PLEDGE AGREEMENT
This PLEDGE AGREEMENT, dated as of August 28, 2006 (together with all
amendments, if any, from time to time hereto, this "Agreement") between CHARYS
HOLDING COMPANY, INC., a Delaware corporation (the "Pledgor") and NEW STREAM
COMMERCIAL FINANCE, LLC, a Delaware limited liability company ("Lender").
W I T N E S S E T H:
WHEREAS, as of the date hereof, AYIN HOLDING COMPANY, a wholly owned
subsidiary of Pledgor, is indebted to CROCHET & BOREL SERVICES, INC.
("Borrower"), in the principal amount of $6,350,000 (the "Ayin Loan"), which
Ayin Loan is evidenced by that certain Promissory Note dated July 7, 2006 in the
original principal amount of $6,350,000 executed and delivered by Ayin Holding
Company in favor of Borrower (the "Ayin Note");
WHEREAS, pursuant to that certain Loan and Security Agreement dated as of
August 28, 2006 by and between Borrower and Lender (including all annexes,
exhibits and schedules thereto, and as from time to time amended, restated,
supplemented or otherwise modified (the "Loan Agreement") the Lender has agreed
to make Loans to Borrower;
WHEREAS, as security for the Borrower's Obligations under the Loan
Agreement, Borrower has pledged, among other assets, all of its rights, title
and interest in and to the Ayin Note to Lender;
WHEREAS, Pledgor is the record and beneficial owner of the shares of Stock
listed in Schedule I hereto;
WHEREAS, Pledgor owns all of the issued and outstanding capital stock of
Borrower and benefits from the credit facilities made available to Borrower
under the Loan Agreement;
WHEREAS, in order to induce Lender to continue to make Loans as provided
for in the Loan Agreement, Pledgor has agreed to pledge the Pledged Collateral
to Lender in accordance herewith;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained and to induce Lender to make Loans under the Loan
Agreement, it is agreed as follows:
1. DEFINITIONS. Unless otherwise defined herein, terms defined in the Loan
Agreement are used herein as therein defined, and the following shall have
(unless otherwise provided elsewhere in this Agreement) the following respective
meanings (such meanings being equally applicable to both the singular and plural
form of the terms defined):
"Bankruptcy Code" means title 11, United States Code, as amended from time
to time, and any successor statute thereto.
"Event of Default" means:
(a) Ayin shall fail to make any payment in respect of the Ayin Note
when due and payable or declared due and payable (and such failure shall
continue for a period of five (5) Business Days with respect to interest and
fees); or
(b) a case or proceeding shall have been commenced involuntarily
against Borrower, Pledgor or Ayin in a court having competent jurisdiction
seeking a decree or order: (i) under the United States Bankruptcy Code or any
other applicable Federal, state or foreign bankruptcy or other similar law, and
seeking either (A) the appointment of a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for such Person or of
any substantial part of its properties, (B) or the reorganization or winding up
or liquidation of the affairs of any such Person, and such case or proceeding
shall remain undismissed or unstayed for sixty (60) consecutive days or such
court shall enter a decree or order granting the relief sought in such case or
proceeding; or (ii) invalidating or denying any Person's right, power, or
competence to enter into or perform any of its obligations hereunder or
invalidating or denying the validity or enforceability of this Agreement or any
action taken hereunder or thereunder; or
(c) Borrower, Pledgor or Ayin shall (i) commence any case, proceeding
or other action under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship
or relief of debtors, seeking to have an order for relief entered with respect
to it or seeking appointment of a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for it or any substantial part of
its properties, (ii) make a general assignment for the benefit of creditors,
(iii) consent to or take any action in furtherance of, or, indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
paragraphs (b) or (c) of this definition or clauses (i) and (ii) of this
paragraph (c), or (iv) shall admit in writing its inability to, or shall be
generally unable to, pay its debts as such debts become due.
"Pledged Collateral" has the meaning assigned to such term in Section 2
hereof.
"Pledged Entity" means an issuer of Pledged Shares.
"Pledged Shares" means those shares listed on Schedule I hereto.
"Secured Obligations" has the meaning assigned to such term in Section 3
hereof.
