1
EXHIBIT 10.14
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Security
Agreement"), dated the 25th day of October, 1996, made and entered into by
USTMAN INDUSTRIES, INC., a Delaware corporation ("Pledgor"), in favor of BANK
ONE, TEXAS, N.A., a national banking association (the "Bank").
W I T N E S S E T H
WHEREAS, Pledgor, NDE Environmental Corporation, a Delaware
corporation, Tanknology/NDE Corporation, a Delaware corporation, ProEco, Inc.,
a Delaware corporation, and Tanknology Canada (1988) Inc., a Canadian federal
corporation (individually, an "NDE Party", and collectively, the "NDE Parties")
and the Bank, have entered into a Loan Agreement dated as of even date herewith
(hereinafter, as the same may from time to time be amended, supplemented,
extended or otherwise modified referred to as the "Loan Agreement"), pursuant
to which the Bank has agreed to make Loans to the NDE Parties, and further,
that pursuant to the Loan Agreement, the NDE Parties have delivered and will
execute and deliver to the Bank, among other documents, Notes and other Loan
Documents (as defined in the Loan Agreement); and
WHEREAS, the obligation of the Bank to make Loans under the
Loan Agreement is conditioned on, among other things, the execution and
delivery of this Security Agreement; and
WHEREAS, the Pledgor has duly authorized the execution,
delivery, and performance of this Security Agreement;
NOW, THEREFORE, in consideration of the Bank's agreement to
make Loans on the terms and conditions of the Loan Agreement, Pledgor hereby
agrees with the Bank as follows:
ARTICLE I.
DEFINITIONS
As used in this Security Agreement, the following terms shall
have the meanings indicated:
Collateral is defined in Article II.
Event of Default is defined in Article IX.
Secured Obligations is defined in Article III.
2
Unless otherwise indicated, capitalized terms used and not
defined herein shall have the respective meanings given to them in the Loan
Agreement. Whenever the context requires, reference herein made to the single
number shall be understood to include the plural and likewise the plural shall
be understood to include the singular. Words denoting sex shall be construed
to include the masculine, feminine, and neuter, when such construction is
appropriate, and specific enumeration shall not exclude the general, but shall
be construed as cumulative.
ARTICLE II.
GRANT OF SECURITY INTEREST
To secure the full and punctual payment of the Secured
Obligations, as and when the same become due and payable in accordance with the
tenor and effect thereof, and the performance of all other obligations of the
NDE Parties under the Loan Documents, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
confessed by Pledgor, and upon and subject to the terms, provisions and
conditions hereinafter set forth, Pledgor hereby assigns, pledges, transfers
and grants unto the Bank, for the benefit of the Bank, a continuing security
interest in and to the following, whether now or after existing or acquired
(collectively, the "Collateral"):
(a) All inventory in all of its forms of the Pledgor,
wherever located, and all accessions thereto, products thereof and
documents therefor;
(b) All accounts, contracts, contract rights, chattel
paper, documents, instruments, and general intangibles of the Pledgor,
whether or not arising out of or in connection with the sale or lease
of goods or the rendering of services, and all rights of the Pledgor
now or hereafter existing in and to all security agreements,
guaranties, leases, letters of credit (including confirmations and
advices of letters of credit) and other contracts securing or
otherwise relating to any such accounts, contracts, contract rights,
chattel paper, documents, instruments, and general intangibles, and
any renewals or extensions of the foregoing;
(c) All General Intangibles of the Pledgor, including
without limitation any patents, trademarks, goodwill, any licenses in
connection therewith or rights thereunder, and any rights under
license agreements;
(d) All proprietary software of the Pledgor, any licenses
in connection therewith and any rights thereunder, including without
limitation the SIR computer system;
(e) All furniture and equipment of the Pledgor, wherever
located;
(f) All books, records, writings, data bases,
information, computer hardware and software (and all documentation
therefor or relating thereto and all licenses relating to or covering
such computer hardware, software and/or documentation), trademarks,
service
-2-
3
marks, business names, designs, logos, indicia, and/or other source
and/or business identifiers (and the goodwill of the business relating
thereto) and all registrations which have heretofore been or may
hereafter be issued thereon throughout the world, and other property
applicable to, relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Article II; and
(g) All products, offspring, rents, issues, profits,
returns, income and proceeds of and from any and all of the foregoing
Collateral (including proceeds which constitute property of the types
described in this Article, and, to the extent not otherwise included,
all payments under insurance (whether or not the Bank is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral).
