PLEDGE AGREEMENT
Exhibit
10.3
This
Pledge Agreement (“Pledge
Agreement”) is between Marquette Business Credit, Inc., d/b/a Marquette
Healthcare Finance (“Lender”) and Zynex, Inc., a
Nevada corporation (“Pledgor”).
RECITALS
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A.
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Lender,
Pledgor and Zynex Medical, Inc., f/d/b/a Stroke Recovery Systems, Inc., a
Colorado corporation (“Zynex Medical”) are
parties to a Loan and Security Agreement dated as of the date of this
Pledge Agreement, and associated documents and agreements (collectively,
the “Loan
Documents”).
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B.
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Pledgor
is the sole shareholder of Zynex
Medical.
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C.
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It
is a condition precedent to the agreement of Lender to enter into the Loan
Documents that Pledgor execute and deliver this Pledge Agreement in favor
of Lender.
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AGREEMENT
SECTION
1. DEFINITIONS
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1.1
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Capitalized
terms not otherwise defined in this Pledge Agreement have the meanings
ascribed in the Loan and Security
Agreement.
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1.2
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The
following term used in this Pledge Agreement will have the following
meaning:
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“Shares” means Pledgor’s entire
interest in (i) all shares now owned of Zynex Medical’s stock, presently
numbering 1,000,000, representing all of the issued and outstanding shares of
Zynex Medical, or (ii) all shares of Zynex Medical’s stock hereafter acquired by
Pledgor.
SECTION
2. SECURITY
INTEREST
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2.1
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Grant. As
security for the full and prompt payment and performance of all of Pledgor
and Zynex Medical’s Obligations to Lender, Pledgor grants Lender a
security interest in the Shares.
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2.2
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Perfection.
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(a)
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Contemporaneously
with the signing and delivery of this Pledge Agreement, Pledgor is
delivering to Lender the share certificates and other documents
representing the Shares, together with one or more stock powers or
assignments indorsed in blank.
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(b)
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Pledgor
will promptly deliver to Lender all share certificates and other documents
representing any shares in Zynex Medical that Pledgor subsequently
acquires, together with one or more stock powers or assignments indorsed
in blank.
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(c)
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Pledgor
authorizes Lender to file all financing statements that Lender deems
reasonably necessary to perfect and continue Lender’s security interest in
the Shares. Pledgor ratifies Pledgor’s prior authorization of
Lender to file similar financing statements before the date of this Pledge
Agreement.
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(d)
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Upon
Lender’s request, Pledgor will take any other actions that Lender deems
reasonably necessary to perfect and continue Lender’s security interest in
the Shares.
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2.3
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Termination. Upon
Pledgor’s request after the full payment and performance of the
Obligations, Lender will re-deliver to Pledgor the Shares and terminate
Lender’s financing statement concerning the
Shares.
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SECTION
3. REPRESENTATIONS
AND WARRANTIES OF PLEDGOR
Pledgor
represents and warrants to Lender as follows:
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3.1
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Authority. Pledgor
has full power and authority to sign and deliver this Pledge Agreement and
to perform all of Pledgor’s obligations under this Pledge
Agreement.
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3.2
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Binding
Obligation. This Pledge Agreement is the legal, valid,
and binding obligation of Pledgor, enforceable against Pledgor in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, or other similar laws of general application or by
general principles of equity.
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3.3
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No
Conflicts. The signing and delivery of this Pledge
Agreement by Pledgor and the performance by Pledgor of all of Pledgor’s
obligations under this Pledge Agreement will not: (a) breach
any agreement to which Pledgor is a party, or give any person the right to
accelerate any obligation of Pledgor; (b) violate any law, judgment, or
order to which Pledgor is subject; or (c) require the consent,
authorization, or approval of any person, including but not limited to any
governmental body.
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3.4
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Ownership. Pledgor
has good title to the Shares, free from all liens, mortgages, pledges,
security interests, and other encumbrances except encumbrances in favor of
Lender. Pledgor has the right and power to transfer and assign
the Shares to Lender, free from any restriction or
condition.
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SECTION
4. COVENANTS
OF PLEDGOR
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4.1
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Ownership. Pledgor
will keep the Shares free from all liens, mortgages, pledges, security
interests, and other encumbrances except encumbrances in favor of
Lender. Pledgor will not permit any person to restrict or
condition Pledgor’s right and power to: (a) transfer and assign
the Shares to Lender; or (b) vote or exercise the
Shares.
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4.2
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No Disposition of
Shares. Pledgor will not sell, encumber, license,
distribute, or otherwise dispose of any of the
Shares.
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Exhibit
10.3 - Page 2 of 5
SECTION
5. RIGHTS
AND OBLIGATIONS CONCERNING SHARES
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5.1
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Voting. Before
an Event of Default, and after any Event of Default that has been cured,,
Pledgor may vote and exercise the
Shares.
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SECTION
6. DEFAULT
AND REMEDIES
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6.1
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Default. Pledgor
shall be in default under this Pledge Agreement
upon:
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(a)
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Any
Event of Default under the Loan and Security Agreement or under any of the
other Loan Documents; or
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(b)
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Any
failure to perform under this Pledge Agreement within fifteen (15) days
after Lender’s written notice to Pledgor and opportunity to cure such
noticed failure to perform.
