STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement (this
“Agreement”) dated as of February 11, 2010, between Xxxx Xxxxxxxx (“Pledgor”)
and Uzi Halevy (the “Pledgee Representative”).
BACKGROUND
WHEREAS, effective as of the date
hereof, those parties listed on Schedule 1 hereto
(each a “Pledgee”, together the “Pledgees”) have entered into a subscription
agreement (“Subscription Agreement”) with XxXxx Mobility, Inc., a Delaware
corporation and wholly-owned subsidiary of InovaChem, Inc., a Delaware
corporation (“InovaChem”) for the purchase of an aggregate of $500,000 of common
stock, par value $0.001 per share, of InovaChem (the “Common Stock”) at a
purchase price of $0.15 per share (“Purchase Price”);
WHEREAS, the Pledgor is a significant
stockholder and Chairman, Chief Executive Officer and President of
InovaChem;
WHEREAS, the Pledgor has agreed to
pledge certain securities of InovaChem to secure certain anti-dilution rights
granted to the Pledgees; and
WHEREAS,
in order to induce the Pledgees to make an aggregate investment of
$500,000 in InovaChem and enter into the Subscription Agreement, Pledgor has
agreed to pledge and grant a security interest in the collateral described
herein to the Pledgees on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the
premises and for other good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Pledge and Grant of Security
Interest. To secure the full and punctual payment of shares to
each Pledgee in the event of a Dilution Event (as defined below), Pledgor hereby
pledges, assigns, hypothecates, transfers and grants a security interest to the
Pledgees, pro rata as set forth on Schedule 1 hereto, in
1,000,000 shares of Common Stock held by Pledgor (the
“Collateral”).
2. Delivery of
Collateral. All certificates representing or evidencing the
Collateral shall be delivered to and held by Xxx Xxxxxx (the “Collateral
Holder”) at Xxxxxx Xxxxxx & Xxxxxx P.C., Two Memorial City Plaza, 000
Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000 on behalf of the Pledgees and shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Pledgee Representative. Pledgor hereby
authorizes InovaChem upon demand by the Pledgee Representative to deliver any
certificates, instruments or other distributions issued in connection with the
Collateral directly to the Collateral Holder, in each case to be held by the
Collateral Holder, subject to the terms hereof. Upon the occurrence
of a Dilution Event, the Pledgee Representative shall have the right, during
such time in the Pledgee Representative’s discretion and with notice to the
Pledgor, to transfer to or to register in the names of the Pledgees or any of
their nominees the Collateral pro ratably in accordance with their respective
interest therein.
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3. Anti Dilution Rights;
Dilution Event.
(a) If, at any time on or after
February 11, 2010 (the “Original Issue Date”) and prior to August 11, 2011,
InovaChem issues any Common Stock or any securities convertible into the Common
Stock (“Convertible Securities”), other than an Excepted Issuance (as defined
below), for a consideration per share less than $0.15 per share (a “Dilution
Event”), then immediately upon such issuance and thereafter successively upon
each such issuance, each Pledgee shall have a pro rata right, in proportion to
such Pledgee’s investment in InovaChem as of the date hereof, to receive from
the Collateral, that number of additional shares that would have been issued to
such Pledgee had the Purchase Price been reduced to such other lower per share
price. For purposes of this Agreement, an Excepted Issuance shall
include issuances:
(i) upon
conversion of any shares of series preferred stock of InovaChem outstanding as
of the Original Issue Date;
(ii)
pursuant to the exercise of Convertible Securities
outstanding as of the Original Issue Date;
(iii) for
full or partial consideration in connection with a strategic merger,
acquisition, consolidation or purchase of substantially all of the securities or
assets of a corporation or other entity approved by InovaChem’s Board of
Directors (the “Board”);
(iv) in
connection with strategic license agreements and other partnering arrangements
so long as such issuances are not for the purpose of raising capital and are
approved by the Board; and
(v) shares
of Common Stock and/or options, warrants or other Common Stock purchase rights
and the Common Stock issued pursuant to such options, warrants or other rights
(as adjusted for any stock dividends, combinations, splits, recapitalizations
and the like after the Original Issue Date) to employees, officers or directors
of, or consultants or advisors to, InovaChem pursuant to equity incentive plans
or grants that are approved by the Board.
