EXHIBIT 10.19
PLEDGE AGREEMENT
----------------
THIS PLEDGE AGREEMENT ("Agreement") is made as of the 11th
day of January 2000, by XXXXX X. XXXXX (hereinafter called
"Pledgor"), in favor of ASD SYSTEMS, INC. ("Lender"). Pledgor
hereby agrees with Lender as follows:
A. Definitions. As used in this Agreement, the following terms
shall have the meanings indicated below:
(a) The term "Borrower" shall mean Pledgor.
(b) The term "Code" shall mean the Uniform Commercial
Code as in effect in the State of Texas on the date of this
Agreement or as it may hereafter be amended from time to
time.
(c) The term "Collateral" shall mean all property
specifically described on Schedule "A" attached hereto and
made a part hereof. The term Collateral, as used herein,
shall also include (i) all certificates, instruments and/or
other documents evidencing the foregoing, (ii) all renewals,
replacements and substitutions of all of the foregoing, and
(iii) all PRODUCTS and PROCEEDS of all of the foregoing.
The designation of proceeds does not authorize Pledgor to
sell, transfer or otherwise convey any of the foregoing
property. The delivery at any time by Pledgor to Secured
Party of any property as a pledge to secure payment or
performance of any indebtedness or obligation whatsoever
shall also constitute a pledge of such property as
Collateral hereunder.
(d) The term "Indebtedness" shall mean (i) all
indebtedness, obligations and liabilities of Borrower to
Secured Party pursuant to that certain promissory note dated
January 11, 2000 in the principal amount of $80,000, (ii)
all indebtedness, obligations and liabilities of Borrower to
Secured Party pursuant to that certain promissory note dated
January 11, 2000 in the principal amount of up to $65,000,
(iii) all accrued but unpaid interest on any of the
indebtedness described in (i) and (ii) above, (iv) all
obligations owing to Secured Party under any documents
evidencing, securing, governing and/or pertaining to all or
any part of the indebtedness described in (i), (ii) and
(iii) above, (v) all costs and expenses incurred by Secured
Party in connection with the collection and administration
of all or any part of the indebtedness and obligations
described in (i), (ii), (iii) and (iv) above or the
protection or preservation of, or realization upon, the
collateral securing all or any part of such indebtedness and
obligations, including without limitation all reasonable
attorneys' fees, and (vi) all renewals, extensions,
modifications and rearrangements of the indebtedness and
obligations described in (i), (ii), (iii), (iv) and (v)
above.
(e) The term "Loan Documents" shall mean all
instruments and documents evidencing, securing, governing,
guaranteeing and/or pertaining to the Indebtedness.
(f) The term "Secured Party" shall mean Lender, its
successors and assigns, including without limitation, any
party to whom Lender, or its successors or assigns, may
assign its rights and interests under this Agreement.
All words and phrases used herein which are
expressly defined in Section 1.201, Chapter 8 or Chapter 9
of the Code shall have the meaning provided for therein.
Other words and phrases defined elsewhere in the Code shall
have the meaning specified therein except to the extent such
meaning is inconsistent with a definition in Section 1.201,
Chapter 8 or Chapter 9 of the Code.
2. SECURITY INTEREST. As security for the Indebtedness,
Pledgor, for value received, hereby grants to Secured Party a
continuing security interest in the Collateral.
3. MAINTENANCE OF COLLATERAL. Other than the exercise of
reasonable care to assure the safe custody of any Collateral in
Secured Party's possession from time to time, Secured Party does
not have any obligation, duty or responsibility with respect to
the Collateral. Without limiting the generality of the
foregoing, Secured Party shall not have any obligation, duty or
responsibility to do any of the following: (a) ascertain any
maturities, calls, conversions, exchanges, offers, tenders or
similar matters relating to the Collateral or informing Pledgor
with respect to any such matters; (b) fix, preserve or exercise
any right, privilege or option (whether conversion, redemption or
otherwise) with respect to the Collateral unless (i) Pledgor
makes written demand to Secured Party to do so, (ii) such written
demand is received by Secured Party in sufficient time to permit
Secured Party to take the action demanded in the ordinary course
of its business, and (iii) Pledgor provides additional
collateral, acceptable to Secured Party in its sole discretion;
(c) collect any amounts payable in respect of the Collateral
(Secured Party being liable to account to Pledgor only for what
Secured Party may actually receive or collect thereon); (d) sell
all or any portion of the Collateral to avoid market loss; (e)
sell all or any portion of the Collateral (or exercise any option
granted pursuant to the terms of the Collateral) unless and until
(i) Pledgor makes written demand upon Secured Party to sell the
Collateral, and (ii) Pledgor provides additional collateral,
acceptable to Secured Party in its sole discretion; or (f) hold
the Collateral for or on behalf of any party other than Pledgor.
