PLEDGE AGREEMENT
THIS
PLEDGE AGREEMENT ("Agreement"),
dated
as of __________ ___, 2007, is executed by and between Ho
Capital Management LLC,
a
Delaware limited liability company having an office at 000 Xxxxxxxx Xxxxxx,
Xxx.
00X, Xxx Xxxx, Xxx Xxxx 00000 ("HCM");
Noble
Investment Fund Ltd.,
a
company formed under the laws of Gibraltar having an address at World Trade
Center, Xxx Xxxxxx 00, 0000 Xxxxxx-Xxxx, Xxxxxxxxxxx ("Noble");
and
Xxxxxxx
Xxxx, LLP,
a law
firm formed under the laws of the State of New York and having an office at
0000
Xxxxxxxx, 00xx
xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the “Collateral
Agent”).
HCM,
Noble and their respective officers, directors, members, authorized
representatives and affiliates are hereinafter sometimes collectively referred
to as the “Business
Parties.”
WITNESSETH:
WHEREAS,
on the date hereof, the Noble has made a loan of $5,725,000.00 (the
“Loan”)
to
HCM, to enable HCM to purchase, for $5,725,000, Warrants (the “Warrants”)
to
purchase up to 5,725,000 ordinary shares (the “Warrant
Shares”)
of
Asia
Special Situation Acquisition Corp.,
a
Cayman Islands company (the “Business
Combination Company”),
which
Warrants are issued in the name of HCM in connection with the initial public
offering of the Business Combination Company’s ordinary shares; and
WHEREAS,
to evidence such Loan, HCM has issued to the Noble that certain $5,725,000.00
promissory note payable to the Noble, dated of even date herewith (the
“Note”);
and
WHEREAS,
in order to secure the payment and performance of the obligations, liabilities
and indebtedness of HCM in favor of Noble under the Note, HCM has agreed to
pledge to the Noble the Warrants and underlying Warrant Shares, and (upon
release of the “Noble Warrants” (as hereinafter defined) from this Agreement
referred to in Section
3(a) below)
to
cause the “HCM Warrants” (as hereinafter defined) to be delivered to the
Collateral Agent for the benefit of Noble;
NOW,
THEREFORE, in
consideration of the premises and of the mutual covenants set forth herein
and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1.
Pledge;
Non-Recourse Obligation.
(a) HCM
hereby pledges, as pledgor, to Noble, as pledge, and grants to Noble a first
priority lien on and security interest in all of HCM's right, title and interest
in and to all of the Warrants, together with all proceeds from the sale of
the
Warrants and the Warrant Shares, all dividends paid in respect of the Warrant
Shares and any property or securities delivered to the holder of the Warrants
or
Warrant Shares in respect thereof in the event of a merger or takeover of the
Business Combination Company by a third party (collectively, the "Pledged
Collateral").
(b) Notwithstanding
the foregoing, upon consummation of a Required Acquisition (as such term is
defined in the Note) by the Business Combination Company, fifty percent (50%)
of
the Pledged Collateral, representing Warrants to purchase 2,862,000 Warrant
Shares (the “Noble
Warrants”):
(i)
shall be released from the pledge and security interest contemplated by this
Agreement, (ii) shall be registered by the Business Combination Company in
the
name of the Noble or its designees, (iii) shall (together with the underlying
2,862,000 Warrant Shares issuable upon exercise of the Noble Warrants) be owned
of record and beneficially by the Noble, and (iv) shall be delivered by the
Collateral Agent to the Noble. Upon consummation of such Required Acquisition
by
the Business Combination Company, the fifty percent (50%) balance of the Pledged
Collateral, representing Warrants to purchase 2,862,000 Warrant Shares (the
“HCM
Warrants”):
(i)
shall continue to remain Pledged Collateral under this Agreement, (ii) shall
be
registered in the name of HCM or its designees, (iii) shall (together with
the
underlying 2,862,000 Warrant Shares issuable upon exercise of the HCM Warrants)
be owned of record by HCM and beneficially owned solely by Xxxxxx Xx or her
designees, and (iv) shall be delivered to the Collateral Agent and held by
the
Collateral Agent subject to the terms and conditions of this Agreement, all
as
contemplated by Section 3 below. As a result, the only Pledged Collateral
following consummation of a Required Acquisition shall be the HCM Warrants
and
underlying 2,862,000 Warrant Shares issuable upon exercise of the HCM
Warrants.
-
1
-
(c) HCM
hereby agrees to execute and deliver to the Collateral Agent, as the case
may be
(i)
assignments
separate from the Warrants substantially in the form of Exhibit
A
hereto,
undated and appropriately endorsed in blank, with respect to the Warrants
comprising the Pledged Collateral and (ii) if legally required, such financing
statements as the Collateral Agent may reasonably request with respect to
the
Pledged Collateral (or, if execution by HCM is not required pursuant to the
applicable Uniform Commercial Code, HCM hereby authorizes the Collateral
Agent
to file all financing statements deemed necessary by Noble to perfect the
security interests granted hereunder), (iii) take such other steps as Noble
may
from time to time reasonably request to perfect Noble's security interest
in the
Pledged Collateral or any part thereof under applicable law, and (iv) after
the
occurrence and during the continuance of an Event of Default, to execute
and
deliver on behalf of HCM such other documents of transfer as Noble or the
Collateral Agent may from time to time reasonably require to enable Noble
to
transfer the Pledged Collateral into the name of Noble or the name of its
nominee (all of the foregoing are hereinafter collectively referred to as
the
"Assignments").