(b) No
fractional shares of Common Stock shall be issued upon a Dilution
Event. If a Pledgee has a right to a fractional share pursuant to
this Section 3(a), the Pledgor shall, in lieu of issuing any fractional share,
pay cash equal to the product of such fraction multiplied by the fair market
value of one share of Common Stock (as determined by the Board) on the date of
the Dilution Event.
4. Representations and
Warranties of Pledgor. Pledgor hereby represents and warrants
to each Pledgee that:
(a) The
execution, delivery and performance by Pledgor of this Agreement and the pledge
of the Collateral hereunder do not and will not result in any violation of any
agreement, indenture, instrument, license, judgment, decree, order, law,
statute, ordinance or other governmental rule or regulation applicable to
Pledgor.
(b) This
Agreement constitutes the legal, valid, and binding obligation of Pledgor
enforceable against Pledgor in accordance with its terms.
(c) Pledgor
is the direct and beneficial owner of each share of the Collateral.
(d) All
of the shares of the Collateral have been duly authorized, validly issued and
are fully paid and nonassessable.
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(e) No
consent or approval of any person, corporation, governmental body, regulatory
authority or other entity, is or will be necessary for (i) the execution,
delivery and performance of this Agreement, (ii) the exercise by any Pledgee of
any rights with respect to the Collateral or (iii) the pledge and assignment of,
and the grant of a security interest in, the Collateral hereunder.
(f)
Pledgor has the requisite power and authority to enter
into this Agreement and to pledge and assign the Collateral to the Pledgees in
accordance with the terms of this Agreement.
(h) Pledgor
owns the Collateral and, except for the pledge and security interest granted to
the Pledgees, the Collateral shall be free and clear of any other security
interest, pledge, claim, lien, charge, hypothecation, assignment, offset or
encumbrance whatsoever, other than those imposed under applicable securities
laws (collectively, “Liens”).
5. Covenants. Pledgor
covenants that:
(a) Pledgor
will not sell, assign, transfer, convey, or otherwise dispose of its rights in
or to the Collateral or any interest therein; nor create, incur or permit to
exist any Lien whatsoever with respect to any of the Collateral or the proceeds
thereof other than that created hereby.
(b) Pledgor
shall at any time, and from time to time, at its own expense, upon the written
request of the Pledgee Representative, execute and deliver such further
documents and do such further acts and things as the Pledgee Representative may
reasonably request in order to effect the purposes of this Agreement including,
but without limitation, delivering to the Collateral Holder upon the occurrence
of a Dilution Event, irrevocable proxies in respect of the Collateral in form
satisfactory to the Pledgee Representative.
6. Voting Rights and
Dividends. Pledgor shall retain all voting control and all
other rights and incidents thereto until the occurrence of a Dilution
Event. Until the occurrence of a Dilution Event, Pledgor shall retain the
right to receive and retain any and all payments, proceeds, dividends,
distributions, monies, compensation, property, assets, instruments or rights,
other than stock dividends or dividends or other amounts payable under or in
connection with any recapitalization, restructuring or other non-ordinary course
event, paid, issued or distributed from time to time in respect of the
Collateral pledged by the Pledgor.
7. No
Waiver. Any and all rights of each Pledgee with respect to the
Liens granted under this Agreement shall continue unimpaired, and Pledgor shall
be and remain obligated in accordance with the terms hereof, notwithstanding (a)
the bankruptcy, insolvency or reorganization of Pledgor or (b) the release or
substitution of any item of the Collateral at any time, or of any rights or
interests therein. Pledgor hereby waives all notice of any such
delay, extension, release, substitution, renewal, compromise or other
indulgence, and hereby consents to be bound hereby as fully and effectively as
if Pledgor had expressly agreed thereto in advance. No delay or
extension of time by the Pledgee Representative in exercising any power of sale,
option or other right or remedy hereunder, and no failure by the Pledgee
Representative to give notice or make demand, shall constitute a waiver thereof,
or limit, impair or prejudice any Pledgee’s right to take any action against
Pledgor or to exercise any other power of sale, option or any other right or
remedy.
