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EXHIBIT C
SECURITY AGREEMENT - PLEDGE
HOUSTON POST OAK PARTNERS, LTD., whose address is ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, hereinafter called "Debtor", for value
received, the receipt and sufficiency of which is hereby acknowledged, hereby
grants to whose address is hereinafter
called "Secured Party", the security interest hereinafter set forth and agrees
with Secured Party as follows:
I. SECURITY INTEREST
Debtor hereby grants to Secured Party a security interest in and agrees and
acknowledges that Secured Party has and shall continue to have a security
interest in the following described property, to-wit:
1,200,000 shares of common stock of Team, Inc.
together with all monies, income, proceeds and benefits attributable or accruing
to said property, including, but not limited to, all stock rights, rights to
subscribe, liquidating dividends, stock dividends, property, cash distributions,
dividends paid in stock, new securities, cash dividends or other properties or
benefits of which Debtor is or may hereafter become entitled to receive on
account of said property, and in the event that Debtor shall receive any such,
Debtor shall hold same as Trustee for Secured Party and will immediately deliver
same to Secured Party, to be held by Secured Party in the same manner as the
property specifically described above is held hereunder. All property of all
kinds in which the Secured Party is herein granted a security interest shall
hereinafter be called the "Collateral". The undersigned agrees to execute such
stock powers, endorse such instruments, or execute such additional pledge
agreements or other documents as may be required by the Secured Party in order
to effectively grant to Secured Party the security interest in the Collateral.
The security interest granted hereby is to secure the payment of (1) that
certain promissory note of even date herewith, executed by Debtor in favor of
Secured Party in the principal amount of $1,650,000.00, and (2) that certain
promissory note of even date herewith executed by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in favor of
Secured Party in the principal amount of $1,000,000.00 (the "$1,000,000.00
Note"), together with any and all other indebtedness and liabilities whatsoever
of the Debtor to Secured Party whether direct or indirect, absolute or
contingent, due or to become due, and whether now existing or hereafter arising
and howsoever evidenced or acquired, and whether joint or several (all of which
are hereinafter sometimes called the "Obligations").
II. WARRANTIES AND COVENANTS OF DEBTOR
Debtor warrants, covenants and agrees that:
(1) Except for the security interest granted hereby, the Debtor is the
owner of the Collateral free of any adverse claim, security interest or
encumbrance; and the Debtor will defend the Collateral against all claims and
demands of all persons at any time claiming the same or interest therein;
(2) Debtor authorizes the Secured Party to file, in jurisdictions where
this authorization will be given effect, a Financing Statement signed only by
the Secured Party covering the Collateral; and at the request of Secured Party,
the Debtor will join the Secured Party in executing one or more Financing
Statements pursuant to the Uniform Commercial Code, in form satisfactory to
the Secured Party, and will pay the cost of filing the same or filing or
recording the Security Agreement in all public offices wherever filing or
recording is deemed by the Secured Party to be necessary or desirable, it being
further stipulated in this regard that the Secured Party may also at any time or
times sign any counterpart of this Security Agreement signed by the Debtor and
file same as a Financing Statement if the Secured Party shall elect to do so;
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(3) Debtor will not sell or offer to sell or otherwise transfer or encumber
the Collateral or any interest therein without the written consent of the
Secured Party;
(4) Debtor will keep the Collateral free from any adverse lien, security
interest or encumbrances;
(5) Debtor will deliver to the holder of the Obligations additional
collateral, upon demand by such holder, if such holder deems the Collateral then
held hereon to be insufficient, to properly and amply secure all Obligations
secured hereby;
(6) Debtor will pay to Secured Party all expenses and expenditures,
including reasonable attorneys' fees and legal expenses, incurred or paid by the
Secured Party in exercising or protecting its interest, rights and remedies
under this Security Agreement.
III. GENERAL COVENANTS
(1) The security interest granted hereby shall in no way be affected by any
indulgence or indulgences, extension or extensions, change or changes in the
form, evidence, maturity, rate of interest or otherwise of any of the
Obligations hereby secured, nor by want of presentment, notice, protest, suit or
indulgence upon any of such Obligations, nor shall any release of any security
for or of any of the parties liable for the payment of any of the Obligations
secured hereby in any manner affect or impair this pledge, and same shall
continue in full force and effect in accordance with the terms until all of the
Obligations have been fully paid.
