PLEDGE AGREEMENT
PLEDGE AGREEMENT (this "Agreement") made this 31st day of
January, 2001, among the undersigned shareholder of XXXXXXXXX.XXX, INC., a
Delaware corporation with an office at 0000 Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxx
00000 (the "Corporation") (such shareholder, with the same address as the
Corporation, hereinafter referred to as the "Pledgor"), and DMTR, LLC, a New
York limited liability company, having an office at 1325 Avenue of the Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Secured Party").
W I T N E S S E T H :
WHEREAS, the Pledgor owns eighty-eight percent (88%) of the issued and
outstanding stock of the Corporation;
WHEREAS, the Pledgor has on or about this day executed and delivered
that certain Secured Promissory Note dated the date hereof (the "Note") to the
Secured Party, pursuant to that certain Loan Agreement dated the date hereof
(the "Loan Agreement") between the Pledgor and the Secured Party; and
WHEREAS, the Pledgor has agreed to secure the Pledgor's debts,
obligations, and liabilities under the Note and Loan Agreement with a pledge of
its stock in the Corporation; and
WHEREAS, the Pledgor has agreed to execute and deliver this Agreement
with the Secured Party;
NOW THEREFORE, in consideration of these premises, the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. PLEDGED INTERESTS. The term "Pledged Stock" as used herein
shall mean and include 4,400,000 shares of the common capital stock of the
Corporation represented by Certificate No. 3 and any stock certificate, option
or rights issued by the Corporation as an addition to, in substitution of, or in
exchange for any such shares, and any and all proceeds thereof, now or hereafter
owned or acquired by the Pledgor.
2. PLEDGE.
The Pledgor agrees as follows:
a) As collateral security for the due payment and performance
of all indebtedness and all other liabilities and obligations relating to such
indebtedness, of the Pledgor to the Secured Party arising out of the Note, the
Loan Agreement and all instruments, agreements and documents executed, issued
and delivered pursuant thereto, including, without limitation, this Agreement,
whether now existing or hereafter arising (all hereinafter referred to
collectively as the "Obligations"), the Pledgor hereby pledges, assigns,
hypothecates, delivers and sets over to the Secured Party all the Pledged Stock
owned by the Pledgor, and hereby grants to the Secured Party a lien and security
interest in all the Pledged Stock. The Pledgor expressly confirms, and the
Secured Party hereby acknowledges, that the Pledged Stock is subject to a prior
pledge or pledges thereof by the Pledgor to Xxxxx Xxxxxxxx, as collateral agent
for the payees of the Bridge Notes, as that term is defined in the Loan
Agreement, and the Pledgor acknowledges that such liens and security interests
have been assigned to the Secured Party and affirms such assignment.
b) If the Pledgor shall become entitled to receive or shall
receive any stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital), option or rights, whether
as an addition to, in substitution of, or in exchange for any shares of the
Pledged Stock, or otherwise, the Pledgor (subject, however, to the rights of any
prior pledgees of the Pledged Stock) shall accept any such instruments as the
Secured Party's agent, shall hold them in trust for the Secured Party, and shall
deliver them forthwith to the Secured Party in the exact form received, with the
Pledgor's endorsement when necessary and/or appropriate stock powers duly
executed in blank, to be held by the Secured Party, subject to the terms hereof,
as further collateral security for the Obligations.
c) In the event of the occurrence and continuation of any
Event of Default defined or specified in the Note, the Secured Party or its
nominee may, in addition to any other rights the Secured Party may possess in
such event and without notice (subject, however, to the rights of any prior
pledgees of the Pledged Stock), exercise the right to receive dividends payable
thereon, the right to exchange, at its discretion, any and all of the Pledged
Stock upon the merger, consolidation, reorganization, recapitalization or other
readjustment of the Corporation or upon the exercise by the Corporation of any
right, privilege or option pertaining to any shares of the Pledged Stock, and in
connection therewith, to deposit and deliver any and all of the Pledged Stock
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 the 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.
d) In the event of the occurrence of any Event of Default
defined or specified in the Note, all distributions with respect to any part of
the Pledged Stock shall (subject, however, to the rights of any prior pledgees
of the Pledged Stock) be paid to the Secured Party to be held by the Secured
Party as additional security hereunder until applied to the Obligations.
