Exhibit 10.50
[EXECUTION ORIGINAL]
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is made as of
April 8, 1998, by and between Xxxxxxxx Adhesives, Inc., a Virginia corporation
(the "Secured Party") and Xxxxxxxx Family Limited Partnership, a Virginia
limited partnership (the "Partnership" or "Pledgor").
RECITALS:
WHEREAS, Xxxxxxxx Industries, Inc. (the "Company"), the Secured Party,
the Partnership, H. Xxxxxx Xxxxxxxx, Xx. ("Xxxxxxxx") and Xxxxxx X. Xxxxxxxx,
Xx. (the "Guarantor") have entered into a Settlement Agreement dated April 8,
1998 (the "Settlement Agreement") regarding the settlement of certain claims of
the Company and the Secured Party against Xxxxxxxx; and
WHEREAS, pursuant to the Settlement Agreement and concurrently with the
execution of this Agreement, the Partnership shall execute and deliver a certain
Promissory Note dated April 8, 1998 (the "Note") payable to the Secured Party in
the original face amount of $375,000.00; and
WHEREAS, the Partnership owns 2,325,000 shares of common stock in the
Company, which shares are represented by certificate numbers 3673 and 3674 (the
"Securities"); and
WHEREAS, the Partnership wishes to pledge to the Secured Party, and
grant the Secured Party a security interest in, all of its right, title and
interest in and to the Securities to secure the obligations of the Partnership
under the Note and this Agreement.
AGREEMENT:
NOW THEREFORE, for and in consideration of Ten Dollars ($10.00) and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. "UCC." For the purposes of this Agreement, "UCC" means the
Uniform Commercial Code as adopted in the Commonwealth of Virginia, and all
amendments thereto, provided that if, by reason of mandatory provisions of law,
the validity or perfection of any security interest granted herein is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than
Virginia, then, as to the validity or perfection of such security interest,
"UCC" shall mean the Uniform Commercial Code in effect in such other
jurisdiction.
SECTION 1.2. UCC Terms. Unless otherwise defined herein, or unless the
context otherwise requires, all terms used herein which are defined in the UCC
in effect as of the date hereof shall have the meanings therein stated.
ARTICLE II
THE SECURITY INTERESTS
SECTION 2.1. The Security Interest. To secure the "Obligations" (as
such term is hereinafter defined), the Partnership hereby pledges, assigns and
grants a continuing security interest in and to the "Pledged Collateral" (as
such term is hereinafter defined) as herein provided, to the Secured Party.
SECTION 2.2. Obligations. The security interest and liens hereby
granted are to secure the full payment and performance when due, without offset,
whether by acceleration or otherwise, of each and all of the Obligations. The
term "Obligations" shall include, without limitation, all of the liabilities and
obligations of the Partnership under the Note, this Agreement and the Settlement
Agreement (the Note, this Agreement and the Settlement Agreement are
collectively referred to herein as the "Security Documents"), and all costs and
expenses incurred by the Secured Party in connection with the enforcement of the
Security Documents, the collection of any judgment rendered thereon, and/or the
defense of any claim arising out of, or in any way relating to, the Security
Documents, including, without limitation, reasonable attorneys' fees. The
foregoing and all other provisions of this Agreement notwithstanding, the
parties agree that, solely for the purposes of this Agreement, the various
obligations of the Pledgor hereunder to pay or reimburse the Secured Party for
certain legal and related expenses shall not include any legal or related
expenses incurred by the Secured Party or for which it may be liable with
respect to that certain lawsuit in the United States District Court for the
District of Colorado, Civil Action No. 97-D-2214, styled Xxx Xxxxxxxxx, Minority
Shareholder of Record, et al. x. Xxxxxxxx Industries, Inc., et al. (the
"Derivative Action"); provided, however, that this provision shall not preclude
the Secured Party from exercising any right it has or may have to recover from
Pledgor any legal or related expenses relating to the Derivative Action which
right arises otherwise than pursuant to this Agreement.
