Exhibit 10.4(l)
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COMMERCIAL PLEDGE AGREEMENT
Principal Loan Date Maturity Loan No. Call
$172,725.73 08-18-1998 11-16-1998 5010001204 CPB
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Collateral Account Officer Initials
010 11M
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or Item.
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Borrower: AMERICAN FIRE RETARDANT CORPORATION TIN: 00-0000000
000 XXXXX XXXX
XXXXXXXXX, XX 00000
Lender: ST. XXXXXX BANK & TRUST COMPANY TIN: 000000000
Lafayette Office
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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THIS COMMERCIAL PLEDGE AGREEMENT is entered into between AMERICAN FIRE RETARDANT
CORPORATION (referred to below as "Grantor"); and ST. XXXXXX BANK & TRUST
COMPANY (referred to below as "Lender").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a continuing security interest in the Collateral to secure the indebtedness and
agrees that Lender shall have the rights stated in this Agreement with respect
to the Collateral, in addition to all other rights which Lender may have by law.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement:
Agreement. The word "Agreement" means this Commercial Pledge Agreement, as
this Commercial Pledge Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached or to be attached
to this Commercial Pledge Agreement from time to time.
Collateral. The word "Collateral" means individually, .collectively and
interchangeably Grantor's present and future rights, title and interest in
and to the following, together with any and all present and future
additions thereto, substitutions therefore, and replacements thereof,
together with any and all present and future certificates and/or
instruments evidencing any investment property, and further together with
all income and proceeds as described below:
Commercial Security Agreement dated May 21,1997 covering all inventory,
accounts, and equipment
Encumbrances. The word "Encumbrances" means individually, collectively and
interchangeably any and all presently existing and/or future mortgages,
liens, privileges and other contractual and/or statutory security interests
and rights of every nature and kind that, now and/or in the future, may
affect the Collateral or any part or parts thereof.
Event of Default. The words "Event of Default" mean individually,
collectively, and interchangeably any of the Events of Default set forth
below in the section titled "Events of Default."
Grantor. The word "Grantor" means individually, collectively and
interchangeably AMERICAN FIRE RETARDANT CORPORATION, Its successors and
assigns.
Guarantor. The word "Guarantor" means and includes individually,
collectively, interchangeably and without limitation each and all of the
guarantors, sureties, and accommodation parties in connection with the
indebtedness.
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Income and Proceeds. "The words Income and Proceeds" mean all present and
future income, proceeds, earnings, increases, and substitutions from or for
the Collateral of every kind and nature, including without limitation all
payments, interest. profits, distributions. benefits, rights, options,
warrants, dividends, stock dividends of every type and description, stock
splits, stock rights, regulatory dividends, distributions, subscriptions,
monies, claims for money due and to become due, proceeds of any insurance
on the Collateral, and all other types of proceeds, shares of stock of
different par value or no par value issued in substitution or exchange for
shares included in the Collateral, and all other property of every type and
description which Grantor is entitled to receive on account of such
Collateral, including accounts, documents, instruments, chattel paper, and
general intangibles. The words "Income and Proceeds" also specifically
include, without limitation, (a) any and all of Grantor's present and
future options, warrants and/or rights accruing from, or arising out of, or
in any way connected with the Collateral, including without limitation,
Grantor's rights to exercise and/or enforce such options, warrants or
rights; (b) any and all of Grantor's present and future rights. title and
interest in and to any and all distributions, of every type and
description, to be paid or payable under, or on account of, or attributable
to the Collateral, Including without limitation, Grantor's rights to
receive and to collect such distributions and Grantor's rights to enforce
performance, collection and/or payment thereof; (c) any and all of
Grantor's present and future rights, title and Interest in and to all
Interest, Income, profits and other benefits and distributions, of every
type and description, derived or to be derived from the Collateral,
Including without limitation, Grantor's rights to receive such Interest,
Income, profits, benefits and other distributions and Grantor's rights to
