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EXHIBIT 10.2
STOCK PLEDGE AGREEMENT
This STOCK PLEDGE AGREEMENT, dated as of September 17, 1997, made by
and among NB FINANCIAL LIMITED, a corporation organized pursuant to the laws of
the ▇▇▇▇ Islands (the "Pledgor"), ▇▇▇ ▇. ▇▇▇▇▇, an individual residing in the
State of California (the "Pledgee"), and ▇▇▇▇▇ & ▇▇▇▇▇▇, a law firm located at ▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Pledge Holder").
W I T N E S S E T H :
WHEREAS, the Pledgor and Pledgee, as well as others, have entered into
that certain Stock Purchase Agreement, of even date herewith (the "Stock
Purchase Agreement"), and that certain Agreement to Hold Funds in Trust Account,
dated August 15, 1997 (the "Funds Agreement").
WHEREAS, pursuant to the Stock Purchase Agreement and the Funds
Agreement, the Pledgor has issued that certain Secured Promissory Note, of even
date herewith (the "Note").
WHEREAS, pursuant to the Stock Purchase Agreement and the Funds
Agreement, the Pledgor is the legal and beneficial owner of the Pledged Stock
(as hereinafter defined), which consists of shares of common stock of
EXHIBITRONIX, INC., a Nevada corporation (the "Company"). This Pledge Agreement,
the Stock Purchase Agreement, the Funds Agreement, and the Note collectively may
be referred to hereinafter as the "Transaction Documents."
NOW, THEREFORE, in consideration of the premises and to secure the
obligations of the Pledgor under and evidenced by the Note, and to induce the
Pledgee to enter into the Transaction Documents, the Pledgor hereby agrees with
the Pledgee for its benefit as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Note and used herein are so used as so defined, and the following
terms shall have the following meanings:
1.1 "Obligations" means each and every one of those obligations of
the Pledgor set forth in the Transaction Documents.
1.2 "Collateral" means the Pledged Stock and all Proceeds thereof.
1.3 "Pledge Agreement" means this Stock Pledge Agreement, as
amended, supplemented or otherwise modified from time to time.
1.4 "Pledged Stock" means all of the shares of capital stock of the
Company sold, transferred, assigned, and delivered to Pledgor pursuant to the
Stock Purchase Agreement.
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1.5 "Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Uniform Commercial Code ("UCC") on the date hereof and,
in any event, shall include, without limitation, all dividends or other income
from the Pledged Stock, collections thereon or distributions with respect
thereto.
1.6 "Stock" means all of the shares of capital stock of the Company,
together with all options, rights, or other securities of any nature whatsoever
in respect of the capital stock of the Company.
2. Grant of Security Interest. The Pledgor hereby grants to the Pledgee
a first priority security interest in and lien on the Collateral as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations.
3. Pledge; Stock Assignment; Term. For the benefit of the Pledgee, the
Pledgor hereby delivers to the Pledge Holder the certificate(s) representing all
of the Pledged Stock and an undated stock assignment covering such
certificate(s) duly executed in blank, and if the Pledge Holder so requests,
with signatures guaranteed, who shall hold the Pledged Stock, stock assignment,
and any additional Collateral pursuant to this Pledge Agreement. The term of
this Pledge Agreement shall begin upon the date hereof and continue until the
Obligations have been fully and completely satisfied. Except as otherwise
provided herein, the Pledge Holder shall return the Pledged Stock, stock
assignment, and additional Collateral held by it to the Pledgor within a
reasonable time following the termination of this Pledge Agreement.
4. Representations and Warranties. The Pledgor represents and warrants
to the Pledgee that:
4.1 Existence and Good Standing; Power and Authority. The Pledgor is
a corporation duly organized, validly existing and in good standing under the
laws of the ▇▇▇▇ Islands. The Pledgor has the corporate power and authority to
make, execute, deliver and perform this Pledge Agreement. This Pledge Agreement
has been duly authorized and approved by all required corporate action of the
Pledgor.
