PLEDGE AGREEMENT
PLEDGE AGREEMENT ("Pledge Agreement") made as of the 31st day of
August, 1994, between Edward R. Anderson ("Pledgor"), and CompuCom
Systems, Inc., a Delaware corporation ("Secured Party").
1. Definitions. In addition to the terms defined elsewhere in this
Pledge Agreement, the following terms shall have the following meanings
for purposes of this Pledge Agreement:
(a) The term "Event of Default" shall have the meaning ascribed
thereto in Section 9 of this Pledge Agreement.
(b) The term "Note" means and includes that certain Note, dated
of even date herewith, in the original principal amount of $1,181,250,
which Pledgor has executed, or is the process of executing payable to
the order of Secured Party, together with any and all concurrent or
subsequent extensions, amendments, or modifications thereto.
(c) The term "Obligations" means and includes all obligations
of Pledgor to Secured Party pursuant to the terms of the Note and this
Pledge Agreement.
(d) The term "Option Shares" means 350,000 shares of capital
stock of Secured Party being purchased by Pledgor with the proceeds of
the Note pursuant to the exercise of certain Non Qualified Stock Options
granted to Pledgor by Secured Party.
2. Pledge. Upon the terms hereof, Pledgor hereby pledges and grants
to Secured Party a lien on and security interest (the "Security
Interest") in and to all of the following instruments and property of
Pledgor (all of the following being herein sometimes called the
"Collateral"):
(a) Three hundred fifty thousand shares of capital stock of
Secured Party as described on Exhibit A attached hereto and incorporated
herein for all purposes representing the Option Shares being purchased
by Pledgor with the proceeds of the Note, together with all
certificates, options, rights or other distributions issued as an
addition to, in substitution or in exchange for, or on account of, any
such shares (collectively, the "Stock");
(b) All securities and other property, rights or interests of
any description at any time issued or issuable as an addition to, in
substitution or exchange for, with respect to, incident to or in lieu of
such shares described in Section 2(a) hereof or with respect to,
incident to or in lieu of the Collateral (i) due to any dividend, stock-
split, stock dividend or distribution on dissolution, on partial or
total liquidation, or other corporate reorganization or for any other
reason; (ii) in connection with a reduction of capital, capital surplus
or paid-in surplus; or (iii) in connection with any spin-off, split-off,
reclassification, readjustment, merger, consolidation, sale of assets,
combination of shares or any other plan of distribution affecting the
companies which have issued the shares described in Section 2(a) hereof;
(c) Any and all proceeds, monies, income and benefits arising
from or by virtue of, and all dividends and distributions (cash or
otherwise) payable and/or distributable with respect to, all or any of
the shares or other securities and rights and interests described in
clauses (a) through (c) of this Section 2.
3. Obligations Secured. This Pledge Agreement and the Security
Interest granted hereby secure the prompt satisfaction of the
Obligations.
4. Warranties. Pledgor represents and warrants that each of the
following statements is true and correct: (a) Pledgor is the legal and
beneficial owner of the Stock; (b) the Collateral is owned by Pledgor
free of any pledge, mortgage, hypothecation, lien, charge, encumbrance
or security interest or purchase right or option on the part of any
third person in such Collateral, except the Security Interest; (c)
Pledgor has the full power, authority and legal right to transfer and
pledge the Collateral free of any encumbrances and without obtaining the
consent of any other person or entity; and (d) upon delivery of the
Collateral to Secured Party, this Pledge Agreement will create a valid
and perfected first priority lien upon, and security interest in, the
Collateral and the proceeds thereof, securing the payment of the
Obligations. The delivery at any time by Pledgor to Secured Party of
Collateral shall constitute a representation and warranty by Pledgor
under this Pledge Agreement that, with respect to the Collateral and
each item thereof, Pledgor is the owner of the Collateral and the
matters heretofore warranted in clauses (a) through (d) of this Section
4 are true and correct.
5. Covenants. Pledgor covenants to do or not to do, as the case may
be, each of the following; provided, however, in the case of a negative
covenant, Pledgor will not undertake any of the proscribed activities
without the prior written consent of Secured Party: (a) from time to
time to do all other acts or things as Secured Party may reasonably
request in order more fully to evidence and perfect the Security
Interest; (b) after the occurrence of an Event of Default, to promptly
pay to Secured Party the amount of all court costs and reasonable
attorneys' fees incurred by Secured Party hereunder; and (c) except as
otherwise provided herein, to promptly deliver to Secured Party, in the
exact form received, all securities and other property described in
Section 2(b) and Section 2(c) hereof which come into the possession,
custody or control of Pledgor. Pledgor further covenants and agrees
that, without the prior written consent of Secured Party, Pledgor shall
not assign or transfer Pledgor's rights in the Collateral, or create any
other lien or security interest in or otherwise encumber any of the
Collateral, or permit any of the Collateral to ever be or become subject
to any lien, attachment, execution, sequestration, other legal or
equitable process, or any lien or encumbrance of any kind.