SECTION 2.3. Pledged Collateral. The term "Pledged Collateral" shall
include, without limitation, the Securities and all dividends, distributions,
interest, instruments and other property from time to time received, receivable
or otherwise made upon or distributed in respect of or in exchange for any or
all of such Securities, and the proceeds of each and all of the foregoing.
SECTION 2.4. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of the Secured Party pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Secured Party.
SECTION 2.5. Termination of Security Interests; Release of Pledged
Collateral.
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(a) Upon the full, final and irrevocable payment and
performance of all the Obligations, the security interests in the Pledged
Collateral shall terminate and all rights to the Pledged Collateral shall revert
to the Pledgor.
(b) Upon any such termination of the security interests or
any release of the Pledged Collateral, the Secured Party will, at the Pledgor's
expense, execute and deliver to the Pledgor such documents as the Pledgor shall
reasonably request to evidence the termination of the security interests or the
release of the Pledged Collateral. Any such documents shall be without recourse
to or warranty by the Secured Party.
SECTION 2.6. Security Interests Absolute. All rights of the Secured
Party and security interests hereunder, and all duties, and obligations of the
Pledgor hereunder, shall be absolute and unconditional and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver
or release in respect of any of the Obligations, or any document evidencing or
securing any of the Obligations, by operation of law or otherwise;
(ii) any modification or amendment or supplement to the
Note, the Settlement Agreement, the Guaranty of even date hereof from the
Guarantor to the Secured Party (the "Guaranty") or any other document evidencing
or securing any of the Obligations;
(iii) any release, non-perfection or invalidity of any
direct or indirect security for any of the Obligations;
(iv) any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Pledgor or its assets or any resulting
disallowance, release or discharge of all or any portion of the Obligations;
(v) the existence of any claim, set-off or other right
which the Pledgor may have at any time against the Secured Party or any other
entity or person, whether in connection herewith or any unrelated transactions;
provided, that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or
against the Pledgor for any reason of any of the Obligations, or any provision
of applicable law or regulation purporting to prohibit the payment by the
Pledgor of the Obligations; or
(vii) any failure by the Secured Party (a) to commence any
action against the Pledgor, or (b) to proceed with due diligence in the
collection, protection or realization upon any collateral securing the
Obligations, or (c) any other act or omission to act or delay of any kind by the
Pledgor, the Secured Party or any other corporation or person or any other
circumstance whatsoever which might, but for the provisions of this clause,
constitute a legal or equitable discharge of the Pledgor's obligations
hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Pledgor represents, warrants and agrees as follows:
SECTION 3.1. Contravention. The execution, delivery and performance by
the Pledgor of this Agreement requires no action by or in respect of, or filing
with, any governmental authority and does not contravene, or constitute (with or
without the giving of notice or lapse of time or both) a default under, any
provision of applicable law or of any agreement, judgment, injunction, order,
decree or other instrument binding upon or affecting the Pledgor.
SECTION 3.2. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Pledgor, enforceable against the Pledgor in accordance
with its terms, except as the enforceability hereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors rights generally and
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by equitable principles of general applicability (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 3.3. Title to Pledged Collateral. The Pledgor owns all of the
Pledged Collateral free and clear of any liens or encumbrances other than the
liens and security interests granted hereby.
SECTION 3.4. Pledged Collateral. The Pledgor is not and will not become
a party to or otherwise bound by any agreement, other than this Agreement, which
restricts in any manner the rights of any present or future holder of any of the
Pledged Collateral with respect thereto.
SECTION 3.5. Validity, Perfection and Priority of Security Interests.
Upon delivery of all certificates or instruments representing or evidencing the
Pledged Collateral to the Secured Party, the Secured Party will have a valid and
perfected security interest in the Pledged Collateral subject to no prior lien
or encumbrance. No registration, recordation or filing with any governmental
agency is required in connection with the execution or delivery of this
Agreement, or necessary for the validity or enforceability hereof or for the
perfection of the security interests of the Secured Party granted hereby. The
Pledgor has not performed any acts which might prevent the Secured Party from
enforcing any of the terms and conditions of this Agreement or which would limit
the Secured Party in any such enforcement.