2. PLEDGE. Pledgor hereby pledges to Lender, and grants to Lender a first
priority security interest in all of the following (collectively, the "Pledged
Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all dividends, distributions, cash, instruments and other property
or proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares; and
(b) such portion, as determined by Lender as provided in Section 6(d)
below, of any additional shares of stock of a Pledged Entity from time to time
acquired by Pledgor in any manner (which shares shall be deemed to be part of
the Pledged Shares), and the certificates representing such additional shares,
and all dividends, distributions, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange
for any or all of such Stock.
3. SECURITY FOR OBLIGATIONS. This Agreement secures, and the Pledged
Collateral is security for, the prompt payment in full when due, whether at
stated maturity, by acceleration or otherwise, and performance of all
obligations of any kind under or in connection with the Ayin Note and all
obligations of Pledgor now or hereafter existing thereunder, including, without
limitation, all fees, costs and expenses whether in connection with collection
actions hereunder or otherwise (collectively, the "Secured Obligations").
4. DELIVERY OF PLEDGED COLLATERAL. All certificates and all promissory
notes and instruments evidencing the Pledged Collateral shall be delivered to
and held by or on behalf of Lender pursuant hereto. All Pledged Shares shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to Lender.
5. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants to
Lender that:
(a) Pledgor is, and at the time of delivery of the Pledged Shares to
Lender will be, the sole holder of record and the sole beneficial owner of such
Pledged Collateral pledged by Pledgor free and clear of any Lien thereon or
affecting the title thereto, except for any Lien created by this Agreement;
(b) All of the Pledged Shares have been duly authorized, validly issued
and are fully paid and non-assessable;
(c) Pledgor has the right and requisite authority to pledge, assign,
transfer, deliver, deposit and set over the Pledged Collateral pledged by
Pledgor to Lender as provided herein;
(d) The Pledged Shares have not been issued or transferred in violation
of the securities registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be subject;
(e) All of the Pledged Shares are presently owned by Pledgor, and are
presently represented by the certificates listed on Part A of Schedule I hereto.
As of the date hereof, there are no existing options, warrants, calls or
commitments of any character whatsoever relating to the Pledged Shares;
(f) No consent, approval, authorization or other order or other action
by, and no notice to or filing with, any Governmental Authority or any other
Person is required (i) for the pledge by Pledgor of the Pledged Collateral
pursuant to this Agreement or for the execution, delivery or performance of this
Agreement by Pledgor, or (ii) for the exercise by Lender of the voting or other
rights provided for in this Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement, except as may be required in connection
with such disposition by laws affecting the offering and sale of securities
generally;
(g) The pledge, assignment and delivery of the Pledged Collateral
pursuant to this Agreement will create a valid first priority Lien on and a
first priority perfected security interest in favor of the Lender in the Pledged
Collateral and the proceeds thereof, securing the payment of the
Secured Obligations, subject to no other Lien;
(h) This Agreement has been duly authorized, executed and delivered by
Pledgor and constitutes a legal, valid and binding obligation of Pledgor
enforceable against Pledgor in accordance with its terms; and
(i) The Pledged Shares constitute 100% of the issued and outstanding
shares of Stock of each Pledged Entity.
The representations and warranties set forth in this Section 5 shall
survive the execution and delivery of this Agreement.
6. COVENANTS. PLEDGOR COVENANTS and agrees that until the Termination Date:
(a) Without the prior written consent of Lender, Pledgor will not sell,
assign, transfer, pledge, or otherwise encumber any of its rights in or to the
Pledged Collateral, or any unpaid dividends, interest or other distributions or
payments with respect to the Pledged Collateral or ▇▇▇▇▇ ▇ ▇▇▇▇ in the Pledged
Collateral, unless otherwise expressly permitted by the Loan Agreement;
(b) Pledgor will, at its expense, promptly execute, acknowledge and
deliver all such instruments and take all such actions as Lender from time to
time may request in order to ensure to Lender the benefits of the Liens in and
to the Pledged Collateral intended to be created by this Agreement, including
the filing of any necessary Code financing statements, which may be filed by
Lender with or (to the extent permitted by law) without the signature of
Pledgor, and will cooperate with Lender, at Pledgor's expense, in obtaining all
necessary approvals and making all necessary filings under federal, state, local
or foreign law in connection with such Liens or any sale or transfer of the
Pledged Collateral;
(c) Pledgor has and will defend the title to the Pledged Collateral and
the Liens of Lender in the Pledged Collateral against the claim of any Person
and will maintain and preserve such Liens; and
(d) Pledgor will, upon obtaining ownership of any additional Stock or
promissory notes or instruments of a Pledged Entity or Stock or promissory notes
or instruments otherwise required to be pledged to Lender pursuant to any of the
Loan Documents, which Stock, notes or instruments are not already Pledged
Collateral, promptly (and in any event within three (3) Business Days) deliver
to Lender a Pledge Amendment, duly executed by Pledgor, in substantially the
form of Schedule II hereto (a "Pledge Amendment") in respect of any such
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additional Stock, notes or instruments, pursuant to which Pledgor shall pledge
to Lender all of such additional Stock, notes and instruments. Pledgor hereby
authorizes Lender to attach each Pledge Amendment to this Agreement and agrees
that all Pledged Shares listed on any Pledge Amendment delivered to Lender shall
for all purposes hereunder be considered Pledged Collateral.
