ex10-20



 



Exhibit 10.20


EXECUTION COPY


OWNERS’ EQUITY PLEDGE AND SECURITY AGREEMENT


         THIS OWNERS’ EQUITY PLEDGE AND SECURITY AGREEMENT (as defined in Article 6
hereof, along with all other defined terms, this “Pledge Agreement”) is made
and effective as of May      , 2002 by STEVE FORGET (as more fully defined below,
a “Pledgor”), and COUSINEAU, DOUCET, PARENT, FORGET AUDIOPROTHÉSISTES s.e.n.c.
(as more fully defined below, “Pledged Share Issuer”), in favor of HEARx LTD.
(as more fully defined below, “Lender”).

R E C I T A L S:


         WHEREAS, Pledgor owns capital and/or voting equity ownership interests (or
rights thereto) of Pledged Share Issuer; and

         WHEREAS, Helix Hearing Care of America Corp. (“Helix”) and each of its
direct and indirect Subsidiaries (each, a “Borrower”; collectively, the
“Borrowers”) desire and have applied to Lender for a credit facility consisting
of a $9.42 million term loan; and

         WHEREAS, pursuant to that certain Credit Agreement by and among Borrowers
and Lender dated as of April 30, 2002 (as may be amended from time to time,
“Credit Agreement”), a condition precedent to Lender’s obligation to execute
and perform under the Credit Agreement is that Pledgor shall have executed and
delivered this Pledge Agreement; and

         WHEREAS, Pledgor is the President, Chief Executive Officer and Chairman of
Helix and Pledgor has determined that it is in his best interest to execute
this Pledge Agreement inasmuch as he will derive substantial direct and
indirect benefits from the funding of the Advances by Lender pursuant to the
Credit Agreement;

         NOW, THEREFORE, for good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), and intending to be legally
bound hereby, Pledgor, Pledged Share Issuer and Lender hereby agree as follows:

ARTICLE 1: PLEDGE


         1.1. Grant of Security Interest. Pledgor hereby pledges, hypothecates,
assigns, charges, mortgages, delivers, and transfers to Lender and hereby
grants to Lender a present, absolute, unconditional and continuing first
priority security interest in all of the following property (collectively,
“Collateral”):

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	 	a.	 	All issued and outstanding equity ownership
interests (whether in the form of stock, partnership interests,
membership interests or otherwise) of Pledged Share Issuer
owned by such Pledgor, as identified on Schedule 1.1 hereto;
and
	 
	 	b.	 	All other Pledged Shares issued from time to time
to such Pledgor; and
	 
	 	c.	 	All other Pledged Property (including, without
limitation, all options and warrants for Pledged Shares, as
identified on Schedule 1.1 hereto) owned by Pledgor, whether
now or hereafter delivered to Lender in connection with this
Pledge Agreement; and
	 
	 	d.	 	All Dividends, Distributions, capital accounts, and
other payments and rights with respect to any Pledged Property
received or receivable by Pledgor; and
	 
	 	e.	 	All proceeds of any of the foregoing; and



in each case, whether now existing or owned or hereafter acquired by Pledgor
and howsoever Pledgor’s interest therein may arise or appear (whether by
ownership, security interest, claim or otherwise).


         1.2. Security for Secured Obligations. This Pledge Agreement secures the
payment and performance in full of (a) all obligations (monetary or otherwise)
of each Borrower and other Obligor (including Pledgor) now or hereafter
existing under the Credit Agreement or any other Loan Document as well as under
any other agreement with Lender now or hereafter to extend credit to any such
Obligor (whether for principal, interest, costs, fees, expenses, protective
advances or otherwise), and (b) all obligations (monetary or otherwise) of
Pledgor and/or Pledged Share Issuer now or hereafter existing under this Pledge
Agreement or any other Loan Document to which he, she or it may be a party (all
such obligations under clauses “(a)” and “(b)” being referred to collectively
as the “Secured Obligations”).


         1.3. Delivery of Pledged Property. To the extent that any of the
Collateral is evidenced by a certificate or instrument, then all such
certificates or instruments (a) must be delivered to and held by or on behalf
of Lender pursuant hereto, and (b) must be in suitable form for transfer by
delivery, and (c) must be accompanied by all necessary powers, appointments and
instruments of transfer or assignment, duly executed in blank. To the extent
that any of the Collateral is not evidenced by a certificate or instrument,
then Pledgor shall cause the Pledge Share Issuer of such uncertificated
security to either (a) register the Lender as a registered owner thereof on the
books and records of such Pledge Shared Issuer, or (b) execute a control
agreement pursuant to which such Pledge Share Issuer agrees to comply with the
Lender’s instructions with respect to such uncertificated security without
further consent by the Pledgor.


         1.4. Dividends and Distributions on Pledged Shares. Except as otherwise
expressly permitted in the Credit Agreement, until the Pledge Agreement has
been terminated in accordance with Section 1.5, then Pledged Share Issuer shall
not declare, pay or deliver and Pledgor shall not receive or retain any
Dividend or Distribution.


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         1.5. Continuing Security Interest; Assignments; Termination. This Pledge
Agreement creates a continuing security interest in the Collateral and will
remain in full force and effect until terminated as described below in this
Section. This Pledge Agreement is binding upon Pledgor, and his, her or its
heirs, executors, administrators, personal representatives, successors and
assignees, and (together with the rights and remedies of Lender hereunder)
inures to the benefit of the Lender and
its successors, transferees, participants and assignees. Without limiting
the generality of the foregoing, except to the extent restricted under the
Credit Agreement, Lender may assign or otherwise transfer (in whole or in part,
and without Pledgor’s consent) any Loan Document and any indebtedness
thereunder to any other Person, and such other Person will thereupon become
vested with all the rights and benefits in respect thereof granted to Lender
under any such Loan Document (including this Pledge Agreement) or otherwise,
subject, however, to any contrary provisions in such assignment or transfer.
The pledge and security interest granted herein will terminate (and all rights
to the Collateral will revert to the Pledgor) upon the earlier to occur of (1)
satisfaction of the following conditions: (a) the payment and performance in
full of all Secured Obligations (unconditionally and indefeasibly) and (b) the
termination of the Credit Agreement (and the Facilities thereunder), or (2) the
consummation of the Plan of Arrangement contemplated by the Merger Agreement
and the execution by and between Pledged Share Issuer and any of Helix, Lender
or one or more of their subsidiaries of a definitive agreement or agreements
relating to the continued management by Helix, Lender or one or more of their
subsidiaries of certain clinics located in Quebec. Upon any such termination,
Lender (at Pledgor’s request and sole expense) (a) will execute and deliver to
Pledgor (without any representation, warranties or recourse of any kind
whatsoever) such documents as Pledgor may reasonably request to evidence such
termination and delivery, and (b) will deliver to Pledgor or to another person
that Lender reasonably believes may be entitled thereto (in either instance,
without any representation, warranties or recourse of any kind whatsoever) all
certificates and instruments representing or evidencing Collateral held by
Lender hereunder.


