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EXHIBIT 10.44
EXECUTION COPY
(CODE ALARM)
PLEDGE AGREEMENT
This PLEDGE AGREEMENT, dated as of October 24, 1997 (together
with all amendments, if any, from time to time hereto, this "Agreement") between
CODE-ALARM, INC., a Michigan corporation (the "Pledgor") and GENERAL ELECTRIC
CAPITAL CORPORATION in its capacity as Agent for "Lenders", as defined below
("Agent").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement dated as of
the date hereof by and among Pledgor (in such capacity, the "Borrower"), the
Persons named therein as Credit Parties, Agent and the Persons signatory thereto
from time to time as Lenders (including all annexes, exhibits and schedules
thereto, and as from time to time amended, restated, supplemented or otherwise
modified (the "Credit Agreement"), the Lenders have agreed to make Loans to, and
incur Letter of Credit Obligations for the benefit of, Borrower;
WHEREAS, Pledgor is the record and beneficial owner of the
shares of Stock listed in Schedule I hereto;
WHEREAS, in order to induce Agent and Lenders to make the
Loans and to incur the Letter of Credit Obligations as provided for in the
Credit Agreement, Pledgor has agreed to pledge the Pledged Collateral to Agent
in accordance herewith;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained and to induce Lenders to make Loans and to incur
Letter of Credit Obligations under the Credit Agreement, it is agreed as
follows:
1. Definitions. Unless otherwise defined herein, terms defined
in the Credit Agreement are used herein as therein defined, and the following
shall have (unless otherwise provided elsewhere in this Agreement) the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):
"Bankruptcy Code" means title 11, United States Code, as
amended from time to time, and any successor statute thereto.
"Pledged Collateral" has the meaning assigned to such term in
Section 2 hereof.
"Pledged Entity" means an issuer of Pledged Stock.
"Pledged Shares" means those shares listed in Schedule I
hereto.
"Secured Obligations" has the meaning assigned to such term in
Section 3 hereof.
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2. Pledge. Pledgor hereby pledges to Agent, and grants to
Agent for itself and the benefit of Lenders, a continuing security interest in
all of the following, other than Permitted Encumbrances collectively, the
"Pledged Collateral"):
(i) the Pledged Shares and the certificates
representing the Pledged Shares, and all dividends,
distributions, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
Pledged Shares; and
(ii) such portion, as determined by Agent as provided
in Section 6(d) below, of any additional shares of Stock of a
Pledged Entity from time to time acquired by Pledgor in any
manner (which shares shall be deemed to be part of the Pledged
Shares), and the certificates representing such additional
shares, and all dividends, distributions, cash, instruments
and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of such Stock.
3. Security for Obligations. This Agreement secures, and the
Pledged Collateral is security for, the prompt payment in full when due, whether
at stated maturity, by acceleration or otherwise, and performance of all
Obligations other than the Litigation Obligations of any kind under or in
connection with the Credit Agreement and the other Loan Documents other than the
Litigation Collateral Documents and all obligations of Pledgor now or hereafter
existing under this Agreement including, without limitation, all fees, costs and
expenses whether in connection with collection actions hereunder or otherwise
(collectively, the "Secured Obligations").
4. Delivery of Pledged Collateral. All certificates evidencing
the Pledged Collateral shall be delivered to and held by or on behalf of Agent,
for itself and the benefit of Lenders, pursuant hereto. All Pledged Shares shall
be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to Agent.