(d) By
its execution of this Agreement, the Noble does hereby acknowledge and agree
that notwithstanding anything to the contrary, express or implied, contained
in
this Agreement or in the Note: (i) in the event that a Required Acquisition
is
not consummated within 24 months following the closing of the Business
Combination Company’s initial public offering, the Warrants and the Pledged
Collateral will likely be worthless, and (ii) in the event that such Required
Acquisition shall be timely consummated, the sole source for repayment of
the
Loan and payment of the outstanding principal amount of and interest accrued
on
the Note will be the HCM Warrants, the 2,862,000 Warrant Shares underlying
the
HCM Warrants, when and if exercised, and/or the proceeds from the sale or
disposition thereof. Accordingly, notwithstanding anything to the contrary,
express or implied, contained in this Agreement or in the
Note:
(i) absent
only acts or omissions of HCM or Xxxxxx Xx constituting actual fraud against
Noble, neither HCM, Xxxxxx Xx, nor any transferee of HCM or Xxxxxx Xx, nor
any
other person or firm, shall have any personal liability or obligation to the
Noble pursuant to this Note; and
(ii) except
for the HCM Warrants and underlying 2,862,000 Warrant Shares and the proceeds
thereof, none of the assets or properties of HCM, Xxxxxx Xx or their transferees
(including without limitation all or any portion of the 1,312,500 ordinary
shares of the Business Combination Company owned of record by HCM and
beneficially owned by Xxxxxx Xx or her transferees) shall be subject to any
claims, attachments, liens, security interests or rights in favor of the Noble
to secure payment of the Note or otherwise.
2.
Security
for Secured Obligations.
The
Pledged Collateral secures the prompt and complete payment, performance and
observance of the Note (including, without limitation, all obligations and
liabilities of HCM hereunder).
3.
Delivery
of Warrants; Perfection of Security Interest.
(a) Upon
consummation of the initial public offering of the Business Combination Company,
HCM hereby agrees to promptly deliver: (i) the Warrants to Maxim
Group LLC,
as
escrow agent (the “Escrow
Agent”),
pursuant to the terms of an agreement, of even date herewith, by and among
HCM,
Noble and the Escrow Agent (the “Escrow
Agreement”),
and
(ii) the Assignments to the Collateral Agent to be held subject to this
Agreement.
-
2
-
(b)
Upon
the
Business Combination Company’s consummation of a Required Acquisition, the
Escrow Agreement shall immediately terminate in accordance with its terms.
At
such time, the Escrow Agent shall promptly return to the Business Combination
Company or its transfer agent all Warrant certificates or other instruments
evidencing the Pledged Collateral then in its possession, together with a
signed
instruction letter, instructing the Business Combination Company and its
transfer agent to: (i) exchange such Warrant certificates for two new Warrant
certificates each entitling the holders thereof to purchase up to 2,862,500
ordinary shares of the Business Combination Company; (ii) cause one of such
Warrant certificates, representing the HCM Warrants, to be registered in
the
name of HCM and the other Warrant certificate, representing the Noble Warrants,
to be registered in the name of Noble; (iii) deliver the Warrant certificate
representing the Noble Warrants directly to Noble (at an address designated
by
it), and (iv) deliver the Warrant certificate representing the HCM Warrants
directly to the Collateral Agent at 0000 Xxxxxxxx, 00xx
xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, attn: Xxxxxxx X. Xxxxx, Esq.
4.
Pledged
Collateral Adjustments.
If during
the term of this Agreement:
(a)
any
non-cash dividend or distribution, reclassification, readjustment or other
change is declared or made in the capital structure of Company, or any option,
warrant or similar instrument included within the Pledged Collateral is
exercised, or both, or
(b)
any
subscription, warrants, options shall be issued in connection with the Pledged
Collateral,
then
HCM
shall (i) promptly deliver new, substituted and additional shares, warrants,
options, or other equity securities, issued by reason of any of the foregoing,
and all certificates and other instruments evidencing the same to Noble to
be
held under the terms of this Agreement and shall constitute Pledged Collateral
hereunder, and (ii) promptly deliver to Noble or the Collateral Agent such
additional Pledged Collateral.
5.
Subsequent
Changes Affecting Pledged Collateral; Sale of Warrants or Warrant Shares;
Co-Sale Rights.
(a) Noble
may, after the occurrence and during the continuance of an “Event of Default”
(as that term is defined in the Note), upon not less than ten (10) days prior
written notice to HCM and the Collateral Agent and at its option, transfer
or
register the Pledged Collateral or any part thereof into its or its nominee's
name with or without any indication that such Pledged Collateral is subject
to
the lien created hereunder. In addition, upon the occurrence and during the
continuance of an Event of Default, Noble may at any time exchange certificates
or other instruments representing or evidencing Pledged Collateral for
certificates or other instruments of smaller or larger denominations.
