Common use of Pledge of Subsidiary Stock Clause in Contracts

Pledge of Subsidiary Stock. (a) The obligations of the Company under the Notes, including without limitation the principal amount of, and accrued interest on, all Advances, shall be ratably secured by the pledge and collateral assignment of, and the grant of a security interest in, all the issued and outstanding shares (the "Pledged Shares") of capital stock of Lasertechnics Marking Corporation, a wholly-owned subsidiary of the Company (the "Stock Pledge"). The Stock Pledge shall be on such terms as are reasonable and customary for transactions such as the transactions contemplated hereby. Prior to the occurrence of an event of default under the Notes, the Purchasers shall not have any rights with respect to the voting or disposition of any shares of such subsidiary capital stock so pledged. (b) Concurrently, with the execution and delivery of this Agreement, the Company is delivering to JPMIC, as collateral agent for the benefit of the holders of the Notes, ratably in proportion to the respective aggregate unpaid principal amounts thereof (the "Collateral Agent"), certificates representing the Pledged Shares, together with stock powers in customary form. The Company hereby pledges the Pledged Shares to the Collateral Agent, and grants to the Collateral Agent a security interest therein, to secure the full and timely payment and performance of all obligations of the Company under the Notes, in accordance with paragraph 6(a), above, effective at the Initial Closing. The parties shall use their respective best commercially reasonable efforts to negotiate, execute and deliver a definitive pledge agreement, in customary and reasonable form, to further document the Stock Pledge on terms and conditions consistent with the terms and conditions set forth herein (the "Pledge Agreement"), and upon the effectiveness of the Pledge Agreement, the terms of the Pledge Agreement shall amend and supersede any contrary provisions of this paragraph 6(b).