e) In the event of the occurrence and continuation of any
Event of Default defined or specified in the Note, the Secured Party without
demand of performance or other demand, advertisement or notice of any kind
(except the notice specified below of time and place of public or private sale)
to or upon the Pledgor or any other person (all and each of which demands,
advertisements and/or notices are, to the extent permitted by law, hereby
expressly waived), may(subject, however, to the rights of any prior pledgees of
the Pledged Stock) forthwith collect, receive, appropriate and realize upon the
Pledged Stock, or any part thereof, take title to and hold the Pledged Stock, or
any part thereof, and/or may forthwith, to the extent permitted by applicable
law, sell, assign, give an option or options to purchase, contract to sell or
otherwise dispose of and deliver said Pledged Stock, or any part thereof, in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or at any of the Secured Party's offices or elsewhere at such prices and
on such terms (including, without limitation, a requirement, if necessary under
applicable securities laws, that any purchaser of all or any part of the Pledged
Stock shall be required to purchase the Pledged Stock for investment and without
any intention to make a distribution thereof) as shall be commercially
reasonable, for cash or on credit or for future delivery without assumption of
any credit risk, with the right to the Secured Party or any purchaser upon any
such sale or sales, whether public or private, to purchase the whole or any part
of the Pledged Stock so sold, free of any right in the Pledgor, which right is
hereby expressly waived and released.
f) The proceeds of any collection, recovery, receipt,
appropriation, realization or sale as aforesaid, shall (subject, however, to the
rights of any prior pledgees of the Pledged Stock) be applied as follows:
First, to the costs and expenses of every kind
incurred in connection therewith or incidental to the care, safekeeping or
otherwise of any and all of the Pledged Stock or in any way relating to the
rights of the Secured Party hereunder, including reasonable attorneys' fees and
legal expenses;
Second, to the satisfaction of the Obligations;
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Third, to the payment of any other amounts required
by applicable law (including, without limitation, Section 9-504(1)(c) of the
Uniform Commercial Code); and
Fourth, to the Pledgor to the extent of the surplus
proceeds, if any.
g) The Secured Party (subject, however, to the rights of any
prior pledgees of the Pledged Stock) shall give not less than ten (10) days'
notice of the time and place of any public or private sale and such notice shall
be deemed to be reasonable notification of such matters so long as such notice
is given in accordance with ss.8 hereof and, with respect to a private sale,
includes a description of the sale terms.
3. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants that:
a) The Pledgor is, as of the date hereof, the direct and
beneficial owner of the number of shares of the Pledged Stock pledged hereby;
b) The Pledged Stock constitutes eighty-eight (88%) of the
issued and outstanding shares of capital stock of the Corporation;
c) All of the shares of the Pledged Stock have been duly and
validly issued, are fully paid and non-assessable and are owned by the Pledgor
free and clear of any pledge, mortgage, hypothecation, lien, charge, encumbrance
or any security interest in such interest or the proceeds thereof except for the
security interests granted hereby to the Secured Party and security interests
previously granted to Xxxxx Xxxxxxxx, as collateral agent for the payees of the
Bridge Notes;
d) Upon delivery of the Pledged Stock to the Secured Party or
an agent of the Secured Party upon the release of the Pledged Stock by the
aforesaid collateral agent currently holding the Pledged Stock, this Pledge
Agreement will create and grant a valid lien on and security interest in the
shares of the Pledged Stock and the proceeds thereof, subject to no prior
security interest, lien, charge or encumbrance or to any agreement purporting to
grant to any third party a security interest in the property or assets of the
Pledgor which would include the Pledged Stock;
e) The Pledgor has the power and authority to execute, deliver
and perform this Agreement. All necessary action to authorize the execution,
delivery and performance of this Agreement has been duly and properly taken;
f) The execution, delivery and performance of this Agreement
will not i) violate any provision of law or any order of any court or other
agency or instrumentality of government, or any material indenture, agreement or
other instrument to which the Pledgor is a party or by which any of the property
or assets of the Pledgor is bound (other than the pledge agreements pursuant to
which the aforesaid collateral agent currently holds the Pledged Stock), or ii)
be in conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any such indenture, agreement or other
instrument (other than the pledge agreements pursuant to which the aforesaid
collateral agent currently holds the Pledged Stock), or iii) except as
contemplated by this Agreement, result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the property or
assets of the Pledgor, the result of any of which would materially adversely
affect enforcement of this Agreement; and
g) There are no actions, suits or proceedings (whether or not
purportedly on behalf of the Pledgor), pending or, to the best of the Pledgor's
knowledge, threatened against or affecting the Pledgor, at law or in equity or
before or by any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, which
involve or affect this Agreement, the Pledged Stock or the assignment of the
Pledged Stock. Pledgor is not in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court or Federal, state,
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municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (having jurisdiction) which could directly
or indirectly affect the performance under this Agreement.
h) Except for disclosure filings which may be required under
the Securities Exchange Act of 1934, as amended, Pledgor is not required to give
any notice to, make any filing with, or obtain any authorization, consent or
approval of any governmental entity or any other person for the execution,
delivery and performance of this Agreement and the Note.