(b) At
any
time, and from time to time, prior to the expiration of the five-year term
of
the Note, upon receipt of written notice from HCM to Noble of HCM’s intent to
sell for cash all or any portion of the HCM Warrants or the underlying Warrant
Shares, HCM shall arrange, or shall instruct the Collateral Agent to arrange,
to
deliver the securities to the then acting transfer agent for the Warrants
or
ordinary shares, as the case may be, of the Business Combination Company
so that
they may be sold accordingly. Until the Note, together with all interest
accrued
thereon, shall have been paid in full, on each occasion that HCM elects to
sell
any of the HCM Warrants or underlying Warrant Shares, all of such sales shall
be
made only (i) through a brokerage account on which both HCM or Xxxxxx Xx,
on the
one part, and Noble (or their designee), on the other part, are joint
signatories, or (ii) though a private escrow account on which both HCM or
Xxxxxx
Xx (for HCM) and Noble (or their designee) are joint signatories. All of
the net
proceeds from the sale of the HCM Warrants or underlying Warrant Shares,
as the
case may be, shall be paid over to HCM until the balance of principal and
interest, if any, on the Note shall be paid in full.
-
3
-
(c) Notwithstanding
the foregoing provision of Section
5(b),
HCM may
only sell or transfer the HCM Warrants or underlying Warrant Shares to
unaffiliated third parties for cash at the then prevailing market prices
for
such HCM Warrants and/or Warrant Shares,
unless
such sale or transfer is either (i) in connection with a
merger,
reorganization, or sale of control of the Business Combination Company with
a
third party, or (ii) approved in writing by the Noble; which approval shall
not
be unreasonably withheld or delayed. In the event that HCM shall seek to
sell
HCM Warrants or underlying Warrant Shares to unaffiliated third parties for
either (x) all or part of the consideration in a form other than cash, or
(y) at
a price other than the then prevailing market prices, Noble shall either
approve
or disapprove such proposed sale (or request further information in respect
thereof) within five (5) “Business Days” of Noble’s receipt of written notice
from HCM of such proposed sale (which written notice shall contain all relevant
terms of such proposed sale, including the name of the proposed purchaser).
The
failure by Noble to appropriately and timely respond to such written notice
shall be deemed to be Noble’s consent to such sale transaction. As used herein,
a “Business Day” shall mean any day, other than Saturday, Sunday or any other
day in which Citibank N.A., New York, N.Y., is not open for
business.
(d)
Until
the Note, together with all interest accrued thereon, shall have been paid
in
full, at any time that Noble or its transferees (excluding, however, from
the
provisions of this Section 5(d), any transferees in a public distribution
of the
Noble Warrants or underlying Warrant Shares) are entitled hereunder to sell,
and
elect to sell all or any portion of the Noble Warrants or underlying Warrant
Shares, Noble or such transferee(s) shall notify HCM of its or their intent
so
to sell, which notice shall contain all of the material terms of the proposed
sale, including the amount of securities to be sold and the price. For a
period
of ten (10) days following its receipt of such notice, HCM shall have the
right
to participate in the sale by selling up to fifty percent (50%) of the aggregate
number and amount of Warrants or Warrant Shares (including the HCM Warrants
and
the Noble Warrants), as the case may be, proposed to be sold by the Noble
or its
transferee(s) at the same time and price and to the same purchaser(s). Until
the
Note, together with all interest accrued thereon, shall be paid in full,
as
provided in Section
5(b) hereof,
all net proceeds from any such sales by HCM shall be applied toward payment
of
the Note. HCM shall notify Noble of the names and addresses of any transferees
of the HCM Warrants and underlying Warrant Shares, and any such transferee(s)
shall, as a condition of such transfer, execute a written acknowledgement
reasonably satisfactory to Noble or its counsel agreeing to be bound by the
provisions of this Section 5(d).
6.
Representations
and Warranties.
HCM
hereby represent and warrant as of the effective date hereof to Noble as
follows:
(a)
HCM
is
the legal and beneficial owner of the Pledged Collateral owned by HCM, free
and
clear of any lien, except for the lien created by this Agreement; provided,
however,
that
upon the consummation by the Business Combination Company of a Required
Acquisition and the simultaneous distribution of the Warrants
as
provided in Section 3 of this Agreement, in accordance with the terms of
the
Operating Agreement of HCM, one hundred percent (100%) of the beneficial
interest in the Pledged Collateral shall be deemed vested solely in Xxxxxx
Xx,
her affiliates or designated assigns;
(b)
The
Pledged Collateral has been duly authorized and issued and has been fully
paid
and non-assessable; and
(c)
HCM
has
full power and authority to enter into this Agreement and has the right to
vote
the Warrant Shares issuable upon exercise of the Pledged Collateral, assign,
deposit, pledge and xxxxx x xxxx on or otherwise transfer all of its rights
in
the Pledged Collateral free and clear of any liens;
7.
Voting
Rights.
During
the term of this Agreement, and except as otherwise provided in this Section
7,
HCM shall have the right to vote the Pledged Collateral (to the extent it
may
vote) on all questions presented to the holders of ordinary shares of the
Business Combination Company, and the Collateral Agent will deliver all
necessary documents to allow HCM to take such action upon HCM's request.
