledgor
and all third parties and securing the payment and performance of the
Obligations.
3.7 Sale, Disposition or Encumbrance of Collateral. Pledgor will
not in any way encumber any of the Collateral (or permit or suffer any of the
Collateral to be encumbered) or sell, pledge, assign, lend or otherwise dispose
of or transfer any of the Collateral to or in favor of any person or entity
other than Secured Party.
3.8 Dividends or Distributions. Any and all:
(a) dividends and other distributions paid or payable in cash
in respect of any 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, or reclassification, and
(b) cash paid, payable or otherwise distributed in redemption
of, or in exchange for,
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any Collateral,
shall be, and shall be forthwith delivered to Secured Party to hold as,
Collateral and shall, if received by Pledgor, be received in trust for the
benefit of Secured Party, be segregated from the other property or funds of
Pledgor, and be forthwith delivered to Secured Party as Collateral in the same
form as so received (with any necessary indorsement); provided, however, that
Secured Party shall have no duty to receive and hold such dividends and
interest payments and shall not be responsible for any failure to do so or
delay in so doing.
3.9 Stock Powers. Pledgor shall furnish to Secured Party such
stock powers and other instruments as may be required by Secured Party to
assure the transferability of the Collateral when and as often as may be
requested by Secured Party.
3.10 Voting and Other Consensual Rights. Except to the extent
otherwise provided in Section 4.6(c), Pledgor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the Collateral or any
part thereof for any purpose not inconsistent with the terms of this Pledge
Agreement, the Note or any other Transaction Document; provided however, that
Pledgor shall not exercise or refrain from exercising any such right if such
action would have a material adverse effect on the value of the Collateral or
any part thereof, and, provided, further, that upon request of Secured Party at
any time or from time to time, Pledgor shall give Secured Party prompt written
notice of the manner in which Pledgor has exercised, or the reasons for
refraining from exercising, any such right.
3.11 Attorney-in-Fact. Pledgor hereby irrevocably appoints 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
Secured Party's discretion, but at Pledgor's cost and expense and without
notice to Pledgor, to take any action and to execute any assignment,
certificate, financing statement, stock power, notification, document or
instrument which Secured Party may deem necessary or advisable to accomplish
the purposes of this Pledge 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 or any part thereof and to give full discharge for the same.
3.12 Custody and Preservation of the Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which comparable secured parties accord
comparable collateral, it being understood and agreed, however, that Secured
Party shall not have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not Secured Party has or is deemed to
have knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against persons or entities with respect to any Collateral.
SECTION 4. DEFAULT
4.1 Events of Default. Upon the occurrence and continuation of an
Event of Default beyond any applicable cure periods, as provided in the Note,
Secured Party may declare all Obligations immediately due and payable.
4.2 Rights in Respect of Collateral. Upon the occurrence and
continuation of any Event of Default, in addition to all other rights of
Secured Party, Secured Party will have the right and power, but will not be
obligated, to enter upon and take possession of all or any part of the
Collateral, exclude Pledgor therefrom, and to hold, use, administer, manage,
and operate the same to the extent that Pledgor could do so. After a Default
under the Note, Secured Party may exercise every power, right, and privilege of
Pledgor with respect to the Collateral (including, without limitation, the
right of
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collection) without any liability (SPECIFICALLY INCLUDING LIABILITY FOR
ORDINARY OR PARTIAL NEGLIGENCE) to Pledgor in connection therewith except with
respect to bad faith, gross negligence or willful misconduct; provided,
however, that Secured Party may notify account debtors of Pledgor to make
payments directly to Secured Party only after all cure periods, as provided in
the Note, applicable to such Default have lapsed. Provided there has been no
foreclosure sale, when and if such expenses of operation have been paid and the
Obligations paid in full, the remaining Collateral shall be returned to
Pledgor.
4.3 Ancillary Rights. Upon the occurrence and continuation of an
Event of Default, in addition to all other rights of Secured Party hereunder,
without notice, demand, or declaration of default, all of which are hereby
expressly waived by Pledgor, Secured Party may proceed by a suit or suits in
equity or at law (a) for the seizure and sale of the Collateral or any part
thereof, (b) for the specific performance of any covenant or agreement
contained in this Pledge Agreement, the Note or any of the other Transaction
Documents or in aid of the execution of any power herein granted, (c) for the
foreclosure or sale of the Collateral or any part thereof under the judgment or
decree of any court of competent jurisdiction, or (d) for the enforcement of
any other appropriate legal or equitable remedy.
