ex10_2.htm


    
      ACCOUNT
PLEDGE AGREEMENT

      


      THIS PLEDGE SECURITY AGREEMENT,
dated as of December 2, 2008 (the “Agreement”), is made by HAUPPAUGE COMPUTER WORKS, INC.,
a Delaware corporation (“Pledgor”), and JPMORGAN CHASE BANK, N.A., a national banking
association (the “Bank”).

      


      RECITALS

       

      A.           The
Bank has made a $700,000 uncommitted secured line of credit available to the
Pledgor on the terms and conditions described in the Line Letter and the Note,
pursuant to which the Pledgor may request the issuance of letters of credit and
may receive other financial accommodations from the Bank and, in connection
therewith, may incur Liabilities (as hereinafter defined).

      


      B.           To
induce the Bank to continue to extend credit to the Pledgor on and after the
date hereof as provided in the Line Letter and the Note, Pledgor desires to
grant the Bank security and assurance to secure the payment and performance by
the Pledgor of the Liabilities and, to that effect, to grant, pledge and assign
to the Bank all of its right, title and interest in the Collateral (as defined
below).

      


      1.           Definitions.

       

      
        “Account”
means that account listed on Exhibit A.

        


        “Account
Assets” means Deposits and any other assets held from time to time in the
Account (all of which shall be considered “financial assets” under the
UCC).

        


        “Collateral”
means: (i) the Account Assets; (ii) all additions to, and proceeds, renewals,
investments and reinvestments of, the foregoing, whether or not listed on Exhibit A; and (iii)
all certificates, receipts and other instruments (including any certificates of
deposit) evidencing any of the foregoing.

        


        “Deposits”
means the deposits of the Pledgor with the Bank.

        


        “Event of
Default” shall have the meaning assigned to such term in the Note.

        


        “Liabilities”
shall have the meaning given to such term in the Note.

        


        “Line
Letter” shall mean the Line Letter, dated as March 31, 2008, by the Bank in
favor of the Pledgor, as same has been and may be further amended, restated,
extended, supplemented or modified, from time to time.

        


        “Note”
shall mean the Fourth Amended and Restated Promissory Note, in the original
principal amount of $700,000, dated as of date hereof, issued by the Pledgor in
favor of the Bank, as same may be amended, restated, modified or otherwise
supplemented from time to time.

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
 

        “UCC”
means the Uniform Commercial Code in effect, from time to time, in the State of
New York.  Unless the context otherwise requires, all terms used in
this Agreement which are defined in the UCC will have the meanings stated in the
UCC.

      

       

      2.           Grant of Security
Interest.

      


      As
security for the payment of all the Liabilities, the Pledgor hereby pledges,
transfers and assigns to the Bank, and grants to the Bank a security interest
in, and right of set off against, the Collateral.  Notwithstanding
anything to the contrary herein, the security interest of the Bank in the
Collateral, at any time, shall not exceed the amount of the Liabilities, at such
time.

      


      3.           Agreements of the Pledgor and Rights
of the Bank.

      


      The
Pledgor agrees as follows and irrevocably authorizes the Bank to exercise the
rights listed below, at its option, for its own benefit, either in its own name
or in the name of the Pledgor, and appoints the Bank as its attorney-in-fact to
take all action permitted under this Agreement.

      


      (a)           Deposits: The Bank may: (i)
renew the Deposits on terms and for periods the Bank deems appropriate; (ii)
demand, collect, and receive payment of any monies or proceeds due or to become
due under the Deposits; (iii) execute any instruments required for the
withdrawal or repayment of the Deposits; and (iv) in all respects, deal with the
Deposits as the owner; provided that, as to (ii), (iii) and (iv) above, until
the occurrence of an Event of Default, the Bank will only take that action if,
in its judgment, failure to take that action would impair its rights under this
Agreement.

      


      (b)           General:   The
Bank may, in its name, or in the name of the Pledgor:  (i) file
financing statements under the UCC or any other filings or notices necessary or
desirable to create, perfect or preserve its security interest, all without
notice (except as required by applicable law and not waivable) and without
liability except to account for property actually received by it; and (ii) make
any notification or take any other action in connection with the perfection or
preservation of its security interest or any enforcement of remedies, and retain
any documents evidencing the title of the Pledgor to any item of the
Collateral.  Further, following the occurrence of an Event of Default,
the Bank may, in its name, or in the name of the Pledgor, demand, sue for,
collect or receive any money or property at any time payable or receivable on
account of or in exchange for, or make any compromise or settlement deemed
desirable with respect to, any item of the Collateral (but shall be under no
obligation to do so).