(2) Any and all securities and other properties heretofore, now or
hereafter delivered to Secured Party, or in Secured Party's possession, shall
also secure all Obligations and shall be held and construed to be a part of the
Collateral hereunder to the same extent as fully described herein.
(3) Secured Party shall have the power to endorse and is hereby appointed
Debtor's agent for the purpose of endorsing in the name of Debtor any instrument
or document constituting Collateral or which may be received in payment of or on
account of the Collateral.
IV. EVENTS OF DEFAULT
The Debtor shall be in default under this Security Agreement upon the
happening of any of the following events or conditions:
(1) Default in the payment or performance of any liability or obligation of
the Debtor or of any maker, endorser or guarantor of any liability or obligation
of the Debtor to the holder of the Obligations, including, but not by way of
limitation, default in the payment of any principal or interest on any of the
Obligations when due;
(2) Failure of the Debtor to deliver additional collateral as provided;
(3) Any deterioration or impairment of the Collateral or any part thereof
or any decline or depreciation in the market price thereof (whether actual or
reasonably anticipated) which, in the judgment of the Secured Party, causes the
Collateral to become unsatisfactory as to value or character;
(4) The levy of any attachment, execution or other process against the
Debtor or any of the Collateral;
(5) Death, dissolution, termination of existence, insolvency or business
failure of the Debtor or any endorser, guarantor or surety of any of the
Obligations, or the commission of the act of bankruptcy by, or the appointment
of receiver or other legal representative for any part of the property of,
assignment for the benefit of creditors by, or the
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commencement of any proceedings under any bankruptcy or insolvency law by or
against, the Debtor or any endorser, guarantor or surety for any of the
Obligations.
(6) Default in the performance of any other covenant or agreement of Debtor
to Secured Party, whether under this Security Agreement or otherwise;
(7) The occurrence of any event which under the terms of any evidence of
indebtedness, indenture, loan agreement, security agreement or similar
instrument permits the acceleration of maturity of any indebtedness of Debtor to
Secured Party, or to others than Secured Party; or Secured Party receives
notification that another person has or expects to acquire a security interest
in the Collateral or any part thereof.
V. REMEDIES
In the event of the default in the payment of any of the Obligations or any
principal, interest or other amount payable thereunder, when due, or upon the
happening of any of the events of default specified herein, and at any time
thereafter, at the option of the holder thereof, any or all of the Obligations
shall become immediately due and payable without presentment or demand or any
notice to the Debtor or any other person obligated thereon and the Secured Party
shall have and may exercise with reference to the Collateral and Obligations any
and all of the rights and remedies of a secured party under the Uniform
Commercial Code as adopted in the State of Texas, and as otherwise granted
herein or under any other applicable law or under any other agreement executed
by Debtor, including, without limitation, the right and power to sell, at public
or private sale or sales, or otherwise dispose of or utilize the Collateral and
any part or parts thereof in any manner authorized or permitted under this
Security Agreement or under the Uniform Commercial Code after default by the
Debtor, and to apply the proceeds thereof toward payment of any costs and
expenses and attorneys' fees and legal expenses thereby incurred by the Secured
Party and toward payment of the Obligations, in such order or manner as Secured
Party may elect. To the extent permitted by law, Debtor expressly waives any
notice of sale or other disposition of the Collateral and any other rights or
remedies of Debtor or formalities prescribed by law relative to sale or
disposition of the Collateral or exercise of any other right or remedy of
Secured Party existing after default hereunder, and to the extent any such
notice is required and cannot be waived, Debtor agrees that if such notice is
mailed, postage prepaid, to the Debtor at the address shown hereinabove at least
five (5) days before the time of the sale or disposition, such notice shall be
deemed reasonable and shall fully satisfy any requirement for giving of said
notice.
Secured Party is hereby granted the right, after default in payment of any
of the Obligations or in the performance of any covenants secured hereby, to
transfer at any time to itself or its nominee the securities or other property
hereby pledged, or any part thereof, and to thereafter exercise all voting
rights with respect to such security so transferred and to receive the proceeds,
payments, moneys, income or benefits attributable or accruing thereto and to
hold the same as security for the Obligations hereby secured, or at Secured
Party's election, to apply such amounts to the Obligations, whether or not then
due, in such order as Secured Party may elect, or, Secured Party may, at its
option, without transferring such securities or property to its nominee,
exercise all voting rights with respect to the securities pledged hereunder and
vote all or any part of such securities at any regular or special meeting of
shareholders, and the undersigned does hereby name, constitute and appoint as a
proxy of the undersigned the President or any Vice President of Secured Party,
in the undersigned's name, place and stead to vote any and all such securities,
as said proxy may elect, for and in the name, place and stead of the
undersigned, such proxy to be irrevocable and deemed coupled with an interest.
