AMENDED AND RESTATED PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT (this "Agreement") is made
as of July 28, 1998, between American Digital Communications, Inc., a Wyoming
corporation (the "Pledgor"), and Pellinore Securities Corporation (for itself
and as agent, the "Pledgee Agent").
WHEREAS, as of April 17, 1998, the Pledgor and the Pledgee Agent
entered into a Pledge Agreement (the "Old Pledge Agreement"), relating to the
pledge of certain collateral by the Pledgor as security for the repayment of a
certain Secured Demand Note, dated April 17, 1998, in the principal amount of
$500,000 (the "Old Note"; the indebtedness represented by the Old Note is
hereinafter referred to as the "Old Loan");
WHEREAS, the Pledgor intends to borrow certain additional sums,
in an amount not to exceed $350,000 (the "Additional Loan" and, together with
the Old Loan, the "New Loan");
WHEREAS, the investors entitled to the benefit of the Old Pledge
Agreement (the "Old Investors"), have agreed that the collateral subject to the
Old Pledge Agreement may secure the repayment of, in addition to the Old Loan,
the Additional Loan;
WHEREAS, simultaneously with the execution of this Amended and
Restated Pledge Agreement, the Pledgor is issuing to the Pledgee Agent, for
itself and as agent for the other investors listed on Exhibit A hereto
(collectively, including the
Pledgee Agent and the Old Investors, the "Investors") a new Secured Demand Note
in the aggregate amount of up to $800,000 (the "New Note"), representing the
aggregate amount lent by the Investors to the Pledgor;
WHEREAS, simultaneously with the execution of this Amended and
Restated Pledge Agreement, the Old Note is being delivered to the Pledgor,
marked "cancelled";
NOW THEREFORE, the Old Pledge Agreement is amended and restated
as follows:
1. Pledge. The Pledgor hereby grants a security interest to the
Pledgee Agent in the following (collectively, the "Collateral"): (a) 418,387
common shares of Intek Global Corporation, a Delaware corporation (the "Intek
Issuer"), represented by certificates Nos. 12529 (50,000 shs.); 12530 (50,000
shs.); 12531 (50,000 shs.); 12532 (50,000 shs.); 12533 (50,000 shs.); 12534
(50,000 shs.); 12535 (50,000 shs.); 12536 (50,000 shs.); 12537 (18,387 shs.);
(b) subject to Section 9 hereof, 429,999 shares of Common Stock of Ventel Inc, a
corporation organized under the laws of Canada (the "Ventel Issuer" and,
together with the Intek Issuer, the "Issuers"); (c) cash in the amount of
$6,940; and (d) the proceeds of any of the foregoing. (The shares described in
paragraphs (a) and (b) above, together with any additional securities of the
Issuer subsequently pledged pursuant to paragraph 7 or 8 hereof, are hereinafter
collectively referred to as the "Pledged Shares"). The Pledgee Agent shall hold
the Collateral as security for the
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repayment of the New Loan, and shall not encumber or dispose of the Collateral
except as provided in paragraph 10 herein.
2. Delivery of Instruments. The Pledgor has previously delivered
to the Pledgee Agent all certificates, instruments or other property
representing or constituting any Pledged Shares. All additional certificates,
instruments or other property representing or constituting any Pledged Shares
received by the Pledgor after the date of this Amended and Restated Pledge
Agreement shall be held by the Pledgor in trust for the Pledgee Agent and shall
forthwith be delivered by the Pledgor to the Pledgee Agent as aforesaid. If at
any time the Pledgee Agent notifies the Pledgor that additional endorsements or
other instruments of transfer or assignment with respect to any of the Pledged
Shares held by the Pledgee Agent are required, the Pledgor shall promptly
execute the same in blank and deliver such endorsements or other instruments of
transfer or assignment as the Pledgee Agent may request.
