PLEDGE AGREEMENT
Exhibit
3
THIS
PLEDGE AGREEMENT (this “Agreement”),
dated
March 29, 2007, is made by and between IHL
INVESTMENTS, LLC,
a
Delaware limited liability company (“Pledgor”),
in
favor of XXXXXX
CORPORATION,
a
Delaware corporation (“Pledgee”).
W I T N E S S E T H:
WHEREAS,
Pledgor, pursuant to a certain Stock Purchase Agreement of even date herewith
(the “Stock
Purchase Agreement”)
by and
among Pledgor and Pledgee, is purchasing FORTY THOUSAND (40,000) shares of
Series C Preferred stock, par value $0.001 in Teltronics, Inc., a Delaware
corporation (“Teltronics”)
(the
“Series C Stock”);
WHEREAS,
Pledgor has executed a certain Secured Promissory Note of even date herewith,
in
the principal amount of $400,000 (as amended, supplemented or modified from
time
to time, the “Note”);
WHEREAS,
Pledgor acknowledges that, by reason of the foregoing, it will receive
substantial economic and other benefits from Pledgee and acknowledges that
without this Agreement, Pledgee would be unwilling to accept the Note;
and
WHEREAS,
as consideration for the execution of this Agreement by the Pledgee, and to
further secure the obligations of the Pledgee under the Note, Pledgor agrees
to
pledge and grant to Pledgee a security interest in (i)10,000 shares of the
Series C Stock (the “Stock”), (ii) any other interest in Teltronics now owned or
hereafter acquired by Pledgor, and (iii) Distributions (as defined below)
to Pledgor of or from Teltronics (each, a “Pledged
Interest”
and,
collectively, the “Pledged
Interests”).
NOW
THEREFORE, in consideration of the premises and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency whereof are hereby acknowledged, the parties hereto hereby covenant
and agree as follows:
Section
1. Pledge.
(a) Pledgor
hereby pledges, assigns, hypothecates, delivers, sets over and grants to Pledgee
a lien on and first priority security interest in and to all right, title and
interest of Pledgor in the Pledged Interests, any certificates, instruments
or
documents representing the same, all options and other rights, contractual
or
otherwise, in respect thereof (including, without limitation, any registration
rights) and all dividends, distributions, liquidation proceeds, cash,
instruments and other property (including, without limitation, additional stock
or securities distributed in respect of any Pledged Interests by way of stock
splits, spin-offs, reclassification, combination, consolidation, merger or
similar arrangement) to which Pledgor is entitled with respect to the Pledged
Interests, whether or not received by or otherwise distributed to Pledgor,
whether such dividends, distributions, liquidation proceeds, cash, instruments
and other property are paid or distributed by Teltronics in respect of operating
profits, sales, exchanges, refinancing,
1
(b) Concurrently
herewith, Pledgor is receiving and will cause delivery to Pledgee an
“Agreement
and Acknowledgment of Pledge”
in
substantially in the form of Exhibit A
hereto
duly executed and delivered by Teltronics.
Section
2. Security
for Obligations.
This
Agreement secures (i) the full and prompt payment when due, whether at the
respective stated maturity dates, by acceleration or otherwise, of all
obligations and any other amounts due or to become due under the Note, whether
for principal, interest, fees, expenses or otherwise, (ii) any and all
obligations of Pledgor now or hereafter existing under this Agreement, and
(iii)
any and all other obligations of Pledgor to Pledgee now or hereafter existing
(all such obligations being hereinafter collectively referred to as the
“Obligations”).
Section
3. Delivery
of Pledged Collateral.
(a) Concurrent
with this Agreement: (i) the Pledged Interests shall be delivered, transferred
to or placed under the control of the Pledgee by Pledgor by certificates,
instruments, or other documents now or hereafter representing or evidencing
the
Pledged Collateral (“Certificates”)
and, as
appropriate, shall be accompanied by duly executed instruments of transfer
or
assignment in blank, all in form and substance reasonably satisfactory to
Pledgee; (ii) Pledgor shall deliver to Pledgee such Uniform Commercial Code
financing statements, executed by Pledgor and in a form ready for filing, as
may
be necessary or desirable to perfect and/or evidence the security interests
in
the Pledged Collateral granted to Pledgee pursuant to this Agreement; and
(iii) Pledgor shall deliver satisfactory evidence to Pledgee in its sole
discretion that all other filings, recordings, registrations and other actions
Pledgee deems necessary or desirable to establish, preserve and perfect the
security interests and other rights granted to Pledgee pursuant to this
Agreement shall have been made.
