Exhibit 10.2
PLEDGE AGREEMENT
This PLEDGE AGREEMENT is made and entered into as of November 12, 2004
by MXL Industries, Inc., a Delaware corporation ("MXL", or the "Pledgor"), in
favor of Bedford Oak Partners, L.P. ("Bedford Oak"), as collateral agent (in
such capacity, the "Agent") for itself and Jerome Feldman ("Feldman" and,
together with Bedford Oak, the "Secured Parties").
WHEREAS, MXL and MXL's parent, National Patent Development Corporation
("NPDC"), have entered into a Note Purchase Agreement with Bedford Oak and
Feldman, dated the date hereof (the "Purchase Agreement"), pursuant to which
NPDC shall issue and sell $1,590,000 aggregate principal amount of its 6%
Secured Notes due 2009 (the "Notes") to Bedford Oak and Feldman; and
WHEREAS, NPDC shall use the proceeds of such issuance and sale of the
Notes to exercise its option to purchase 2,068,966 Series B Convertible
Preferred Shares (the "Shares") of Valera Pharmaceuticals, Inc. ("Valera"), and,
immediately upon exercise of such option, shall contribute the Shares to MXL;
and
WHEREAS, as a condition to their purchase of the Notes pursuant to the
Purchase Agreement, the Purchasers have required the Pledgor to pledge to the
Agent, for the equal and ratable benefit of the Secured Parties, all of the
Shares and any other shares of the capital stock of Valera held by it
(collectively, the "Pledged Shares") as security for the indebtedness of NPDC
under the Notes; and
WHEREAS, in consideration of the contribution of the Shares by NPDC to
the Pledgor, the Pledgor desires to make such pledge;
NOW, THEREFORE, in consideration of the foregoing premises and to
induce Bedford Oak and Feldman to purchase the Notes pursuant to the Purchase
Agreement, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Pledgor hereby agrees with the
Agent for the benefit of itself and the Secured Parties as follows:
Section 1. Pledge. As security for the payment and performance when due
(whether upon demand or otherwise) of the indebtedness represented by, and any
other amounts payable by Pledgor under or in connection with, the Notes (the
"Secured Obligations"), the Pledgor hereby pledges, assigns, transfers and
grants to the Agent for the equal and ratable benefit of the Secured Parties, a
lien on and security interest in and to all of the right, title and interest of
the Pledgor in and to the following property, in each case whether now existing
or hereafter acquired (collectively, the "Pledged Collateral"):
(a) the Pledged Shares, including the certificates representing the Pledged
Shares and any interest of the Pledgor in the entries on the books of
any financial intermediary pertaining to the Pledged Shares;
(b) all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital, income, profits and other property,
interests or proceeds from time to time received, receivable or
otherwise distributed to the Pledgor in respect of or in exchange for
any or all of the Pledged Shares (collectively, "Distributions"); and
(c) all proceeds (as defined under the Uniform Commercial Code as in effect
in any relevant jurisdiction (the "UCC") or under other relevant law)
of any and all of the foregoing.
Section 2. No Release. Nothing set forth in this Agreement shall
relieve the Pledgor from the performance of any term, covenant, condition or
agreement on the Pledgor's part to be performed or observed under or in respect
of any of the Pledged Collateral or from any liability to any individual,
corporation, partnership or other legal entity ("Persons") under or in respect
of any of the Pledged Collateral or shall impose any obligation on the Agent or
any Secured Party to perform or observe any such term, covenant, condition or
agreement on the Pledgor's part to be so performed or observed or shall impose
any liability on the Agent or any Secured Party for any act or omission on the
part of the Pledgor relating thereto or for any breach of any representation or
warranty on the part of the Pledgor contained in this Agreement or under or in
respect of the Pledged Collateral or made in connection herewith or therewith.
Section 3. Delivery of Pledged Collateral. All certificates, agreements
or instruments representing or evidencing the Pledged Collateral, to the extent
not previously delivered to the Agent, shall immediately upon receipt thereof by
the Pledgor be delivered to and held by or on behalf of the Agent pursuant
hereto. All Pledged Collateral shall be in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of transfer or
assignment in blank (with signatures appropriately guaranteed), all in form and
substance satisfactory to the Agent. The Agent shall have the right, at any time
upon the occurrence and during the continuance of an Event of Default (as
defined in the Notes) and without notice to the Pledgor, to endorse, assign or
otherwise transfer to or to register in the name of the Agent or any of its
nominees any or all of the Pledged Collateral. In addition, upon the occurrence
and during the continuance of an Event of Default, the Agent shall have the
right at any time to exchange certificates representing or evidencing Pledged
Collateral for certificates of smaller or larger denominations.
