Exhibit 10.3
SECOND LIEN PLEDGE
AGREEMENT
This Second Lien Pledge Agreement
(this “ Agreement ”) is made as of the 20th day
of August, 2009 by
TieTek Technologies, Inc., a Texas
corporation (the “ Pledgor ”) in favor of Opus
5949 LLC (formerly known as Tie Investors, LLC), a Texas limited
liability company (the “ Lender ”).
R E C I T A L S :
A. Pursuant to that certain Second
Lien Credit Agreement dated as of August 20, 2009, by and
among North American Technologies Group, Inc., a Delaware
corporation (“ NATK ”), Pledgor and TieTek LLC,
a Delaware limited liability company (“ TieTek ”
and together with NATK and the Pledgor, the “Borrowers”
and each individually a “Borrower”), and Lender (as the
same may from time to time be amended, restated, supplemented or
otherwise modified, the “ Loan Agreement ”), the
Lender has agreed to make Loans to Borrowers.
B. Pledgor is the record and
beneficial owner of the Pledged Shares listed next to
Pledgor’s name in Part A of Schedule I hereto and the
owner of the promissory notes and instruments listed in Part B of
Schedule I hereto.
C. In order to induce Lender to make
the Loans as provided for in the Loan Agreement, the Pledgor has
agreed to pledge the Pledged Collateral to Lender in accordance
herewith.
NOW, THEREFORE, for and in
consideration of the premises and the making of the Loans, and
other good and valuable consideration, the receipt and sufficiency
of which are acknowledged by the Pledgor, the Pledgor hereby agrees
as follows:
A G R E E M E N T S
:
1. Definitions . Unless
otherwise defined herein, terms defined in the Loan Agreement are
used herein as therein defined, and following shall have (unless
otherwise provided elsewhere in this Agreement) the following
respective meanings (such meanings being equally applicable to both
singular and plural form of the terms defined):
“ Membership Interest
” has the meaning assigned to such term in Section 2
hereof.
“ Pledged Collateral
” has the meaning assigned to such term in Section 2
hereof.
“ Pledged Indebtedness
” means the indebtedness evidenced by promissory notes and
instruments listed on Part B of Schedule I
hereto.
“ Pledged Shares
” means the Membership Interest, other interests and those
other shares listed on Part A of Schedule I hereto.
“ Secured Indebtedness
” has the meaning assigned to such term in Section 2
hereof.
2. Pledge . The Pledgor
hereby pledges to Lender and grants to Lender a security interest
in all of the following (collectively, the “ Pledged
Collateral ”):
(i) (a) All of the right, title and
interest (the “ Membership Interest ”) of the
Pledgor in and to TieTek, which was formed pursuant to the Articles
of Formation (the “ Articles of Formation ”)
dated as of February 5, 2004, and the Regulations (the
“Regulations”) dated as of February 5, 2004,
(together, the “ Organization Documents ”,
(b) all other Pledged Shares, and (c) the certificates
representing the Membership Interest and other Pledged
Shares;
(ii) Any and all proceeds and
distributions (the “ Proceeds ”) due or to
become due to the Pledgor under the Organization Documents and all
dividends, distributions, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
Pledged Shares;
(iii) All rights under all operating
or limited liability company agreements and other documents
(including the Articles of Formation and the Regulations) governing
any of the Pledged Shares (collectively, the “ LLC
Agreements ”);
(iv) Any additional shares of stock
or equity interests from time to time acquired by the Pledgor in
any manner (which shares shall be deemed to be part of the Pledged
Shares), and the certificates representing such additional shares,
and all dividends, distributions, cash, instruments and other
property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any o all of
such stock;
(v) Any and all present and future
accounts, certificates of deposit, securities, general intangibles,
chattel paper and other proceeds arising from, or by virtue of, or
from the disposition of, or claims against any other person or
entities with respect to, all or any part of the property described
in clauses (i) or (ii)
preceding;
(vi) The Pledged Indebtedness and
the promissory notes or instruments evidencing the Pledged
Indebtedness, and all interest, cash, instruments and other
property and assets from time to time received, receivable or
otherwise distributed in respect of the Pledged
Indebtedness;
(vii) All additional indebtedness
arising after the date hereof and owing to such Pledgor and
evidenced by promissory notes or other instruments, together with
such promissory notes and instruments, and all interest, cash,
instruments and other property and assets from time to time
received or otherwise distributed in respect of that Pledged
Indebtedness.
3. Secured Indebtedness .
This Agreement is made to secure the payment and performance of
(a) the Loans and any renewals, increases, extensions, and
modifications thereof, (b) any and all advances made and costs
and expenses incurred by the Lender pursuant to the Loan Agreement,
this Agreement and any other Loan Document, as such term is defined
in the Loan Agreement, (c) Borrowers’ performance of its
obligations under the Note, the Loan Agreement and other Loan
Documents, (d) the Pledgor’s performance of its
obligations under this Agreement and other Loan Documents, and
(e) all other and additional debts, obligations and
liabilities of every
kind and character of Borrowers now or hereafter
existing in favor of the Lender, under the Loan Documents, as such
term is defined in the Loan Agreement. The debts, obligations and
liabilities referred to in clauses (a), (b), (c), (d)
and (e) above are referred to collectively as
the “ Secured Indebtedness .” Upon full payment
in cash and performance of the Secured Indebtedness, the Lender, at
the request and expense of the Pledgor, shall execute a release of
this Agreement.