Notwithstanding anything contained in the preceding sentence to the
contrary, Pledgor shall be free to sell the Stock provided that Pledgor
complies with all applicable laws in effecting such sale and in the
event of any such sale the shares of Stock will be released from the
Security Interest created pursuant to this Pledge Agreement upon payment
to Secured Party of $3.375 for each share of Stock sold. All
assignments and endorsements by Pledgor shall be in such form and
substance as may be satisfactory to Secured Party. Should any covenant,
duty or agreement of Pledgor fail to be performed in accordance with its
terms hereunder, Secured Party may, but shall never be obligated to,
perform or attempt to perform such covenant, duty or agreement on behalf
of Pledgor, and any amount expended by Secured Party in such performance
or attempted performance shall become part of the Obligations, except
to the extent prohibited by applicable law, and Pledgor agrees to pay
such amount promptly to Secured Party.
6. Adjustments and Distributions Concerning Collateral. Should the
Collateral, or any part thereof, ever be converted in any manner by its
issuer into another type of property or any money or other proceeds ever
be paid or delivered to Pledgor as a result of Pledgor's rights in the
Collateral, then in any such event (except as provided in Section 7
hereof), all such property, money and other proceeds shall immediately
be and become part of the Collateral, and Pledgor covenants to forthwith
pay and deliver all such property, money or other proceeds so received
to Secured Party; and, if Secured Party deems it necessary and so
requests, to endorse properly or assign any and all such other proceeds
to Secured Party and to deliver to Secured Party any and all such other
proceeds which require perfection by possession under the Uniform
Commercial Code of the State of Texas or other appropriate jurisdiction
(the "UCC"). With respect to any of such property of a kind requiring
an additional security agreement, financing statement or other writing
to perfect a security interest therein in favor of Secured Party,
Pledgor will forthwith execute and deliver to Secured Party whatever
Secured Party shall deem necessary or proper for such purpose.
7. Cash Dividends and Voting Rights. Unless an Event of Default has
occurred and shall not have been waived by Secured Party, Pledgor is
entitled, (a) to exercise all voting rights with respect to the
Collateral and (b) to receive for his own use cash dividends on the
Collateral. Upon the occurrence of an Event of Default, Secured Party
may exercise all voting rights with respect to the Collateral subject to
all applicable rules and regulations and may require any such cash
dividends to be delivered to Secured Party as additional Collateral
hereunder or applied toward the satisfaction of the Obligations.
8. Registration of Collateral in Name of Secured Party. Upon the
occurrence of an Event of Default, Secured Party, at its option, may
have any or all of the Collateral registered in its name or that of its
nominee. Immediately and without further notice, upon the occurrence of
an Event of Default, whether or not the Collateral has been registered
in the name of Secured Party or its nominee, Secured Party or its
nominee shall have, with respect to the Collateral, the right to
exercise all voting rights and all conversion, exchange, subscription
or other rights, privileges or options pertaining thereto including,
without limitation, the right to exchange any or all of the Collateral
upon the merger, consolidation, reorganization, recapitalization or
other readjustment of the issuer thereof, or upon the exercise by such
issuer of any right, privilege, or option pertaining to any of the
Collateral, and, in connection therewith, to deliver any of the
Collateral to any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as it may
determine, all without liability except to account for property actually
received by it; but Secured Party shall have no duty to exercise any of
the aforesaid rights, privileges or options and shall not be responsible
for any failure to do so, delay in doing so, or depreciation in the
value of the Collateral by reason of doing so. Thereafter, at such time
as (a) all Events of Defaults have been cured, and (b) there exists no
condition, event or act which, with the giving of notice or lapse of
time, or both, would constitute an Event of Default, then the right to
exercise all voting rights with respect to the Collateral shall revert
to Pledgor.