4.2 Record and Beneficial Owner. Pursuant to the Transaction
Documents, and subject to the terms hereof, the Pledgor is the record and
beneficial owner of, and has good, valid and marketable title to, the
Collateral, free and clear of all pledges, security interests, liens, charges,
encumbrances, equities, claims or options of whatever nature, except the
security interest and lien in favor of the Pledgee created by this Pledge
Agreement.
4.3 Valid Security Interest. Upon delivery to the Pledge Holder of
the stock certificates evidencing the Pledged Stock, and assuming the continuous
possession thereafter of such stock certificates by the Pledge Holder, the
security interest and lien granted pursuant to this Pledge Agreement will
constitute a valid, perfected first priority security interest in and lien on
the Collateral, enforceable as such against all creditors of the Pledgor and any
persons purporting to purchase any Collateral from the Pledgor.
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4.4 Restrictive Documents. The Pledgor is not subject to any
charter, by-law, mortgage, lien, lease, agreement, instrument, order, law, rule,
regulation, judgment or decree, or any other restriction of any kind or
character, which would prevent consummation of the transactions contemplated by
this Pledge Agreement.
4.5 Binding Nature. When executed and delivered in accordance with
the terms hereof, this Pledge Agreement will constitute a legal, valid and
binding obligation of the Pledgor enforceable in accordance with its terms
except to the extent that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (ii) such enforcement may be
subject to general principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law).
4.6 No Breach. The execution, delivery, and performance of this
Pledge Agreement has not resulted and will not result in any violation of, or
conflict with, or constitute a default under any agreements, or any applicable
statue, rule, regulation, order or restriction of any federal or state
governmental entity or agency thereof nor result in the creation of any
mortgage, pledge, lien, encumbrances, or charge upon any of the properties or
assets of the Pledgor that would have a material adverse effect upon the
Pledgor, except as contemplated by the this Pledge Agreement.
4.7 Effective Control. Upon the Closing Date, as that term is
defined in the Stock Purchase Agreement, and subject to the Pledge Agreement,
the Pledgor will exercise effective control of the Company.
5. Covenants. The Pledgor covenants and agrees with the Pledgee that,
during the term of this Pledge Agreement or until the Pledgee otherwise releases
the security interests in and/or liens on the Collateral:
5.1 Additional Collateral. If the Pledgor shall, as a result of its
ownership of the Pledged Stock, become entitled to receive or shall receive any
stock certificate (including, without limitation, any certificate representing a
stock dividend or a distribution in connection with any reclassification,
increase or reduction of capital and any certificate issued in connection with
any reorganization), option or right, whether in addition to, in substitution
of, as a conversion of, or in exchange for any shares of the Pledged Stock, or
otherwise in respect thereof, the Pledgor shall accept the same as the Pledgee's
agent, hold the same in trust for the Pledgee and deliver the same forthwith to
the Pledge Holder in the exact form received, duly endorsed by the Pledgor, if
required, together with an undated stock assignment covering such certificate
duly executed in blank and, if the Pledge Holder so requests, with signatures
guaranteed, to be held, subject to the terms hereof, by the Pledge Holder
hereunder as additional collateral security for the Obligations. Any sums paid
upon or in respect of the Pledged Stock upon the liquidation or dissolution of
the Company shall be forthwith paid over to the Pledge Holder to be held,
subject to the terms hereof, by it hereunder as additional collateral security
for the Obligations, and in case any distribution of capital shall be made on or
in respect of the
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Pledged Stock or any property shall be distributed upon or with respect to the
Pledged Stock pursuant to the recapitalization or reclassification of the
capital of the Company or pursuant to the reorganization thereof, the property
so distributed shall be forthwith delivered to the Pledge Holder to be held,
subject to the terms hereof, by it as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in respect
of the Pledged Stock shall be received by the Pledgor, the Pledgor shall, until
such money or property is paid or delivered to the Pledge Holder, hold such
money or property in trust for the Pledgee, segregated from other funds of the
Pledgor, as additional collateral security for the Obligations.