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6.2
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Remedies. On
and after any default of this Pledge Agreement, Lender may exercise the
following remedies, which are cumulative and which may be exercised
singularly or concurrently:
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(a)
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Foreclose
on the Shares in any manner authorized by
law;
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(b)
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Exercise
any remedy available to Lender under any Loan
Document;
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(c)
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Exercise
the right to vote and to exercise all rights with respect to the
Shares;
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(d)
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Exercise
any remedy available to Lender under the Uniform Commercial Code;
and
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(e)
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Exercise
any other remedy available to Lender at law or in
equity.
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6.3
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Additional Rights and
Obligations. After any default under this Pledge
Agreement and upon Lender’s request, Pledgor will assist Lender in
exercising any remedy available to Lender under this Pledge
Agreement.
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SECTION
7.
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AUTHORIZATION
AND WAIVERS
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7.1
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Authorization. Pledgor
authorizes Lender to take any action that Lender deems desirable to
perfect or continue Lender’s security interest in the
Shares.
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7.2
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Waiver by
Pledgor. Pledgor waives demand, presentment for payment,
notice of dishonor or nonpayment, protest, notice of protest, and lack of
diligence in collection, and agrees that Lender may amend any agreement
evidencing, guaranteeing, or securing any of the Obligations, take or not
take any action respecting any of the Collateral under the Loan Documents,
or extend or postpone the due dates of the Obligations without affecting
Pledgor’s liability under this Pledge
Agreement.
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Exhibit
10.3 - Page 3 of 5
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7.3
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No Waiver by
Lender. No waiver will be binding on Lender unless it is
in writing and signed by Lender. Lender’s waiver of a breach of
a provision of this Pledge Agreement or any agreement evidencing,
guaranteeing, or securing any of the Obligations will not be a waiver of
any other provision or a waiver of a subsequent breach of the same
provision. Lender’s failure to exercise any remedy under this
Pledge Agreement or any agreement evidencing, guaranteeing, or securing
any of the Obligations will not be considered a waiver by Lender of
Lender’s right to exercise the
remedy.
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SECTION
8. GENERAL
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8.1
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Time of
Essence. Time is of the essence with respect to all
dates and time periods in this Pledge
Agreement.
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8.2
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Binding
Effect. This Pledge Agreement will be binding on the
parties and their respective heirs, personal representatives, successors,
and permitted assigns, and will inure to their
benefit.
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8.3
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Amendment. This
Pledge Agreement may be amended only by a written document signed by the
party against whom enforcement is
sought.
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8.4
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Notices. All
notices or other communications required or permitted by this Pledge
Agreement: (a) must be in writing; (b) must be delivered to the
parties at the addresses set forth below, or any other address that a
party may designate by notice to the other parties; and (c) are considered
delivered upon actual receipt if delivered personally, by fax, or by a
nationally recognized overnight delivery service, or at the end of the
third business day after the date of deposit in the United States mail,
postage pre-paid, certified, return receipt
requested.
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To
Lender:
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To
Pledgor:
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Marquette
Healthcare Finance
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Zynex,
Inc.
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Standard
Insurance Center
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0000
Xxxxxxxxx Xxxxxx, Xxxxx 000
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000
XX Xxxxx Xxxxxx, Xxxxx 0000
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Xxxxxxxxx,
XX 00000
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Xxxxxxxx,
Xxxxxx 00000
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Attn: Xxxxxxxx
Xxxxxxxxxx
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Attn:
Xxxxxx Xxxxxxxxx
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Xxxxxxxx.Xxxxxxxxxx@xxxxxxxxx.xxx
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xxxxxxxxxx@xxxxxxxx.xxx
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8.5
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Severability. If
a provision of this Pledge Agreement is determined to be unenforceable in
any respect, the enforceability of the provision in any other respect and
of the remaining provisions of this Pledge Agreement will not be
impaired.
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8.6
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Further
Assurances. The parties will sign other documents and
take other actions reasonably necessary to further effect and evidence
this Pledge Agreement.
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8.7
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Governing
Law. This Pledge Agreement is governed by the laws of
the State of Oregon, without giving effect to any conflict-of-law
principle that would result in the laws of any other jurisdiction
governing this Pledge Agreement.
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Exhibit
10.3 - Page 4 of 5
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8.8
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8.9
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Jury
Waiver. Pledgor and Lender hereby voluntarily,
knowingly, irrevocable, and unconditionally waive any right to have a jury
participate in resolving any dispute (whether based upon contract, tort,
or otherwise) between Pledgor and Lender arising out of or in any way
related to this Pledge Agreement.
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8.10
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Attorney’s
Fees. The prevailing party in any legal action arising
under this Pledge Agreement will be entitled to the prevailing party’s
reasonable attorney's fees and other fees, costs, and expenses of every
kind, including but not limited to the costs and disbursements specified
in ORCP 68 A(2), incurred in connection with the legal
action.
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8.11
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Signatures. This
Pledge Agreement may be signed in counterparts. A fax
transmission of a signature page will be considered an original signature
page. At the request of a party, the other party will confirm a
fax-transmitted signature page by delivering an original signature page to
the requesting party.
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Dated
effective: September 22, 2008
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Lender:
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Marquette
Business Credit,
Inc.,
d/b/a
Marquette Healthcare Finance
/s/ Xxxxxxxx
Xxxxxxxxxx
By: Xxxxxxxx
Xxxxxxxxxx
Its: Senior
Vice President
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Pledgor:
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Zynex,
Inc.
/s/
Xxxxxx Xxxxxxxxx
By: Xxxxxx
Xxxxxxxxx
Its: Chief
Executive Officer and
President
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Exhibit 10.3 - Page 5 of 5