4. REPRESENTATIONS AND WARRANTIES. Pledgor hereby
represents and warrants the following to Secured Party:
(a) Enforceability. This Agreement and the other Loan
Documents constitute legal, valid and binding obligations of
Pledgor, enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency or
similar laws of general application relating to the
enforcement of creditors' rights and except to the extent
specific remedies may generally be limited by equitable
principles.
(b) Ownership and Liens. Pledgor has good and
marketable title to the Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement.
Pledgor has not executed any other security agreement
currently affecting the Collateral and no financing
statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any recording
office except as may have been executed or filed in favor of
Secured Party.
(c) Security Interest. Pledgor has and will have at
all times full right, power and authority to grant a
security interest in the Collateral to Secured Party in the
manner provided herein, free and clear of any lien, security
interest or other charge or encumbrance. This Agreement
creates a legal, valid and binding security interest in
favor of Secured Party in the Collateral.
(d) Location. Pledgor's residence is located at its
address set forth on the signature page hereof.
(e) Solvency of Pledgor. As of the date hereof, and
after giving effect to this Agreement and the completion of
all other transactions contemplated by Pledgor at the time
of the execution of this Agreement, (i) Pledgor is and will
be solvent, (ii) the fair saleable value of Pledgor's assets
exceeds and will continue to exceed Pledgor's liabilities
(both fixed and contingent), and (iii) Pledgor is paying and
will continue to be able to pay his debts as they mature.
5. AFFIRMATIVE COVENANTS. Pledgor will comply with the
covenants contained in this Section at all times during the
period of time this Agreement is effective unless Secured Party
shall otherwise consent in writing.
(a) Ownership and Liens. Pledgor will maintain good
and marketable title to all Collateral free and clear of all
liens, security interests, encumbrances or adverse claims,
except for the security
-2-
interest created by this Agreement and the security
interests and other encumbrances expressly permitted by the
other Loan Documents. Pledgor will not permit any dispute,
right of setoff, counterclaim or defense to exist with
respect to all or any part of the Collateral. Pledgor will
cause any financing statement or other security instrument
with respect to the Collateral to be terminated, except as
may exist or as may have been filed in favor of Secured
Party. Pledgor will defend at its expense Secured Party's
right, title and security interest in and to the Collateral
against the claims of any third party.
(b) Adverse Claim. Pledgor covenants and agrees to
promptly notify Secured Party of any claim, action or
proceeding affecting title to the Collateral, or any part
thereof, or the security interest created hereunder and, at
Pledgor's expense, defend Secured Party's security interest
in the Collateral against the claims of any third party.
Pledgor also covenants and agrees to promptly deliver to
Secured Party a copy of all written notices received by
Pledgor with respect to the Collateral.
(c) Delivery of Instruments and/or Certificates.
Contemporaneously herewith, Pledgor covenants and agrees to
deliver to Secured Party any certificates, documents or
instruments representing or evidencing the Collateral, with
Pledgor's endorsement thereon and/or accompanied by proper
instruments of transfer, assignment, or exercise (in the
case of options to purchase stock) duly executed in blank.
(d) Further Assurances. Pledgor will contemporaneously
with the execution hereof and from time to time thereafter
at his expense promptly execute and deliver all further
instruments and documents and take all further action
necessary or appropriate or that Secured Party may request
in order (i) to perfect and protect the security interest
created or purported to be created hereby and the first
priority of such security interest, (ii) to enable Secured
Party to exercise and enforce its rights and remedies
hereunder in respect of the Collateral, and (iii) to
otherwise effect the purposes of this Agreement, including
without limitation executing and filing any financing or
continuation statements, or any amendments thereto. Pledgor
further agrees to execute such additional documents as
Lender may request to grant a security interest in
additional collateral to the extent necessary to reasonably
secure Pledgor's obligation to make payment on the
Indebtedness.
6. NEGATIVE COVENANTS. Pledgor will comply with the
covenants contained in this Section at all times during the
period of time this Agreement is effective, unless Secured Party
shall otherwise consent in writing.