7. PLEDGOR'S RIGHTS. As long as no Event of Default shall have occurred and
be continuing and until written notice shall be given to Pledgor in accordance
with Section 8(a) hereof:
(a) Pledgor shall have the right, from time to time, to vote and give
consents with respect
to the Pledged Collateral, or any part thereof for all purposes not inconsistent
with the provisions of this Agreement, the Loan Agreement or any other Loan
Document; provided, however, that no vote shall be cast, and no consent shall be
given or action taken, which would have the effect of impairing the position or
interest of Lender in respect of the Pledged Collateral or which would
authorize, effect or consent to (unless and to the extent expressly permitted by
the Loan Agreement):
(i) the dissolution or liquidation, in whole or in part, of a
Pledged Entity;
(ii) the consolidation or merger of a Pledged Entity with any
other Person;
(iii) the sale, disposition or encumbrance of all or substantially
all of the assets of a Pledged Entity, except for Liens in favor of Lender;
(iv) any change in the authorized number of shares, the stated
capital or the authorized share capital of a Pledged Entity or the issuance of
any additional shares of its Stock; or
(v) the alteration of the voting rights with respect to the Stock
of a Pledged Entity; and
(b) except as expressly permitted under the Loan Agreement, all
dividends, payments and interest and all other distributions in respect of any
of the Pledged Shares, whenever paid or made, shall be delivered to Lender to
hold as Pledged Collateral and shall, if received by Pledgor, be received in
trust for the benefit of Lender, be segregated from the other property or funds
of Pledgor, and be forthwith delivered to Lender as Pledged Collateral in the
same form as so received (with any necessary endorsement).
8. DEFAULTS AND REMEDIES; PROXY.
(a) Upon the occurrence of an Event of Default and during the
continuation of such Event of Default, and concurrently with written notice to
Pledgor, Lender (personally or through an agent) is hereby authorized and
empowered to transfer and register in its name or in the name of its nominee the
whole or any part of the Pledged Collateral, to exchange certificates or
instruments representing or evidencing Pledged Collateral for certificates or
instruments of smaller or larger denominations, to exercise the voting and all
other rights as a holder with respect thereto, to collect and receive all cash
dividends, interest, principal and other distributions made thereon, to sell in
one or more sales after ten (10) days' notice of the time and place of any
public sale or of the time at which a private sale is to take place (which
notice Pledgor agrees is commercially reasonable) the whole or any part of the
Pledged Collateral and to otherwise act with respect to the Pledged Collateral
as though Lender was the outright owner thereof. Any sale shall be made at a
public or private sale at Lender's place of business, or at any place to be
named in the notice of sale, either for cash or upon credit or for future
delivery at such price as Lender may deem fair, and Lender may be the purchaser
of the whole or any part of the Pledged Collateral so sold and hold the same
thereafter in its own right free from any claim of Pledgor or any right of
redemption. Each sale shall be made to the highest bidder, but Lender reserves
the right to reject any and all bids at such sale which, in its discretion, it
shall deem inadequate. Demands of performance, except as otherwise herein
specifically provided for, notices of sale, advertisements and the presence of
property at sale are hereby waived and any sale hereunder
may be conducted by an auctioneer or any officer or agent of Lender. PLEDGOR
HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS LENDER AS THE PROXY AND ATTORNEY IN
FACT OF PLEDGOR WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO
VOTE THE PLEDGED SHARES, WITH FULL POWER OF SUBSTITUTION TO DO SO. THE
APPOINTMENT OF LENDER AS PROXY AND ATTORNEY IN FACT IS COUPLED WITH AN INTEREST
AND SHALL BE IRREVOCABLE UNTIL THE TERMINATION DATE. IN ADDITION TO THE RIGHT
TO VOTE THE PLEDGED SHARES, THE APPOINTMENT OF LENDER AS PROXY AND ATTORNEY IN
FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES
AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED SHARES WOULD BE ENTITLED
(INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING
SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL
BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING
ANY TRANSFER OF ANY PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY
ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED SHARES OR ANY OFFICER OR AGENT
THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT. NOTWITHSTANDING THE
FOREGOING, LENDER SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO
PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY
DELAY IN DOING SO.
