EXHIBIT 10.12
STOCK PLEDGE AND SECURITY AGREEMENT
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(WITH IRREVOCABLE PROXY)
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THIS STOCK PLEDGE AND SECURITY AGREEMENT (WITH IRREVOCABLE PROXY)
("Agreement"), is entered into as of the 29th day of December, 1994, by and
between G. ▇▇▇▇ ▇▇▇▇▇, a single man ("Pledgor"), and GREYHOUND FINANCIAL
CORPORATION, a Delaware corporation ("Secured Party").
A. CPS Acquisition Corp., a Georgia corporation ("Issuing
Corporation"), has requested that Secured Party extend to it a loan ("Term
Loan") in an amount not to exceed One Million Five Hundred Thousand Dollars
($1,500,000) pursuant to a Term Loan Agreement between Issuing Corporation and
Secured Party dated as of even date herewith (as it may be from time to time
renewed, amended, restated or replaced, "Term Loan Agreement") and evidenced by
a promissory note (as from time to time renewed, amended, restated or replaced,
"Term Loan Note").
B. CPS Systems Inc., a Texas corporation ("Company"; and Issuing
Corporation and Company collectively, "Borrowers"), has requested that Secured
Party extend to it in the form a revolving line of credit a loan ("Revolver
Loan"; and the Term Loan and Revolver Loan collectively, "Loans") in a principal
amount not to exceed One Million Dollars ($1,000,000) pursuant to a Revolver
Loan and Security Agreement between Company and Secured Party dated as of even
date herewith (as it may be from time to time renewed, amended, restated or
replaced, "Revolver Loan Agreement"; and the Term Loan Agreement and the
Revolver Loan Agreement collectively, "Loan Agreements") and evidenced by a
promissory note (as from time to time renewed, amended, restated or replaced,
"Revolver Loan Note"; and the Term Loan Note and the Revolver Loan Note
collectively, "Notes").
C. The Loan Agreements, Notes, and all other documents now or
hereafter evidencing and/or securing the Loans are hereinafter referred to as
the "Credit Facilities Documents."
D. The Term Loan will be used to pay a part of the acquisition costs
of Issuing Corporation for all of the capital stock of Company. Under the terms
of the Credit Facilities Documents, Acquisition Corp. is required to merge into
Company. Upon such merger, the term "Issuing Corporation" shall mean Company and
the term "Borrowers" will include only Company.
E. Pledgor owns the shares of common stock of Issuing Corporation
described in Schedule E (including any of the share of capital stock of Company
into which it may be converted upon consummation of the merger, "Shares").
F. In order to induce Secured Party to make the Loans, Pledgor desires
to grant a security interest in, pledge, assign and transfer to Secured Party,
as additional security for the Loans and other obligations, all of Pledgor's
right, title and interest in and to the Shares.
A G R E E M E N T:
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NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants, conditions, representations and warranties contained herein,
the parties hereto do hereby agree as follows:
1. Security Interest. Pledgor hereby grants a security interest to
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Secured Party in and to the Shares, together with all rights thereof or arising
therefrom, all certificates, options or warrants associated therewith, all
additions thereto, dividends and payments arising thereunder, all substitutions
therefor and the proceeds (including, without limitation, all accounts, chattel
paper, contract rights, documents, general intangibles, instruments, and
equipment, inventory and other goods) of all of the foregoing (collectively,
"Collateral"), as security for all of the following (collectively,
"Obligations"): the obligations of Borrowers, or either of them, to Secured
Party under the Loan Agreements and any and all of the other Credit Facilities
Documents, all obligations of Pledgor under this Agreement, and all other
obligations now or hereafter owed to Secured Party by Borrowers, or either of
them, or their respective successors and/or assigns to Secured Party. Upon
execution of this Agreement, Pledgor shall deliver to Secured Party the
certificates evidencing the Shares together with stock power(s) and
assignment(s) separate from certificate for the certificates representing the
Shares, endorsed in blank, with signature guaranteed as required by the transfer
agent for the Shares, and the books of Issuing Corporation of such Shares shall
contain a legend to reflect such pledge of the Shares hereunder.