3. Power of Attorney. The Pledgor hereby constitutes and
irrevocably appoints the Pledgee Agent, with full power of substitution and
revocation by the Pledgee Agent, as the Pledgor's true and lawful
attorney-in-fact, for the purpose from time to time of carrying out the
provisions of this Amended and Restated Pledge Agreement and taking any
reasonable action and executing any instrument that the Pledgee Agent reasonably
deems necessary or advisable to accomplish the purposes of this Amended and
Restated Pledge Agreement, including, without limitation, to affix to
certificates representing any Pledged Shares the
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endorsements or other instruments of transfer or assignment delivered with
respect thereto and to transfer or cause the transfer of the Pledged Shares, or
any part thereof, on the books of the Issuers. The power of attorney granted
pursuant to this Amended and Restated Pledge Agreement and all authority hereby
conferred are granted and conferred solely to protect the Pledgee Agent's
interest in the Pledged Shares and shall not impose any duty upon the Pledgee
Agent to exercise any power. This power of attorney shall be irrevocable as one
coupled with an interest.
4. Dividends. During the term of this Pledge Agreement, and so
long as the Pledgor is not in default in the performance of any term of this
Amended and Restated Pledge Agreement or in the payment of the principal or
interest of the New Loan (a "Default"), the Pledgor shall be entitled to receive
all dividends and other amounts paid in respect of the Pledged Shares and any
other property of any kind received, receivable, distributed or distributable on
or by reason of the Pledged Shares pledged hereunder, whether in the form of or
by way of cash distributions, warrants, subscription rights, partial
liquidation, conversion, prepayments or redemptions (in whole or in part),
liquidation, or otherwise that may be made subsequent to the date hereof.
5. Voting rights. During the term of this Amended and Restated
Pledge Agreement, and so long as no Default has occurred and is continuing, the
Pledgor may vote the Pledged Shares on all corporate questions, and the Pledgee
Agent shall
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execute due and timely proxies in favor of the Pledgor to this end.
6. Representations of Pledgor. The Pledgor represents and
warrants to the Pledgee Agent that:
(a) the Pledgor is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite power and authority to own, lease and operate
its properties, to carry on its business as currently being conducted, to enter
into this Amended and Restated Pledge Agreement and to perform its obligations
hereunder and thereunder.
(b) the Pledgor has the corporate power and authority and
the legal right to execute, deliver and perform this Amended and Restated Pledge
Agreement and to grant the lien on the Pledged Shares contemplated hereby in
favor of the Pledgee Agent, and all parties whose consent to the pledge made
herein is required have given written consent to such pledge.
(c) The execution, delivery and performance of this Amended
and Restated Pledge Agreement by the Pledgor and the granting of the lien on the
Pledged Shares contemplated hereby have been duly authorized by all necessary
corporate action and do not and will not (i) violate any applicable law, rule or
regulation or any provision of the corporate charter or the by-laws of the
Pledgor, (ii) conflict with, result in a breach of, or constitute a default
under any provision of any indenture, mortgage or other material agreement or
instrument to which the Pledgor is a party or by which it or its respective
properties or
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assets is bound or subject or of any license, judgment, order or decree of any
governmental authority having jurisdiction over the Pledgor or any of its
activities, properties or assets or (iii) result in or require the creation or
imposition of any lien, security interest, charge or other claims or
encumbrances upon or with respect to any properties or assets now or hereafter
owned by the Pledgor (other than the liens created hereunder).
(d) This Amended and Restated Pledge Agreement has been duly
executed and delivered by the Pledgor and constitutes a legal, valid and binding
obligation of the Pledgor enforceable against the Pledgor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
(e) No consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or governmental authority and no consent
of any other persons is required (i) for the execution, delivery and performance
of this Amended and Restated Pledge Agreement by the Pledgor, (ii) for the
pledge by the Pledgor of the Collateral to the Pledgee Agent pursuant to this
Amended and Restated Pledge Agreement or (iii) for the exercise by the Pledgee
Agent of the rights provided for in this Amended and Restated Pledge Agreement
or the remedies in respect of the Pledged Shares pursuant to this Amended and
Restated Pledge Agreement, except such as have been obtained, made or taken and
are in full force and effect or may be required under
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federal or state securities laws in connection with any sale of the Pledged
Shares.
(f) The Pledgor is the sole legal and beneficial owner of,
and has valid and transferrable title to, the Pledged Shares, free and clear of
all liens, security increases, charges or other claims or encumbrances, other
than the lien in favor of the Pledgee Agent created by this Amended and Restated
Pledge Agreement.