5.2 Negative Covenant. The Pledgor will not, directly or indirectly,
(i) cause, authorize, enable, permit, or allow the Company to issue any stock or
other equity securities of any nature or any other securities convertible into
or granting the right to purchase or exchange for any stock or other equity
securities of the Company (such grant transactions to include, but not be
limited to, grants of warrants, options, or rights exercisable (directly or
indirectly and initially or by subsequent agreement) of shares of the Company's
capital stock or sales of debt convertible (directly or indirectly and initially
or by subsequent agreement) into shares of the Company's capital stock) in any
transaction or series of transactions, whether or not, as a result thereof, (X)
a merger, consolidation, reorganization, recapitalization, or other fundamental
change in the corporate structure of the Company or (Y) a change of control of
the Company results (or reasonably could result) therefrom, if such transactions
(either individually or in series) result or could result in the issuance of not
less than forty-nine percent (49%) of the capital stock of the Company, both as
to the Company's then issued and outstanding capital stock and on a fully
diluted basis, unless, concurrently with each and every such issuance, grant, or
sale, each of the issuees (or, if a grant or sale of debt, prospective issuees)
have executed (and delivered to the Pledgee) a stock pledge agreement (or a
when-issued stock pledge agreement) solely in favor of the Pledgee, on terms and
in format substantially identical to this Pledge Agreement, such that upon any
or all of such issuances, exercises, exchanges, or conversions, whether in any
one transaction or series of transactions, not less than seventy-six percent
(76%) of the Company's capital stock, both then issued and outstanding and on a
fully diluted basis, shall be subject to stock pledge agreements solely in favor
of the Pledgee, which stock pledge agreements are on terms and in format
substantially identical to this Pledge Agreement; (ii) sell, assign, transfer,
convey, gift, exchange, or otherwise dispose of, or grant any option with
respect to, or other rights in or to the Collateral; or (iii) create, incur, or
permit to exist any lien or option in favor of, or any claim of any person with
respect to, any of the Collateral (or any part thereof), or any interest
therein, except for the security interests and liens provided for by this Pledge
Agreement. The Pledgor will defend the right, title and interest of the Pledgee
in and to the Collateral against the claims and demands of all persons
whomsoever, except for claims and demands that result from the gross negligence
or misconduct of the Pledgee.
5.3 Notification and Conformity. The Pledgor will use its best
efforts (i) to cause the Company to provide written notice to the Pledgee, which
notice shall be given to the Pledgee not less than 10 days prior to the Company
engaging, directly or indirectly, in any transaction listed in Section 5.2(i)
herein; and (ii) to ensure that any documents memorializing and/or relating to
such proposed transaction reflect and conform with the provisions of this
Section 5.3 and Section 5.2(i) herein.
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5.4 Further Assurances. At any time and from time to time, upon the
request of the Pledgee, and at the sole expense of the Pledgor, the Pledgor will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as the Pledgee may reasonably request for the purposes
of obtaining or preserving the full benefits of this Pledge Agreement and of the
rights and powers herein granted. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory note,
other instrument or chattel paper, such note, instrument or chattel paper shall
be immediately delivered to the Pledgee, duly endorsed in a manner reasonably
satisfactory to the Pledgee, to be held as additional collateral security for
the Obligations.
6. Cash Dividends; Interest Payments; Voting Rights. Unless an Event of
Default shall have occurred and be continuing, and the Pledgee shall have given
notice to the Pledgor of the Pledgee's intent to exercise its corresponding
rights pursuant to paragraph 7 below, the Pledgor shall be permitted to receive
all cash dividends of the Company in respect of the Pledged Stock and to
exercise all voting and corporate rights with respect to the Pledged Stock;
provided, however, that no vote shall be cast or corporate right exercised or
other action taken as a shareholder which, in the Pledgee's reasonable judgment,
would impair the Collateral or result in any violation of any provision of the
Transaction Documents, including, but not limited to, the provisions of Section
5.2(1), above.