         1.6. Security Interest Absolute. All rights of Lender and the pledges and
security interests granted to Lender hereunder, and all obligations of Pledgor
hereunder, are absolute and unconditional, irrespective of:



	 	a.	 	Any lack of validity or enforceability of any Note
or any other Loan Document; or
	 
	 	b.	 	The failure of Lender or any holder of any Note:
	 



	 	1.	 	To assert any claim or demand or to
enforce any right or remedy under the provisions of any
Note or any other Loan Document or otherwise, or
	 
	 	2.	 	To exercise any right or remedy against
any other Obligor of, or collateral securing, any
obligations of any Borrower owing to Lender; or



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	 	c.	 	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 extension, compromise or renewal of
any Secured Obligation; or
	 
	 	d.	 	Any reduction, limitation, impairment or
termination of any Secured Obligation for any reason, including
any claim of waiver, release, surrender, alteration or
compromise (and each Pledgor hereby waives any right to or
claim of any defense or setoff, counterclaim, recoupment or
termination
whatsoever by reason of any invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of,
or any other event or occurrence affecting, any Secured
Obligation); or
	 
	 	e.	 	Any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any Note or
any other Loan Document; or
	 
	 	f.	 	Any addition, exchange, release, surrender or
nonperfection of any collateral (including the Collateral), or
any amendment to or waiver or release of or addition to or
consent to departure from any guaranty, for any of the Secured
Obligations; or
	 
	 	g.	 	Any other circumstances that might otherwise
constitute a defense available to, or a legal or equitable
discharge of, Pledgor, including, without limitation, any and
all suretyship defenses.



ARTICLE 2: REPRESENTATIONS AND WARRANTIES



                  As of the date hereof and each pledge and delivery of any Collateral
hereunder (including each pledge and delivery of Pledged Shares), Pledgor
hereby represents and warrants to Lender as set forth in this Article.



         2.1. Legal Capacity. Pledgor has the full power and legal capacity to
execute and deliver the Pledge Agreement and to perform his obligations
hereunder.


         2.2. Ownership; No Liens. Pledgor is the legal and beneficial owner of,
and has good and marketable title to (and has full right and authority to
pledge and assign) such Collateral, free and clear of all Liens, security
interests, options, charges, claims or other encumbrances (including, without
limitation, any dower, curtsey or other rights of third parties), except any
Lien or security interest granted pursuant hereto in favor of Lender.


         2.3. Valid Security Interest. The execution of this Pledge Agreement is
effective to create a valid and enforceable pledge of and security interest in
the Collateral and all proceeds thereof securing the payment of the Secured
Obligations. The delivery of the Collateral (to the extent certificated) to
Lender is effective to create a perfected, first priority security interest in
the Collateral and all proceeds thereof. No filing or other action will be
necessary to perfect or protect such security interest.


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         2.4. As to Pledged Shares. With respect to any Pledged Shares
constituting Collateral, all of such Pledged Shares are duly authorized and
validly issued, fully paid, and non-assessable. The Pledged Shares constitute
all of the issued and outstanding shares (and other rights) of equity ownership
of Pledged Share Issuer owned by such Pledgor.


         2.5. Non-Contravention. The execution, delivery and performance by such
Pledgor of this Pledge Agreement and each other Loan Document executed or to be
executed by such Pledgor do not:



	 	a.	 	Contravene any provision of the Organic Documents
of Pledged Share Issuer; or
	 
	 	b.	 	Contravene any contractual restriction the
violation of which individually or in the aggregate could
possibly have a Material Adverse Effect; or
	 
	 	c.	 	Contravene any law or governmental regulation or
court decree or order binding on or affecting such Pledgor; or
	 
	 	d.	 	Result in, or require the creation or imposition
of, any Lien on any of such Pledgor’s property, other than the
Lien created pursuant to this Pledge Agreement.



         2.6. Valid Obligations. This Pledge Agreement constitutes the legal,
valid and binding obligation of Pledgor and is enforceable against Pledgor in
accordance with the terms hereof.


         2.7. Pledgor Solvency. Pledgor is not “insolvent,” as such term is defined
in Section 101(32) of the Bankruptcy Code (11 U.S.C. § 101(32)) or in any other
applicable law of any jurisdiction, including without limitation, the
Bankruptcy and Insolvency Act (Canada). Pledgor, by virtue of its obligations
and actions in connection with the Loan Documents, has not engaged and is not
engaging in any transaction that constitutes a fraudulent transfer or
fraudulent conveyance under applicable federal, provincial, or state law
(including without limitation under Section 548 of the Bankruptcy Code or under
the Uniform Fraudulent Transfer Act or the Uniform Fraudulent Conveyance Act).


ARTICLE 3: COVENANTS



                  Pledgor hereby covenants and agrees that, so long as this Pledge Agreement
remains effective, Pledgor will comply with the covenants set forth in this
Article, unless Lender otherwise consents in writing.



         3.1. Protect Collateral; Negative Pledge; Further Assurances. Pledgor
will not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of Lender hereunder). Pledgor will warrant and
defend the right and title herein granted to Lender in and to the Collateral
(and all right, title, and interest represented by the Collateral) against the
claims and demands of all persons whomsoever. At any time and from time to
time, Pledgor (at Pledgor’s expense) will promptly execute and deliver all
further instruments, and will take all further action,


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that may be necessary or
desirable, or that Lender may reasonably request, in order to perfect and
protect any pledge or security interest granted or purported to be granted
hereby or to enable Lender to exercise and endorse its rights and remedies
hereunder with respect to any Collateral.


         3.2. Powers and Appointments. Pledgor agrees that all Pledged Shares (and
all other shares of stock or equity ownership interests constituting
Collateral) delivered by Pledgor pursuant to this Pledge Agreement will be
accompanied by duly executed undated blank powers, appointments or other
equivalent instruments of transfer acceptable to Lender. From time to time at
Lender’s request, Pledgor will promptly deliver to Lender such powers,
appointments, instruments and similar documents (satisfactory in form and
substance to Lender) with respect to the Collateral. From time
to time at Lender’s request after the occurrence and during the
continuance of any Event of Default (and after any applicable grace period
under Section 7.2 of the Credit Agreement has expired), Pledgor will promptly
transfer any Pledged Shares or other shares of capital stock or ownership
interests constituting Collateral into the name of any nominee designated by
Lender.


         3.3. Continuous Pledge. At all times, Pledgor will keep pledged to Lender
pursuant hereto all Pledged Shares and all other shares of capital stock and
other ownership interests constituting Collateral, all Dividends and
Distributions with respect thereto (subject, however, to Section 1.4 hereof),
and all other Collateral and other securities, instruments, proceeds, capital
accounts, and rights from time to time received by or distributable to Pledgor
in respect of any Collateral.