(g) There are, (i) as of December 31, 1997, a total of
42,254,930 shares of common stock of the Intek Issuer outstanding (computed
assuming that all outstanding options and warrants and securities convertible
into shares of common stock of the Intek Issuer have been exercised or
converted, as the case may be), and (ii) as of March 31, 1998, 28,648,635 shares
of common stock of the Ventel Issuer outstanding (computed assuming that all
outstanding options and warrants and securities convertible into shares of
common stock of the Ventel Issuer have been exercised or converted, as the case
may be), in each case including the Pledged Shares. No other shares of capital
stock of the Issuers are outstanding as of the date hereof.
(h) The Pledged Shares are not subject to any restrictions
governing their issuance, transfer, ownership or control except as set forth in
the organizational documents of the Issuers, true, correct and complete copies
of which have been provided to the Pledgee Agent, or on the face of the
certificates themselves and the Pledgor has the right to transfer the Pledged
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Shares free of any encumbrances and without obtaining the consents of the other
shareholders of the Issuers.
(i) Each Issuer was duly formed and is validly existing as a
corporation under the laws of the jurisdiction of its incorporation.
(j) All actions required to create and perfect the lien of
the Pledgee Agent in the Collateral have been taken and the liens on the
Collateral in favor of the Pledgee Agent are superior in right to any rights or
claims of any other person.
7. Adjustments. If, during the term of this Amended and Restated
Pledge Agreement any share dividend, reclassification, readjustment, or other
change is declared or made in the capital structure of the Issuers, all new,
substituted, and additional shares, or other securities, issued by reason of any
such change shall be held by the Pledgee Agent under the terms of this Amended
and Restated Pledge Agreement in the same manner as the originally pledged
Pledged Shares.
8. Warrants and rights. If, during the term of this Amended and
Restated Pledge Agreement subscription warrants or any other rights or options
are issued in connection with the Pledged Shares, the Pledgee Agent shall
immediately assign the pledged warrants, rights, or options to the Pledgor. All
new shares or other securities so acquired by the Pledgor shall be immediately
assigned to the Pledgee Agent to be held under the terms of this Pledge
Agreement in the same manner as the originally pledged Pledged Shares.
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9. Payment of loan; Release of Collateral. Upon payment of all
principal and interest owed by the Pledgor pursuant to the New Loan, the
Collateral shall automatically and without further action on the part of any
party hereto be released from the pledge hereunder and Pledgee Agent shall
promptly transfer to the Pledgor all the Collateral and all rights received by
the Pledgee Agent with respect thereto. Notwithstanding the foregoing, effective
the date upon which the principal amount of the New Loan outstanding is less
than $400,000, the Ventel Pledged Shares shall automatically and without further
action on the part of any party hereto be released from the pledge hereunder and
the Pledgee Agent shall promptly transfer to the Pledgor all such Ventel Pledged
Shares and all rights received by the Pledgee Agent as a result of the Pledgee
Agent's record ownership thereof.
10. Default. If the Pledgor defaults in the performance of any
terms of this Amended and Restated Pledge Agreement, or in the payment on demand
of the principal or interest of the New Loan, the Pledgee Agent shall have the
rights and remedies provided in the Uniform Commercial Code in force in the
State of New York at the date of this Amended and Restated Pledge Agreement. In
addition to and in conjunction with such rights and remedies, the Pledgee Agent
may, by giving five Business Days' notice to the Pledgor by registered mail, and
without liability for any diminution in price that may have occurred, sell all
the Pledged Shares in any manner that accords with applicable law. At any bona
fide public sale the Pledgee
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Agent may purchase all or any part of the Pledged Shares. The Pledgee Agent may
retain out of the proceeds of any sale an amount equal to the principal and
interest then due on the loan, plus the expenses of the sale, and shall pay any
balance of the proceeds to the Pledgor. If the sale proceeds, together with any
Collateral consisting of cash, are insufficient to cover the principal and
interest of the New Loan and the sale expenses, the Pledgor shall remain liable
to the Pledgee Agent for the resulting deficiency. As used herein, the term
"Business Day" shall mean a day other than Saturday, Sunday or any other day on
which banks located in the State of New York are authorized or obligated to
close.
11. Obligations of Pledgor. The Pledgor covenants to the Pledgee
Agent that:
(a) The Pledgor will not sell, transfer or convey any
interest in, or suffer or permit any lien, security interest, charge or other
claim or encumbrance to exist on or with respect to, any of the Collateral
except the lien created under this Amended and Restated Pledge Agreement; and
(b) The Pledgor will defend the Pledgee Agent's right, title
and interest in, to and under the Collateral against the claims and demands of
all persons wheresoever.