7. Rights of the Pledgee.
7.1 Rights in the Event of Default. If an Event of Default shall
have occurred and be continuing and the Pledgee shall have given notice to the
Pledgor of the Pledgee's intent to exercise the following rights: (i) the
Pledgee shall have the right to receive any and all payments of any character
paid in respect of the Collateral and make application thereof to the
Obligations (in the manner set forth in paragraph 8 hereof) and (ii) all Pledged
Stock shall be registered in the name of the Pledgee or its nominee, and the
Pledgee or its nominee may thereafter exercise (A) all voting, corporate, and
other rights pertaining to the Pledged Stock at any meeting of shareholders of
the Company or otherwise and (B) any and all rights of conversion, exchange,
subscription, and any other rights, privileges, or options pertaining to the
Pledged Stock as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Stock upon the merger, consolidation, reorganization, recapitalization or other
fundamental change in the corporate structure of the Company, or upon the
exercise by the Pledgor or the Pledgee of any right, privilege or option
pertaining to such shares of the Pledged Stock, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Stock with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as it may determine), all without liability except to
account for property actually received by it, but the Pledgee shall have no duty
to exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing; provided, however, that the Pledgor
may exercise any such right, privilege or option if the Pledgee fails or delays
in so doing, only if such exercise by the Pledgor, in the Pledgee's reasonable
judgment, would not impair the Collateral or result in any violation of any
provision of the Transaction Documents; provided, further, that the Pledgee's
exercise of his
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rights, as set forth in section (ii) above, shall be conditioned upon the
Pledgor's use of its best efforts as a controlling stockholder of the Company,
or otherwise, to cause each and every business combination transaction or
acquisition of equity or assets of any third party or any assumption of
liabilities of any third party to be rescinded, such that each such transaction
will be void ab initio, and that, immediately prior to the Pledgee's exercise of
his rights hereunder and under the Note, the Company's financial status will be
substantially similar to its current status, with the exception that any sales
of the Company's equity for cash shall not be subject to such rescission. If
such rescissions are not commenced and finalized within a reasonable period of
time, the condition precedent set forth in the immediately preceding proviso
will be deemed to have been waived by the Pledgor.
7.2 Not Conditioned or Contingent. The rights of the Pledgee
hereunder shall not be conditioned or contingent upon the pursuit by the Pledgee
of any right or remedy against the Pledgor or the Company or against any other
person which may be or become liable in respect of all or any part of the
Obligations or against any other collateral security therefor, guaranty thereof
or right of offset with respect thereto.
8. Remedies. Subject to the conditions set forth in the final proviso
of Section 7.1, above, if an Event of Default shall have occurred and shall be
continuing, the Pledgee may exercise, in addition to all other rights and
remedies granted in this Pledge Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, including,
without limitation, the Transaction Documents, all rights and remedies of a
secured party under the UCC or any other applicable law. Without limiting the
generality of the foregoing, the Pledgee, without demand of performance or other
demand, defense, presentment, protest, advertisement or notice of any kind
(except any notice required by law) to or upon the Pledgor, the Company or any
other person (all and each of which demands, defenses, presentments, protests,
advertisements and notices are hereby waived, except any notice required by law)
may in such circumstances forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof, and/or may forthwith sell, assign,
give an option or options to purchase or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more portions, upon such terms and conditions and at such prices as it may
deem advisable, for cash or on credit or for future delivery without assumption
of any credit risk. The Pledgee shall have the right, to the extent permitted by
law, upon any such sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Pledgor,
which right or equity is hereby waived or released. The Pledgee shall apply any
Proceeds from time to time held by it and the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Pledgee hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Obligations in whatever order the Pledgee may elect
and only after such application and after the payment by the Pledgee of any
other amount required by any provision of law, including, without limitation,
Section 9-504(1)(c) of the UCC, need the Pledgee account for the surplus, if
any, to the Pledgor. The Pledgor waives all claims, damages and demands it may
acquire against the Pledgee arising out of the exercise by the Pledgee of any of
its rights hereunder, except any that
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may arise from the gross negligence or misconduct of the Pledgee. If any notice
of a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition. The Pledgee shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given. The
Pledgee may postpone or adjourn any sale of any Collateral from time to time by
announcement at the time and place fixed therefor, and such sale may, upon
further notice, be made at the time and place to which it was so postponed or
adjourned.