After
the occurrence and during the continuance of an Event of Default, Noble may,
at
Noble's option, exercise all voting and other consensual rights and powers
pertaining to the Pledged Collateral (to the extent it may vote). HCM hereby
agrees to execute all proxies or other instruments, documents or agreements
deemed reasonably necessary by Noble to evidence the right to vote the Pledged
Collateral as provided hereunder, and HCM agrees that it shall not be entitled
to rescind, revoke or otherwise modify Noble's vote executed in accordance
with
this Section 7. Any and all proxies executed by HCM pursuant to this Section
7
shall be deemed for all purposes to be a proxy coupled with an interest and
shall be irrevocable until the payment in full, in cash, of all amounts due
under the Note (the "Obligations").
-
4
-
8.
Dividends
and Other Distributions. The
Collateral Agent shall be entitled to receive any and all dividends and other
distributions paid in respect of the Pledged Collateral which dividends and/or
distributions shall be deemed to be held in escrow if received by Noble and
shall become part of the Pledged Collateral upon receipt thereof.
9.
Transfers
and Other Liens.
HCM
agrees that, except as otherwise provided in Section 5 above, until all of
the
Obligations are paid in full, it will not (i)
sell
or
otherwise dispose of, or grant any option or other rights with respect to,
any
of the Pledged Collateral without the prior written consent of Noble, or (ii)
create or permit to exist any lien upon or with respect to any of the Pledged
Collateral, except for the lien created by this Agreement.
10.
Remedies.
Subject
at all times to the provisions of Section 11 below:
(a)
Noble
shall have, in addition to any other rights given under this Agreement, the
Note
or by applicable law, all of the rights and remedies with respect to the
Pledged
Collateral of a secured party under the Uniform Commercial Code as in effect
from time to time in the State of New York. In
addition,
after the occurrence and during the continuance of an Event of Default (as
that
term is defined in the Note), Noble shall, subject to provisions of applicable
law, have such powers of sale and other powers as may be conferred by applicable
law. With respect to the Pledged Collateral or any part thereof which shall
then
be in or shall thereafter come into the possession or custody of Noble, or
which
Noble shall otherwise have the ability to transfer under applicable law,
Noble
may, in its sole discretion, without notice except as specified below, after
the
occurrence and during the continuance of an Event of Default, sell or cause
the
same to be sold in private sale, in one or more sales or lots, at such price
as
Noble may deem best, for cash or on credit or for future delivery, without
assumption of any credit risk, and the purchaser of any or all of the Pledged
Collateral so sold shall thereafter own the same, absolutely free and clear
of
any subordinate claim, encumbrance or right of any kind whatsoever, subject
only
to any restrictions as may be imposed from time to time under applicable
federal
and state securities laws. After the occurrence and during the continuance
of an
Event of Default, Noble may, in its own name, or in the name of a designee
or
nominee, buy the Pledged Collateral, in full satisfaction of all obligations
under the Note at any private sale. Noble agrees to apply any proceeds of
the
sale of the Pledged Collateral to the Obligations in accordance with the
terms
of the Note, and, to the extent any surplus remains after the repayment in
full
in cash of the Obligations, Noble agrees to distribute any such proceeds
as
required by law.
(b)
Unless
any of the Pledged Collateral threatens to decline speedily in value or is
or
becomes of a type sold on a recognized market, Noble will give HCM not less
than
ten (10) Business Days notice of the time and place of any public sale thereof,
or of the time after which any private sale or other intended disposition
is to
be made. Any sale of the Pledged Collateral conducted in conformity with
reasonable commercial practices of banks, commercial finance companies,
insurance companies or other financial institutions disposing of property
similar to the Pledged Collateral shall be deemed to be commercially reasonable.
Notwithstanding any provision to the contrary contained herein, HCM agrees
that
any requirements of reasonable notice shall be met if such notice is received
by
HCM as provided in this Agreement at least ten (10)
Business Days
before the time of the sale or disposition. Any other requirement of notice,
demand or advertisement for sale is waived by HCM, to the extent permitted
by
law.
(c)
In
view
of
the fact that federal and state securities laws may impose certain restrictions
on the method by which a sale of the Pledged Collateral may be effected after
an
Event of Default, HCM agrees that after the occurrence and during the
continuance of an Event of Default, Noble may, from time to time, attempt to
sell all or any part of the Pledged Collateral by means 0f
a
private placement restricting the bidders and prospective purchasers to those
who are qualified and will represent and agree that they are purchasing for
investment only and not for distribution. In so doing, Noble may solicit offers
to buy the Pledged Collateral, or any part of it, from one or more investors
deemed by Noble, in its reasonable judgment, to be financially responsible
parties who might be interested in purchasing the Pledged Collateral. The
acceptance by Noble of the highest and best offer obtained therefrom shall
be
deemed to be a commercially reasonable method of disposing of such Pledged
Collateral
-
5
-
11. Alternative
Remedy. Notwithstanding
the provisions of Section 10 above, on and after an Event of Default, the Noble
may (but shall not be obligated to) elect, in lieu of the remedies specified
in
Section 10, to retain all of the Pledged Collateral as full and complete
liquidated damages for any amounts then due and owing by HCM to the Noble under
the Note.
