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EXHIBIT 10.12
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December 15, 1998 (this "Agreement"),
between the Neubauer Family Trust, by Walter Neubauer, trustee (the "Pledgor")
and J. F. Lehman & Company (the "Pledgee").
On June 19, 1998, Special Devices, Incorporated, a Delaware
corporation (the "Company"), entered into an Agreement and Plan of Merger (as
amended and restated and in effect from time to time, the "Merger Agreement")
with SDI Acquisition Corp. a Delaware corporation ("Acquisition"). The Merger
Agreement, which was amended and restated as of August 17, 1998, provided for
the merger of Acquisition with and into the Company and the conversion of each
outstanding share of common stock, par value $0.01 per share, of the Company
(the "Common Stock"), into the right to receive $37.00 in cash payable to the
holder thereof other than certain of the shares held by Messrs. Neubauer and
Treinen.
On October 27, 1998, the Merger Agreement was further amended (i) to
reduce the cash consideration payable in respect of the shares of Common Stock
from $37.00 to $34.00 per share, (ii) to provide for the rollover of 735,294
additional shares of Common Stock held by Messrs. Neubauer and Treinen (the
"Additional Rollover Shares") and (iii) to extend the Termination Date under the
Merger Agreement to the second business day after approval of such amendment by
the stockholders of the Company.
On October 19, 1998, in connection with the foregoing proposed
amendments to the Merger Agreement, the Company, Acquisition and the Pledgee
entered into a letter agreement (the "Letter Agreement") with Messrs. Neubauer
and Treinen setting forth in principle certain agreements among them.
Concurrently with the execution and delivery of this Agreement, the
Neubauer Family Trust and the Treinen Family Trust are entering into a Rollover
Stockholders Agreement with Pledgee and the Company (the "Stockholders
Agreement") setting forth, among other things, certain rights and obligations of
the parties with respect to the Additional Rollover Shares outlined in the
Letter Agreement. In order to induce the Pledgee to enter into the Stockholders
Agreement, Pledgor is entering into this Agreement with Pledgee.
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NOW, THEREFORE, in consideration of the receipt of the sum of $1.00
and the mutual premises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor and the Pledgee hereby agree as follows:
1. Definitions. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the
Stockholders Agreement. The term "Transfer" as used herein shall have the
meaning ascribed to it in Section 5(a) of the Stockholders Agreement.
2. Pledge. The Pledgor hereby pledges and grants to the Pledgee, for
its benefit, a first priority, perfected security interest in the following,
whether now existing or hereafter arising (collectively, the "Pledged
Collateral"):
(a) The Additional Rollover Shares now owned by Pledgor and
the certificate no. ___ representing such shares (all of such shares are
referred to herein as the "Pledged Stock"), and stock powers in the form
attached hereto as Exhibit A (the "Powers"), duly executed in blank, and, except
as provided in Section 9, all dividends, instruments, securities and other
property and distributions from time to time received, receivable or otherwise
distributed in respect of, or in exchange for, any or all of the Pledged Stock;
and
(b) All proceeds of any or all of the foregoing of any kind or
description (subject to Section 10 hereof).
3. Security for Liabilities. The Pledged Collateral secures the
prompt performance and observance of each of the Pledgor's obligations and
liabilities arising under or out of Section 3(a) of the Stockholders Agreement
(together with the related definitions and ancillary provisions) and this
Agreement (all such obligations and liabilities of the Pledgor now existing or
hereafter arising being hereinafter referred to as the "Liabilities").
4. Pledged Collateral Adjustments. If, during the term of this
Agreement:
(a) any stock dividend, reclassification, readjustment or
other change is declared or made in the capital structure of the Company with
respect to the Pledged Collateral; or
(b) any subscription warrants or any other rights or options
shall be issued in connection with the Pledged Collateral,
then all new, substituted and additional shares, warrants, rights, options or
other securities issued by reason of any of the foregoing shall be immediately
delivered to and held by the
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Pledgee under the terms of this Agreement and shall constitute additional
Pledged Collateral hereunder.
