EXHIBIT 10.15
STOCK
PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT ("Agreement") is made and entered into as of
the 2nd day of May, 2002, by and among Armitec, Inc., a Delaware corporation
(the "Pledgor" or "Armitec") and Xxxx Xxxxx, an individual resident of the state
of Pennsylvania (the "Secured Party").
WITNESSETH:
WHEREAS, Xxxx Xxxxx Associates, Inc. ("Xxxx Xxxxx Associates"), a wholly
owned subsidiary of Armitec, the Secured Party, the sole shareholder of Pocono
Knits, Inc., and Pocono Knits, Inc. ("Pocono") have entered into that certain
Asset Purchase Agreement, dated as of March 15, 2002 (the "Asset Purchase
Agreement"), whereby Xxxx Xxxxx Associates is purchasing all of the assets of
Pocono in exchange for the assumption of all of the Assumed Obligations as such
term is defined in the Asset Purchase Agreement;
WHEREAS, in order to induce Pocono and the Secured Party to enter into the
Asset Purchase Agreement, the Pledgor has agreed to pledge all of the issued and
outstanding shares of Xxxx Xxxxx Associates to the Secured Party to secure the
performance by Xxxx Xxxxx Associates of its obligations in connection with the
Obligations (as such term is defined herein) (the "Pledged Shares"); and
WHEREAS, the parties have entered into an Escrow Agreement of even date
herewith directing the transfer or return of the Pledged Shares.
NOW THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00) cash in hand paid and in consideration of the promises and
mutual benefits to be derived, and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms used but undefined herein shall
have the meanings ascribed to such terms in the Asset Purchase Agreement, if
any.
2. Pledge. The Pledgor hereby pledges, assigns, hypothicates, transfers
and sets over to the Secured Party, and grants to the Secured Party a continuing
first priority security interest in and to the Pledged Shares and the
certificates representing the Pledged Shares and as provided in section 7 below
(the "Pledged Collateral"). True and correct copies of such share certificates
representing the Pledged Shares are attached hereto as Exhibit "A" and are
incorporated herein by reference.
3. Security for Obligations. The Secured Party's security interest in the
Pledged Collateral secures the performance of all obligations of the Pledgor in
connection with the Obligations set forth on Exhibit "B", including payment of
all amounts now due or coming due at any time hereafter in connection with the
Obligations, specifically including, but not limited to, principal, interest,
fees (including reasonable attorney fees), expenses or otherwise, and any and
all extensions or renewals of the foregoing in whole or in part (all such
obligations hereinafter the "Obligations").
4. Security Interest Absolute. The security interest granted hereby and
all rights of the Secured Party under this Agreement, and all obligations of the
Pledgor under this Agreement, shall be absolute and unconditional irrespective
of:
(a) any lack of validity or enforceability of the Obligations or any
other agreement or instrument relating to the Obligations; or
(b) any exchange, release or non-perfection of any other collateral
for all or any of the Obligations, or any release or amendment or waiver of or
consent to departure from the terms on any guaranty for all or any of the
Obligations.
5. Delivery of Pledged Collateral; Further Assurances. All certificates
or instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by an escrow agent mutually acceptable to the parties (the
"Escrow Agent") for or on behalf of the Secured Party and shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Secured Party. The Pledgor agrees that at any time
and from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Secured Party may
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral.
6. Representations and Warranties.
(a) By the Pledgor. The Pledgor represents and warrants as follows:
(i) The Pledgor is the legal and beneficial owner of the Pledged
Collateral free and clear of any lien, security interest, option or other charge
or encumbrance created by the Pledgor, except for the security interest created
by this Agreement.
(ii) The pledge of the Pledged Shares pursuant to this Agreement
creates a valid and perfected first priority security interest in the Pledged
Collateral securing the payment of the Obligations.