5. Representations and Warranties. Pledgor represents and
warrants to Agent that on the Closing Date and, unless otherwise specified
below, as of each time Pledgor requests or accepts the proceeds of an Advance or
Loan under the Credit Agreement:
(a) Pledgor is, and at the time of delivery of the Pledged
Shares to Agent will be, the sole holder of record and the sole
beneficial owner of such Pledged Collateral pledged by Pledgor free and
clear of any Lien thereon or affecting the title thereto, except for
Permitted Encumbrances or any Lien created by this Agreement;
(b) All of the Pledged Shares have been duly authorized,
validly issued and are fully paid and non-assessable;
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(c) Pledgor has the right and requisite authority to pledge,
assign, transfer, deliver, deposit and set over the Pledged Collateral
pledged by Pledgor to Agent as provided herein;
(d) None of the Pledged Shares has been issued or transferred
in violation of the securities registration, securities disclosure or
similar laws of any jurisdiction to which such issuance or transfer may
be subject;
(e) All of the Pledged Shares are presently owned by Pledgor,
and are presently represented by the certificates listed in Schedule I
hereto. As of the date hereof, there are no existing options, warrants,
calls or commitments of any character whatsoever relating to the
Pledged Shares;
(f) No consent, approval, authorization or other order or
other action by, and no notice to or filing with, any Governmental
Authority or any other Person is required (i) for the pledge by Pledgor
of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by Pledgor, or
(ii) for the exercise by Agent of the voting or other rights provided
for in this Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement, except as may be required in
connection with such disposition by laws affecting the offering and
sale of securities generally;
(g) The pledge, assignment and delivery of the Pledged
Collateral pursuant to this Agreement will create a valid Lien on and a
continuing perfected security interest in favor of the Agent for the
benefit of Agent and Lenders in the Pledged Collateral and the proceeds
thereof, securing the payment of the Secured Obligations, subject to no
other Lien (other than Permitted Encumbrances and Liens created
pursuant to the Litigation Collateral Documents);
(h) This Agreement has been duly authorized, executed and
delivered by Pledgor and constitutes a legal, valid and binding
obligation of Pledgor enforceable against Pledgor in accordance with
its terms; and
(i) The Pledged Shares constitute 100% of the issued and
outstanding shares of Stock of each Pledged Entity.
The representations and warranties set forth in this Section 5
shall survive the execution and delivery of this Agreement.
6. Covenants. Pledgor covenants and agrees that until the
Termination Date:
(a) Without the prior written consent of Agent, Pledgor will
not sell, assign, transfer, pledge, or otherwise encumber any of its
rights in or to the Pledged Collateral, or any unpaid dividends,
interest or other distributions or payments with respect to the
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Pledged Collateral or grant a Lien in the Pledged Collateral, unless
otherwise expressly permitted by the Credit Agreement;
(b) Pledgor will, at its expense, promptly execute,
acknowledge and deliver all such instruments and take all such actions
as Agent from time to time may request in order to ensure to Agent and
Lenders the benefits of the Liens in and to the Pledged Collateral
intended to be created by this Agreement, including the filing of any
necessary Code financing statements, which may be filed by Agent with
or (to the extent permitted by law) without the signature of Pledgor,
and will cooperate with Agent, at Pledgor's expense, in obtaining all
necessary approvals and making all necessary filings under federal,
state, local or foreign law in connection with such Liens or any sale
or transfer of the Pledged Collateral;
(c) Pledgor has and will defend the title to the Pledged
Collateral and the Liens of Agent in the Pledged Collateral against the
claim of any Person and will maintain and preserve such Liens; and
(d) Pledgor will, upon obtaining ownership of any additional
Stock of a Pledged Entity or Stock otherwise required to be pledged to
Agent pursuant to any of the Loan Documents (other than the Litigation
Collateral Documents), which Stock is not already Pledged Collateral,
promptly (and in any event within three (3) Business Days) deliver to
Agent a Pledge Amendment, duly executed by Pledgor, in substantially
the form of Schedule II hereto (a "Pledge Amendment") in respect of any
such additional Stock, pursuant to which Pledgor shall pledge to Agent
all of such additional Stock. Pledgor hereby authorizes Agent to attach
each Pledge Amendment to this Agreement and agrees that all Pledged
Shares listed on any Pledge Amendment delivered to Agent shall for all
purposes hereunder be considered Pledged Collateral.
