EXHIBIT 10.6
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Agreement") is made as of the 30th day of
September, 2002 by AMX Corporation, a Texas corporation (hereinafter called
"Pledgor", whether one or more), in favor of BANK ONE, NA ("Bank"). Pledgor
hereby agrees with Bank as follows:
1. 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, (iii) all Additional Property (as hereinafter defined),
and (iv) 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 of any kind
or character, now existing or hereafter arising, whether direct,
indirect, related, unrelated, fixed, contingent, liquidated,
unliquidated, joint, several or joint and several, and regardless of
whether such indebtedness, obligations and liabilities may, prior to
their acquisition by Secured Party, be or have been payable to or in
favor of a third party and subsequently acquired by Secured Party (it
being contemplated that Secured Party may make such acquisitions from
third parties), including without limitation all indebtedness,
obligations and liabilities of Borrower to Secured Party now existing
or hereafter arising by note, draft, acceptance, guaranty,
endorsement, letter of credit, assignment, purchase, overdraft,
discount, indemnity agreement or otherwise, (ii) all accrued but
unpaid interest on any of the indebtedness described in (i) above,
(iii) all obligations of Borrower to Secured Party under any documents
evidencing, securing, governing and/or pertaining to all or any part
of the indebtedness described in (i) and (ii) above, (iv) 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) and (iii) 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 (v)
all renewals, extensions, modifications and rearrangements of the
indebtedness and obligations described in (i), (ii), (iii) and (iv)
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 "Obligated Party" shall mean any party other than
Borrower who secures, guarantees and/or is otherwise obligated to pay
all or any portion of the Indebtedness.
(g) The term "Secured Party" shall mean Bank, its successors
and assigns, including without limitation, any party to whom Bank, 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. ADDITIONAL PROPERTY. Collateral shall also include the following
property (collectively, the "Additional Property") which Pledgor becomes
entitled to receive or shall receive in connection with any other Collateral:
(a) any stock certificate, including without limitation, any certificate
representing a stock dividend or any certificate in connection with any
recapitalization, reclassification, merger, consolidation, conversion, sale of
assets, combination of shares, stock split or spin-off; (b) any option, warrant,
subscription or right, whether as an addition to or in substitution of any other
Collateral; (c) any dividends or distributions of any kind whatsoever, whether
distributable in cash, stock or other property; (d) any interest, premium or
principal payments; and (e) any conversion or redemption proceeds; provided,
however, that until the occurrence of an Event of Default (as hereinafter
defined), Pledgor shall be entitled to all cash dividends and all interest paid
on the Collateral (except interest paid on any certificate of deposit pledged
hereunder) free of the security interest created under this Agreement. All
Additional Property received by Pledgor shall be received in trust for the
benefit of Secured Party. All Additional Property and all certificates or other
written instruments or documents evidencing and/or representing the Additional
Property that is received by Pledgor, together with such instruments of transfer
as Secured Party may request, shall immediately be delivered to or deposited
with Secured Party and held by Secured Party as Collateral under the terms of
this Agreement. If the Additional Property received by Pledgor shall be shares
of stock or other securities, such shares of stock or other securities shall be
duly endorsed in blank or accompanied by proper instruments of transfer and
assignment duly executed in blank with, if requested by Secured Party,
signatures guaranteed by a member or member organization in good standing of an
authorized Securities Transfer Agents Medallion Program, all in form and
substance satisfactory to Secured Party. Secured Party shall be deemed to have
possession of any Collateral in transit to Secured Party or its agent.
4. VOTING RIGHTS. As long as no Event of Default shall have occurred
hereunder, any voting rights incident to any stock or other securities pledged
as Collateral may be exercised by Pledgor; provided, however, that Pledgor will
not exercise, or cause to be exercised, any such voting rights, without the
prior written consent of Secured Party, if the direct or indirect effect of such
vote will result in an Event of Default hereunder.
5. 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
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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
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.
6. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and
warrants the following to Secured Party:
(a) Due Authorization. The execution, delivery and performance
of this Agreement and all of the other Loan Documents by Pledgor have
been duly authorized by all necessary corporate action of Pledgor, to
the extent Pledgor is a corporation, or by all necessary partnership
action, to the extent Pledgor is a partnership.
(b) 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.
(c) 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 and other liens expressly permitted by the
other Loan Documents. No dispute, right of setoff, counterclaim or
defense exists with respect to all or any part of the Collateral.
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.