12. Term.
This
Agreement shall remain in full force and effect until the
Note
shall have been indefeasibly paid and satisfied in full. Upon the termination
of
this Agreement as provided above (other than as a result of the sale of the
Pledged Collateral), this Agreement shall automatically terminate and all
liens
and security interests created hereunder shall terminate and be released.
Upon
confirmation of payment in full of the Note, the Collateral Agent shall (a)
if
any UCC-1 Financing Statements were previously filed, file any UCC-3 Termination
Statements releasing the lien and security interest created by the Assignments,
and (b) to the extent it then has possession of any of the remaining Pledged
Collateral, will deliver such Pledged Collateral and the Assignments to HCM.
13. Agreements
with and Duties of the Collateral Agent.
(a) The
Collateral Agent shall be under no duty to give the Pledged Collateral held
by
it hereunder any greater degree of care than it gives its own similar
property.
(b) If
the
Collateral Agent is permitted or required to deliver any of the Pledged
Collateral or pay money back to any Business Party or Business Parties, such
payment shall be made by check or by wire transfer, at the Collateral Agent's
sole discretion, unless the Collateral Agent shall have received written
notice
from such Business Party or Business Parties of a new and/or different postal
address or unless this Agreement shall have provided otherwise. If payment
is
made by check or Pledged Collateral is to be delivered, the same shall be
mailed
to the address specified by the Business Party(s) in this Agreement (or to
a new
or different address subsequently specified to Collateral Agent by writing
from
such Business Party(s)).
(c) Whenever
authorization shall be provided by the terms of this Agreement for the payment
or delivery of Pledged Collateral by the Collateral Agent to one or more
Business Parties and there is no express requirement hereunder for written
instructions from the applicable Business Party(s) before such delivery is
made,
the Collateral Agent shall notify all Business Parties and, in its sole
discretion, may defer payment or defer return or delivery of Pledged Collateral
until such written requirement or consent is received from all of the Business
Parties (or, depending on the Collateral Agent’s requirements, from less than
all of them). Where Collateral Agent determines to so defer payment or delivery,
the Collateral Agent shall give written notice to the Business Parties of such
determination.
(e) It
is
expressly understood and agreed that under no circumstances shall the Collateral
Agent be required to pay or have paid to any Business Party(s) any sum not
representing proceeds from the sale of any Pledged Collateral that may be
delivered to the Collateral Agent.
(f) It
is
intended that the duties and responsibilities of the Collateral Agent shall
be
limited to ministerial duties and responsibilities to the maximum extent
permitted by law. In keeping with that intent, it is agreed that the receipt
by
Collateral Agent of Exhibit
B,
or an
alternative written instrument containing the substantive information or
content
that is in Exhibit
B
(whether
or not also including other information and content not inconsistent with
the
request and approval of delivery or disbursement action proposed to be taken
by
the Collateral Agent) shall, in the absence of actual knowledge by the
Collateral Agent of falsehood, fraud or other intentional or gross misconduct
on
the part of any of the Business Parties that would render the proposed action
under the written instrument to be inappropriate, be full and sufficient
justification and authorization for the proposed payment or disbursement
action
by the Collateral Agent. Notwithstanding
anything to the contrary, express or implied, contained in this Agreement,
if
the Collateral Agent shall receive written instructions from Noble in accordance
with Alternative Instructions 2 of Exhibit
B
(or words of similar import), the Collateral Agent shall: (i) furnish a copy
of
such instructions to HCM at the address designated on Exhibit
B
(or any alternative address requested by HCM in writing), and (ii) take no
action with respect to such written request until a date which shall be not
less
than ten (10) Business Days following receipt of such written instructions
from
Noble.
-
6
-
(g) The
ministerial reliance by Collateral Agent on the written instrument referred
to
in Section 13(f) shall be full and sufficient justification and authorization,
as stated in such Section, notwithstanding a determination that Collateral
Agent
had certain specified discretionary inquiry powers and opportunities that
Collateral Agent did not pursue or that, absent the provisions of Section 13(f)
above, Collateral Agent had (or might have had) fiduciary responsibilities
to
investigate before making any such payment or disbursement and did not do
so.
(h) The
Collateral Agent shall have no duty or responsibility to enforce collection
of
any check delivered to it and subsequently dishonored, nor shall Collateral
Agent have any duty or responsibility to give notice to any Business Party
of
such attempted payment and the subsequent dishonor thereof.
(i) The
Collateral Agent shall be entitled to rely upon the accuracy, act in reliance
upon the contents, and assume the genuineness of any notice, instruction,
certificate, signature (including copies of signature pages), instrument or
other document (in each case, whether a copy, facsimile or original) which
is
given to the Collateral Agent pursuant to this Agreement, without the Collateral
Agent being obligated to undertake any action or investigation to verify the
truth or accuracy thereof -- unless
the Collateral Agent has actual knowledge that the document or other document,
instruction, certificate or signature is not accurate, truthful, authorized
or
genuine. For
purposes of this Section
13(i),
“Actual
knowledge, or any other instance where “knowledge” would be required (and,
therefore, “actual knowledge” would be required as a standard of “knowledge”)
shall consist of actual and conscious apprehension and understanding, presently
in the mind or consciousness of the person acting for Collateral Agent (as
opposed to knowledge previously known but not currently remembered or
consciously being thought about) and shall be limited to such “actual knowledge”
by an attorney in Collateral Agent’s firm who is currently actively engaged in
the management of the Collateral Agent and who is made aware of the document,
etc. that is the subject of this Section
13(i).