7. Pledgor's Rights. As long as no Default or Event of Default
shall have occurred and be continuing and until written notice shall be given to
Pledgor in accordance with Section 8(a) hereof:
(a) Pledgor shall have the right, from time to time, to vote
and give consents with respect to the Pledged Collateral, or any part
thereof for all purposes not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document; provided,
however, that no vote shall be cast, and no consent shall be given or
action taken, which would have the effect of impairing the position or
interest of Agent in respect of the Pledged Collateral or which would
authorize, effect or consent to (unless and to the extent expressly
permitted by the Credit Agreement):
(i) the dissolution or liquidation, in whole or in part, of a
Pledged Entity;
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(ii) the consolidation or merger of a Pledged Entity with any
other Person;
(iii) the sale, disposition or encumbrance of all or
substantially all of the assets of a Pledged Entity, except for Liens
in favor of Agent;
(iv) any change in the authorized number of shares, the stated
capital or the authorized share capital of a Pledged Entity or the
issuance of any additional shares of its Stock; or
(v) the alteration of the voting rights with respect to the
Stock of a Pledged Entity; and
(b) (i) Pledgor shall be entitled, from time to time, to collect and
receive for its own use all cash dividends paid in respect of the
Pledged Shares to the extent not in violation of the Credit Agreement
other than any and all: (A) dividends paid or payable other than in
cash in respect of any Pledged Collateral, and instruments and other
property received, receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Collateral; (B) dividends and other
distributions paid or payable in cash in respect of any Pledged Shares
in connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in
capital of a Pledged Entity; and (C) cash paid, payable or otherwise
distributed, in respect of principal of, or in redemption of, or in
exchange for, any Pledged Collateral; provided, however, that until
actually paid all rights to such distributions shall remain subject to
the Lien created by this Agreement; and
(ii) all dividends (other than such cash dividends as are
permitted to be paid to Pledgor in accordance with clause (i) above)
and all other distributions in respect of any of the Pledged Shares,
whenever paid or made, shall be delivered to Agent to hold as Pledged
Collateral and shall, if received by Pledgor, be received in trust for
the benefit of Agent, be segregated from the other property or funds of
Pledgor, and be forthwith delivered to Agent as Pledged Collateral in
the same form as so received (with any necessary indorsement).
8. Defaults and Remedies.
(a) Upon the occurrence of an Event of Default and during the
continuation of such Event of Default, and concurrently with written
notice to Pledgor, Agent (personally or through an agent) is hereby
authorized and empowered to transfer and register in its name or in the
name of its nominee the whole or any part of the Pledged Collateral, to
exchange certificates representing or evidencing Pledged Collateral for
certificates of smaller or larger denominations, to exercise the voting
rights with respect thereto, to collect and receive all cash dividends
and other distributions made thereon, to sell in one
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or more sales after ten (10) days' notice of the time and place of any
public sale or of the time at which a private sale is to take place
(which notice Pledgor agrees is commercially reasonable) the whole or
any part of the Pledged Collateral and to otherwise act with respect to
the Pledged Collateral as though Agent was the outright owner thereof,
Pledgor hereby irrevocably constituting and appointing Agent as the
proxy and attorney-in-fact of Pledgor, with full power of substitution
to do so, and which appointment shall remain in effect until the
Termination Date; provided, however, Agent shall not have any duty to
exercise any such right or to preserve the same and shall not be liable
for any failure to do so or for any delay in doing so. Any sale shall
be made at a public or private sale at Agent's place of business, or at
any place to be named in the notice of sale, either for cash or upon
credit or for future delivery at such price as Agent may deem fair, and
Agent may be the purchaser of the whole or any part of the Pledged
Collateral so sold and hold the same thereafter in its own right free
from any claim of Pledgor or any right of redemption. Each sale shall
be made to the highest bidder, but Agent reserves the right to reject
any and all bids at such sale which, in its discretion, it shall deem
inadequate. Demands of performance, except as otherwise herein
specifically provided for, notices of sale, advertisements and the
presence of property at sale are hereby waived and any sale hereunder
may be conducted by an auctioneer or any officer or agent of Agent.
(b) If, at the original time or times appointed for the sale
of the whole or any part of the Pledged Collateral, the highest bid, if
there be but one sale, shall be inadequate to discharge in full all the
Secured Obligations, or if the Pledged Collateral be offered for sale
in lots, if at any of such sales, the highest bid for the lot offered
for sale would indicate to Agent, in its discretion, that the proceeds
of the sales of the whole of the Pledged Collateral would be unlikely
to be sufficient to discharge all the Secured Obligations, Agent may,
on one or more occasions and in its discretion, postpone any of said
sales by public announcement at the time of sale or the time of
previous postponement of sale, and no other notice of such postponement
or postponements of sale need be given, any other notice being hereby
waived; provided, however, that any sale or sales made after such
postponement shall be after ten (10) days' notice to Pledgor.