(d) No Conflicts or Consents. Neither the ownership, the
intended use of the Collateral by Pledgor, the grant of the security
interest by Pledgor to Secured Party herein nor the exercise by
Secured Party of its rights or remedies hereunder, will (i) conflict
with any provision of (A) any domestic or foreign law, statute, rule
or regulation applicable to Pledgor or its property, (B) the articles
or certificate of incorporation, charter, bylaws or partnership
agreement, as the case may be, of Pledgor, or (C) any agreement,
judgment, license, order or permit applicable to or binding upon
Pledgor or otherwise affecting the Collateral, or (ii) result in or
require the creation of any lien, charge or encumbrance upon any
assets or properties of Pledgor or of any person except as may be
expressly contemplated in the Loan Documents. Except as expressly
contemplated in the Loan Documents, no consent, approval,
authorization or order of, and no notice to or filing with, any court,
governmental authority or third party is required in connection with
the grant by Pledgor of the security interest herein or the exercise
by Secured Party of its rights and remedies hereunder.
(e) 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.
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(f) Location. Pledgor's residence or chief executive office,
as the case may be, and the office where the records concerning the
Collateral are kept is located at its address set forth on the
signature page hereof.
(g) 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), (iii) Pledgor is
paying and will continue to be able to pay its debts as they mature,
and (iv) if Pledgor is not an individual, Pledgor has and will have
sufficient capital to carry on Pledgor's businesses and all businesses
in which Pledgor is about to engage.
(h) Securities. Any certificates evidencing securities pledged
as Collateral are valid and genuine and have not been altered. All
securities pledged as Collateral have been duly authorized and validly
issued, are fully paid and non-assessable, and were not issued in
violation of the preemptive rights of any party or of any agreement by
which Pledgor or the issuer thereof is bound. No restrictions or
conditions exist with respect to the transfer or voting of any
securities pledged as Collateral, except as has been disclosed to
Secured Party in writing. To the best of Pledgor's knowledge, no
issuer of such securities (other than securities of a class which are
publicly traded) has any outstanding stock rights, rights to
subscribe, options, warrants or convertible securities outstanding or
any other rights outstanding entitling any party to have issued to
such party capital stock of such issuer, except as has been disclosed
to Secured Party in writing.
7. 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 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) Inspection of Books and Records. Pledgor will keep
adequate records concerning the Collateral and will permit Secured
Party and all representatives and agents appointed by Secured Party to
inspect Pledgor's books and records of or relating to the Collateral
at any time during normal business hours and upon not less than 48
hours advance notice, to make and take away photocopies, photographs
and printouts thereof and to write down and record any such
information.
(c) 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
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respect to the Collateral, including without limitation, notices
received from the issuer of any securities pledged hereunder as
Collateral.
(d) 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 and assignment
duly executed in blank with, if requested by Secured Party, signatures
guaranteed by a member or member organization in good standing of an
authorized Securities Transfer Agents Medallion Program, all in form
and substance satisfactory to Secured Party.
(e) Further Assurances. Pledgor will contemporaneously with
the execution hereof and from time to time thereafter at its 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: (A) executing and filing any
financing or continuation statements, or any amendments thereto; (B)
obtaining written confirmation from the issuer of any securities
pledged as Collateral of the pledge of such securities, in form and
substance satisfactory to Secured Party; (C) cooperating with Secured
Party in registering the pledge of any securities pledged as
Collateral with the issuer of such securities; (D) delivering notice
of Secured Party's security interest in any securities pledged as
Collateral to any securities or financial intermediary, clearing
corporation or other party required by Secured Party, in form and
substance satisfactory to Secured Party; and (E) obtaining written
confirmation of the pledge of any securities constituting Collateral
from any securities or financial intermediary, clearing corporation or
other party required by Secured Party, in form and substance
satisfactory to Secured Party. If all or any part of the Collateral is
securities issued by an agency or department of the United States,
Pledgor covenants and agrees, at Secured Party's request, to cooperate
in registering such securities in Secured Party's name or with Secured
Party's account maintained with a Federal Reserve Bank. When
applicable law provides more than one method of perfection of Secured
Party's security interest in the Collateral, Secured Party may choose
the method(s) to be used.
8. 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) ▇▇▇▇▇ ▇ ▇▇▇▇ 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) Impairment of Security Interest. Pledgor will not take or
fail to take any action which would in any manner impair the value or
enforceability of Secured Party's security interest in any Collateral.