2. Covenants, Representations and Warranties. Pledgor covenants,
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represents and warrants to Secured Party, with the understanding that Secured
Party is relying on such representations and warranties, that:
(a) the Collateral is the sole and separate Property of
Pledgor, and Pledgor has title to the Collateral and is the legal and
beneficial owner of the Collateral, free from any liens, security
interests, assignments, encumbrances or claims of any kind, other than
the security interest created by this Agreement and, subject to the
provisions of the Subordination Agreement (as defined in the Term Loan
Agreement), and the Subordinated Indebtedness Liens (as defined in the
Term Loan Agreement);
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(b) Except for the Subordinated Indebtedness Lien, so long as it is
subject to the terms and conditions of the Subordination Agreement, Pledgor will
not assign, pledge, encumber or otherwise transfer in any way, so long as this
Agreement shall remain in effect, the whole or any part of the Collateral;
(c) Except for the Subordinated Indebtedness Liens, so long as it is
subject to the terms and conditions of the Subordination Agreement, Pledgor will
not permit or suffer to exist any lien, security interest, encumbrance or claim
of any kind upon the Collateral, except those in favor of Secured Party;
(d) Pledgor shall deliver to Secured Party and Secured Party shall
retain physical possession of all stock certificates and other instruments and
documents representing or evidencing any of the Collateral, which stock
certificates shall be duly endorsed for transfer to Secured Party;
(e) Pledgor will not amend or waive or consent to any amendment or
waiver of the instruments or documents constituting the Collateral or make any
compromise, adjustment, settlement or termination in connection therewith, and
Pledgor will preserve and enforce all of its rights under the corporate
governance documents establishing the rights of holders of shares of stock of
the class held by Pledgor, unless failure to do so would not adversely affect
the Collateral;
(f) Pledgor will accept no payments, distributions or dividends on the
Collateral, Pledgor will hold any such payment, distribution or dividend
received by Pledgor in trust for Secured Party and not commingle it with its
general funds, and Pledgor will immediately remit to Secured Party any payment,
distribution or dividend received by it;
(g) The execution and delivery of this Agreement, and the performance
of its terms, will not result in any violation of or constitute a default under
the terms of any agreement, or other instrument, license, judgment, order,
statute, ordinance or other governmental rule or regulation, applicable to
Pledgor or the Collateral;
(h) Upon its execution and delivery, this Agreement shall create an
enforceable and valid lien upon and security interest in the Collateral;
(i) Pledgor has full power and authority to enter into this Agreement
and, if Pledgor is other than a natural person,
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the person executing this Agreement on behalf of Pledgor have been duly
authorized to act on behalf of Pledgor in the execution thereof;
(j) The capitalization of the Issuing Corporation consists of ten
thousand (10,000) authorized and issued shares of common stock and upon the
merger of Issuing Corporation into Company will convert into ten thousand
(10,000) shares of common stock of Company; the capitalization of Company
consists of five thousand six hundred (5,600) authorized and issued shares of
common stock and except for the warrants described in Schedule 2(j), there are
no agreements in effect which require or obligate Issuing Corporation or Company
to issue any additional shares of stock of Issuing Corporation or Company and
there are no outstanding warrants, options of other rights to purchase any
shares of stock of Issuing Corporation;
(k) Other than Pledgor and the other stockholders of Issuing
Corporation listed in Schedule 2(k), there are no persons who assert any type of
ownership interest or control (whether by virtue of voting rights or otherwise)
whatsoever in Issuing Corporation; and other than Issuing Corporation, there are
no other persons who assert any type of ownership interest in Company.
(1) Other than this Agreement and the pledge agreement creating the
Subordinated Indebtedness Liens on the Collateral, there is no agreement which
imposes any conditions or restrictions on the Shares, and Pledgor shall take no
action to impose any such restrictions prior to full satisfaction of all of
Borrowers' Obligations under the Credit Facilities Documents;
(m) All of the Shares have been duly authorized, validly issued and are
fully paid and non-assessable;
(n) The granting by Pledgor to Secured Party of the security interest
in the Collateral as evidenced by this Agreement complies with all applicable
federal and state securities laws or qualifies for an exemption from such
registration;
(o) Pledgor will promptly (but not later than three (3) days after
receipt thereof) deliver to Secured Party copies of any notices received with
respect to matters materially affecting the Collateral; and
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(p) Pledgor's principal place of business, chief executive
office and/or (if it is a natural person) residence is located at the
mailing address set forth in Schedule 2(m) and Pledgor will not change
the location of its principal place of business or chief executive
office or (if it is a natural person) residence without ten (10) days
prior written notice to Secured Party.
