1
SUBJECT TO THAT CERTAIN INTERCREDITOR AGREEMENT, DATED AS OF DECEMBER 29, 1998,
AMONG KTI, INC., A NEW JERSEY CORPORATION, FINOVA CAPITAL CORPORATION, A
DELAWARE CORPORATION AND OAKHURST COMPANY, INC., A DELAWARE CORPORATION
EXHIBIT A
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, dated as of December 29, 1998, is made and given
by OAKHURST COMPANY, INC., a Delaware corporation ("OCI") and Oakhurst
Technology, Inc., a Delaware corporation ("OTI" and, together with OCI, the
"Pledgors"), to KTI, INC., a New Jersey corporation (the "Lender").
RECITALS
A. The Pledgors and the Lender have entered into a Letter Loan
Agreement dated as of the date hereof (as the same may hereafter be amended,
restated, or otherwise modified from time to time, the "Credit Agreement")
pursuant to which the Lender has agreed to extend to OCI for the benefit of OTI
that certain credit accommodation consisting of a multiple advance term loan of
up to $11,500,000, subject to further adjustment.
B. OCI is the owner of the shares (the "Pledged Shares") of all of the
issued and outstanding shares of stock of OTI described in Part I of Schedule I
hereto issued by OTI, and OTI is the owner of membership interests (the "Pledged
LLC Interests") of New Heights Recovery & Power, LLC, a Delaware limited
liability company ("New Heights") described in Part II of Schedule I and issued
by New Heights.
C. It is a condition precedent to the obligation of the Lender to
extend credit accommodations pursuant to the terms of the Credit Agreement that
this Agreement be executed and delivered by the Pledgors.
D. Each Pledgor finds it advantageous, desirable and in the best
interests of such Pledgor to comply with the requirement that this Agreement be
executed and delivered to the Lender.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lender to enter into the Credit Agreement and to extend credit
accommodations to OCI thereunder, the Pledgors hereby agree with the Lender for
the Lender's benefit as follows:
Section 1. Defined Terms.
-1-
2
1(a) As used in this Agreement, the following terms shall have
the meanings indicated:
"Collateral" shall have the meaning given to such
term in Section 2.
"Event of Default" shall have the meaning given to
such term in Section 11.
"Lien" shall mean any security interest, mortgage,
pledge, lien, charge, encumbrance, title retention agreement
or analogous instrument or device (including the interest of
the lessors under capitalized leases), in, of or on any assets
or properties of the Person referred to.
"Obligations" shall mean (a) all indebtedness,
liabilities and obligations of the Pledgors to the Lender of
every kind, nature or description under the Credit Agreement,
including either Pledgor's obligation on any promissory note
or notes under the Credit Agreement and any note or notes
hereafter issued in substitution or replacement thereof, (b)
all liabilities of the Pledgors under this Agreement, (c) any
and all other liabilities and obligations of the Pledgors or
either of them to the Lender of every kind, nature and
description, whether direct or indirect or hereafter acquired
by the Lender from any Person, absolute or contingent,
regardless of how such liabilities arise or by what agreement
or instrument they may be evidenced, and in all of the
foregoing cases whether due or to become due, and whether now
existing or hereafter arising or incurred.
"Person" shall mean any individual, corporation,
partnership, limited partnership, joint venture, firm,
association, trust, unincorporated organization, government or
governmental agency or political subdivision or any other
entity, whether acting in an individual, fiduciary or other
capacity.
"Pledged LLC Interests" shall have the meaning given
to such term in Recital B above.
"Pledged Shares" shall have the meaning given to such
term in Recital B above.
"Security Interest" shall have the meaning given to
such term in Section 2.
1(b) Terms Defined in Uniform Commercial Code. All other terms
used in this Agreement that are not specifically defined herein or the
definitions of
-2-
3
which are not incorporated herein by reference shall have the meaning
assigned to such terms in the Uniform Commercial Code in effect in the
State of New York as of the date first above written to the extent such
other terms are defined therein.
1(c) Singular/Plural, Etc. Unless the context of this
Agreement otherwise clearly requires, references to the plural include
the singular, the singular, the plural and "or" has the inclusive
meaning represented by the phrase "and/or." The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation." The words "hereof," "herein," "hereunder," and
similar terms in this Agreement refer to this Agreement as a whole and
not to any particular provision of this Agreement. References to
Section s are references to Section s in this Pledge Agreement unless
otherwise provided.