The Bank is hereby authorized to receive any and all of the
Collateral as and for security for the payment of the Secured Obligations, and
to hold and apply the same in payment of the Secured Obligations. This
Security Agreement shall: (a) remain in full force and effect until payment in
full of all Obligations under the Loan Documents; (b) be binding upon Pledgor,
its successors, transferees and assigns; and (c) inure, together with the
rights and remedies of the Bank hereunder, to the benefit of the Bank.
ARTICLE III.
SECURED OBLIGATIONS
This Security Agreement secures the payment of all obligations
and liabilities of Pledgor to the Bank now or hereafter existing under or in
connection with the Loan Agreement, the Notes and other Loan Documents, whether
in respect of principal, interest, fees, expenses or otherwise, and all
obligations and liabilities of the Pledgor to the Bank now or hereafter
existing under or in connection with this Security Agreement, together with all
renewals, extensions, rearrangements, modifications, refinancings or
replacements of any of the above, (collectively, the "Secured Obligations").
ARTICLE IV.
COVENANTS OF PLEDGOR
Pledgor covenants and agrees that (i) until the Secured
Obligations shall have been either fully paid or shall have been satisfied and
discharged by action under this Security Agreement, whichever shall first
occur, or (ii) unless the prior written consent of the holder of the Notes
shall have been first obtained, Pledgor will not, except as otherwise provided
in the Loan Documents:
-3-
4
(a) sell, assign, transfer or further encumber any of the
Collateral or any interest therein;
(b) dissolve, liquidate, or consolidate with or merge
into any other corporation, or merge into it; or sell, lease, transfer
or otherwise dispose of any of its properties and assets, whether by a
single or successive transactions; or to make any amendment to its
Articles of Incorporation or By-laws;
(c) make any loan or advances of any kind whatsoever to
any NDE Party, to any subsidiary or affiliate of Pledgor, or to any
other party;
(d) declare or pay any dividends or other distributions,
either in cash or property, on any class of its stock, directly or
indirectly, issue any additional shares of its capital stock or other
securities or options or rights to purchase the same, or purchase,
redeem or retire any of its capital stock or make any other
distribution with respect to its capital stock;
(e) mortgage, pledge or subject to any lien or other
encumbrance, any of its assets, tangible or intangible, or sell or
transfer any of its tangible assets or cancel any debts or claims,
except as permitted by the Loan Documents;
(f) dispose or otherwise divest itself of the ownership,
possession, custody or control of any books and records of any NDE
Party of any nature which, in accordance with prudent and accepted
business practice, are retained for a period of time after their use,
creation or receipt;
(g) make any investments, loans or commitments, or incur
any expenses, except as permitted by the Loan Documents; and
(h) take any action that would result in an Event of
Default hereunder or under the Loan Agreement, or a default under the
other Loan Documents.
ARTICLE V.
PAYMENT OF SECURED OBLIGATIONS
If the NDE Parties shall pay to the Bank in full all of the
Secured Obligations and sums payable by the NDE Parties, then these presents
and the security interest hereby granted shall cease, terminate and become
void; and immediately thereafter the Bank shall deliver to Pledgor the
Collateral and, on demand of Pledgor, shall also execute, acknowledge, and
deliver to Pledgor at Pledgor's expense such instruments of release and/or
transfer in respect of the Collateral; otherwise, this Security Agreement shall
remain in full force.
