-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MoKhKYm8tkQWz9XnQ/LX0letMfzZPjjUF1MUoH4PN3NxRcf4NiGAgy4w+qU4VPAj H4n6innpWBYqklDqXzx92A== /in/edgar/work/20001102/0000909143-00-000316/0000909143-00-000316.txt : 20001106 0000909143-00-000316.hdr.sgml : 20001106 ACCESSION NUMBER: 0000909143-00-000316 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20001102 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EDGE TECHNOLOGY GROUP INC CENTRAL INDEX KEY: 0001015172 STANDARD INDUSTRIAL CLASSIFICATION: [7997 ] IRS NUMBER: 133778895 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-49607 FILM NUMBER: 752155 BUSINESS ADDRESS: STREET 1: 901 YAMATO ROAD SUITE 175 CITY: BOCA RATON STATE: FL ZIP: 33431 BUSINESS PHONE: 5617507559 MAIL ADDRESS: STREET 1: 901 YAMATO ROAD SUITE 175 STREET 2: SUITE 175 CITY: BOCA RATON STATE: FL ZIP: 33431 FORMER COMPANY: FORMER CONFORMED NAME: VISUAL EDGE SYSTEMS INC DATE OF NAME CHANGE: 19960604 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GLOBAL TECHNOLOGY VALUE PARTNERS LTD CENTRAL INDEX KEY: 0001127603 STANDARD INDUSTRIAL CLASSIFICATION: [ ] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: LISTER HOUSE STREET 2: THE PARADE ST HELLER CITY: JERSEY UK JE2 3QQ STATE: X0 ZIP: 00000 SC 13D 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. )* EDGE TECHNOLOGY GROUP, INC. (Name of Issuer) - ------------------------------------------------------------------------ Common Stock, par value $.01 per share (Title of Class of Securities) - ------------------------------------------------------------------------ 928430 10 7 (CUSIP Number) - ------------------------------------------------------------------------ Benjamin R. N. Warner Lister House 35 The Parade St. Helier, Jersey JE2 3QQ 011-44-1534-505-800 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) - ----------------------------------------------------------------------- October 23, 2000 (Date of Event Which Requires Filing of this Statement) - ----------------------------------------------------------------------- If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for the parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a Reporting Person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NUMBER 928430 10 7 13D/A Page 2 (1) Name of Reporting Persons. Global Technology Value Partners Limited I.R.S. Identification Nos. of Above Persons (entities only) N/A (2) Check the Appropriate Box if a (a) [ ] Member of a Group (see instructions) (b) [ ] (3) SEC Use Only (4) Source of Funds (see instructions) OO (5) Check if Disclosure of Legal [ ] Proceedings is Required Pursuant to Items 2(d) or 2(e) (6) Citizenship or Place of Organization Number of Shares (7) Sole Voting 6,869,854 Power Beneficially (8) Shared Voting 0 Owned by Each Power Reporting Person (9) Sole Dispositive 6,869,854 Power with: (10) Shared Dispositive 0 Power (11) Aggregate Amount Beneficially Owned 6,869,854 by Each Reporting Person (12) Check if the Aggregate Amount in [ ] Row (11) Excludes Certain Shares (see instructions) (13) Percent of Class Represented by 42.8% Amount in Row (11) (14) Type of Reporting Person (see instructions) CO . CUSIP NUMBER 928430 10 7 13D/A Page 3 ITEM 1. Security and Issuer. This statement relates to the ownership of common stock, $.01 par value (the "Common Stock"), of Edge Technology Group, Inc., a Delaware corporation formerly known as Visual Edge Systems, Inc. The principal executive offices of the Issuer are located at 901 Yamato Road, Suite 175, Boca Raton, Florida 33431. ITEM 2. Identity and Background. This statement is being filed by Global Technology Value Partners Limited ("Global "). Global is a British Virgin Islands company and its principal address, which also serves as its principal office, is Lister House, 35 The Parade, St. Helier, Jersey JE2 3QQ. The principal business of Global is the purchase, sale, exchange, acquisition and holding of investment securities. Benjamin R. N. Warner is a director of Global and a director of the Corporate Secretary, Europlan Secretarial Services Limited. Mr. Warner's principal occupation is that of accountant. His business address is Lister House, 35 The Parade, St. Helier, Jersey JE2 3QQ, Channel Islands. Mr. Warner is a citizen of Great Britain. Whitestone Ltd is a director of Global. Whitestone Ltd's principal business is that of Corporate Director. The Company's business address is Akara Bldg., 24 De Castro Street, Wickham's Cay I, Road Town, Tortola, British Virgin Islands. Whitestone Ltd is registered in the British Virgin Islands. Europlan Secretarial Services Limited is the Corporate Secretary of Global. Europlan Secreterial Services Limited's principal business is that of Corporate Secretary. The Company's business address is Lister House, 35 The Parade, St. Heiler, Jersey, Channel Islands, Jersey JE2 3QQ. Europlan Secreterial Services Limited is registered in Jersey, Channel Islands. Neither Global nor, to its knowledge, any of the persons identified above have, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. Source and Amount of Funds or Other Consideration. Global acquired the shares of Common Stock from Infinity Investors Limited pursuant to a letter agreement dated as of October 23, 2000 (the "Letter Agreement"). The aggregate purchase price for the shares of Common Stock acquired thereunder was $5,500,000, or approximately $0.80 per share, payable on or before June 30, 2001. The obligation to pay the purchase price is with full recourse but without interest. Global's obligation to pay the purchase price is secured by a pledge of the shares of Common Stock granted pursuant a Pledge Agreement, dated as of October 23, 2000, between Infinity Investors Limited and Global. CUSIP NUMBER 928430 10 7 13D/A Page 4 The foregoing response is qualified in its entirety by reference to the Letter Agreement, the Pledge Agreement, and the related Transfer Agent Agreement, copies of which are filed as Exhibits 99.1, 99.2, and 99.3, respectively, and incorporated into this response by reference. ITEM 4. Purpose of Transaction. The shares of Common Stock acquired by Global were acquired for investment. Depending upon market conditions and other factors that it deems material to an investment decision, Global may purchase additional shares of Common Stock from time to time or may dispose of all or a portion of the shares of Common Stock it now beneficially owns or may hereafter acquire. Except as set forth in this Item 4, Global does not have any present plans or proposals that relate to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D. ITEM 5. Interest in Securities of the Issuer. Global beneficially owns 6,869,854 shares or 42.8%, of the Common Stock of the Company. Global possesses sole voting and dispositive power with respect to 6,869,854 shares of Common Stock. Except as set forth in Item 3 above, no transactions in the Common Stock were effected by Global during the last 60 days or since the most recent filing on Schedule 13D, whichever is less. ITEM 6. Contracts, Arrangements, or Understandings or Relationships with Respect to Securities of the Issuer. The response to Item 3 is incorporated herein by reference. ITEM 7. Material to be Filed as Exhibits. EXHIBIT NO. TITLE OF EXHIBIT - ----------- ---------------- 99.1 Letter Agreement, dated as of October 23, 2000, among Global Technology Value Partners Limited, Infinity Investors Limited, and Edge Technology Group, Inc. (Filed herewith) 99.2 Pledge Agreement, dated as of October 23, 2000, between Global Technology Value Partners Limited and Infinity Investors Limited. (Filed herewith) 99.3 Transfer Agent Agreement, dated as of October 23, 2000, among Global Technology Value Partners Limited, Infinity Investors Limited, and Edge Technology Group, Inc. (Filed herewith) (Signature Page Follows) CUSIP NUMBER 928430 10 7 13D/A Page 5 After reasonable inquiry, and to the best of their knowledge and belief, the undersigned certify that the information set forth in this Statement is true, complete and correct. Date: November 1, 2000 GLOBAL TECHNOLOGY VALUE PARTNERS LIMITED By: /s/ Benjamin R. N. Warner ------------------------------------- Benjamin R. N. Warner, Director EX-99.1 2 0002.txt Infinity Investors Limited ("Infinity") October 23, 2000 Global Technology Value Partners Limited ("Purchaser") Re: Proposed transfer of 6,869,854 shares of the Common Stock of Edge Technology Group, Inc. (formerly known as Visual Edge Systems Inc.) currently held by Infinity to Purchaser. Gentlemen: Infinity proposes to sell to Purchaser in a single negotiated transaction, and Purchaser desires to purchase from Infinity, 6,869,854 shares of common stock (the "Infinity Shares") of Edge Technology Group, Inc., a Delaware corporation (the "Company"), for an aggregate purchase price of $5,500,000 (the "Purchase Price") or approximately $.80 per Share. The Infinity Shares are being transferred to and acquired by the Purchaser under the conditions and upon the representations contained in this letter agreement (the "Letter Agreement"). Infinity hereby sells, transfers and delivers to Purchaser, and Purchaser hereby purchases and accepts from Infinity, the Infinity Shares in exchange for Purchaser's promise to pay the Purchase Price in cash in full on or before June 30, 2001. Purchaser may prepay the Purchase Price in whole or in part at any time prior to June 30, 2001 without penalty. Contemporaneous herewith, Infinity and Purchaser shall execute a Pledge Agreement in the form set forth on Exhibit A hereto pursuant to which Purchaser shall grant a security interest in the Infinity Shares to Infinity to secure payment of the Purchase Price. Infinity shall deliver certificates representing the Infinity Shares, with a Stock Power duly endorsed by Infinity in favor of Purchaser in the form set forth on Exhibit B hereto, to the Company's Stock Transfer Agent, accompanied by (i) the letter attached hereto as Exhibit C signed by Infinity and countersigned by the Company, and (ii) an opinion of counsel for Infinity addressed to the Company in the form attached hereto as Exhibit D. Purchaser hereby represents and warrants to each of the Company and Infinity that: (a) Purchaser is acquiring the Infinity Shares for its own account and for investment purposes only. (b) Purchaser is not acquiring the Infinity Shares with a view to dividing its participation with others or with a view to or in connection with any offering or distribution in violation of Section 5 of the Securities Act of 1933, as amended (the "Act"), or any other applicable federal or state securities laws. -1- (c) Purchaser has no contract, undertaking, arrangement or agreement with any person to sell or transfer to any such person or to have any such person sell for Purchaser all or any of said Infinity Shares, and Purchaser is not engaged in and does not within the foreseeable future, plan to engage in any venture with any person relative to the sale or transfer of any of the said Infinity Shares. (d) Purchaser has no present obligation, indebtedness or commitment, nor are any circumstances in existence, which will compel Purchaser to secure funds by the sale of any of the said Infinity Shares, nor is Purchaser a party to any plan or undertaking which would require or contemplate that proceeds from the sale of all or a part of said Infinity Shares be utilized in connection therewith. (e) Purchaser does not anticipate acquiring the Infinity Shares for sale or other distribution upon the occurrence or non-occurrence of some predetermined event or upon the lapse of any particular period of time. (f) Purchaser has not been induced to acquire the Infinity Shares by the use of advertisements or any form of public solicitation by the Company, Infinity, or their respective agents or representatives, and Purchaser has not and does not intend to pay any commission or other remuneration to any person in connection with its acquisition of the Infinity Shares. (g) The Infinity Shares will be held by Purchaser subject to all applicable provisions of the Act, the Rules and Regulations of the Securities and Exchange Commission thereunder, and all applicable state securities laws and rules thereunder. (h) Purchaser understands that the Infinity Shares have not been registered under the Act, or under the securities laws of any state, and that the Infinity Shares cannot be sold unless they are subsequently registered under the Act and/or applicable state securities laws or unless exemptions from such registration provisions are available. Purchaser understands that the certificates representing the Infinity Shares and any and all securities issued in replacement therefor or exchanged therefor shall bear the following legend, or one substantially similar thereto: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED UNLESS THEY ARE SO REGISTERED OR, IN THE OPINION OF COUNSEL ACCEPTABLE TO THIS CORPORATION, SUCH TRANSFER IS EXEMPT FROM REGISTRATION. (i) Purchaser understands that, although an exemption from registration under Rule 144 under the Act may become available for certain resales of the Infinity Shares, various significant conditions of Rule 144 must be satisfied prior to any sale in reliance thereon. -2- (j) Purchaser understands that ownership of the Infinity Shares involves substantial risk. Purchaser acknowledges that Purchaser has evaluated such risk and has determined that the Infinity Shares are suitable investments. Purchaser considers itself sophisticated in financial and business matters and is capable of evaluating the merits and risks of an investment of this type and of protecting its own interests in connection with this transaction. (k) Purchaser represents that it is an "accredited investor" as such term is defined in Rule 501(a) of the Act. (l) Purchaser understands that each of the Company and Infinity are relying on the accuracy of the representations made herein and, but for the existence of this letter, Infinity would not sell the Infinity Shares and the Company would not consent to the transfer thereof. (m) Purchaser or its representatives have been provided access to business and financial information regarding the Company and have had the opportunity to attend a meeting with representatives of the Company for the purpose of asking questions of and receiving answers from the officers and directors of the Company, concerning the Company's financial position, valuation, opportunities and/or business and to discuss such information with Purchaser's advisors to enable Purchaser to make an informed investment decision regarding the acquisition of the Infinity Shares. Infinity hereby represents and warrants to each of the Company and Purchaser that: (a) Infinity has good and marketable title in and to the Infinity Shares, free and clear of any charge, claim, encumbrance, lien, option, pledge, security interest, right of first refusal or restriction of any kind, except for the restrictions required by the Act. (b) Infinity has full right, power and authority to sell the Infinity Shares as contemplated by this Letter Agreement. (c) The Infinity Shares have not been sold, assigned, endorsed, transferred or otherwise disposed of by Infinity. (d) Infinity did not purchase the Infinity Shares from the Company with a view to distribution of such Infinity Shares. (e) Infinity is not offering the Infinity Shares in connection with any distribution. Miscellaneous (a) Infinity and Purchaser Representations. Infinity and Purchaser each hereby acknowledge and agree that a copy of this Letter Agreement may be delivered to the Company and that the representations and warranties set forth herein may be relied upon by the Company in connection with the Company's issuance of -3- any instructions to the Company's Stock Transfer Agent with regards to the sale of the Infinity Shares. (b) Governing Law. This Letter Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law. (c) Complete Agreement. This Letter Agreement represents the entire agreement between the parties with respect to the transaction described herein and, except as provided herein, supersedes all previous negotiations, commitments and writings with respect to such transaction. (d) Indemnity. Purchaser hereby agrees to defend, indemnify and hold harmless Infinity