(a) Transfer or Encumbrance. Pledgor will not (i)
sell, assign (by operation of law or otherwise) or transfer
Pledgor's rights in any of the Collateral, (ii) xxxxx x xxxx
or security interest in or execute, file or record any
financing statement or other security instrument with
respect to the Collateral to any party other than Secured
Party, or (iii) deliver actual or constructive possession of
any certificate, instrument or document evidencing and/or
representing any of the Collateral to any party other than
Secured Party.
(b) Restrictions on Securities. Pledgor will not
enter into any agreement creating, or otherwise permit to
exist, any restriction or condition upon the transfer,
voting or control of any securities pledged as Collateral,
except as consented to in writing by Secured Party.
7. RIGHTS OF SECURED PARTY. Secured Party shall have the
rights contained in this Section at all times during the period
of time this Agreement is effective.
(a) Power of Attorney. Solely for purposes of this
Agreement Pledgor hereby irrevocably appoints Secured Party
as Pledgor's attorney-in-fact, such power of attorney being
coupled with an interest, with full authority in the place
and stead of Pledgor and in the name of Pledgor or
otherwise, to take any action and to execute any instrument
which Secured Party may from time to time in Secured Party's
discretion deem necessary or appropriate to accomplish the
purposes of this Agreement, including without limitation,
the following action: (i) transfer any securities,
instruments, documents or certificates
-3-
pledged as Collateral in the name of Secured Party or its
nominee; (ii) use any interest, premium or principal
payments, conversion or redemption proceeds or other cash
proceeds received in connection with any Collateral to
reduce any of the Indebtedness; (iii) exchange any of the
securities pledged as Collateral for any other property upon
any merger, consolidation, reorganization, recapitalization
or other readjustment of the issuer thereof, and, in
connection therewith, to deposit and deliver any and all of
such securities with any committee, depository, transfer
agent, registrar or other designated agent upon such terms
and conditions as Secured Party may deem necessary or
appropriate; (iv) exercise or comply with any conversion,
exchange, redemption, subscription or any other right,
privilege or option pertaining to any securities pledged as
Collateral, including, without limitation, exercising
Pledgor's stock options to purchase Lender's stock;
provided, however, except as provided herein, Secured Party
shall not have a duty to exercise or comply with any such
right, privilege or option (whether conversion, redemption
or otherwise) and shall not be responsible for any delay or
failure to do so; and (v) file any claims or take any action
or institute any proceedings which Secured Party may deem
necessary or appropriate for the collection and/or
preservation of the Collateral or otherwise to enforce the
rights of Secured Party with respect to the Collateral.
(b) Performance by Secured Party. If Pledgor fails to
perform any agreement or obligation provided herein, Secured
Party may itself perform, or cause performance of, such
agreement or obligation, and the expenses of Secured Party
incurred in connection therewith shall be a part of the
Indebtedness, secured by the Collateral and payable by
Pledgor on demand.
Notwithstanding any other provision herein to the
contrary, Secured Party does not have any duty to exercise
or continue to exercise any of the foregoing rights and
shall not be responsible for any failure to do so or for any
delay in doing so.
8. EVENTS OF DEFAULT. Each of the following constitutes
an "Event of Default" under this Agreement:
(a) Failure to Pay Indebtedness. The failure, refusal
or neglect of Borrower to make any payment of principal or
interest on the Indebtedness, or any portion thereof, as the
same shall become due and payable; or
(b) Non-Performance of Covenants. The failure of
Borrower to timely and properly observe, keep or perform any
covenant, agreement, warranty or condition required herein
or in any of the other Loan Documents; or
(c) Default Under other Loan Documents. The
occurrence of an event of default under any of the other
Loan Documents.