3. Default. The occurrence of any of the following shall constitute an
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event of default ("Event of Default") under this Agreement:
(a) A default or violation shall occur in the performance
of any of the obligations of Pledgor under Section 2;
(b) A default or violation in the performance of Pledgor's
obligations under this Agreement or any of the other Loan Documents
(other than a default or violation referred to elsewhere in this
Section 3) which continues unremedied (i) for a period of five (5)
Business Days (as defined below) after notice of such default or
violation to Pledgor in the case of any default or violation which can
be cured by the payment of money alone or (ii) for a period of twenty
(20) Business Days after notice to Pledgor in the case of any other
default or violation;
(c) Any representation or warranty of Pledgor contained herein
or in any certificate furnished to Secured Party hereunder by or on
behalf of Pledgor proves to be, in any material respect, false or
misleading as of the date deemed made; or
(d) An "Event of Default," as defined elsewhere in any of the
other Credit Facilities Documents.
As used herein, the term "Business Day" means any day other than a Saturday,
Sunday or a day on which banks in, Los Angeles, California, or New York, New
York, are required to close.
4. Remedies. Upon the occurrence of any Event of Default, Secured Party
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may, at its option and without further notice to Pledgor, do one or more of the
following:
(a) Sell, assign and deliver any or all of the Collateral or
any rights or interest therein at public or private sale, at Secured
Party's option;
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(b) Collect any and all dividends or proceeds due from the
Collateral and apply such to all costs and expenses of Secured Party
and to all obligations secured hereby; and
(c) Take such other action and remedies as are provided in the
applicable Uniform Commercial Code or as otherwise allowed by law.
With respect to any sale of the Collateral by Secured Party, whether public or
private, under the UCC or otherwise, notice of such sale shall be deemed
commercially reasonable if given to Pledgor at least ten (10) Business Days
prior to the date of the intended disposition. Any and all remedies conferred
upon Secured Party shall be deemed cumulative with and non-exclusive of any
other remedies allowed by law. The exercise of any one remedy by Secured Party
shall not preclude the exercise of any other. Secured Party may delay exercising
a right or remedy hereunder without waiving that, or any other past, present or
future right or remedy.
5. Maintenance of Priority of Security Interest. Except for the
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Subordinated Indebtedness Liens, so long as it is subject to the terms and
conditions of the Subordination Agreement, Pledgor will not, and will it not
attempt to or permit a third party to, assign, pledge, mortgage, lease,
hypothecate or otherwise encumber, sell or otherwise dispose of the Collateral,
and Pledgor will not suffer or permit to be incurred any liens on or security
interests in the Collateral or permit the Collateral to be subjected to any
unpaid charges whatsoever. In addition, Pledgor agrees that it will defend the
Collateral against the claims and demand of all parties; provided, that, at
Secured Party's option, Secured Party may do so at Pledgor's expense. Pledgor
agrees, at its sole cost and expenses, to execute, re-execute, deliver and
re-deliver all documents requested by Secured Party to enable Secured Party to
perfect, preserve and protects its security interest in and on the Collateral,
and does hereby authorize Secured Party to file and record any such documents
for such purposes. If Issuing Corporation declares any share dividend,
reclassification, readjustment, makes any other change in the structure of
Issuing Corporation or if any subscription, warrants or other options are
exercisable with respect to the Collateral, of if Issuing Corporation is a party
to any merger or consolidation, all new, substituted, or additional shares or
other securities, issued by reason of such change or option, shall be subject to
the security interest of Secured Party described herein, and all references to
the word "Collateral" shall automatically be deemed to include such new,
substituted or additional shares or other securities (notwithstanding the fact
that such action on the part of Issuing Corporation may constitute an Event of
Default under this Agreement) and immediately upon the issuance of such new,
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substituted or additional shares or other securities, Pledgor shall deliver such
shares or other securities to Secured Party, accompanied by a stock power and
assignment apart from certificate (or other comparable assignment instrument in
the case of the issuance of securities other than stock) endorsed in blank.
