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Exhibit 13
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 JPMIC, 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
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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 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
part 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:
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(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
(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 (as such 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
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(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.
(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;
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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 indicates its 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.
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,
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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
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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.
(b) The security interests 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
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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 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
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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
(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
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(vi) agrees that the provisions of this Section 10(f)
relating to jurisdiction and venue shall be binding and enforceable to the
fullest extent permissible under New York General Obligations Law Section 5-1402
or otherwise.
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IN WITNESS WHEREOF, the Pledgor has executed this Agreement on the date
first above written.
/s/ E.A. Xxxx Xxxxxxxxx
-----------------------------------------------
Name: E.A. Xxxx Xxxxxxxxx
Title: Vice President & Chief Financial Officer
AGREED TO AND ACCEPTED:
XXXXXXXXXX PARTNERS L.P.
By: /s/ R.C.E. Xxxxxx
------------------------
its general partner
By: /s/ R.C.E. Xxxxxx
-------------------------
Name: R.C.E. Xxxxxx
Title: General Partner
X.X. XXXXXX INVESTMENT CORPORATION
(Individually and as Agent)
By:
-------------------------
Name:
Title:
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PLEDGOR
LASERTECHNICS, INC.
---------------------------------
Name:
Title:
AGREED TO AND ACCEPTED:
XXXXXXXXXX PARTNERS L.P.,
By: /s/ R.C.E. Xxxxxx
-------------------------
its general partner
By:
-------------------------
Name:
Title:
X.X. XXXXXX INVESTMENT CORPORATION
(Individually and as Agent)
By:
-------------------------
Name:
Title:
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PLEDGOR
LASERTECHNICS, INC.
-------------------------
Name:
Title:
AGREED TO AND ACCEPTED:
XXXXXXXXXX PARTNERS L.P.,
By:
-------------------------
its general partner
By:
-------------------------
Name:
Title:
X.X. XXXXXX INVESTMENT CORPORATION
(Individually and as Agent)
By: /s/ Xxxxxx X. Kiss
-------------------------
Name: Xxxxxx X. Kiss
Title: Vice President
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SCHEDULE A
Delivered Stock
Certificate for 2,400,000 shares of Convertible Preferred Stock, par value $.01
per share, of Marking
Certificate for 200,000 shares of Convertible Preferred Stock, par value $.01
per share, of Marking
Certificate for 10 shares of Common Stock, par value $.01 per share, of Marking
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