EXHIBIT 4.2
PLEDGE AGREEMENT
This Pledge Agreement ("Pledge Agreement") is executed to be effective
as of April 1, 2003 (the "Effective Date") between SVI Solutions, Inc., a
Delaware corporation ("SVI"), and Xxxxxx X. Xxxxxxxxx, an individual
("Klitofsky") who agree as follows as follows:
1. Recitals.
1.1. SVI and Klitofsky have executed a Stock Purchase
Agreement dated April 30, 2003 (the "Agreement"), pursuant to which Klitofsky
has acquired from SVI 100 shares (the "Shares") of the common stock of SVI
Training Products, Inc. (the "Company"). Pursuant to the Agreement, Klitofsky is
required to deliver to SVI the Purchase Price for the Shares in accordance with
the terms of the Agreement (the "Payment Obligations").
1.2. In order to provide security for Klitofsky's obligations
under the Agreement, Klitofsky has agreed to pledge the Shares to SVI.
2. GRANT OF SECURITY INTEREST. To secure Klitofsky's obligations to SVI
under the Agreement, Klitofsky pledges, assigns and grants to SVI a security
interest in (a) the Shares and (b) all stock or cash dividends, substitutions,
and shares issued pursuant to any merger or reorganization, or any other
"proceeds" (as such term is defined in Section 9102 of the California Uniform
Commercial Code) of such Shares.
3. DELIVERY OF SHARES; AGENCY. Upon Klitofsky's execution of this
Pledge Agreement, SVI shall deliver the certificate representing the Shares to
Xxxxxxx Xxxx Seidenwurm & Xxxxx, LLP ("Pledgeholder"). Pledgeholder is
designated as the agent and attorney in fact for SVI and is authorized to
collect and disburse the payments under the Agreement, as well as being the sole
person authorized to act upon and with respect to the Agreement and this Pledge
Agreement on behalf of the SVI. Klitofsky acknowledges that Xxxxxxx Xxxx
Seidenwurm & Xxxxx, LLP represents SVI and waives any claim or defense relating
thereto.
4. TERMS OF PLEDGE. The Shares shall be held by Pledgeholder in pledge
subject to the terms and conditions of this Pledge Agreement. Pledgeholder shall
retain the Shares to secure Klitofsky's obligations to SVI under this Pledge
Agreement. As long as no event of default exists as described in Section 6
below, Klitofsky shall have the right at all times to vote such Shares on any
and all matters.
5. RELEASE OF SHARES. Upon receiving written confirmation from SVI of
the receipt by SVI of all amounts due by Klitofsky under the Agreement,
Pledgeholder is authorized to release to Klitofsky the certificate representing
the Shares.
6. EVENTS OF DEFAULT. There shall be a default under this Pledge
Agreement if the Klitofsky breaches any of his obligations under the Agreement
and the Klitofsky fails to cure such breach within 5 business days of written
notice by SVI to the Klitofsky of such breach.
7. RIGHTS OF SVI UPON DEFAULT. In the event of an uncured default under
Section 6, SVI shall have the rights of a secured party under the California
Uniform Commercial Code, in addition to any other remedies available to it.
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8. RIGHTS AND DUTIES OF PLEDGEHOLDER.
8.1. Unless a default has occurred which remains uncured,
Pledgeholder's sole duty shall be to hold the Shares, until such time as the
Payment Obligations have been paid in full. Pledgeholder shall not act
unilaterally in discharging his duties hereunder. The Pledgeholder is directed
to deliver the Shares to Klitofsky at such time as Pledgeholder receives written
confirmation from SVI that SVI that all of the Payment Obligations are paid or
otherwise satisfied or released in full.
8.2. In the event SVI determines that an uncured or incurable
default has occurred, SVI shall deliver written notice to Klitofsky ("Notice of
Default"). The Notice of Default shall set forth the facts underlying the
alleged default with particularity. Pledgeholder may deliver the Shares to SVI
following such Notice of Default if Pledgeholder has not received a notice
disputing the default ("Notice Of Protest") within thirty (30) days following
the date that Pledgeholder received the Notice of Default.
8.3. Pledgeholder shall have the right, at any time it deems
necessary in its sole discretion, to resign or file an action in interpleader
with a court of competent jurisdiction.
8.4. For the performance by Pledgeholder of its duties under
this Agreement, the SVI and Klitofsky shall pay to Pledgeholder compensation at
its standard hourly rates and reimburse to Pledgeholder all costs and expenses
incurred in connection therewith. The SVI and the Klitofsky shall be jointly and
severally liable for the obligations under this paragraph.
9. INDEMNIFICATION OF PLEDGEHOLDER. The SVI and Klitofsky shall,
jointly and severally, indemnify, defend, and hold Pledgeholder harmless from
and against any and all actions, causes of action, claims, demands, expenses,
and liabilities that Pledgeholder may suffer or incur by virtue of its role as
Pledgeholder under this Agreement; provided, however, the foregoing
indemnification will not relate to any such matter arising out of the
intentional misconduct of Pledgeholder.