6. Taxes. Pledgor will pay promptly, when due, any and all property
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taxes, excise taxes (however called) and other taxes, assessments, duties and
other charges, which, if unpaid, might by law or otherwise become a lien or
charge upon the Collateral (including any and all interest, penalties and
related provisional fees) imposed, levied or assessed against the Collateral, or
upon or measured by the use, ownership, possession or operation thereof, or in
respect of this Agreement or incident to the security interest in the Collateral
granted and conveyed herein; provided, however, that Pledgor shall have the
right to contest in good faith by appropriate proceedings promptly initiated,
the validity, amount or imposition of such fee or tax if such contest, in
Secured Party's determination, does not have any material adverse impact on
Secured Party's interest under this Agreement or any other Loan Document or on
the Collateral.
7. Pledgor's Failure to Pay Taxes and Other Items. If Pledgor fails to
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make any payment or do any act required of it under this Agreement, then Secured
Party shall have the right, but not the obligation, upon three (3) Business Days
notice to Pledgor, and without releasing Pledgor from any obligation under this
Agreement, to make or do the same, and to pay, purchase, contest or compromise
any lien which in Secured Party's judgment places its security interest in the
Collateral or Pledgor's title to the Collateral in jeopardy, and in exercising
any such rights, to expend whatever reasonable amounts Secured Party in its sole
discretion may deem necessary therefor. Any amounts expended by Secured Party
pursuant to this Section 7 shall be a demand obligation owing by Pledgor, which
shall bear interest at the Default Rate (as defined in the Term Loan Agreement)
from the date Secured Party expends such amount until repaid.
8. Indemnification. Pledgor agrees to indemnify, defend and hold
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harmless Secured Party for, from and against all losses, claims, demands and
expenses, including, without limitation, expert witness fees and attorneys'
fees, incurred by Secured Party and arising out of: (a) a misrepresentation or
breach of warranty contained in this Agreement; (b) failure of Debtor to
establish or maintain in favor of Lender a first priority security interest in
the Collateral in favor of Lender subject only to the restrictions set forth in
the Subordination Agreement; or (c) any contest by Debtor of the exercise of any
of Secured Party's rights or remedies under this Agreement, at law or in equity.
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9. Unregistered Securities. Pledgor acknowledges that the Shares
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constitute unregistered securities subject to legal restrictions upon the
transfer thereof which will render a public sale of the Shares unavailable, and
that Secured Party has no obligation to register the Collateral under federal
and/or state securities laws. If, upon an Event of Default, Secured Party
exercises its right to sell the Shares, Pledgor waives all right to a public
sale and agrees to the private placement of the Shares to any qualified third
party buyer at a commercially reasonable price therefor. Secured Party may in
its discretion at any such sale, restrict the prospective bidders or purchasers
as to their number, nature of business and investment intention and may require
that the persons making such purchases represent and agree to the satisfaction
of Secured Party that they are purchasing the Collateral for their account, for
investment, and not for distribution or resale or place any other restrictions
on sale that are necessary to satisfy any securities law restrictions. Pledgor
further acknowledges that the legal restrictions upon transfer of the Shares
adversely affect the marketability of the Shares and any commercially reasonable
price of the Shares will include a discount from the proportionate part of the
net asset value of Issuing Corporation represented by the Shares to reflect
those restrictions upon marketability.
