EXHIBIT 3
STOCK PLEDGE AND SECURITY AGREEMENT
THIS STOCK PLEDGE AND SECURITY AGREEMENT (the "Agreement") is entered into
as of the 29th day of August, 1997 by and between DOMINION PARK, L.L.C., a
Delaware limited liability company ("Pledgor"), and DEERE PARK EQUITIES, L.L.C.,
an Illinois limited liability company ("Secured Party").
R E C I T A L S:
A. In return for certain financial accommodations by Secured Party,
Pledgor is to become indebted to Secured Party as to be evidenced by a Secured
Promissory Note of even date herewith in the principal amount of $4,760,000 (the
"Note").
B. Pledgor is the legal owner of 4,490,100 shares of common stock, $0.001
par value per share, of Dominion Bridge Corporation, a Delaware corporation
("Dominion Bridge"), comprised of 2,380,000 shares of common stock of Dominion
Bridge that were contributed to Pledgor by Wellgate International Ltd. and
2,110,000 shares of common stock of Dominion Bridge that were contributed to
Pledgor by Secured Party.
C. As collateral security for the performance of Pledgor's obligations
under the Note and to induce Secured Party to make financial accommodations to
Pledgor, Debtor is willing to pledge his shares of Dominion Bridge and other
collateral to Secured Party upon the terms and subject to the conditions of this
Agreement.
A G R E E M E N T:
In consideration of the foregoing recitals and other mutual promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement, the following terms shall have the meanings indicated for purposes of
this Agreement (such meanings to be equally applicable to both their singular
and plural forms of the terms defined):
"Collateral" has the meaning ascribed to such term in Section 2.
"Dominion Bridge" has the meaning ascribed to such term in the
Recitals hereto.
"Event of Default" has the meaning ascribed to such term in the
Note.
"Letter Agreement" means that certain letter agreement dated
August 19, 1997, as amended, among Secured Party, Xxxxxx X. Xxxxxxxxx
and Xxxxxxx X. Xxxxxxxxx.
"Liabilities" means any and all liabilities and obligations or
Pledgor of every kind and description, direct or indirect, absolute or
contingent, whether due or to become due and whether now existing or
hereafter arising in connection with or under the Note.
"Note" has the meaning ascribed to such term in the Recitals
hereto.
"Shares" means all the shares of capital stock of Dominion Bridge
now or hereafter owned by Pledgor and pledged hereunder together with
all other shares delivered or required to be delivered hereunder.
"UCC" means the Uniform Commercial Code of the State of Illinois.
2. GRANT OF SECURITY INTEREST. Pledgor hereby grants to Secured
Party, as collateral security for the prompt and complete performance and
observance of the Liabilities, a security interest in, and Pledgor hereby
pledges, hypothecates, assigns, transfers, sets over and delivers unto Secured
Party, the following (collectively, the "Collateral") subject to the terms and
conditions hereinafter set forth:
(a) the Shares and the certificates representing the Shares, and
all cash, securities, dividends, rights, and other property at any
time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Shares;
(b) all additional shares of stock of Dominion Bridge at any
time and from time to time acquired by Pledgor in any manner, and the
certificates representing such additional shares, and all cash,
securities, dividends, rights, and other property at any time and from
time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of cash shares;
(c) all warrants, options and other rights to acquire capital
stock of Dominion Bridge now or at any time or times hereafter owned
by the Pledgor;
(d) all other property hereafter delivered to Pledgor in
substitution or replacement for or in addition to any of the
foregoing, all certificates and instruments representing or evidencing
such property, and all cash, securities, interest, dividends, rights,
and other property at any time and from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all thereof; and
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(e) all proceeds of any of the foregoing.
It is the intent, agreement and understanding of Pledgor and Secured Party
that the pledge hereinabove made to Secured Party shall constitute a first
priority pledge and security interest in the Collateral.
3. PERFECTION OF SECURITY INTEREST. Pledgor agrees to (a)
immediately deliver to Secured Party for deposit in a margin account all
certificates evidencing any of the Collateral which may at any time come into
the possession of Pledgor together with stock powers endorsed in blank with
respect to the Shares ("Stock Powers") and (b) at the expense of Secured Party
take such other steps as Secured Party may from time to time reasonably request
to perfect Secured Party's security interest in the Collateral under applicable
law.