enforce performance, collection and/or payment thereof; (d) all general
Intangibles In any way related to the Collateral; and (e) any and all of
Grantees present and future rights, title and interest in and to any and
all proceeds, of every type and description, derived or to be derived from
the sale, transfer, assignment and/or other distribution of the Collateral,
including the right to receive such proceeds and Grantor's rights to
enforce performance, collection and/or payment thereof.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced by
the Note, in principal, interest, costs, expenses and attorneys' fees and
all other fees and charges, together with all other indebtedness and costs
and expenses for which Grantor is responsible under this Agreement or under
any of the Related Documents. in addition, the word "Indebtedness" also
includes any and all other loans, extensions of credit, obligations, debts
and liabilities, plus interest thereon, of Grantor, or any one or more of
them, that may now and in the future be owed to or incurred in favor of
Lender, as well as all claims by Lender against Grantor, or any one or more
of them, whether existing now or later; whether they are voluntary or
involuntary, whether related or unrelated, whether committed or purely
discretionary, due or to become due, direct or indirect or by way of
assignment, determined or undetermined, absolute or contingent, liquidated
or unliquidated; whether Grantor may be liable individually or jointly with
others, of every nature and kind whatsoever, in principal, interest, costs,
expenses and attorneys' fees and all other fees and charges; whether
Grantor may be obligated as guarantor, surety, accommodation party or
otherwise; whether recovery upon such indebtedness may be or hereafter may
become barred by the statute of limitations; and whether such indebtedness
may be or hereafter may become void or otherwise unenforceable. (initial
___)
Lender. The word "Lender" means ST. XXXXXX BANK & TRUST COMPANY TIN:
00-0000000, Its successors and assigns, and any subsequent holder or
holders of the Note, or any interest therein.
Note. The word "Note" means the note or credit agreement dated August 18,
1998, in the principal amount of $172,725.73 from AMERICAN FIRE RETARDANT
CORPORATION to Lender, together with all substitute or replacement notes
therefor, as well as all renewals, extensions, modifications, refinancings,
consolidations and substitutions of and for the note or credit agreement.
Obligor. The word "Obligor" means and includes individually, collectively
and interchangeably without limitation any and all persons or entities
obligated to pay money or to perform some other act under the Collateral.
in the context of Grantor's Collateral, the word "Obligor" means the issuer
or issuers of the Collateral.
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Related Documents. The words "Related Documents" mean and include
individually, collectively, interchangeably and without limitation all
promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, collateral
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with
the Indebtedness.
DELIVERY OF COLLATERAL. Contemporaneous with the execution of this Agreement,
Grantor has delivered or will deliver to Lender or Lender's designated agent the
above described Collateral, including without limitation, any and all
certificates and/or instruments evidencing Grantor's Collateral subject to this
Agreement, appropriately endorsed in blank, together with irrevocable stock
powers also endorsed in blank. As long as this Agreement remains in effect,
Grantor further agrees to immediately deliver to Lender, or Lender's designated
agent, any and all additions to and/or substitutions or replacements for the
Collateral. In the event that Grantor is unable to deliver any of the Collateral
to Lender or Lender's designated agent at the time this Agreement is executed
,or should Grantor ever withdraw or obtain temporary possession of any of the
Collateral while this Agreement remains in effect, either under a trust receipt
or otherwise, Grantor unconditionally agrees to deliver Immediately to Lender
the Collateral or, alternatively, such substitute or replacement collateral
security as may then be satisfactory to Lender.
CONTINUING SECURITY INTEREST TO SECURE PRESENT AND FUTURE INDEBTEDNESS. Grantor
affirms that Grantor has granted a continuing security interest in the
Collateral in favor of Lender to secure any and all present and future
indebtedness of Grantor in favor of Lender, as may be outstanding from time to
time, in principal, interest, costs, expenses, attorneys' fees and other fees
and charges, with the continuing preferences and priorities provided under
applicable Louisiana law.
DURATION. This Agreement shall remain in full force and effect until such time
as this Agreement and the security interests created hereby are terminated and
cancelled by Lender under a written cancellation instrument in favor of Grantor.