      


      The
Pledgor agrees that it will not (i) file or permit to be filed any termination
statement with respect to the Collateral or any financing or like
statement  with respect to the Collateral in which the Bank is not
named as the sole secured party, or (ii) sell, assign, or otherwise dispose of,
or pledge, or otherwise encumber the Collateral.  At the request of
the Bank, the Pledgor agrees to do all other things which the Bank may deem
necessary or advisable in order to perfect and preserve the security interest
and to give effect to the rights granted to the Bank under this Agreement or
enable the Bank to comply with any applicable laws or
regulations.  Notwithstanding the foregoing, the Bank does not assume
any duty with respect to the Collateral and is not required to take any action
to collect, preserve or protect its or the Pledgor’s rights in any item of the
Collateral.  The Pledgor releases the Bank and agrees to hold the Bank
harmless from any claims, causes of action and demands at any time arising with
respect to this Agreement, the use or disposition of any item of the Collateral
or any action taken or omitted to be taken by the Bank with respect
thereto.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      4.           Value of the
Collateral.

      


      The
Pledgor agrees that at all times the aggregate value of Collateral held pursuant
to this Agreement shall not be less than $700,000.

      


      5.           Representations and
Warranties.

      


      The
Pledgor represents and warrants to the Bank that the Pledgor is the sole owner
of the Collateral and the Collateral is free of all encumbrances except for the
security interest in favor of the Bank created by this Agreement.

      


      6.           Event of Default.

      


      Upon the
occurrence and during the continuance of an Event of Default, the Bank will have
the rights and remedies under the UCC and the other rights granted to the Bank
under this Agreement and may exercise its rights without regard to any premium
or penalty from liquidation of any Collateral and without regard to the
Pledgor’s basis or holding period for any Collateral.

      


      Upon the
occurrence and during the continuance of an Event of Default, the Bank may
transfer the Collateral into the name of the Bank or its nominee, and proceed
forthwith to collect, receive, appropriate and realize upon the Collateral, or
any part thereof or may assign or otherwise dispose of and deliver the
Collateral, or any part thereof, as the Bank in its sole and absolute discretion
deems appropriate without any liability for any loss due to decrease in the
market value of the Collateral during the period held, in any reasonable manner
permissible under the UCC (except that, to the extent required under the UCC,
the Bank shall provide the Pledgor ten (10) days prior notice of any such
sale).

      


      The Bank
may also, in its sole discretion: apply any portion of the Collateral, first, to all costs
and expenses of the Bank (including, without limitation, the reasonable legal
fees and expenses of legal counsel), second, to the
payment of interest on the Liabilities and any fees or commissions to which the
Bank may be entitled, third, to the payment
of principal of the Liabilities, whether or not then due, and fourth, to the
Pledgor.

      


      The
Pledgor will pay to the Bank all expenses (including reasonable attorneys’ fees
and legal expenses incurred by the Bank) in connection with the exercise of any
of the Bank’s rights or obligations under this Agreement or the
Note.  Upon the occurrence and during the continuance of an Event of
Default, the Pledgor will take any action requested by the Bank to allow it to
dispose of the Collateral.  Notwithstanding that the Bank may continue
to hold Collateral and regardless of the value of the Collateral, the Pledgor
will remain liable for the payment in full of any unpaid  balance of
the Obligations.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7.           Governing Law;
Jurisdiction.

      


      This
Agreement and the rights and obligations of the parties hereunder shall be
governed by, and shall be construed and enforced in accordance with, the laws of
the State of New York, without regard to its principles of conflicts of
laws.  THE PLEDGOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK CITY,
COUNTY OF NASSAU, OR COUNTY OF SUFFOLK, OVER ANY ACTION OR PROCEEDING ARISING
OUT OF THIS AGREEMENT, AND THE PLEDGOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HELD AND DETERMINED IN SUCH NEW
YORK STATE OR FEDERAL COURT.  THE PLEDGOR FURTHER AGREES THAT ANY
ACTION OR PROCEEDING BROUGHT AGAINST THE BANK MAY BE BROUGHT ONLY IN A NEW YORK
STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK COUNTY.  THE
PLEDGOR HEREBY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY
SUCH ACTION OR PROCEEDING IN EITHER OF SAID COURTS BY MAILING THEREOF BY THE
BANK BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PLEDGOR AT ITS
ADDRESS SPECIFIED ON THE SIGNATURE PAGE HEREOF, OR AT THE PLEDGOR’S MOST RECENT
MAILING ADDRESS AS SET FORTH IN THE RECORDS OF THE BANK.