SECTION 3.6. No Pledge of Partnership Interest. To the best knowledge
of the Pledgor, no partner of the Partnership has assigned, granted a security
interest in, or has otherwise encumbered or allowed to be encumbered, his or her
partnership interest in the Partnership.
ARTICLE IV
COVENANTS
The Pledgor agrees that so long as any of the Obligations remains
unpaid:
SECTION 4.1. Filing; Further Assurances. The Pledgor will, at Pledgor's
expense and in such manner and form as the Secured Party may reasonably require,
execute and deliver to the Secured Party any financing statement, specific
assignment or other paper and take any other action that may be reasonably
necessary or desirable, or that the Secured Party may reasonably request, in
order to create, preserve, perfect or validate the security interests granted
hereby or to enable the Secured Party to exercise and enforce its rights
hereunder with respect to any of the Pledged Collateral. To the extent permitted
by applicable law, the Pledgor hereby authorizes the Secured Party to execute
and file, in the name of the Pledgor or otherwise, UCC financing statements
which the Secured Party in its sole discretion may deem necessary or appropriate
to further perfect the security interests granted hereby.
SECTION 4.2. Liens on Pledged Collateral. The Pledgor will not sell or
otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral or create or suffer to exist any lien, security interest or
encumbrance (other than security interests in favor of the Secured Party) on any
Pledged Collateral. The Pledgor will pledge hereunder, immediately upon
Pledgor's acquisition (directly or indirectly) thereof, any and all additional
shares of stock or other securities received in substitution for or with respect
to any Pledged Collateral.
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ARTICLE V
VOTING; DISTRIBUTIONS ON COLLATERAL
SECTION 5.1. Voting Rights.
(a) The Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this Agreement.
(b) The Secured Party shall execute and deliver, or cause
to be executed and delivered, to the Pledgor all such proxies, powers of
attorney, consents, ratifications and waivers and other instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights which the Pledgor is entitled to exercise
pursuant to paragraph (a) above.
SECTION 5.2. Dividends with Respect to the Pledged Collateral.
(a) During the term hereof, all cash dividends whether out
of earned or capital surplus or otherwise (other than stock dividends) on the
Pledged Collateral, or any part thereof, shall be paid to the Secured Party
(with any necessary endorsement) and such cash dividends shall be applied toward
the obligations of the Partnership under the Note, first to any late charges
outstanding, then to any interest payments outstanding and finally to the
principal balance of the Note. All stock or property representing stock or
liquidating dividends on distribution and liquidation upon or in respect of the
Pledged Collateral or any part thereof, or resulting from a stock dividend,
stock distribution, stock split or reclassification of the Pledged Collateral,
or any part thereof, received or exchanged for the Pledged Collateral, or any
part thereof, as a result of any merger, consolidation or otherwise, shall be
paid or transferred directly to (with any necessary endorsement) and deposited
with the Secured Party as part of the Pledged Collateral pursuant to this
Agreement immediately upon receipt thereof by the Partnership.
(b) All such dividends, distributions or payments of cash,
stock or property relating to the Pledged Collateral which are received by the
Pledgor shall be received in trust for the benefit of the Secured Party, and
shall be segregated from other funds of the Pledgor until paid over to the
Secured Party as Pledged Collateral.
ARTICLE VI
EVENTS OF DEFAULT
Any one of the following events will constitute an "Event of Default"
under this Agreement:
SECTION 6.1. The occurrence of a Default under the Note.
SECTION 6.2. A breach by the Secured Party or the Guarantor under the
Settlement Agreement.
SECTION 6.3. The failure by the Pledgor to observe or perform any of
the applicable agreements contained herein and to cure such failure within ten
(10) days of notice thereof from the Secured Party.
SECTION 6.4. Discovery that any representation or warranty made by the
Pledgor herein or any statement or representation made in any certificate,
report or opinion delivered pursuant hereto
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was incorrect, incomplete or misleading in any material respect on or as of the
date made or deemed made.