4.4 Receivership. Upon the occurrence and continuation of an
Event of Default, in addition to all other rights of Secured Party, Secured
Party from time to time may apply to a court of competent jurisdiction for the
appointment of one or more receivers to take possession of and to manage and
administer the Collateral or any portion thereof and to collect the Proceeds,
all without demand or declaration of default, which are hereby waived by
Pledgor. Secured Party shall be entitled to the appointment of such
receiver(s) as a matter of right, without regard to the value of the Collateral
as security for the Obligations or the solvency of Pledgor or any Person liable
for the payment or performance of all or any part of the Obligations. Such
receiver(s) shall serve without bond and shall have all usual and customary
powers and authorities in addition to all other powers and authorities
permitted by the law of the jurisdiction where the Collateral is situated and
all powers and authorities granted to Secured Party herein.
4.5 Expenses. Pledgor will pay to Secured Party all reasonable
expenses, including, without limitation, fees and expenses of any receiver(s),
reasonable attorneys' and consultants' fees and expenses, advanced by Secured
Party and incurred pursuant to the provisions contained in this Section 4, and
all such unpaid expenses shall be (a) a Lien against the Collateral; (b) added
to the Obligations, and (c) payable upon demand, with interest in accordance
with Section 6.14; provided, however, that the existence of said Lien shall in
no way waive, diminish, or prejudice any other rights, remedies, powers, and
privileges that Secured Party or any receiver(s) may have under the applicable
laws in the collection of such funds as loans or otherwise.
4.6 Pledged Securities. Upon the occurrence and during the
continuance of an Event of Default:
(a) All dividends and interest payments that are received by
Pledgor contrary to the provisions of this Pledge Agreement shall be
received in trust for the benefit of Secured Party, shall be
segregated from other funds of Pledgor and shall be forthwith paid
over to Secured Party as Collateral in the same form as so received
(with any necessary indorsement).
(b) Secured Party may exercise any and all rights of
conversion, exchange, subscription or any other rights, privileges or
options pertaining to any of the Pledged Securities as if it were the
absolute owner thereof, including without limitation, the right to
exchange at its discretion, any and all of the Pledged Securities upon
the merger, consolidation, reorganization, recapitalization or other
readjustment of any issuer of such Pledged Securities or upon the
exercise by any such issuer or Secured Party of any right, privilege
or option pertaining to any of the Pledged Securities, and in
connection therewith, to
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deposit and deliver any and all of the Pledged Securities with any
committee, depository, transfer agent, registrar or other designated
agency upon such terms and conditions as it may determine, all without
liability except to account for property actually received by it, but
Secured Party shall have no duty to exercise any of the aforesaid
rights, privileges or options and shall not be responsible for any
failure to do so or delay in so doing.
(c) at the option of Secured Party and upon written
notification thereof to Pledgor, all rights of Pledgor to exercise the
voting and other consensual rights which Pledgor would otherwise be
entitled to exercise pursuant to Section 3.10 with respect to the
Pledged Securities shall cease, and all such rights shall thereupon
become vested in Secured Party who shall thereupon have the sole right
to exercise such voting and other consensual rights, but Secured Party
shall have no duty to exercise any such voting or other consensual
rights and shall not be responsible for any failure to do so or delay
in so doing.
SECTION 5. FORECLOSURE ON COLLATERAL
5.1 Sale. Upon the occurrence and continuation of an Event of
Default, Secured Party will have all rights and remedies granted by law, and
particularly by the UCC, including, without limitation, the right to take
possession of the Collateral, and for this purpose Secured Party may enter upon
any premises on which any or all of the Collateral is situated and take
possession of and manage the Collateral or remove it therefrom. Secured Party
may require Pledgor to assemble the Collateral and make it available to Secured
Party at a place to be designated by Secured Party that is reasonably
convenient to all parties. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Secured Party will give Pledgor reasonable notice of the time and place
of any public sale or of the time after which any private sale or other
disposition of the Collateral is to be made. This requirement of sending
reasonable notice will be met if the notice is sent to Pledgor as provided in
the Note at least ten days before the time of the sale or disposition.