c) If, at any time when Agent in its sole discretion
determines, following the occurrence and during the continuance of an
Event of Default, that, in connection with any actual or contemplated
exercise of its rights (when permitted under this Section 8) to sell
the whole or any part of the Pledged Shares hereunder, it is necessary
or advisable to effect a public registration of all or part of the
Pledged Collateral pursuant to the Securities Act of 1933, as amended
(or any similar statute then in effect) (the "Act"), Pledgor shall, in
an expeditious manner, cause the Pledged Entities to:
(i) Prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with
respect to the Pledged Shares and in good faith use
commercially reasonable efforts to cause such registration
statement to become and remain effective;
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(ii) Prepare and file with the Commission such
amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to
comply with the provisions of the Act with respect to the sale
or other disposition of the Pledged Shares covered by such
registration statement whenever Agent shall desire to sell or
otherwise dispose of the Pledged Shares;
(iii) Furnish to Agent such numbers of copies of a
prospectus and a preliminary prospectus, in conformity with
the requirements of the Act, and such other documents as Agent
may request in order to facilitate the public sale or other
disposition of the Pledged Shares by Agent;
(iv) Use commercially reasonable efforts to register
or qualify the Pledged Shares covered by such registration
statement under such other securities or blue sky laws of such
jurisdictions within the United States and Puerto Rico as
Agent shall request, and do such other reasonable acts and
things as may be required of it to enable Agent to consummate
the public sale or other disposition in such juris dictions of
the Pledged Shares by Agent;
(v) Furnish, at the request of Agent, on the date
that shares of the Pledged Collateral are delivered to the
underwriters for sale pursuant to such registration or, if the
security is not being sold through underwriters, on the date
that the registration statement with respect to such Pledged
Shares becomes effective, (A) an opinion, dated such date, of
the independent counsel representing such registrant for the
purposes of such registration, addressed to the underwriters,
if any, and in the event the Pledged Shares are not being sold
through underwriters, then to Agent, in customary form and
covering matters of the type customarily covered in such legal
opinions; and (B) a comfort letter, dated such date, from the
independent certified public accountants of such registrant,
addressed to the underwriters, if any, and in the event the
Pledged Shares are not being sold through underwriters, then
to Agent, in a customary form and covering matters of the type
customarily covered by such comfort letters and as the
underwriters or Agent shall reasonably request. The opinion of
counsel referred to above shall additionally cover such other
legal matters with respect to the registration in respect of
which such opinion is being given as Agent may reasonably
request. The letter referred to above from the independent
certified public accountants shall additionally cover such
other financial matters (including information as to the
period ending not more than five (5) Business Days prior to
the date of such letter) with respect to the registration in
respect of which such letter is being given as Agent may
reasonably request; and
(vi) Otherwise use commercially reasonable efforts to
comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as
soon as reasonably practicable but not later than 18 months
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after the effective date of the registration statement, an
earnings statement covering the period of at least 12 months
beginning with the first full month after the effective date
of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
(d) All expenses incurred in complying with Section 8(c)
hereof, including, without limitation, all registration and filing fees
(including all expenses incident to filing with the National
Association of Securities Dealers, Inc.), printing expenses, fees and
disbursements of counsel for the registrant, the fees and expenses of
counsel for Agent, expenses of the independent certified public
accountants (including any special audits incident to or required by
any such registration) and expenses of complying with the securities or
blue sky laws or any jurisdictions, shall be paid by Pledgor.
