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Exhibit 10.18
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of the 18th day of August, 1997 (the
"Agreement") by and among Lasertechnics, Inc., a Delaware corporation (the
"Pledgor"), Xxxxxxxxxx Partners L.P., a Delaware limited partnership (the
"Partnership"), X.X. Xxxxxx Investment Corporation, a Delaware corporation
("JPMIC"), and JPMIC as agent for the Partnership and JPMIC.
WHEREAS, in order to induce the Partnership and JPMIC to, among other
things, make the loans contemplated by that certain Note Purchase Agreement,
dated as of June 25, 1997 (the "Note Purchase Agreement"), by and among the
Pledgor, the Partnership and JMIC, Pledgor has agreed to grant a pledge and
security interest to Agent (as such term is hereinafter defined) for the
ratable benefit of the Partnership and JPMIC (collectively, the "Lenders") in
the shares of Lasertechnics Marking Corporation, a Delaware corporation and
wholly-owned subsidiary of Pledgor ("Marking"), now owned and hereafter
acquired by Pledgor (the "Shares") on the terms and conditions contained
herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, the parties hereto agree as follows:
1. Creation of Security Interest. (a) As collateral security for
the payment in full of all of the Secured Obligations (as such term is
hereinafter defined), the Pledgor hereby pledges, hypothecates, assigns,
transfers, sets over and delivers unto the Agent, and hereby grants to the
Agent for the ratable benefit of the Partnership and JPMIC a first lien and
security interest in, all of the Shares, the proceeds thereof, and all cash,
securities or other property at any time and from time to time receivable or
otherwise distributed in respect of or in exchange for any of the Shares (all
the Shares, proceeds thereof, cash, securities and other property being
hereinafter collectively referred to as the "Collateral"). Concurrently with
the execution of this Agreement, the Pledgor is delivering to the Agent (i) the
stock certificates listed on Schedule A hereto (the "Delivered Stock"), and
(ii) duly endorsed irrevocable stock powers in blank for the Delivered Stock.
(b) This Agreement secures, and the Collateral is
collateral security for, the prompt payment and performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including the payment of amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362 (a)), of all obligations and liabilities of every
nature of Pledgor now or hereafter existing under or arising out of or in
connection with the Note Purchase Agreement and the Senior Promissory Notes
issued thereunder (the "Senior Promissory Notes"), and all extensions or
renewals thereof, whether for principal, interest (including interest that, but
for the filing of a petition in bankruptcy with respect to Pledgor, would
accrue on such obligations), fees, expenses, indemnities or otherwise, whether
voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and
whether or not
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from time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Agent or either Lender as a preference, fraudulent
transfer or otherwise, and all obligations of every nature of Pledgor now or
hereafter existing under this Agreement (all such obligations of Pledgor being
the "Secured Obligations").
2. Stock Dividends and Adjustments; Voting Rights.
(a) In the event that during the term of this Agreement
any stock dividend, reclassification, stock split, readjustment, warrant,
option or right to acquire additional securities is issued with respect to the
Collateral or any party thereof, or any other changes are made in the capital
structure of Marking, the Pledgor shall deliver promptly to the Agent all the
new, substituted or additional shares or securities (collectively, the
"Additional Securities") it has received together with appropriate instruments
of transfer duly endorsed in blank. From and after the time the Pledgor has
received any Additional Securities they shall be deemed to be part of the
Collateral pledged hereunder.
(b) So long as a Default, as defined below, shall not
have occurred and be continuing, the Pledgor shall be the sole owner of the
securities that are part of the Collateral and shall have and be entitled to
exercise all rights which a holder of such securities would be entitled to
exercise, including the right (i) to vote all securities that are part of the
Collateral and (ii) to dispose of the securities that are part of the
Collateral in a transaction which results in the discharge of Pledgor's
obligations under the Senior Promissory Notes. Upon the occurrence and during
the continuance of a Default, the Agent shall have exclusive voting rights for
such securities.
3. Representations, Warranties and Covenants. The Pledgor hereby
represents, warrants and covenants that:
(i) the Pledgor is the sole legal and beneficial
owner of the Collateral, free and clear of any adverse claims, and the Pledgor
has the unrestricted right to transfer, pledge and deliver the Collateral to
the Company hereunder;
(ii) the Delivered Stock constitutes all of the
issued and outstanding capital stock of Marking as of the date hereof (in this
regard Pledgor represents and the other parties hereto acknowledge that options
to purchase 482,500 shares of the Common Stock, par value $.01 per share
("Common Stock"), have been issued to directors and employees of Marking
pursuant to the 1995 Stock Option Plan of Marking (the "Plan") and 17,500
additional shares of Common Stock may be issued pursuant to the Plan);
(iii) the Pledgor will preserve and defend all
right, title and interest of the Agent in and to the Collateral against all
claims made by third parties thereon; and
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(iv) the pledge of the Delivered Stock made hereby
and the delivery of the Delivered Stock in accordance herewith are effective to
vest in the Agent a valid and perfected first priority security interest in the
Delivered Stock as set forth herein.