9. Events of Default. The occurrence of any one or more of the
following shall constitute an Event of Default: (a) the failure of
Pledgor to make timely payment of any portion of the principal or
interest of the Note or any portion of the Obligations when due subject
to any applicable cure periods; (b) the failure of Pledgor to perform
fully, faithfully and promptly any material agreements, covenants and
conditions contained in this Pledge Agreement; (c) the levy against the
Collateral, or any substantial part thereof, or any execution,
attachment, sequestration, distraint warrant or other like or similar
writ or the attachment to the Collateral of any lien other than the
Security Interest; (d) the entry of a decree or order for relief by a
court having jurisdiction in the premises in respect of Pledgor in an
involuntary case under the United States bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of Pledgor or of any substantial part of Pledgor's property,
or ordering the winding-up or liquidation of the affairs of Pledgor and
the continuance of any such decree or order unstayed and in effect for a
period of thirty (30) consecutive days; or (e) the commencement by
Pledgor of a voluntary case under the United States bankruptcy laws, as
now constituted or hereafter amended, or any other applicable federal or
state bankruptcy, insolvency or other similar law, or the consent by
Pledgor to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of Pledgor for any substantial part of Pledgor's property, or
the making by Pledgor of any assignment for the benefit of creditors, or
the inability of Pledgor generally to pay his debts as such debts become
due, or the taking of any action by Pledgor in furtherance of any of the
foregoing.
10. Remedies. Upon the occurrence of an Event of Default, Secured
Party may then exercise any and all rights to which it is entitled under
the UCC or otherwise. Pledgor hereby grants to Secured Party an
irrevocable proxy coupled with an interest to exercise as to such
Collateral, upon the occurrence of an Event of Default, all rights,
powers and remedies of an owner and all of the rights, powers and
remedies hereinabove set forth, the proxy herein granted to exist until
all of the Obligations have been paid and performed in full.
11. Application of Proceeds. The proceeds of any disposition of the
Collateral or other action by Secured Party shall be applied (a) first,
to the cost and expenses incurred in connection therewith or incidental
thereto or to the care or safekeeping of any of the Collateral or in any
way relating to the rights of Secured Party hereunder, including
reasonable attorneys' fees and legal expenses; (b) then, to the
satisfaction of the Obligations in such order and to such portions as
Secured Party may elect; (c) then, to the payment of any other amounts
required by applicable law; and (d) then, to Pledgor to the extent of
any surplus proceeds. Secured Party shall be under no duty to exercise
or to withhold the exercise of any of the rights, powers, privileges and
options expressly or implicitly granted to Secured Party in this Pledge
Agreement, and shall not be responsible for any failure to do so or
delay in so doing.
12. Notification of Sale. Reasonable notification of the time and
place of any public sale of the Collateral, or reasonable notification
of the time after which any private sale or other intended disposition
of the Collateral is to be made, shall be sent to Pledgor and to any
other person entitled under the UCC to notice; provided that if any of
the Collateral threatens to decline speedily in value or is of the type
customarily sold on a recognized market, Secured Party may sell or
otherwise dispose of the Collateral without notification, advertisement,
or other notice of any kind. It is agreed that notice sent or given not
less than five (5) calendar days prior to the taking of the action to
which the notice relates is reasonable notification and notice for the
purposes of this paragraph.
13. Satisfaction of Obligations and Release of Collateral. Upon the
satisfaction in full of the Obligations, and the satisfaction of all
additional costs and expenses of Secured Party as provided herein, this
Pledge Agreement shall terminate, and Secured Party shall deliver to
Pledgor, at Pledgor's expense, such of the Collateral as shall not have
been sold or otherwise applied pursuant to this Pledge Agreement which
Secured Party shall have in its possession. In addition and
notwithstanding any provision contained in this Pledge Agreement to the
contrary, Pledgor shall be entitled to obtain the release of shares of
Stock from the Security Interest created hereby by paying to Secured
Party the sum of $3.375 for each share of Stock which Pledgor desires be
released from the terms hereof and upon receipt of such payment, Secured
Party will promptly release the applicable number of shares of Stock to
Pledgor.
14. Notices. Any notice required or permitted by this Pledge
Agreement shall be deemed to have been given or made when deposited in
the United States Mail, postage prepaid, certified mail, return receipt
requested, addressed to the parties at the addresses set forth opposite
their respective signatures below, or, if hand delivered, upon actual
receipt.
15. Duties of Secured Party. Secured Party's duty with respect to
any Collateral now or hereafter in the possession of Secured Party is
solely to use reasonable care in the custody and preservation of the
Collateral. Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral if the Collateral
is accorded treatment substantially equal to that which Secured Party
accords its own property, its being understood that Secured Party shall
not have any responsibility for ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral or for informing Pledgor of such
matters whether or not Secured Party has or is deemed to have any
knowledge of such matters. Secured Party shall not be required to take
any steps necessary to preserve any rights in the Collateral against
prior parties or to protect, perfect, preserve or maintain any security
interest given to secure the Collateral, nor to invest any cash
constituting Collateral in any account or security or otherwise.