         3.4. Delivery of Dividends, Distributions and Other Collateral. Promptly
upon receipt and without any request by Lender, Pledgor agrees to deliver to
Lender (properly endorsed if required hereby or requested by Lender) all
Distributions, all Dividends (except as provided in Section 1.4 and Section
5.10 of the Credit Agreement), all other non-Dividend cash payments, and all
proceeds thereof, all of which will be held by Lender as additional Collateral
separate, segregated and apart from it other property.


         3.5. Voting Rights.


                  a.  Unless and until an Event of Default has occurred and is continuing,
Pledgor will have the exclusive right to exercise all voting rights with
respect to his, her or its Pledged Shares. Upon written request from Pledgor
(and at Pledgor’s sole expense), Lender will promptly execute and deliver such
proxies and other documents, if any, as reasonably requested in writing by
Pledgor (together with a reasonably acceptable form) that are necessary to
allow Pledgor to exercise voting power with respect to any Pledged Shares owned
by Pledgor constituting Collateral; provided, however, that no vote may be cast
or other action taken by Pledgor (including, the giving of any consent, waiver,
or ratification) that could impair any Collateral or would otherwise be
inconsistent with or violate any provision of any Loan Document (including this
Pledge Agreement).



                  b.  After any Event of Default has occurred and is continuing and Lender
has notified Pledgor of Lender’s intention to exercise its voting power, unless
otherwise then expressly impermissible under applicable law, Lender may
exercise (to the exclusion of Pledgor) the voting power and all other
incidental rights of ownership with respect to any Pledged Shares or other
shares of stock or ownership interests constituting Collateral. Pledgor hereby
grants Lender an irrevocable proxy, exercisable under such circumstances set
forth above, to vote the Pledged Shares and such



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other Collateral. Pledgor
hereby covenants to promptly deliver to Lender such additional proxies,
appointments and other documents as may be necessary to allow Lender to
exercise such voting power and other incidental ownership rights.


         3.6. Investment Property. Without obtaining Lender’s prior written
consent (which consent will not be unreasonably withheld), Pledgor will not
keep or maintain any of the Collateral hereunder in a “securities account” with
any “securities intermediary” (as such terms are defined in Article 8 of the
UCC), unless a control agreement acceptable in form and substance to Lender is
first executed by such “securities intermediary” securing Lender’s first
priority interest and rights in and to all “financial assets” and “security
entitlements” constituting Collateral in such “securities account”.


         3.7. Consent to Sale. If (at any time) a majority of the voting equity
interests of Pledged Share Issuer or a majority of the members of Pledged Share
Issuer’s board of directors approves a resolution recommending the sale or
liquidation of any Pledged Share Issuer (or a material portion of the assets
thereof) in a commercially reasonable transaction and (in either instance) with
Lender’s consent, then (a) Pledgor will not unreasonably withhold consent for
such disposition transaction and (b) Pledgor will not assert any claim against
any such holder of voting equity interests or any such director based upon a
breach of fiduciary duty solely as a result such vote or disposition
transaction.


         3.8. Equityholder Agreements. With respect to Lender, any Affiliate of
Lender or any subsequent acquiror or transferee of the Collateral pursuant to
any sale of or foreclosure on such Collateral, Pledgor hereby waives any and
all rights under any shareholder agreement, operating agreement, partnership
agreement or other equityholder agreement among some or all of the
equityholders of Pledged Share Issuer including (as applicable) (i) any right
to consent to the sale, assignment, pledge or other transfer of any of the
Collateral, and (ii) any right of first refusal, and (iii) any right to consent
to any transfer of the Collateral, and (iv) any right to cause any of the
Collateral to become non-voting stock, and (v) any right to demand a sale of
all or any part of any Pledged Share Issuer’s assets, and (vi) any right to
require a shareholder to vote for or against any matter that is the subject of
a shareholder vote, and (vii) any put right or right to require any Pledged
Share Issuer to purchase any shares of capital stock. Pledgor also hereby
agrees that he or she will not amend or modify any such agreement without the
prior written consent of Lender. Pledgor and Pledged Share Issuer hereby
consent to the pledge of the Collateral hereunder by Pledgor and the compliance
by Pledgor with the terms of this Pledge Agreement.


ARTICLE 4: LENDER



         4.1. Lender Appointed as Attorney-in-Fact. Pledgor and the Pledged Share
Issuer hereby irrevocably appoint Lender as his, her or its attorney-in-fact,
with full authority in the name, place and stead of Pledgor, the Pledged Share
Issuer or otherwise, from time to time in Lender’s reasonable discretion, to
take any action and to execute any instrument which Lender may deem necessary
or advisable to accomplish the purposes of this Pledge Agreement upon the
occurrence and during the continuation of an Event of Default. Pledgor and
Pledged Share Issuer each hereby acknowledges, consents and agrees that the
power of attorney granted pursuant to this Section is irrevocable and coupled
with an interest, but that it will terminate upon the termination of this
Pledge Agreement pursuant to Section 1.5 hereof.


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         4.2. Lender May Perform. From time to time, at Lender’s option, Lender
may perform (or cause the performance of) any act which Pledgor or Pledged
Share Issuer agrees hereunder to perform and which Pledgor or Pledged Share
Issuer fails to perform after being requested in writing so to perform (it
being understood that no such request need be given after the occurrence and
during the continuance of an Event of Default and after any applicable grace
period under Section 7.2 of the Credit Agreement has expired). Lender from
time to time may also take any other action which Lender reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest herein. Moreover, Pledgor hereby
authorizes, consents and instructs Lender from time to time, in the absence of
an Event of Default, not more than once a year (at Lender’s election) (a) to
obtain, review and use a credit report on Pledgor and any other information
relating to the creditworthiness of Pledgor from any third party and (b) to
share such information with Lender’s Affiliates, counsel and agents for use in
connection with the Credit
Agreement. The costs and expenses of Lender incurred in connection with
any such performance will be jointly and severally payable by Pledgor and
Pledged Share Issuer pursuant to Section 5.6 hereof.


         4.3. Lender Has No Duty. The rights and powers conferred on Lender
hereunder are solely to protect its interest in the Collateral and do not
impose any duty on Lender to exercise any such rights or powers. Except for
reasonable care of any Collateral in Lender’s possession and the accounting for
moneys actually received by it hereunder, Lender has no duty as to any
Collateral or any responsibility for:



	 	a.	 	Ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other
matters relative to any Pledged Property, whether or not Lender
has or is deemed to have knowledge of such matters; or
	 
	 	b.	 	Taking any necessary steps to preserve rights
against prior parties or any other rights pertaining to any
Collateral.



