PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made as of July 26, 1996 and
effective as of July 31, 1996, between ENVIROMETRICS a Delaware corporation (the
"Creditor"), and Xxxxxx X. Xxxxxxxx, a South Carolina resident ("Xxxxxxxx").
RECITALS:
A. Trico Envirometrics, Inc., a South Carolina corporation (the "Debtor")
is currently indebted to the Creditor in an approximate aggregate amount of Six
Hundred Thousand Dollars ($600,000.00 US), which indebtedness is subject to
increase (as such may change from time to time, the "Indebtedness") and is now
evidenced by a certain Promissory Note of even date herewith in favor of the
Creditor (the "Note").
B. Concurrent herewith, Xxxxxxxx is purchasing from the Creditor pursuant
to a certain Stock Purchase Agreement of even date, all of the outstanding
shares of common stock of the Debtor for a purchase price of 45,000 shares of
Envirometrics, Inc. common stock. The Creditor has agreed to sell such stock for
such price to Xxxxxxxx subject to, among other conditions, Xxxxxxxx'x executing
and delivering this Agreement to the Creditor.
C. To induce the Creditor to sell to Xxxxxxxx all of the outstanding shares
of common stock of the Debtor for such purchase price, Xxxxxxxx wishes to pledge
to the Creditor all of his interest in Trico Envirometrics, Inc.. and to options
to the purchase of shares of common stock of the Creditor to secure (i) payment
of the Indebtedness, and (ii) performance of all of the respective covenants,
obligations and agreements of each of the Debtor and Xxxxxxxx, as set forth in
the documents evidencing, securing the repayment of, executed in connection
with, or otherwise related to the Indebtedness or sale of stock to Xxxxxxxx,
including without limitation, the Stock Purchase Agreement, the Unconditional
Guarantee Agreement, the Promissory Note, this Agreement, the Security Agreement
and the Accounting Services Agreement, all of even date (collectively, as
hereafter amended, modified, extended or renewed from time to time, the
"Transaction Documents") all according to the terms and conditions hereinafter
set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the representations, warranties and
covenants herein set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and as an inducement
to the Creditor to sell all of the issued and outstanding common stock of the
Debtor to Xxxxxxxx, the parties hereby covenant and agree as follows:
1. Method and Terms of Pledge. To secure (i) the payment of all of the
Indebtedness, and (ii) performance of all of the respective covenants,
obligations and agreements of each of the Debtor and Xxxxxxxx, as set forth in
the Transaction Documents, or
any of them (collectively, the "Obligations"), Xxxxxxxx hereby pledges,
assigns and grants a security interest in all of his interest in Trico
Envirometrics Inc. stock and to options to purchase shares of common stock of
the Creditor (together with any other securities substituted therefor or issued
in addition thereto as herein provided, the "Pledged Securities") to the
Creditor. The term "Obligations" shall include all Obligations, whether matured
or un-matured, or absolute or contingent, and whether they are from time to time
reduced, increased, or entirely extinguished and thereafter reincurred. The term
"Obligations" shall further include, without limitation, all liability of the
Debtor to the Creditor, whether now or hereafter incurred; whether direct,
indirect, or contingent; whether incurred as primary debtor, co-maker or
guarantor; whether otherwise guaranteed or secured; and whether on open account,
evidenced by an instrument or otherwise. Immediately after execution and
delivery of this Agreement, Xxxxxxxx will deposit or cause to be deposited with
the Creditor a certificate in Xxxxxxxx'x name representing the Pledged
Securities' or common stock certificates if pledged options are exercised or,
with stock powers duly endorsed in blank, and the Creditor will acknowledge
receipt thereof.
2. Representations and Warranties of Xxxxxxxx. Xxxxxxxx represents and
warrants that he owns the Pledged Securities and that the Pledged Securities are
not subject to any lien, pledge, charge, encumbrance or security interest or
right or option on the part of any third party to purchase or otherwise acquire
the Pledged Securities or any part thereof.