9. Private Sales; Further Assurances.
9.1 Private Sales. The Pledgor recognizes that the Pledgee may be
unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
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. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the Pledgee than if such sale were a public
sale and agrees that such circumstances shall not, in and of themselves, result
in a determination that such sale was not made in a commercially reasonable
manner.
9.2 Further Assurances. The Pledgor further agrees to do or cause to
be done all such other acts as may be necessary to make any sale or sales of all
or any portion of the Collateral pursuant to this Pledge Agreement valid and
binding and in compliance with any or all applicable Articles of Incorporation
and By-Laws or other organizational or governing documents of the Company, and
all laws, treaties, rules or regulations or determinations of an arbitrator or a
court or other governmental authority. The Pledgor authorizes the Pledgee to
disclose information regarding the Company in the Pledgee's possession to a
potential purchaser of the Collateral in a foreclosure sale, provided that such
purchaser agrees to keep such information confidential. The Pledgor further
agrees that a breach of any of the covenants contained in this paragraph 9 will
cause irreparable injury to the Pledgee, that the Pledgee has no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this paragraph 9 shall be specifically enforceable against
the Pledgor, and the Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred and is continuing, that prior
payment has been made, or that prior performance has occurred.
10. Limitation on Duties Regarding Collateral. The Pledge Holder's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall
be to deal with it in the same manner as the Pledge Holder deals with similar
securities and property for its own account. Such duty shall not include any
obligation to ascertain or to initiate any action with respect to, or to inform
the Pledgor of, maturity dates, conversion, call, exchange rights, offers to
purchase the Collateral or any similar matters, notwithstanding the Pledge
Holder's knowledge of these matters. The
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Pledge Holder shall not have any duty to initiate any action to protect against
the possibility of a decline in the market value of the Collateral. The Pledge
Holder shall not be liable for failure to demand, collect or realize upon the
Collateral, or any part thereof, or for any delay in doing so or shall be under
any obligation to sell or otherwise dispose of any Collateral upon the request
of the Pledgor or otherwise or to take any other action whatsoever with regard
to the Collateral or any part thereof.
11. The Pledgee Appointed Attorney-in-Fact and Proxy. The Pledgor
hereby appoints the Pledgee or the Pledgee's designee as the Pledgor's
attorney-in-fact and proxy, with full authority and power in the Pledgor's place
and stead, and in the Pledgor's name, from time to time in the Pledgee's
discretion from and after the occurrence and during the continuance of an Event
of Default to take any action and to execute any instrument which the Pledgee
may deem necessary or advisable to perfect, protect or enforce any right or
security interest hereunder or otherwise accomplish the purposes of this Pledge
Agreement, including, without limitation, to execute and file alone any
financing statement under the UCC and any document or instrument under any other
applicable laws, and to receive, endorse and collect all instruments made
payable to the Pledgor representing any dividend or other distribution in
respect of any of the Collateral and to give full discharge for the same. The
Pledgor ratifies and approves all such acts of such attorney and proxy. Neither
the Pledgee nor said attorney and proxy will be liable for any acts or
omissions, nor for any error of judgment or mistake of fact or law, other than
the Pledgee's or said attorney's and proxy's gross negligence or misconduct as
determined by a final non-appealable judgment of a court of competent
jurisdiction. This power, being coupled with an interest, is irrevocable until
all Obligations have been fully satisfied or until the Pledgee otherwise
releases the security interests in and/or liens on the Collateral.
12. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
13. Severability. The invalidity, illegality or unenforceability in any
jurisdiction of any provision in or obligation under this Pledge Agreement shall
not affect or impair the validity, legality or enforceability of the remaining
provisions or obligations under this Pledge Agreement or of such provision or
obligation in any other jurisdiction.