      


      The
Pledgor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit or proceeding
in such state and hereby waives any defense on the basis of an inconvenient
forum.  Nothing herein shall affect the right of the Bank to serve
legal process in any other manner permitted by law or affect the right of the
Bank to bring any action or proceeding against the Pledgor or its property in
the courts of any other jurisdiction.

      


      8.           Waiver of Jury
Trial.

      


      THE
PLEDGOR AND THE BANK EACH WAIVE ANY RIGHT TO JURY TRIAL.

      


      9.           Notices.

      


      All
notices, statements, requests and demands given to or made upon the Bank or
Pledgor in accordance with the provisions of this Agreement shall be deemed to
have been given or made (a) if mailed, four (4) Business Days after such writing
shall have been deposited in the mail, postage pre-paid, or (b) if sent by
overnight courier, one (1) Business Day after such writing shall have been
deposited with the overnight courier, charges prepaid, addressed as
follows:

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      If to
Pledgor:         Hauppauge Computer
Works, Inc.

      91 Cabot
Court

      Hauppauge,
NY 11788

      Attn:  Gerald Tucciarone,
Chief Financial Officer

      


      If to the
Bank:       JPMorgan Chase Bank,
N.A.

      395 North Service Road

      Melville, New York 11747

      Attn:  Relationship Manager
– Hauppauge Computer Works, Inc.

      


      10.           Miscellaneous.

      


                   
 (a)            This
Agreement shall be binding on the Pledgor and its successors and assigns and
shall inure to the benefit of the Bank and its successors and assigns, except
that the Pledgor may not delegate any of its obligations hereunder without the
prior written consent of the Bank.

      


      (b)           No
amendment or waiver of any provision of this Agreement nor consent to any
departure by the Pledgor will be effective unless it is in writing and signed by
the Pledgor and the Bank and will be effective only in that specific instance
and for that specific purpose.  No failure on the part of the Bank to
exercise, and no delay in exercising, any right will operate as a waiver or
preclude any other or further exercise or the exercise of any other
right.

      


      (c)           The
rights and remedies in this Agreement are cumulative and not exclusive of any
rights and remedies which the Bank may have under law or under other agreements
or arrangements with the Pledgor.

      


      (d)           The
provisions of this Agreement are intended to be severable.  If for any
reason any provision of this Agreement is not valid or enforceable in whole or
in part in any jurisdiction, that provision will, as to that jurisdiction, be
ineffective to the extent of that invalidity or unenforceability without in any
manner affecting the validity or enforceability in any other jurisdiction or the
remaining provisions of this Agreement.

      


      (e)           The
Pledgor hereby waives presentment, notice of dishonor and protest of all
instruments included in or evidencing the Obligations or the Collateral and any
other notices and demands, whether or not relating to those
instruments.

      


      (f)           This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, taken together, shall constitute one
and the same instrument.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN WITNESS WHEREOF, the
Pledgor has signed this Agreement as of this 2nd day of December,
2008.

      


      


       

      
        
          	 	 PLEDGOR:	 
	 	 	 
	 	      
                  HAUPPAUGE
      COMPUTER WORKS, INC.

                	 
	 	 	 	 
	
                  Date

                	
                  By:
      

                	/s/ Gerald
      Tucciarone	 
	 	 	Name:  Gerald
      Tucciarone	 
	 	 	Title:    Chief
      Financial Officer	 
	 	 	 	 


        

      

      
ACCEPTED:

      


      JPMORGAN
CHASE BANK, N.A.

      


      


      By:_____________________________

      Name:  Carolyn
B. Lattanzi

      Title:    Vice
President

      



      
        
          
             

          

           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
A

      


      


      DESCRIPTION
OF THE COLLATERAL

      


      


      The
following account and any successor account thereto and all assets held or to be
held therein:

      


      Bank
Name:                           JPMorgan
Chase Bank, N.A.

      395 North Service Road, Suite
302

      Melville,
New York 11747

      


      Account
Name:                    Hauppauge
Computer Works, Inc.

      


      Account
#:                            __________________–
Certificate of Deposit

      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      



      
        
          
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