from and against any and all damages, losses, costs, liabilities and expenses (including reasonable attorneys' fees) arising out of or related to any breach of the representations, warranties or covenants of Purchaser under this Letter Agreement. Infinity hereby agrees to defend, indemnify and hold harmless Purchaser from and against any and all damages, losses, costs, liabilities and expenses (including reasonable attorneys' fees) arising out of or related to any breach of the representations, warranties or covenants of Infinity under this Letter Agreement. (signature page follows) -4- INFINITY INVESTORS LIMITED By:/s/ James A. Loughran ------------------------------- Name: James A. Loughran ----------------------------- Title: Director ---------------------------- ACKNOWLEDGED AND AGREED: GLOBAL TECHNOLOGY VALUE PARTNERS LIMITED By: /s/ Benjamin R. N. Warner ------------------------------------- Name: Benjamin R. N. Warner ------------------------------------ Title: Director ------------------------------------ COMPANY: EDGE TECHNOLOGY GROUP, INC (formerly known as Visual Edge Systems Inc.) By: /s/ Pierre Koshakji ------------------------------------------- Name: Pierre Koshakji ---------------------------------------- Title: Chief Executive Officer --------------------------------------- EXHIBIT A --------- PLEDGE AGREEMENT EXHIBIT B -------- STOCK POWER EXHIBIT C ---------- TRANSFER AGENT LETTER EXHIBIT D --------- OPINION OF INFINITY'S COUNSEL EX-99.2 3 0003.txt PLEDGE AGREEMENT ---------------- THIS PLEDGE AGREEMENT ("Agreement") is made as of the 23rd day of October, 2000, by GLOBAL TECHNOLOGY VALUE PARTNERS LIMITED (hereinafter called "Pledgor," whether one or more), in favor of INFINITY INVESTORS LIMITED ("Pledgee"). Pledgor hereby agrees with Pledgee as follows: 1. Definitions. As used in this Agreement, the following terms shall have the meanings indicated below: (a) The term "Borrower" shall mean Pledgor. (b) The term "Code" shall mean the Uniform Commercial Code as in effect in the State of Texas on the date of this Agreement or as it may hereafter be amended from time to time. (c) The term "Collateral" shall mean all property specifically described on Schedule A attached hereto and made a part hereof. The term Collateral, as used herein, shall also include (i) all certificates, instruments and/or other documents evidencing the foregoing, (ii) all renewals, replacements and substitutions of all of the foregoing, (iii) all Additional Property (as hereinafter defined), and (iv) all PROCEEDS of all of the foregoing. The designation of proceeds does not authorize Pledgor to sell, transfer or otherwise convey any of the foregoing property. The delivery at any time by Pledgor to Secured Party of any property as a pledge to secure payment or performance of any indebtedness or obligation whatsoever shall also constitute a pledge of such property as Collateral hereunder. (d) The term "Indebtedness" shall mean (i) all indebtedness, obligations and liabilities of Borrower to Secured Party (as hereinafter defined) of any kind or character, now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several or joint and several arising under, pursuant to or otherwise in connection with the Letter Agreement dated the date hereof among Pledgor and Pledgee (as the same may hereafter be amended or modified, the "Letter Agreement") and this Agreement, (ii) all obligations of Borrower to Secured Party under any documents evidencing, securing, governing and/or pertaining to all or any part of the indebtedness described in (i) above, (iii) all costs and expenses incurred by Secured Party in connection with the collection and administration of all or any part of the indebtedness and obligations described in (i) and (ii) above or the protection or preservation of, or realization upon, the collateral securing all or any part of such indebtedness and obligations, including without limitation all reasonable attorneys' fees, and (iv) all renewals, extensions, modifications and rearrangements of the indebtedness and obligations described in (i), (ii) and (iii) above. (e) The term "Loan Documents" shall mean the Letter Agreement and all other instruments and documents evidencing, securing, governing, guaranteeing and/or pertaining to the Indebtedness. (f) The term "Obligated Party" shall mean any party other than Borrower who secures, guarantees and/or is otherwise obligated to pay all or any portion of the Indebtedness. (g) The term "Secured Party" shall mean Pledgee, its successors and assigns, including without limitation, any party to whom Pledgee, or its successors or assigns, may assign its rights and interests under this Agreement. All words and phrases used herein which are expressly defined in Section 1.201, Chapter 8 or Chapter 9 of the Code shall have the meaning provided for therein. Other words and phrases defined elsewhere in the Code shall have the meaning specified therein except to the extent such meaning is inconsistent with a definition in Section 1.201, Chapter 8 or Chapter 9 of the Code. 2. Security Interest. As security for the Indebtedness, Pledgor, for value received, hereby grants to Secured Party a continuing security interest in the Collateral. 3. Additional Property. Collateral shall also include the following property (collectively, the "Additional Property") which Pledgor becomes entitled to receive or shall receive in connection with the Collateral: (a) any stock certificate, including without limitation, any certificate representing a stock dividend or any certificate in connection with any recapitalization, reclassification, merger, consolidation, conversion, sale of assets, combination of shares, stock split or spin-off associated with the Collateral; (b) any option, warrant, subscription or right related to or arising out of the Collateral; and (c) any dividends or distributions of any kind whatsoever, whether distributable in cash, stock or other property associated with the Collateral. All Additional Property received by Pledgor shall be received in trust for the benefit of Secured Party. All Additional Property and all certificates or other written instruments or documents evidencing and/or representing the Additional Property that is received by Pledgor, together with such instruments of transfer as Secured Party may request, shall immediately be delivered to or deposited with Secured Party and held by Secured Party as Collateral under the terms of this Agreement. If the Additional Property received by Pledgor shall be shares of stock or other securities, such shares of stock or other securities shall be duly endorsed in blank or accompanied by proper instruments of transfer and assignment duly executed in blank with, if requested by Secured Party, signatures guaranteed by a member or member organization in good standing of an authorized Securities Transfer Agents Medallion Program, all in form and substance satisfactory to Secured Party. Secured Party shall be deemed to have possession of any Collateral in transit to Secured Party or its agent. 4. Voting Rights. As long as no Event of Default shall have occurred hereunder, any voting rights incident to any stock or other securities pledged as Collateral may be exercised by Pledgor; provided, however, that Pledgor will not exercise, or cause to be exercised, any such voting rights, without the prior written consent of Secured Party, if the direct or indirect effect of such vote will result in an Event of Default hereunder. 