(c) Dilution of Ownership. As to any securities pledged as
Collateral (other than securities of a class which are publicly
traded), Pledgor will not consent to or approve of the
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issuance of (i) any additional shares of any class of securities of
such issuer (unless immediately upon issuance additional securities
are pledged and delivered to Secured Party pursuant to the terms
hereof to the extent necessary to give Secured Party a security
interest after such issuance in at least the same percentage of such
issuer's outstanding securities as Secured Party had before such
issuance), (ii) any instrument convertible voluntarily by the holder
thereof or automatically upon the occurrence or non-occurrence of any
event or condition into, or exchangeable for, any such securities, or
(iii) any warrants, options, contracts or other commitments entitling
any third party to purchase or otherwise acquire any such securities.
(d) 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.
9. RIGHTS OF SECURED PARTY. Secured Party shall have the rights
contained in this Section at all times (except as otherwise specified) during
the period of time this Agreement is effective.
(a) Power of Attorney. 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 during the continuance of an Event of Default, 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 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; 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.
10. EVENTS OF DEFAULT. Each of the following constitutes an "Event of
Default" under this Agreement:
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(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, and the continuation of such failure, refusal or neglect
for ten (10) days; or
(b) Non-Performance of Covenants. The failure of Borrower or
any Obligated Party to timely and properly observe, keep or perform
any covenant, agreement, warranty or condition required herein or in
any of the other Loan Documents and the continuation of such failure
for thirty (30) days (other than the covenants contained in Sections
8, 9 or Addendum 1 of the Loan Agreement, for which there is no grace
period); or
(c) Default Under other Loan Documents. The occurrence of an
event of default hereunder or 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 or any
Obligated Party 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 in excess
of $100,000.00 owing by Borrower or any Obligated Party to any third
party under any agreement or undertaking; or
(f) Bankruptcy or Insolvency. If Borrower or any Obligated
Party: (i) becomes insolvent, or makes a transfer in fraud of
creditors, or makes an assignment for the benefit of creditors, or
admits in writing its inability to pay its debts as they become due;
(ii) generally is not paying its 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 (60) days
after the effective date thereof or such party consents to or
acquiesces in such appointment or possession; or (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;
or
(g) Execution on Collateral. The Collateral or any portion
thereof is taken on execution or other process of law in any action
against Pledgor; provided that it shall not be an Event of Default
hereunder for a period of thirty (30) days following such taking
(during which time Bank may, in its sole and absolute discretion,
elect to waive the operation of this section with respect to such
taking); or
(h) 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 and the failure of such holder to revoke such
declaration or cease such foreclosure or other proceedings within 20
days thereafter; or
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(i) Liquidation, Death and Related Events. If Borrower or any
Obligated Party is an entity, the liquidation, dissolution, merger or
consolidation of any such entity or, if Borrower or any Obligated
Party is an individual, the death or legal incapacity of any such
individual; or
(j) Dilution of Ownership. The issuer of any securities (other
than securities of a class which are publicly traded) constituting
Collateral hereafter issues any shares of any class of capital stock
(unless immediately upon issuance, additional securities are pledged
and delivered to Secured Party pursuant to the terms hereof to the
extent necessary to give Secured Party a security interest after such
issuance in at least the same percentage of such issuer's outstanding
securities as Secured Party had before such issuance) or any options,
warrants or other rights to purchase any such capital stock; or
(k) Bankruptcy of Issuer. (i) The issuer of any securities
constituting Collateral files a petition for relief under any
Applicable Bankruptcy Law, (ii) an involuntary petition for relief is
filed against any such issuer under any Applicable Bankruptcy Law and
such involuntary petition is not dismissed within sixty (60) days
after the filing thereof, or (iii) an order for relief naming any such
issuer is entered under any Applicable Bankruptcy Law.
(l) The entry of any judgment against Borrower or the issuance
or entry of any attachment or other lien against any of the property
of Borrower for an amount in excess of $250,000.00, if undischarged,
unbonded or undismissed within thirty (30) days after such entry.
11. REMEDIES AND RELATED RIGHTS. If an Event of Default shall have
occurred and is continuing, 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
disposition;
(v) buy the Collateral, or any portion thereof, at any
private disposition 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;
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(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.