5.2 Private Sale. If Secured Party in good faith believes that
the Securities Act of 1933 or any other state or federal law prohibits or
restricts the customary manner of sale or distribution of any of the
Collateral, or if Secured Party determines that there is any other restraint or
restriction limiting the timely sale or distribution of any such property in
accordance with the customary manner of sale or distribution, Secured Party may
sell such property privately or in any other manner it deems, in good faith,
advisable at such price or prices as it determines in good faith, but otherwise
without any liability whatsoever to Pledgor in connection therewith. Pledgor
recognizes and agrees that such prohibition or restriction may cause such
property to have less value than it otherwise would have and that,
consequently, such sale or disposition by Secured Party may result in a lower
sales price than if the sale were otherwise held.
5.3 Secured Party as Purchaser. Secured Party will have the right
to become the purchaser at any foreclosure sale, and it will have the right to
credit upon the amount of the bid the amount payable to it out of the net
proceeds of sale.
5.4 Recitals Conclusive; Warranty; Ratification. Recitals
contained in any assignment or xxxx of sale to any purchaser at any sale made
hereunder will conclusively establish, as between the parties to such
assignment or xxxx of sale, the truth and accuracy of the matters therein
stated, including, without limitation, nonpayment of the unpaid principal sum
of, and the interest accrued on, the written instruments constituting part or
all of the Obligations after the same have become due and payable, nonpayment
of any other of the Obligations, or advertisement and conduct of the sale in
the manner provided herein. Secured Party will have authority to appoint an
attorney-in-fact to act in conducting any foreclosure sale and executing
assignments and bills of sale. All assignments and bills of sale may contain a
general warranty of title from the grantor. Pledgor ratifies and confirms all
legal acts that Secured Party may do in accordance with this Pledge Agreement.
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5.5 Effect of Sale. Any sale or sales of the Collateral or any
part thereof will operate to divest all right, title, interest, claim, and
demand whatsoever, either at law or in equity, of Pledgor in and to the
property sold, and will be a perpetual bar, both at law and in equity, against
Pledgor, Pledgor's successors or assigns and against any and all persons
claiming or who shall thereafter claim all or any of the property sold from,
through, or under Pledgor, or Pledgor's successors or assigns. The purchaser
or purchasers at the foreclosure sale will receive immediate possession of the
property purchased.
5.6 Application of Proceeds. Secured Party shall apply the
proceeds of any sale or other disposition of the Collateral as follows: First,
to the payment of all its expenses incurred in retaking, holding, and preparing
any of the Collateral for sale(s) or other disposition, in arranging for such
sale(s) or other disposition, and in actually selling or disposing of the same
(all of which are part of the Obligations); second, toward repayment of amounts
reasonably expended by Secured Party under Section 5 hereof; and third, toward
payment of the balance of the Obligations in the order and manner determined by
Secured Party in its sole discretion. Any surplus remaining shall be delivered
to Pledgor or as a court of competent jurisdiction may direct.
5.7 Deficiency. Pledgor shall remain liable for any deficiency
owing to Secured Party after application of the net proceeds of any foreclosure
sale. Nothing herein contained shall be construed as limiting Secured Party to
the collection of any Obligations only out of the income, revenue, rents,
issues, and profits from the Collateral or as obligating Secured Party to delay
or withhold action upon any default that may be occasioned by failure of such
income or revenue to be sufficient to retire the principal or interest when due
on the indebtedness secured hereby. It is expressly understood between Secured
Party and Pledgor that any Obligations shall constitute an absolute,
unconditional obligation of Pledgor to pay as provided herein or in the Note in
accordance with the terms of the instrument evidencing such Obligations in the
amount therein specified at the maturity date or at the respective maturity
dates of the installments thereof, whether by acceleration or otherwise.