4. Default, Remedies. (a) A "Default" shall occur hereunder if:
(i) the Pledgor shall fail to pay the principal
of, or interest on, any Senior Promissory Note on the date when due, whether at
maturity, by acceleration or otherwise; or
(ii) an Insolvency Event (such as term is
hereinafter defined) occurs with respect to the Pledgor or Marking; or
(iii) this Agreement shall for any reason
whatsoever cease to be a valid, binding and enforceable agreement against
Pledgor; or
(iv) the Pledgor sells, assigns, transfers or
otherwise disposes of, or grants a lien on or security interest in or option or
right with respect to, or otherwise encumbers the Collateral or any part
thereof or any interest therein, provided that either of the following shall
not be deemed to be a Default: (A) any issuance of Common Stock upon the
exercise of options granted pursuant to the Plan or (B) a disposition of
securities that are part of the Collateral contemplated by Section 2(b); or
(v) any of the Collateral shall be attached or
levied upon or seized in any legal proceedings, or held by virtue of any levy
or distraint, which attachment, levy or distraint shall not be vacated within
60 days; or
(vi) the Pledgor otherwise defaults in the
observance or performance of any material representation or other material
covenant or agreement contained herein, the Senior Promissory Notes or in the
Note Purchase Agreement, and such default continues for a period of 20 days
after notice thereof.
(b) Upon the occurrence and during the continuance of a
default hereunder, the Agent shall have the right, at the request of the
Required Lenders (as such term is hereinafter defined), in addition to any
other rights granted under the Note Purchase Agreement or the Senior Promissory
Notes, to pursue all of the rights and remedies with respect to the Collateral
of a secured party under the Uniform Commercial Code as adopted and amended in
the State of New York as in effect from time to time or any other applicable
law, all of which rights and remedies, to the full extent permitted by law,
shall be cumulative and not alternative. In addition, from and after the
occurrence of a Default, each Lender may independently exercise any rights or
remedies in respect of the Senior Promissory Notes not provided for herein, and
the Agent acknowledges the authority of the Lenders to exercise such rights and
remedies.
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(c) The Pledgor agrees that ten business days shall
constitute reasonable notice of a sale or other disposition of the Collateral.
The proceeds from any such sale or other disposition, after deducting therefrom
all expenses incurred in connection therewith (including reasonable legal fees
and expenses) and after payment in full of the Secured Obligations, shall be
paid over to the Pledgor. The Agent agrees that a private sale of the
Collateral shall be held on commercially reasonable terms; provided, however,
that the Agent is authorized in its absolute discretion to restrict the
prospective purchasers to such persons who represent and agree to the
satisfaction of the Agent and its counsel that such person is purchasing the
Collateral for his own account, for investment, and not with a view to or for
sale in connection with a distribution in violation of the Securities Act of
1933 or any other applicable law or regulation.
(d) As used in this Agreement, an "Insolvency Event" with
respect to any Person (as such term is hereinafter defined) shall mean, the
making by such Person of a general assignment made by such Person for the
benefit of creditors; or an order, judgment or decree is entered adjudicating
such Person bankrupt or insolvent; or any order for relief with respect to such
Person is entered under the Bankruptcy Code; or such Person petitions or
applies to any tribunal for the appointment of a custodian, trustee, receiver
or liquidator of such Person or of any substantial part of the assets of such
Person, or commences any proceeding relating to such Person under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction; or any such petition or
application is filed, or any such proceeding is commenced, against such person
and either (A) such Person by any act indicated is approval thereof, consent
thereto or acquiescence therein or (B) such petition, application or proceeding
is not dismissed within 30 days.
(e) As used in this Agreement, the term "Person" shall
mean and include an individual, a partnership, a limited liability company, a
joint venture, a corporation, a trust, an unincorporated organization and a
governmental entity or any department or agency thereof.
5. Waiver of Rights or Remedies. (a) The Agent, by act,
delay, omission, acceptance of partial payment or otherwise, shall not be
deemed to have waived any rights or remedies hereunder, unless such waiver is
in writing and signed by the Agent, and then only to the extent therein set
forth. A waiver by the Agent of any right or remedy on any one occasion, shall
not be construed as a bar to or waiver of any such right or remedy, or both,
which the Agent otherwise would have had on any future occasion.