(b) If, at the original time or times appointed for the sale of the
whole or any part of the Pledged Collateral, the highest bid, if there be but
one sale, shall be inadequate to discharge in full all the Secured Obligations,
or if the Pledged Collateral be offered for sale in lots, if at any of such
sales, the highest bid for the lot offered for sale would indicate to Lender, in
its discretion, that the proceeds of the sales of the whole of the Pledged
Collateral would be unlikely to be sufficient to discharge all the Secured
Obligations, Lender may, on one or more occasions and in its discretion,
postpone any of said sales by public announcement at the time of sale or the
time of previous postponement of sale, and no other notice of such postponement
or postponements of sale need be given, any other notice being hereby waived;
provided, however, that any sale or sales made after such postponement shall be
after ten (10) days' notice to Pledgor.
(c) If, at any time when Lender in its sole discretion determines,
following the occurrence and during the continuance of an Event of Default,
that, in connection with any actual or contemplated exercise of its rights (when
permitted under this Section 8) to sell the whole or any part of the Pledged
Shares hereunder, it is necessary or advisable to effect a public registration
of all or part of the Pledged Collateral pursuant to the Securities Act of 1933,
as amended (or any similar statute then in effect) (the "Act"), Pledgor shall,
in an expeditious manner, cause the Pledged Entities to:
(i) Prepare and file with the Securities and Exchange Commission
(the "Commission") a registration statement with respect to the Pledged Shares
and in good faith use commercially reasonable efforts to cause such registration
statement to become and remain effective;
(ii) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to
keep such registration statement effective and to comply with the provisions of
the Act with respect to the sale or other disposition of the Pledged Shares
covered by such registration statement whenever Lender shall desire to sell or
otherwise dispose of the Pledged Shares;
(iii) Furnish to Lender such numbers of copies of a prospectus and
a preliminary prospectus, in conformity with the requirements of the Act, and
such other documents as Lender may request in order to facilitate the public
sale or other disposition of the Pledged Shares by Lender;
(iv) Use commercially reasonable efforts to register or qualify
the Pledged Shares covered by such registration statement under such other
securities or blue sky laws of such jurisdictions within the United States and
Puerto Rico as Lender shall request, and do such other reasonable acts and
things as may be required of it to enable Lender to consummate the public sale
or other disposition in such jurisdictions of the Pledged Shares by Lender;
(v) Furnish, at the request of Lender, on the date that shares of
the Pledged Collateral are delivered to the underwriters for sale pursuant to
such registration or, if the security is not being sold through underwriters, on
the date that the registration statement with respect to such Pledged Shares
becomes effective, (A) an opinion, dated such date, of the independent counsel
representing such registrant for the purposes of such registration, addressed to
the underwriters, if any, and in the event the Pledged Shares are not being sold
through underwriters, then to Lender, in customary form and covering matters of
the type customarily covered in such legal opinions; and a comfort letter, dated
such date, from the independent certified public accountants of such registrant,
addressed to the underwriters, if any, and in the event the Pledged Shares are
not being sold through underwriters, then to Lender, in a customary form and
covering matters of the type customarily covered by such comfort letters and as
the underwriters or Lender shall reasonably request. The opinion of counsel
referred to above shall additionally cover such other legal matters with respect
to the registration in respect of which such opinion is being given as Lender
may reasonably request. The letter referred to above from the independent
certified public accountants shall additionally cover such other financial
matters (including information as to the period ending not more than five (5)
Business Days prior to the date of such letter) with respect to the registration
in respect of which such letter is being given as Lender may reasonably request;
and
(vi) Otherwise use commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable but not later than 18
months after the effective date of the registration statement, an earnings
statement covering the period of at least 12 months beginning with the first
full month after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the Act.