10. Irrevocable Proxy. Pledgor does hereby irrevocably constitute and
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appoint Secured Party and Secured Party's successors and assigns as its proxy,
with full power, in the same manner, to the same extent, and with the same
effect as if they were to do the same:
(a) To attend all meetings of Issuing Corporation held from
the date hereof, and to vote the Collateral at any such meeting in such
manner as Secured Party shall, in its sole discretion deem appropriate;
and
(b) To consent, in the sole discretion of Secured Party, to
any and all actions by or with respect to Issuing Corporation for which
the consent of the Pledgor is or may be necessary or appropriate; and
(c) Without limitation, to do all things which Pledgor can or
could do as a shareholder of Issuing Corporation, giving to Secured
Party full power of substitution and revocation;
provided, however, that this proxy shall not be exercisable by Secured Party,
and Pledgor alone shall have the foregoing powers, so long as no Event of
Default exists, and provided further that this proxy shall terminate at such
time as this Agreement is terminated as provided in Section 11 below. Except for
the proxy
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of ▇▇▇▇ ▇▇▇▇ which expires not later than thirty (30) days from the date hereof,
Pledgor hereby revokes any proxy or proxies heretofore given to any person or
persons and agrees not to give any other proxy in derogation hereof until such
time as this Agreement is terminated as provided below. Pledgor and Secured
Party hereby specifically agree that the proxy granted hereunder shall be deemed
to be valid and irrevocable until this Agreement shall be terminated as provided
below.
11. Attorney-in-Fact. Pledgor hereby appoints Secured Party as
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Pledgor's attorney-in-fact with full power of substitution (without imposing any
obligations on Secured Party), to perform all acts which Secured Party deems
appropriate to perfect and continue the security interest granted hereunder. The
power of attorney granted herein is coupled with an interest and is irrevocable
until this Agreement is terminated as provided below.
12. Termination. Subject to the provisions of the Subordination
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Agreement with respect to the delivery of the Collateral to Subordinated Lender
(as defined in the Term Loan Agreement), this Agreement shall terminate upon
full satisfaction of the indebtedness hereby secured, and, upon such
termination, Secured Party shall return to Pledgor any of the Collateral held by
Secured Party pursuant to this Agreement, and the original executed copy of this
Agreement which contains an irrevocable proxy.
13. Acknowledgement. Pledgor acknowledges that Secured Party would not
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agree to make the Loans to Borrower without the execution, delivery and
performance of this Agreement by Pledgor. Pledgor further acknowledges that it
has received good and sufficient consideration for the execution, delivery and
performance of this Agreement.
14. No Duty to Protect. This is a pledge and assignment of Pledgor's
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rights and benefits in the Collateral without an assumption by Secured Party of
any of Pledgor's duties or obligations attendant thereto. Except for physical
safeguarding of the stock certificate(s) included in the Collateral delivered to
Secured Party, Secured Party shall have no duty to protect, insure, collect or
realize upon the Collateral or any proceeds therefrom. Secured Party shall not
have any obligation to any third party by virtue of Secured Party's possession
of the Collateral.
15. Miscellaneous.
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(a) This Agreement and all other Credit Facilities Documents
shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and shall supersede all other
prior agreements, written or oral, with respect thereto.
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[TO COME]
AND PLEDGOR HEREBY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY SUCH
PROCEEDING.
(g) ALL OF THE PROVISIONS SET FORTH IN THIS PARAGRAPHS 15(d) - (g),
INCLUSIVE, ARE MATERIAL INDUCEMENTS FOR SECURED PARTY'S MAKING THE LOANS
TO BORROWERS.
[INITIALS
APPEAR
HERE]
[Pledgor's initials ____________]
(h) All parties hereto shall, from time to time, do and perform such
other and further actions and execute and deliver any and all such other and
further instruments as may be required or reasonably requested by any other
party to establish, maintain and protect the respective rights and remedies of
such other party and to carry out and effect the intents and purposes of this
Agreement.
(i) All documents, agreements, certificates and instruments herein
required shall be in form and substance satisfactory in all respects to Secured
Party in its sole discretion and shall be provided at the sole cost and expense
of Pledgor.
(j) The representations and warranties hereunder shall survive the
execution hereof and Secured Party may enforce such representations and
warranties at any time. Pledgor's covenants shall survive the execution hereof
and shall be performed fully and faithfully by Pledgor at all times. The
indemnities of Pledgor shall survive repayment of the indebtedness secured
hereby.