10. GOVERNING LAW. This Pledge Agreement is governed by and construed
in accordance with the laws of the State of California, irrespective of
California's choice of law principles. Venue for all purposes shall be San
Diego, California.
11. FURTHER ASSURANCES. Each party to this Pledge Agreement shall
execute and deliver all instruments and documents and take all actions as may be
reasonably required or appropriate to carry out the purposes of this Pledge
Agreement.
12. COUNTERPARTS AND EXHIBITS. This Pledge Agreement may be executed in
counterparts, each of which is deemed an original and all of which together
constitute one document. All exhibits attached to and referenced in this Pledge
Agreement are incorporated into this Pledge Agreement.
13. MODIFICATION. This Pledge Agreement may be modified only by an
instrument in writing executed by the party to this Pledge Agreement against
whom enforcement of the modification is sought.
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14. PRIOR UNDERSTANDINGS. This Pledge Agreement and all documents
specifically referred to and executed in connection with this Pledge Agreement:
(a) contain the entire and final agreement of the parties to this Pledge
Agreement with respect to the subject matter of this Pledge Agreement, and (b)
supersede all negotiations, stipulations, understandings, agreements,
representations and warranties, if any, with respect to such subject matter,
which precede or accompany the execution of this Pledge Agreement.
15. INTERPRETATION. Wherever the context of this Pledge Agreement
requires, all words used in the singular shall be construed to have been used in
the plural, and vice versa, and the use of any gender specific pronoun shall
include any other appropriate gender. The conjunctive "or" shall mean "and/or"
unless otherwise required by the context in which the conjunctive "or" is used.
Klitofsky and SVI have each been represented, or have had the opportunity to be
represented by legal counsel and hereby waives any benefit under any rule of law
or legal decision that would require interpretation of any ambiguities in this
Pledge Agreement against the party drafting it. The provisions of this Pledge
Agreement shall be interpreted in a reasonable manner to effect the purposes of
the parties and this Pledge Agreement.
16. PARTIAL INVALIDITY. Each provision of this Pledge Agreement is
valid and enforceable to the fullest extent permitted by law. If any provision
of this Pledge Agreement (or the application of such provision to any person or
circumstance) is or becomes invalid or unenforceable, the remainder of this
Pledge Agreement, and the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
are not affected by such invalidity or unenforceability.
17. NOTICES. Each notice and other communication required or permitted
to be given under this Pledge Agreement ("Notice") must be in writing. Notice is
duly given to another party upon: (a) hand delivery to the other party, (b)
receipt by the other party when sent by facsimile to the address and number for
such party set forth below (provided, however, that the Notice is not effective
unless a duplicate copy of the facsimile Notice is promptly given by one of the
other methods permitted under this paragraph), (c) three business days after the
Notice has been deposited with the United States postal service as first class
certified mail, return receipt requested, postage prepaid, and addressed to the
party as set forth below, or (d) the next business day after the Notice has been
deposited with a reputable overnight delivery service, postage prepaid,
addressed to the party as set forth below with next business day delivery
guaranteed, provided that the sending party receives a confirmation of delivery
from the delivery service provider. Notice given to the Pledgeholder shall be
addressed as set forth below.
To: SVI Solutions, Inc.
0000 Xxxxxx Xxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
(000) 000-0000 - (Telecopy)
Copy to: Xxxxxxx Xxxx Seidenwurm & Xxxxx, LLP
000 X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
(000) 000-0000 -- (Telecopy)
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To: Xxxxxx Xxxxxxxxx
0000X Xxxxxxx Xx.
Xxx Xxxxx, XX 00000
000-000-0000 -- (Telecopy)
Each party shall make a reasonable, good faith effort to ensure that it
will accept or receive Notices to it that are given in accordance with this
paragraph. A party may change its address for purposes of this paragraph by
giving the other party written notice of a new address in the manner set forth
above.
18. WAIVER. Any waiver of a default or provision under this Pledge
Agreement must be in writing. No such waiver constitutes a waiver of any other
default or provision concerning the same or any other provision of this Pledge
Agreement. No delay or omission by a party in the exercise of any of its rights
or remedies constitutes a waiver of (or otherwise impairs) such right or remedy.
A consent to or approval of an act does not waive or render unnecessary the
consent to or approval of any other or subsequent act.
[CONTINUED ON FOLLOWING PAGE]
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19. THIRD-PARTY BENEFICIARIES. Nothing in this Pledge Agreement is
intended to confer any rights or remedies on any person or entity other than the
Pledgeholder and parties to this Pledge Agreement and their respective
successors in interest and permitted assignees, unless such rights are expressly
granted in this Pledge Agreement to another person specifically identified as a
"Third-Party Beneficiary."
SVI SOLUTIONS, INC.,
a Delaware corporation
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxxx, Chief Executive Officer
/s/ Xxxxxx X. Klitostsky
--------------------------------------------
Xxxxxx X. Klitostsky
THE UNDERSIGNED ACCEPTS THE OBLIGATIONS IMPOSED UPON IT AS PLEDGEHOLDER UNDER
THIS PLEDGE AGREEMENT:
XXXXXXX XXXX SEIDENWURM & XXXXX, LLP
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx, Esq.
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