4. Delivery of Pledged
Collateral . Unless in possession of First Lien Lender, all
certificates and all promissory notes and instruments evidencing
the Pledged Collateral shall be delivered to Lender. All Pledged
Shares shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance
reasonably satisfactory to Lender and all promissory notes or other
instruments evidencing the Pledged Indebtedness shall be endorsed
by the Pledgor.
5. Representations and
Warranties . To induce the Lender to make the Loans, the
Pledgor represents and warrants as follows:
(a) The Organization Documents are
valid and in full force and effect according to its terms, and no
change, modification or amendment has been made to the Organization
Documents;
(b) The Pledgor has good title to
its interest in the Pledged Collateral and full authority to grant
a security interest in the Pledged Collateral; and no other person,
corporation or entity (other than the First Lien Lender) has any
right, title or interest therein;
(c) Subject to paragraph
(h) below, there are no provisions in any indenture, contract,
agreement or other document controlling (directly or indirectly)
the Pledgor or to which the Pledgor is a party or is bound, which
prohibits the execution and delivery of this Agreement or the
performance of its terms;
(d) The Pledgor has performed duly
and punctually all and singular the terms, covenants, conditions
and warranties of the Organization Documents on the Pledgor’s
part to be kept, observed and performed;
(e) The Pledgor has not previously
sold, assigned, transferred, mortgaged, pledged or encumbered the
Pledgor’s interests in the Pledged Collateral, except as set
forth in the Security Agreement (Membership Interest) dated as of
February 5, 2004 (the “ First Lien Pledge
Agreement ”) ;
(f) The Pledgor is not in default of
any of the terms of the Organization Documents;
(g) To the knowledge of Pledgor, no
other party to the Organization Documents is in default
thereunder;
(h) Except as required by the
Organization Documents and the First Lien Loan Agreement, which
requirement has been waived, no consent, approval, or authorization
of or from any person, entity or governmental authority is
necessary for the Pledgor validly to grant a security interest in
the Pledged Collateral;
(i) Any sums to which the Pledgor is
entitled under the Organization Documents, which are due from and
after the date hereof have not been collected; and payment of such
sums has not otherwise been anticipated, waived, released,
discounted, set off, or otherwise discharged or compromised;
and
(j) The pledge, assignment and
delivery of the Pledged Collateral (together with duly executed
instruments of transfer or assignment in blank and appropriate
endorsements) pursuant to this Agreement will create a valid Lien
on and a perfected security interest in favor of the Lender in the
Pledged Collateral and the proceeds thereof, securing the payment
of the Secured Indebtedness, subject to no other Lien other than
the lien pursuant to the First Lien Loan Agreement
6. Covenants . The Pledgor
covenants and agrees as follows:
(a) To observe, perform and
discharge all obligations, covenants and warranties provided for
under the terms of the Organization Documents to be kept, observed
and performed by the Pledgor, and to inform the Lender promptly in
writing of any notice received by the Pledgor (i) with respect
to any obligation to be performed but alleged not to have been
performed by the Pledgor under the Organization Documents, and
(ii) of any default or claimed default by any party to the
Organization Documents;
(b) To enforce or secure the
enforcement, in the name of the Lender, the performance of each and
every obligation, term, covenant, condition and agreement to be
performed by any other party under the terms of the Organization
Documents;
(c) Not to vote in favor of, or
cause, the termination of TieTek, or vote in favor of any
modification, extension, renewal, amendment or material alteration
of any term of the Organization Documents without, in each such
instance, the prior written consent of the Lender;
(d) To keep accurate books, records,
and accounts with respect to TieTek and make them available to the
Lender, at its request, for examination and inspection;
(e) At any time after the occurrence
of an Event of Default or Default (as defined in the Loan
Agreement), to pay over and deliver immediately to the Lender as a
prepayment on the Secured Indebtedness any and all amounts
hereafter received by the Pledgor pursuant to the terms of the
Organization Documents or documents evidencing Pledged Indebtedness
(any and all amounts paid to the Lender pursuant hereto shall be
applied against the Secured Indebtedness in the manner the Lender
shall determine, in its sole and absolute discretion);
(f) That the Lender, after the
occurrence of an Event of Default or a Default, without notice to
the Pledgor, shall have the right at any time and from time to time
to notify and direct any officer or such other appropriate party,
of TieTek to thereafter make all disbursements of the Proceeds
directly to the Lender; such officer or other party shall be fully
protected in relying on the written statement of the Lender that it
holds a security interest that entitles the Lender to receive any
such disbursement, and the receipt by the Lender of such
disbursements shall be full acquittance thereof to the party making
such disbursements;
(g) At any time, and from time to
time, at the request of the Lender, to execute and deliver to the
Lender any and all additional instrume