3. Right to Vote and to Receive Dividends With Respect to Pledged
Securities. So long as a default in the payment or performance of any of the
Obligations shall not have occurred and be continuing, (i) Xxxxxxxx shall from
time to time be entitled to receive and collect for his own use all dividends
paid in cash out of the earned surplus or net profits of the Creditor on any of
the Pledged Securities, and (ii) Xxxxxxxx shall from time to time have the right
to vote or to execute waivers or consents with respect to the Pledged
Securities. However, all stock dividends, stock splits or other stock
distributions on any or all of the Pledged Securities shall be pledged to and
deposited with the Creditor as part of the Pledged Securities pursuant to this
Agreement.
4. Reclassification, Sale, Merger, and Consolidation. The capital stock of
the Creditor of Xxxxxxxx may be sold or exchanged, by merger or otherwise, may
be increased or reduced or reclassified and additional shares may be issued to
Xxxxxxxx, provide that any certificates for such additional or reclassified
securities shall be pledged to a deposited with the Creditor as part of the
Pledged Securities pursuant to this Agreement. Xxxxxxxx agrees to take all such
action, including without limitation, signing such stock powers and UCC
financing statements, as may be reasonably requested from time to time by
Creditor to perfect or maintain the security interest of Creditor in the Pledged
Securities.
5. Rights and Remedies of Creditor; Exercise. j of Same.
5.1. Rights and Remedies of Creditor. With respect to the Pledged
Securities, the Creditor shall have the rights and remedies of a secured party
under the Uniform Commercial Code of South Carolina. Such rights and remedies
shall include, without limitation:
(a) The right, upon the occurrence of any default under the Transaction
Documents or in the payment or performance of any of the Obligations (an "Event
of Default"), to have the Pledged Securities, or any part thereof, transferred
to its name or in the name of its nominee(s);
(b) The right, upon an Event of Default, to sell, assign, give option or
options to purchase, contract to sell or otherwise dispose of, and deliver as
much of the Pledged Securities, or any part thereof, in one or more parcels at
public or private sale, at any exchange or broker's board as the Creditor may
elect, either for cash or on credit, and upon such terms and conditions and at
such prices as the Creditor deems best without assumption of any credit risk and
without demand or advertisement (unless otherwise required by law);
(c) At any such private or public sale of the Pledged Securities then
remaining, or part thereof, the Creditor may purchase and pay for the same by
cancellation of any amount due under the Note, or any other of the Obligations,
equal to the purchase price and free of any right of redemption on the pan of
Xxxxxxxx, which right is hereby expressly waived.
5.2 Exercise of Rights and Remedies by Creditor. The Creditor may exercise
any and all of its rights hereunder without demand of performance or other
demand, advertisement or notice of any kind to or upon Xxxxxxxx or any other
person or entity, all of which demands, advertisements and notices are hereby
expressly waived by Xxxxxxxx. However, notwithstanding the foregoing sentence,
the Creditor shall give then (10) days notice of the time and place of any
public sale hereunder or of the time after which a private sale or other
intended disposition may occur. In the event of any sale hereunder, the Creditor
shall apply the proceeds in the order set forth in Section 6 below. The Creditor
may have to resort to the Pledged Securities or any portion thereof with no
requirement on its part to proceed first against any other person, entity or
property.
6. Application of Proceeds. The proceeds from the sale of the Pledged
Securities or any pan thereof shall be applied by the Creditor in the following
order:
(a) First to the payment of the reasonable costs and expenses of care,
safekeeping, collection and sale incurred by the Creditor, including without
limitation, reasonable attorneys' fees and all other reasonable expenses,
liabilities and costs incurred by the Creditor in connection therewith;
(b) Next to the payment of all amounts then owing and unpaid, whether
principal, interest or otherwise, pursuant to the Obligations, in such order as
the Creditor may elect; and
(c) finally to the payment to Xxxxxxxx or as required by applicable law of
any surplus then remaining from such proceeds.
7. Anticipation and Release of Collateral.
(a) The Debtor may anticipate payment of the Note in whole or in part
without penalty as specified in the Note.