(d) False Representation. Any representation
contained herein or in any of the other Loan Documents made
by Borrower is false or misleading in any material respect;
or
(e) Default to Third Party. The occurrence of any
event which permits the acceleration of the maturity of any
indebtedness owing by Borrower to any third party under any
agreement or undertaking; or
(f) Bankruptcy or Insolvency. If Borrower: (i)
becomes insolvent, or makes a transfer in fraud of
creditors, or makes an assignment for the benefit of
creditors, or admits in writing his inability to pay his
debts as they become due; (ii) generally is not paying his
debts as such debts become due; (iii) has a receiver,
trustee or custodian appointed for, or take possession of,
all or substantially all of the assets of such party or any
of the Collateral, either in a proceeding brought by such
party or in a proceeding brought against such party and such
appointment is not discharged or such possession is not
terminated within sixty
-4-
(60) days after the effective date thereof or such party
consents to or acquiesces in such appointment or possession;
(iv) files a petition for relief under the United States
Bankruptcy Code or any other present or future federal or
state insolvency, bankruptcy or similar laws (all of the
foregoing hereinafter collectively called "Applicable
Bankruptcy Law") or an involuntary petition for relief is
filed against such party under any Applicable Bankruptcy Law
and such involuntary petition is not dismissed within sixty
(60) days after the filing thereof, or an order for relief
naming such party is entered under any Applicable Bankruptcy
Law, or any composition, rearrangement, extension,
reorganization or other relief of debtors now or hereafter
existing is requested or consented to by such party; (v)
fails to have discharged within a period of sixty (60) days
any attachment, sequestration or similar writ levied upon
any property of such party; or (vi) fails to pay within
thirty (30) days any final money judgment against such
party; or
(g) Action by Other Lienholder. The holder of any
lien or security interest on any of the assets of Pledgor,
including without limitation, the Collateral (without hereby
implying the consent of Secured Party to the existence or
creation of any such lien or security interest on the
Collateral), declares a default thereunder or institutes
foreclosure or other proceedings for the enforcement of its
remedies thereunder; or
(h) Liquidation, Death and Related Events. The death
or legal incapacity of any Pledgor.
9. REMEDIES AND RELATED RIGHTS. If an Event of Default
shall have occurred, and without limiting any other rights and
remedies provided herein, under any of the other Loan Documents
or otherwise available to Secured Party, Secured Party may
exercise one or more of the rights and remedies provided in this
Section.
(a) Remedies. Secured Party may from time to time at
its discretion, without limitation and without notice except
as expressly provided in any of the Loan Documents:
(i) exercise in respect of the Collateral
all the rights and remedies of a secured party under
the Code (whether or not the Code applies to the
affected Collateral);
(ii) reduce its claim to judgment or
foreclose or otherwise enforce, in whole or in part,
the security interest granted hereunder by any
available judicial procedure;
(iii) sell or otherwise dispose of, at its
office, on the premises of Pledgor or elsewhere, the
Collateral, as a unit or in parcels, by public or
private proceedings, and by way of one or more
contracts (it being agreed that the sale or other
disposition of any part of the Collateral shall not
exhaust Secured Party's power of sale, but sales or
other dispositions may be made from time to time until
all of the Collateral has been sold or disposed of or
until the Indebtedness has been paid and performed in
full), and at any such sale or other disposition it
shall not be necessary to exhibit any of the
Collateral;
(iv) buy the Collateral, or any portion
thereof, at any public sale;
(v) buy the Collateral, or any portion
thereof, at any private sale if the Collateral is of a
type customarily sold in a recognized market or is of a
type which is the subject of widely distributed
standard price quotations;
(vi) apply for the appointment of a receiver
for the Collateral, and Pledgor hereby consents to any
such appointment; and
(vii) at its option, retain the Collateral in
satisfaction of the Indebtedness whenever the
circumstances are such that Secured Party is entitled
to do so under the Code or otherwise.
-5-
Pledgor agrees that in the event Pledgor is entitled to
receive any notice under the Uniform Commercial Code, as it
exists in the state governing any such notice, of the sale or
other disposition of any Collateral, reasonable notice shall be
deemed given when such notice is deposited in a depository
receptacle under the care and custody of the United States Postal
Service, postage prepaid, at Pledgor's address set forth on the
signature page hereof, five (5) days prior to the date of any
public sale, or after which a private sale, of any of such
Collateral is to be held. Secured Party shall not be obligated
to make any sale of Collateral regardless of notice of sale
having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) Private Sale of Securities. Pledgor recognizes
that Secured Party may be unable to effect a public sale of
all or any part of the securities pledged as Collateral
because of restrictions in applicable federal and state
securities laws and that Secured Party may, therefore,
determine to make one or more private sales of any such
securities to a restricted group of purchasers who will be
obligated to agree, among other things, to acquire such
securities for their own account, for investment and not
with a view to the distribution or resale thereof. Pledgor
acknowledges that each any such private sale may be at
prices and other terms less favorable then what might have
been obtained at a public sale and, notwithstanding the
foregoing, agrees that each such private sale shall be
deemed to have been made in a commercially reasonable manner
and that Secured Party shall have no obligation to delay the
sale of any such securities for the period of time necessary
to permit the issuer to register such securities for public
sale under any federal or state securities laws. Pledgor
further acknowledges and agrees that any offer to sell such
securities which has been made privately in the manner
described above to not less than five (5) bona fide offerees
shall be deemed to involve a "public sale" for the purposes
of Section 9.504(c) of the Code, notwithstanding that such
sale may not constitute a "public offering" under any
federal or state securities laws and that Secured Party may,
in such event, bid for the purchase of such securities.