(d) All expenses incurred in complying with Section 8(c) hereof,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the National Association of Securities Dealers,
Inc.), printing expenses, fees and disbursements of counsel for the registrant,
the fees and expenses of counsel for Lender, expenses of the independent
certified public accountants (including any special audits incident to or
required by any such registration) and expenses of complying with the securities
or blue sky laws or any jurisdictions, shall be paid by Pledgor.
(e) If, at any time when Lender shall determine to exercise its right
to sell the whole or any part of the Pledged Collateral hereunder, such Pledged
Collateral or the part thereof to be sold shall not, for any reason whatsoever,
be effectively registered under the Securities Act of 1933, as amended (or any
similar statute then in effect) (the "Act")/the Act, Lender may, in its
discretion (subject only to applicable requirements of law), sell such Pledged
Collateral or part thereof by private sale in such manner and under such
circumstances as Lender may deem necessary or advisable, but subject to the
other requirements of this Section 8, and shall not be required to effect such
registration or to cause the same to be effected. Without limiting the
generality of the foregoing, in any such event, Lender in its discretion (i)
may, in accordance with applicable securities laws, proceed to make such private
sale notwithstanding that a registration statement for the purpose of
registering such Pledged Collateral or part thereof could be or shall have been
filed under said Act (or similar statute), (ii) may approach and negotiate with
a single possible purchaser to effect such sale, and (iii) may restrict such
sale to a purchaser who is an accredited investor under the Act and who will
represent and agree that such purchaser is purchasing for its own account, for
investment and not with a view to the distribution or sale of such Pledged
Collateral or any part thereof. In addition to a private sale as provided above
in this Section 8, if any of the Pledged Collateral shall not be freely
distributable to the public without registration under the Act (or similar
statute) at the time of any proposed sale pursuant to this Section 8, then
Lender shall not be required to effect such registration or cause the same to be
effected but, in its discretion (subject only to applicable requirements of
law), may require that any sale hereunder (including a sale at auction) be
conducted subject to restrictions:
(A) as to the financial sophistication and ability of any
Person permitted to bid or purchase at any such sale;
(B) as to the content of legends to be placed upon any
certificates representing the Pledged Collateral sold in such sale, including
restrictions on future transfer thereof;
(C) as to the representations required to be made by each
Person bidding or purchasing at such sale relating to that Person's access to
financial information about Pledgor and such Person's intentions as to the
holding of the Pledged Collateral so sold for investment for its own account and
not with a view to the distribution thereof; and
(D) as to such other matters as Lender may, in its
discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement of creditors'
rights and the Act and all applicable state securities laws.
(f) Pledgor recognizes that Lender may be unable to effect a public
sale of any or all the Pledged Collateral and may be compelled to resort to one
or more private sales thereof in accordance with clause (e) above. Pledgor also
acknowledges that any such private sale may result in prices and other terms
less favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall not
be deemed to have been made in a commercially unreasonable manner solely by
virtue of such sale being private. Lender shall be under no obligation to delay
a sale of any of the Pledged Collateral for the period of time necessary to
permit the Pledged Entity to register such securities for public sale under the
Act, or under applicable
state securities laws, even if Pledgor and the Pledged Entity would agree to do
so.
(g) Pledgor agrees to the maximum extent permitted by applicable law
that following the occurrence and during the continuance of an Event of Default
it will not at any time plead, claim or take the benefit of any appraisal,
valuation, stay, extension, moratorium or redemption law now or hereafter in
force in order to prevent or delay the enforcement of this Agreement, or the
absolute sale of the whole or any part of the Pledged Collateral or the
possession thereof by any purchaser at any sale hereunder, and Pledgor waives
the benefit of all such laws to the extent it lawfully may do so. Pledgor
agrees that it will not interfere with any right, power and remedy of Lender
provided for in this Agreement or now or hereafter existing at law or in equity
or by statute or otherwise, or the exercise or beginning of the exercise by
Lender of any one or more of such rights, powers or remedies. No failure or
delay on the part of Lender to exercise any such right, power or remedy and no
notice or demand which may be given to or made upon Pledgor by Lender with
respect to any such remedies shall operate as a waiver thereof, or limit or
impair Lender's right to take any action or to exercise any power or remedy
hereunder, without notice or demand, or prejudice its rights as against Pledgor
in any respect.