Section 2. Pledge. As security for the payment and performance of all
of the Obligations, the Pledgors hereby pledge to the Lender and grant to the
Lender a security interest (the "Security Interest") in the following (the
"Collateral"):
2(a) The Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares.
2(b) All additional shares of stock of the issuer of the
Pledged Shares from time to time acquired by the Pledgors in any
manner, and the certificates representing such additional shares, and
all dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares.
2(c) The Pledged LLC Interests and the certificates, units or
subscription agreements evidencing the Pledged LLC Interests, if any,
and all interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged LLC Interests.
2(d) All additional membership interests of New Heights from
time to time acquired by the Pledgors in any manner, and the units,
certificates or subscription agreements, if any, representing such
additional interests, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
membership interests.
-3-
4
2(e) All proceeds of any and all of the foregoing (including
proceeds that constitute property of types described above).
Section 3. Delivery of Collateral. All certificates and instruments
representing or evidencing the Pledged Shares and the Pledged LLC Interests
shall be delivered to the Lender contemporaneously with the execution of this
Agreement. All certificates and instruments representing or evidencing
Collateral received by the Pledgors after the execution of this Agreement shall
be delivered to the Lender promptly upon a Pledgor's receipt thereof. All such
certificates and instruments shall be held by or on behalf of the Lender
pursuant hereto and shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Lender. The Lender shall have the
right at any time, whether before or after an Event of Default, to cause any or
all of the Collateral to be transferred of record into the name of the Lender or
its nominee (but subject to the rights of the Pledgors under Section 6) and to
exchange certificates or evidence of membership interests representing or
evidencing Collateral for certificates of smaller or larger denominations.
Notwithstanding any of the foregoing, as to any Collateral consisting of
book-entry or uncertificated securities or securities which are held by a third
Person, the Pledgors shall deliver to the Lender evidence satisfactory to the
Lender that such Collateral has been registered in the name of, or as pledged
to, the Lender. Such evidence shall include the acknowledgment of the issuer or
Person holding such Collateral that such issuer or Person holds such Collateral
as agent for the Lender and that such Collateral is identified on the books of
such issuer or third Person as belonging to or pledged to the Lender.
Section 4. Certain Warranties and Covenants. Each Pledgor makes the
following warranties and covenants:
4(a) OCI has title to the Pledged Shares and OTI has title to
the Pledged LLC Interests and each respective Pledgor will have title
to each other item of Collateral hereafter acquired, free of all Liens
except the Security Interest.
4(b) The Pledgor has full power and authority to execute this
Pledge Agreement, to perform such Pledgor's obligations hereunder and
to subject the Collateral to the Security Interest created hereby.
4(c) No financing statement covering all or any part of the
Collateral is on file in any public office (except for any financing
statements filed by the Lender, and any financing statements or other
documents filed).
4(d) The Pledged Shares have been duly authorized and validly
issued by the issuer thereof and are fully paid and non-assessable. The
Pledged LLC Interests have been duly authorized, issued and delivered
and are fully paid and non-assessable. The certificates representing
the Pledged Shares and the units,
-4-
5
certificates or subscription agreements, if any, evidencing the Pledged
LLC Interests are genuine. A true and correct copy of the Agreement of
Limited Liability Company of New Heights (the "New Heights LLC
Agreement") has been provided to the Lender. Neither the Pledged Shares
nor the Pledged LLC Interests are subject to any offset or similar
right or claim of the issuers thereof.
4(e) The Pledged Shares constitute 100% of the issued and
outstanding shares of stock of OTI. The Pledged LLC Interests
constitute the percentage of interests in New Heights as indicated on
Schedule I hereto.
4(f) OTI will not execute or consent to any amendment to the
New Heights LLC Agreement or any related operating agreement without
the prior written consent of the Lender.
4(g) OCI has one or more places of business and its chief
executive office is located in the State of Delaware. OTI has one or
more places of business and its chief executive office is located in
the State of Delaware.
Section 5. Further Assurances. The Pledgors agree that at any time and
from time to time, at the expense of the respective Pledgor, each Pledgor will
promptly execute and deliver all further instruments and documents, and take all
further action that may be necessary or that the Lender may reasonably request,
in order to perfect and protect the Security Interest or to enable the Lender to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral (but any failure to request or assure that the applicable Pledgor
execute and deliver such instruments or documents or to take such action shall
not affect or impair the validity, sufficiency or enforceability of this
Agreement and the Security Interest, regardless of whether any such item was or
was not executed and delivered or action taken in a similar context or on a
prior occasion).