5. Subsequent Changes Affecting Pledged Collateral. The Pledgor
represents and warrants that he has made his own arrangements for keeping
himself informed of changes or potential changes affecting the Pledged
Collateral (including, without limitation, rights to convert, rights to
subscribe, payment of dividends, reorganization or other exchanges, tender
offers and voting rights), and the Pledgor agrees that the Pledgee shall not
have any obligation to inform the Pledgor of any such changes or potential
changes or to take any action or omit to take any action with respect thereto.
In addition to, and not in limitation of, the rights of the Pledgee under the
Stockholders Agreement, the Pledgee may, after the failure of the Pledgor to
comply strictly with the terms of Section 3(a) of the Stockholders Agreement (an
"Event of Default"), without notice and at its option, transfer or register the
Pledged Collateral or any part thereof into its or its nominee's name with or
without any indication that such Pledged Collateral is subject to the security
interest hereunder; provided, however, that nothing herein shall serve to modify
Pledgor's obligation to pay the Call Price as required by the Stockholders
Agreement for any Pledge Collateral so transferred or registered. In addition,
the Pledgee may at any time exchange certificates or instruments representing or
evidencing Pledged Stock for certificates or instruments of smaller or larger
denominations.
6. Delivery of Pledged Collateral. Concurrently with the execution
and delivery of this Agreement, the Pledgor shall deliver to the Pledgee all
certificates representing the Pledged Stock and such certificates shall be
accompanied by the Powers, with signature appropriately guaranteed, and
accompanied by any required transfer tax stamps, all in form and substance
satisfactory to the Pledgee.
7. Representations and Warranties. The Pledgor represents and
warrants to the Pledgee as follows:
(a) The Pledgor is the sole record and beneficial owner of the
Pledged Stock, free and clear of all claims, pledges, liens, encumbrances,
charges and security interests of every nature whatsoever (collectively,
"Liens"), except Liens created by this Agreement, and has good and marketable
title to the Pledged Stock.
(b) The Pledgor has the capacity to enter into this Agreement.
(c) All of the Pledged Stock owned by the Pledgor has been
duly authorized and validly issued, is fully paid and nonassessable, and is not
subject to any options, warrants or rights of any other Person (other than in
connection with the Stockholders Agreement). The Pledgor is not and will not
become a party to or otherwise bound by any agreement, other than this Agreement
and the Stockholders Agreement,
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which restricts in any manner the rights of any present or future holder of any
of the Pledged Stock with respect thereto.
(d) Except for the irrevocable voting proxy granted to Pledgee
in the Stockholders Agreement and the restrictions, if any, contained in that
certain Stockholders Agreement, of even date herewith, by and among Pledgor,
Pledgee, the Company and certain other Stockholders of the Company, there are no
restrictions upon the voting rights associated with the Pledged Stock owned by
the Pledgor or upon the transfer of any of the Pledged Collateral owned by the
Pledgor, and the Pledgor has full right and authority to vote the Pledged Stock
owned by such Pledgor, subject to the irrevocable voting proxy granted to
Pledgee contained in the Stockholders Agreement and the restrictions, if any,
contained in that certain Stockholders Agreement, of even date herewith, by and
among Pledgor, Pledgee, the Company and certain other Stockholders of the
Company, and to pledge and grant to the Pledgee a security interest in or
otherwise transfer, subject to federal and state securities laws, the Pledged
Collateral free of any Liens.
(e) None of the Pledged Stock has been issued or transferred
in violation of the securities laws of the United States of America or any State
to which such issuance or transfer may be subject.
(f) This Agreement has been duly executed and delivered by the
Pledgor and constitutes the legal, valid and binding obligation of the Pledgor,
enforceable against the Pledgor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
(g) No approval, consent, authorization, or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required either for the pledge of the Pledged Collateral pursuant to this
Agreement or for the execution, delivery or performance of this Agreement by the
Pledgor.