5. Maintenance of Collateral. Other than the exercise of reasonable care to assure the safe custody of any Collateral in Secured Party's possession from time to time, Secured Party does not have any obligation, duty or responsibility with respect to the Collateral. Without limiting the generality of the foregoing, Secured Party shall not have any obligation, duty or responsibility to do any of the following: (a) ascertain any maturities, calls, conversions, exchanges, offers, tenders or similar matters relating to the Collateral or informing Pledgor with respect to any such matters; (b) fix, preserve or exercise any right, privilege or option (whether conversion, redemption or otherwise) with respect to the Collateral unless (i) Pledgor makes written demand to Secured Party to do so, (ii) such written demand is received by Secured Party in sufficient time to permit Secured Party to take the action demanded in the ordinary course of its business, and (iii) Pledgor provides additional collateral, acceptable to Secured Party in its sole discretion; (c) collect any amounts payable in respect of the Collateral (Secured Party being liable to account to Pledgor only for what Secured Party may actually receive or collect thereon); (d) sell all or any portion of the Collateral to avoid market loss; (e) sell all or any portion of the Collateral unless and until (i) Pledgor makes written demand upon Secured Party to sell the Collateral, and (ii) Pledgor provides additional collateral, acceptable to Secured Party in its sole discretion; or (f) hold the Collateral for or on behalf of any party other than Pledgor. 6. Representations and Warranties. Pledgor hereby represents and warrants the following to Secured Party: (a) Due Authorization. The execution, delivery and performance of this Agreement and all of the other Loan Documents by Pledgor have been duly authorized by all necessary corporate action of Pledgor. (b) Enforceability. This Agreement and the other Loan Documents constitute legal, valid and binding obligations of Pledgor, enforceable in accordance with their respective terms, except as limited by bankruptcy, insolvency or similar laws of general application relating to the enforcement of creditors' rights and except to the extent specific remedies may generally be limited by equitable principles. (c) Ownership and Liens. Pledgor has good and marketable title to the Collateral free and clear of all liens, security interests, encumbrances or adverse claims, except for the security interest created by this Agreement. No dispute, right of setoff, counterclaim or defense exists with respect to all or any part of the Collateral. Pledgor has not executed any other security agreement currently affecting the Collateral and no financing statement or other instrument similar in effect covering all or any part of -2- the Collateral is on file in any recording office except as may have been executed or filed in favor of Secured Party. (c) No Conflicts or Consents. Neither the ownership, the intended use of the Collateral by Pledgor, the grant of the security interest by Pledgor to Secured Party herein nor the exercise by Secured Party of its rights or remedies hereunder, will (i) conflict with any provision of (A) any domestic or foreign law, statute, rule or regulation, (B) the articles or certificate of incorporation, charter or bylaws, as the case may be, of Pledgor, or (C) any agreement, judgment, license, order or permit applicable to or binding upon Pledgor or otherwise affecting the Collateral, or (ii) result in or require the creation of any lien, charge or encumbrance upon any assets or properties of Pledgor or of any person except as may be expressly contemplated in the Loan Documents. Except as expressly contemplated in the Loan Documents, no consent, approval, authorization or order of, and no notice to or filing with, any court, governmental authority or third party is required in connection with the grant by Pledgor of the security interest herein or the exercise by Secured Party of its rights and remedies hereunder. (e) Security Interest. Pledgor has and will have at all times full right, power and authority to grant a security interest in the Collateral to Secured Party in the manner provided herein, free and clear of any lien, security interest or other charge or encumbrance. This Agreement creates a legal, valid and binding security interest in favor of Secured Party in the Collateral. (f) Location. Pledgor's residence or chief executive office, as the case may be, and the office where the records concerning the Collateral are kept is located at its address set forth on the signature page hereof. (g) Solvency of Pledgor. As of the date hereof, and after giving effect to this Agreement and the completion of all other transactions contemplated by Pledgor at the time of the execution of this Agreement, (i) Pledgor is and will be solvent, (ii) the fair saleable value of Pledgor's assets exceeds and will continue to exceed Pledgor's liabilities (both fixed and contingent), (iii) Pledgor is paying and will continue to be able to pay its debts as they mature, and (iv) Pledgor has and will have sufficient capital to carry on Pledgor's businesses and all businesses in which Pledgor is about to engage. (h) Securities. Any certificates evidencing securities pledged as Collateral are valid and genuine and have not been altered. All securities pledged as Collateral have been duly authorized and validly issued, are fully paid and non-assessable, and were not issued in violation of the preemptive rights of any party or of any agreement by which Pledgor or the issuer thereof is bound. No restrictions or conditions exist with respect to the transfer or voting of any securities pledged as Collateral, except as has been disclosed to Secured Party in writing. To the best of Pledgor's knowledge, no issuer of such securities (other than securities of a class which are publicly traded) has any outstanding stock rights, rights to subscribe, options, warrants or convertible securities outstanding or any other rights outstanding entitling any party to have issued to such party capital stock of such issuer, except as has been disclosed to Secured Party in writing. 7. Affirmative Covenants. Pledgor will comply with the covenants contained in this Section at all times during the period of time this Agreement is effective unless Secured Party shall otherwise consent in writing. (a) Ownership and Liens. Pledgor will maintain good and marketable title to all Collateral free and clear of all liens, security interests, encumbrances or adverse claims, except for the security interest created by this Agreement and the security interests and other encumbrances expressly permitted by the other Loan Documents. Pledgor will not permit any dispute, right of setoff, counterclaim or defense to exist with respect to all or any part of the Collateral. Pledgor will cause any financing statement or other security instrument with respect to the Collateral to be terminated, except as may exist or as may have been filed in favor of Secured Party. Pledgor will defend at its expense Secured Party's right, title and security interest in and to the Collateral against the claims of any third party. (b) Inspection of Books and Records. Pledgor will keep adequate records concerning the Collateral and will permit Secured Party and all representatives and agents appointed by Secured Party to -3- inspect Pledgor's books and records of or relating to the Collateral at any time during normal business hours, to make and take away photocopies, photographs and printouts thereof and to write down and record any such information. (c) Adverse Claim. Pledgor covenants and agrees to promptly notify Secured Party of any claim, action or proceeding affecting title to the Collateral, or any part thereof, or the security interest created hereunder and, at Pledgor's expense, defend Secured Party's security interest in the Collateral against the claims of any third party. Pledgor also covenants and agrees to promptly deliver to Secured Party a copy of all written notices received by Pledgor with respect to the Collateral, including without limitation, notices received from the issuer of any securities pledged hereunder as Collateral. (d) Delivery of Instruments and/or Certificates. Contemporaneously herewith, Pledgor covenants and agrees to deliver to Secured Party any certificates, documents or instruments representing or evidencing the Collateral, with Pledgor's endorsement thereon and/or accompanied by proper instruments of transfer and assignment duly executed in blank with, if requested by Secured Party, signatures guaranteed by a member or member organization in good standing of an authorized Securities Transfer Agents Medallion