Section 6. Voting Rights; Dividends; Etc.
6(a) Subject to paragraph (d) of this Section 6, the Pledgors
shall be entitled to exercise or refrain from exercising any and all
voting and other consensual rights pertaining to the Pledged Shares,
the Pledged LLC Interests or any other stock or interest that becomes
part of the Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Credit Agreement;
provided, however, that the Pledgors shall not exercise or refrain from
exercising any such right if such action could reasonably be expected
to have a material adverse effect on the value of the Collateral or any
material part thereof.
6(b) Subject to paragraph (e) of this Section 6, the Pledgors
shall be entitled to receive, retain, and use in any manner not
prohibited by the Credit
-5-
6
Agreement any and all interest and dividends paid in respect of the
Collateral; provided, however, that any and all
(i) dividends paid or payable other than in cash in
respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in
exchange for, any Collateral,
(ii) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in-surplus, and
(iii) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange
for, any Collateral,
shall be, and shall be forthwith delivered to the Lender to hold as,
Collateral and shall, if received by the Pledgors, be received in trust
for the benefit of the Lender, be segregated from the other property or
funds of the Pledgor, and be forthwith delivered to the Lender as
Collateral in the same form as so received (with any necessary
indorsement or assignment). The Pledgors shall, upon request by the
Lender, promptly execute all such documents and do all such acts as may
be necessary or desirable to give effect to the provisions of this
Section 6 (b).
6(c) The Lender shall execute and deliver (or cause to be
executed and delivered) to the Pledgors all such proxies and other
instruments as the applicable Pledgor may reasonably request for the
purpose of enabling the applicable Pledgor to exercise the voting and
other rights that it is entitled to exercise pursuant to Section 6 (a)
hereof and to receive the dividends and interest that it is authorized
to receive and retain pursuant to Section 6 (b) hereof.
6(d) Upon the occurrence and during the continuance of any
Event of Default, the Lender shall have the right in its sole
discretion, and the Pledgors shall execute and deliver all such proxies
and other instruments as may be necessary or appropriate to give effect
to such right, to terminate all rights of the Pledgors to exercise or
refrain from exercising the voting and other consensual rights that it
would otherwise be entitled to exercise pursuant to Section 6 (a)
hereof, and all such rights shall thereupon become vested in the Lender
who shall thereupon have the sole right to exercise or refrain from
exercising such voting and other consensual rights; provided, however,
that the Lender shall not be deemed to possess or have control over any
voting rights with respect to any Collateral unless and until the
Lender has given written notice to the applicable Pledgor that any
further exercise of such voting rights by the applicable Pledgor is
prohibited and that the Lender and/or its assigns will henceforth
exercise such
-6-
7
voting rights; and provided, further, that neither the registration of
any item of Collateral in the Lender's name nor the exercise of any
voting rights with respect thereto shall be deemed to constitute a
retention by the Lender of any such Collateral in satisfaction of the
Obligations or any part thereof.
6(e) Upon the occurrence and during the continuance of any
Event of Default:
(i) all rights of the Pledgors to receive the
dividends and interest that it would otherwise be authorized
to receive and retain pursuant to Section 6(b) hereof shall
cease, and all such rights shall thereupon become vested in
the Lender who shall thereupon have the sole right to receive
and hold such dividends as Collateral, and
(ii) all payments of interest and dividends that are
received by the Pledgors contrary to the provisions of
paragraph (i) of this Section 6 (e) shall be received in trust
for the benefit of the Lender, shall be segregated from other
funds of the Pledgors and shall be forthwith paid over to the
Lender as Collateral in the same form as so received (with any
necessary indorsement).
Section 7. Transfers and Other Liens; Additional Shares and Membership
Interests.
7(a) Except as may be permitted by the Credit Agreement, each
Pledgor agrees that it will not (i) sell, assign (by operation of law
or otherwise) or otherwise dispose of, or grant any option with respect
to, any of the Collateral, or (ii) create or permit to exist any Lien,
upon or with respect to any of the Collateral.