         4.4. Reasonable Care. Lender is required to exercise reasonable care in
the custody and preservation of any of the Collateral in its possession;
provided, however, Lender will be deemed to have exercised such reasonable care
in the custody and preservation of any of the Collateral if Lender takes such
action for that purpose as Pledgor reasonably requests in writing at times
other than after the occurrence or during the continuance of an Event of
Default (and after any applicable grace period under Section 7.2 of the Credit
Agreement has expired). Notwithstanding the foregoing, any failure or refusal
by Lender at any time to comply with any such request by a Pledgor will not in
itself be deemed a failure to exercise reasonable care.


ARTICLE 5: DEFAULTS AND REMEDIES



         5.1. Events of Default. The occurrence of any “Event of Default” under and
as defined in the Credit Agreement will constitute an independent Event of
Default (“Event of Default”) hereunder.


         5.2. Certain Remedies. If any Event of Default occurs and is continuing:

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                  a.  In addition to other rights and remedies provided for herein or
otherwise available to Lender, Lender may exercise in respect of the Collateral
all the rights and remedies of a secured party on default under the UCC or the
Personal Property Security Act (Ontario) (the “PPSA”)(whether or not the UCC or
PPSA applies to the affected Collateral). Upon the occurrence and during the
continuance of any Event of Default, Lender will have the immediate right to
enforce and realize upon any and all collateral security granted under the Loan
Documents (including the Collateral hereunder) in any manner or order that
Lender deems expedient without regard to any equitable principles of
marshalling or otherwise. All rights and remedies available to Lender are to
be considered cumulative in nature. Notwithstanding the foregoing, Lender
agrees that its exercise of its right to enforce or realize upon any and all
Collateral hereunder shall be subject to any grace period under Section 7.2 of
the Credit Agreement.



                  b.  Without notice except as specified below, Lender may also sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any of Lender’s offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as Lender may deem commercially
reasonable. To the extent any notice of sale is required by applicable law,
Pledgor agrees that prior notice to Pledgor of at least ten (10) calendar days
indicating the time and place of any public sale or the time after which any
private sale is to be made will constitute reasonable notification. Lender is
not and will not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Lender may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor,
and without further notice, such sale may be made at the time and place to
which it was so adjourned.



                  c.  Lender, in addition, (1) may transfer all or any part of the Collateral
into the name of Lender or its nominee, with or without disclosing that such
Collateral is subject to the Lien and security interest hereunder, and (2) may
take control of any proceeds of the Collateral, and (3) may execute (in the
name, place and stead of Pledgor) endorsements, assignments, stock powers and
other instruments of conveyance or transfer with respect to all or any of the
Collateral.



                  d.  To the extent any of the Collateral represents an interest in a
partnership, a limited liability company or other unincorporated enterprise, in
addition to any other rights and remedies available to Lender under the Loan
Documents or applicable law, Lender (at its option but with notice to the
Pledgor) may also exercise all rights and privileges of the holder of such
interest under the agreements governing such Collateral and the Organic
Documents for the related organization or may instruct Pledgor how to exercise
such rights and privileges (with which instructions Pledgor and the Pledged
Share Issuer hereby agree to comply). Pledgor and the Pledged Share Issuer, in
addition, hereby covenants and agrees (at Lender’s request) to amend (and to
use his, her or its best efforts to cause others to amend) any of the Organic
Documents for such organization in order to authorize Lender to so exercise any
such rights and privileges associated with such Collateral (including, without
limitation, voting rights and the rights to participate in management
decisions). The rights of Lender under this Subsection may be transferred to
and exercised by any subsequent acquiror or transferee of the Collateral
pursuant to any sale of or foreclosure on such Collateral. Pledgor and Pledged
Share Issuer hereby agree that the rights of Lender (or any subsequent acquiror
or transferee of the Collateral) under this Subsection may be enforced by
specific performance or otherwise.



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         5.3. Special Securities-Related Remedies. If, upon the occurrence and
during the continuance of an Event of Default (and after any applicable grace
period under Section 7.2 of the Credit Agreement has expired), Lender
determines to exercise its right to sell all or any portion of the Collateral
pursuant to Section 5.2 hereof, upon Lender’s request, Pledgor (at Pledged
Share Issuer’s expense):



	 	a.	 	Will execute and deliver, and will cause each
issuer of the Collateral contemplated to be sold (and the
directors and officers thereof) to execute and deliver, all
such instruments and documents, and will do or cause to be done
all such other acts and things as may be necessary or, in
Lender’s opinion, reasonably advisable (1) to register such
Collateral under the provisions of the Securities Act, and (2)
to cause the registration statement relating thereto to become
effective and to remain effective for such period as
prospectuses are
required by law to be furnished, and (3) to make all
amendments and supplements thereto and to the related
prospectus which, in Lender’s opinion, are necessary or
reasonably advisable, all in conformity with the requirements
of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto; and
	 
	 	b.	 	Will use his, her or its best efforts to qualify
the Collateral under the state securities or “Blue Sky” laws
and to obtain all necessary governmental approvals for the sale
of the Collateral, as requested by Lender; and
	 
	 	c.	 	Will cause each such issuer to make available to
its security holders, as soon as practicable, an earnings
statement that will satisfy the provisions of Section 11(a) of
the Securities Act; and
	 
	 	d.	 	Will do or cause to be done all such other acts and
things as may be reasonably necessary or in Lender’s opinion
advisable to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable
law.



In furtherance of the foregoing (and not in limitation of any other
obligations under the Loan Documents), Pledged Share Issuer covenants that
it will fully cooperate with Pledgor and Lender, and will comply with all
requests of Lender, in order to permit Lender to fully and timely exercise
the remedies under this Section.


         5.4. Compliance with Restrictions. Pledgor agrees that in any sale of any
of the Collateral whenever an Event of Default has occurred and is continuing,
Lender is hereby authorized to comply with any limitation or restriction in
connection with such sale as Lender may be advised by counsel is necessary or
reasonably desirable in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Official


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Body. Pledgor further agrees that
such compliance will not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner, nor will Lender be liable
or accountable to Pledgor for any discount allowed by reason of the fact that
such Collateral is sold at foreclosure or otherwise in compliance with any such
limitation or restriction or by reason of the fact that such Collateral may
represent a minority interest in the Pledged Share Issuer.


         5.5. Application of Proceeds. All cash proceeds received by Lender in
respect of any sale of, collection from, or other realization upon, all or any
part of the Collateral, in the discretion of Lender, may be held by Lender as
additional Collateral security for the Secured Obligations, or then or at any
time thereafter may be applied (after payment of any amounts payable to Lender
pursuant to Section 5.6 hereof) in whole or in part by Lender against all or
any part of the Secured Obligations in an order consistent with the designated
application of payments provided for in Article 1 of the Credit Agreement. Any
surplus of such cash or cash proceeds held by Lender and remaining after
payment in full of all the Secured Obligations, and the termination of the
Credit Agreement, will be
paid over to the Pledgor (on a pro-rata basis in accordance with his, her
or its relative percentage of ownership of the Pledged Share Issuer) or to
whomsoever may be lawfully entitled to receive such surplus.