(iii)No authorization, approval, or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required either (i) for the pledge by the Pledgor of the Pledged Collateral
pursuant to this Agreement or for the execution, delivery or performance of this
Agreement by the Pledgor or (ii) for the exercise by the Secured Party of the
voting or other rights provided for in this Agreement or the remedies in respect
of the Pledged Collateral pursuant to this Agreement (except as maybe required
in connection with such disposition by laws affecting the offering and sale of
securities generally).
(iv) The Pledged Shares constitute one hundred percent (100%)
percent of the issued and outstanding shares of all classes of capital stock of
Xxxx Xxxxx Associates.
(b) By All Parties. Each party represents and warrants to the other
(i) that it has the power and authority to enter into this Agreement and to
carry out its terms and conditions and (ii) that the carrying out of the terms
and conditions of this Agreement is not restricted by or in violation either of
any applicable law to which it is subject or of any agreement, commitment,
order, ruling or proceeding to which it is a party or to which it or any of its
assets are subject.
7. Voting Rights; Dividends, Etc.
(a) General. So long as no Event of Default (as defined below) or
event which, with the giving of notice or the lapse of time, or both, would
become an Event of Default shall have occurred and be continuing:
(i) Voting Rights. The Pledgor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the Pledged Collateral
or any part thereof for any purpose not inconsistent with the terms of this
Agreement; provided, however, that the Pledgor shall not exercise or refrain
from exercising any such right if, in the Secured Party's reasonable judgment,
such action would have a material adverse effect on the value of the Pledged
Collateral or any part thereof.
(ii) Dividends. Any and all cash paid, payable or otherwise as
dividends or distributed in partial or complete redemption of, or in exchange
for, any Pledged Collateral shall be, and shall be forthwith delivered to the
Escrow Agent to hold as, Pledged Collateral (but if cash, shall instead be
applied first by the Secured Party against the Obligations in such order as the
Secured Party may elect) and shall, if received by the Pledgor, be received in
trust for the benefit of the Secured Party, be segregated from the other
property or funds of the Pledgor, and be forthwith delivered to the Escrow Agent
as Pledged Collateral in the same form as so received (with any necessary
endorsement).
(iii)Other. The Secured Party shall execute and deliver (or
cause to be executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purposes of enabling
the Pledgor to exercise the voting and other rights which it is entitled to
exercise pursuant to subsection (i) above and to receive payments which it is
authorized to receive and retain pursuant to subsection (ii) above.
(iv) Sale of Assets. Except in the ordinary course of business,
the Pledgor agrees not to sell any of the equipment or fixtures of the company.
(b) Upon Default. Upon the occurrence of an Event of Default (as
defined below), which is not cured within ten (10) days of receipt by Pledgor of
a written notice of default, the Escrow Agent shall deliver the Pledged Shares
to the Secured Party.
8. No Transfers or Liens: Additional Shares.
(a) No Transfers or Liens. The Pledgor agrees that it will not (i)
sell or otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral, or (ii) create or permit to exist any lien, security
interest, or other charge or encumbrance upon or with respect to any of the
Pledged Collateral, except for the security interest under this Agreement.
(b) Additional Shares. The Pledgor agrees that it will deliver to
Secured Party any stock or other securities issued to Pledgor in addition to or
in substitution for the Pledged Shares issued by Xxxx Xxxxx Associates to the
Escrow Agent upon receipt thereof by Pledgor.
9. Events of Default. The failure of Pledgor to pay any of the
Obligations, as and when the same shall become due and payable and after taking
into account any cure periods shall constitute an Event of Default under this
Agreement.
10. Return of Pledged Collateral. Upon (i) the satisfaction in full of the
Obligations, or (ii) the receipt by the Secured Party of a release of liability
from all of the Named Obligees, the Escrow Agent shall return the Pledged
Collateral to the Pledgor.
11. Continuing Interest. This Agreement shall create a continuing first
priority security interest in the Pledged Collateral and shall (a) remain in
full force and effect until payment in full of the Obligations, (b) be binding
upon the Pledgor, its successors and assigns, and (c) inure to the benefit of
the Secured Party and its permitted, if any, successors, transferees and
assigns.
