EXHIBIT 6
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "AGREEMENT") is made and entered into as of
March 28, 2002 by and between TOROTEL, INC., a Missouri corporation ("PLEDGOR"),
and THE CALOYERAS FAMILY PARTNERSHIP, a California limited partnership
("PLEDGEE"), with reference to the following facts:
A. Pledgor is in the process of acquiring all of the outstanding common
stock of Electronika, Inc., a Nevada corporation ("ELECTRONIKA"), consisting of
1,000 shares of common stock, which acquisition is expected to close in April
2002.
B. Pledgor also is in the process of acquiring 4,000,000 shares of the
common stock, $.001 par value per share of Apex Innovations, Inc., a Delaware
corporation ("APEX"), which acquisition is expected to close in March 2002.
C. Pledgor is indebted to Pledgee pursuant to the terms of a Secured
Promissory Note dated March 28, 2002 (the "NOTE") in the original principal
amount of Seven Hundred Fifty Thousand Dollars ($750,000).
D. In order to secure the obligations of Pledgor under the Note, Pledgor
desires to grant to Pledgee a security interest in all of the shares of capital
stock being acquired by Pledgor in Electronika and Apex (the "PLEDGED
SECURITIES").
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, the parties hereby agree as follows:
1. Pledgor hereby grants and pledges to Pledgee a security interest in the
Pledged Securities as security for the full, faithful and timely performance by
Pledgor of its obligations under the Note, such grant and pledge to be effective
immediately upon the acquisition of the Pledged Securities by Pledgor. During
the term of this Agreement, Pledgor agrees that the security interests hereby
granted will at all times be kept a first lien on the Pledged Securities and
that Pledgor shall not encumber or otherwise dispose of the Pledged Securities,
without Pledgee's prior written consent.
2. Immediately upon the acquisition of the Pledged Securities by Pledgor,
Pledgor shall deliver to Pledgee certificates for the Pledged Securities
together with stock assignments separate from the stock certificates relating to
the Pledged Securities and executed in blank. Upon such delivery, Pledgee shall
hold, administer and distribute the Pledged Securities pursuant to the terms of
the Note and this Agreement.
3. During the term of this Agreement, and so long as no "Event of Default"
as defined in the Note, is in effect:
3.1 Pledgor shall have the right to vote the Pledged Securities on all
corporate questions. If need be, Pledgee shall, upon the request of Pledgor,
promptly execute due and timely proxies in favor of Pledgor to this end.
3.2 Pledgor shall be entitled to receive any and all dividends and
other amounts distributed or paid with respect to the Pledged Securities.
4. If, during the term of this pledge any share dividend,
reclassification, readjustment or other change is declared or made in the
capital structure of either Electronika or Apex, Pledgor shall notify Pledgee of
such change and all new, substituted and additional shares or other securities
issued with respect to the Pledged Securities by reason of such change shall be
held by Pledgee in the same manner as the Pledged Securities originally pledged
hereunder.
5. Upon payment in full of the principal of and all interest on the Note
by Pledgor, the pledge granted hereunder shall terminate, Pledgee shall return
all Pledged Securities to Pledgor and Pledgee shall immediately file a
termination of any financing statements delivered by Pledgor hereunder.
6. Pledgor hereby agrees to procure, execute and deliver from time to time
any endorsements, assignments, financing statements and other writings deemed
necessary or appropriate by Pledgee to perfect, maintain or protect Pledgee's
interests in the Pledged Securities.
7. If an "Event of Default", as defined in the Note, shall occur, and
during the continuance thereof (subject to any right of offset or other
applicable defense), Pledgee shall have the rights and remedies provided a
secured party in the Uniform Commercial Code. In this connection, Pledgee may,
on twenty (20) days' notice to Pledgor and without liability for any diminution
in price that may have occurred, sell all the Pledged Securities in accordance
with the provisions of the Uniform Commercial Code as in effect in California.
At any bona fide sale, Pledgee and Pledgor shall be free to purchase all or any
part of the Pledged Securities. Pledgee
shall apply the net proceeds of any such sale, after deducting all reasonable
costs and expenses of such sale, to the payment in whole or part of the
obligations under the Note. After so applying such net proceeds, Pledgee shall
pay any balance of the proceeds of the sale to Pledgor.
8. Pledgor understands that compliance with the federal securities laws
may limit the course of conduct of Pledgee if Pledgee were to attempt to dispose
of all or any part of the Pledged Securities and may also limit the extent to
which or the manner in which any subsequent transferee of any of the Pledged
Securities may dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting Pledgee, in any attempt to dispose of all
or any part of the Pledged Securities, under applicable Blue Sky or other state
securities laws. Pledgor hereby waives any claims against Pledgee arising by
reason of the fact that the price at which the Pledged Securities may have been
sold at a private sale conducted in a commercially reasonable manner was less
than that which might have been obtained at a public sale, even if Pledgee
accepts the first offer received and does not offer the Pledged Securities to
more than one possible purchaser.
9. Pledgor shall reimburse Pledgee for any costs or expenses, including
but not limited to reasonable attorneys' fees and legal expenses, in connection
with the exercise of any rights or remedies pursuant to the terms of this
Agreement or at law.
10. Any and all notices, demands, requests or other communications
hereunder shall be in writing and shall be deemed duly given when personally
delivered to or transmitted by overnight express delivery or by facsimile to and
received by the party to whom such notice is intended, or in lieu of such
personal delivery or overnight express delivery or facsimile transmission, three
(3) business days after deposit in the United States mail, first-class,
certified or registered, postage prepaid, return receipt requested, addressed to
the applicable party at the address provided below. The parties may change their
respective addresses for the purpose of this Section 10 by giving notice of such
change to the other party in the manner which is provided in this Section 10.
Pledgee: The Caloyeras Family Partnership
c/o Xxxxx X. Xxxxxxxxx
Magnetika, Inc.
0000 X. 000xx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Copy to: Xxxxxx X. Xxxxxx, Esq.
Xxxxx, Xxxxx & Xxxxxx LLP
0000 Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Pledgor: Torotel, Inc.
00000 Xxxxx 00 Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Xx., President
Facsimile: 000-000-0000
Copy to: Xxxxx Xxxxxxxxxx, Esq.
Shook, Hardy & Bacon LLP
0000 Xxxxx Xxxx., 0xx Xxxxx
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
11. This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original Agreement, and all of which shall constitute one
Agreement. This Agreement may be executed by any party by delivery of a
facsimile signature, which signature shall have the same force and effect as an
original signature. Any party which delivers a facsimile signature shall
promptly thereafter deliver an originally executed signature to the other
parties; provided, however, that the failure to deliver an original signature
page shall not affect the validity of any signature delivered by facsimile.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
PLEDGOR:
TOROTEL, INC., a Missouri corporation
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------
Xxxx X. Xxxxxxxx
President and Secretary
PLEDGEE:
THE CALOYERAS FAMILY
PARTNERSHIP, a California limited
partnership
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
General Partner