GRANTOR'S OBLIGATIONS TO DELIVER COLLATERAL CERTIFICATES, DISTRIBUTIONS, ETC. In
the event that Grantor should ever receive any: (a) certificates and/or
instruments representing any of the Collateral, including without limitation,
any certificates and/or instruments representing Collateral issued in connection
with any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock split, spin-off, or
split-off of any renewal or refinancing of any Collateral; (b) options, warrants
or rights, whether as an addition to or in substitution of, or exchange for, any
of the Collateral, or otherwise; (c) distributions payable in property,
including securities issued by third parties other than the Issuer(s) of the
Collateral; (d) cash and/or cash equivalent interest or other distributions;
and/or (e) proceeds and/or payments, whether in cash or otherwise, derived or to
be derived from the sale, transfer, assignment - delivery or other distribution
of the Collateral; then Grantor shall accept the same as Lender's agent, in
trust for and on behalf of Lender, and Grantor shall deliver them forthwith to
Lender in the exact form received, with Grantor's endorsement in blank, when
necessary, and/or with Irrevocable Collateral powers duly executed by Lender in
blank, with the same to be held in pledge by Lender, subject to the terms and
conditions of this Agreement, as collateral security for repayment of the
indebtedness, as heretofore stated.
LENDER'S RIGHT TO REGISTER COLLATERAL IN LENDER'S NAME. Grantor unconditionally
agrees that Lender may, at Lender's sole and exclusive option, and at any time,
whether or not an Event of Default has occurred or exists under this Agreement,
require that the Collateral and any and all certificates issued thereunder, be
registered in Lender's name or in the name of Lender's designated nominee.
Grantor additionally agrees that, upon Lender's request, Grantor will cause the
Collateral Issuer(s), transfer agent(s), or registrar(s) to effect such
registration.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. Grantor
represents and warrants to Lender that:
Ownership. Grantor at all times will continue to be the legal and lawful
owner of the Collateral free and clear of all security interests, liens,
Encumbrances and claims of others except as disclosed to and accepted by
Lender in writing prior to execution of this Agreement.
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Right to Pledge. Grantor has the right, power and authority to enter into
this Agreement and to grant a continuing security Interest in the
Collateral in favor of Lender.
Authorization. Grantor's execution, delivery and performance of this
Agreement have been duly authorized, and do not conflict with, and will not
result in a violation of, or constitute or give rise to an event of default
under Grantor's Articles of Incorporation or Bylaws, or any agreement or
other Instrument which may be binding upon Grantor, or under any law or
governmental regulation or court decree or order applicable to Grantor
and/or Grantor's properties.
Perfection of Security Interest. Upon delivery of the Collateral to Lender,
including without limitation delivery of the certificates and/or
instruments evidencing and representing the Collateral, this Agreement
shall create a valid first lien upon, and perfect a security interest in
the Collateral subject to no prior security interest, lien, charge,
Encumbrance or other agreement purporting to grant to any third party a
security interest in the Collateral.
Binding Effect. This Agreement is binding upon Grantor, as well as
Grantor's heirs, successors, representatives and assigns, and is legally
enforceable in accordance with its terms.
No Further Assignment. Grantor has not, and will not, sell, assign,
transfer, encumber or otherwise dispose of any of Grantor's rights in the
Collateral except as provided in this Agreement.
No Defaults. There are no defaults existing under the Collateral, and there
are no offsets or counterclaims to the same. Grantor will strictly and
promptly perform each of the terms, conditions, covenants and agreements
contained in the Collateral which are to be performed by Grantor, if any.
No Violation. The execution and delivery of this Agreement will not violate
any law or agreement governing Grantor or to which Grantor is a party, and
its certificate or articles of incorporation and bylaws do not prohibit any
term or condition of this Agreement.
Survivorship of Representations and Warranties. The foregoing
representations and warranties and all other representations and warranties
of Grantor under this Agreement shall be continuing in nature and shall
survive the termination of this Agreement.
LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO COLLATERAL. Lender shall have
the following rights in addition to all other rights it may have by law:
Maintenance and Protection of Collateral. Lender may, but shall not be
obligated to, take such steps as it deems necessary or desirable to
protect, maintain, insure, store, or care for the Collateral, including
payment of any liens or claims against the Collateral. Lender may charge
any cost incurred in so doing to Grantor.