         5.6. Indemnity and Expenses.


                  a.  Pledgor (jointly and severally with Pledged Share Issuer) hereby agrees
to indemnify and hold harmless Lender from and against any and all claims,
losses and liabilities arising out of or resulting from any or all of the
following: (1) Pledgor’s failure to perform or otherwise observe any of his,
her or its obligations hereunder, and (2) Lender’s enforcement of any of the
provisions hereof as regards Pledgor except where any such claims, losses and
liabilities result from Lender’s own gross negligence, misrepresentation, fraud
or willful misconduct, and (3) Pledgor’s gross negligence, misrepresentation,
willful misconduct or fraud.



                  b.  Upon demand, Pledgor (jointly and severally with Pledged Share Issuer)
will pay Lender the amount of all reasonable costs and expenses that Lender may
incur in connection with any of the matters described under clause “a” of this
Section. Without limitation, such obligation to reimburse Lender for such
fees, costs and expenses includes all reasonable fees and disbursements of
Lender’s counsel and any other experts and agents that Lender may retain in
connection herewith (whether or not litigation is commenced).



                  c.  If Pledgor fails or refuses to pay Lender any amount due hereunder or
to otherwise deliver to Lender any property required to be delivered hereunder,
then such amount (or, as appropriate, the fair market value of such property)
will accrue interest until paid or delivered at a per annum rate equal to the
lesser of: (i) two percent (2%) per annum in excess of the highest rate then
otherwise applicable to indebtedness under the Credit Agreement (not including
the default rate) or (ii) the maximum amount permitted by applicable law.



                  d.  If, in connection with the bankruptcy, liquidation or other disposition
of any Borrower, Pledgor or Pledged Share Issuer or the assets of any thereof,
Pledgor is retained by a bankruptcy trustee or other representative of such
estate as a consultant, witness or other advisor, Pledgor hereby agrees to
indemnify and hold harmless Lender against any and all claims, losses or



11







 





liabilities arising out of or otherwise directly or indirectly resulting from
such party’s service as consultant, witness or other advisor (including,
without limitation, any costs or losses resulting from any party’s assistance
in challenging the enforceability of the Loan Documents or any transfers of
interests thereunder) except where any such claims, losses and liabilities
result from Lender’s own gross negligence, misrepresentation, fraud or willful
misconduct. Moreover, if Pledgor votes in favor of, consents to or otherwise
participates in causing (or fails or refuses to take all reasonable actions
necessary to prevent) the occurrence of a Liquidation Event, without the prior
written consent of Lender, then Pledgor hereby agrees to indemnify and hold
harmless Lender against any and all claims, losses and liabilities arising out
of or otherwise directly or indirectly resulting from such Liquidation Event
except where any such claims, losses and liabilities result from Lender’s own
gross negligence, misrepresentation, fraud or willful misconduct.
Notwithstanding the foregoing, Pledgor is not responsible to Lender under this
clause “d” to the extent that Pledgor’s participation in the such bankruptcy
proceeding is (1) as a witness for no or nominal consideration and pursuant to
a subpoena or other compulsory process, or (2) otherwise required by applicable
laws, regulations or rules.


                  e.  Pledgor is not responsible to Lender under this Section 5.6 (other than
to the extent of Pledgor’s interest in the Collateral) for non-performance of
an obligation under this Pledge Agreement if (i) fulfillment of such obligation
would cause Pledgor to breach his, her or its fiduciary duties as an officer,
director or shareholder of Pledged Share Issuer and (ii) Pledgor provides
Lender with prior written notice of such non-performance.



         5.7. Lender’s and Lenders’ Rights Upon Occurrence of Liquidation Events.


                  a.  Right to Certain Payments and Distributions. Upon the occurrence of
any Liquidation Event, any payment or distribution of any kind or character
(whether in cash, securities or other property) that but for this Pledge
Agreement would be payable or deliverable to Pledgor must instead be paid or
delivered directly to Lender for application on the Secured Obligations,
whether or not then due or mature, until such time as the entire Secured
Obligations have been fully paid and satisfied (unconditional and
indefeasibly).



                  b.  Non-Cash Payments and Distributions. Notwithstanding the provisions of
clause “a” of this Section, if Lender receives delivery of any such payment or
distribution in connection with a Liquidation Event in a form other than cash,
then Lender may hold such property as additional Collateral for the Secured
Obligations, and neither Pledgor nor any other Obligor of the Secured
Obligations (including Pledged Share Issuer) will be entitled to a credit with
respect to the Secured Obligations, nor will the Secured Obligations otherwise
be adjusted in any respect, until such time as Lender (in its sole and absolute
discretion) has sold, discounted or otherwise liquidated such distribution (at
a price considered by Lender to be in its sole best interest) and then (subject
to the terms of Section 7.8 hereof) such credit and/or adjustment to the
Secured Obligations will be limited only to the net cash proceeds realized
therefrom after the payment of all costs and expenses associated with such sale
or liquidation.



                  c.  Collection of Payments and Distributions. Pledgor hereby irrevocably
authorizes and empowers Lender, upon the occurrence of a Liquidation Event, (1)
to demand, sue for, settle, compromise, discount, collect and receive every
such payment or distribution and give



12







 





acquittance for the payments and
distributions described in this Pledge Agreement, and (2) to file and/or vote
claims and take such other proceedings, in each instance in Lender’s own name
or in the name of Pledgor, or otherwise, all as Lender may deem reasonably
necessary or advisable for the enforcement of this Pledge Agreement. Pledgor
further agrees duly and promptly (i) to take such action as may be requested by
Lender to assist in the collection and/or compromise of any amounts owed to
Pledgor by Pledged Share Issuer (or its estate), and (ii) to file appropriate
proofs of claim in respect of such amounts, and (iii) to execute and deliver to
Lender on demand such powers of attorney, proofs of claim, assignments of claim
or other instruments as may be requested by Lender to enable Lender to enforce
any and all claims upon or with respect to such amounts, and (iv) to collect,
compromise and receive any and all payments or distributions that may be
payable or deliverable at any time upon or with respect to such amounts.