SECTION 6.5. If this Agreement shall at any time and for any reason
cease to create a valid and perfected first priority security interest in and to
the Pledged Collateral or such security interest shall cease to be in full force
and effect or shall be declared null and void, or the validity or enforceability
thereof shall be contested by the Pledgor or the Pledgor shall deny that it has
any further liability or obligation with respect thereto; provided, however, in
the event that an Event of Default arises under this Section 6.5 solely as a
result of the Derivative Action, then the Pledgor shall have a period of twenty
(20) days following notice thereof from the Secured Party to cure such Event of
Default by providing the Secured Party with substitute collateral, of a nature
reasonably satisfactory to the Secured Party and having a value equal to or
greater than any of the Pledged Collateral to which such Event of Default would
relate.
SECTION 6.6. If any Pledged Collateral is lost, abandoned, destroyed,
severally damaged and not replaced within 30 days of notice to Pledgor, or sold
or transferred except as permitted by prior agreement with the Secured Party.
ARTICLE VII
GENERAL AUTHORITY; REMEDIES
SECTION 7.1. General Authority. The Pledgor hereby irrevocably appoints
the Secured Party and any officer or agent thereof, with full power of
substitution, as the Pledgor's true and lawful attorney-in-fact, in the name of
the Pledgor, for the sole use and benefit of the Secured Party, but at the
Pledgor's expense, at and following the occurrence of an Event of Default, to
take any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to carry out the terms of this
Agreement. Without limiting the foregoing, the Pledgor hereby gives the Secured
Party the power and right on the Pledgor's behalf, at and following the
occurrence of an Event of Default, without notice to or further assent by the
Pledgor, to do the following:
(a) to receive, take, endorse, assign and deliver any and
all checks, notes, drafts, acceptances, documents and other negotiable and
non-negotiable instruments taken or received by the Pledgor as, or in connection
with, the Pledged Collateral;
(b) to demand, xxx for, collect, receive and give
acquaintance for any and all monies due or to become due upon or in connection
with the Pledged Collateral;
(c) to commence, settle, compromise, compound, prosecute,
defend or adjust any claim, suit, action or proceeding with respect to, or in
connection with, the Pledged Collateral;
(d) to sell, transfer, assign or otherwise deal in or with
the Pledged Collateral or any part thereof, as fully and effectually as if the
Secured Party were the absolute owner thereof; and
(e) to do, at its option, but at the expense of the
Pledgor, at any time or from time to time, all acts and things which the Secured
Party deems necessary to protect or preserve the Pledged Collateral and to
realize upon the Pledged Collateral.
SECTION 7.2. UCC Rights. If an Event of Default shall have occurred,
the Secured Party may, in addition to all other rights and remedies granted to
it in this Agreement and in any other agreement securing, evidencing or relating
to the Obligations, exercise (i) all rights and remedies of a
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secured party under the UCC (whether or not in effect in the jurisdiction where
such rights are exercised) and (ii) all other rights available to the Secured
Party at law or equity.
SECTION 7.3. Application of Proceeds; Sale of Pledged Collateral.
(a) The Pledgor expressly agrees that if an Event of
Default shall occur and be continuing, the Secured Party, without demand of any
kind (except the notice specified below of the time and place of any public or
private sale) to or upon the Pledgor or any other person or entity (all of which
demands and/or notices are hereby waived by the Pledgor), may forthwith (i)
apply the cash, if any, then held by it as specified in Section 7.8 and (ii) if
there shall be no such cash or if such cash shall be insufficient to pay the
Obligations in full, to collect, receive, appropriate and realize upon the
Pledged Collateral and/or sell, assign, give an option or options to purchase or
otherwise dispose of and deliver the Pledged Collateral (or contract to do so)
or any part thereof in one or more lots or parcels (which need not be in round
lots) at public or private sale, at any office of the Secured Party or elsewhere
in such manner as is commercially reasonable, and as the Secured Party may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Secured Party shall have the right upon any such public sale,
and, if the Pledged Collateral is of a type customarily sold in a recognized
market or is of a type which is the subject of widely distributed standard price
quotations, upon any such private sale or sales, to purchase the whole or any
part of the Pledged Collateral so sold, and thereafter to hold the same,
absolutely and free from any right or claim of any kind. To the extent permitted
by applicable law, the Pledgor waives all claims, damages and demands against
the Secured Party arising out of the foreclosure, repossession, retention or
sale of the Pledged Collateral.