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(b) If
Pledgor shall acquire (by purchase, Distribution or otherwise) any additional
securities or ownership interest of any kind or nature in, or rights to
Distributions from, or relating to, Teltronics (collectively, “Securities”)
at any
time or from time to time after the date hereof, Pledgor will forthwith pledge
and deliver such Securities (and all certificates or instruments representing
such Securities) as collateral with Pledgee and deliver to Pledgee the other
documents and evidence described in the preceding Section 3(a) to effect any
transfer thereof as required hereby, together with a certificate executed by
Pledgor describing such Securities and certifying that the same have been duly
pledged with Pledgee hereunder.
(c) If
Pledgor shall come into possession of any Distribution, including any dividends,
distributions, liquidation proceeds, cash or other property paid or distributed
with respect to the Stock at any time or from time to time after the date
hereof, Pledgor shall surrender such Distributions to Pledgee who may apply
any
such Distributions to any portion of the Obligations then due or hold such
Distributions as part of the Pledged Collateral.
(d) Pledgee
shall have the right to appoint one or more agents for the purpose of retaining
physical possession of any of the Pledged Collateral, which may be held (in
the
discretion of Pledgee) in the name of Pledgor, or endorsed or assigned in blank
or in favor of Pledgee or any nominee or nominees of Pledgee or any agent
appointed by Pledgee in accordance herewith.
Section
4. Voting
Power, Etc.
Notwithstanding anything to the contrary contained in Section 1
hereof,
provided that no Event of Default (as hereinafter defined) shall have occurred
and be continuing, but subject in all respects to the terms, conditions,
prohibitions or limitations on the actions of Pledgor as a shareholder of
Teltronics provided in the Organizational Documents of Teltronics, Pledgor
shall
be entitled to exercise all voting, consensual and other powers of ownership
pertaining to the Pledged Collateral (including, without limitation, to make
determinations, to exercise any election (including, without limitation,
election of remedies) or option, and to give or receive any notice, consent,
amendment, waiver, approval or other rights described in Section 1
hereof),
provided
that no
ratification shall be given, nor any power pertaining to the Pledged Collateral
exercised, nor any other action taken, which would violate or be inconsistent
with the terms of this Agreement or which would have the effect of impairing
the
position or interests of Pledgee, or, in each case, in such a manner as would
reasonably be expected to have an adverse effect on the ability of Pledgor
to
perform its obligations hereunder. If any of the foregoing rights are exercised
by Pledgor, Pledgor shall promptly give written notice to Pledgee of its
exercise of such right. Upon the occurrence of any Event of Default and for
so
long as such Event of Default is continuing, Pledgee shall have the sole and
exclusive right to exercise all voting, consensual and other powers of ownership
pertaining to the Pledged Collateral.
Section
5. No
Assumption.
Notwithstanding anything contained herein to the contrary, whether or not an
Event of Default shall have occurred, and whether or not Pledgee elects to
foreclose or otherwise realize on its security interest in the Pledged
Collateral as set forth herein or exercise any of its rights under this
Agreement or otherwise, neither this Agreement, receipt by Pledgee of any
Distributions, the foreclosure or other realization by Pledgee of the security
interest in the Pledged Collateral nor any exercise by Pledgee of any of its
rights under this Agreement or otherwise, shall in any way be deemed to obligate
Pledgee to assume any of Pledgor’s obligations, duties, expenses or liabilities
with respect to the Pledged Collateral or any agreement relating
3
Section
6. Events
of Default.
The
occurrence of any of the following events shall constitute an “Event
of Default”
under
this Agreement: (a) Pledgor shall at any time fail timely to perform or comply
with any provision of this Agreement after Pledgor actually obtains knowledge
of
such default or after notice of such default and a cure period of ten (10)
days
during which to cure such default; (b) any of the representations or
warranties made by Pledgor in this Agreement shall be, or at any time shall
become, false or inaccurate in any material respect after Pledgor actually
obtains knowledge of such default or after notice of such default and a cure
period of ten (10) days during which to cure such default; or (c) if there
shall
occur any Event of Default under the Note.
Section
7. Representations,
Warranties and Covenants.