(h) Pledgor further agrees that a breach of any of the covenants
contained in this Section 8 will cause irreparable injury to Lender, that Lender
shall have no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this Section 8
shall be specifically enforceable against Pledgor, and Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that the Secured Obligations are not then
due and payable in accordance with the agreements and instruments governing and
evidencing such obligations.
9. WAIVER. No delay on Lender's part in exercising any power of sale, Lien,
option or other right hereunder, and no notice or demand which may be given to
or made upon Pledgor by Lender with respect to any power of sale, Lien, option
or other right hereunder, shall constitute a waiver thereof, or limit or impair
Lender's right to take any action or to exercise any power of sale, Lien,
option, or any other right hereunder, without notice or demand, or prejudice
Lender's rights as against Pledgor in any respect.
10. ASSIGNMENT. Lender may assign, indorse or transfer any instrument
evidencing all or any part of the Secured Obligations as provided in, and in
accordance with, the Loan Agreement, and the holder of such instrument shall be
entitled to the benefits of this Agreement.
11. TERMINATION. Immediately following the Termination Date, Lender shall
deliver to Pledgor the Pledged Collateral pledged by Pledgor at the time subject
to this Agreement and all instruments of assignment executed in connection
therewith, free and clear of the Liens hereof and, except as otherwise provided
herein, all of Pledgor's obligations hereunder shall at such time terminate.
12. LIEN ABSOLUTE. All rights of Lender hereunder, and all obligations of
Pledgor hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Loan Agreement, any
other Loan Document or any other agreement or instrument governing or evidencing
any Secured Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Loan Agreement,
any other Loan Document or any other agreement or instrument governing or
evidencing any Secured Obligations;
(c) any exchange, release or n n perfection of any other Collateral, or
any release or amendment or waiver of or consent to departure from any guaranty,
for all or any of the Secured Obligations;
(d) the insolvency of any Credit Party; or
(e) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Pledgor.
13. RELEASE. Pledgor consents and agrees that Lender may at any time, or
from time to time, in its discretion:
(a) renew, extend or change the time of payment, and/or the manner,
place or terms of payment of all or any part of the Secured Obligations; and
(b) exchange, release and/or surrender all or any of the Collateral
(including the Pledged Collateral), or any part thereof, by whomsoever
deposited, which is now or may hereafter be held by Lender in connection with
all or any of the Secured Obligations; all in such manner and upon such terms as
Lender may deem proper, and without notice to or further assent from Pledgor, it
being hereby agreed that Pledgor shall be and remain bound upon this Agreement,
irrespective of the value or condition of any of the Collateral, and
notwithstanding any such change, exchange, settlement, compromise, surrender,
release, renewal or extension, and notwithstanding also that the Secured
Obligations may, at any time, exceed the aggregate principal amount thereof set
forth in the Loan Agreement, or any other agreement governing any Secured
Obligations. Pledgor hereby waives notice of acceptance of this Agreement, and
also presentment, demand, protest and notice of dishonor of any and all of the
Secured Obligations, and promptness in commencing suit against any party hereto
or liable hereon, and in giving any notice to or of making any claim or demand
hereunder upon Pledgor. No act or omission of any kind on Lender's part shall
in any event affect or impair this Agreement.
14. REINSTATEMENT. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against Pledgor or
any Pledged Entity for liquidation or reorganization, should Pledgor or any
Pledged Entity become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any
significant part of Pledgor's or a Pledged Entity's assets, and shall continue
to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a "voidable
preference", "fraudulent conveyance", or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Secured
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
15. MISCELLANEOUS.
(a) Lender may execute any of its duties
hereunder by or through agents or employees and shall be entitled to advice of
counsel concerning all matters pertaining to its duties hereunder.
(b) Pledgor agrees to promptly reimburse Lender for actual out of
pocket expenses, including, without limitation, reasonable counsel fees,
incurred by Lender in connection with the administration and enforcement of this
Agreement.