7(b) OCI and OTI, as the case may be, each agrees that it will
(i) cause each issuer of the Pledged Shares that it controls not to
issue any stock, membership interests or other securities in addition
to or in substitution for the Pledged Shares or Pledged LLC Interests
issued by such issuer, except to the applicable Pledgor, and (ii)
pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional shares of stock, membership
interests or other securities of each issuer of the Pledged Shares or
Pledged LLC Interests.
Section 8. Lender Appointed Attorney-in-Fact. Each Pledgor hereby
appoints the Lender such Pledgor's attorney-in-fact, with full authority in the
place and stead of such Pledgor and in the name of such Pledgor or otherwise,
from time to time in the Lender's good-faith discretion, to take any action and
to execute any instrument that the Lender may reasonably believe necessary or
advisable to accomplish the purposes
-7-
8
of this Agreement (subject to the rights of the Pledgor under Section 6 hereof),
in a manner consistent with the terms hereof, including, without limitation, to
receive, indorse and collect all instruments made payable to such Pledgor
representing any dividend or other distribution in respect of the Collateral or
any part thereof and to give full discharge for the same.
Section 9. Lender May Perform. If a Pledgor fails to perform any
agreement contained herein, the Lender may itself perform, or cause performance
of, such agreement, and the reasonable expenses of the Lender incurred in
connection therewith shall be payable by the applicable Pledgor under Section 14
hereof.
Section 10. The Lender's Duties. The powers conferred on the Lender
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. The Lender shall be deemed
to have exercised reasonable care in the safekeeping of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to the
safekeeping which the Lender accords its own property of like kind. Except for
the safekeeping of any Collateral in its possession and the accounting for
monies and for other properties actually received by it hereunder, the Lender
shall have no duty, as to any Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Lender has or is deemed
to have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any Persons or any other rights pertaining to any
Collateral. The Lender will take action in the nature of exchanges, conversions,
redemption, tenders and the like requested in writing by a Pledgor with respect
to any of the Collateral in the Lender's possession if the Lender in its
reasonable judgment determines that such action will not impair the Security
Interest or the value of the Collateral, but a failure of the Lender to comply
with any such request shall not of itself be deemed a failure to exercise
reasonable care.
Section 11. Default. Each of the following occurrences shall constitute
an Event of Default under this Agreement: (a) a Pledgor shall fail to observe or
perform any covenant or agreement applicable to such Pledgor under this
Agreement; or (b) any representation or warranty made by a Pledgor in this
Agreement or in any financial statements, reports or certificates heretofore or
at any time hereafter submitted by or on behalf of a Pledgor to the Lender shall
prove to have been false or materially misleading when made; or (c) any Event of
Default shall occur under the Credit Agreement.
Section 12. Remedies upon Default. If any Event of Default shall have
occurred and be continuing:
12(a) The Lender may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on
default under the Uniform
-8-
9
Commercial Code of the State of New York (the "Code") in effect at that
time (whether or not the Code then applies to the affected Collateral),
and may, without notice except as specified below, sell the Collateral
or any part thereof in one or more parcels at public or private sale,
at any exchange, broker's board or at any of the Lender's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Lender may reasonably believe are commercially
reasonable. Each Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days' prior notice to such
Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Lender shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Lender
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned. Each Pledgor hereby waives all requirements of law, if
any, relating to the marshalling of assets which would be applicable in
connection with the enforcement by the Lender of its remedies
hereunder, absent this waiver.
12(b) The Lender may notify any Person obligated on any of the
Collateral that the same has been assigned or transferred to the Lender
and that the same should be performed as requested by, or paid directly
to, the Lender, as the case may be. The applicable Pledgor shall join
in giving such notice, if the Lender so requests. The Lender may, in
the Lender's name or in such Pledgor's name, demand, xxx for, collect
or receive any money or property at any time payable or receivable on
account of, or securing, any such Collateral or grant any extension to,
make any compromise or settlement with or otherwise agree to waive,
modify, amend or change the obligation of any such Person.
12(c) Any cash held by the Lender as Collateral and all cash
proceeds received by the Lender in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral may,
in the discretion of the Lender, be held by the Lender as collateral
for, or then or at any time thereafter be applied in whole or in part
by the Lender against, all or any part of the Obligations (including
any expenses of the Lender payable pursuant to Section 14 hereof).