(k) If any term or provision of this Agreement, or the application
thereof to any circumstances, shall be invalid, illegal or unenforceable to any
extent, such term or provision shall not invalidate or render unenforceable any
other term or provision of this Agreement, or the application of such term or
provision to any other circumstance. To the extent permitted by law, the parties
hereto hereby waive any provision of law that render any term or provision
hereof invalid or unenforceable in any respect.
(l) Time is of the essence of this Agreement.
(m) All notices, requests or demands required or permitted to be given
hereunder shall be in writing, and shall be deemed effective (a) upon hand
delivery, if hand delivered; (b) one (1) Business Day after such are deposited
for delivery via Federal Express or other nationally recognized overnight
courier service; or (c) three (3) Business Days after such are deposited in the
United States mails, certified or registered mail, all with delivery charges
and/or postage prepaid, and
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addressed as shown below, or to such other address as either party may, from
time to time, designate in writing. Written notice may be given by telecopy to
the telecopier number shown below or such other telecopier number as either
party may designate, from time to time, in writing, provided that such notice
shall not be deemed effective unless it is confirmed within twenty-four (24)
hours by hand delivery, courier delivery or mailing of a copy of such notice in
accordance with the requirements set forth above.
If to Secured Party: Greyhound Financial Corporation
(two copies) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Vice President Law
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Greyhound Financial Corporation
▇▇▇ ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Attn: Portfolio Manager
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Pledgor: G. ▇▇▇▇ ▇▇▇▇▇
c/o ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(n) This Agreement may be executed in any number of counterparts, each
of which, when so executed and delivered, shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
(o) The headings of the sections and paragraphs of this Agreement have
been inserted for convenience of reference only and shall in no way restrict or
otherwise modify any of the terms or provisions hereof.
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(p) All references to the singular shall include the plural and vice
versa and all references to the masculine shall include the neuter or feminine
and vice versa. This Agreement has been reviewed and negotiated by counsel for
each party and no ambiguity in this Agreement shall be construed against any
party based upon its having prepared the same.
16. Waiver of Suretyship Defenses and Rights.
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(a) Neither (i) the exercise or the failure to exercise by Secured
Party of any rights of remedies conferred on it under any of the
other Credit Facilities Documents, hereunder or existing at law or
otherwise, or against any other security for performance of
Obligations, (ii) the commencement of an action at law or the
recovery of a judgment at law against a Borrower or other obligor
("Third Party Obligor") for the Obligations and the enforcement
thereof through levy or execution or otherwise, (iii) the taking or
institution or any other action or proceeding against a Borrower or
any other Third Party Obligor nor (iv) any delay in taking,
pursuing or exercising any of the foregoing actions, rights, powers
or remedies (even though requested by Pledgor) of Secured Party or
anyone acting for Secured Party shall extinguish or affect the
obligations of Pledgor hereunder. Pledgor shall be and remain
liable hereunder until all Obligations are fully paid and
performed, notwithstanding the previous discharge (total or
partial) from further liability of a Borrower or any Third Party
Obligor.
(b) Borrower hereby expressly waives: (i) notice of the existence,
creation or non-payment of all or any of the Obligations except as
otherwise provided in this Agreement; (ii) presentment, protest,
demand, dishonor, notice of dishonor, protest and all notices
whatsoever with respect to the Obligations; (iii) all diligence in
collection or protection of or realization on the Obligations or
any part thereof, an Obligation hereunder, or any security for or
guarantee of any of the foregoing; (iv) any right or defense based
upon an election of remedies by Secured Party or marshalling of
assets; (v) any defense arising because of Secured Party's election
under Section 1111(b)(2) of the United States Bankruptcy Code
("Bankruptcy Code") in any proceeding instituted under the
Bankruptcy Code;
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(vi) any defense based on post-petition borrowing or the grant of a
security interest by a Borrower under Section 365 of the Bankruptcy
Code; (vii) any duty on the part of Secured Party to disclose to
Pledgor any facts Secured Party may know or hereafter know about a
Borrower, regardless of whether Secured Party has reason to believe
that any such facts materially increase the risk beyond that which
Pledgor intends to assume or has reason to believe that such facts
are known to Pledgor or has a reasonable opportunity to communicate
such facts to Pledgor, because Pledgor represents and warrants that
it is fully responsible for being and keeping informed of the
financial condition of each Borrower and of all circumstances
bearing on the risk of non-payment or any obligation guaranteed
hereby; and (viii) any and all suretyship defenses and defenses in
the nature thereof under Arizona and/or any other applicable law,
including, without limitation, the benefits of the provisions of
Sections 12-1641 through 12-1646, of the Arizona Revised Statues,
Sections 17 and 21, A.R.C.P., and all other laws and procedural
rules of similar import.