Pledgor
represents and warrants to, and agrees with, Pledgee as follows:
(a) Pledgor
is a duly formed limited liability company under the laws of the State of
Delaware, validly existing and in good standing under the laws of the State
of
Delaware, and has full power and authority to execute and deliver to Pledgee
this Agreement, to own its properties and to perform the obligations and carry
out the duties imposed upon Pledgor by this Agreement. Pledgor is not required
by applicable law to be authorized to do business in any other
jurisdiction.
(b) Pledgor
is, and at all times will be, the only record and beneficial owner of the
Pledged Collateral. Pledgor will defend Pledgee’s right, title and interest in
and to the Pledged Collateral pledged by it pursuant hereto against the claims
and demands of any third party. The costs and expenses incurred by Pledgor
to
defend Pledgee’s rights, title and interests in and to the Pledged Collateral,
shall be borne solely and exclusively by Pledgor.
(c) Pledgor’s
rights to Distributions, if any, under the Organizational Documents of
Teltronics are not subject to any defense, offset, counterclaim or contingency
whatsoever. Giving effect to the aforesaid grants and pledges to Pledgee and
the
deliveries required hereunder, Pledgee has, as of the date of this Agreement,
and, as to any Pledged Collateral acquired from time to time after such date,
shall have, a valid, perfected and continuing first priority lien upon and
security interest in the Pledged Collateral; provided,
however,
that no
representation or warranty is made with respect to the perfected status of
the
security interest of Pledgee in the proceeds of the Pledged Collateral
consisting of “cash proceeds” or “non-cash proceeds” as defined in the Uniform
Commercial Code in effect in the State of Delaware (the “Code”).
(d) Pledgor
agrees to pay, and to save Pledgee harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamps, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Pledged Collateral or in connection with any of the
transactions contemplated by this Agreement or the exercise by Pledgee of any
right or remedy granted to it.
4
(e) Pledgor
shall not transfer any of the Pledged Collateral until payment or satisfaction
in full of the Obligations.
(f) This
Agreement and each provision herein has been duly authorized, executed and
delivered by Pledgor and constitutes the legal, valid and binding obligation
of
Pledgor, enforceable against Pledgor in accordance with its terms.
(g) The
principal place of business and chief executive office of Pledgor and the
principal place where Pledgor’s records concerning the Pledged Collateral are
kept, is the Pledgor’s address provided in this Agreement. Pledgor will not
change such principal place of business or remove such records nor will Pledgor
move its principal place of business from such address unless it shall provide
Pledgee with at least thirty (30) days’ prior written notice thereof and there
shall have been taken such action, satisfactory to Pledgee, as may be necessary
to maintain the security interest of Pledgee hereunder at all times fully
perfected and in full force and effect. Pledgor shall not change its name unless
it shall have given Pledgee at least thirty (30) days’ prior written notice of
any such proposed change and shall have taken such action, satisfactory to
Pledgee, as may be necessary to maintain the security interest of Pledgee in
the
Pledged Collateral at all times fully perfected and in full force and
effect.
(h) Pledgor
has delivered to Pledgee true, correct and complete copies of all of the
Organizational Documents of Pledgor, and Pledgor shall not permit or consent
to
any amendments thereto without the prior written consent of Pledgee. The
Organizational Documents of Pledgor have been duly executed and delivered by
Pledgor and the shareholders, directors, members, managers, officers,
incorporators, or organizers, as the case may be, of Pledgor and constitute
the
legal, valid and binding obligations of such parties enforceable in accordance
with their respective terms. Pledgor has the full power and authority to own
its
property and to carry on its business as now being conducted, and has the power
and authority to execute and deliver and to perform its Obligations hereunder
and under any of the other documents to which it is a party.
The
representations, warranties and covenants set forth in this Section 7
shall
survive the execution and delivery of this Agreement.
Section
8. Further
Assurances.
Pledgor
agrees that at any time and from time to time Pledgor will promptly execute
and
deliver all further instruments and documents, and take all further action,
that
may be reasonably necessary or desirable, or that Pledgee may request, in order
to perfect and protect any security interest granted or purported to be granted
or to enable Pledgee to exercise and enforce its rights and remedies hereunder
with respect to any Pledged Collateral.
Section
9. Distributions.
(a) Upon
the
occurrence and continuation of an Event of Default:
(i) All
rights of Pledgor to receive Distributions and any and all proceeds from the
sale or other disposition of the Pledged Collateral (or any portion thereof)
which Pledgor would otherwise be authorized to receive and retain shall cease,
and all such rights shall thereupon become vested in Pledgee, who shall
thereupon have the sole right to receive and hold as Pledged Collateral such
Distributions and proceeds.