5.8 Pledgor's Waiver of Appraisement, Marshalling, Etc. To the
extent permitted by applicable law, Pledgor agrees that Pledgor will not at any
time insist upon or plead or in any manner whatsoever claim the benefit of any
appraisement, valuation, stay, extension, or redemption law, if any, now or
hereafter in force, to prevent or hinder the enforcement or foreclosure of this
instrument, the absolute sale of the Collateral or the possession thereof by
any purchaser at any sale made pursuant to this instrument or pursuant to the
decree of any court having jurisdiction. To the extent permitted by applicable
law, Pledgor, for Pledgor and all who may claim by, through, or under Pledgor,
hereby waives the benefit of all such laws, if any, and to the extent that
Pledgor may lawfully do so under applicable law, waives any and all right to
have any Collateral marshalled upon any foreclosure of the Lien hereof or sold
in inverse order of alienation, and Pledgor agrees that Secured Party may sell
the Collateral as an entirety.
5.9 Discharge of Purchaser. Upon any sale made under the powers
of sale herein granted and conferred, the sales receipt issued by Secured Party
will be sufficient discharge to the purchaser or purchasers at any sale for the
purchase money, and such purchaser or purchasers and the heirs, devisees,
personal representatives, successors, and assigns thereof will not, after
paying such purchase money and receiving such receipt of Secured Party, be
obliged to see to the application thereof or be in anywise answerable for any
loss, misapplication, or nonapplication thereof.
SECTION 6. MISCELLANEOUS
6.1 Termination. If all the Obligations are paid and performed in
full and the covenants herein contained are performed in all respects, then
Secured Party shall, upon the request of Pledgor and at Pledgor's cost and
expense, deliver to Pledgor proper instruments executed by Secured Party
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evidencing the release of this instrument. Until such delivery, this
instrument shall remain and continue in full force and effect.
6.2 Remedies Cumulative. No failure on the part of Secured Party
or any holder of the Note to exercise, and no delay in exercising, any right,
power or privilege hereunder, under the Note or under any other Transaction
Document and no course of dealing between Pledgor and Secured Party or any
holder of the Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or privilege, or any abandonment or
discontinuance of any steps to enforce such right, power or privilege, preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. No notice to or demand on Pledgor in any case shall entitle
Pledgor to any other or further notice or demand in similar or other
circumstances. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
6.3 Partial Release. Except as expressly set forth therein, no
release from the Lien of this instrument of any part of the Collateral by
Secured Party shall in any way alter, vary, or diminish the force, effect or
lien of this instrument on the balance or remainder of the Collateral.
6.4 Subrogation. This Pledge Agreement is made with full
substitution and subrogation of Secured Party in and to all covenants and
warranties by others heretofore given or made in respect of the Collateral or
any part thereof.
6.5 Successor Lender. Any Person that succeeds to St. Xxxxx
Capital Corp. as Holder pursuant to, and as permitted by, the terms of the Note
automatically shall become Secured Party hereunder.
6.6 Notices. Subject to the provisions of Section 5.1, all
communications under this Pledge Agreement shall be given as provided in the
Note and shall be effective as therein provided.
6.7 Successors and Assigns. Neither party may assign its rights
or delegate its duties hereunder to any Person without prior written consent of
of the other party, which consent will not be unreasonably withheld. This
Pledge Agreement shall be binding upon the successors and permitted assigns of
each of the parties, and, except as expressly set forth in the Note and this
Section 6.7, shall inure to the benefit of the successors and permitted assigns
of each of the parties. The provisions of this Pledge Agreement are intended
to be for the benefit of all Persons constituting Secured Party.
6.8 Amendment and Waiver. (a) This Pledge Agreement may be
amended, and the observance of any term of this Pledge Agreement may be waived,
with (and only with) the written consent of Pledgor and Secured Party.
(b) Pledgor shall not solicit, request, or negotiate for or with
respect to any proposed waiver or amendment hereof except in accordance with
the provisions of this Agreement and the Note.
(c) Any such amendment or waiver shall apply equally to all persons
constituting Secured Party or Pledgor and shall be binding upon each future
Secured Party and upon each person constituting Pledgor regardless of whether
this Pledge Agreement, the Note or any other document shall have been marked to
indicate such amendment or waiver. No such amendment or waiver shall extend to
or affect any obligation not expressly amended or waived or impair any right
consequent thereon.