Section 13. Waiver of Certain Claims. Each Pledgor acknowledges that
because of present or future circumstances, a question may arise under the
Securities Act of 1933, as from time to time amended (the "Securities Act"),
with respect to any disposition of the Collateral permitted hereunder. Each
Pledgor understands that compliance with the Securities Act may very strictly
limit the course of conduct of the Lender if the Lender were to attempt to
dispose of all or any portion of the Collateral and may also limit the extent to
which or the manner in which any subsequent transferee of the Collateral or any
portion thereof may dispose of the same. There may
-9-
10
be other legal restrictions or limitations affecting the Lender in any attempt
to dispose of all or any portion of the Collateral under the applicable Blue Sky
or other securities laws or similar laws analogous in purpose or effect. The
Lender may be compelled to resort to one or more private sales to a restricted
group of purchasers who will be obliged to agree, among other things, to acquire
such Collateral for their own account for investment only and not to engage in a
distribution or resale thereof. Each Pledgor agrees that the Lender shall not
incur any liability, and any liability of such Pledgor for any deficiency shall
not be impaired, as a result of the sale of the Collateral or any portion
thereof at any such private sale in a manner that the Lender reasonably believes
is commercially reasonable (within the meaning of Section 9-504(3) of the
Uniform Commercial Code). Each Pledgor hereby waives any claims against the
Lender arising by reason of the fact that the price at which the Collateral may
have been sold at such sale was less than the price that might have been
obtained at a public sale or was less than the aggregate amount of the
Obligations, even if the Lender shall accept the first offer received and does
not offer any portion of the Collateral to more than one possible purchaser.
Each Pledgor further agrees that the Lender has no obligation to delay sale of
any Collateral for the period of time necessary to permit the issuer of such
Collateral to qualify or register such Collateral for public sale under the
Securities Act, applicable Blue Sky laws and other applicable state and federal
securities laws, even if said issuer would agree to do so. Without limiting the
generality of the foregoing, the provisions of this Section would apply if, for
example, the Lender were to place all or any portion of the Collateral for
private placement by an investment banking firm, or if such investment banking
firm purchased all or any portion of the Collateral for its own account, or if
the Lender placed all or any portion of the Collateral privately with a
purchaser or purchasers.
Section 14. Costs and Expenses; Indemnity. The Pledgors will pay or
reimburse the Lender on demand for all out-of-pocket expenses (including in each
case all filing and recording fees and taxes and all reasonable fees and
expenses of counsel and of any experts and agents) incurred by the Lender in
connection with the creation, perfection, protection, satisfaction, foreclosure
or enforcement of the Security Interest and the preparation, administration,
continuance, amendment or enforcement of this Agreement, and all such costs and
expenses shall be part of the Obligations secured by the Security Interest. The
Pledgors shall indemnify and hold the Lender harmless from and against any and
all claims, losses and liabilities (including reasonable attorneys' fees)
growing out of or resulting from this Agreement (including enforcement of this
Agreement) or the Lender's actions pursuant hereto, except claims, losses or
liabilities resulting from the Lender's gross negligence or willful misconduct
as determined by a final judgment of a court of competent jurisdiction. Any
liability of the Pledgors to indemnify and hold the Lender harmless pursuant to
the preceding sentence shall be part of the Obligations secured by the Security
Interest. The obligations of the Pledgors under this Section shall survive any
termination of this Agreement.
-10-
11
Section 15. Waivers and Amendments; Remedies. This Agreement can be
waived, modified, amended, terminated or discharged, and the Security Interest
can be released, only explicitly in a writing signed by the Lender. A waiver so
signed shall be effective only in the specific instance and for the specific
purpose given. Mere delay or failure to act shall not preclude the exercise or
enforcement of any rights and remedies available to the Lender. All rights and
remedies of the Lender shall be cumulative and may be exercised singly in any
order or sequence, or concurrently, at the Lender's option, and the exercise or
enforcement of any such right or remedy shall neither be a condition to nor bar
the exercise or enforcement of any other.
Section 16. Notices. Any notice or other communication to any party in
connection with this Agreement shall be in writing and shall be sent by manual
delivery, telegram, telex, facsimile transmission, overnight courier or United
States mail (postage prepaid) addressed to such party at the address specified
on the signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing. All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by telegram, telex or facsimile transmission, from
the first business day after the date of sending if sent by overnight courier,
or from four days after the date of mailing if mailed.
Section 17. Pledgors Acknowledgements. Each Pledgor hereby acknowledges
that (a) such Pledgor has been advised by counsel in the negotiation, execution
and delivery of this Agreement, (b) the Lender has no fiduciary relationship to
such Pledgor, the relationship being solely that of debtor and creditor, and (c)
no joint venture exists between the Pledgors and the Lender.