         5.8. Delivery of Payments and Distributions. If Pledgor receives any
payment, distribution or any other funds or property in contravention of the
provisions of any Loan Document, then Pledgor must immediately forthwith
deliver such payment, distribution or other funds or property (or proceeds
thereof) to Lender in precisely the form received (except for the endorsement
or assignment without recourse of Pledgor where necessary) for application on
the Secured
Obligations (or, at Lender’s option, held as additional Collateral
therefor), whether or not then due or mature. Until such funds or property are
delivered to Lender, Pledgor must hold such payment, distribution or other
funds or property (or proceeds thereof) (a) in trust for the benefit of and as
property of Lender and (b) separate from (i.e., not commingled with) its other
assets. If Pledgor fails or refuses to make any such endorsement or
assignment, then Lender (or any of its officers or employees) are hereby
irrevocably authorized by Pledgor to make the endorsement and/or assignment.


         5.9. Cooperation and Assistance. Pledgor agrees (during the existence of
an Event of Default) to take any actions that Lender may reasonably request in
order to enable Lender to receive the full rights and benefits granted to
Lender by the Loan Documents. Pledgor further agrees that, during the
existence of an Event of Default, Pledgor will assist and cooperate with Lender
(and will use its best efforts to cause others to assist and cooperate with
Lender) to ensure that each Borrower continues (a) to operate in the normal
course of business, and (b) to fulfill all of its legal, regulatory and
contractual obligations and (c) to otherwise be properly and professionally
managed. At Lender’s request and the expense of Borrowers (jointly and
severally), at any time during the existence of an Event of Default, such
assistance and cooperation may include the employment of (and, to the maximum
extent not prohibited by the rules, regulations and orders of any Official Body
with jurisdiction, the delegation of appropriate management authority to) one
or more qualified and independent consultants and professional managers
acceptable to Lender to assist in the interim operations of Borrowers; all of
which Pledgor hereby agrees not to challenge.


ARTICLE 6: DEFINITIONS



         6.1. Credit Agreement Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Pledge Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement.


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         6.2. Certain Terms. Unless otherwise defined herein, the following terms
used in this Pledge Agreement, including its preamble and recitals, have the
following meanings (such definitions to be equally applicable to the singular
and plural forms thereof):


                  a.  “Lender” means HEARx Ltd., a Delaware corporation, and any successor,
assignee, transferee, pledgee or participant thereof.



                  b.  “Borrower” or “Borrowers” are defined in the Recitals hereof.



                  c.  “Collateral” is defined in Section 1.1 hereof.



                  d.  “Credit Agreement” is defined in the Recitals hereof.



                  e.  “Distribution” means all equity dividends, liquidating dividends,
shares or interests of equity resulting from (or in connection with the
exercise of) equity splits, reclassifications, warrants, options, non-cash
dividends, mergers, consolidations, distributions of capital accounts, and all
other distributions (whether similar or dissimilar to the foregoing) on or
with respect to any Pledged Shares or other shares or interests of equity
constituting Collateral, but such term does not include Dividends.



                  f.  “Dividend” means cash dividends and cash distributions with respect to
any Pledged Shares or other Pledged Property made in the ordinary course of
business, but such term shall not include a liquidating dividend.



                  g.  “Liquidation Event” means any foreclosure on or involuntary sale of all
or any part of the assets of any Pledged Share Issuer, or any liquidation,
dissolution or other winding up (partial or complete) of any Pledged Share
Issuer or Pledged Share Issuer’s business, or any sale, receivership,
insolvency or bankruptcy proceeding, any assignment for the benefit of
creditors, or any other proceeding by or against any Pledged Share Issuer or
its assets for any relief under any bankruptcy or insolvency law relating to
the relief of debtors, readjustment of indebtedness, arrangements,
reorganizations, compositions or extensions.



                  h.  “Person” means any natural person, corporation, partnership, firm
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.



                  i.  “Pledge Agreement” means this Owner’s Equity Pledge and Security
Agreement, and all exhibits and schedules hereto, all as may be amended,
supplemented and otherwise modified from time to time.



                  j.  “Pledged Property” means all Pledged Shares and all other forms of
equity interests and rights, all other securities (including, without
limitation, all options, warrants and puts for Pledged Shares), all assignments
of any amounts due or to become due, all other instruments which are now being
delivered by Pledgor to Lender or may from time to time hereafter be delivered
by Pledgor to Lender for the purpose of pledge under the Pledge Agreement, and
all proceeds of any of the foregoing.



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                  k.  “Pledged Share Issuer” means the Pledged Share Issuer defined in the
Recitals hereof and any successor or permitted assignee thereof.



                  l.  “Pledged Shares” means all shares of capital or voting stock and all
other forms of equity or ownership rights and interests (whether in the form of
partnership interests, membership interests or otherwise) of or in the Pledged
Share Issuer beneficially owned by Pledgor.



                  m.  “Pledgor” Steve Forget, and any successor, assignee, heir, executor,
administrator or personal representative thereof.



                  n.  “Secured Obligations” is defined in Section 1.2 hereof.



                  o.  “Securities Act” means the Securities Act of 1933, as amended from time
to time, and as implemented by the Securities Exchange Commission.



                  p.  “UCC” means the Uniform Commercial Code as in effect in the State of
New York or, if the laws of some other jurisdiction otherwise dictates, then
the Uniform Commercial
Code as in effect in the jurisdiction whose laws govern the interpretation
of the relevant provisions of this Pledge Agreement.



         6.3. UCC Definitions. Unless otherwise defined herein or the context
otherwise requires, terms for which meanings are provided in the UCC are used
in this Pledge Agreement (including in the preamble and recitals hereof) with
such meanings.


ARTICLE 7: MISCELLANEOUS PROVISIONS



         7.1. Loan Document. This Pledge Agreement is a Loan Document executed
pursuant to the Credit Agreement and (unless otherwise expressly indicated
herein) is to be construed, administered and applied in accordance with the
terms and provisions thereof.


         7.2. Amendments. No amendment to or waiver of any provision of this
Pledge Agreement, nor any consent to any departure by Pledgor herefrom, will in
any event be effective unless the same is in writing and signed by Lender. Any
such waiver or consent will be effective only in the specific instance and for
the specific purpose for which it is given.


         7.3. Addresses for Notices. Any notice, request, consent, waiver or other
communication required or permitted under or in connection with this Pledge
Agreement will be deemed satisfactorily given if it is in writing and is
delivered either personally to the addressee thereof, or by prepaid registered
or certified U.S. mail or Canadian Post (return receipt requested), or by a
nationally recognized commercial courier service with next-day delivery charges
prepaid, or by telegraph, or by facsimile (voice confirmed), or by any other
reasonable means of personal delivery to the party entitled thereto at its
respective address set forth below his, her or its signature to this Pledge
Agreement. If any party hereto fails to insert an address below, then such
failure shall constitute a designation of his, her or its last known address as
the address for all notices, including notices of default and sale. Any party
to this Pledge Agreement may change his, her or its address or facsimile number
for notice purposes by giving notice thereof to the other parties hereto in


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accordance with this Section, provided that such change shall not be effective
until 2 calendar days after notice of such change. All such notices and other
communications will be deemed given and effective (a) if by mail, then upon
actual receipt or 5 calendar days after mailing as provided above (whichever is
earlier), or (b) if by facsimile, then upon successful transmittal to such
party’s designated number, or (c) if by telegraph, then upon actual receipt or
2 Business Days after delivery to the telegraph company (whichever is earlier),
or (d) if by nationally recognized commercial courier service, then upon actual
receipt or 2 Business Days after delivery to the courier service (whichever is
earlier), or (e) if otherwise delivered, then upon actual receipt.