(h) This Agreement is effective to create in favor of the
Pledgee, for the benefit of the Pledgee, a legal, valid and enforceable security
interest in the Pledged Collateral, and the delivery by the Pledgor of a
certificate or certificates representing the Pledged Stock to the Pledgee
pursuant to Section 6 hereof, will create in favor of the Pledgee, for the
benefit of the Pledgee, a valid and perfected first priority security interest
in the Pledged Collateral securing the performance of the Liabilities.
(i) The Powers have been duly executed and, when delivered to
the Pledgee, will give the Pledgee the authority they purport to confer.
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8. Voting Rights. Under the Stockholders Agreement, Pledgor has
granted to Pledgee an irrevocable voting proxy to vote the Pledged Stock as set
forth in the Stockholders Agreement.
9. Dividends and Other Distributions.
(a) So long as there shall exist no condition, event or act
which constitutes an Event of Default or which with notice or lapse of time or
both would constitute an Event of Default:
(i) The Pledgor shall be entitled to receive and retain
any and all dividends or interest paid in respect of the Pledged Collateral;
provided, however, that any and all:
(x) dividends paid or payable other than in cash
with respect to, and instruments and other property received, receivable
or otherwise distributed with respect to, or in exchange for, any of the
Pledged Collateral;
(y) dividends and other distributions paid or
payable in cash with respect to any of the Pledged Collateral on account
of a partial or total liquidation or dissolution or in connection with a
reduction of capital, capital surplus or paid-in surplus; and
(z) cash paid, payable or otherwise distributed
with respect to principal of, or in redemption of, or in exchange for, any
of the Pledged Collateral; provided, however, that in the case of a
redemption or exchange of shares for cash, Pledgee shall only be entitled
to receive the portion, if any, of the cash paid that exceeds the Call
Price for the shares so redeemed or exchanged.
shall be Pledged Collateral, and shall be forthwith delivered to the Pledgee to
hold for the benefit of the Pledgee as Pledged Collateral and shall, if received
by the Pledgor, be held in trust for the benefit of the Pledgee as Pledged
Collateral and shall be segregated from the other property or funds of the
Pledgor, and shall be delivered immediately to the Pledgee as Pledged Collateral
in the same form as so received (with any necessary endorsement).
(ii) The Pledgee shall execute and deliver (or cause
to be executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purpose of enabling
the Pledgor to receive the dividends or interest payments that it is authorized
to receive and retain pursuant to clause (i) above.
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(b) After the occurrence of an Event of Default and subject to
Pledgee's payment of the Call Price pursuant to the requirements of Section 3 of
the Stockholders Agreement:
(i) All rights of the Pledgor to receive the
dividends that it would otherwise be authorized to receive and retain pursuant
to Section 9(a)(i) hereof shall cease, and all such rights shall thereupon
become vested in the Pledgee, for the benefit of the Pledgee, which shall
thereupon have the sole right to receive and retain as Pledged Collateral such
dividends and interest payments; and
(ii) All dividends that are received by the Pledgor
contrary to the provisions of clause (i) of this Section 9(b) shall be held in
trust for the benefit of the Pledgee, shall be segregated from other funds of
the Pledgor and shall be delivered immediately to the Pledgee as Pledged
Collateral in the same form as so received (with any necessary endorsements).
10. Defense of Title, Transfers and Other Liens. Until the
performance in full of the Liabilities, the Pledgor shall defend the Pledgee's
title to and security interest in the Pledged Collateral against the claims of
all Persons, and the Pledgor shall not without complying with Section 3 of the
Stockholders Agreement (a) sell, assign, transfer, pledge or otherwise dispose
of or encumber, or grant any option with respect to, any of the Pledged
Collateral or any unpaid dividends or other distributions with respect thereto
to which the Pledgee is entitled pursuant to Section 9 hereof, or (b) create or
permit to exist any Lien upon or with respect to any of the Pledged Collateral,
except for the security interest under this Agreement. Notwithstanding the
foregoing, so long as no Event of Default has occurred, the Pledgor may Transfer
all or any of the Pledged Collateral in accordance with the Stockholders
Agreement, provided that the purchaser or transferee, as the case may be, (i)
acknowledges that the Pledged Collateral is subject to the terms of this
Agreement and (ii) executes an assumption of the obligations of such Pledgor
under this Agreement in form and substance reasonably acceptable to the Pledgee.