Section 18. Continuing Security Interest; Assignments under Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Obligations and the expiration of the obligation, if any, of the
Lender to extend credit accommodations to the Pledgors, (b) be binding upon the
Pledgors, and their successors and assigns, and (c) inure, together with the
rights and remedies of the Lender hereunder, to the benefit of, and be
enforceable by, the Lender and its successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), the Lender may assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement and the Loan Documents to any other Person to the extent and in
the manner provided in the Credit Agreement, and may similarly transfer all or
any portion of its rights under this Pledge Agreement to such Persons.
Section 19. Termination of Security Interest. Upon payment in full of
the Obligations and the expiration of any obligation of the Lender to extend
credit accommodations to the Borrower, the security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the applicable
Pledgor. Upon any such
-11-
12
termination, the Lender will return to the applicable Pledgor such of the
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof and execute and deliver to such Pledgor such documents as such
Pledgor shall reasonably request to evidence such termination. Any reversion or
return of the Collateral upon termination of this Agreement and any instruments
of transfer or termination shall be at the expense of the applicable Pledgor and
shall be without warranty by, or recourse on, the Lender. As used in this
Section , "Pledgors" includes any assigns of a Pledgor, any Person holding a
subordinate security interest in any part of the Collateral or whoever else may
be lawfully entitled to any part of the Collateral.
SECTION 20. GOVERNING LAW AND CONSTRUCTION. THE VALIDITY, CONSTRUCTION
AND ENFORCEABILITY OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK; PROVIDED, HOWEVER, THAT NO EFFECT SHALL BE GIVEN TO CONFLICT OF
LAWS PRINCIPLES OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY
OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE MANDATORILY GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Whenever possible, each provision
of this Agreement and any other statement, instrument or transaction
contemplated hereby or relating hereto shall be interpreted in such manner as to
be effective and valid under such applicable law, but, if any provision of this
Agreement or any other statement, instrument or transaction contemplated hereby
or relating hereto shall be held to be prohibited or invalid under such
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement or any other statement, instrument
or transaction contemplated hereby or relating hereto.
SECTION 21. CONSENT TO JURISDICTION. AT THE OPTION OF THE LENDER, THIS
AGREEMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR NEW YORK STATE COURT SITTING
IN THE CITY OF NEW YORK; AND THE PLEDGORS CONSENT TO THE JURISDICTION AND VENUE
OF ANY SUCH COURT AND WAIVE ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT
CONVENIENT. IN THE EVENT A PLEDGOR COMMENCES ANY ACTION IN ANOTHER JURISDICTION
OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM
THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE LENDER AT ITS OPTION SHALL BE
ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES
ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE
LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.
SECTION 22. WAIVER OF JURY TRIAL. EACH OF THE PLEDGORS AND THE LENDER,
BY ITS ACCEPTANCE OF THIS AGREEMENT, IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING
-12-
13
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 23. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
Section 24. General. All representations and warranties contained in
this Agreement or in any other agreement between a Pledgor and the Lender shall
survive the execution, delivery and performance of this Agreement and the
creation and payment of the Obligations. Each Pledgor waives notice of the
acceptance of this Agreement by the Lender. Captions in this Agreement are for
reference and convenience only and shall not affect the interpretation or
meaning of any provision of this Agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
-13-
14
IN WITNESS WHEREOF, each Pledgor has caused this Pledge Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
OAKHURST COMPANY, INC.
By /s/ Xxxxxx X. Xxxxxx
Its Chairman and CEO
Address for OCI:
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxx 00000
Attn: President
Fax: (000) 000-0000
OAKHURST TECHNOLOGY, INC.
By /s/ Xxxxxx X. Xxxxxx
Its Chairman and CEO
Address for OTI:
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxx 00000
Attn: President
Fax: (000) 000-0000
Address for Lender:
KTI, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: President
Fax: (000) 000-0000
-14-
15
SCHEDULE I
Part I
PLEDGED STOCK
Stock Issuer: Oakhurst Technology, Inc.
Percentage Ownership: 100%
Class of Stock:
Certificate No(s).:
Par Value:
Number of Shares:
Part II
PLEDGED LLC INTERESTS:
Issuer: New Heights Recovery & Power, LLC
Percentage Ownership: 50%
Number of Units: 7,963,500
-15-