-4-
5
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Pledgor represents and warrants to the Bank that:
(a) Pledgor (a) is a duly organized and validly existing
corporation in good standing under the laws of the State of Delaware,
and (b) has all requisite power and authority to own its properties
and conduct its business as presently conducted and to execute and
deliver, and to perform its obligations under, this Security
Agreement.
(b) There is no action, suit, proceeding, or
investigation at law or in equity by or before any court, governmental
body, agency, commission or other tribunal now pending or, to the best
knowledge of Pledgor after due inquiry, threatened which questions or
would question the validity of this Security Agreement to which
Pledgor is a party.
(c) The execution, delivery and performance of this
Security Agreement has been duly authorized by all necessary action of
Pledgor. This Security Agreement has been duly executed and delivered
by Pledgor. This Security Agreement when executed and delivered by
Pledgor will constitute a legal, valid and binding obligation of
Pledgor, enforceable according to its terms, subject, as to
enforceability, to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(d) All authorizations, consents, approvals,
registrations, filings, exemptions and licenses with or from
governmental or regulatory authorities which are necessary for the
execution and delivery of this Security Agreement or for the
performance by Pledgor of its obligations hereunder have been effected
and obtained are in full force and effect.
(e) Pledgor has good title to the Collateral and is the
sole legal owner thereof, and there are no Liens (other than the
Permitted Liens) existing against any of the Collateral of Pledgor.
(f) This Security Agreement creates a valid security
interest in the Collateral securing the payment of the Secured
Obligations.
(g) On the date hereof, the Pledgor is "located" (as that
term is defined in Section 9-103(3)(d) of the Uniform Commercial
Code) at 00000 Xxxxxx Xxx., Xxxxxxxx, Xxxxxxxx 00000.
-5-
6
ARTICLE VII.
FURTHER ASSURANCES
Pledgor covenants and agrees to from time to time promptly
execute and deliver to the Bank all such other assignments, certificates,
supplemental writings and financing statements, and do all other acts or
things, as the Bank may reasonably request in order to more fully evidence and
perfect the security interest herein created.
ARTICLE VIII.
PRESERVATION OF RIGHTS
The Bank shall have no duty to fix or preserve rights against
prior parties to the Collateral, and shall never be liable for its failure to
use diligence to collect any amount payable in respect of the Collateral, but
shall be liable only to account to Pledgor for what it may actually collect or
receive thereon.
ARTICLE IX.
DEFAULT
The term "Event of Default" as used herein, means the
occurrence of an Event of Default as defined and as provided in the Loan
Agreement.
ARTICLE X.
REMEDIES
Upon the occurrence of an Event of Default, in addition to any
and all other rights and remedies which the Bank may then have hereunder, or
under the Uniform Commercial Code of the State of Texas (hereinafter called
"Code"), or otherwise, the Bank at its option may: (i) declare the entire
unpaid balance of principal of and all accrued interest on the Secured
Obligations immediately due and payable, without notice, demand, presentment or
notice of intention to accelerate, which are hereby expressly waived; (ii)
reduce its claim to judgment, foreclose or otherwise enforce its security
interest in all or any part of the Collateral by any available judicial
procedure; (iii) after notification, if any, provided for in Article XI hereof,
sell or otherwise dispose of, at its office, or elsewhere, as chosen by the
Bank, all or any part of the Collateral, and any such sale or other disposition
may be as a unit or in parcels, at public or private sale, and by way of one or
more contracts (it being agreed that the sale of any part of the Collateral
shall not exhaust the Bank's power of sale, but sales may be made from time to
time until all of the Collateral has been sold or until all sums payable under
the Secured Obligations and hereunder have been paid in full), and at any such
sale it shall not be necessary to exhibit the Collateral; (iv) at its
discretion, retain the
-6-
7
Collateral in satisfaction of the unpaid balance of principal of and interest
upon the Secured Obligations whenever the circumstances are such that the Bank
is entitled to do so under the Code; (v) apply by appropriate judicial
proceedings for appointment of a receiver for the Collateral, or any part
thereof, and Pledgor hereby consents to any such appointment; or (vi) buy the
Collateral at any public or private sale. The Bank shall be entitled to apply
the proceeds of any sale or other disposition of the Collateral in the
following order: first, to the payment of all of its reasonable expenses,
including attorneys' fees and other legal expenses, incurred in holding and
preparing the Collateral, or any part thereof, for sale(s) or other
disposition, in arranging for such sale(s) or other disposition, and in
actually selling the same; and next, toward payment of the unpaid balance of
principal of and interest upon the Secured Obligations and other sums secured
hereby in such order and manner as the Bank, in its discretion, may deem
advisable. The Bank shall account to Pledgor for any surplus. If the proceeds
are not sufficient to pay the Secured Obligations in full, Pledgor shall remain
liable for any deficiency.