If such a sale or transfer is made in accordance with this Section 10, the
Pledgee shall permit the Pledged Collateral to be registered initially in the
name of the purchaser or transferee, as the case may be, and the proceeds from
such sale shall be released from the Lien hereunder and delivered to Pledgor;
provided that, the Pledged Collateral is immediately redeposited with the
Pledgee.
11. Rights and Remedies.
If the Purchase Right is exercised under Section 3(a) of the
Stockholders Agreement, the Pledgee shall have the right to transfer to itself
or such other Purchaser record and beneficial ownership of all or any portion of
the Pledged Collateral in exchange for payment by Pledgee or such other
Purchaser of the Call Price therefor in accordance with Section 3(a) of the
Stockholders Agreement. In addition, upon the occurrence of an Event of Default,
Pledgee also shall have all of the applicable rights and
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remedies with respect to the Pledged Collateral of a secured party under the
Uniform Commercial Code as in effect in the State of New York. The Pledgor
agrees to pay to the Pledgee all reasonable expenses (including, without
limitation, court costs and reasonable attorneys' fees and expenses) of, or
incident to, the enforcement of any of the provisions of this Agreement and such
expenses shall constitute Liabilities hereunder.
12. Security Interest Absolute. All rights of the Pledgee and
security interests hereunder, and all obligations of the Pledgor hereunder,
shall be absolute and unconditional irrespective of (a) any change in any manner
of any term of all or any part of the Liabilities, and (b) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Pledgor in respect of the Liabilities or of this Agreement.
13. Pledgee Appointed Attorney-in-Fact. The Pledgor hereby
irrevocably appoints the Pledgee as his attorney-in-fact, which appointment is
irrevocable and coupled with an interest, with full authority, in the name of
such Pledgor or otherwise, after the occurrence of an uncured Event of Default,
from time to time in the Pledgee's reasonable discretion, to take any action and
to execute any instrument that the Pledgee may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, to
take the following actions with respect to the Pledged Collateral:
(a) to receive, endorse and collect all instruments made
payable to the Pledgor representing any dividend or other distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same;
(b) to demand, sue for, collect, receive and give acquittance
for any and all monies due or to become due thereon or by virtue thereof;
(c) to settle, compromise, combine, prosecute or defend any
action or proceeding with respect thereto; and
(d) to sell, transfer, assign or otherwise deal in or with the
same or the proceeds thereof, as fully and effectually as if the Pledgee were
the absolute owner thereof; provided, however, that nothing in this Section 13
shall eliminate or modify Pledgee's obligation to pay the Call Price pursuant to
Section 3 of the Stockholders Agreement.
14. Waivers.
(a) The Pledgor hereby agrees that his obligations under this
Agreement shall be unconditional, irrespective of: (i) the validity or
enforceability, avoidance or subordination of the Liabilities; (ii) the absence
of any attempt by, or on behalf
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of, the Pledgee to collect, or take any other action to enforce, all or any part
of the Liabilities; (iii) the election of any remedy by, or on behalf of, the
Pledgee with respect to all or any part of the Liabilities; (iv) the failure of
the Pledgee to take any steps to perfect and maintain its security interests in,
or to the preserve its right to any of the Pledged Collateral for all or any
part of the Liabilities; or (v) any other circumstance that might otherwise
constitute a legal or equitable discharge or defense of the Pledgor.
(b) The Pledgor hereby waives any requirement of diligence,
presentment, demand of payment, protest or notice with respect to all or any
part of the Liabilities, the benefit of any statutes of limitation, and all
demands whatsoever, and covenants that this Agreement will not be discharged,
except by complete performance of the Liabilities, unless prior to such complete
performance, by an order or decree a court of competent jurisdiction states that
this Agreement is discharged.
(c) The Pledgor consents and agrees that neither the Pledgee
nor any party acting for or on behalf of the Pledgee shall be under any
obligation to marshal any assets in favor of the Pledgor or against or
satisfaction of all or any part of the Liabilities.