(b) To the full extent that the Pledgor may lawfully so
agree, the Pledgor shall not at any time plead, claim or take the benefit of
any moratorium or redemption law now or hereafter enforced, in order to prevent
or delay the enforcement of this Agreement or the application of any portion or
all of the Collateral as provided by this Agreement, and the Pledgor, for
itself and all who may claim under the Pledgor, to the extent legally
permitted, hereby waive the benefit of all such laws. Nothing herein
constitutes a waiver of the Pledgor's rights arising under the provisions of
the Uniform Commercial Code as in effect in the State of New York from time to
time.
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6. Further Assurances. The Pledgor agrees that it shall at
the request of the Agent execute and deliver all such further assignments,
endorsements and other documents and take all such further action as the Agent
may reasonably request in order to effect the purposes and provisions of this
Agreement and to perfect, continue, better assure or confirm the rights of the
Agent in the Collateral provided for hereunder.
7. Termination. The security interest and assignment created and
granted hereunder shall terminate only when the Pledgor has fully satisfied all
of the obligations under the Senior Promissory Notes and no Default, or event
which with notice or lapse of time or both would constitute a Default, has
occurred and is continuing, and upon such termination all Collateral in the
possession of the Agent shall be returned to the Pledgor, accompanied by
appropriate stock powers, without recourse to the Agent.
8. Notices. Notices or other communications to any of the
parties hereto shall be in writing and shall be given, in the case of the
Pledgor and the Lenders, as provided in the Note Purchase Agreement and, in the
case of the Agent, to X.X. Xxxxxx Investment Corporation, 00 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention: Mr. Xxxxxx Xxxx and Xx. Xxxxx X. Marriott.
Pledgor agrees that any notices or other communications sent by it to either
Lender shall also be sent to the Agent.
9. Appointment of Agent.
(a) By the execution and delivery of this Agreement, each
of the Lenders appoints, and by its execution hereof the Pledgor hereby
acknowledges, JPMIC, as collateral agent for itself and the Partnership under
this Agreement and for the purposes herein stated and any and all incidental
and related rights, powers, remedies, actions, steps and matters (in such
capacity herein referred to as the "Agent," which term shall include successors
and assigns), to take any and every action allowed pursuant to this Agreement,
and to protect all rights of each Lender as herein provided or as otherwise
agreed, from time to time, by those Lenders holding at least 90% of the
aggregate total of the Secured Obligations owed to all Lenders (the "Required
Lenders"); provided, however, if a Default shall have occurred, either Lender,
acting individually, may instruct the Agent to the same extent as the Required
Lenders, but without approval of, or consent by, the Pledgor or any other
Person, including with respect to all rights as provided in the Uniform
Commercial Code of the State of New York as now in effect or hereafter amended
or any other applicable law, as now in effect or hereafter amended to increase
said rights of the Agent or the Lenders; provided, however, that with respect
to any determination to be made at such time as only one Lender shall hold any
Secured Obligations, the Agent shall act solely at the request of such Lender.
It is acknowledged and agreed that the relationship of the Agent and Lenders
shall be that of principals and agent and not, in any event, that of partners
or joint venturers. Neither this Agreement nor any document executed in
connection herewith shall be deemed to create or establish a partnership or
joint venture among any of the parties hereto or thereto. Agent shall not
have, by reason of this Agreement or otherwise, a fiduciary relationship in
respect of any Lender.
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(b) The security interest granted to the respective
Lenders shall each be of equal priority and any and all amounts realized as a
result of any disposition or collection of Collateral shall be shared on a pro
rata basis based upon the ratio of the amount of Secured Obligations owed to
each respective Lender to the aggregate total of the Secured Obligations owed
to all Lenders, such ratio to be calculated on the basis of the Secured
Obligations outstanding on the date of determination (such ratio is hereinafter
referred to as such Lender's "Pro Rata Share").
(c) Neither the Agent nor any of its officers, directors,
employees or agents shall be liable to Lenders for any action taken or omitted
by Agent under or in connection with this Agreement except to the extent caused
by Agent's gross negligence or willful misconduct. The Agent shall be entitled
to refrain from any act or the taking of any action (including the failure to
take an action) in connection with this Agreement or from the exercise of any
power, discretion or authority vested in it hereunder unless and until Agent
shall have received instructions in respect thereof from the Required Lenders
and, upon receipt of such instructions from the Required Lenders, Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Pledgor and its subsidiaries or for any
Lender), accountants, experts and other professional advisors selected by it;
and (ii) no Lender shall have any right of action whatsoever against Agent as a
result of Agent acting or (where so instructed) refraining from acting under
this Agreement or any of the other Loan Documents in accordance with the
instructions of Required Lenders.