         7.4. Headings. The various headings used in this Pledge Agreement are for
convenience of reference only, and shall not affect the meaning or
interpretation of this Pledge Agreement or any provision hereof.


         7.5. Severability. Wherever possible, each provision of this Pledge
Agreement is to be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Pledge Agreement is
prohibited by or invalid under such law, such provision is to be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.


         7.6. Governing Law; Entire Agreement. This Pledge Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York, except to the extent that the validity or perfection of the security
interest hereunder (or remedies hereunder) in respect of any particular
collateral are required to be governed by the laws of a jurisdiction other than
the State of New York. This Pledge Agreement and the other Loan Documents
constitute the entire understanding among the parties hereto with respect to
the subject matter hereof and supersede any prior agreements, written or oral,
with respect thereto.


         7.7. Reinstatement. To the maximum extent not explicitly prohibited by
applicable law, this Pledge Agreement shall continue to be effective or be
reinstated if at any time any amount received by Lender in respect of the
Credit Agreement or any other Loan Document is rescinded or must otherwise be
restored or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Borrower or Pledgor or upon the
appointment of any receiver, intervenor, conservator, trustee or similar
official for any Borrower or Pledgor or any substantial part of any Borrower’s
or Pledgor’s assets, or otherwise, all as though such payments had not been
made.


         7.8. Estoppel Certificates and Replacement Agreements. In connection with
any subsequent sale, assignment, participation or other transfer or refinancing
of the Secured Obligations (or any portion thereof) by Lender or at any other
time requested by Lender, Pledgor within 15 calendar days of receiving a
request by Lender will provide a certificate of estoppel in form and substance
satisfactory to such Lender confirming, among other items, (if and to the
extent then true) that to Pledgor’s knowledge after due inquiry (1) this Pledge
Agreement remains in full force and effect, and (2) there exists no defaults
under this Pledge Agreement or any circumstances that with the passage of time
or the giving of notice, or both, might constitute a default hereunder, and (3)
there exists no offsets, counterclaims or other adjustments in favor of Pledgor
under this Pledge Agreement. Moreover, in connection with any subsequent sale,
assignment, participation or other transfer or refinancing of the Secured
Obligations (or any portion thereof), Pledgor (if requested by


16







 




Lender) will
concurrently execute in favor of the transferee or refinancing lender a pledge
agreement substantially similar in form and substance to this Pledge Agreement.


         7.9. Conflict Provision. In the event of any irreconcilable conflict
between the terms and conditions of this Pledge Agreement and the terms and
conditions of the Credit Agreement, the terms and conditions of the Credit
Agreement shall govern.


         7.10. Successors. This Pledge Agreement, and the terms, covenants and
conditions hereof, shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns, heirs, executors,
administrators and personal representatives.


         7.11. No Benefit to Third Parties. Nothing contained herein shall be
deemed to indicate that this Pledge Agreement has been entered into for the
benefit of any Borrower or any other Person other than the Pledgor and Lender.
If Pledgor or Lender shall waive or enforce his, her or its rights or remedies
in violation of the terms of this Pledge Agreement, neither any Borrower nor
any other Person shall be entitled to use such waiver or violation as a defense
to enforcement by Lender of its rights under the Credit Agreement or any other
agreement, nor assert such waiver or violation as a counterclaim or basis for
setoff or recoupment against Lender.


         7.12. Waiver of Notice. Except as set forth in the Loan Documents or as
required by applicable law, Pledgor hereby unconditionally waives notice of the
incurring of the Secured Obligations or any part thereof and reliance by Lender
upon the agreements herein.


         7.13. Lender. References in this Pledge Agreement to Lender shall mean to
Lender in such capacity. Unless otherwise indicated in this Pledge Agreement
or the other Loan Documents, all Collateral held and all payments received by
Lender are deemed to be held and received, respectively, for the benefit of
Lender.


         7.14. Waiver of Suretyship Defenses. Pledgor hereby waives any and all
defenses and rights of discharge based on suretyship or impairment of
collateral (including, without limitation, lack of attachment or perfection
with respect thereto) that it, he or she may now have or may hereafter acquire
with respect to Lender or any of Pledgor’s obligations hereunder or under any
other agreement that it, he or she may have or hereafter enter into with
Lender.


         7.15. Waiver of Subrogation. Until all of the Obligations have been
satisfied (unconditionally and indefeasibly) and the Loan Documents have been
terminated, Pledgor hereby irrevocably waives any claim or other rights which
he, she or it may now or hereafter acquire against any other Obligor that arise
from the existence, payment, performance or enforcement of Pledgor’s
obligations under this Pledge Agreement or any other Loan Document, including
any right of subrogation, reimbursement, contribution, exoneration, or
indemnification, any right to participate in any claim or remedy of Lender
against any other Obligor or any collateral which Lender now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from
any Obligor (directly or indirectly) in cash or other property or by set-off or
in any manner, payment or security on account of such claim or other rights.


17







 


         7.16. Waiver of Notice; Waiver of Bond. Pledgor waives all rights of
notice and hearing of any kind prior to the exercise by Lender of its rights
from and after the occurrence of any Event of Default to repossess the
Collateral with judicial process or to replevy, attach or levy upon the
Collateral. Pledgor waives the posting of any bond otherwise required of
Lender in connection with any judicial process or proceeding to obtain
possession of, replevy, attach or levy upon Collateral or other security for
the Secured Obligations, to enforce any judgment or other court order entered
in favor of Lender, or to enforce by specific performance, temporary
restraining order or preliminary or permanent injunction this Pledge Agreement
or any other agreement or document between Pledgor and Lender.