4. COVENANTS.
a) The Pledgor hereby covenants that for so long as the
Obligations shall be outstanding and unpaid, in whole or in part, the Pledgor
will not sell, convey or otherwise dispose of any shares of the Pledged Stock or
any interest therein, nor will the Pledgor create, incur or permit to exist any
pledge, mortgage, lien, charge, encumbrance or any security interest whatsoever
with respect to any of the Pledged Stock or the proceeds thereof other than that
created hereby and those previously granted in favor of the aforesaid collateral
agent currently holding the Pledged Stock, nor will the Pledgor consent to or
approve the issuance of any additional shares of any class of the issuer of the
Pledged Stock without the Secured Party's prior written consent.
b) The Pledgor warrants and will defend the Secured Party's
right, title and security interest in and to the Pledged Stock against the
claims of any person, firm, corporation or other entity (subject, however, to
the rights of any prior pledgees of the Pledged Stock).
c) Without the prior written consent of the Secured Party
(subject, however, to the rights of any prior pledgees of the Pledged Stock),
Pledgor shall have no right to reach the Collateral or to withdraw any part
thereof from the possession of the Secured Party or to in any way control the
Secured Party regarding the disposition of the Collateral, except as otherwise
provided in this Agreement or by operation of law.
d) The Pledgor will warrant and defend the title of the
Secured Party to the Collateral against the claims and demands of all persons
(subject, however, to the rights of any prior pledgees of the Pledged Stock) .
5. FURTHER ASSURANCES. The Pledgor shall (subject, however, to
the rights of any prior pledgees of the Pledged Stock) at any time and from time
to time upon the written request of the Secured Party, execute and deliver such
further documents and do such further acts and things as the Secured Party may
reasonably request in order to effect the purposes of this Agreement including,
without limitation, delivering to the Secured Party on the date hereof or at any
time hereafter irrevocable proxies in respect of the Pledged Stock in the form
of Exhibit A annexed hereto (which proxies shall, however, be of no force or
effect unless the Secured Party shall, at the time it seeks to exercise its
rights thereunder, have the right to possession and custody of the Pledged
Stock).
6. DUTIES.
a) Beyond the exercise of reasonable care to assure the safe
custody of the Pledged Stock while held hereunder and except as otherwise
provided herein, the Secured Party shall have no duty or liability to preserve
rights pertaining thereto, and shall be relieved of all responsibility for the
Pledged Stock upon surrendering it to the Pledgor in the share amount set forth
on Schedule A annexed hereto.
b) No course of dealing between the Pledgor and the Secured
Party, nor any failure to exercise, nor any delay in exercising, on the part of
the Secured Party, any right, power or privilege hereunder or under the Notes
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
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c) So far as the Pledgor is concerned, the Secured Party may,
at any time and from time to time, without the consent of, or notice to, the
Pledgor, and without impairing or releasing any of the obligations of the
Pledgor, upon or without any terms or conditions and in whole or in part, sell,
exchange, release, surrender, realize upon or otherwise deal with, in any manner
and in any order, any other property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing the Obligations or any liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset or right with respect thereto, all in
accordance with and subject to applicable agreements with respect to such other
property or applicable law.
d) The rights and remedies herein provided, and provided in
the Notes and in all other agreements, instruments and documents delivered
pursuant to the Notes, are cumulative and are in addition to, and not exclusive
of, any rights or remedies provided by law including, without limitation, the
rights and remedies of a the Secured Party under the Uniform Commercial Code.
e) The provisions of this Agreement are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision in this Agreement in any jurisdiction.
7. NOTICES. All notices and other communications to the
Pledgor pursuant to this Agreement shall be in writing, sent by letter
(delivered by hand or sent by registered or certified mail, return receipt
requested) addressed to the Pledgor at its address set forth above, and shall be
deemed to have been given on the day delivered by hand or on the earlier of
actual receipt by the Pledgor or three (3) days after deposited in the mails,
postage prepaid.
8. SUCCESSORS. This Agreement shall inure to the benefit of,
and be binding upon, the successors and assigns of the parties hereto.