ARTICLE XI.
NOTICE OF SALE
Reasonable notification of the time and place of any public
sale of the Collateral, or reasonable notification of the time after which any
private sale or other intended disposition of the Collateral is to be made,
shall be sent to Pledgor and to any other person entitled under the Code to
notice. It is agreed that notice sent or given not less than ten (10) calendar
days prior to the taking of the action to which the notice relates is
reasonable notification and notice for the purpose of this paragraph.
ARTICLE XII.
BANK APPOINTED ATTORNEY-IN-FACT
Pledgor hereby irrevocably appoints the Bank as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor or otherwise, from time to time after the occurrence of an
Event of Default, to take any action, to execute any instruments and to
exercise any rights, privileges, options, elections or powers of Pledgor
pertaining or relating to the Collateral which the Bank may reasonably deem
necessary or desirable to preserve and enforce its security interest in the
Collateral and otherwise to accomplish the purposes of this Security Agreement.
The Bank shall not have any duty to take any such action, to execute any such
instrument, to exercise any such rights, privileges, options, elections or
powers or to sell or otherwise to realize upon any of the Collateral, as
hereinafter authorized, and the Bank shall not be responsible for any failure
to do so or delay in so doing.
-7-
8
ARTICLE XIII.
BANK MAY PERFORM
If Pledgor fails to perform any agreement contained herein,
the Bank may (but shall not be obligated to) perform, or cause performance of,
such agreement. Pledgor shall reimburse the Bank on demand for any amounts
paid or any expenses incurred by the Bank in connection therewith.
ARTICLE XIV.
BANK'S DUTIES
The powers conferred on the Bank hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. The Bank shall have no duty whatsoever to (i) take
any steps to preserve the security interest granted hereby, or (ii) preserve or
protect or take any action whatsoever with respect to, any of the Collateral.
ARTICLE XV.
AMENDMENTS, ETC.
No amendment or waiver of any provision of this Security
Agreement, nor consent to any departure by Pledgor therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Bank,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
ARTICLE XVI.
CUMULATIVE RIGHTS
All rights and remedies of the Bank are cumulative of each
other and of every other right or remedy which the Bank may otherwise have at
law or in equity or under any other contract or other writing for the
enforcement of the security interest herein or the collection of the
indebtedness evidenced by the Secured Obligations, and the exercise of one or
more rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies.
-8-
9
ARTICLE XVII.
ASSIGNABILITY
The rights, powers and interests held by the Bank hereunder,
together with the Collateral, may be transferred and assigned by the Bank, in
whole or in part, at such time and upon such terms as it may deem advisable;
and the term "Bank" shall be deemed to refer to and include such transferees
and assignees and the holder or holders from time to time of the Secured
Obligations.
ARTICLE XVIII.
NO WAIVER
The acceptance by the Bank at any time and from time to time
of part payment of the aggregate amount of the Secured Obligations then matured
shall not be deemed to be a waiver of any default then existing. No waiver by
the Bank of any default shall be deemed to be a waiver of any subsequent
default, nor shall any such waiver by the Bank be deemed to be a continuing
waiver. No delay or omission by the Bank in exercising any right or power
hereunder, or under any other writings executed by Pledgor as security for or
in connection with the Secured Obligations, shall impair any such right or
power or be construed as a waiver thereof or any acquiescence therein, nor
shall any single or partial exercise of any such right or power preclude other
or further exercise of any other right or power of the Bank hereunder.