Program, all in form and substance satisfactory to Secured Party. (e) Further Assurances. Pledgor will contemporaneously with the execution hereof and from time to time thereafter at its expense promptly execute and deliver all further instruments and documents and take all further action necessary or appropriate or that Secured Party may request in order (i) to perfect and protect the security interest created or purported to be created hereby and the first priority of such security interest, (ii) to enable Secured Party to exercise and enforce its rights and remedies hereunder in respect of the Collateral, and (iii) to otherwise effect the purposes of this Agreement, including without limitation: (A) executing and filing any financing or continuation statements, or any amendments thereto; (B) obtaining written confirmation from the issuer of any securities pledged as Collateral of the pledge of such securities, in form and substance satisfactory to Secured Party; (C) cooperating with Secured Party in registering the pledge of any securities pledged as Collateral with the issuer of such securities; (D) delivering notice of Secured Party's security interest in any securities pledged as Collateral to any securities or financial intermediary, clearing corporation or other party required by Secured Party, in form and substance satisfactory to Secured Party; and (E) obtaining written confirmation of the pledge of any securities constituting Collateral from any securities or financial intermediary, clearing corporation or other party required by Secured Party, in form and substance satisfactory to Secured Party. If all or any part of the Collateral is securities issued by an agency or department of the United States, Pledgor covenants and agrees, at Secured Party's request, to cooperate in registering such securities in Secured Party's name or with Secured Party's account maintained with a Federal Reserve Bank. When applicable law provides more than one method of perfection of Secured Party's security interest in the Collateral, Secured Party may choose the method(s) to be used. 8. Negative Covenants. Pledgor will comply with the covenants contained in this Section at all times during the period of time this Agreement is effective, unless Secured Party shall otherwise consent in writing. (a) Transfer or Encumbrance. Pledgor will not (i) sell, assign (by operation of law or otherwise) or transfer Pledgor's rights in any of the Collateral, (ii) grant a lien or security interest in or execute, file or record any financing statement or other security instrument with respect to the Collateral to any party other than Secured Party, or (iii) deliver actual or constructive possession of any certificate, instrument or document evidencing and/or representing any of the Collateral to any party other than Secured Party. Any attempted transfer in contravention of this provision shall be null and void. (b) Impairment of Security Interest. Pledgor will not take or fail to take any action which would in any manner impair the value or enforceability of Secured Party's security interest in any Collateral. (c) Dilution of Ownership. As to any securities pledged as Collateral (other than securities of a class which are publicly traded), Pledgor will not consent to or approve of the issuance of (i) any additional shares of any class of securities of such issuer (unless immediately upon issuance additional -4- securities are pledged and delivered to Secured Party pursuant to the terms hereof to the extent necessary to give Secured Party a security interest after such issuance in at least the same percentage of such issuer's outstanding securities as Secured Party had before such issuance), (ii) any instrument convertible voluntarily by the holder thereof or automatically upon the occurrence or non-occurrence of any event or condition into, or exchangeable for, any such securities, or (iii) any warrants, options, contracts or other commitments entitling any third party to purchase or otherwise acquire any such securities. (d) Restrictions on Securities. Pledgor will not enter into any agreement creating, or otherwise permit to exist, any restriction or condition upon the transfer, voting or control of any securities pledged as Collateral, except as consented to in writing by Secured Party. 9. Rights of Secured Party. Secured Party shall have the rights contained in this Section at all times during the period of time this Agreement is effective. (a) Power of Attorney. Pledgor hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact, such power of attorney being coupled with an interest, with full authority in the place and stead of Pledgor and in the name of Pledgor or otherwise, to take any action and to execute any instrument which Secured Party may from time to time in Secured Party's discretion deem necessary or appropriate to accomplish the purposes of this Agreement, including without limitation, the following action: (i) transfer any securities, instruments, documents or certificates pledged as Collateral in the name of Secured Party or its nominee; (ii) use any interest, premium or principal payments, conversion or redemption proceeds or other cash proceeds received in connection with any Collateral to reduce any of the Indebtedness; (iii) exchange any of the securities pledged as Collateral for any other property upon any merger, consolidation, reorganization, recapitalization or other readjustment of the issuer thereof, and, in connection therewith, to deposit and deliver any and all of such securities with any committee, depository, transfer agent, registrar or other designated agent upon such terms and conditions as Secured Party may deem necessary or appropriate; (iv) exercise or comply with any conversion, exchange, redemption, subscription or any other right, privilege or option pertaining to any securities pledged as Collateral; provided, however, except as provided herein, Secured Party shall not have a duty to exercise or comply with any such right, privilege or option (whether conversion, redemption or otherwise) and shall not be responsible for any delay or failure to do so; and (v) file any claims or take any action or institute any proceedings which Secured Party may deem necessary or appropriate for the collection and/or preservation of the Collateral or otherwise to enforce the rights of Secured Party with respect to the Collateral. (b) Performance by Secured Party. If Pledgor fails to perform any agreement or obligation provided herein, Secured Party may itself perform, or cause performance of, such agreement or obligation, and the expenses of Secured Party incurred in connection therewith shall be a part of the Indebtedness, secured by the Collateral and payable by Pledgor on demand. Notwithstanding any other provision herein to the contrary, Secured Party does not have any duty to exercise or continue to exercise any of the foregoing rights and shall not be responsible for any failure to do so or for any delay in doing so. 10. Events of Default. Each of the following constitutes an "Event of Default" under this Agreement: (a) Failure to Pay Indebtedness. The failure, refusal or neglect of Borrower to make any payment of principal on the Indebtedness, or any portion thereof, as the same shall become due and payable; or (b) Non-Performance of Covenants. The failure of Borrower or any Obligated Party to timely and properly observe, keep or perform any covenant, agreement, warranty or condition required herein or in any of the other Loan Documents; or (c) Default Under other Loan Documents. The occurrence of an event of default under any of the other Loan Documents; or -5- (d) False Representation. Any representation contained herein or in any of the other Loan Documents made by Borrower or any Obligated Party is false or misleading in any material respect; or (e) Bankruptcy or Insolvency. If Borrower or any Obligated Party: (i) becomes insolvent, or makes a transfer in fraud of creditors, or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts as they become due; (ii) generally is not paying its debts as such debts become due; (iii) has