         7.17. Waivers of Liability. Pledgor and Pledged Share Issuer (a) agree
that neither Lender nor any director, officer, employee or agent of Lender
shall have any liability to Pledgor or any Pledged Share Issuer (whether
sounding in tort, contract or otherwise) for losses or costs suffered or
incurred by Pledgor or any Pledged Share Issuer in connection with or in any
way related to the transactions contemplated or the relationship established by
this Pledge Agreement or any other Loan Document, or any act, omission or event
occurring in connection herewith or therewith (including, without limitation,
any actions taken by Pledgor or any Pledged Share Issuer at the direction of
Lender pursuant to the terms hereof), except for foreseeable actual losses
resulting from Lender’s own gross negligence, willful misconduct or fraud and
(b) waives, releases and agrees not to sue upon any claim against Lender (or
any
director, officer, employee or agent of Lender) whether sounding in tort,
contract or otherwise, except for claims for foreseeable actual losses
resulting from Lender’s own gross negligence, willful misconduct or fraud.
Moreover, whether or not such damages are related to a claim that is subject to
the waiver effected above and whether or not such waiver is effective, neither
Lender nor any director, officer, employee or agent of Lender shall have any
liability with respect to (and Pledgor and Pledged Share Issuer hereby waives,
releases and agrees not to sue upon any claim for) any special, indirect,
consequential, punitive or non-foreseeable damages suffered by Pledgor or any
Pledged Share Issuer in connection with or in any way related to the
transactions contemplated or the relationship established by this Pledge
Agreement or any other Loan Document, or any act, omission or event occurring
in connection herewith or therewith.


         7.18. Forum Selection and Consent to Jurisdiction. Any litigation in
connection with or in any way related to this Pledge Agreement or any other
Loan Document, or any course of conduct, course of dealing, statements (whether
verbal or written), actions or inactions of Lender, any Pledgor or Pledged
Share Issuer will be brought and maintained exclusively in the courts of the
State of New York or in the United States District Court for the Southern
District of New York; provided, however, that any suit seeking enforcement
against any Pledgor or any Collateral or other property may also be brought (at
Lender’s or such Lender’s option) in the courts of any jurisdiction where such
Collateral or other property may be found or where Lender or such Lender may
otherwise obtain personal jurisdiction over such Pledgor. Each Pledgor and
Pledged Share Issuer each hereby expressly and irrevocably submits to the
jurisdiction of the courts of the State of New York and of the United States
District Court for the Southern District of New York for the purpose of any
such litigation as set forth above and irrevocably agrees to be bound by any
final and non-appealable judgment rendered thereby in


18







 




connection with such
litigation. Pledgor and each Pledged Share Issuer further irrevocably consents
to the service of process by registered or certified mail, postage prepaid, or
by personal service within or outside the State of New York. Pledgor and each
Pledged Share Issuer hereby expressly and irrevocably waives, to the fullest
extent permitted by law, any objection which he, she or it may have or
hereafter may have to the laying of venue of any such litigation brought in any
such court referred to above and any claim that any such litigation has been
brought in an inconvenient forum. To the extent that Pledgor or any Pledged
Share Issuer has or hereafter may acquire any immunity from jurisdiction of any
court or from any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution or otherwise) with respect to
himself, herself or itself or his, her or its property, then Pledgor and each
Pledged Share Issuer hereby irrevocably waives such immunity in respect of his,
her or its obligations under this Pledge Agreement and the other Loan
Documents.


         7.19. Jury Trial Waiver. Lender, Pledgor and Pledged Share Issuer each
hereby knowingly, voluntarily and intentionally waive any rights he, she or it
may have to a trial by jury in respect of any litigation (whether as claim,
counter-claim, affirmative defense or otherwise) in connection with or in any
way related to this Pledge Agreement or any other Loan Document, or any course
of conduct, course of dealing, statements (whether oral or written), actions or
inactions of Lender, Pledgor or any Pledged Share Issuer. Pledgor and Pledged
Share Issuer acknowledge and agree (a) that he, she or it has received full
and
sufficient consideration for this provision (and each other provision of
this Pledge Agreement), and (b) that he, she or it has been advised by (or has
had ample opportunity to consult with) legal counsel in connection herewith,
and (c) that this provision is a material inducement for Lender entering into
the Loan Documents and funding Advances thereunder.


         7.20. Counterparts. This Pledge Agreement may be executed in any number
of counterparts with the same effect as if all the signatures on such
counterparts appeared on one document. Each such counterpart will be deemed to
be an original but all counterparts together will constitute one and the same
instrument.


         7.21 Judgment Currency. If for the purpose of obtaining judgment in any
court it is necessary to convert an amount due hereunder in the currency in
which it is due (the “Original Currency”) into another currency (the “Second
Currency”), the rate of exchange applied shall be that at which, in accordance
with normal banking procedures, the Lender could purchase in the Toronto
foreign exchange market, the Original Currency with the Second Currency on the
date two (2) Business Days preceding that on which judgment is given. Each
Obligor agrees that its obligation in respect of any Original Currency due from
it hereunder shall, notwithstanding any judgment or payment in such other
currency, be discharged only to the extent that, on the Business Day following
the date the Lender receives payment of any sum so adjudged to be due hereunder
in the Second Currency, the Lender may, in accordance with normal banking
procedures, purchase, in the Toronto foreign exchange market, the Original
Currency with the amount of the Second Currency so paid; and if the amount of
the Original Currency so purchased or could have been so purchased is less than
the amount originally due in the Original Currency, each Obligor agrees as a
separate obligation and notwithstanding any such payment or judgment to
indemnify the Lender against such loss. The term


19







 




“rate of exchange” in this
Section 7.21 means the spot rate at which the Lenders, in accordance with
normal practices, is able on the relevant date to purchase the Original
Currency with the Second Currency and includes any premium and costs of
exchange payable in connection with such purchase.


         7.22 French/English Acknowledgment. It is the express wish of the parties
hereto that this Pledge Agreement and any related documents be drawn up and
executed in English. Il est la volonté expresse des parties que cette
convention et tous les documents s’y rattachant soient redigés et signés en
anglais.


[BALANCE OF PAGE INTENTIONALLY BLANK]



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         IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement
to be duly executed and delivered, as an instrument under seal (whether or not
any such seals are physically attached hereto), as of the day and year first
above written.



	 	 	 	 	 
	WITNESS:	 	STEVE FORGET, Pledgor
	 
	 
	 

	 	 


	 
	 	 	Address:	 	 


	 

	 	 


	 
	 	 	Facsimile: (      ) -            -                               
	 
	 	 	 	 	 
	 
	 	 	COUSINEAU, DOUCET, PARENT,

FORGET AUDIOPROTHÉSISTES

s.e.n.c, Pledged Share Issuer
	 
	 	 	By:	 	 


	 
	 	 	Name:	 	 


	 
	 	 	Title:	 	 


	 
	 	 	Address:	 	 


	 
	 	 	 


	 
	 	 	Facsimile: (      ) -            -                               
	 
	 	 	 	 	 
	 
	WITNESS:	 	HEARx LTD., Lender
	 
	 

	 	By:	 	 


	 
	 	 	Name:	 	Stephen J. Hansbrough
	 
	 

	 	Title:	 	President and Chief Operating Officer
	 
	 	 	Address:	 	1250 Northpoint Parkway

West Palm Beach, FL 33407