14. Headings. All headings used in this Pledge Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
15. Failure or Indulgence Not Waiver; Cumulative Remedies. No failure
or delay on the part of the Pledgee in the exercise of any power, right or
privilege under this Pledge Agreement and no course of dealing with respect
thereto shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude any other or further
exercise thereof or any other right, power or privilege. The rights and remedies
of the Pledgee provided under this Pledge Agreement, the Note, and the other
related documents are cumulative,
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may be exercised singly or concurrently and are cumulative to, and not exclusive
of any rights or remedies provided by law or otherwise available.
16. Security Interest Absolute; Successors and Assigns; Governing Law;
Compliance. All rights of the Pledgee and security interests hereunder, and all
obligations of the Pledgor under this Pledge Agreement, shall be absolute and
unconditional irrespective of (i) any lack of validity or enforceability of any
Obligations or the Note or any other related document; (ii) the absence of any
attempt to collect Obligations from the Pledgor or any other person or of any
other action to enforce the same; (iii) any change of the time, manner or place
of payment, or any other term, of any Obligations; (iv) any exchange, release or
non-perfection of any collateral securing payment of any Obligations; (v) any
law, regulation or order of any jurisdiction affecting any term of any
Obligations or the Pledgee's rights with respect thereto; and (vi) any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Pledgor, any guarantor or any other person. This Pledge
Agreement shall be binding upon and inure to the benefit of the successors and
permitted assigns of the Pledgor and the Pledgee, except that the Pledgor may
not assign its rights or obligations hereunder or under any other related
document (or any portion hereof or thereof) without the prior written consent of
the Pledgee, which shall not be unreasonably withheld by the Pledgee. THIS
PLEDGE AGREEMENT SHALL BE GOVERNED AND CONTROLLED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA (BUT
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICT OF LAWS) AS TO INTERPRETATION,
ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT AND IN ALL OTHER RESPECTS, BUT
EXCLUDING PERFECTION, WHICH SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE
RELEVANT JURISDICTION.
17. Notices. All notices, approvals, requests, demands and other
communications required or permitted to be given hereunder shall be given (and
shall be effective) in accordance with the notice provision of the Stock
Purchase Agreement.
18. Irrevocable Authorization and Instruction to Company. The Pledgor
hereby authorizes and instructs the Company to comply with any instruction
received by it from the Pledgee, in his capacity as a stockholder and owner of
Stock, in writing (with a copy to the Pledgor) that (a) states that an Event of
Default has occurred and is continuing and (b) is otherwise in accordance with
the terms of this Pledge Agreement, without any other or further instructions
from the Pledgor, and the Pledgor agrees that the Company shall be fully
protected from all claims or causes of action of the Pledgor arising therefrom
or related thereto in so complying, except for those claims or causes of action
of the Pledgor resulting from the gross negligence or misconduct of the Company.
19. Termination of Pledge Agreement; Release of Collateral. This Pledge
Agreement, and all obligations of the Pledgor hereunder, shall terminate upon
payment in full of all Obligations or the release by the Pledgee of the security
interests in and/or liens on the Collateral and all right, title and interest of
the Pledgee in and to the Collateral shall revert to the Pledgor and its
successors and assigns. Upon the termination of the Pledgee's security interest
and the release of the Collateral, the Pledgee will, at the written request and
expense of the Pledgor,
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(a) promptly execute and deliver to the Pledgor such documents as the Pledgor
shall reasonably request to evidence the termination of such security interest
or the release of the Collateral, and (b) promptly deliver or cause to be
delivered to the Pledgor all property of the Pledgor then held by the Pledgee or
any agent or nominee of the Pledgee pursuant to this Pledge Agreement. If, at
any time, all or part of any payment of the Obligations theretofore made by the
Pledgor or any other person is rescinded or otherwise must be returned by the
Pledgee for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of the Pledgor or any other person),
this Pledge Agreement shall continue to be effective or shall be reinstated, as
the case may be, as to the Obligations which were satisfied by the payment to be
rescinded or returned, all as though such payment had not been made.