(b) The Secured Party shall give the Pledgor fifteen (15)
days written notice of its intention to make any such public or private sale or
sale at a broker's board or on a securities exchange. Such notice shall (i) in
the case of a public sale, state the time and place fixed for such sale, (ii) in
the case of sale at a broker's board or on a securities exchange, state the
board or exchange at which such sale is to be made and the day on which the
Pledged Collateral, or the portion thereof being sold, will first be offered for
sale and (iii) in the case of a private sale, state the day after which such
sale may be consummated. The Secured Party shall not be obligated to make any
such sale pursuant to any such notice. The Secured Party may adjourn any public
or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may be made
at any time or place to which the same may be so adjourned. In the case of any
sale of all or any part of the Pledged Collateral on credit or for future
delivery, the Pledged Collateral so sold may be retained by the Secured Party
until the selling price is paid by the purchaser thereof, but the Secured Party
shall not incur any liability in case of the failure of such purchaser to take
up and pay for the Pledged Collateral so sold and, in the case of such failure,
such Pledged Collateral may again be sold upon like notice.
SECTION 7.4. Rights of Purchasers. Upon any sale of the Pledged
Collateral (whether public or private) the Secured Party shall have the right to
deliver, assign and transfer to the purchaser thereof the Pledged Collateral so
sold. Each purchaser (including the Secured Party) at any such sale shall hold
the Pledged Collateral so sold absolutely, free from any claim or right of any
kind, including any equity or right of redemption of the Pledgor who, to the
extent permitted by law, hereby specifically waives all rights of redemption,
including, without limitation, any right to redeem the Pledged Collateral under
Section 8.9-506 of the UCC, stay or approval which the Pledgor has or may have
under any law now existing or hereafter adopted.
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SECTION 7.5. Securities Act, etc.
(a) The Pledgor understands that compliance with the
Federal Securities Laws might very strictly limit the course of conduct of the
Secured Party if the Secured Party were to attempt to dispose of all or any part
of the Pledged Collateral, and might also limit the extent to which or the
manner in which any subsequent transferee of any Pledged Collateral could
dispose of the same. Similarly, there may be other legal restrictions or
limitations affecting the Secured Party in any attempt to dispose of all or part
of the Pledged Collateral under applicable Blue Sky or other state securities
laws or similar laws analogous in purpose or effect.
(b) Accordingly, the Pledgor expressly agrees that the
Secured Party is authorized, in connection with any sale of the Pledged
Collateral, if it deems it advisable so to do, (i) to restrict the prospective
bidders on or purchasers of any of the Pledged Collateral to a limited number of
sophisticated investors who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
sale of any of such Pledged Collateral, (ii) to cause to be placed on
certificates for any or all of the Pledged Collateral or on any other securities
pledged hereunder a legend to the effect that such security has not been
registered under the Federal Securities Laws and may not be disposed of in
violation of the provision of any applicable law, rule or regulation and (iii)
to impose such other limitations or conditions in connection with any such sale
as the Secured Party deems necessary or advisable in order to comply with any
law, rule or regulation.
(c) The Pledgor covenants and agrees that the Pledgor will
execute and deliver such documents and take such other action as the Secured
Party deems necessary or advisable in order to comply with all applicable laws,
rules or regulations. The Pledgor acknowledges and agrees that such limitations
may result in prices and other terms less favorable to the seller than if such
limitations were not imposed, and, notwithstanding such limitations, agrees that
any such sale shall be deemed to have been made in a commercially reasonable
manner, it being the agreement of the Pledgor and the Secured Party that the
provisions of this Section 7.5 will apply notwithstanding the existence of a
public or private market upon which the quotations or sales prices may exceed
the price at which the Secured Party sells. The Secured Party shall be under no
obligation to delay a sale of any Pledged Collateral for a period of time
necessary to permit the issuer of any securities contained therein to register
such securities under the Securities Act of 1933, as amended, or under
applicable state securities laws, even if the issuer would agree to it.