Income and Proceeds from the Collateral. Lender shall have the right,
whether or not an Event of Default exists under this Agreement, to directly
collect and receive any and all income and Proceeds as such become due and
payable. In order to permit the foregoing, Grantor unconditionally agrees
to deliver to Lender, immediately following demand, any and all such Income
and Proceeds that may be received by or that may be payable to Grantor.
Grantor further unconditionally agrees that Lender shall have the right to
notify the Issuer(s) of the Collateral and all other Obligors to pay and/or
deliver such Income and Proceeds directly to Lender or Lender's nominee at
an address to be designated by Lender, and to do any and all other things
as Lender may deem necessary and proper, within Lender's sole discretion,
to carry out the terms and intent of this Agreement. Lender shall have the
further right, where appropriate, and within Lender's sole discretion, to
file suit, either In Lender's own name or in the name of Grantor, to
collect and/or enforce performance, payment and/or delivery of any and all
such Income and Proceeds.
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Where it is necessary for Lender to enforce performance, payment and/or
delivery of any such income and Proceeds from the Obligor therefor, Grantor
unconditionally agrees that Lender may compromise or take such other
actions, either In Grantor's name or in the name of Lender, as Lender may
deem appropriate, within Lender's sole judgment, with regard to
performance, collection and/or payment of the same, without affecting the
obligations and liabilities of Grantor under this Agreement and/or any
indebtedness secured hereby. in order to further permit the foregoing,
Grantor agrees that Lender shall have the additional irrevocable rights,
coupled with an Interest, to: (a) receive, open and dispose of all mail
addressed to Grantor pertaining to any of the Collateral; (b) notify the
postal authorities to change the address and delivery of mail addressed to
Grantor pertaining to any of the Collateral to such address as Lender may
designate; and (c) endorse Grantor's name on any and all notes,
acceptances, checks, drafts, money orders or other Instruments of payment
of such Income and Proceeds that may come into Lender's possession, and to
deposit or otherwise collect the same, applying such funds to the unpaid
balance of the indebtedness in the manner provided below.
In the event that Grantor should, for any reason, receive any income and
Proceeds subject to this Agreement, and Grantor should deposit such funds
into one or more of Grantor's deposit accounts, no matter where located,
Lender shall have the additional right following any Event of Default under
this Agreement, to attach any and all of Grantor's deposit accounts in
which such funds may have been deposited, whether or not any such funds
were commingled with other funds of Grantor, and whether or not any such
funds then remain on deposit in such an account or accounts. to this end,
Grantor additionally collaterally assigns and pledges to Lender and grants
to Lender a continuing security interest in and to any and all of Grantor's
present and future rights, title and interest in and to any and all funds
that Grantor may now and/or in the future maintain on deposit with banks,
savings and loan associations and other financial institutions, as well as
money market accounts with other types of entities, in which Grantor at any
time may deposit any such Income and Proceeds.
Application of Cash. At Lender's option, Lender may apply any cash, whether
included in the Collateral or received as. Income and Proceeds or through
liquidation, sale, or retirement, of the Collateral, to the satisfaction of
the, indebtedness or such portion thereof as Lender shall choose, whether
or not matured. Lender may alternatively and at its sole option and
election hold such cash as additional "cash collateral" to secure the
Indebtedness.
Transactions with Others. Lender may (a) extend time for payment or other
performance, (b) grant a renewal or change In terms or conditions, or (c)
compromise, compound or release any obligation, with any one or more
Obligors, endorsers, or Guarantors of the Indebtedness as Lender deems
advisable, without obtaining the prior written consent of Grantor, and no
such act or failure to act shall affect Lender's rights against Grantor or
the Collateral.
All Collateral Secures Indebtedness. All Collateral shall be security for
the Indebtedness, whether the Collateral Is located at one or more offices
or branches of Lender and whether or not the office or branch where the
Indebtedness Is created Is aware of or relies upon the Collateral.