ARTICLE XIX.
GOVERNING LAW; SEVERABILITY
THIS SECURITY AGREEMENT IS EXECUTED UNDER AND SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND THIS SECURITY
AGREEMENT IS PERFORMABLE IN TEXAS, AND PLEDGOR WAIVES THE RIGHT TO BE SUED
ELSEWHERE. Any provision of this Security Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
ARTICLE XX.
BINDING EFFECT
This Security Agreement shall be binding on Pledgor and
Pledgor's successors and assigns and shall inure to the benefit of the Bank and
the Bank's successors and assigns.
-9-
10
ARTICLE XXI.
NOTICES
Unless otherwise specified herein all notices, requests and
other communications to any party hereunder shall be in writing (including
telex, facsimile or similar writing) and shall be given to such party at its
address or telex or facsimile number set forth below or such other address or
telex or facsimile number as such party may hereafter specify by notice to the
other party. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in this Article XXI and the appropriate answerback is
received, (ii) if given by facsimile or other form of facsimile transmission,
when the recipient confirms legible transmission thereof, or (iii) if given by
any other means, when delivered at the address specified in this Article:
(a) If to Pledgor:
USTMAN INDUSTRIES, INC.
00000 Xxxxxx Xxx.
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
USTMAN INDUSTRIES, INC.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to the Bank:
BANK ONE, TEXAS, N.A.
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx-Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-10-
11
Any party hereto may at any time, by giving five (5) days written notice to the
other parties hereto, designate any other address in substitution of the
foregoing address to which such notice shall be given.
ARTICLE XXII.
HEADINGS
The article and section headings contained in this Security
Agreement are for reference purposes only and shall have no effect upon the
meaning or interpretation of any provision hereof.
ARTICLE XXIII.
MISCELLANEOUS
23.01 The principal office of the Pledgor is in Lakewood,
Colorado.
23.02 Pledgor shall, at its expense, make, procure, execute
and deliver such financing statement or amendments thereof or supplements
thereto, or other instruments, certificates and supplemental writings, and do
and deliver all acts, things, writings and assurances as the Bank may from time
to time reasonably require in order to comply with the Code, or any other
applicable law, and to preserve and protect the security interest hereby
granted. In the event, for any reason, that the law of any jurisdiction other
than the State of Texas becomes or is applicable to the Collateral, or any part
thereof, or to any of the Obligation, Pledgor agrees to execute and deliver all
such instruments and do all such other things as may be necessary or
appropriate to preserve, protect and enforce the security interests or liens of
the Bank, under the law of such other jurisdiction, to at least the same extent
as such security interests would be protected under the Code.
23.03 Pledgor shall perform, at its sole cost and expense,
any and all steps, and shall pay the amount of all expenses necessary to
obtain, preserve, perfect, defend and enforce the security interest in any of
the Collateral, the collection of the Obligation, and preserve, defend, enforce
and collect the Collateral.
23.04 Should the Collateral or any part thereof, ever be in
any manner converted into another type of property or any money or other
proceeds ever be paid or delivered to the Pledgor as a result of Pledgor's
rights in the Collateral, then, in any such event, all such property, money or
other proceeds shall become part of the Collateral, and Pledgor covenants to
forthwith pay and deliver to the Bank all of the same, which are acceptable of
delivery, and, at the same time Pledgor will properly endorse or assign the
same.
23.05 THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
-11-
12
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED as of the day and year first above written.
PLEDGOR:
USTMAN INDUSTRIES, INC.,
a Delaware corporation
By: /s/ XXX XXXXX XXXXXXX
-----------------------------------------
Xxx Xxxxx Xxxxxxx
Chairman of the Board
BANK:
BANK ONE, TEXAS, N.A.
By: /s/ XXXXXXX XXXXXXXXX-XXXXX
-----------------------------------------
Xxxxxxx Xxxxxxxxx-Xxxxx
Vice President
-12-