SECTION 7.6. Other Rights of the Secured Party.
(a) The Secured Party (i) shall have the right and power
to institute and maintain such suits and proceedings as it may deem appropriate
to protect and enforce the rights vested in it by this Agreement and (ii)
proceed by suit or suits at law or in equity to enforce such rights and to
foreclose upon the Pledged Collateral and to sell all, or from time to time, any
of the Pledged Collateral under the judgment or decree of a court of competent
jurisdiction.
(b) Upon the occurrence of an Event of Default, the
Secured Party shall, to the extent permitted by applicable law, without notice
to the Pledgor or any party claiming through the Pledgor, without regard to the
solvency or insolvency at such time of any person or entity then liable for the
payment of any of the Obligations, without regard to the then value of the
Pledged Collateral and without requiring any bond from any complainant in such
proceedings, be entitled as a matter of right to the appointment of a receiver
or receivers (who may be the Secured Party) of the Pledged Collateral or any
part thereof, and of the profits, revenues and other income thereof, pending
such proceedings, with such powers as the court making such appointment shall
confer, and to the entry of an order directing that the profits, revenues and
other income of the property constituting the whole or
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any part of the Pledged Collateral be segregated, sequestered and impounded for
the benefit of the Secured Party, and the Pledgor irrevocably consents to the
appointment of such receiver or receivers and to the entry of such order.
(c) In no event shall the Secured Party have any duty to
exercise any rights or take any steps to preserve the rights of the Secured
Party in the Pledged Collateral. Pledgor acknowledges that Secured Party shall
not have any duty or responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Collateral, whether or not the Secured Party has or is
deemed to have knowledge of such matters or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Pledged Collateral.
SECTION 7.7. Waiver and Estoppel.
(a) The Pledgor agrees, to the extent the Pledgor may
lawfully do so, that the Pledgor will not at any time in any manner whatsoever
claim or take the benefit or advantage of, any appraisal, valuation, stay,
extension, moratorium, turnover or redemption law, or any law permitting the
Pledgor to direct the order in which the Pledged Collateral shall be sold, now
or at any time hereafter in force which may delay, prevent or otherwise affect
the performance or enforcement of this Agreement, and hereby waives all benefit
or advantage of all such laws.
(b) The Pledgor, to the extent the Pledgor may lawfully do
so, on behalf the Pledgor and all who claim through or under the Pledgor,
including without limitation any and all subsequent creditors, vendees,
assignees and lienors, waives and releases all rights to demand or to have any
marshaling of the Pledged Collateral upon any sale, whether made under any power
of sale granted herein or pursuant to judicial proceedings or under any
foreclosure or any enforcement of this Agreement, and consents and agrees that
all of the Pledged Collateral may at any such sale be offered and sold as an
entirety.
(c) The Pledgor waives, to the extent permitted by law,
presentment, demand, protest and any notice of any kind (except the notices
expressly required hereunder) in connection with this Agreement and any action
taken by the Secured Party with respect to the Pledged Collateral.
SECTION 7.8. Application of Monies. The proceeds of any sale of, or
other realization upon, all or any part of the Pledged Collateral shall be
applied by the Secured Party in the following order of priority, (the Pledgor
remaining liable for any deficiency remaining unpaid after such application):
(a) first, to payment of the expenses of such sale or
other realization, including reasonable compensation to the Secured Party's
agents and counsel, and all expenses, liabilities and advances incurred or made
by the Secured Party, its agents and counsel in connection therewith or in
connection with the care, safekeeping or otherwise of any or all of the Pledged
Collateral, and any other unreimbursed expenses for which the Secured Party is
to be reimbursed pursuant to Section 8.3;
(b) second, to payment of the Obligations in such order as
the Secured Party shall determine; and
(c) finally, any surplus then remaining shall be paid to
the Pledgor, or the Pledgor's successors or assigns, or to whomsoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct.