5
(ii) All
Distributions and proceeds which are received by Pledgor contrary to the
provisions of paragraph (a) of this Section 9
shall be
received in trust for the benefit of Pledgee, shall be segregated from other
funds of Pledgor and shall be forthwith paid over to Pledgee as Pledged
Collateral in the same form as so received (with any necessary
endorsement).
(iii) All
Distributions received by Pledgor in a partial or total liquidation of
Teltronics shall, in the event that any of the Obligations remain outstanding
at
the time of such partial or total liquidation, be paid to Pledgee and applied
by
Pledgee to such outstanding Obligations.
Section
10. Transfers
and Other Liens; Additional Interests.
Pledgor
agrees, so long as any of the Obligations are outstanding, not to:
(a) sell,
transfer or otherwise dispose of, or grant any option or similar right with
respect to, any of the Pledged Collateral; or
(b) create
or
permit to exist any lien, security interest or other charge or encumbrance
upon
or with respect to any of the Pledged Collateral; or
(c) sell,
transfer or otherwise dispose of, or grant an option or similar right with
respect to, the thirty thousand shares of Series C Preferred Stock not
constituting the Pledged Collateral until the Note is fully paid.
Section
11. Appointment
of Attorney-in-Fact.
Pledgor
hereby appoints Pledgee the attorney-in-fact for Pledgor, with full authority
in
the place and stead of Pledgor and in the name of Pledgor or otherwise, from
time to time in Pledgee’s discretion to take any action and to execute any
instrument which Pledgee may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, to receive, endorse
and collect all Distributions and any instruments made payable to Pledgor
representing any dividend, interest payment or other Distributions in respect
of
the Pledged Collateral or any part thereof and to give full discharge for the
same. Pledgor agrees that the foregoing power constitutes a power coupled with
an interest which may not be revoked and which shall survive until all of the
Obligations shall have been indefeasibly paid in full and satisfied, provided
that except with respect to the execution and filing of the Uniform Commercial
Code Financing Statements, this paragraph shall not be effective until the
occurrence of an Event of Default.
Section
12. Pledgee
to Perform.
If
Pledgor fails to perform any agreement contained herein, Pledgee may itself
perform, or cause performance of, such agreement, and the expenses of Pledgee
incurred in connection therewith shall be payable by Pledgor in accordance
with
Section 17
hereof.
Section
13. Remedies
Upon Default.
Upon the
occurrence of any Event of Default:
(a) Pledgee
may, without any notice to Pledgor of the occurrence of such Event of Default,
except as otherwise expressly required under the Note, exercise in respect
of
the Pledged Collateral, in addition to the other rights and remedies provided
for herein or otherwise available to Pledgee, all the rights and remedies of
a
secured party under the Code in
6
(b) Pledgee
may transfer all or any part of the Pledged Collateral into Pledgee’s name or
the name of its nominee or nominees, by endorsing the Certificates.
(c) Pledgee
may vote all or any part of the Pledged Collateral (whether or not transferred
into the name of Pledgee) and give all consents, waivers and ratifications
in
respect of the Pledged Collateral and otherwise act with respect thereto as
though it were the outright owner thereof (Pledgor hereby irrevocably
constituting and appointing Pledgee the proxy and attorney-in-fact of Pledgor,
with full power of substitution to do so).
(d) Any
Pledged Collateral or proceeds thereof held by Pledgee as Pledged Collateral
and
all proceeds thereof received by Pledgee in respect of any sale of, collection
from or other realization upon all or any part of the Pledged Collateral may,
in
the discretion of Pledgee, be held by Pledgee as collateral for, and/or then
or
at any time thereafter, be applied (after payment of any amounts payable to
Pledgee pursuant to Section 17
hereof),
in whole or in part by Pledgee for the benefit of Pledgor, against all or any
part of the Obligations and in such order as Pledgee shall elect. Any surplus
of
such Pledged Collateral or proceeds thereof held by Pledgee and remaining after
payment or satisfaction in full of all of the Obligations and the expenses
referred to in Section 17
hereof
shall be delivered or paid over to Pledgor or to whomsoever may be lawfully
entitled to receive such surplus.