15. Term. This Agreement shall remain in full force and effect until
the Liabilities have been performed in full. Upon the termination of this
Agreement as provided above (other than as a result of the transfer of the
Pledged Collateral to Pledgee as provided in Section 11 or the sale of all of
the Pledged Collateral), all rights to the Pledged Collateral shall revert to
the Pledgor and the Pledgee shall (a) release the security interest created
hereunder, (b) promptly execute and deliver to the Pledgor a proper instrument
or instruments acknowledging the release and discharge of the security interest
created hereby and (c) assign, transfer and deliver to the Pledgor, at the
Pledgee's expense, the Pledged Collateral and the Powers then in the possession
of the Pledgee, together with any moneys at the time held by the Pledgee
hereunder.
16. Waiver of Bond. The Pledgor waives the posting of any bond
otherwise required of the Pledgee in connection with any judicial process or
proceeding to realize on the Pledged Collateral or any other security for the
Liabilities, to enforce any judgment or other court order entered in favor of
the Pledgee, or to enforce by specific performance, temporary restraining order,
or preliminary or permanent injunction, this Agreement.
17. Pledgee's Duty of Care. The Pledgee shall not be liable for any
acts, omissions, errors of judgment or mistakes of fact or law including,
without limitation, acts, omissions, errors or mistakes with respect to the
Pledged Collateral, except for those arising out of or in connection with the
Pledgee's (a) gross negligence or willful misconduct or (b) failure to exercise
reasonable care with respect to the safe custody and preservation of the Pledged
Collateral in the Pledgee's possession; provided, however, that the Pledgee
shall be deemed to have exercised reasonable care in the
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custody and preservation of the Pledged Collateral in the Pledgee's possession
if the Pledged Collateral is accorded treatment substantially equal to that
which it accords its own securities and property. Without limiting the
generality of the foregoing, the Pledgee shall be under no obligation to take
any steps necessary to preserve rights in the Pledged Collateral against any
other parties but may do so at its option. All expenses incurred in connection
therewith shall be for the sole account of the Pledgor, and shall constitute
part of the Liabilities secured hereby.
18. Notices. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be by registered
or certified first-class mail, return receipt requested, telecopier, pre-paid
overnight delivery service, or personal delivery:
(a) if to the Pledgor:
Mr. Walter Neubauer
c/o Ordnance Products Inc.
21200 S. Figueroa Street
Carson, California 90745
Telecopy: 310-618-3738
with a copy to:
Jeffer, Mangels, Butler & Marmaro LLP
2121 Avenue of the Stars
Tenth Floor
Los Angeles, California 90067
Telecopy: 310-203-0567
Attention: Robert H. Goon, Esq.
(b) if to the Pledgee:
J.F. Lehman & Company
450 Park Avenue
New York, New York 10022
Telecopy: (212) 634-1155
Attention: Mr. Keith Oster
with a copy to:
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Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopy: (212) 757-3990
Attention: Paul D. Ginsberg, Esq.
(c) or such other address and to the attention of such other
person as any party hereto may designate by written
notice to the other in accordance with the terms of this
Section 18.
All such notices and communications shall be deemed to have been duly given when
delivered by hand, if personally delivered; on the business day following
deposit with the overnight delivery service, if delivered by overnight delivery
service; five (5) [business] days after being deposited in the mail, postage
prepaid, if mailed; and when receipt is mechanically acknowledged, if
telecopied.
19. Amendments, Waivers and Consents. No amendment or waiver of any
provision of this Agreement nor consent to any departure by any party herefrom,
shall in any event be effective unless the same shall be in writing and signed
by all of the parties, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
20. Severability. In the event that any provision of this Agreement
shall be declared to be invalid, illegal or unenforceable, such provision shall
survive to the extent it is not so declared, and the validity, legality and
enforceability of the other provisions hereof shall not in any way be affected
or impaired thereby, unless such action would substantially impair the benefits
to either party of the remaining provisions of this Agreement.
21. Entire Agreement. This Agreement, together with the exhibits
hereto, and the Stockholders Agreement, are intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. This Agreement, together with
the exhibits hereto, and the Stockholders Agreement, supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
22. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meanings hereof.