EXPENDITURES BY LENDER. Grantor recognizes and agrees that Lender may incur
certain expenses In connection with Lender's exercise of rights under this
Agreement. if not discharged or paid when due, Lender may (but shall not be
obligated to) discharge or pay any amounts required to be discharged or paid by
Grantor under this Agreement, Including without limitation all taxes,
Encumbrances and other claims, at any time levied or placed on the Collateral.
Lender also may (but shall not be obligated to) pay all costs for Insuring,
maintaining and preserving the Collateral, Including without limitation, the
purchase of Insurance protecting only Lender's Interest In the Collateral.
Lender may further take such other action or actions and incur such additional
expenditures as Lender may deem to be necessary and proper to cure or rectify
any actions or inactions on Grantor's part as may be required under this
Agreement. Nothing under this Agreement or otherwise shall obligate Lender to
take any such actions or to incur any such additional expenditures on Grantor's
behalf, or as making Lender in any way responsible or liable for any loss,
damage, or injury to the Collateral, to Grantor, or to any other person or
persons, resulting from Lender's election not to take such actions or to incur
such additional expenses. In addition, Lender's election to take any such
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actions or to incur such additional expenditures shall not constitute a waiver
or forbearance by Lender of any Event of Default under this Agreement. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment. All such expenses shall become a part of the
Indebtedness and, at Lender's option, will (a) be payable on demand, (b) be
added to the balance of the Note and be apportioned among and be payable with
any payments to become due during either (i) the term of any applicable
Insurance policy or (ii) the remaining term of the Note, or (c) be treated as a
balloon payment which will be due and payable at the Note's maturity. This
Agreement also will secure payment of these amounts. Such right shall be In
addition to all other rights and remedies to which Lender may be entitled upon
the occurrence of an Event of Default.
LIMITATIONS ON OBLIGATIONS OF LENDER. Lender shall use ordinary reasonable care
in the physical preservation and custody of the Collateral in Lender's
possession, but shall have no other obligation to protect the Collateral or Its
value. In particular, but without limitation, Lender shall have no
responsibility for (a) any depreciation In value of the Collateral or for the
collection or protection of any Income and Proceeds from the Collateral, (b)
preservation of rights against parties to the Collateral or against third
persons, (c) ascertaining any maturities, calls, conversions, exchanges, offers,
tenders. or similar matters relating to any of the Collateral, or (d) Informing
Grantor about any of the above, whether or not Lender has or is deemed to have
knowledge of such matters. Except as provided above, Lender shall have no
liability for depreciation or deterioration of the Collateral.
EVENTS OF DEFAULT. The following actions or inactions or both shall constitute
Events of Default under this Agreement:
Default Under Loan Agreement. Should an event of default occur or exist
under the terms of Grantor's Loan Agreement in favor of Lender.
Default under the Indebtedness. Should Grantor default In the payment of
principal or interest under any of the indebtedness.
Default under this Agreement. Should Grantor violate, or fall to comply
fully with any of the terms and conditions of, or default under this
Agreement.
Default Under Other Agreements. Should any event of default occur or exist
under any Related Document which directly or indirectly secures repayment
of any of the Indebtedness.
Other Defaults In Favor of Lender. Should Grantor or any Guarantor default
under any other loan, extension of credit, security agreement, or
obligation in favor of Lender.
Default In Favor of Third Parties. Should Grantor or any Guarantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Grantor's property, or Grantor's or any
Guarantor's ability to perform their respective obligations under this
Agreement, or any Related Document, or pertaining to the indebtedness.
Insolvency. Should the suspension, failure or Insolvency, however
evidenced, of Grantor or any Guarantor occur or exist.
Readjustment of Indebtedness. Should proceedings for readjustment of
Indebtedness, reorganization, composition or extension under any insolvency
law be brought by or against Grantor or any Guarantor.
Assignment for Benefit of Creditors. Should Grantor or any Guarantor file
proceedings for a respite or make a general assignment for the benefit of
creditors.
Receivership. Should a receiver of all or any part of Grantor's property,
or the property of any Guarantor, be applied for or appointed.
Dissolution Proceedings. Should proceedings for the dissolution or
appointment of a liquidator of Grantor or any Guarantor be commenced.