(d) Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify Agent, to the extent that Agent shall not have
been reimbursed by Pledgor, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against Agent in exercising its powers, rights and remedies or performing its
duties hereunder or otherwise in its capacity as Agent in any way relating to
or arising out of this Agreement; provided that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Agent's gross negligence or willful misconduct. If any indemnity furnished to
Agent for any purposes shall, in the opinion of Agent, be insufficient or
become impaired, Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
(e) Agent may resign at any time by giving 30 days' prior
written notice thereof to Lenders and Pledgor, and Agent may be removed at any
time with or without cause by an instrument or concurrent instruments in
writing delivered to Pledgor and Agent and signed by the Required Lenders.
Upon any such notice of resignation or any such removal, the Required Lenders
shall have the right, upon five business days' notice to Pledgor, to appoint a
successor Agent. Upon
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the acceptance of any appointment as Agent hereunder by a successor Agent, that
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Agent and the
retiring or removed Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring or removed Agent's resignation or
removal hereunder as Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. Notwithstanding anything in this Agreement to the
contrary, JPMIC may resign as Agent hereunder at any time and substitute the
Partnership as the successor Agent, and upon notice of such substitution, the
Partnership shall become the Agent hereunder.
10. Miscellaneous.
(a) This Agreement shall be governed by the laws of the
State of New York without regard to the principles of conflicts of law thereof.
In the event that any term or provision of this Agreement shall, for any
reason, be held to be illegal, invalid or unenforceable under the laws of any
governmental authority to which this Agreement is subject, that term or
provision shall be deemed severed from this Agreement, and the remaining terms
and provisions shall be enforceable, to the fullest extent permitted by law.
(b) This Agreement shall inure to the benefit of and
shall be binding upon the respective successors, assigns and legal
representatives of the parties and any holder of Senior Promissory Notes,
except that the Pledgor shall not be permitted to assign this Agreement or any
interest herein or in the Collateral, or any part thereof, or otherwise pledge,
encumber or grant any option with respect to the Collateral, or any part
thereof, or any cash or property held by the Agent as Collateral under this
Agreement. The Agent may assign this Agreement, any interest herein or in the
Collateral or any part thereof, to an affiliated entity of the Agent.
(c) Captions used herein are inserted for reference only
and shall not affect the interpretation or meaning of this Agreement.
(d) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
(e) This Agreement may not be changed, modified or
amended except by a written instrument signed by the party to be charged
therewith; provided, however, that Section 9 hereof may be changed, modified or
amended by a written instrument signed by the Lenders, a copy of which shall be
provided to the Pledgor.
(f) All judicial proceedings brought against Pledgor
arising out of or relating to this Agreement, or any obligations hereunder, may
be brought in any state or federal court of competent jurisdiction in the
state, county and city of New York. By executing and delivering this
Agreement, Pledgor, for itself and in connection with its properties,
irrevocably
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(i) accepts generally and unconditionally the
nonexclusive jurisdiction and venue of such courts;
(ii) waives any defense of forum non conveniens;
(iii) agrees that service of all process in any
such proceeding in any such court may be made by registered or certified mail,
return receipt requested, to Pledgor at its address provided in the Note
Purchase Agreement;
(iv) agrees that service as provided in clause
(iii) above is sufficient to confer personal jurisdiction over Pledgor in any
such proceeding in any such court, and otherwise constitutes effective and
binding service in every respect;
(v) agrees that the Agent and the Lenders retain
the right to serve process in any other manner permitted by law or to bring
proceedings against Pledgor in the courts of any other jurisdiction; and
(vi) agrees that the provisions of this Section 10
(f) relating to jurisdiction and venue shall be binding and enforceable to the
fullest extend permissible under New York General Obligations Law Section
5-1402 or otherwise.
IN WITNESS WHEREOF, the Pledgor has executed this Agreement on
the date first above written.
PLEDGOR
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LASERTECHNICS, INC.
/s/
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Name:
Title:
AGREED TO AND ACCEPTED:
XXXXXXXXXX PARTNERS L.P.,
By: /s/
----------------------------------------
its general partner
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By: /s/
---------------------------------
Name:
Title:
X.X. XXXXXX INVESTMENT CORPORATION
(Individually and as Agent)
By: /s/
---------------------------------
Name:
Title:
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