12. Pledgee Agent as Agent. The Pledgee Agent is acting hereunder
as agent for and on behalf of the Investors. Any action may be taken by the
Pledgee Agent on behalf of the Investors without authorization, vote or other
action on the part of the Investors.
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13. General Provisions.
(a) No failure on the part of the Pledgee Agent to exercise, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Pledgee Agent of
any right, power or remedy hereunder preclude any other or future exercise
thereof, or the exercise of any other right, power or remedy. The
representations, covenants and agreements of the Pledgor herein contained shall
survive the date hereof.
(b) This Amended and Restated Pledge Agreement and any provisions
hereof, may not be modified, amended, waived, extended, changed, discharged or
terminated orally.
(c) Any notice, demand, statement, request or consent made
hereunder shall be in writing and delivered personally or sent to the party to
whom the notice, demand or request is being made by Federal Express or other
nationally recognized overnight delivery service, as follows, and shall be
deemed given when delivered personally or one business day after being deposited
with Federal Express or such other nationally recognized delivery service:
If to the Investors or the Pledgee Agent:
To: Pellinore Securities Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: J. Xxxxxxx Xxxxxxx
with a copy to:
Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, Xxx. 0000
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, Xx.
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If to the Pledgor:
To: American Digital Communications, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxxx Xxxxxxx X0X 0X0
XXXXXX
with a copy to:
Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
provided that any notice, request or demand to or upon the Pledgee Agent shall
not be effective until actually received. Any notices, requests or demands
received on a day which is not a business day shall be deemed to have been
received on the next following business day.
(d) THIS AMENDED AND RESTATED PLEDGE AGREEMENT SHALL BE GOVERNED
BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK. EACH OF THE PARTIES HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT.
(e) The parties hereto hereby consents to the non-exclusive
jurisdiction of the Supreme Court of the State of New York County and the United
States District Court for the Southern District of New York with respect to any
suit, claim, action or proceeding arising out of or related to this Agreement or
the transaction contemplated hereby and hereby waives any objection which it may
have now or hereafter to the venue of any suit, claim, action or proceeding
arising out of or related to this
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Agreement or the transactions contemplated hereby and brought in the courts
specified above and also hereby waives any claims that any such suit, claim,
action or proceeding has been brought in an inconvenient forum.
(f) Notwithstanding anything to the contrary in this Amended and
Restated Pledge Agreement, the Pledgee Agent's recourse for amounts payable by
the Pledgor under this Amended and Restated Pledge Agreement shall be limited to
the Collateral and any other collateral hereinafter specifically designated by
the Pledgor or any other Person as security for the payment of such amounts;
provided, however, that the foregoing shall not in any manner preclude or limit
Pledgee Agent from (i) proceeding against the Pledgor by appropriate action to
prevent or seek redress for any breach by the Pledgor of its obligations under
this Amended and Restated Pledge Agreement of for any fraud or intentional
misrepresentation by the Pledgor or (ii) exercising any of its rights or
remedies with respect to the Pledged Shares or any other collateral or security
for the New Note or from otherwise seeking enforcement of the New Note.
(g) If any provision of this Amended and Restated Pledge
Agreement is determined by a court of competent jurisdiction to be
unenforceable, such provision shall be automatically reformed and construed so
as to be valid, operative and enforceable to the maximum extent permitted by the
law while most nearly preserving its original intent. The invalidity of any part
of this Amended and Restated Pledge Agreement shall not
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render invalid the remainder of the Amended and Restated Pledge Agreement.
(h) This Amended and Restated Pledge Agreement may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts taken together shall constitute one and the
same instrument.
(i) The section headings in this Amended and Restated Pledge
Agreement are for convenience of reference only and shall not affect the
interpretation hereof.
IN WITNESS WHEREOF, the parties have executed this
agreement.
AMERICAN DIGITAL COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------
Xxxx X. Xxxxxxxx
President
PELLINORE SECURITIES CORP. FOR ITSELF
AND AS AGENT FOR THE INVESTORS LISTED ON
EXHIBIT A HERETO
By: /s/ J. Xxxxxxx Xxxxxxx
----------------------
J. Xxxxxxx Xxxxxxx
President
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