EXHIBIT 10.22
PLEDGE AGREEMENT
This Pledge Agreement is made by and between INDUSTRIAL DATA SYSTEMS,
CORP., a Nevada corporation ("Corporation"); and XXXX X. "XXXX" XXXXXX,
("Shareholder") this 25th day of March, 1998.
RECITALS
WHEREAS the parties hereto have executed and consummated that certain
Stock Acquisition Agreement dated March 25th, 1998 whereby the Corporation
acquired from Shareholder 1,000 shares of Common stock in exchange for 300,000
shares of INDUSTRIAL DATA SYSTEMS, CORP. common stock, $.01 par value, and
WHEREAS pursuant to the terms of the Stock Acquisition Agreement,
Shareholder has agreed to pledge his stock in Industrial Data Systems, Corp. to
secure his indemnification obligations contained in Article 11 therein;
NOW THEREFORE the parties hereto have agreed as follows:
1. ITEMS OF PLEDGE. The following items are delivered to Corporation subject
to the terms of this agreement:
(i) Stock Certificate No. _____ issued to XXXX X. XXXXXX
representing 150,000 shares of common stock of INDUSTRIAL DATA
SYSTMS, CORP. accompanied by a stock power endorsed to
INDUSTRIAL DATA SYSTEMS, CORP. for such shares executed by XXXX
X. XXXXXX.
(ii) Stock Certificate No. _____ issued to XXXX X. XXXXXX
representing 90,000 shares of common stock of INDUSTRIAL DATA
SYSTMS, CORP. accompanied by a stock power endorsed to
INDUSTRIAL DATA SYSTEMS, CORP. for such shares executed by XXXX
X. XXXXXX.
(iii) Stock Certificate No. _____ issued to XXXX X. XXXXXX
representing 60,000 shares of common stock of INDUSTRIAL DATA
SYSTEMS, CORP. accompanied by a stock power endorsed to
INDUSTRIAL DATA SYSTEMS, CORP. for such shares executed by XXXX
X. XXXXXX.
2. CREATION OF SECURITY INTEREST. Shareholder pledges and assigns to corporation
escrow items (i), (ii) and (iii) above as security for performance of his
indemnity obligations contained in the above referenced Stock Acquisition
Agreement.
Corporation obligates itself to hold the shares pledged to it as
security for the payment of any Shareholder indemnified claims under the Stock
Acquisition Agreement.
Corporation will have, as to the shares, the rights and obligations of a
secured party under Chapter 9 of the Texas Business and Commerce Code.
3. DELIVERY UPON EXPIRATION OF INDEMNITY PERIODS TO SHAREHOLDER. Provided
Corporation has not notified Shareholder of claim for damages in accordance with
Article 11.3 of the Stock Acquisition Agreement, Corporation shall deliver to
Shareholder free of this Pledge Agreement Pledge items (i) on April 1, 1999,
Pledge item (ii) on April 1, 2000 and Pledge item (iii) on June 24th, 2002. In
the event Shareholder has exercised his option requiring repurchase all 300,000
shares of stock, escrow item (i) shall be deemed to be the sum of $150,000.00
and escrow item (ii) shall be deemed to be the sum of $90,000.00 and Pledge item
(iii) shall be deemed to be the sum of $60,000. If Shareholder has exercised his
option requiring repurchase for less than 300,000 shares, then the cash received
shall be equally allocated between Pledge items (i), (ii) and (iii).
4. REMEDIES IN EVENT OF CLAIM. In the event Shareholder has been notified by
Corporation of a claim for indemnification, Corporation shall hold all remaining
Pledge items until such time as the validity of such indemnification claim is
finally resolved by settlement, arbitration or litigation. Upon final resolution
the Pledge items will be delivered in accordance with the settlement agreement,
arbitration award or Judgment. IT IS EXPRESSLY AGREED THAT NEITHER CORPORATION
OR SHAREHOLDER SHALL HAVE ANY LIABILITY WHATSOEVER FOR ANY DIMINUTION IN THE
VALUE OF THE PLEDGE ITEMS DURING THE TERM OF THIS AGREEMENT. IN THE EVENT A
CLAIM FOR INDEMNITY IS SUSTAINED, SHAREHOLDER SHALL HAVE NO LIABILITY TO
CORPORATION EXCEEDING THE VALUE OF THE REMAINING PLEDGE ITEMS.
Corporation may transfer the shares of stock to its own name or to the
name of its nominee in full satisfaction of Shareholder's obligations or may
sell, assign, or deliver as much of the shares of stock as may be necessary to
satisfy
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the unpaid obligations of Shareholder, together with the expenses Corporation
incurs in connection with the sale, assignment or delivery. At any sale of the
shares of stock, whether private or public, corporation may purchase and pay for
any of the shares by canceling so much of Shareholder,s obligation as is equal
to the purchase price. Corporation agrees to notify Shareholder at least ten
days before the date of any proposed sale of the shares. Shareholder waives any
right of redemption under the Texas Business Corporations Act as to the shares
of stock sold.
Any proceeds from the sale of the shares, on default, will be applied by
the Corporation as follows:
First, to the costs and expenses of collection incurred by Corporation,
including, but not limited to, costs of any public or private sale, stock broker
fees, attorney fees, and all other reasonable expenses; and
Second, to payment of the entire amount of the principle and interest
due under the settlement agreement, arbitration award or judgment.
Any remaining proceeds from the sale will be delivered to Shareholder.
5. COLLECTION OF DIVIDENDS AND DISTRIBUTIONS
During the term of this agreement, provided no notification of claim has
been given to Shareholder, Shareholder will receive and collect all cash
dividends and distributions in respect of the pledged shares. If notification of
claim has been given to Shareholder, Corporation may retain any such dividends
or distributions and may apply the same toward satisfying Shareholder's
obligations. 6. NOTICES
All notices or other communications by either party to this agreement
must be in writing and either mailed by registered or certified mail, postage
prepaid, or hand delivered to the addresses setforth below during regular
business hours:
7. AMENDMENT OR MODIFICATION
This agreement cannot be amended or modified except in a writing,
executed and signed by the parties.
8. ADDITIONAL DOCUMENTS
Pledgor agrees to execute and deliver to Pledgee any and all additional
documents which may be necessary to perfect the security interest given to
Pledgee under this agreement.
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9. BINDING EFFECT
This agreement will be binding on the parties and their representatives,
heirs, successors, and assigns.
EXECUTED this 25 day of March, 1998.
SHAREHOLDER INDUSTRIAL DATA SYSTEMS,
CORP.
/s/ XXXX X. XXXXXX By: /s/ XXXXXXX XXXXXX
XXXX X."XXXX" XXXXXX XXXXXXX XXXXXX, President
_____________________ ______________________
_____________________ ______________________
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