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SECTION 7.9. Redemption of Pledged Collateral by the Company. The
Pledgor acknowledges and agrees that the Obligations, the Note, this Agreement,
the Guaranty and all related agreements, documents, instruments, and rights and
obligations of the Secured Party thereunder may, in the sole and absolute
discretion of the Secured Party and without notice to the Pledgor, be assigned
or otherwise transferred to the Company. Upon such assignment or transfer, the
Company shall possess all of the rights of the Secured Party hereunder,
notwithstanding that any purchase of the Pledged Collateral by the Company (in
the place of and to the extent that the Secured Party is permitted hereunder)
would result in the redemption and cancellation of any the Pledged Collateral
consisting of shares of the capital stock of the Company.
ARTCLE VIII
MISCELLANEOUS
SECTION 8.1. Notices. All notices, requests and other communications to
any party hereunder shall be in writing and shall be given to such party at the
address set forth on the signature page hereof or to such other address as such
party may hereafter specify for the purpose by notice to the other. Each such
notice, request or other communication shall be effective when delivered in
person or delivered certified mail, postage prepaid, return receipt requested.
Rejection or refusal to accept, or the inability to deliver because of a changed
address of which no notice was given shall not affect the validity of notice
given in accordance with this Section 8.1.
SECTION 8.2. Waivers, Non-Exclusive Remedies. No failure on the part of
the Secured Party to exercise, no delay in exercising, and no course of dealing
with respect to any right under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise by the Secured Party of any
right under this Agreement preclude any other or further exercise thereof or the
exercise of any other right. The rights of the Secured Party under this
Agreement are cumulative and are not exclusive of any other remedies provided by
law.
SECTION 8.3. Expenses; Documentary Taxes. The Pledgor shall forthwith
on demand pay all out-of-pocket expenses incurred by the Secured Party,
including the reasonable fees and disbursements of its counsel and agents, in
connection with the administration, sale or other disposition of the Pledged
Collateral and the preservation, protection or defense of the rights of the
Secured Party in and to the Pledged Collateral. The Pledgor shall forthwith pay
on demand the amount of any taxes which the Secured Party shall pay by reason of
the security interests (including any applicable transfer taxes).
SECTION 8.4. Successors and Assigns.
(a) This Agreement is for the benefit of the Secured Party
and its successors and assigns, and in the event of an assignment of all or any
of the Obligations, the rights hereunder, to the extent applicable to the
Obligations so assigned, may be transferred with such Obligations. Without
limiting the foregoing, the Secured Party shall have the right to assign all of
its rights and obligations hereunder to the Company.
(b) This Agreement shall be binding upon the Pledgor and
the Pledgor's heirs, personal representatives, successors and assigns, except
that the Pledgor may not assign or transfer any of its rights under this
Agreement without the prior written consent of the Secured Party.
SECTION 8.5. Amendments and Waivers. Any provision of this Agreement
may be amended or waived, if, but only if, such amendment or waiver is in
writing and is signed by the Pledgor and the Secured Party.
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SECTION 8.6. Delivery and Virginia Law. This Agreement has been
delivered in Virginia and shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia, without reference to its conflicts of
laws provisions, except as otherwise required by mandatory provisions of law and
except to the extent that remedies provided by the laws of any jurisdiction
other than Virginia are governed by the laws of such jurisdiction.
SECTION 8.7. Limitation by Law; Severability.
(a) All rights, remedies and powers provided in this
Agreement may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law, and all the provisions of this
Agreement are intended to be subject to all applicable mandatory provisions of
law which may be controlling and be limited to the extent necessary so that they
will not render this Agreement invalid, unenforceable in whole or in part, or
not entitled to be recorded, registered or filed under the provisions of any
applicable law.
(b) If any provision hereof is invalid and unenforceable
in any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Secured Party in order to carry out
the intentions of the parties hereto as nearly as may be possible; and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
SECTION 8.8. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when the Secured Party shall have received
counterparts hereof signed by itself and the Pledgor.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
XXXXXXXX FAMILY LIMITED PARTNERSHIP
By: Xxxxxxxx Family Corporation, its general partner
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
------------------------------------------------
Xxxxxx X. Xxxxxxxx, Xx., President
XXXXXXXX ADHESIVES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Its Chairman, CEO