(e) If, at any time when Agent shall determine to exercise its
right to sell the whole or any part of the Pledged Collateral
hereunder, such Pledged Collateral or the part thereof to be sold shall
not, for any reason whatsoever, be effectively registered under the
Securities Act of 1933, as amended (or any similar statute then in
effect) (the "Act"), Agent may, in its discretion (subject only to
applicable requirements of law), sell such Pledged Collateral or part
thereof by private sale in such manner and under such circumstances as
Agent may deem necessary or advisable, but subject to the other
requirements of this Section 8, and shall not be required to effect
such registration or to cause the same to be effected. Without limiting
the generality of the foregoing, in any such event, Agent in its
discretion (x) may, in accordance with applicable securities laws,
proceed to make such private sale notwithstanding that a registration
statement for the purpose of registering such Pledged Collateral or
part thereof could be or shall have been filed under said Act (or
similar statute), (y) may approach and negotiate with a single possible
purchaser to effect such sale, and (z) may restrict such sale to a
purchaser who is an accredited investor under the Act and who will
represent and agree that such purchaser is purchasing for its own
account, for investment and not with a view to the distribution or sale
of such Pledged Collateral or any part thereof. In addition to a
private sale as provided above in this Section 8, if any of the Pledged
Collateral shall not be freely distributable to the public without
registration under the Act (or similar statute) at the time of any
proposed sale pursuant to this Section 8, then Agent shall not be
required to effect such registration or cause the same to be effected
but, in its discretion (subject only to applicable requirements of
law), may require that any sale hereunder (including a sale at auction)
be conducted subject to restrictions:
(i) as to the financial sophistication and ability
of any Person permitted to bid or purchase at any such sale;
(ii) as to the content of legends to be placed upon
any certificates representing the Pledged Collateral sold in
such sale, including restrictions on future transfer thereof;
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(iii) as to the representations required to be made
by each Person bidding or purchasing at such sale relating to
that Person's access to financial information about Pledgor
and such Person's intentions as to the holding of the Pledged
Collateral so sold for investment for its own account and not
with a view to the distribution thereof; and
(iv) as to such other matters as Agent may, in its
discretion, deem necessary or appropriate in order that such
sale (notwithstanding any failure so to register) may be
effected in compliance with the Bankruptcy Code and other laws
affecting the enforcement of creditors' rights and the Act and
all applicable state securities laws.
(f) Pledgor recognizes that Agent may be unable to effect a
public sale of any or all the Pledged Collateral and may be compelled
to resort to one or more private sales thereof in accordance with
clause (e) above. Pledgor also acknowledges that any such private sale
may result in prices and other terms less favorable to the seller than
if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall not be deemed to
have been made in a commercially unreasonable manner solely by virtue
of such sale being private. Agent shall be under no obligation to delay
a sale of any of the Pledged Collateral for the period of time
necessary to permit the Pledged Entity to register such securities for
public sale under the Act, or under applicable state securities laws,
even if Pledgor and the Pledged Entity would agree to do so.
(g) Pledgor agrees to the maximum extent permitted by
applicable law that following the occurrence and during the continuance
of an Event of Default it will not at any time plead, claim or take the
benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay
the enforcement of this Agreement, or the absolute sale of the whole or
any part of the Pledged Collateral or the possession thereof by any
purchaser at any sale hereunder, and Pledgor waives the benefit of all
such laws to the extent it lawfully may do so. Pledgor agrees that it
will not interfere with any right, power and remedy of Agent provided
for in this Agreement or now or hereafter existing at law or in equity
or by statute or otherwise, or the exercise or beginning of the
exercise by Agent of any one or more of such rights, powers or
remedies. No failure or delay on the part of Agent to exercise any such
right, power or remedy and no notice or demand which may be given to or
made upon Pledgor by Agent with respect to any such remedies shall
operate as a waiver thereof, or limit or impair Agent's right to take
any action or to exercise any power or remedy hereunder, without notice
or demand, or prejudice its rights as against Pledgor in any respect.
(h) Pledgor further agrees that a breach of any of the
covenants contained in this Section 8 will cause irreparable injury to
Agent, that Agent shall have no adequate remedy at law in respect of
such breach and, as a consequence, agrees that each and every covenant
contained in this Section 8 shall be specifically enforceable against
Pledgor, and
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Pledgor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense
that the Secured Obligations are not then due and payable in accordance
with the agreements and instruments governing and evidencing such
obligations.
9. Waiver. No delay on Agent's part in exercising any power of
sale, Lien, option or other right hereunder, and no notice or demand which may
be given to or made upon Pledgor by Agent with respect to any power of sale,
Lien, option or other right hereunder, shall constitute a waiver thereof, or
limit or impair Agent's right to take any action or to exercise any power of
sale, Lien, option, or any other right hereunder, without notice or demand, or
prejudice Agent's rights as against Pledgor in any respect.
10. Assignment. Agent may assign, indorse or transfer any
instrument evidencing all or any part of the Secured Obligations as provided in,
and in accordance with, the Credit Agreement, and the holder of such instrument
shall be entitled to the benefits of this Agreement.
11. Termination. Immediately following the Termination Date,
Agent shall deliver to Pledgor the Pledged Collateral pledged by Pledgor at the
time subject to this Agreement and all instruments of assignment executed in
connection therewith, free and clear of the Liens hereof and, except as
otherwise provided herein, all of Pledgor's obligations hereunder shall at such
time terminate.