Section 4. Supplements, Further Assurances. The Pledgor agrees that at
any time and from time to time, at the sole cost and expense of the Pledgor, the
Pledgor shall promptly execute and deliver all further instruments and
documents, and take all further action that may be necessary or that the Agent
may reasonably request, in order to perfect and protect the pledge, security
interest and lien granted or purported to be granted hereby or to enable the
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Pledged Collateral.
Section 5. Representations and Warranties. The Pledgor represents and
warrants as follows:
(a) No Liens. The Pledgor is, and at the time of any delivery
of any Pledged Collateral to the Agent pursuant to Section 3 will be,
the sole legal and beneficial owner of the Pledged Collateral, and all
such Pledged Collateral is on the date hereof, and will be, so owned by
the Pledgor free and clear of any lien except for the lien created by
this Agreement.
(b) Authorization, Enforceability. The Pledgor has full
authority and legal right to pledge and grant a security interest
pursuant to this Agreement in all the Pledged Collateral, and this
Agreement constitutes the legal, valid and binding obligation of the
Pledgor, enforceable against the Pledgor in accordance with its terms.
(c) No Consents, etc. No consent of any party and no consent,
authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body or other Person is
required for the pledge by the Pledgor of the Pledged Collateral
pursuant to this Agreement or the execution, delivery or performance of
this Agreement by the Pledgor, the exercise by the Agent of the voting
or other rights provided for in this Agreement, or the exercise by the
Agent of the remedies in respect of the Pledged Collateral pursuant to
this Agreement.
(d) Delivery of Pledged Collateral; Filings. The delivery to the Agent of
all certificates representing the Pledged Shares creates a valid and
perfected first priority security interest in all of the Pledged
Collateral securing the payment of the Secured Obligations pursuant to
the UCC in effect in any applicable jurisdiction.
Section 6. Voting Rights; Distributions; etc. (a) So long as no Event
of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Shares or any part thereof
for any purpose not inconsistent with the terms or purpose of this
Agreement or the Notes; provided, that the Pledgor shall not exercise
such rights in any manner which may have an adverse effect on the value
of the Pledged Collateral or the security intended to be provided by
this Agreement.
(ii) The Pledgor shall be entitled to receive and retain, and to utilize
free and clear of the lien of this Agreement, any and all cash
Distributions, provided, that any and all such Distributions other than
cash shall be, and shall be forthwith delivered to the Agent to hold
as, Pledged Collateral and shall, if received by the Pledgor, be
received in trust for the benefit of the Agent, be segregated from the
other property or funds of the Pledgor, and be forthwith delivered to
the Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement).
(iii) The Agent shall be deemed without further action or formality to have
granted to the Pledgor all necessary consents relating to voting rights
and shall, if necessary, upon written request of the Pledgor and at the
Pledgor's sole cost and expense, from time to time execute and deliver
(or cause to be executed and delivered) to the Pledgor all such
instruments as the Pledgor may reasonably request in order to permit
the Pledgor to exercise the voting and other rights which it is
entitled to exercise pursuant to Section 6(a)(i) hereof and to receive
the Distributions which it is authorized to receive and retain pursuant
to Section 6(a)(ii) hereof.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of the Pledgor to exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant
to Section 6(a)(i) hereof without any action or the giving of any
notice shall cease, and all such rights shall thereupon become vested
in the Agent, which shall thereupon have the sole right to exercise
such voting and other consensual rights.
(ii) Subject to Section 9(a) hereof, all rights of the Pledgor
to receive Distributions which it would otherwise be authorized to
receive and retain pursuant to Section 6(a)(ii) hereof shall cease and
all such rights shall thereupon become vested in the Agent, which shall
thereupon have the sole right to receive and hold as Pledged Collateral
such Distributions.
(c) The Pledgor shall, at the Pledgor's sole cost and expense, from
time to time execute and deliver to the Agent appropriate instruments as the
Agent may request in order to permit the Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 6(b)(i) hereof
and to receive all Distributions which it may be entitled to receive under
Section 6(b)(ii) hereof.