23. Variations in Pronouns. All pronouns and any variations thereof
refer to masculine, feminine or neuter, singular or plural, as the context may
require.
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24. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
25. Consent to Jurisdiction; Counterclaims; Forum Non Conveniens.
(a) Exclusive Jurisdiction. Except as provided in subsection
(b) of this Section 25, the Pledgor and the Pledgee agree that all disputes
between them arising out of or related to the relationship established between
them in connection with this Agreement, whether arising in contract, tort,
equity, or otherwise, shall be resolved only by federal courts located in New
York, New York to the extent such courts have jurisdiction.
(b) Other Jurisdictions. The Pledgee shall have the right to
proceed against the Pledgor or his real or personal property in a court in any
location to enable the Pledgee to obtain personal jurisdiction over the Pledgor,
to realize on the Pledged Collateral or any other security for the Liabilities
or to enforce a judgment or other court order entered in favor of the Pledgee.
The Pledgor shall not assert any permissive counterclaims in any proceeding
brought by the Pledgee arising out of or relating to this Agreement.
(c) Venue; Forum Non Conveniens. Each of the Pledgor and the
Pledgee waives any objection that each may have (including, without limitation,
any objection to the laying of venue or based on forum non conveniens) to the
location of the court in which any proceeding is commenced in accordance with
this Section 25.
26. Service of Process. The Pledgor waives personal service of any
process upon him and, as security for the Liabilities, irrevocably consents to
service of process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Pledgor's address specified in Section 18 or such other
address designated by the Pledgor if the Pledgor has designated such other
address by written notice to the Pledgee in accordance with the terms of Section
18(c).
27. WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR AND THE PLEDGEE WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, BETWEEN THE PLEDGOR AND THE PLEDGEE ARISING OUT OF OR RELATED TO
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EITHER THE
PLEDGOR OR THE PLEDGEE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
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28. Advice of Counsel. The Pledgor represents and warrants to the
Pledgee that he has discussed this Agreement and, specifically, the provisions
of Sections 25 through 27 hereof, with the Pledgor's lawyers.
29. Further Assurances. The Pledgor agrees that, from time to time,
upon written request of the Pledgee, the Pledgor shall promptly execute and
deliver such further documents and do such other acts and things as the Pledgee
may from time to time reasonably request to enable the Pledgee to enforce its
rights hereunder with respect to the Pledged Collateral and in order to fully
effectuate the purposes of this Agreement.
30. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Pledgee and the Pledgor and their respective heirs,
executors, personal representatives, successors and assigns; provided, however,
that the Pledgor may not assign this Agreement or any of the rights and
obligations of the Pledgor hereunder without the prior written consent of the
Pledgee.
31. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
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IN WITNESS WHEREOF, the Pledgor and the Pledgee have executed this
Agreement as of the date set forth above.
PLEDGOR:
THE NEUBAUER FAMILY TRUST
By: /s/ Walter Neubauer
--------------------------
Walter Neubauer
Trustee
PLEDGEE:
J.F. LEHMAN & COMPANY
By: /s/ Donald Glickman
--------------------------
Name: Donald Glickman
Title: Partner
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Exhibit A
Form of Stock Power
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and
transfer to ______________________________ _____ shares, par value $.01 per
share (the "Stock"), of Common Stock of SPECIAL DEVICES INCORPORATED, a Delaware
corporation (the "Corporation"), represented by Certificate No. __, standing in
the name of the undersigned on the books of the Corporation and does hereby
irrevocably constitute and appoint _______________________ as the undersigned's
true and lawful attorney, for it and in its name and stead, to sell, assign and
transfer all or any of the Stock, and for that purpose to make and execute all
necessary acts of assignment and transfer thereof; and to substitute one or more
persons with like full power, hereby ratifying and confirming all that said
attorney or substitute or substitutes shall lawfully do by virtue hereof.
Dated: ________________
THE NEUBAUER FAMILY TRUST
By:_____________________________
Walter Neubauer
Trustee