12. Lien Absolute. All rights of Agent hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any part of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from
the Credit Agreement, any other Loan Document or any other agreement or
instrument governing or evidencing any Secured Obligations;
(c) any exchange, release or non-perfection of any other
Collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
(d) the insolvency of any Credit Party; or
(e) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Pledgor.
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13. Release. Pledgor consents and agrees that Agent may at any
time, or from time to time, in its discretion:
(a) renew, extend or change the time of payment, and/or the
manner, place or terms of payment of all or any part of the Secured
Obligations; and
(b) exchange, release and/or surrender all or any of the
Collateral (including the Pledged Collateral), or any part thereof, by
whomsoever deposited, which is now or may hereafter be held by Agent in
connection with all or any of the Secured Obligations; all in such
manner and upon such terms as Agent may deem proper, and without notice
to or further assent from Pledgor, it being hereby agreed that Pledgor
shall be and remain bound upon this Agreement, irrespective of the
value or condition of any of the Collateral, and notwithstanding any
such change, exchange, settlement, compromise, surrender, release,
renewal or extension, and notwithstanding also that the Secured
Obligations may, at any time, exceed the aggregate principal amount
thereof set forth in the Credit Agreement, or any other agreement
governing any Secured Obligations. Pledgor hereby waives notice of
acceptance of this Agreement, and also presentment, demand, protest and
notice of dishonor of any and all of the Secured Obligations, and
promptness in commencing suit against any party hereto or liable
hereon, and in giving any notice to or of making any claim or demand
hereunder upon Pledgor. No act or omission of any kind on Agent's part
shall in any event affect or impair this Agreement.
14. Reinstatement. Notwithstanding anything contained herein
to the contrary, this Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against Pledgor or
any Pledged Entity for liquidation or reorganization, should Pledgor or any
Pledged Entity become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any
significant part of Pledgor's or a Pledged Entity's assets, and shall continue
to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
applicable law, rescinded, avoided or reduced in amount, or must otherwise be
restored or returned by any obligee of the Secured Obligations, whether as a
"voidable preference", "fraudulent transfer", "fraudulent conveyance", or
otherwise, all as though such payment or performance had not been made.
Notwithstanding anything contained herein to the contrary, in the event that any
payment, or any part thereof, is rescinded, avoided, reduced, restored or
returned, the Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, avoided, reduced, restored or returned.
15. Miscellaneous.
(a) Agent may execute any of its duties hereunder by or
through agents or employees and shall be entitled to advice of counsel
concerning all matters pertaining to its duties hereunder.
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(b) Pledgor agrees to promptly reimburse Agent for actual
out-of-pocket expenses, including, without limitation, reasonable
counsel fees, incurred by Agent in connection with the administration
and enforcement of this Agreement as provided in the Credit Agreement.
(c) Neither Agent, nor any of its respective officers,
directors, employees, agents or counsel shall be liable for any action
lawfully taken or omitted to be taken by it or them hereunder or in
connection herewith, except for its or their own gross negligence or
willful misconduct as finally determined by a court of competent
jurisdiction.
(d) THIS AGREEMENT SHALL BE BINDING UPON PLEDGOR AND ITS
SUCCESSORS AND ASSIGNS (INCLUDING A DEBTOR-IN-POSSESSION ON BEHALF OF
PLEDGOR), AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY,
AGENT AND ITS SUCCESSORS AND ASSIGNS, AND SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, AND
NONE OF THE TERMS OR PROVISIONS OF THIS AGREEMENT MAY BE WAIVED,
ALTERED, MODIFIED OR AMENDED EXCEPT IN WRITING DULY SIGNED FOR AND ON
BEHALF OF AGENT AND PLEDGOR.
16. Severability. If for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing or
future law, such invalidity shall not impair the operation of or effect those
portions of this Agreement which are valid.
17. Notices. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give or serve upon any other a communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be given in the manner, and deemed
received, as provided for in the Credit Agreement.
18. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
19. Counterparts. This Agreement may be executed in any number
of counterparts, which shall, collectively and separately, constitute one
agreement.