(c) Without limiting the generality of the foregoing, Pledgor will
not assert against Secured Party any defense of waiver, release,
discharge in bankruptcy, statute of limitation, res judicata,
statute of frauds, anti-deficiency statute, fraud, usury,
illegality or unenforceability which may be available to Borrower
with respect to the other Credit Facilities Documents, or any
setoff available to a Borrower against Secured Party, whether or
not on account of a related transaction.
(d) Anything else contained herein to the contrary notwithstanding,
Secured Party, from time to time, without notice to Pledgor, may
take all or any of the following actions without in any manner
affecting or impairing the obligations of Pledgor hereunder: (i)
obtain a lien on or a security interest in any property to secure
any of the Obligations; (ii) retain or obtain the secondary
liability of any party or parties, in addition to Pledgor, with
respect to any of the Obligations; (iii) renew, extend or otherwise
change the time for payment or performance of any of the
Obligations for any period; (iv) release or compromise any
liability of a Borrower or any
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liability of any nature of any other party or parties with respect
to any of the Obligations; (v) exchange, enforce, waive, release
and apply any security for the performance of any of the
Obligations and direct the order or manner of sale thereof as
Secured Party may in Secured Party's discretion determine; (vi)
resort to the Collateral for payment of any Obligations, whether or
not Secured Party shall proceed against any other party primary or
secondarily against any other party primarily or secondarily liable
on any of the Obligations; (vii) agree to any amendment (including,
without limitation, any amendment which changes the amount of
interest to be paid under the Credit Facilities Documents or
extends the period of time during which a Borrower may obtain
advances of a Loan), any alteration of any of the Credit Facilities
Documents or any waiver of any of the provision of any of the
Credit Facilities Documents and/or exercise Secured Party's rights
to consent to any action or non-action of a Borrower which may
violate the covenants and agreements contained in the Credit
Facilities Documents, with or without consideration and on such
terms and conditions as may be acceptable to Secured Party; or (h)
exercise any of Secured Party's rights conferred by the Credit
Facilities Documents or by law.
(e) Notwithstanding anything herein to the contrary, if at any time
or any part of any payment theretofore applied by Secured Party to
any of the Obligations is or must be rescinded or returned by
Secured Party for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of a
Borrower), such Obligations, for purposes of this Section 16, to
the extent that such payment is or must be rescinded or returned,
shall be deemed to have never been performed; and this Section 16
shall continue to be effective or be reinstated, as the case may
be, as to such Obligations, all as though such application by
Secured Party had not been made.
(f) Borrower shall have no right of subrogation with respect to the
Obligations or any right of indemnification reimbursement or
contribution from a Borrower or from any other Third Party Obligor
with respect to the Obligations regardless of any payment thereon
resulting from the provisions of this Section 16 until the
Obligations have been
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paid and performed in full and Borrower hereby unconditionally
waives any such right of subrogation, indemnification,
reimbursement or arbitration.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first hereinabove written.
PLEDGOR:
/s/ G. ▇▇▇▇ ▇▇▇▇▇
------------------------------------
G. ▇▇▇▇ ▇▇▇▇▇
SECURED PARTY: GREYHOUND FINANCIAL CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
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SCHEDULES
Schedule E 623 shares, $.0l par value, represented by
certificate No. 35.
Schedule 2 (j) Warrant in favor of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Mezzanine
Fund, L.P.
Warrant in favor of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Company, Inc.
Schedule 2 (k) G. ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
Schedule 2 (p) ▇▇▇▇▇▇ County, Georgia
17