For
purposes of this Agreement “knowledge” (being required to be “actual knowledge”)
shall not included knowledge of any other attorney or person in Xxxxxxx Xxxx
who
is not directly involved in making decisions regarding, or managing, the Xxxxxxx
Xxxx activities as Collateral Agent. Knowledge by others within Xxxxxxx Xxxx
shall not be imputed to the persons described above for purposes of determining
whether “knowledge” or “actual knowledge” existed. Persons (lawyers) at
Collateral Agent as to whom “actual knowledge” is relevant under this Section
13(i) currently includes Xxxxxxx X. Xxxxx, Esq.
(j) The
Collateral Agent may consult with and act relative hereto upon advice of counsel
of its own selection in reference to any matter connected herewith, and shall
not be liable to any of the parties hereto, or their respective legal
representatives, heirs, successors and assigns, for any action taken in good
faith on the advice of counsel or for any mistake of fact or error of judgment,
or for any acts or omissions of any kind taken or made in good faith unless
caused by its willful misconduct or gross negligence.
(k) The
Collateral Agent shall not be responsible for, or have any duty to inquire
into,
or be required to enforce any of the terms and provisions of any document or
agreement other than this Agreement.
-
7
-
(l) Without
limiting the foregoing, the Collateral Agent shall not be responsible for,
or
have any duty to inquire into, monitor or enforce obligations between any
of the
Business Parties as to (i) whether there was support or justification for
any
such Business Party to act in accordance with written instructions of such
Business Party or any other Business Party in attached Exhibit
B
or any
written alternative acceptable to Collateral Agent that included (with anything
else) the material or content of Exhibit
B,
or (ii)
whether any Business Party properly uses and applies funds received by it,
whether from the Collateral Agent or third parties, in accordance with the
provisions of this Agreement or other applicable documents. Notwithstanding
anything to the contrary, express or implied, contained in this Agreement,
if
the Collateral Agent shall receive written instructions from Noble in accordance
with Alternative Instructions 2 of Exhibit
B
(or words of similar import), the Collateral Agent shall: (i) furnish a copy
of
such instructions to HCM at the address designated on Exhibit
B
(or any alternative address requested by HCM in writing), and (ii) take no
action with respect to such written request until a date which shall be not
less
than ten (10) Business Days following receipt of such written instructions
from
Noble.
(m) This
Agreement sets forth exclusively the duties of the Collateral Agent with respect
to any and all matters pertinent hereto and no implied duties or obligations
shall be read into this Agreement against the Collateral Agent.
(n) If
the
Collateral Agent shall be uncertain as to its duties or rights hereunder or
if
it receives instructions with respect to the Pledged Collateral or any funds
that may be derived from the sale or transfer of any Pledged Collateral, which,
in the Collateral Agent’s sole discretion, it determines to be in actual or
potential conflict with this Agreement or other instructions that it has
received, the Collateral Agent shall be excused from taking action that it
might
otherwise be required to take, and its sole obligation shall be to keep safely
all property held in escrow until the uncertainty is resolved. Such uncertainty
can be resolved by written and signed agreement among all affected Business
Parties or by order or judgment of a court of competent jurisdiction, naming
the
involved Business Parties as participants in the action or proceeding brought
to
obtain judicial determination of the involved uncertain duties and
obligations.
(o) Alternatively,
the Collateral Agent may, in its discretion, seek judicial determination of
any
dispute or uncertainty and/or deposit all of the Pledged Collateral and any
funds that may be derived from the sale or transfer of any Pledged Collateral,
in Court pursuant to proceedings under New York law.
(p) The
Collateral Agent makes no representation as to the validity, value, genuineness
or collectability of any portion or all of the Pledged Collateral held by or
delivered to it.
(q) In
the
event that:
(i) the
Collateral Agent shall receive any conflicting or inconsistent notices or
instructions from any one or more of the Business Parties, or
(ii) there
shall be any disagreement between or among any of the Business Parties,
resulting in adverse claims or demands being made in connection with the subject
matter of this Agreement, or
(iii) there
shall be any disagreement between or among any of the Business Parties and
any
other person, resulting in adverse claims or demands being made in connection
with the subject matter of this Agreement, or
(iv) the
Collateral Agent, in good faith, shall be in doubt as to what action it should
take hereunder,
then,
and
in any such event, Collateral Agent may, at its option, refuse to comply with
any notices, instructions, claims or demands on it, or refuse to take any other
action hereunder, so long as such disagreement continues or such doubt exists,
and in any such event, the Collateral Agent shall not become liable in any
way
or to any person for its failure or refusal to act. The Collateral Agent shall
be entitled to continue so to refrain from acting until (A) the rights of all
Business Parties or other third person(s) shall have been fully and finally
adjudicated by a court of competent jurisdiction or (B) all differences shall
have been adjusted and all doubt resolved by agreement among all of the
interested persons, and the Collateral Agent shall have been notified thereof
in
writing signed by all such persons. The Collateral Agent shall have the option,
after thirty (30) days’ notice to the Business Parties of its intention to do
so, to file an action in interpleader requiring the parties to answer and
litigate any claims and rights among themselves.