12. Termination. Upon the final payment of all Obligations or the release
of liability from all of the Named Obligees of Secured Party, this Agreement
shall terminate and the Escrow Agent shall transfer and deliver the Pledged
Collateral and the accompanying stock transfer powers to the Pledgor or to
whosoever shall be lawfully entitled to the same, marked "Terminated-Underlying
Obligations Satisfied" and dated and signed by the Secured Party.
13. Miscellaneous.
(a) Survival. All representations, warranties, covenants and
agreements herein contained shall survive the execution and delivery of this
Agreement and the pledge of the Pledged Shares, the remedies of a party for
breaches of representations, warranties, covenants or agreements shall not be
affected by any investigation by, or knowledge of, the non breaching party prior
to the date of this Agreement, and each party agrees to indemnify, defend and
hold the other harmless for all losses, costs and expenses (including reasonable
attorneys' fees) arising out of its breach of any representation, warranty,
covenant or agreement made by it in this Agreement.
(b) Further Assurances. Each party agrees to do such further acts,
and to execute and deliver such additional conveyances, assignments, agreements
and instruments, as another party may at any time request in connection with the
administration and enforcement of this Agreement or relating to the Pledged
Collateral or any part of it, or in order better to assure and confirm to the
requesting party its rights, powers and remedies under this Agreement.
(c) Notices. All notices, communications and deliveries under this
Agreement (i) shall be made in writing signed by the party making the same to
the address and with copies as specified below, (ii) shall be deemed to be given
if delivered in person on the date delivered, if sent by telecopier on the date
of telephonic confirmation of receipt, or if mailed by overnight delivery
service (with postage and other fees prepaid), on the date mailed, and (iii)
shall be deemed received if delivered in person on the date of personal
delivery, if telecopied on the date of telephonic confirmation of receipt or if
so mailed, on the first (1st) business day after so mailed. Such notice shall
not be effective unless copies are provided contemporaneously as specified
below, but neither the manner nor the time of giving notice to those to whom
copies are to be given (which need not be the same as the addressee) shall
control the date notice is given or received. The addresses and requirements for
copies are as follows:
Pledgor: Xxxx Xxxxx Associates, Inc.
-------
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
With a copy to: Xxxxxx X. Xxxxxxxxx, Esq.
--------------
Xxxxxxxxx Traurig, LLP
0000 Xxxxxxxxx Xxxxxxx, X.X.
Xxxxx 000
Xxxxxxx, XX 00000
Secured Party: Mr. Xxxx Xxxxx
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000 X. Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
With a copy to: Xxxxxx X. Xxxxxxxxx, Xx.
--------------
00 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx-Xxxxx, XX 00000
Such notice shall be given at such other address or to such other
representative as a party to this Agreement may furnish pursuant to this
subsection (c) to the other parties to this Agreement. If notice is given
pursuant to this subsection (c) of a permitted successor or assign of a party to
this Agreement, then notice shall thereafter be given as set forth above also to
such successor or assign of such party to this Agreement.
(d) Time of the Essence; Computation of Time. Time is of the essence
of each and every provision of this Agreement. Whenever the last day for the
exercise of any privilege or the discharge of any duty under this Agreement
shall fall upon Saturday, Sunday or any public or legal holiday, whether state
of Pennsylvania or federal, the party having such privilege or duty shall have
until 5:00 p.m. on the next succeeding regular business day to exercise such
privilege or to discharge such duty.
(e) Assignment; Successors in Interest.
(i) Assigning. Except with the prior written consent of the
other party or for an assignment upon the death of a party to his legal
representatives, heirs, devisees or legatees, who take subject to the
liabilities and obligations of such party hereunder, no assignment or transfer
by a party of its rights and obligations under this Agreement may be made.