(c) Application of Proceeds. If any Event of Default
shall have occurred, Secured Party may at its discretion
apply or use any cash held by Secured Party as Collateral,
and any cash proceeds received by Secured Party in respect
of any sale or other disposition of, collection from, or
other realization upon, all or any part of the Collateral as
follows in such order and manner as Secured Party may elect:
(i) to the repayment or reimbursement of the
reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses)
incurred by Secured Party in connection with (A) the
administration of the Loan Documents, (B) the custody,
preservation, use or operation of, or the sale of,
collection from, or other realization upon, the
Collateral, and (C) the exercise or enforcement of any
of the rights and remedies of Secured Party hereunder;
(ii) to the payment or other satisfaction of
any liens and other encumbrances upon the Collateral;
(iii) to the satisfaction of the Indebtedness;
(iv) by holding such cash and proceeds as
Collateral;
(v) to the payment of any other amounts
required by applicable law (including without
limitation, Section 9.504(a)(3) of the Code or any
other applicable statutory provision); and
(vi) by delivery to Pledgor or any other
party lawfully entitled to receive such cash or
proceeds whether by direction of a court of competent
jurisdiction or otherwise.
-6-
(d) Deficiency. In the event that the proceeds of any
sale of, collection from, or other realization upon, all or
any part of the Collateral by Secured Party are insufficient
to pay all amounts to which Secured Party is legally
entitled, Borrower shall be liable for the deficiency,
together with interest thereon as provided in the Loan
Documents.
(e) Non-Judicial Remedies. In granting to Secured
Party the power to enforce its rights hereunder without
prior judicial process or judicial hearing, Pledgor
expressly waives, renounces and knowingly relinquishes any
legal right which might otherwise require Secured Party to
enforce its rights by judicial process. Pledgor recognizes
and concedes that non-judicial remedies are consistent with
the usage of trade, are responsive to commercial necessity
and are the result of a bargain at arm's length. Nothing
herein is intended to prevent Secured Party or Pledgor from
resorting to judicial process at either party's option.
(f) Other Recourse. Pledgor waives any right to
require Secured Party to proceed against any third party,
exhaust any Collateral or other security for the
Indebtedness, or to have any third party joined with Pledgor
in any suit arising out of the Indebtedness or any of the
Loan Documents, or pursue any other remedy available to
Secured Party. Pledgor further waives any and all notice of
acceptance of this Agreement and of the creation,
modification, rearrangement, renewal or extension of the
Indebtedness. Pledgor further waives any defense arising by
reason of any disability or other defense of any third party
or by reason of the cessation from any cause whatsoever of
the liability of any third party. Until all of the
Indebtedness shall have been paid in full, Pledgor shall
have no right of subrogation and Pledgor waives the right to
enforce any remedy which Secured Party has or may hereafter
have against any third party, and waives any benefit of and
any right to participate in any other security whatsoever
now or hereafter held by Secured Party. Pledgor authorizes
Secured Party, and without notice or demand and without any
reservation of rights against Pledgor and without affecting
Pledgor's liability hereunder or on the Indebtedness, to (i)
take or hold any other property of any type from any third
party as security for the Indebtedness, and exchange,
enforce, waive and release any or all of such other
property, (ii) apply such other property and direct the
order or manner of sale thereof as Secured Party may in its
discretion determine, (iii) renew, extend, accelerate,
modify, compromise, settle or release any of the
Indebtedness or other security for the Indebtedness, (iv)
waive, enforce or modify any of the provisions of any of the
Loan Documents executed by any third party, and (v) release
or substitute any third party.