20. Benefit of Lenders. All security interests granted or
contemplated hereby shall be for the benefit of Agent and Lenders, and all
proceeds or payments realized from the Pledged Collateral in accordance herewith
shall be applied to the Secured Obligations in accordance with the terms of the
Credit Agreement.
12
13
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
CODE-ALARM, INC.
By: /s/ Rand Mueller
----------------------------------
Name: Rand Mueller
----------------------------
Title: President
----------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent
By: /s/ Timothy S. Van Kirk
----------------------------------
Name: Timothy S. Van Kirk
------------------------------
Its Duly Authorized Signatory
14
SCHEDULE I
PLEDGED SHARES
Class Stock Certificate Number Percentage of
Pledged Entity of Stock Number(s) of Shares Outstanding Shares
-------------- -------- ----------- --------- ------------------
Tessco Group, Inc. Common 001 1000 100%
Anes, Inc. Common 1001 1000 100%
Chapman Security Systems, Inc. Common 1001 1000 100%
Intercept Systems, Inc. Common 1001 1000 100%
15
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated October 24, 1997 is delivered
pursuant to Section 6(d) of the Pledge Agreement referred to below. All defined
terms herein shall have the meanings ascribed thereto or incorporated by
reference in the Pledge Agreement. The undersigned hereby certifies that the
representations and warranties in Section 5 of the Pledge Agreement are and
continue to be true and correct, both as to the shares pledged prior to this
Pledge Amendment and as to the shares pledged pursuant to this Pledge Amendment.
The undersigned further agrees that this Pledge Amendment may be attached to
that certain Pledge Agreement, dated October 24, 1997, between undersigned, as
Pledgor, and General Electric Capital Corporation, as Agent, (the "Pledge
Agreement") and that the Pledged Shares listed on this Pledge Amendment shall be
and become a part of the Pledged Collateral referred to in said Pledge Agreement
and shall secure all Secured Obligations referred to in said Pledge Agreement.
The undersigned acknowledges that any shares not included in the Pledged
Collateral at the discretion of Agent may not otherwise be pledged by Pledgor to
any other Person or otherwise used as security for any obligations other than
the Secured Obligations or the Litigation Obligations.
CODE-ALARM, INC.
By:____________________________
Name:_______________________
Title:______________________
Name and Class Certificate Number
Address of Pledgor Pledged Entity of Stock Number(s) of Shares
------------------ -------------- -------- ---------- ---------
16
EXHIBIT
to
PLEDGE AGREEMENT
dated as of October 24, 1997
Form of Stock Power
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign
and transfer to ________________________________________ _____ Shares of Capital
Stock of Tessco Group, Inc., a Michigan corporation, represented by Certificate
No. _____________ (the "Stock"), standing in the name of the undersigned on the
books of said 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 endorsements or other 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: October 24, 1997
CODE-ALARM, INC.
By:______________________
Title:
17
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign
and transfer to ________________________________________ _____ Shares of Capital
Stock of Tessco Group, Inc., a Michigan corporation, represented by Certificate
No. _________ (the "Stock"), standing in the name of the undersigned on the
books of said 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 endorsements or other 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: October 24, 1997
CODE-ALARM, INC.
By: /s/ Rand Mueller
-----------------------
Title: President
18
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign
and transfer to ________________________________________ _____ Shares of Capital
Stock of Anes, Inc., a Michigan corporation, represented by Certificate No.
_________ (the "Stock"), standing in the name of the undersigned on the books of
said 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
endorsements or other 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: October 24, 1997
CODE-ALARM, INC.
By: /s/ Rand Mueller
----------------------
Title: President
19
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign
and transfer to ________________________________________ _____ Shares of Capital
Stock of Chapman Security Systems, Inc., a Michigan corporation, represented by
Certificate No. ___________ (the "Stock"), standing in the name of the
undersigned on the books of said 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 endorsements or other 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: October 24, 1997
CODE-ALARM, INC.
By: /s/ Rand Mueller
------------------------
Title: President
20
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign
and transfer to ________________________________________ _____ Shares of Capital
Stock of Intercept Systems, Inc., a Michigan corporation, represented by
Certificate No. (the "Stock"), standing in the name of the undersigned on the
books of said 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 endorsements or other 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: October 24, 1997
CODE-ALARM, INC.
By: /s/ Rand Mueller
------------------------
Title: President