4. CARE OF COLLATERAL. Secured Party shall cause reasonable care to
be exercised with respect to the custody and preservation of the Collateral.
5. VOTING AND DIVIDEND RIGHTS. Unless and until there occurs an
Event of Default, Pledgor shall have the right to vote the Shares and to receive
any and all dividends and other distributions with respect to the Collateral
(other than distributions constituting Collateral, which shall be delivered to
Secured Party pursuant to Section 3). If an Event of Default has occurred and
is continuing, Pledgor shall deliver to Secured Party (or an agent designated by
Secured Party), promptly upon request of Secured Party, such proxies and other
documents as may be necessary to allow Secured Party to exercise the voting
power with respect to any of the Shares. If an Event of Default has occurred
and is cured, the right to vote the Shares and to receive any and all dividends
and other distributions with respect to the Collateral (other than distributions
constituting Collateral, which shall be delivered to Secured Party pursuant to
Section 3) shall revert to Pledgor.
6. SHARES ADJUSTMENTS. In the event that during the term of this
Agreement, any stock dividend, reclassification, readjustment or other change is
declared or made in the capital structure of Dominion Bridge (including, without
limitation, the issuance of additional shares of capital stock of Dominion
Bridge and/or the issuance of new capital stock to Pledgor in connection with
the merger of Dominion Bridge with or into any other firm or entity), or any
warrants, options or other rights with regard to the capital stock of Dominion
Bridge are exercised, or both, then Secured Party shall have a security interest
(with the same priority as herein established) in all new substituted and
additional shares or other securities issued to or acquired by Pledgor by reason
of any such change or exercise, and such shares or other securities shall become
part of the Collateral. In the event that, during the term of this Agreement,
subscription warrants or any other rights or options shall be issued by Dominion
Bridge in connection with the Collateral or otherwise issued to or acquired by
Pledgor, then Secured Party shall have a security interest (with the same
priority as herein established) in such warrants, rights and options, and such
warrants, rights and options shall become part of the Collateral.
Notwithstanding the foregoing, nothing contained in this paragraph shall be
deemed to permit any stock dividend, issuance of additional stock,
reclassification, readjustment or other change in
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the capital structure of Dominion Bridge, or issuance of any warrants or other
rights or options by Dominion Bridge which is prohibited by this Agreement.
7. REINSTATEMENT OF LIABILITIES. To the extent that Pledgor
discharges any or all of its financial obligations to Secured Party through
making a payment or payments to Secured Party, which payment or payments or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to Pledgor or any other
party, under any bankruptcy law, state or federal law, common law or equitable
cause, then to the extent of such payment or repayment, the obligations or any
part thereof which has been paid, reduced or satisfied by such amount shall be
reinstated and continued in full force and effect as of the date such initial
payment, reduction or satisfaction occurred.
8. UNCONDITIONAL OBLIGATION. All rights of Secured Party and
security interests hereunder shall be absolute and unconditional irrespective
of:
(i) any lack of validity or enforceability of any financial
obligations of Pledgor to Secured Party or any agreement or instrument
relating thereto;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of such financial obligations;
(iii) any exchange, surrender, release or nonperfection of any
other collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of such obligations; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Pledgor in respect of the
obligations of the Pledgor under the Note or this Agreement.
9. WAIVERS.
(a) UNTIL ALL OBLIGATIONS OUTSTANDING UNDER THE NOTE HAVE BEEN PAID
IN FULL, PLEDGOR WAIVES ALL RIGHTS OF SUBROGATION (WHETHER EQUITABLE,
CONTRACTUAL, UNDER SECTION 509 OF THE BANKRUPTCY CODE OR OTHERWISE) TO THE
CLAIMS OF SECURED PARTY AGAINST COMPANY.