16. Indemnification. Pledgor hereby agrees to indemnify and to hold
Secured Party harmless from and against any loss (excluding any loss
attributable to a diminution in the value of the Stock), claim, demand
or expense (including attorneys' fees) by reason, or in any manner
related to, the Collateral, including any such claim as may arise by
reason of any alleged breach of warranty concerning the Collateral, by
reason of the failure of Pledgor to comply with any applicable state,
federal or foreign statute, rule, regulation, order or decree, or by
reason of Secured Party's efforts to enforce payment of the Obligations,
including expenses incurred in satisfying any applicable securities
laws.
17. Expenses. Pledgor will upon demand pay to Secured Party the
amount of any and all reasonable expenses, including the reasonable fees
and expenses of its counsel and of any experts and agents, which Secured
Party may incur in connection with the custody or preservation of, or
the sale of, collection from, or other realization upon, any of the
Collateral, the exercise or enforcement of any of the rights of Secured
Party hereunder, or the failure by Pledgor to perform or observe any of
the provisions hereof.
18. Security Interest Absolute. All rights of Secured Party and the
pledge and Security Interest hereunder, and all obligations of Pledgor
hereunder, shall be absolute and unconditional in all respects and shall
not be released, diminished, impaired, or affected for any reason,
including without limitation the occurrence of any one or more of the
following events: (a) the taking or accepting of any other security or
assurance for any or all of the Obligations; (b) any change in the time,
manner or place of payment of, or in any other term of, all or any of
the Obligations; (c) any exchange, release, subordination, surrender,
loss or nonperfection of any other collateral at any time existing in
connection with any or all of the Obligations, or any release or
amendment or waiver of or consent to departure from any guaranty, or
other security, for all or any of the Obligations; (d) any neglect,
delay, omission, failure, or refusal of Secured Party to take or
prosecute any action in connection with this Pledge Agreement; (e) the
insolvency or bankruptcy of Pledgor; or (f) any other circumstance which
might otherwise constitute a defense available to a discharge of Pledgor
in respect of the Obligations of Pledgor in respect of this Pledge
Agreement.
19. Waivers. Except as otherwise required by the terms hereof or by
applicable law, Pledgor hereby waives all notices, including but not
limited to demand, presentment for payment, notice of nonpayment,
protest, notice of protest, notice of intent to accelerate, notice of
acceleration and all other notices.
20. Remedies Cumulative. The rights and remedies provided herein
are cumulative and are in addition to and not exclusive of any rights or
remedies provided by law, including, but without limitation, the rights
and remedies of a secured party under the UCC.
21. Amendment. This Pledge Agreement may be amended only by written
instrument signed by all parties.
22. Invalidity of Any Provision. The invalidity of any one or more
phrases, sentences, clauses, paragraphs or sections hereof shall not
affect the remaining portions of this Pledge Agreement, all of which are
being inserted conditionally on its being held legally valid. In the
event that any one or more of the phrases, sentences, clauses,
paragraphs or sections contained herein should be invalid, or should
operate to render this Pledge Agreement invalid, then this Pledge
Agreement shall be construed as if such invalid phrase or phrases,
sentence or sentences, clause or clauses, paragraph or paragraphs, or
section or sections had not been inserted.
23. Assignment. This Pledge Agreement shall apply to, inure to the
benefit of and be binding upon and enforceable against the parties
hereto and their respective legal representatives, successors and
assigns, except that the rights and obligations of Pledgor contained
herein shall not be assignable.
24. Governing Law. The substantive laws of the State of Texas shall
govern the validity, construction, enforcement and interpretation of
this Pledge Agreement, unless the laws of another state or jurisdiction
require the application of the laws of such state or jurisdiction. This
Pledge Agreement is performable in Dallas County, Texas.
IN WITNESS WHEREOF, the parties have executed this Pledge Agreement
as of the date and year first above written.
PLEDGOR:
Address: ---------------------------------
Edward R. Anderson
10100 North Central Expressway
Dallas, Texas 75231
SECURED PARTY:
Address: COMPUCOM SYSTEMS, INC.
10100 North Central Expressway
Dallas, Texas 75231 By:------------------------------
Its:-----------------------------
EXHIBIT A
STOCK NUMBER OF
CERTIFICATE NO. SHARES
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