6.9 Governing Law. THIS PLEDGE AGREEMENT, THE LEGAL RELATIONS
AMONG THE PARTIES HERETO, AND ALL RIGHTS AND OBLIGATIONS HEREUNDER, INCLUDING
MATTERS OF CONSTRUCTION, VALIDITY, AND PERFORMANCE, SHALL BE GOVERNED BY AND
INTERPRETED, CONSTRUED, APPLIED, AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE
STATE OF TEXAS WITHOUT REFERENCE TO
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THE LAW OF ANOTHER JURISDICTION AND THE LAWS OF THE UNITED STATES OF AMERICA;
PROVIDED, HOWEVER, THAT MATTERS RELATING TO THE PERFECTION OF SECURITY
INTERESTS UPON ANY PERSONAL PROPERTY SHALL BE GOVERNED BY THE LAW OF ANOTHER
JURISDICTION TO THE EXTENT REQUIRED BY THE NONWAIVABLE PROVISIONS OF SUCH LAW
OR THE LAW OF THE STATE OF TEXAS.
6.10 Severability. If any provision in this Pledge Agreement is
rendered or declared illegal, invalid, or unenforceable by reason of any rule
of law, public policy, or final judicial decision, all other terms and
provisions of this Pledge Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the transactions
contemplated hereby are not affected in any manner adverse to Pledgor or
Secured Party. Upon such determination that any term or other provision is
invalid, illegal, or incapable of being enforced, Pledgor and Secured Party
shall negotiate in good faith to modify this Pledge Agreement so as to effect
the original intent of the parties hereto as closely as possible to the end
that the transactions contemplated hereby are fulfilled to the extent possible.
6.11 Entire Agreement. This Pledge Agreement constitutes the
entire agreement of the parties hereto with respect to the matters contained
herein and supersede all prior contracts and agreements with respect thereto,
whether written or oral.
6.12 Multiple Counterparts. The parties may execute more than one
counterpart of this Pledge Agreement, each of which shall be an original but
all of which together shall constitute one and the same instrument.
6.13 References. All references herein to one gender shall include
the other. Unless otherwise expressly provided, all references to "Sections"
are to Sections of this Pledge Agreement and all references to "Exhibits" are
to the exhibits attached hereto, each of which is made a part hereof for all
purposes.
6.14 Interest. The Obligations of Pledgor pursuant to Sections 3.2
and 4.5 shall bear interest at an annual rate equal to the default rate set
forth in the Note from the date that is ten days after the date Secured Party
notifies Pledgor that Secured Party has paid amounts required to be paid by
Pledgor hereunder until such amounts are reimbursed to Secured Party. Secured
Party agrees to use all reasonable efforts to forward expense invoices to
Pledgor for direct payment by Pledgor before Secured Party advances amounts to
be reimbursed by Pledgor, and no interest shall accrue on amounts directly paid
by Pledgor.
6.15. FINAL AGREEMENT OF THE PARTIES. THIS PLEDGE AGREEMENT
(INCLUDING THE EXHIBITS HERETO), THE NOTE AND THE OTHER TRANSACTION DOCUMENTS
TO WHICH PLEDGOR OR ANY OF ITS SUBSIDIARIES IS A PARTY CONSTITUTE A "LOAN
AGREEMENT" AS DEFINED IN SECTION 26.02(A) OF THE TEXAS BUSINESS AND COMMERCE
CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
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EXECUTED as of the Effective Date.
Pledgor: INTELECT SYSTEMS CORPORATION
Address: By:__________________________________
0000 Xxxxxxxxx Xxxxx Name:________________________________
Xxxxxxxxxx, Xxxxx 00000 Title: ______________________________
SECURED PARTY: ST. XXXXX CAPITAL CORP.
Address: By:__________________________________
0000 Xxxx Xxx Xxxx Name:________________________________
Suite 2030 Title: ______________________________
Xxxxxxx, Xxxxx 00000
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IRREVOCABLE STOCK POWER
For Value Received, the undersigned hereby sells, assigns and
transfers to ____________________________________ ______________, One Thousand
One Hundred (1,100) shares of the common stock of DNA Enterprises, Inc., a
corporation organized under the laws of the State of Texas, standing in the
undersigned's name on the books of the corporation, represented by Certificate
No. 8, and the undersigned does hereby irrevocably constitute and appoint
_______________________________________________ my true and lawful
attorney-in-fact, with full power of substitution, to transfer this stock on
the books of the corporation.
Dated: ___________________________
INTELECT SYSTEMS CORPORATION
By:
Name:
Title:
In the presence of:
___________________________________________________
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