(e) Each
right, power and remedy of Pledgee provided for in this Agreement or now or
hereafter existing at law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by Pledgee of any one or more of
the
rights, powers or remedies provided for in this Agreement now or hereafter
existing at law or in equity or by statute or otherwise shall not preclude
the
simultaneous or later exercise by Pledgee of all such other rights, powers
or
remedies, and no failure or delay on the part of Pledgee to exercise any such
right, power or remedy shall operate as a waiver thereof.
Section
14. Jurisdiction,
Venue, Service of Process.
ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT SHALL BE BROUGHT,
AT
PLEDGEE’S OPTION, ONLY IN THE COURTS OF THE STATE OF FLORIDA, BREVARD COUNTY OR
THE MIDDLE DISTRICT OF FLORIDA. PLEDGOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION
OF THE AFORESAID COURTS. PLEDGOR
7
Section
15. Jury
Trial Waiver.
EACH OF
PLEDGOR AND PLEDGEE HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY
AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED
ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN),
OR
ACTIONS OF PLEDGOR OR PLEDGEE RELATING TO THE NOTE, AND THE LENDING RELATIONSHIP
WHICH IS THE SUBJECT OF THIS PLEDGE AGREEMENT. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR PLEDGEE ENTERING INTO THIS AGREEMENT.
Section
16. Indemnity.
The
Pledgor agrees to indemnify and hold harmless the Pledgee from and against
any
and all claims, demands, losses, judgments and liabilities (including
liabilities for penalties) of whatsoever kind or nature, and to reimburse the
Pledgee for all costs and expenses, including reasonable attorneys' fees,
growing out of or resulting from this Agreement or the exercise by the Pledgee
of any right or remedy granted to it hereunder; provided,
that
the Pledgor shall not be required to indemnify the Pledgee in respect of any
claims, demands, losses, judgments, liabilities, costs or expenses arising
from
the gross negligence or willful misconduct of the Pledgee. In no event shall
the
Pledgee be liable, in the absence of gross negligence or willful misconduct
on
its part, for any matter or thing in connection with this Agreement other than
to account for moneys actually received by it in accordance with the terms
hereof. If and to the extent that the obligations of the Pledgor under this
Section
16
are
unenforceable for any reason, the Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law. Notwith-standing any other provision of this
Agreement, the Pledgee shall not be liable hereunder for any action or failure
to act hereunder, except to the extent of its gross negligence or willful
misconduct.
Section
17. Expenses.
Upon
demand, Pledgor will pay to Pledgee the amount of any and all expenses,
including the reasonable fees and expenses of Pledgee’s counsel and of any
experts and agents, which Pledgee may incur in connection with (i) the sale
of,
collection from, or other realization upon, any of the Pledged Collateral,
(ii)
the exercise or enforcement of any of Pledgee’s rights hereunder, or (iii) the
failure by Pledgor to perform or observe any of the provisions
hereof.
8
Section
18. Amendments,
Waivers, Etc.
No
amendment or waiver of any provision of this Agreement, nor consent to any
departure by Pledgor herefrom, shall in any event be effective unless the same
shall be in writing and signed by Pledgee, and then such waiver or consent
shall
be effective only in the specific instance and for the specific purpose for
which given.
Section
19. Notices.
All
notices, demands, instructions and other communications required or permitted
to
be given to or made upon any party hereto shall be given in the manner specified
in the Note, and at the address of each party hereto set forth below its
signature on the signature page hereto. The parties hereto may change the
address at which they are to receive notices hereunder by notice in writing
in
the foregoing manner to all parties.
Section
20. Continuing
Security Interest; Transfer.
This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) remain in full force and effect until the indefeasible payment
or
satisfaction in full of the Obligations, (ii) be binding upon Pledgor, its
permitted transferees, representatives, successors and assigns, and (iii) inure,
together with the rights and remedies of Pledgee hereunder, to the benefit
of
Pledgee and its permitted transferees, representatives, successors and assigns.
Without limiting the generality of the foregoing clause (iii), Pledgee, but
not
Pledgor, may assign or otherwise transfer this Agreement together with the
Pledged Collateral, the Note and any other Obligations to any other Persons
to
the extent permitted by the Note, and such other Persons shall thereupon become
vested with all the benefits in respect thereof granted to Pledgee herein or
otherwise. Upon the indefeasible payment or satisfaction in full of the
Obligations, (x) Pledgor shall be entitled to the return, upon its request
and
at its expense, of such portion of the Pledged Collateral as shall not have
been
sold or otherwise applied or forfeited pursuant to the terms hereof, and (y)
this Agreement shall be of no further force or effect except for the provisions
of Sections 5, 12 and 16, which shall survive.