(g) Voting Rights. Upon the occurrence of an Event of
Default, Pledgor will not exercise any voting rights with
respect to securities pledged as Collateral. Pledgor hereby
irrevocably appoints Secured Party as Pledgor's attorney-in-
fact (such power of attorney being coupled with an interest)
and proxy to exercise any voting rights with respect to
Pledgor's securities pledged as Collateral upon the
occurrence of an Event of Default.
10. INDEMNITY. Pledgor hereby indemnifies and agrees to
hold harmless Secured Party, and its officers, directors,
employees, agents and representatives (each an "Indemnified
Person") from and against any and all liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature
(collectively, the "Claims") which may be imposed on, incurred
by, or asserted against, any Indemnified Person arising in
connection with the Loan Documents, the Indebtedness or the
Collateral (including without limitation, the enforcement of the
Loan Documents and the defense of any Indemnified Person's
actions and/or inactions in connection with the Loan Documents).
WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO ANY CLAIMS WHICH IN WHOLE OR
IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH
AND/OR ANY OTHER INDEMNIFIED PERSON, except to the limited extent
the Claims against an Indemnified Person are proximately caused
by Such Indemnified Person's gross negligence or willful
misconduct. If Pledgor or any third party ever alleges such
gross negligence or willful misconduct by any Indemnified Person,
the indemnification provided for in this Section shall
nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as
-7-
to the extent and effect of the alleged gross negligence or
willful misconduct. The indemnification provided for in this
Section shall survive the termination of this Agreement and shall
extend and continue to benefit each individual or entity who is
or has at any time been an Indemnified Person hereunder.
11. MISCELLANEOUS.
(a) Entire Agreement. This Agreement contains the
entire agreement of Secured Party and Pledgor with respect
to the Collateral. If the parties hereto are parties to any
prior agreement, either written or oral, relating to the
Collateral, the terms of this Agreement shall amend and
supersede the terms of such prior agreements as to
transactions on or after the effective date of this
Agreement, but all security agreements, financing
statements, guaranties, other contracts and notices for the
benefit of Secured Party shall continue in full force and
effect to secure the Indebtedness unless Secured Party
specifically releases its rights thereunder by separate
release.
(b) Amendment. No modification, consent or amendment
of any provision of this Agreement or any of the other Loan
Documents shall be valid or effective unless the same is in
writing and signed by the party against whom it is sought to
be enforced.
(c) Actions by Secured Party. The lien, security
interest and other security rights of Secured Party
hereunder shall not be impaired by (i) any renewal,
extension, increase or modification with respect to the
Indebtedness, (ii) any surrender, compromise, release,
renewal, extension, exchange or substitution which Secured
Party may grant with respect to the Collateral, or (iii) any
release or indulgence granted to any endorser, guarantor or
surety of the Indebtedness. The taking of additional
security by Secured Party shall not release or impair the
lien, security interest or other security rights of Secured
Party hereunder or affect the obligations of Pledgor
hereunder.
(d) Waiver by Secured Party. Secured Party may waive
any Event of Default without waiving any other prior or
subsequent Event of Default. Secured Party may remedy any
default without waiving the Event of Default remedied.
Neither the failure by Secured Party to exercise, nor the
delay by Secured Party in exercising, any right or remedy
upon any Event of Default shall be construed as a waiver of
such Event of Default or as a waiver of the right to
exercise any such right or remedy at a later date. No
single or partial exercise by Secured Party of any right or
remedy hereunder shall exhaust the same or shall preclude
any other or further exercise thereof, and every such right
or remedy hereunder may be exercised at any time. No waiver
of any provision hereof or consent to any departure by
Pledgor therefrom shall be effective unless the same shall
be in writing and signed by Secured Party and then such
waiver or consent shall be effective only in the specific
instances, for the purpose for which given and to the extent
therein specified. No notice to or demand on Pledgor in any
case shall of itself entitle Pledgor to any other or further
notice or demand in similar or other circumstances.
(e) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND APPLICABLE FEDERAL LAWS, EXCEPT TO THE EXTENT
PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF
THE SECURITY INTEREST GRANTED HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF TEXAS.
(f) Venue. This Agreement has been entered into in
the county in Texas where Lender's address for notice
purposes is located, and it shall be performable for all
purposes in such county. Courts within the State of Texas
shall have jurisdiction over any and all disputes arising
under or pertaining to this Agreement and venue for any such
disputes shall be in the county or judicial district where
this Agreement has been executed and delivered.