(d) All Distributions which are received by the Pledgor contrary to the
provisions of Section 6(b)(ii) hereof shall be received in trust for the benefit
of the Agent, shall be segregated from other funds of the Pledgor and shall
immediately be paid over to the Agent as Pledged Collateral in the same form as
so received (with any necessary endorsement).
Section 7. Transfers and Other Liens; Principal Office. The Pledgor
agrees that it shall not (a) sell, convey, assign or otherwise dispose of, or
grant any option, right or warrant with respect to, any of the Pledged
Collateral, (b) create or permit to exist any lien upon or with respect to any
Pledged Collateral other than the lien and security interest granted to the
Agent under this Agreement, or (c) relocate its principal office outside of the
State of New York without the prior written consent of Agent.
Section 8. Reasonable Care. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if such Pledged Collateral is accorded treatment substantially
equivalent to that which the Agent, in its individual capacity, accords its own
property consisting of similar instruments or interests, it being understood
that neither the Agent nor any of the Secured Parties shall have responsibility
for ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Collateral, whether
or not the Agent or any other Secured Party has or is deemed to have knowledge
of such matters, or taking any necessary steps to preserve rights against any
Person with respect to any Pledged Collateral.
Section 9. Remedies Upon Event of Default; Decisions Relating to
Exercise of Remedies. (a) If an Event of Default shall occur and be continuing,
the Agent shall have the right, in addition to other rights and remedies
provided for herein or otherwise available to it to be exercised from time to
time, (i) to retain and apply the Distributions to the Secured Obligations as
provided in Section 10 hereof, and (ii) to exercise all the rights and remedies
of a secured party on default under the Uniform Commercial Code in effect in the
State of New York at that time, and the Agent may also in its sole discretion,
without notice except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any exchange,
broker's board or at any of the Agent's offices or elsewhere, for cash, on
credit or for future delivery, and at such price or prices and upon such other
terms as the Agent may deem commercially reasonable. The Agent or any other
Secured Party or any of their respective affiliates may be the purchaser of any
or all of the Pledged Collateral at any such sale and shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Pledged Collateral sold at such sale, to use and apply
any of the Secured Obligations owed to such Person as a credit on account of the
purchase price of any Pledged Collateral payable by such Person at such sale.
Each purchaser at any such sale shall acquire the property sold absolutely free
from any claim or right on the part of the Pledgor, and the Pledgor hereby
waives (to the fullest extent permitted by law) all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. The Pledgor
acknowledges and agrees that, to the extent notice of sale shall be required by
law, five days notice to the Pledgor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. The Agent shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. The Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. The Pledgor hereby waives any
claims against the Agent arising by reason of the fact that the price at which
any Pledged Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if the Agent
accepts the first offer received and does not offer such Pledged Collateral to
more than one offeree.
(b) The Pledgor acknowledges that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws, the Agent may be compelled, with respect to
any sale of all or any part of the Pledged Collateral, to limit purchasers to
Persons who will agree, among other things, to acquire the Pledged Collateral
for their own account, for investment and not with a view to the distribution or
resale thereof. The Pledgor further acknowledges that any such private sales may
be at prices and on terms less favorable to the Agent than those obtainable
through a public sale without such restrictions, and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Pledged Collateral for the period of time necessary to permit the issuer thereof
to register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer
would agree to do so.
(c) In addition to any of the other rights and remedies hereunder, the
Agent shall have the right to institute a proceeding seeking specific
performance in connection with any of the agreements or obligations hereunder.
Section 10. Application of Proceeds. All Distributions held from time
to time by the Agent and all cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Pledged Collateral pursuant to the exercise by the Agent of its remedies as a
secured creditor as provided in Section 9 hereof shall be applied, together with
any other sums then held by the Agent pursuant to this Agreement, promptly by
the Agent as follows:
First, to the payment of all reasonable costs and expenses,
fees, commissions and taxes of such sale, collection or other
realization, including, without limitation, compensation to the Agent
and its agents and counsel, and all expenses, liabilities and advances
made or incurred by the Agent in connection therewith; and
Second, to the payment of all other fees, expenses, principal
and interest under the Notes, and to any other amounts owing to the
Agent and any other Secured Parties under the Notes; and
Third, to the payment of the balance or surplus, if any, to
the Pledgor, its successors and assigns, or to whomsoever may be
lawfully entitled to receive the same.