Section
21. Severability.
If for
any reason any provision or provisions hereof are determined to be invalid
and
contrary to any existing or future law, such invalidity shall not impair the
operation of or affect those portions of this Agreement which are
valid.
Section
22. Governing
Law; Terms.
This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of Delaware (without giving effect to principles of conflicts
of law). Unless otherwise defined herein, terms defined in the Code are used
herein as therein defined.
Section
23. Recitals.
The
Recitals at the beginning of this Agreement are hereby incorporated into the
substantive provisions of this Agreement.
Section
24. Counterparts.
This
Agreement may be executed in one or more counterparts (including by means of
facsimile or other non-alterable electronic transmission), and it shall not
be
necessary that the signature of, or on behalf of, each party, or that the
signatures of all persons required to bind any party, appear on each
counterpart, but it shall be sufficient that the signature of, or on behalf
of,
each party, or that the signatures of the persons required to bind any party,
appear on one or more such counterparts. All counterparts shall constitute
one
and the same instrument. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the other
counterparts.
9
IN
WITNESS WHEREOF, Pledgor has caused this Pledge Agreement to be executed and
delivered by its duly authorized representatives as of the date first set forth
above.
|
XXXXXX
CORPORATION
|
|
|
By:
/s/
X. Xxxxxxxxxx,
Mgr.
Name:
L. Bailkowsky
Title:
Manager
|
By:
/s/
Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
V.P.-Tax & Treasurer
|
|
Address:
|
0000
Xxx Xxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attention:
Manager
|
Address:
|
0000
Xxxx XXXX Xxxx
Xxxxxxxxx,
XX 00000
Attention:
Xxxxx x. Xxxxxx
|
PLEDGOR:
*
* * *
*
State
of
TEXAS
County
of
DALLAS
On
March
29, 2007 before
me
appeared X.
Xxxxxxxxxx
who is
personally
known to me (or proved to me on the basis of satisfactory evidence) to be
the
person whose name is subscribed to within the instrument and acknowledged
to me
that he executed the same in his authorized capacity, and that by his signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
|
Notary
Public,
Commission
No.
Expires
July
25. 2009
|
/s/
Xxxxxxxx Xxxxxxx
|
|
Notary
|
PLEDGEE:
*
* * *
*
State
of
FLORIDA
County
of
BREVARD
On
March
29, 2007
before
me appeared Xxxxxxx
X. Xxxxxx
who is
personally
known to me (or proved to me on the basis of satisfactory evidence) to be
the
person whose name is subscribed to within the instrument and acknowledged
to me
that he executed the same in his authorized capacity, and that by his signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
|
Notary
Public,
Commission
No. DD263331
Expires
2/24/08
|
/s/
Xxxxx X. Xxxxxxxxx
|
|
Notary
|
10
Exhibit
A
AGREEMENT
AND ACKNOWLEDGEMENT OF PLEDGE
OF
TELTRONICS, INC.
Teltronics,
Inc. (the “undersigned”
or
“Teltronics”)
hereby
agrees, acknowledges and consents to the execution and delivery to XXXXXX
CORPORATION (“Pledgee”),
of
that certain Pledge Agreement by IHL INVESTMENTS, LLC (“Pledgor”)
dated
of even date herewith (the “Pledge”),
as
collateral security for the payment and performance by the Pledgor under the
Note delivered to Pledgee and the assignment and pledge under the Pledge to
Pledgee by Pledgor of all of Pledgor’s right, title and interest to the Pledged
Collateral (as defined in the Pledge). All capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed to such terms in
the
Pledge.