-
8
-
The
rights of the Collateral Agent under this Section
13(q)
are
cumulative of all other rights which it may have by law or
otherwise.
(r) The
Collateral Agent does not have and will not have any interest in the Pledged
Collateral or any funds that may be derived from the sale or transfer of any
Pledged Collateral, but is serving only as escrow holder and has only possession
thereof.
(s) The
Collateral Agent’s duties and responsibilities shall be determined only with
reference to this Agreement. The Collateral Agent is not charged with any duties
or responsibilities in connection with any other document or
agreement.
(t) The
Collateral Agent may execute any of its powers or responsibilities hereunder
either directly or by or through its agents or attorneys and the Collateral
Agent shall not be responsible for any misconduct or negligence on the part
of
any agent or attorney appointed with due care by it hereunder.
(u) Each
of
Business Parties do hereby release the Collateral Agent from any act done or
omitted to be done by the Collateral Agent in good faith in the performance
of
its duties hereunder, and each of Business Parties do hereby jointly and
severally agree to fully indemnify the Collateral Agent and its directors,
officers, employees and agents (the “Collateral
Agent Indemnified Parties”)
for,
and to hold each of them harmless from and against, any loss, liability, claim,
damage or expense (including reasonable attorneys’ fees and expenses) incurred
by the Collateral Agent Indemnified Parties, arising out of or in connection
with the Collateral Agent entering into this Agreement and carrying out its
duties hereunder, including the reasonable costs and expenses of defending
itself from any claim or liability; provided,
however,
that
the Collateral Agent Indemnified Parties shall not be entitled to
indemnification hereunder for losses, liabilities and expenses caused by the
willful misconduct, fraud or gross negligence of any of the Collateral Agent
Indemnified Parties. The agreements contained in this Section
13(u)
shall
survive despite any termination of this Agreement or the resignation or removal
of the Collateral Agent.
(v) The
Collateral Agent shall not incur any liability for not performing any act or
fulfilling any duty, obligation or responsibility hereunder by reason of any
occurrence beyond the control of the Collateral Agent (including but not limited
to any act or provision of any present or future law or regulation or
governmental authority, any act of God or war, or the unavailability of the
Federal Reserve Bank wire or telex or other wire or communication
facility).
(w) Anything
in this Agreement to the contrary notwithstanding, in no event shall the
Collateral Agent be liable for consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), regardless of the form
of action.
(x) The
Collateral Agent may resign at any time or be removed by the written mutual
consent of the Business Parties. No resignation or removal of the Collateral
Agent and no appointment of a successor Collateral Agent, however, shall be
effective until the acceptance or removal of the Collateral Agent in the manner
herein provided. In the event of the resignation or removal of the Collateral
Agent, the Business Parties shall in good faith agree upon a successor
Collateral Agent. If the Business Parties are unable to agree upon a successor
Collateral Agent within fourteen (14) days after receipt of a notice of
resignation or removal is given, the Collateral Agent may deposit the Pledged
Collateral and any funds delivered to the Collateral Agent from the sale or
transfer of any Pledged Collateral with a court of competent jurisdiction and
may petition, at the sole expense of the Business Parties, a court of competent
jurisdiction for the appointment of a successor Collateral Agent. Any successor
Collateral Agent shall execute and deliver to the predecessor Collateral Agent
and the Business Parties an instrument accepting such appointment and the
transfer of the Pledged Collateral and any funds delivered to the Collateral
Agent from the sale or transfer of any Pledged Collateral and agreeing to the
terms of this Agreement, and thereupon such successor Collateral Agent shall,
without further act, become vested with all the estates, properties, rights,
powers and duties of the predecessor Collateral Agent as if originally named
herein.
-
9
-
(y) Any
law
firm with which the Collateral Agent may merge or consolidate shall be the
successor Collateral Agent without further act.
14. Definitions. The
singular shall include the plural and vice versa and any gender shall include
any other gender as the context may require.
15. Successors
and Assigns. This
Agreement shall be binding upon and inure to the benefit of HCM, Noble and
their
respective successors and assigns. HCM's successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession of or for HCM.
16. GOVERNING
LAW.
THIS
AGREEMENT SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY
THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY STATE OTHER
THAN THE STATE OF NEW YORK.
17. Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but, if any provision of
this
Agreement shall be held to be prohibited or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
18. Further
Assurances. HCM
agrees that it
will
cooperate with Noble and the Collateral Agent and will execute and deliver,
or
cause to be executed and delivered, all such other assignments separate from
certificate, proxies, instruments and documents, and will take all such other
actions, including, without limitation, the execution and filing of financing
statements, as Noble or the Collateral Agent may reasonably request from time
to
time m order to carry out the provisions and purposes of this Agreement.
19. Notices.
Except
as otherwise provided herein, whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communications shall
or
may be given to or served upon any of the parties by any other party, or
whenever any of the parties desires to give or serve upon any other
communication with respect to this Agreement, each such notice, demand, request,
consent, approval, declaration or other communication shall be in writing and
shall be given (and deemed to have been given) to the address on record with
the
sending party and otherwise in accordance with and subject to the terms of
the
Note.
20.
Amendments,
Waivers and Consents.