Notwithstanding the foregoing, the Pledgor shall not have the right to assign or
delegate any of its rights or obligations hereunder without the prior written
consent of the Secured Party, and any purported assignment or delegation in the
absence of such consent shall be void.
9. GOVERNING LAW; JURISDICTION. (i) THIS AGREEMENT WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT PROVISION OR RULE
(WHETHER OF THE STATE OF NEW YORK, OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK TO BE APPLIED. IN
FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER
SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE
LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. (ii) EACH PARTY CONSENTS
THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT UNDER, ARISING OUT OF OR IN ANY
MANNER RELATING TO THIS AGREEMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT EXECUTED
AND DELIVERED IN CONNECTION HEREWITH, SHALL BE BROUGHT EXCLUSIVELY IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR IF SUCH COURT
LACKS SUBJECT MATTER JURISDICTION THEN IN ANY COURT OF THE STATE OF NEW YORK.
EACH PARTY, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY AND
IRREVOCABLY CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY OF SUCH
COURTS IN ANY SUCH ACTION OR PROCEEDINGS. EACH PARTY AGREES THAT TO THE EXTENT
PERMITTED BY APPLICABLE LAW PERSONAL JURISDICTION OVER IT MAY BE OBTAINED BY THE
DELIVERY OF A SUMMONS (POSTAGE PREPAID) IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 7 OF THIS AGREEMENT. ASSUMING DELIVERY OF THE SUMMONS IN
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ACCORDANCE WITH THE PROVISIONS OF SECTION 7 OF THIS AGREEMENT, EACH PARTY HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES ANY ALLEGED LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OF FORUM NON CONVENIENS OR ANY SIMILAR BASIS.
10. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
IN WITNESS WHEREOF, the parties have caused these presents to be duly
executed and delivered the day and year first above written.
DATAMETRICS CORPORATION
By:_____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
DMTR, LLC
By:_____________________________
Name: Xxxxx Xxxxxxxx
Title: Member
This Corporation is signing below to confirm its consent to the pledge
described above and to the undertaking below of the collateral agent for the
holders of the Bridge Notes.
XXXXXXXXX.XXX, INC.
By:__________________________
Name:
Title:
The undersigned, as collateral agent for the holders of the Bridge
Notes, is signing below to acknowledge that, upon the release of the Pledged
Stock from the pledges thereof securing the Bridge Notes, he will deliver the
Pledged Stock to the Secured Party.
------------------------------
Xxxxx Xxxxxxxx, as Collateral Agent
for the holders of the Bridge Notes
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The undersigned is signing below to consent to the above undertaking of
the collateral agent for the holders of the Bridge Notes.
DATAMETRICS CORPORATION
By:__________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
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EXHIBIT A
IRREVOCABLE PROXY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does
hereby make, constitute and appoint DMTR, LLC, its true and lawful attorney, for
it and in its name, place and stead, to act as its proxy in respect of all of
the shares of capital stock of XXXXXXXXX.XXX, INC., a Delaware corporation
(hereinafter referred to as the "Corporation"), which it now or hereafter may
own or hold, including, without limitation, the right, on its behalf, to demand
the call by any proper officer of the Corporation pursuant to the provisions of
its Certificate of Incorporation or By-Laws and as permitted by law of a meeting
of its shareholders and at any such meeting of shareholders, annual, general or
special, to vote for the transaction of any and all business that may come
before such meeting, or at any adjournment thereof, including, without
limitation, the right to vote for the sale of all or any part of the assets of
the Corporation and/or the liquidation and dissolution of the Corporation;
giving and granting to its said attorney full power and authority to do and
perform each and every act and thing whether necessary or desirable to be done
in and about the premises, as fully as it might or could do if personally
present with full power of substitution, appointment and revocation, hereby
ratifying and confirming all that its said attorney shall do or cause to be done
by virtue hereof.
This Proxy is given to DMTR, LLC in order to carry out the
covenant of the undersigned contained in a certain Pledge Agreement of even date
herewith between the undersigned and DMTR, LLC, and this Proxy shall not be
revocable or revoked by the undersigned, shall be binding upon its successors
and assigns until the payment in full of all of the Obligations (as defined in
the Pledge Agreement) and may be exercised only after an Event of Default has
occurred and is continuing under and as specified in the Notes (as defined in
such Pledge Agreement). This Proxy shall survive more than eleven (11) months.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Irrevocable Proxy this 31st day of January, 2001.
DATAMETRICS CORPORATION
By:______________________________
Name:
Title:
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