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EXHIBIT 10.8
PLEDGE AGREEMENT
This Pledge Agreement (this "Agreement") is made as of March 19, 1998,
by Paragon Coyote Texas Ltd., a Texas limited partnership ("Pledgor"), and Don
& Xxxxx Management Group, Inc., a Texas corporation ("Secured Party").
RECITALS
WHEREAS, Pledgor has executed a certain promissory note payable to
Secured Party of even date herewith (the "Note"); and
WHEREAS, Pledgor has entered into a Loan Agreement of even date
herewith (the "Loan Agreement") with Coyote Sports, Inc., a Nevada corporation
("Coyote"), Xxx X. Xxxxxxxxxxx ("Xxxxxxxxxxx") and Xxxxx X. Xxxxxx ("Xxxxxx")
pursuant to which Pledgor has lent Coyote $6,000,000 (the "Loan"). The Loan is
secured by (i) Xxxxxxxxxxx'x pledge of the Xxxxxxxxxxx Collateral Shares
pursuant to the Xxxxxxxxxxx Security Agreement and (ii) Xxxxxx'x pledge of the
Xxxxxx Collateral Shares pursuant to the Xxxxxx Security Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, the parties hereby agree
as follows:
Section 1. Pledge
Pledgor pledges, assigns, hypothecates, transfers and delivers to
Secured Party, and grants to Secured Party, a first lien and security interest
on and in all of Pledgor's rights and interests in the Collateral Shares
granted to Pledgor pursuant to the Security Instruments (collectively, the
"Pledged Rights") and in all proceeds of the Pledged Rights, and any and all
proceeds of such property, as collateral security for the prompt and complete
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the Note.
Section 2. Pledgor's Representations and Warranties
Pledgor represents and warrants to Secured Party that:
(a) Pledgor has full partnership power and authority to execute
the pledge provided for in this Agreement and to pledge the Pledged Rights to
Secured Party; and
(b) this Agreement has been duly authorized, executed and
delivered by Pledgor and constitutes a legal, valid and binding obligation of
Pledgor enforceable against Pledgor in accordance with its terms (except as
such enforcement may be limited by bankruptcy, insolvency and similar laws and
by general equitable principles).
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Section 3. Administration of Pledged Rights
(a) As long as there has been no event of default under the Note
(an "Event of Default"), Pledgor shall be entitled to enforce any and all of
the Pledged Rights on its own behalf in any manner not inconsistent with this
Agreement or the Note. Pledgor grants to Secured Party the irrevocable right,
effectively immediately upon an Event of Default, to enforce any and all of the
Pledged Rights and to receive any benefits or proceeds that may accrue as a
result of or out of the Pledged Rights, which benefits or proceeds will be used
to pay the Note effective immediately upon an Event of Default.
(b) Subject to Secured Party's enforcement, sale or other
disposition of the Pledged Rights or other property pursuant to this Agreement
upon the occurrence of an Event of Default, the Pledged Rights and any other
property then held as collateral under this Agreement shall revert back or
otherwise be returned to Pledgor upon full payment, satisfaction and
termination of the Note.
Section 5. Rights of Secured Party
Secured Party shall not be liable for failure to collect or realize
upon the Note or any collateral security or guarantee for the Note, or any part
of the Note, or for any delay in so doing. Upon the occurrence of an Event of
Default, Secured Party may exercise without notice any or all of the Pledged
Rights and any other rights, privileges or options pertaining to any of the
Pledged Rights to the same extent as if Secured Party were the original grantee
of the Pledged Rights, but Secured Party shall have no duty to exercise any of
such rights, privileges or options and shall not be responsible for any failure
to do so or delay in so doing. Secured Party shall have all rights and
remedies of a secured party under the Uniform Commercial Code of the State of
Texas in addition to any and all rights and remedies under the Note and this
Agreement.
Section 6. Limitation on Dispositions
Without the prior written consent of the Secured Party, Pledgor agrees
that it will not sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Pledged Rights, nor will it create, incur
or permit to exist any pledge, lien, mortgage, hypothecation, security
interest, charge, option or any other encumbrance with respect to any of the
Pledged Rights, or any interest in the Pledged Rights, or any proceeds of the
Pledged Rights, except for the liens and security interest provided for by this
Agreement. Upon any transfer of Pledged Rights, the liens and security
interest created under this Agreement shall continue, and Pledgor will, and
will cause any transferee of Pledgor to, execute any and all instruments that
Pledgor may deem necessary or appropriate to ensure the continuation of such
liens and security interest.
Section 7. Further Assurances
Pledgor agrees that, at any time and from time to time upon Secured
Party's written request, Pledgor will execute and deliver such further
documents (including but not limited to
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UCC-1 financing statements) and do such further acts and things as Secured
Party reasonably may request consistent with the provisions of this Agreement
in order to effect the purposes and intent hereof.
Section 8. Termination
This Agreement and the liens and security interest granted hereunder
shall terminate upon full and complete performance and satisfaction of the
Note.
Section 9. Miscellaneous
This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas. No party's failure to insist upon another
party's strict adherence to any provision of this Agreement shall constitute a
waiver of such provision or of any right or remedy under this Agreement on that
or any other occasion. This Agreement may be amended, and any right or remedy
under this Agreement may be waived, only in a writing signed by a party against
whom such amendment or waiver is sought to be enforced. If any provision of
this Agreement is held to be unenforceable for any reason, the balance of this
Agreement shall continue in full force and effect and be interpreted and
enforced in such manner as may be necessary to give effect as fully as possible
to the purpose and intent of the unenforceable provision. All undefined
capitalized terms shall have the meanings respectively ascribed to them in the
Loan Agreement.
IN WITNESS WHEREOF, the parties have executed this Pledge Agreement as
of the date first above written.
Secured Party: DON & XXXXX MANAGEMENT GROUP, INC.,
a Texas corporation
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Authorized Signatory
Pledgor: PARAGON COYOTE TEXAS LTD.,
a Texas limited partnership
By: Paragon Management Group, Inc.,
a Texas corporation, General
Partner
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, President
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