The
undersigned shall cause all of its books and records to reflect the pledge
of
the Pledged Collateral to Pledgee and agrees not to consent to or to permit
any
transfer of the Pledged Collateral or any other action that may be taken by
Pledgor that might constitute a breach of any term or condition of the Pledge
or
any Event of Default so long as any Obligations remain outstanding, except
in
accordance with and subject to the terms and conditions of the Pledge. The
undersigned represents and warrants that (i) the execution and delivery of
the
Pledge does not violate any of the undersigned’s Organizational Documents
(including without limitation Teltronics’ Certificate of Incorporation and
Bylaws, as they may be amended) or any other agreement to which the undersigned
is a party or by which any of the property of the undersigned is bound, (ii)
Pledgor’s shares in the undersigned are as set forth in the Pledge and such
shares in the undersigned are not subject to any claim, lien or encumbrance
whatsoever of any kind or nature; and (iii) the undersigned does not have any
claim, right of offset, or counterclaim against Pledgor under or with respect
to
the Pledged Collateral or otherwise under any of the undersigned’s
Organizational Documents, and Pledgor is not in default to the undersigned
or
otherwise under or in respect of any of its obligations under any of the
undersigned’s Organizational Documents. The undersigned agrees that Pledgee
and/or its representatives may at any time during reasonable business hours
inspect the books, records and properties of the undersigned, and the
undersigned shall, so long as any Obligations remain outstanding, at least
five
(5) business days prior to the time any Distributions are proposed to be made,
give written notice thereof to Pledgee at its address provided in the Pledge.
The undersigned has issued a certificate representing Pledgor’s shares in the
undersigned. The undersigned maintains books or records for or relating to
the
transfer of shares in the undersigned.
Notwithstanding
the security interests of Pledgee in the Pledged Collateral, Pledgee shall
have
no obligation or liability whatsoever to the undersigned, or any stockholder
or
director thereof, or any creditor or other person having any relationship,
contractual or otherwise, with the undersigned, nor shall Pledgee be obligated
to perform any of the obligations or duties of Pledgor under any of the
undersigned’s Organizational Documents, or to take any action to collect or
enforce any claim for payment due Pledgor arising thereunder. The undersigned
acknowledges that the security interest of Pledgee in the Pledged Collateral
and
all of Pledgee’s rights and remedies under the Pledge may be freely transferred
or assigned by Pledgee, as
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permitted
by the Note. In the event of any such transfer or assignment, all of the
provisions of this Agreement and Acknowledgment of Pledge shall inure to
the
benefit of the transferees, successors and/or assigns of Pledgee. The provisions
of this Agreement and Acknowledgment of Pledge shall likewise be binding
upon
any and all permitted transferees, successors and assigns of the
undersigned.
The
undersigned hereby agrees that it will comply with all reasonable instructions
concerning the Pledged Collateral originated by Pledgee without further consent
of Pledgor and that: (i) all Distributions will be made directly to Pledgee
until the Obligations have been paid in full, (ii) upon the occurrence of any
Event of Default, Pledgee shall have the sole and exclusive right to exercise
all voting, consensual and other powers of ownership pertaining to the Pledged
Collateral, and (iii) Pledgee may take any reasonable action which Pledgee
may
deem necessary for the maintenance, preservation and protection of any of the
Pledged Collateral or Pledgee’s security interests therein, including, without
limitation, the right to declare any or all Obligations to be immediately due
and payable without demand or notice and the right to transfer any of the
Pledged Interests or other Pledged Collateral into Pledgee’s name or the name of
any designee or nominee of Pledgee.
The
undersigned hereby acknowledges that on the date hereof, Pledgee sold to Pledgor
40,000 shares of Series C Preferred stock of the undersigned but that only
10,000 of such shares are part of the Pledged Collateral and that 30,000 of
such
shares are not pledged (such unpledged shares and any underlying common stock
is
referred to as the “Unpledged
Shares”).
The
undersigned hereby acknowledges that it will not register or effect any transfer
or sale of the Unpledged Shares on its books or otherwise, unless the
Obligations have previously been paid in full or unless the proceeds of such
sale or transfer shall have been applied to pay the Obligations under the Note.
The undersigned also acknowledges that unless the Obligations have previously
been paid in full, any dividends or other Distributions on the Unpledged Shares
will be paid directly to Pledgee to be applied to the Obligations under the
Note.
The
undersigned shall, from time to time, promptly execute and deliver such further
instruments, documents and agreements, and perform such further acts as may
be
necessary or proper to carry out and effect the terms of the Pledge and this
Agreement and Acknowledgment of Pledge.
This
Agreement and Acknowledgment of Pledge is being given to induce Pledgee to
accept the Pledge and with the understanding that Pledgee will rely
hereon.
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IN
WITNESS WHEREOF, the undersigned has caused this Agreement and Acknowledgment
of
Pledge to be duly executed and delivered.
Dated
this 29th day of March, 2007.
|
TELTRONICS,
INC.
By:
/s/ Xxxx X.
Xxxxxxx
Name:
Xxxx X. Xxxxxxx
Title:
President & CEO
|
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