Section 11. Expenses. The Pledgor will upon demand pay to the Agent the
amount of any and all expenses, including the reasonable fees and expenses of
its counsel and, after the occurrence of an Event of Default, the reasonable
fees and expenses of any experts and agents which the Agent may incur in
connection with the collection of the Secured Obligations, the enforcement and
administration of this Agreement, the custody or preservation of, or the sale
of, collection from, or other realization upon, any of the Pledged Collateral,
the exercise or enforcement of any of the rights of the Agent hereunder or the
failure by the Pledgor to perform or observe any of the provisions hereof. All
amounts payable by the Pledgor under this Section 11 shall be due upon demand
and shall be part of the Secured Obligations.
Section 12. No Waiver; Cumulative Remedies. (a) No failure on the part
of the Agent to exercise, no course of dealing with respect to, and no delay on
the part of the Agent in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
provided are cumulative and are not exclusive of any remedies provided by law.
(b) In the event the Agent shall have instituted any proceeding to
enforce any right, power or remedy under this instrument by foreclosure, sale,
entry or otherwise, and such proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Agent,
then and in every such case, the Pledgor, the Agent and each holder of any of
the Secured Obligations shall be restored to their respective former positions
and rights hereunder with respect to the Pledged Collateral, and all rights,
remedies and powers of the Agent and the Secured Parties shall continue as if no
such proceeding had been instituted.
Section 13. Secured Parties May Perform; Secured Parties Appointed
Attorney-in-Fact. If the Pledgor shall fail to do any act or thing that it has
covenanted to do hereunder or any warranty on the part of the Pledgor contained
herein shall be breached, the Agent or any Secured Party may (but shall not be
obligated to) upon three business days notice to the Pledgor specifying the
action to be taken, do the same or cause it to be done or remedy any such
breach, and may expend funds for such purpose. Any and all amounts so expended
by the Agent or such Secured Party shall be paid by the Pledgor promptly upon
demand therefor. The Pledgor hereby appoints the Agent its attorney-in-fact with
an interest, with full authority in the place and stead of the Pledgor and in
the name of the Pledgor, or otherwise, from time to time in the Agent's
discretion to take any action and to execute any instrument consistent with the
terms of this Agreement and the Notes which the Agent may deem necessary or
advisable to accomplish the purposes of this Agreement. The foregoing grant of
authority is a power of attorney coupled with an interest and such appointment
shall be irrevocable for the term of this Agreement. The Pledgor hereby ratifies
all that such attorney shall lawfully do or cause to be done by virtue hereof.
Section 14. Indemnity. (a) Indemnity. The Pledgor agrees to indemnify,
pay and hold harmless the Agent and each of the Secured Parties and the
officers, directors, employees, agents, and affiliates of the Agent and each of
the Secured Parties (collectively, the "Indemnitees") from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, and reasonable costs (including, without limitation,
settlement costs), expenses or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnities in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto), which may be imposed on, incurred by, or
asserted against that Indemnitee, in any manner relating to or arising out of
this Agreement (including, without limitation, any misrepresentation by the
Pledgor) or arising out of a subpoena or document production request against an
Indemnified Party from a legal proceeding relating to the Pledgor or affiliate
thereof whether or not the Indemnified Party is a party thereto or target
thereof (collectively, the "indemnified liabilities"); provided, that the
Pledgor shall have no obligation to an Indemnitee hereunder with respect to
indemnified liabilities if it has been determined by a final decision (after all
appeals and the expiration of time to appeal) by a court of competent
jurisdiction that such indemnified liability arose from the gross negligence or
willful misconduct of that Indemnitee. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Pledgor
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnities or any of them.
(b) Reimbursement. Any amounts paid by any Indemnitee as to which such
Indemnitee has the right to reimbursement shall constitute Secured Obligations
secured by the Pledged Collateral.
Section 15. Modification in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision of this Agreement, nor
consent to any departure by the Pledgor therefrom, shall be effective unless in
writing and signed by the Agent and the Secured Parties. Any amendment,
modification or supplement of or to any provision of this Agreement, any waiver
of any provision of this Agreement, and any consent to any departure by the
Pledgor from the terms of any provision of this Agreement, shall be effective
only in the specific instance and for the specific purpose for which made or
given. Except where notice is specifically required by this Agreement or the
Notes, no notice to or demand on the Pledgor in any case shall entitle the
Pledgor to any other or further notice or demand in similar or other
circumstances.