(c) Neither Lender, nor any of its respective officers, directors,
employees, agents or counsel shall be liable for any action lawfully taken or
omitted to be taken by it or them hereunder or in connection herewith, except
for its or their own gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(d) THIS AGREEMENT SHALL BE BINDING UPON PLEDGOR AND ITS SUCCESSORS AND
ASSIGNS (INCLUDING A DEBTOR IN POSSESSION ON BEHALF OF PLEDGOR), AND SHALL INURE
TO THE BENEFIT OF, AND BE ENFORCEABLE BY, LENDER AND ITS SUCCESSORS AND ASSIGNS,
AND SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF CONNECTICUT APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE, AND NONE OF THE TERMS OR PROVISIONS OF THIS AGREEMENT MAY BE WAIVED,
ALTERED, MODIFIED OR AMENDED EXCEPT IN WRITING DULY SIGNED FOR AND ON BEHALF OF
LENDER AND PLEDGOR.
16. SEVERABILITY. If for any reason any provision or provisions hereof are
determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or effect those portions of this
Agreement which are valid.
17. Notices. Except as otherwise provided herein, whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other party, or whenever any of the parties desires to give or serve upon any
other a communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and either shall be delivered in person or sent by registered or
certified mail, return receipt requested, with proper postage prepaid, or by
facsimile transmission and confirmed by delivery of a copy by personal delivery
or United States Mail as otherwise provided herein:
If to Lender, at:
NEW STREAM COMMERCIAL FINANCE, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Pledgor, at:
CHARYS HOLDING COMPANY, INC.
--------------------
--------------------
Attention:
----------
Fax No.:
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or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly served, given or delivered (i) upon the earlier of actual
receipt and three (3) Business Days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (ii) upon transmission, when sent by telecopy or other similar
facsimile transmission (with such telecopy or facsimile promptly confirmed by
delivery of a copy by personal delivery or United States Mail as otherwise
provided in this Section 17, (iii) one (1) Business Day after deposit with a
reputable overnight courier with all charges prepaid, or (iv) when delivered, if
hand delivered by messenger. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to the persons designated above to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request, consent, approval,
declaration or other communication.
18. SECTION TITLES. The Section titles contained in this Agreement are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, which shall, collectively and separately, constitute one
agreement.
20. BENEFIT OF LENDER. All security interests granted or contemplated
hereby shall be for the benefit of Lender, and all proceeds or payments realized
from the Pledged Collateral in accordance herewith shall be applied to the
Obligations in accordance with the terms of the Loan Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
CHARYS HOLDING COMPANY, INC.
By:
----------------------------
Title:
-------------------------
NEW STREAM COMMERCIAL FINANCE, LLC
By:
----------------------------
Title:
-------------------------
SCHEDULE I
PLEDGED SHARES
-----------------------------------------------------------------------------------------------------
CLASS STOCK CERTIFICATE NUMBER PERCENTAGE OF
PLEDGED ENTITY OF STOCK NUMBER(S) OF SHARES OUTSTANDING SHARES
-----------------------------------------------------------------------------------------------------
--%
-----------------------------------------------------------------------------------------------------
--%
-----------------------------------------------------------------------------------------------------
--%
-----------------------------------------------------------------------------------------------------
--%
-----------------------------------------------------------------------------------------------------
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated , is delivered pursuant to
---------------- ---
Section 6(d) of the Pledge Agreement referred to below. All defined terms
herein shall have the meanings ascribed thereto or incorporated by reference in
the Pledge Agreement. The undersigned hereby certifies that the representations
and warranties in Section 5 of the Pledge Agreement are and continue to be true
and correct, both as to the instruments and shares pledged prior to this Pledge
Amendment and as to instruments and shares pledged pursuant to this Pledge
Amendment. The undersigned further agrees that this Pledge Amendment may be
attached to that certain Pledge Agreement, dated August __, 2006, between
undersigned, as Pledgor, and New Stream Commercial Finance, LLC (the "Pledge
Agreement") and that the Pledged Shares listed on this Pledge Amendment shall be
and become a part of the Pledged Collateral referred to in said Pledge
Agreement and shall secure all Secured Obligations referred to in said Pledge
Agreement. The undersigned acknowledges that any instruments or shares not
included in the Pledged Collateral at the discretion of Lender may not otherwise
be pledged by Pledgor to any other Person or otherwise used as security for any
obligations other than the Secured Obligations.
CHARYS HOLDINGS COMPANY, INC.
By: --------------------------
Title: -----------------------
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CLASS NUMBERS
NAME AND ADDRESS PLEDGED OF CERTIFICATE OF
OF PLEDGOR ENTITY STOCK NUMBERS(S) SHARES
-----------------------------------------------------------------------------------------
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