No
amendment to, modification or waiver of, or consent with respect to, any
provision of this Agreement shall in any event be effective unless the same
shall be in writing and signed and delivered by Noble and HCM, and then any
such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
21.
Section
Headings.
The
section headings in this Agreement are inserted for convenience of reference
and
shall not be considered a part of this Agreement or used in its
interpretation.
-
10
-
22.
Execution
in Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which shall together constitute one and the same
agreement. Any such counterpart which may be delivered by facsimile transmission
shall be deemed the equivalent of an originally signed counterpart and shall
be
fully admissible in any enforcement proceedings regarding this Agreement.
23.
Merger.
This
Agreement represents the final agreement of HCM and Noble with respect to the
matters contained herein and may not be contradicted by evidence of prior or
contemporaneous agreements, or subsequent oral agreements, between HCM and
Noble.
[Remainder
of Page Intentionally Left Blank; Signature Page Follows]
-
11
-
IN
WITNESS WHEREOF, HCM
and
Noble have each caused this Agreement to be executed and delivered by its duly
authorized officer as of the date first set forth above.
PLEDGOR:
|
HO
CAPITAL MANAGEMENT LLC
|
|
By:
|
||
|
Xxxxxx
Xx, Managing Member
|
PLEDGEE:
|
NOBLE
INVESTMENT FUND LTD.
|
||
|
By:
|
||
|
Xxxx xxx Xxxx, Authorized Signatory
|
||
COLLATERAL
AGENT:
|
XXXXXXX
XXXX LLP
|
||
|
By:
|
||
|
Xxxxxxx
X. Xxxxx, Partner
|
||
The
undersigned agrees to comply with the provisions of Section
3(b)
of the above Agreement:
| MAXIM FINANCIAL GROUP LLC | ||
| By: | ||
-
12
-
EXHIBIT
A
FORM
OF ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR
VALUE RECEIVED, the
undersigned, ________________________,
does
hereby sell, assign
and transfer unto ________________________,
warrants
to purchase ordinary shares of ____________________________
(the
“Warrants”),
standing in the name of the undersigned on the books of said corporation and
does hereby irrevocably constitute and appoint
____________________________________, as Agent, as the undersigned's true and
lawful attorney, for it and in its name and stead, to sell, assign and transfer
all or any of the Shares, and for that purpose to make and execute all necessary
acts of assignment and transfer thereof; and to substitute one or more persons
with like full power, hereby ratifying and confirming all that said attorney
or
substitute or substitutes shall lawfully do by virtue hereof.
Dated:
___________________
[_________________________,
a________________, ____________]
| By: | |||
| Name: | |||
| Its: | |||
-
13
-
EXHIBIT
B
LETTER
OF INSTRUCTION
Xxxxxxx
Xxxx LLP
0000
Xxxxxxxx - 00xx
xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx X. Xxxxx, Esq.
Re: Pledge
Agreement, dated __________ 200_ among Ho Capital Management LLC (“HCM”), Noble
Investment Fund Ltd. (“Noble”), Xxxxxxx Xxxx LLP (“Collateral
Agent”).
Gentlemen:
Reference
is made to the above captioned Pledge Agreement. Unless otherwise defined
herein, all capitalized terms shall have the same meaning as is defined in
the
Pledge Agreement.
Alternative
Instructions 1
[Please
be advised that all principal of and accrued interest on the Note have been
paid
in full and you are hereby instructed to release all of the Pledged Collateral
in your possession to HCM or as otherwise designed by Xxxxxx Xx.]
Very
truly yours,
|
Noble
Investment Fund Ltd.
|
Ho
Capital Management LLC
|
||||
|
By:
|
By:
|
||||
|
Xxxx
xxx Xxxx, Authorized Signatory
|
Xxxxxx
Xx, Member/Manager]
|
||||
Alternative
Instructions 2
Please
be
advised that an Event of Default under the Note has occurred and is continuing,
as a result of which you are hereby instructed to release all of the Pledged
Collateral in your possession to Noble Investment Fund Ltd. or as otherwise
designed by Xxxx xxx Xxxx.]
Very
truly yours,
|
Noble
Investment Fund Ltd.
|
|||
|
By:
|
|||
|
Xxxx
xxx Xxxx, Authorized Signatory
|
|||
|
cc:
|
Xxxxxx
Xx, Manager
|
Ho
Capital Management LLC
000
Xxxxxxxx Xxxxxx, Xxx. 00X
Xxx
Xxxx,
Xxx Xxxx 00000
EXHIBIT
C
Names,
Emails and signature(s) for:
Person(s)
Designated to give Instructions to the Collateral
Agent
If
from
HCM:
|
Name
|
Email
|
Signature
|
||
|
|
xxxxxxxx@xxxxxxx.xxx
|
|
||
|
Xxxxxx
Xx
|
or | |||
|
xxxxxx@xxxxxxxx.xxx
|
| If from Noble |
|
Name
|
Email
|
Signature
|
||
|
Xxxx
xxx Xxxx
|
xxx@xxxxxxxxxxx.xxx;
or
xxxxxxxxxxxxxx@xxxxxxx.xxx
|
|
||
| or | ||||
All
instructions must include the signature of the person(s) authorizing said
instructions.
Consent
-- 2
