PLEDGE AGREEMENT
Dated as of February 23, 2000
Aviation Group, Inc., a Texas corporation ("Pledgor") hereby pledges and
assigns to Xxx X. Xxxxxxx ("Secured Party"), and grants a security interest to
Secured Party in, the property described below belonging to (or an interest in
which belongs to) Pledgor:
1. Subject only to the prior pledge described in that certain PLEDGE
AGREEMENT dated March 23, 1998 by and between Aviation Group, Inc. and
Xxxxx Xxxx, all of the issued and outstanding shares of the voting
common stock of Aero Design, Inc., a Tennessee corporation owned by
Pledgor;
2. Subject only to the prior pledge described in that certain PLEDGE
AGREEMENT dated March 23, 1998 by and between Aviation Group, Inc. and
Xxxxx Xxxx, all of the outstanding membership interests of Pledgor in
Battery Shop, LLC, a Tennessee limited liability company, and all
rights of Pledgor arising under the Battery Shop, LLC Operating
Agreement dated January 1, 1995;
3. All of the issued and outstanding shares of the voting common stock of
Aviation Exteriors Greenville, Inc., a Mississippi corporation owned
by Pledgor;
4. All of the issued and outstanding shares of the voting common stock of
Pride Aviation Portland, Inc., an Oregon corporation owned by Pledgor;
5. Subject only to the prior pledge described in that certain PLEDGE
AGREEMENT dated March 1, 1996 and amended August 1, 1996 by and
between Aviation Group, Inc. and certain holders of Pledgor's 10%
CONVERTIBLE NOTES DUE MARCH 1, 2001, 9,900 of the issued and
outstanding shares of the voting common stock of Pride Aviation, Inc.,
an Oklahoma corporation owned by Pledgor; and
6. All of the issued and outstanding shares of the voting common stock of
General Electrodynamics Corporation, a Texas corporation owned by
Pledgor;
7. All dividends and distributions on or other rights in connection with
such property, and all proceeds from the sale of such property.
Collectively all such stock, membership interests and other assets hereinafter
are called the "Collateral". The stock certificates listed above have been, or
will be subject to prior pledge to other parties as described herein, delivered
to the Secured Party, along with a corresponding stock power appropriately
executed in blank.
The security interest granted herein is to secure the following (all of
which is hereinafter called the "Obligations"):
(a) Complete and timely payment of all sums due and performance of all
other obligations of Pledgor described and outlined in that certain
"EMPLOYMENT AGREEMENT" by and between the Pledgor and Xxx X. Xxxxxxx,
dated March 1, 1996 and
1
subsequently amended, specifically including but not limited to
Pledgor's payment of compensation, benefits, and bonus payments as
described in Article III of said EMPLOYMENT AGREEMENT;
(b) Repayment of any and all expenses incurred by Secured Party or
advances made to or for the benefit of the Pledgor from time to time
past, present, and future by Secured Party; and
(c) All costs incurred by Secured Party to obtain, preserve, perfect and
enforce the security interests herein granted, collect the
Obligations, and maintain, preserve, collect and enforce the
Collateral, and including but not limited to reasonable attorneys'
fees and expenses of sale.
Cash dividends on any of the Collateral shall continue to be paid to the
Pledgor unless Pledgor defaults in the payment of any Obligations, in which
event Secured Party is authorized to collect and apply such cash dividends in
reduction of the Obligations. Any liquidating distributions and any additional
securities or other property issued or distributed with respect to any of the
Collateral, including all or any dividends, exchanges, or substitutions, shall
be pledged as additional collateral hereunder, shall be delivered to secured
Party, and shall constitute "Collateral" as that term is defined herein.
Upon the occurrence of a failure to pay any sums when due under the
EMPLOYMENT AGREEMENT, if Secured Party has first given notice of such failure to
Pledgor and given Pledgor 30 days after receipt of such notice in which to cure
such failure to pay, Secured Party is entitled to foreclose on the collateral
and in such event Secured Party shall have:
(1) All remedies and rights under the Texas Business and Commerce Code and
other applicable laws; and
(2) All remedies and rights under the EMPLOYMENT AGREEMENT.
Unless the property pledged hereunder threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Secured Party
will give Pledgor reasonable notice of the time and place of any public sale
thereof or of the time after which any private sale or any other intended
disposition thereof is to be made. The requirements of reasonable notice shall
be met if such notice is mailed, postage prepaid, to the address of Pledgor
shown at the end of this Agreement at least (10) days before the time of the
sale or disposition. The proceeds of any such sale shall be applied, first to
the payment of all costs and expenses of collection, storage, custody, and the
sale and delivery of the Collateral, including Secured Party's reasonable
attorneys' fees and expenses in connection therewith, and next to the payment of
such of the Obligations and in such order of application as Secured Party may
from time to time elect. Any remaining surplus may be retained by Secured party
as security hereunder until all the Obligations shall have terminated.
If, in the opinion of Secured Party, there is any question that a public or
semipublic sale or distribution of any Collateral will violate any state or
federal securities law, Secured Party in its discretion (a) may offer and sell
securities privately to purchasers who will agree to take them for
investment purposes and not with a view to distribution and who will agree to
imposition of intrastate offering under Section 3(a)(11) of the Securities Act
of 1933, as amended, and no sale so made in good faith by Secured Party shall be
deemed to be not "commercially reasonable" because so made. Pledgor shall
cooperate fully with Secured Party in all respects in selling or realizing upon
all or any part of the Collateral.
No delay on the part of Secured Party in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise by
Secured Party of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy. No action of Secured Party
permitted hereunder shall impair or affect the rights of Secured Party in and to
the Collateral. This Agreement shall inure to the benefit of Secured Party and
their successors and assigns.
This Agreement shall be governed by the laws of the State of Texas, venue
in Dallas County, including the version of the Uniform Commercial Code adopted
in such state.
PLEDGOR
Address: AVIATION GROUP, INC.
000 Xxxxx Xxxxx /x/ Xxxxxxx X. Xxxxxx
Xxxxx 0000 ---------------------------
Xxxxxx, Xxxxx 00000 BY:
NAME: Xxxxxxx X. Xxxxxx
TITLE: EVP, Director
SECURED PARTY
/s/ Xxx X. Xxxxxxx
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XXX X. XXXXXXX