a receiver, trustee or custodian appointed for, or take possession of, all or substantially all of the assets of such party or any of the Collateral, either in a proceeding brought by such party or in a proceeding brought against such party and such appointment is not discharged or such possession is not terminated within sixty (60) days after the effective date thereof or such party consents to or acquiesces in such appointment or possession; (iv) files a petition for relief under the United States Bankruptcy Code or any other present or future federal or state insolvency, bankruptcy or similar laws (all of the foregoing hereinafter collectively called "Applicable Bankruptcy Law") or an involuntary petition for relief is filed against such party under any Applicable Bankruptcy Law and such involuntary petition is not dismissed within sixty (60) days after the filing thereof, or an order for relief naming such party is entered under any Applicable Bankruptcy Law, or any composition, rearrangement, extension, reorganization or other relief of debtors now or hereafter existing is requested or consented to by such party; (v) fails to have discharged within a period of sixty (60) days any attachment, sequestration or similar writ levied upon any property of such party; or (vi) fails to pay within thirty (30) days any final money judgment against such party; or (f) Execution on Collateral. The Collateral or any portion thereof is taken on execution or other process of law in any action against Pledgor; or (g) Liquidation, Death and Related Events. The liquidation, dissolution, merger or consolidation of Borrower or any other Obligated Party. 11. Remedies and Related Rights. If an Event of Default shall have occurred, and without limiting any other rights and remedies provided herein, under any of the other Loan Documents or otherwise available to Secured Party, Secured Party may exercise one or more of the rights and remedies provided in this Section. (a) Remedies. Secured Party may from time to time at its discretion, without limitation and without notice except as expressly provided in any of the Loan Documents: (i) exercise in respect of the Collateral all the rights and remedies of a secured party under the Code (whether or not the Code applies to the affected Collateral); (ii) reduce its claim to judgment or foreclose or otherwise enforce, in whole or in part, the security interest granted hereunder by any available judicial procedure; (iii) sell or otherwise dispose of, at its office, on the premises of Pledgor or elsewhere, the Collateral, as a unit or in parcels, by public or private proceedings, and by way of one or more contracts (it being agreed that the sale or other disposition of any part of the Collateral shall not exhaust Secured Party's power of sale, but sales or other dispositions may be made from time to time until all of the Collateral has been sold or disposed of or until the Indebtedness has been paid and performed in full), and at any such sale or other disposition it shall not be necessary to exhibit any of the Collateral; (iv) buy the Collateral, or any portion thereof, at any public sale; (v) buy the Collateral, or any portion thereof, at any private sale if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations; (vi) apply for the appointment of a receiver for the Collateral, and Pledgor hereby consents to any such appointment; and -6- (vii) at its option, retain the Collateral in satisfaction of the Indebtedness whenever the circumstances are such that Secured Party is entitled to do so under the Code or otherwise. Pledgor agrees that in the event Pledgor is entitled to receive any notice under the Uniform Commercial Code, as it exists in the state governing any such notice, of the sale or other disposition of any Collateral, reasonable notice shall be deemed given when such notice is deposited in a depository receptacle under the care and custody of the United States Postal Service, postage prepaid, at Pledgor's address set forth on the signature page hereof, five (5) days prior to the date of any public sale, or after which a private sale, of any of such Collateral is to be held. Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Secured Party 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. Pledgor further acknowledges and agrees that the redemption by Secured Party of any certificate of deposit pledged as Collateral shall be deemed to be a commercially reasonable disposition under Section 9.504(c) of the Code. (b) Private Sale of Securities. Pledgor recognizes that Secured Party may be unable to effect a public sale of all or any part of the securities pledged as Collateral because of restrictions in applicable federal and state securities laws and that Secured Party may, therefore, determine to make one or more private sales of any such securities to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such securities for their own account, for investment and not with a view to the distribution or resale thereof. Pledgor acknowledges that each any such private sale may be at prices and other terms less favorable then what might have been obtained at a public sale and, notwithstanding the foregoing, agrees that each such private sale shall be deemed to have been made in a commercially reasonable manner and that Secured Party shall have no obligation to delay the sale of any such securities for the period of time necessary to permit the issuer to register such securities for public sale under any federal or state securities laws. Pledgor further acknowledges and agrees that any offer to sell such securities which has been made privately in the manner described above to not less than five (5) bona fide offerees shall be deemed to involve a "public sale" for the purposes of Section 9.504(c) of the Code, notwithstanding that such sale may not constitute a "public offering" under any federal or state securities laws and that Secured Party may, in such event, bid for the purchase of such securities. (c) Application of Proceeds. If any Event of Default shall have occurred, Secured Party may at its discretion apply or use any cash held by Secured Party as Collateral, and any cash proceeds received by Secured Party in respect of any sale or other disposition of, collection from, or other realization upon, all or any part of the Collateral as follows in such order and manner as Secured Party may elect: (i) to the repayment or reimbursement of the reasonable costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) incurred by Secured Party in connection with (A) the administration of the Loan Documents, (B) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, the Collateral, and (C) the exercise or enforcement of any of the rights and remedies of Secured Party hereunder; (ii) to the payment or other satisfaction of any liens and other encumbrances upon the Collateral; (iii) to the satisfaction of the Indebtedness; (vi) by holding such cash and proceeds as Collateral; (v) to the payment of any other amounts required by applicable law (including without limitation, Section 9.504(a)(3) of the Code or any other applicable statutory provision); and (vi) by delivery to Pledgor or any other party lawfully entitled to receive such cash or proceeds whether by direction of a court of competent jurisdiction or otherwise. -7- (d) Deficiency. In the event that the proceeds of any sale of, collection from, or other realization upon, all or any part of the Collateral by Secured Party are insufficient to pay all amounts to which Secured Party is legally entitled, Borrower and any party who guaranteed or is otherwise obligated to pay all or any portion of the Indebtedness shall be liable for the deficiency, together with interest thereon as provided in the Loan Documents. (e) Non-Judicial Remedies. In granting to Secured Party the power to enforce its rights hereunder without prior judicial process or judicial hearing, Pledgor expressly waives, renounces and knowingly relinquishes any legal right which might otherwise require Secured Party to enforce its rights by judicial process. Pledgor recognizes and concedes