(b) Upon full and complete payment and performance of all of the
Obligations and upon written notice by Xxxxxxxx to the Note holder as defined in
the Note, the Creditor shall duly transfer and deliver to Xxxxxxxx the Pledged
Securities deposited hereunder, and this Agreement shall terminate.
8. Payment of Installments and Release of Collateral. Beginning on the
second anniversary of this Agreement, and continuing on every anniversary
thereafter, the Creditor shall, at the request of Xxxxxxxx, release and deliver
to Xxxxxxxx a number of Trico Envirometrics, Inc. stock and options (or shares
if options have been exercised); provided, however, that at no time shall the
Creditor be obligated to release any such options or shares unless the value of
the shares retained by the Creditor equals at least two (2) times the amount of
the Obligations then outstanding. For purposes of this Section 8, the value of
each option or share of the Pledged Securities shall be deemed to equal (i) the
anniversary date, if the security is then traded on a recognized public market,
or (ii) an amount agreed by the parties or determined by a qualified appraiser
(who shall be agreeable to the parties and paid for by Xxxxxxxx) to be the value
of a share of such security as of the applicable anniversary date, if such
security is not then traded on a recognized public market. Any shares to be
released to Xxxxxxxx pursuant to this Section 8 shall be released within thirty
(30) days of the determination of the value of the Pledged Securities. Upon the
payment to the Creditor of all remaining unpaid principal, interest and all
other amounts due under the Note, the Creditor shall deliver the stock
certificate or option agreement evidencing the remaining Pledged Securities to
Xxxxxxxx.
9. Further Assurances. Xxxxxxxx agrees that he will duly execute and
deliver to the Creditor any additional documents which may be reasonably
requested by Creditor to give effect fully to the security interest granted to
the Creditor hereunder.
10. Notices. All notices, requests and demands to or upon the respective
parties shall be in writing and shall be deemed to have been given or made when
sent by certified mail, postage prepaid, addressed:
In the case of Xxxxxxxx to:
Xxxxxx X. Xxxxxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
and
0000 Xxxxxxxxxx Xxxxx Xxxxxxx, XX 00000
with a copy to:
Steveri X. Xxxxx, Esquire
Xxxxx, Xxxxxxx & Xxxxxxxxx, P.A. 0000 Xxxxx Xxxxxx Xxxx
Xxxxx 0
Xxxxxxxxxx, XX 00000
In the case of the Creditor, to:
Envirometrics, Inc.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx
Attn.: Xxxxxxx X. Xxxxxxx, President
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esquire
Ten State Street
Charleston, South Carolina
or to such other address as may be specified by any party in a written
notice given to the other parties.
11. Governing Law. This Agreement, and the respective rights and
obligations of the parties hereunder, shall be interpreted, governed, and
enforced according to the laws of South Carolina, without regard to the choice
of law principles of it or any other jurisdiction.
12. Venue and in Personam Jurisdiction. Any cause of action arising from
the terms of this Agreement shall be brought only in a state or federal court in
the City of Charleston, South Carolina, which shall be the exclusive and sole
venue for the adjudication of any disputes hereunder. Xxxxxxxx consents to
exercise by the aforementioned courts of in personam jurisdiction over him with
respect to any cause of action brought pursuant to this Agreement.
13. .Parties In Interest. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the parties hereto.
1N WITNESS WHEREOF, the parties have caused this Agreement executed as of
the day and year first above written.
ENVIROMETRICS, INC.
By: Xxxxxxx X. Xxxxxxx
President & CEO
By:
Xxxxx X. Xxxx, CPA Treasurer
I, Xxxxxxx X. Xxxxxxxx 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, XX 00000 Xxxxxxxx, a
South Carolina resident, hereby pledge and grant to Envirometrics, Inc. pursuant
to the terms of the foregoing Pledge Agreement any and all rights which I many
now or hereafter have in or to any of the Pledged Securities, as defined in the
foregoing Pledge Agreement, including without limitation, any and all fights in
or to the Pledged Securities which may have arisen or at any time hereafter may
arise under the laws of any jurisdictions a result of my marital relationship
with Xxxxxx X. Xxxxxxxx or otherwise
Xxxxxxx X. Xxxxxxxx Jan 10, 1997