-8-
(g) Severability. If any provision of this Agreement
is held by a court of competent jurisdiction to be illegal,
invalid or unenforceable under present or future laws, such
provision shall be fully severable, shall not impair or
invalidate the remainder of this Agreement and the effect
thereof shall be confined to the provision held to be
illegal, invalid or unenforceable.
(h) No Obligation. Nothing contained herein shall be
construed as an obligation on the part of Secured Party to
extend or continue to extend credit to Borrower.
(i) Notices. All notices, requests, demands or other
communications required or permitted to be given pursuant to
this Agreement shall be in writing and given by (i) personal
delivery, (ii) expedited delivery service with proof of
delivery, or (iii) United States mail, postage prepaid,
registered or certified mail, return receipt requested, sent
to the intended addressee at the address set forth on the
signature page hereof or to such different address as the
addressee shall have designated by written notice sent
pursuant to the terms hereof and shall be deemed to have
been received either, in the case of personal delivery, at
the time of personal delivery, in the case of expedited
delivery service, as of the date of first attempted delivery
at the address and in the manner provided herein, or in the
case of mail, upon deposit in a depository receptacle under
the care and custody of the United States Postal Service.
Either party shall have the right to change its address for
notice hereunder to any other location within the
continental United States by notice to the other party of
such new address at least thirty (30) days prior to the
effective date of such new address.
(j) Binding Effect and Assignment. This Agreement (i)
creates a continuing security interest in the Collateral,
(ii) shall be binding on Pledgor and the heirs, executors,
administrators, personal representatives, successors and
assigns of Pledgor, and (iii) shall inure to the benefit of
Secured Party and its successors and assigns. Without
limiting the generality of the foregoing, Secured Party may
pledge, assign or otherwise transfer the Indebtedness and
its rights under this Agreement and any of the other Loan
Documents to any other party. Pledgor's rights and
obligations hereunder may not be assigned or otherwise
transferred without the prior written consent of Secured
Party.
(k) Termination. Upon (i) the satisfaction in full of
the Indebtedness, and (ii) written release delivered by
Secured Party to Pledgor, this Agreement and the security
interests created hereby shall terminate. Upon termination
of this Agreement and Pledgor's written request, Secured
Party will, at Pledgor's sole cost and expense, return to
Pledgor such of the Collateral as shall not have been sold
or otherwise disposed of or applied pursuant to the terms
hereof and execute and deliver to Pledgor such documents as
Pledgor shall reasonably request to evidence such
termination.
(l) Cumulative Rights. All rights and remedies of
Secured Party hereunder are cumulative of each other and of
every other right or remedy which Secured Party may
otherwise have at law or in equity or under any of the other
Loan Documents, and the exercise of one or more of such
rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of any other rights or
remedies.
(m) Gender and Number. Within this Agreement, words
of any gender shall be held and construed to include the
other gender, and words in the singular number shall be held
and construed to include the plural and words in the plural
number shall be held and construed to include the singular,
unless in each instance the context requires otherwise.
(n) Descriptive Headings. The headings in this
Agreement are for convenience only and shall in no way
enlarge, limit or define the scope or meaning of the various
and several provisions hereof.
-9-
EXECUTED as of the date first written above.
Pledgor's Address: PLEDGOR:
0000 Xxxxxxxxx Xxxxx /s/ Xxxxx X. Xxxxx
Xxxxxx, Xxxxx 00000 -------------------------
Xxxxx X. Xxxxx
Secured Party's Address:
ASD SYSTEMS, INC.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
-10-
SCHEDULE "A"
TO
PLEDGE AGREEMENT
DATED JANUARY 11, 2000
BY AND BETWEEN
ASD SYSTEMS, INC.
AND
XXXXX X. XXXXX
The following property is a part of the Collateral as defined in
Subsection 1(c):
1. Any securities of ASD Systems, Inc.
2. Any options to purchase shares of ASD Systems, Inc.
common stock (the "Options"), including, without
limitation, Options granted pursuant to that offer
letter dated December 13, 1999 by the Company and
addressed to Xxxxx X. Xxxxx, together with any and all
other Options granted by the Company after the date
hereof to or for the benefit of Xx. Xxxxx.
3. Any securities of ASD Systems, Inc. obtained by
exercise of the Options.
4. All right, title and interest of Pledgor in, to and
under the agreements, contracts or other documents
evidencing the Collateral hereinabove described.