that non-judicial remedies are consistent with the usage of trade, are responsive to commercial necessity and are the result of a bargain at arm's length. Nothing herein is intended to prevent Secured Party or Pledgor from resorting to judicial process at either party's option. (f) Other Recourse. Pledgor waives any right to require Secured Party to proceed against any third party, exhaust any Collateral or other security for the Indebtedness, or to have any third party joined with Pledgor in any suit arising out of the Indebtedness or any of the Loan Documents, or pursue any other remedy available to Secured Party. Pledgor further waives any and all notice of acceptance of this Agreement and of the creation, modification, rearrangement, renewal or extension of the Indebtedness. Pledgor further waives any defense arising by reason of any disability or other defense of any third party or by reason of the cessation from any cause whatsoever of the liability of any third party. Until all of the Indebtedness shall have been paid in full, Pledgor shall have no right of subrogation and Pledgor waives the right to enforce any remedy which Secured Party has or may hereafter have against any third party, and waives any benefit of and any right to participate in any other security whatsoever now or hereafter held by Secured Party. Pledgor authorizes Secured Party, and without notice or demand and without any reservation of rights against Pledgor and without affecting Pledgor's liability hereunder or on the Indebtedness, to (i) take or hold any other property of any type from any third party as security for the Indebtedness, and exchange, enforce, waive and release any or all of such other property, (ii) apply such other property and direct the order or manner of sale thereof as Secured Party may in its discretion determine, (iii) renew, extend, accelerate, modify, compromise, settle or release any of the Indebtedness or other security for the Indebtedness, (iv) waive, enforce or modify any of the provisions of any of the Loan Documents executed by any third party, and (v) release or substitute any third party. (g) Voting Rights. Upon the occurrence of an Event of Default, Pledgor will not exercise any voting rights with respect to securities pledged as Collateral. Pledgor hereby irrevocably appoints Secured Party as Pledgor's attorney-in-fact (such power of attorney being coupled with an interest) and proxy to exercise any voting rights with respect to Pledgor's securities pledged as Collateral upon the occurrence of an Event of Default. (h) Dividend Rights. Upon the occurrence of an Event of Default: (i) all rights of Pledgor to receive and retain the dividends it would otherwise be authorized to receive and retain pursuant to Section 3 shall automatically cease, and all such rights shall thereupon become vested with Secured Party which shall thereafter have the sole right to receive, hold and apply as Collateral such dividends and interest payments; and (ii) all dividend payments which are received by Pledgor contrary to the provisions of clause (i) of this Subsection shall be received in trust for the benefit of Secured Party, shall be segregated from other funds of Pledgor, and shall be forthwith paid over to Secured Party in the exact form received (properly endorsed or assigned if requested by Secured Party), to be held by Secured Party as Collateral. 12. Indemnity. Pledgor hereby indemnifies and agrees to hold harmless Secured Party, and its officers, directors, employees, agents and representatives (each an "Indemnified Person") from and against any and all liabilities, obligations, claims, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature (collectively, the "Claims") which may be imposed on, incurred by, or asserted -8- against, any Indemnified Person arising in connection with the Loan Documents, the Indebtedness or the Collateral (including without limitation, the enforcement of the Loan Documents and the defense of any Indemnified Person's actions and/or inactions in connection with the Loan Documents). WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO ANY CLAIMS WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH AND/OR ANY OTHER INDEMNIFIED PERSON, except to the limited extent the Claims against an Indemnified Person are proximately caused by such Indemnified Person's gross negligence or willful misconduct. If Pledgor or any third party ever alleges such gross negligence or willful misconduct by any Indemnified Person, the indemnification provided for in this Section shall nonetheless be paid upon demand, subject to later adjustment or reimbursement, until such time as a court of competent jurisdiction enters a final judgment as to the extent and effect of the alleged gross negligence or willful misconduct. The indemnification provided for in this Section shall survive the termination of this Agreement and shall extend and continue to benefit each individual or entity who is or has at any time been an Indemnified Person hereunder. 13. Miscellaneous. (a) Entire Agreement. This Agreement contains the entire agreement of Secured Party and Pledgor with respect to the Collateral. If the parties hereto are parties to any prior agreement, either written or oral, relating to the Collateral, the terms of this Agreement shall amend and supersede the terms of such prior agreements as to transactions on or after the effective date of this Agreement, but all security agreements, financing statements, guaranties, other contracts and notices for the benefit of Secured Party shall continue in full force and effect to secure the Indebtedness unless Secured Party specifically releases its rights thereunder by separate release. (b) Amendment. No modification, consent or amendment of any provision of this Agreement or any of the other Loan Documents shall be valid or effective unless the same is in writing and signed by the party against whom it is sought to be enforced. (c) Actions by Secured Party. The lien, security interest and other security rights of Secured Party hereunder shall not be impaired by (i) any renewal, extension, increase or modification with respect to the Indebtedness, (ii) any surrender, compromise, release, renewal, extension, exchange or substitution which Secured Party may grant with respect to the Collateral, or (iii) any release or indulgence granted to any endorser, guarantor or surety of the Indebtedness. The taking of additional security by Secured Party shall not release or impair the lien, security interest or other security rights of Secured Party hereunder or affect the obligations of Pledgor hereunder. (d) Waiver by Secured Party. Secured Party may waive any Event of Default without waiving any other prior or subsequent Event of Default. Secured Party may remedy any default without waiving the Event of Default remedied. Neither the failure by Secured Party to exercise, nor the delay by Secured Party in exercising, any right or remedy upon any Event of Default shall be construed as a waiver of such Event of Default or as a waiver of the right to exercise any such right or remedy at a later date. No single or partial exercise by Secured Party of any right or remedy hereunder shall exhaust the same or shall preclude any other or further exercise thereof, and every such right or remedy hereunder may be exercised at any time. No waiver of any provision hereof or consent to any departure by Pledgor therefrom shall be effective unless the same shall be in writing and signed by Secured Party and then such waiver or consent shall be effective only in the specific instances, for the purpose for which given and to the extent therein specified. No notice to or demand on Pledgor in any case shall of itself entitle Pledgor to any other or further notice or demand in similar or other circumstances. (e) Costs and Expenses. Pledgor will upon demand pay to Secured Party the amount of any and all costs and expenses (including without limitation, attorneys' fees and expenses), which Secured Party may incur in connection with (i) the transactions which give rise to the Loan Documents, (ii) the preparation of this