Section 16. Release. Upon the payment in full in cash of all Secured
Obligations, the Agent shall, upon the request and at the sole cost and expense
of the Pledgor, forthwith assign, transfer and deliver to the Pledgor, against
receipt and without recourse to or warranty by the Agent, such of the Pledged
Collateral of the Pledgor as may be in the possession of the Agent and as shall
not have been sold or otherwise applied pursuant to the terms hereof, on the
order of and at the sole cost and expense of the Pledgor, and such proper
instruments and/or agreements (including UCC termination statements on Form
UCC-3) as may be reasonably requested by the Pledgor acknowledging the
termination of this Agreement and/or the release of such Pledged Collateral.
Section 17. Notices. Any notice or other communication herein required
or permitted to be given shall be given in the manner set forth in the Notes.
Section 18. Continuing Security Interest; Assignment. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
be binding upon the Pledgor, its successors and assigns, and inure, together
with the rights and remedies of the Agent hereunder, to the benefit of the Agent
and the other Secured Parties and their respective successors, transferees and
assigns; no other Persons (including, without limitation, any other creditor of
the Pledgor) shall have any interest herein or any right or benefit with respect
hereto.
Section 19. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 20. Consent to Jurisdiction and Service of Process;
Waiver of Jury Trial. (a) THE PLEDGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE NOTES, OR FOR RECOGNITION
AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO THE BORROWER AT ITS ADDRESS AS PROVIDED IN SECTION 17
HEREOF OR AT SUCH OTHER ADDRESS OF WHICH THE AGENT SHALL HAVE BEEN
NOTIFIED PURSUANT THERETO;
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION; AND
(v) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM IN
RESPECT OF, AND ALL STATUTES OF LIMITATIONS WHICH MAY BE RELEVANT TO,
SUCH ACTION OR PROCEEDING.
(b) THE PLEDGOR AND THE AGENT EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT, THE NOTES, OR
ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
Section 21. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 22. Execution in Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
Section 23. Headings. The Section headings used in this Agreement are
for convenience of reference only and shall not affect the construction of this
Agreement.
Section 24. Obligations Absolute. All obligations of the Pledgor
hereunder shall be joint and several and absolute and unconditional irrespective
of:
(a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of the Pledgor;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to any departure from the
Notes or any other agreement or instrument relating thereto;
(c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured
Obligations;
(d) any exercise or non-exercise, or any waiver of any right,
remedy, power or privilege under or in respect of this Agreement or the
Notes except as specifically set forth in a waiver granted pursuant to
the provisions of Section 15 hereof; or
(e) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, the Pledgor.
Section 25. Survival of Provisions. All representations, warranties and
covenants of the Pledgor contained herein shall survive the execution and
delivery of this Agreement, and shall terminate only upon the full and
indefeasible payment in cash and performance of all of the Secured Obligations.
Section 26. Agent. The Secured Parties hereby appoint the Agent as
collateral agent with respect to this Agreement. Subject to Section 16 hereof,
the Agent shall have the right hereunder to make demands, give notices, to
exercise or refrain from exercising any rights and to take or refrain from
taking action (including, without limitation, the release or substitution of
Pledged Collateral), in accordance with this Agreement. The Agent may resign and
a successor Agent may be appointed as agreed between the Agent and the Secured
Parties and upon prior written notice to the Pledgor. Upon the acceptance of any
appointment as the Agent by a successor Agent, that successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent under this Agreement, and the retiring Agent
shall thereupon be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was the Agent. The Secured Parties
agree to indemnify, pay and hold harmless the Agent and its officers, directors,
employees, and agents from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, and reasonable
costs, expenses or disbursements of any kind or nature which may be imposed on,
incurred by, or asserted against such person, in any manner relating to or
arising out of Agent's duties hereunder, except as arise from the gross
negligence or willful misconduct of such person.
Section 27. Entire Agreement. THIS WRITTEN AGREEMENT, TOGETHER WITH THE
OTHER AGREEMENTS REFERRED TO HEREIN, REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES WITH RESPECT TO THE MATTERS COVERED HEREBY AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BY THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the Pledgor has duly executed and delivered this
Agreement as of the date first above written.
MXL INDUSTRIES, INC.
By:
--------------------------
Name:
Title:
Accepted and Agreed:
BEDFORD OAK PARTNERS, L.P.
By
---------------------------------------------------
Name:
Title:
Jerome Feldman