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False Statements. Should any representation or warranty of Grantor or any
Guarantor made in connection with the indebtedness prove to be incorrect or
misleading in any respect.
Insecurity. Should Lender deem itself to be insecure with regard to
repayment of the Indebtedness.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender may exercise any one or more of the
following rights and remedies:
Accelerate Indebtedness. Lender, at its sole option, may accelerate the
maturity and declare and demand immediate payment in full of any and all
indebtedness secured hereby in principal, interest, costs, expenses,
attorneys' fees and other fees and charges.
Collect the Collateral. Collect any of the Collateral and, at Lender's
option retain possession thereof while suing on the indebtedness.
Sell the Collateral. Sell the Collateral, at Lender's discretion, as a unit
or in parcels, at one or more public or private sales, or through any
exchange or broker, at such prices and on such terms as Lender may deem
best, for cash or on credit or future delivery, without assumption of any
credit risk, without any further demand or notice upon Grantor for
performance, without appraisal, without the Intervention of any court and
without any formalities other than those provided herein. For purposes of
selling the Collateral, Lender has been and Is hereby made and constituted
the agent of Grantor, such agency being coupled with an Interest. Unless
the Collateral is perishable or threatens to decline speedily in value or
Is of a type customarily sold on a recognized market, Lender shall give or
mail to Grantor, or any of them, notice at least ten (10) days in advance
of the time and place of any public sale, or of the date after which any
private sale may be made. Grantor agrees that any requirement of reasonable
notice is satisfied if Lender mails notice by ordinary mail addressed to
Grantor, or any of them, at the last address Grantor has given Lender in
writing. If a public sale Is held, there shall be sufficient compliance
with all requirements of notice to the public by a single publication In
any newspaper of general circulation in the parish or county where the
Collateral Is located, setting forth the time and place of sale and a brief
description of the property to be sold. Lender may be a purchaser at any
public sale. Grantor agrees that any such sale shall be conclusively deemed
to be conducted in a commercially reasonable manner If It is made
consistent with the standard of similar sales of collateral by commercial
banks In Lafayette, Louisiana.
Rights and Remedies with Respect to Investment Property, Financial Assets
and Related Collateral. In addition to other rights and remedies granted
under this Agreement and under applicable law, Lender may exercise any or
all of the following rights and remedies, at any time, and from time to
time, whether or not an Event of Default has occurred or exists: (a)
register with any Issuer or broker or other securities Intermediary any of
the Collateral consisting of Investment property or financial assets
(collectively herein, 'Investment property") In Lender's sole name or In
the name of Lender's broker, agent or nominee; (b) cause any Issuer, broker
or other securities Intermediary to deliver to Lender any of the Collateral
consisting of securities, or Investment property capable of being
delivered; (c) enter Into a control agreement or power of attorney with any
Issuer or securities Intermediary with respect to any Collateral consisting
of Investment property, on such terms as Lender may deem appropriate, In
Its sole discretion. Including without limitation, an agreement granting to
Lender any of the rights provided hereunder without further notice to or
consent by Grantor; (d) execute any such control agreement on behalf of and
In the name of Grantor, with Grantor hereby irrevocably appointing Lender
as Its agent and attorney-4n-fact, coupled with an Interest, for the
purpose of executing such control agreement on behalf of Grantor; (e)
exercise any and all rights of Lender under any such control agreement or
power of attorney; (f) exercise any voting, conversion, registration,
purchase, option, or other rights with respect to any Collateral; (g)
collect, with or without legal action, and Issues receipts concerning, any
notes, checks, drafts, remittances or distributions that are paid or
payable with respect to any Collateral consisting of Investment property.
Any control agreement entered with respect to any Investment property shall
contain the following provisions, at Lender's discretion. Lender shall be
authorized to Instruct the Issuer, broker or other securities Intermediary
to take or to refrain from taking such actions with respect to the
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Investment property as Lender may Instruct, without further notice to or
consent by Grantor. Such actions may Include without limitation the
Issuance of entitlement orders, account Instructions, general trading or
buy or sell orders, transfer and redemption orders, and stop loss orders.