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8. Waivers.
(a) EACH
PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OTHER AGREEMENT EXECUTED OR DELIVERED BY THEM IN
CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE AND EACH PARTY HERETO HEREBY AGREES AND CONSENTS THAT ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH PARTY TO THE
WAIVER OF ITS RIGHT TO TRIAL BY JURY.
9. Release of Pledged Shares
from Pledge. Upon the termination or expiration of this
Agreement, all certificates evidencing Collateral and all documents and
instruments of transfer or assignment related thereto shall be promptly returned
to Pledgor, whereupon all rights of the Pledgees to the Collateral hereunder
shall be terminated.
10. Miscellaneous.
(a) This
Agreement constitutes the entire and final agreement among the parties with
respect to the subject matter hereof and may not be changed, terminated or
otherwise varied except by a writing duly executed by the parties
hereto.
(b) No
waiver of any term or condition of this Agreement, whether by delay, omission or
otherwise, shall be effective unless in writing and signed by the party sought
to be charged, and then such waiver shall be effective only in the specific
instance and for the purpose for which given.
(c) The
Pledgor hereby irrevocably appoints the Pledgee Representative as the Pledgor's
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor, or otherwise, from time to time at Pledgee
Representative's discretion, to take any action and to execute any instrument
that Pledgee Representative may reasonably deem necessary or advisable to
accomplish the purposes of this Agreement. The foregoing power of
attorney, being coupled with an interest, is irrevocable; provided, that the
foregoing power of attorney shall terminate upon the termination or expiration
of this Agreement.
(d) In
the event that any provision of this Agreement or the application thereof to
Pledgor or any circumstance in any jurisdiction governing this Agreement shall,
to any extent, be invalid or unenforceable under any applicable statute,
regulation, or rule of law, such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform to
such statute, regulation or rule of law, and the remainder of this Agreement and
the application of any such invalid or unenforceable provision to parties,
jurisdictions, or circumstances other than to whom or to which it is held
invalid or unenforceable shall not be affected thereby, nor shall same affect
the validity or enforceability of any other provision of this
Agreement.
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(e) This
Agreement shall be binding upon Pledgor, and Pledgor’s successors and assigns,
and shall inure to the benefit of the Pledgees and their successors and
assigns.
(f)
Any notice or other
communication required or permitted pursuant to this Agreement shall be given in
accordance with the Purchase Agreement.
(g) This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of Texas.
(h) This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which when taken together shall constitute one and
the same agreement. Any signature delivered by a party by facsimile
transmission shall be deemed an original signature hereto.
[SIGNATURE
PAGE FOLLOWS]
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IN WITNESS WHEREOF, the
parties have duly executed this Agreement as of the date written
above.
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PLEDGOR:
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/s/
Xxxx Xxxxxxxx
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Xxxx
Xxxxxxxx
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PLEDGEE
REPRESENTATIVE:
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/s/
Uzi Halevy
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Uzi
Halevy, on behalf of the
Pledgees
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The
undersigned hereby acknowledges and consents to the Stock Pledge Agreement and
agrees to take all steps necessary or desirable to recognize the Pledgees as the
beneficial owners of the Collateral upon notice from the Pledgee Representative
that a Dilution Event has occurred in accordance with the terms and provisions
of this Stock Pledge Agreement.
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INOVACHEM,
INC.
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By:
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Xxxx Xxxxxxxx
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Xxxx
Xxxxxxxx
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Chief
Executive Officer and President
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[Signature
Page to Stock Pledge Agreement]
SCHEDULE
1
Lakeview
Investments, Inc,
Xxxxxx X.
Xxxxxxxxx
Xxxxx
Xxxxxxxxx
Goldeneye
Partners II, Ltd.
3 K
Partners, Ltd.
Xxxxx X.
Xxxxxx
Xxxxxxxx
Xxxxxx
ITC
Trading Company, Ltd.
Uzi
Xxxxxx
Xxxxxxx
and Xxxxx Xxxx
Xxxxx Hi
Tech Investments Holdings