Agreement and the perfection and preservation of the security interests granted under the Loan Documents, (iii) the administration of the Loan Documents, (iv) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, the Collateral, (v) the exercise -9- or enforcement of any of the rights of Secured Party under the Loan Documents, or (vi) the failure by Pledgor to perform or observe any of the provisions hereof. (f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS, EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST GRANTED HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS. (g) Venue. This Agreement has been entered into in the county in Texas where Pledgee's address for notice purposes is located, and it shall be performable for all purposes in such county. Courts within the State of Texas shall have jurisdiction over any and all disputes arising under or pertaining to this Agreement and venue for any such disputes shall be in the county or judicial district where this Agreement has been executed and delivered. (h) Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable, shall not impair or invalidate the remainder of this Agreement and the effect thereof shall be confined to the provision held to be illegal, invalid or unenforceable. (i) No Obligation. Nothing contained herein shall be construed as an obligation on the part of Secured Party to extend or continue to extend credit to Borrower. (j) Notices. All notices, requests, demands or other communications required or permitted to be given pursuant to this Agreement shall be in writing and given by (i) personal delivery, (ii) expedited delivery service with proof of delivery, or (iii) United States mail, postage prepaid, registered or certified mail, return receipt requested, sent to the intended addressee at the address set forth on the signature page hereof or to such different address as the addressee shall have designated by written notice sent pursuant to the terms hereof and shall be deemed to have been received either, in the case of personal delivery, at the time of personal delivery, in the case of expedited delivery service, as of the date of first attempted delivery at the address and in the manner provided herein, or in the case of mail, upon deposit in a depository receptacle under the care and custody of the United States Postal Service. Either party shall have the right to change its address for notice hereunder to any other location within the continental United States by notice to the other party of such new address at least thirty (30) days prior to the effective date of such new address. (k) Binding Effect and Assignment. This Agreement (i) creates a continuing security interest in the Collateral, (ii) shall be binding on Pledgor and the heirs, executors, administrators, personal representatives, successors and assigns of Pledgor, and (iii) shall inure to the benefit of Secured Party and its successors and assigns. Without limiting the generality of the foregoing, Secured Party may pledge, assign or otherwise transfer the Indebtedness and its rights under this Agreement and any of the other Loan Documents to any other party. Pledgor's rights and obligations hereunder may not be assigned or otherwise transferred without the prior written consent of Secured Party. (l) Termination. Upon (i) the satisfaction in full of the Indebtedness, (ii) written request for the termination hereof delivered by Pledgor to Secured Party, and (iii) written release delivered by Secured Party to Pledgor, this Agreement and the security interests created hereby shall terminate. Upon termination of this Agreement and Pledgor's written request, Secured Party will, at Pledgor's sole cost and expense, return to Pledgor such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and execute and deliver to Pledgor such documents as Pledgor shall reasonably request to evidence such termination. (m) Cumulative Rights. All rights and remedies of Secured Party hereunder are cumulative of each other and of every other right or -10- remedy which Secured Party may otherwise have at law or in equity or under any of the other Loan Documents, and the exercise of one or more of such rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of any other rights or remedies. (n) Gender and Number. Within this Agreement, words of any gender shall be held and construed to include the other gender, and words in the singular number shall be held and construed to include the plural and words in the plural number shall be held and construed to include the singular, unless in each instance the context requires otherwise. (o) Descriptive Headings. The headings in this Agreement are for convenience only and shall in no way enlarge, limit or define the scope or meaning of the various and several provisions hereof. -11- EXECUTED as of the date first written above. Pledgor's Address: PLEDGOR: Lister House Global Technology Value 35 The Parade Partners Limited St. Helier, Jersey JE2 3QQ Attention: Mr. Benjamin Warner By: /s/ Benjamin R. N. Warner -------------------------- Name: Benjamin R. N. Warner ------------------------- Title: Director ------------------------- Secured Party's Address: SECURED PARTY: c/o H.W. Partners, L.P. Infinity Investors Limited For the Benefit of Infinity Investors Limited 1601 Elm Street Suite 4000 By: /s/ James A. Loughran ---------------------------- Dallas, Texas 75201 Name: James A. Loughran -------------------------- Attention: Mr. Barrett Wissman Title: Director ------------------------- SCHEDULE A TO PLEDGE AGREEMENT DATED OCTOBER 23, 2000 BY AND BETWEEN INFINITY INVESTORS LIMITED AND GLOBAL TECHNOLOGY VALUE PARTNERS LIMITED The following property is a part of the Collateral as defined in Subsection 1(c): 6,869,854 shares of common stock of EDGE TECHNOLOGY GROUP, INC. (formerly known as Visual Edge Systems Inc.) a Delaware corporation, issued in the name of Pledgor. EX-99.3 4 0004.txt October 23, 2000 Attn: Craig Leibell American Stock Transfer & Trust Company 40 Wall Street New York, NY 10005 Re: Edge Technology Group, Inc. Common Stock ---------------------------------------- Dear Sir or Madam: Enclosed is an executed stock power under which Infinity Investors Limited ("Infinity") transferred and sold 6,869,854 shares (the "Infinity Shares") of Edge Technology Group, Inc. (formerly known as Visual Edge Systems Inc.) (the "Company"), representing all of the shares of the Company owned by Infinity, to Global Technology Value Partners Limited ("Purchaser"). Infinity is delivering to you, as the Company's stock transfer agent, its stock certificates for the 6,869,854 shares in the aggregate. Please cancel all of Infinity's stock certificates and reissue a new certificate (the "New Certificate") in the name of Purchaser. For your records, Purchaser's address is Lister House, 35 The Parade, St. Helier, Jersey JE2 3QQ. The New Certificate to Purchaser should bear the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED UNLESS THEY ARE SO REGISTERED OR, IN THE OPINION OF COUNSEL ACCEPTABLE TO THIS CORPORATION, SUCH TRANSFER IS EXEMPT FROM REGISTRATION. The New Certificate should be mailed c/o HW Partners, L.P., 1601 Elm Street, Suite 4000 Thanksgiving Tower, Dallas, Texas 75201. (signature page follows) By its signature hereto, the Company and Purchaser each have agreed with these instructions and directs you to follow the same. Also enclosed is an opinion of Infinity's counsel with respect to this transfer. Thank you for your cooperation. Sincerely yours, INFINITY INVESTORS LIMITED By: /S/ James A. Loughran ------------------------- Name: James A. Loughran ------------------------ Title: Director ----------------------- ACKNOWLEDGED AND AGREED: EDGE TECHNOLOGY GROUP, INC. By: /s/ Pierre Koshakji ------------------------------ Name: Pierre Koshakji ------------------------------ Title: Chief Executive Officer ------------------------------ GLOBAL TECHNOLOGY VALUE PARTNERS LIMITED By: /s/ Benjamin R. N. Warner ------------------------------ Name: Benjamin R. N. Warner ------------------------------ Title: Director ------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----