Lender shall be further entitled to Instruct the Issuer, broker or
securities Intermediary to sell or to liquidate any Investment property, or
to pay the cash surrender or account termination value with respect to any
and all Investment property, and to deliver all such payments and
liquidation proceeds to Lender. Any such control agreement shall contain
such authorizations as are necessary to place Lender In "control" of such
Investment collateral, as contemplated under the provisions of the Uniform
Commercial Code, and shall fully authorize Lender to Issue "entitlement
orders" concerning the transfer, redemption, liquidation or disposition of
Investment collateral, In conformance with the provisions of the Uniform
Commercial Code.
Foreclosure. Maintain a judicial suit for foreclosure and sale of the
Collateral.
Specific Performance. Lender may, in addition to the foregoing remedies, or
in lieu thereof, and in Lender's sole discretion, commence an appropriate
action or actions against Grantor seeking specific performance of any
covenants contained herein, or in aid of the execution or enforcement of
any power herein granted.
Transfer Title. Effect transfer of title upon sale of all or part of the
Collateral. For this purpose, Grantor Irrevocably appoints Lender as its
attorney-in-fact to execute endorsements, assignments and Instruments in
the name of Grantor and each of them (if more than one) as shall be
necessary or reasonable.
Other Rights and Remedies. Have and exercise any or all of the rights and
remedies of a secured creditor under the provisions of the Louisiana
Commercial Laws (La. R.S. 10: 9-101, at seq.), at law, In equity, or
otherwise.
Application of Proceeds and Payments. Any and all proceeds, interest,
profits, and income and Proceeds that Lender actually receives and
collects, whether resulting from the public or private sale of the
Collateral and/or collection or exercise of any of Lender's rights provided
hereunder, shall be applied first to reimburse Lender for its costs of
collecting the same (including, but not limited to, any attorneys' fees
incurred by Lender and Lender's court costs, whether or not there is a
lawsuit, Including any fees on appeal incurred by Lender In connection with
the collection or sale of the Collateral), with the balance being applied
to principal, interest, costs, expenses, attorneys' fees and other fees and
charges under the Indebtedness, in such order and with such preferences and
priorities as Lender shall determine within its sole discretion.
Cumulative Remedies. All of Lender's rights and remedies, whether evidenced
by this Agreement or by any other writing, shall be cumulative and may be
exercised singularly or concurrently. Election by Lender to pursue any
remedy shall not exclude pursuit of any other remedy, and an election to
make expenditures or to take action to perform an obligation of Grantor
under this Agreement, after Grantor's failure to perform, shall not affect
Lender's right to declare a default and to exercise Its remedies. Nothing
under this Agreement or otherwise shall be construed so as to not affect
Lender's right to declare a default and to exercise its remedies. Nothing
under this agreement, after Grantor's failure to perform, shall not affect
Lender's right to declare a default and to exercise its remedies. Nothing
under this Agreement or otherwise shall be construed so as to limit or
restrict the rights and remedies available to Lender following an Event of
Default, or in any way to limit or restrict the rights and ability of
Lender to proceed directly against Grantor and/or against any Guarantor
and/or to proceed against any other collateral directly or indirectly
Page 8
ASSIGNMENT OF INDEBTEDNESS; TRANSFER OF COLLATERAL. Grantor hereby recognizes
and agrees that Lender may assign all or any portion of the Indebtedness to one
or more third party creditors. Such transfers may Include, but are not limited
to, sales of participation Interests in the Indebtedness. Grantor specifically
agrees and consents to all such transfers and assignments and further waives any
subsequent notice of such transfers or assignments as may be provided under
applicable Louisiana law. Grantor additionally agrees that any and all of
Grantor's other and future loans, extensions of credit, liabilities and
obligations In favor of such a third party assignee will be secured by the
Collateral. Grantor further agrees that Lender may transfer all or any portion
of the Collateral to such a third party assignee, in which case Lender will be
fully released from any and all of Lender's obligations and responsibilities to
Grantor with regard to the transferred Collateral. Any third party creditor to
whom the Collateral is transferred will acquire all of Lender's rights and
powers with respect to the transferred Collateral, with Lender retaining all
powers and rights with regard to any of the Collateral which Is not transferred
to another party.