20. Changes in Writing. No amendment, modification, termination or
waiver of any provision of this Pledge Agreement, or consent to any departure by
the Pledgor therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Pledgee and the Pledgor.
21. Counterparts. This Pledge Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and
by the different parties in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute one and the same instrument. This Pledge
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
22. Duties of Pledge Holder.
22.1 General Duties. The Pledge Holder shall hold the Collateral,
pursuant to the terms of this Pledge Agreement, until this Pledge Agreement
terminates hereunder or the Pledgee delivers to it written instructions with
respect to the Pledgee's exercise of his rights and/or remedies hereunder. Upon
the receipt of such written instructions from the Pledgee, the Pledge Holder
shall take such action(s) or cause such action(s) to be taken with respect to
the Collateral as directed by the Pledgee, and shall be relieved of any further
responsibilities or liability in connection with the Collateral.
22.2 Conflicting Instructions. In the event conflicting
instructions are served upon the Pledge Holder as to the Collateral, or if
either the Pledgee or Pledgor fails to give its or his written approval of any
transaction or act proposed to be taken by the Pledge Holder (it being
understood that such approval is expressly not required but may be sought by the
Pledge Holder at its sole option) the Pledgee and Pledgor agree that the Pledge
Holder shall have the absolute right at its election to do either or both of the
following: (i) immediately cease and withhold any further action(s) to be taken
by it pursuant to this Pledge Agreement, or (ii) file a suit in interpleader and
obtain an order from a court as to the Pledgor and the Pledgee and their
respective claims and rights between themselves. In the event such interpleader
suit is brought, the Pledge Holder shall upon filing such suit be fully released
and discharged from all obligations to further perform any and all duties or
obligations imposed upon it pursuant to this Pledge Agreement, and the Pledgor
agrees to pay to the Pledge Holder all costs, expenses, and attorneys'
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fees expended or incurred by it, the amount thereof to be fixed in a judgment
thereof to be render by the court in such suit.
22.3 Substitution. The Pledge Holder may, at its sole option, upon
not less than 10 days' written notice to the Pledgee and Pledgor, fully
discharge all of its obligations under this Pledge Agreement by transferring the
Collateral held by it subject to this Pledge Agreement to any national bank
located in the County of Orange, State of California, upon the terms of this
Pledge Agreement, with such additional general terms as may ordinarily be
imposed by such bank in connection with such agreements.
22.4 Further Limitations on Duties Regarding Collateral. In
addition to those limitations set forth in Section 10 herein, the Pledge Holder
shall not be held liable for the sufficiency or correctness as to form, manner
of execution, or validity of any instrument deposited in the Pledge Agreement,
nor as to identity, authority, or rights of any person executing the same, nor
for failure to comply with any of the provisions of any agreement, contract, or
other instrument filed herein or referred to herein, and its duties hereunder
shall be limited to the safekeeping of such Collateral received by it as Pledge
Holder, and for the disposition or other transfer of same in accordance with
this Pledge Agreement and any written instructions given by the Pledgee. Pledge
Holder shall not have any responsibilities to secure permits, orders, or
releases from any governmental agencies respecting the issue, release, or
transfer of the Collateral.
22.5 Costs. All costs and expenses of and for the Pledge Holder
shall be paid by the Pledgor.
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IN WITNESS WHEREOF, the parties hereto have executed or have caused a
duly authorized officer or representative to execute this Pledge Agreement, all
as of the date and year first above written.
PLEDGOR:
NB FINANCIAL LIMITED
By: ▇▇▇▇▇▇▇▇▇ LIMITED
as Director by its Nominee
Its: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
PLEDGEE:
/s/ ▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇ ▇. ▇▇▇▇▇
PLEDGE HOLDER:
▇▇▇▇▇ & ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ESQ.
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
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