(b) PLEDGOR FURTHER WAIVES PRESENTMENT AND DEMAND FOR PAYMENT OF ANY
OF THE LIABILITIES, PROTEST AND NOTICE OF DISHONOR OR THE OCCURRENCE OF ANY
DEFAULT WITH RESPECT TO ANY OR ALL OF THE LIABILITIES, AND ALL OTHER
NOTICES TO WHICH PLEDGOR MIGHT OTHERWISE BE ENTITLED, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN OR IN THE SETTLEMENT AGREEMENT.
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10. REMEDIES OF SECURED PARTY FOLLOWING DEFAULT.
(a) Upon the occurrence of an Event of Default, Secured Party shall
have all rights, powers, options and remedies of a secured party under the
UCC or any other applicable law, subject to the provisions of the Letter
Agreement pertaining to the order of application of the Collateral.
(b) Notwithstanding any provision to the contrary contained herein,
any requirements of reasonable notice shall be met if ten (10) days notice
of such sale or disposition is provided to Pledgor at its address specified
herein. Any other requirement of notice, demand or advertisement for sale
is, to the extent permitted by law, waived.
(c) Delay on the part of Secured Party in the exercise of any right
or remedy shall not 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, and
no action of Secured Party permitted hereunder shall impair or affect the
rights of Secured Party in and to the Collateral.
11. TERMINATION. This Agreement shall terminate on the earlier to occur
of (i) the termination of the Security Agreement or (ii) the date all the
Liabilities have been fully paid and performed, at which time, if Pledgor shall
so request, Secured Party shall reassign and redeliver (or cause to be
reassigned or redelivered) to Pledgor, or to such person or persons as Pledgor
shall designate, such of the Collateral (if any) as shall not have been sold or
otherwise applied by Secured Party pursuant to the terms hereof and shall still
be held by it thereunder, together with appropriate instruments of reassignment
and release. Any such reassignment shall be without recourse upon or warranty by
Secured Party.
12. NOTICES. Except as otherwise expressly provided herein, any notice
hereunder to Pledgor or Secured Party shall be in writing and signed and shall
be sent by personal messenger, facsimile, overnight mail or deposited, postage
prepaid, certified mail, return receipt requested, in the United States mail,
and addressed as follows or sent to such address, as Pledgor or Secured Party
may designate by written notice:
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IF TO PLEDGOR: Dominion Park, L.L.C.
c/o Deere Park Equities, L.L.C.
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
WITH A COPY TO: Wellgate International Ltd.
c/o Dominion Bridge Corporation
000 Xxxxx Xxxx
Xxxxxxx (Xxxxxx) XXXXXX X0X 0X0
Facsimile: (000) 000-0000
IF TO SECURED PARTY: Deere Park Equities, L.L.C.
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Notice sent by personal messenger, facsimile or overnight mail shall be deemed
received upon delivery or transmission of same. Notice sent by United States
mail shall be deemed received three (3) days after deposit in the United States
mail, properly addressed as herein provided, with proper postage prepaid.
13. BINDING AGREEMENT; ASSIGNMENT. This Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and assigns, except that
Pledgor shall not be permitted to assign this Agreement or any interest herein
or in the Collateral or any part thereof, or otherwise pledge, encumber or grant
any option with respect to the Collateral or any part thereof, or any cash or
property held by Secured Party as Collateral under this Agreement, except with
the consent of and subordinate to the rights of the Secured Party.
14. MODIFICATION AND WAIVER. Neither this Agreement nor any provision
hereof may be amended, modified, waived, discharged or terminated orally nor may
any of the Collateral be released or the pledge of the security interest created
hereby extended, except by an instrument in writing duly signed by or on behalf
of Pledgor and Secured Party hereunder.
15. SECTION HEADINGS. The section headings used herein are for convenience
of reference only and shall not define or limit the provisions of this
Agreement.
16. GOVERNING LAW; INTERPRETATION. This Agreement shall be governed by
the laws of the State of Illinois without regard to the conflict of law
provisions thereto. Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of the Agreement shall be prohibited by or invalid
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under such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
of this Agreement.
17. COUNTERPARTS. This Agreement may be executed on one or more
counterparts each of which shall be deemed an original and, taken together,
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
date first above written.
PLEDGOR
DOMINION PARK, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Its: Member
SECURED PARTY
DEERE PARK EQUITIES, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, Managing-Member
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