Debtor hereby agrees to cooperate fully with Secured Party in order to
permit Secured Party to sell, at foreclosure or other private sale, the
Collateral pledged hereunder. Specifically, Debtor agrees to fully comply with
the Securities Laws of the United States and of the State of Texas and to take
such action as may be necessary to permit Secured Party to sell or otherwise
transfer the securities pledged hereunder in compliance with such laws.
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VI. MISCELLANEOUS
Secured Party may, at its option, following the occurrence of an Event of
Default, demand, ▇▇▇ for, collect or make any compromise or settlement it deems
desirable with reference to the Collateral. The Secured Party shall not be
obligated to take any steps necessary to preserve any rights in the Collateral
against prior parties, which Debtor hereby assumes to do.
No delay or omission on the part of Secured Party in exercising any rights
hereunder shall operate as a waiver of any such right or any other right. A
waiver on any one or more occasions shall not be construed as a bar to or waiver
of any right or remedy on any future occasion.
It is the intention of the parties hereto to comply with the usury laws of
the State of Texas; accordingly, it is agreed that notwithstanding any provision
to the contrary in the Security Agreement, or in any of the documents evidencing
the Obligations or otherwise relating thereto, no such provision shall require
the payment or permit the collection of interest in excess of the maximum
permitted by law. If any excess of interest in such respect is provided for, or
shall be adjudicated to be so provided for, in this Security Agreement, or in
any of the documents evidencing the Obligations or otherwise relating thereto,
then in such event (a) the provisions of this paragraph shall govern and
control, (b) neither the Debtor hereof nor his heirs, legal representatives,
successors or assigns or any other party liable for the payment hereof, shall
be obligated to pay the amount of such interest to the extent that it is in
excess of the maximum amount permitted by law, (c) any such excess which may
have been collected shall be, at the option of the holder of the instrument
evidencing the Obligations, either applied as a credit against the then unpaid
principal amount thereof or refunded to the Maker thereof and (d) the
effective rate of interest shall be automatically subject to reduction to the
maximum lawful contract rate allowed under the usury laws of the State of
Texas as now or hereafter construed by the courts having jurisdiction.
In order to induce Secured Party to advance and loan such funds to and/or
for the benefit of Debtor, Debtor hereby covenants and agrees that in the event
of default by the Debtor (an event of default shall be any one of those events
of default stated above) that the Secured Party shall have the absolute and
unconditional right, without the prior notice and/or any prior hearing of any
kind whatsoever, to seize and take possession of the Collateral, and furthermore
the Debtor does hereby expressly waive any right to any prior notice and/or any
prior hearing prior to seizure and taking possession of the Collateral and/or
property by the Secured Party in the event of default by the Debtor.
Debtor and Secured Party agree that, upon the earlier to occur of (i)
mutual agreement by both Debtor and Secured Party, or (ii) one (1) year from the
date hereof, the $1,000,000.00 Note shall no longer be secured by this Security
Agreement and shall no longer be considered part of the Obligations.
All rights of Secured Party hereunder shall inure to the benefit of its
successors and assigns; and all obligations of Debtor shall bind his heirs,
executors or administrators and his or its successors or assigns. The rights and
remedies of Secured Party hereunder are cumulative and the exercise of any one
or more of the remedies provided herein shall not be construed as a waiver of
any of the other remedies of Secured Party.
Any provision found to be invalid under the laws of the State of Texas, or
any other state having jurisdiction, shall be invalid only with respect to the
offending provision. All words used herein shall be construed of such gender or
number as the circumstances require. If this Security Agreement is executed by
more than one debtor, the Obligations of all such debtors shall be joint and
several. The law of the State of Texas shall apply to this Security Agreement
and its construction and interpretation.
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EXECUTED on this 12th day of June, 1998.
"DEBTOR":
HOUSTON POST OAK PARTNERS, LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, its general partner
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