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, ten (10) days prior to
the date of any public disposition, or after which a private
disposition, of any of such Collateral is to be held. Secured Party
shall not be obligated to make any sale or other disposition of
Collateral regardless of notice of sale having been given. Secured
Party may adjourn any public or private disposition from time to time
by announcement at the time and place fixed therefor, and such sale or
other disposition may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor further acknowledges and
agrees that the redemption by Secured Party of any certificate of
deposit pledged as Collateral shall be deemed to be a commercially
reasonable disposition under Section 9.610 of the Code.
(b) Private Disposition of Securities. Pledgor recognizes that
Secured Party may be unable to effect a public sale or other
disposition 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 or other dispositions 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 disposition may be at
prices and other terms less favorable then what might have been
obtained at a public disposition and, notwithstanding the foregoing,
agrees that each such private disposition shall be deemed to have been
made in a commercially reasonable manner and that Secured Party shall
have no obligation to delay the sale or other disposition of any such
securities for the period of time necessary to permit the issuer to
register such securities for public sale or other disposition 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 disposition" for
the purposes of Section 9.610 of the Code, notwithstanding that such
sale or other disposition 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 and is continuing, 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 or
other disposition of, collection
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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 9.615 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.
(d) Deficiency. In the event that the proceeds of any sale or
other disposition 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 and
any party who guaranteed or is otherwise obligated to pay all or any
portion of the Indebtedness 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 or other disposition
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.
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(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.
(h) Dividend Rights and Interest Payments. Upon the occurrence
and during the continuation of an Event of Default:
(i) all rights of Pledgor to receive and retain the dividends
and interest payments which it would otherwise be authorized to
receive and retain pursuant to Section 3 shall automatically
cease, and all such rights shall thereupon become vested with
Secured Party which shall thereafter have the sole right to
receive, hold and apply as Collateral such dividends and interest
payments; and
(ii) all dividend and interest payments which are received by
Pledgor contrary to the provisions of clause (i) of this
Subsection shall be received in trust for the benefit of Secured
Party, shall be segregated from other funds of Pledgor, and shall
be forthwith paid over to Secured Party in the exact form
received (properly endorsed or assigned if requested by Secured
Party), to be held by Secured Party as Collateral.
12. 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 (WHETHER SOLE, COMPARATIVE OR CONTRIBUTORY) OF SUCH AND/OR ANY
OTHER INDEMNIFIED PERSON, OR FOR WHICH SUCH OR ANY OTHER INDEMNIFIED PERSON
MIGHT OTHERWISE BE LIABLE (BY VIRTUE OF STRICT LIABILITY OR OTHERWISE), 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 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.
13. 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
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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) Costs and Expenses. Pledgor will upon demand pay to
Secured Party the amount of any and all costs and expenses (including
without limitation, attorneys' fees and expenses), which Secured Party
may incur in connection with (i) the transactions which give rise to
the Loan Documents, (ii) the preparation of this Agreement and the
perfection and preservation of the security interests granted under
the Loan Documents, (iii) the administration of the Loan Documents,
(iv) the custody, preservation, use or operation of, or the sale or
other disposition of, collection from, or other realization upon, the
Collateral, (v) the exercise or enforcement of any of the rights of
Secured Party under the Loan Documents, or (vi) the failure by Pledgor
to perform or observe any of the provisions hereof.
(f) 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.
(g) Venue. This Agreement has been entered into in the county
in Texas where Bank'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
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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.
(h) 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.
(i) 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.
(j) 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, two (2) business days after 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.
(k) 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.
(l) Termination. It is contemplated by the parties hereto that
from time to time there may be no outstanding Indebtedness, but
notwithstanding such occurrences, this Agreement shall remain valid
and shall be in full force and effect as to subsequent outstanding
Indebtedness. Upon (i) the satisfaction in full of the Indebtedness,
(ii) the termination or expiration of any commitment of Secured Party
to extend credit to Borrower, (iii) written request for the
termination hereof delivered by Pledgor to Secured Party, and (iv)
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.
(m) 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.
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(n) 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.
(o) 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.
EXECUTED as of the date first written above.
Debtor's Address: PLEDGOR:
AMX Corporation AMX Corporation, a Texas corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇ ---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: VP & CFO
------------------------------
Secured Party's Address:
Bank One, NA
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Middle Market Banking Group (▇▇▇▇ Points)
- 14 -
SCHEDULE "A"
TO
PLEDGE AGREEMENT
DATED September 30, 2002
BY AND BETWEEN
BANK ONE, NA
AND
AMX Corporation
The following property is a part of the Collateral as defined in Subsection
1(c):
81,250 shares of stock of AMX(UK) Limited represented by
Certificate No. 8.
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