(ii) Binding Nature. This Agreement is binding upon the parties
to this Agreement and their respective successors and assigns, inures to the
benefit of the parties to this Agreement and their respective permitted
successors and assignees (and to or for the benefit of no other person or
entity, whether an employee or otherwise, whatsoever); and upon an assignment
any reference to a party to this Agreement shall also be a reference to a
successor or assign.
(f) Number; Gender; Captions; Certain Definitions. Whenever the
context so requires, the singular number includes the plural, the plural
includes the singular, and the gender of any pronoun includes the other genders.
Titles and captions of or in this Agreement are inserted only as a matter of
convenience and for reference and in no way define, limit, extend or describe
the scope of this Agreement or the intent of any provision of this Agreement.
The parties agree: (i) to all definitions in the statement of parties to this
Agreement and in the "Background Statement" and other introductory language to
this Agreement; (ii) that "this Agreement" includes any amendments or other
modifications and supplements, and all exhibits, schedules and other
attachments, to it; (iii) that "person" shall mean any individual, sole
proprietorship, partnership, joint venture, limited liability company, estate,
trust, unincorporated organization, association, corporation, institution, or
other entity or governmental authority; (iv) that "applicable law" means all
provisions of any constitution, statute, law, rule, regulation, decision, order,
decree, judgment, release, license, permit, stipulation or other official
pronouncement enacted, promulgated or issued by any governmental authority or
arbitrator or arbitration panel; (v) that "governmental authority" means any
legislative, executive, judicial, quasi judicial or other public authority,
agency, department, bureau, division, unit, court or other public body or
person; and (vi) that "including" and other words or phrases of inclusion, if
any, shall not be construed as terms of limitation, so that references to
"included" matters shall be regarded as non-exclusive, non characterizing
illustrations.
(g) Severability. Any determination by any court of competent
jurisdiction of the invalidity of any provision of this Agreement that is not
essential to accomplishing its purposes shall not affect the validity of any
other provision of this Agreement, which shall remain in full force and effect
and which shall be construed as to be valid under applicable law.
(h) Remedies Cumulative. The remedies of a party to this Agreement
provided in this Agreement are cumulative and shall not exclude any other
remedies to which any party to this Agreement may be lawfully entitled, under
this Agreement or applicable law, and the exercise of a remedy shall not be
deemed an election excluding any other remedy (any such claim by the other party
to this Agreement being hereby waived).
(i) Integration: Amendment: Waiver. This Agreement (i) constitutes
the entire agreement of the parties to this Agreement with respect to its
subject matter, (ii) supersedes all prior agreements, if any, of the parties
with respect to its subject matter, and (iii) may not be amended except in
writing signed by the party against whom the change is being asserted. The
failure of any party at any time or times to require the performance of any
provision of this Agreement shall in no manner affect the right to enforce the
same; and no waiver by any party of any provision (or of a breach of any
provision) of this Agreement, whether by conduct or otherwise, in any one or
more instances, shall be deemed or construed either as a further or continuing
waiver of any such provision or breach or as a waiver of any other provision (or
of a breach of any other provision) of this Agreement.
(j) Controlling Law. This Agreement is governed by, and shall be
construed and enforced in accordance with, the laws of the State of
Pennsylvania. Pledgor hereby agrees to submit itself to either the jurisdiction
of the Courts of the State of Pennsylvania, at Secured Party's sole discretion,
in any action founded on this Agreement and venue shall be proper in the
County of Luzerne for any such action.
(k) Copies. This Agreement may be executed in two or more copies,
each of which shall be deemed an original, and it shall not be necessary in
making proof of this Agreement or its terms to produce or account for more than
one of such copies.
DULY EXECUTED and delivered by the Pledgor, under seal, effective as set
forth above.
PLEDGOR:
Armitec, Inc.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
--------------------------
Title: President
-------------------------
(Seal)
SECURED PARTY:
By: /s/ Xxxx Xxxxx
----------------------------
Xxxx Xxxxx
