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EXHIBIT F
SECURITY AGREEMENT - PLEDGE
THE WATERS TRUST, whose address is ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, hereinafter called "Owner", 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
Owner 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:
75,000 shares of common stock of Tyler Corporation.
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 Owner is or may hereafter become entitled to receive on
account of said property, and in the event that Owner shall receive any such,
Owner 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 that
certain promissory note (the "Note") of even date herewith, executed by
Houston Post Oak Partners, Ltd. ("Debtor") in favor of Secured Party in the
principal amount of $325,000.00, 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 OWNER
Owner warrants, covenants and agrees that:
(1) Except for the security interest granted hereby, the Owner is the
owner of the Collateral free of any adverse claim, security interest or
encumbrance; and the Owner will defend the Collateral against all claims and
demands of all persons at any time claiming the same or interest therein;
(2) Owner 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 Owner 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 Owner and
file same as a Financing Statement if the Secured Party shall elect to do so;
(3) Owner 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;
L. A. W.
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(4) Owner will keep the Collateral free from any adverse lien, security
interest or encumbrances;
(5) Owner 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) Owner 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.
(7) At all times during the term of the Note the outstanding principal
balance of the Note, together with accrued interest thereon shall not exceed 60%
of the value of the Collateral. The term "value of the Collateral" as used
herein shall mean the average closing price for the prior sixty (60) day period
as quoted on a national securities exchange on which the Collateral is then
listed or on an automated quotation system times the number of shares comprising
the Collateral. In the event the outstanding principal amount of the Note plus
accrued interest thereon exceeds 60% of the value of the Collateral, Owner
and/or Debtor agree to immediately deliver to the Secured Party collateral
acceptable to the Secured Party its sole discretion to further secure the Note
with a value, as reasonably determined by the Secured Party, that when added to
the then value of the Collateral will cause the then outstanding principal
balance of the Note, together with accrued interest thereon, not to exceed 60%
of the combined value of such additional collateral and the value of the
Collateral.
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
Owner's agent for the purpose of endorsing in the name of Owner 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 Owner 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 Owner and/or Debtor to deliver additional collateral as
provided;
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(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, the Owner or any of the Collateral;
(5) Death, dissolution, termination of existence, insolvency or business
failure of the Debtor, the Owner 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 commencement of
any proceedings under any bankruptcy or insolvency law by or against, the
Debtor, the Owner or any endorser, guarantor or surety for any of the
Obligations.
(6) Default in the performance of any other covenant or agreement of Debtor
or Owner 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 Owner or
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 Owner 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 or Owner, 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 or the Owner, 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 and Owner expressly waive any notice of sale or other disposition of the
Collateral and any other rights or remedies of Debtor and/or Owner 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 and Owner agree that if such notice is mailed, postage prepaid, to the
Owner 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
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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.
Owner 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, Owner 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.
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 Owner 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, Owner hereby covenants and agrees that in the event
of default by the Debtor and/or Owner (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 Owner 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 and/or Owner.
All rights of Secured Party hereunder shall inure to the benefit of its
successors and assigns; and all obligations of Debtor and/or Owner shall bind
their respective heirs, executors or administrators and their 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 Owner, the
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Obligations of all such Owners shall be joint and several. The law of the State
of Texas shall apply to this Security Agreement and its construction and
interpretation.
EXECUTED on this 12th day of June, 1998.
"OWNER"
THE WATERS TRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Sole Trustee
"DEBTOR":
HOUSTON POST OAK PARTNERS, LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, its general partner