PROTECTION OF LENDER'S SECURITY RIGHTS. Grantor agrees to appear In and to
defend all actions or proceedings purporting to affect Lender's security rights
and Interests granted under this Agreement. In the event that Lender elects to
defend any such action or proceeding, Grantor agrees to reimburse Lender for
Lender's costs associated therewith, Including without limitation, Lender's
attorneys' fees, which additional costs and expenses shall be secured by this
Agreement.
INDEMNIFICATION OF LENDER. Grantor agrees to Indemnify, to defend and to save
and hold Lender harmless from any and all claims, suits, obligations, damages,
losses, costs, expenses (including without limitation, Lender's reasonable
attorneys' fees), demands, liabilities, penalties, fines and forfeitures of any
nature whatsoever which may be asserted against or Incurred by Lender, arising
out of or In any manner occasioned by this Agreement or the rights and remedies
granted to Lender hereunder. The foregoing Indemnity provision shall survive the
cancellation of this Agreement as to all matters arising or accruing prior to
such cancellation, and the foregoing Indemnity provision shall further survive
In the event that Lender elects to exercise any of the remedies as provided
under this Agreement following any Event of Default hereunder.
ADDITIONAL OBLIGATIONS OF GRANTOR. Grantor shall have the following additional
obligations under this Agreement:
Additional Collateral. In the event that any of the Collateral should at
any time decline In value or become unsatisfactory to Lender for any
reason, Grantor agrees to Immediately provide Lender with such additional
collateral security as may then be acceptable to Lender.
No Sale or Encumbrance. As long as this Agreement remains In effect,
Grantor unconditionally agrees not to sell, option, assign, pledge, or
create or permit to exist any lion or security Interest In or against any
of the Collateral In favor of any person other than Lender.
No Settlement or Compromise of Rights. Grantor will not, without the prior
written consent of Lender, compromise, settle, adjust or extend payment
under any of Grantor's Collateral.
Notice to Obligors. Upon request by Lender, Grantor will immediately notify
Individual obligors under Grantor's Collateral and/or Rights, advising such
obligors of the fact that their obligations have been collaterally assigned
and pledged to Lender. - In the event that Grantor should fail to provide
such notices for any reason, upon request by Lender, Grantor agrees that
Lender may forward appropriate notices to such obligors, either In Lender's
name or In the name of Grantor.
Additional Pledge Agreement; Effect. Grantor acknowledges and agrees that
Grantor may, from time to time, one or more times, enter Into additional
pledge and security agreements with Lender under which Grantor may
undertake to pledge or grant to Lender a security interest In the same
Collateral. Grantor further acknowledges and agrees that the execution of
such additional agreements, Including any such agreements now in effect,
will not have the effect of cancelling, novating or otherwise modifying
this Agreement; It being Grantor's full Intent and agreement that all such
pledge agreements (including this Agreement) shall be cumulative In nature
and shall remain In full force and effect until expressly cancelled by
Lender under a written cancellation Instrument delivered to Grantor.
Page 9
Additional Documents. Grantor agrees, at any time, from time to time, one
or more times, upon written request by Lender, to execute and deliver such
further documents and do such further acts and things as Lender may
reasonably request, within Lender's sole discretion, to effect the purposes
of this Agreement.
Notification of Lender. Grantor will promptly deliver to Lender all written
notices, and will promptly give Lender written notice of any other notices
received by Grantor with respect to the Collateral.
EFFECT OF WAIVERS. Grantor has waived, and/or does by these presents waive,
presentment for payment, protest, notice of protest and notice of nonpayment
under all of the Indebtedness secured by this Agreement. Grantor has further
waived, and/or does by these presents waive, all pleas of division and
discussion, and all similar rights with regard to the Indebtedness, and agrees
that Grantor shall remain liable, together with any and all Guarantors of the
Indebtedness, on a "solidary" or "Joint and several" basis. Grantor further
agrees that discharge or release of any party who is, may, or will be liable to
Lender under any of the Indebtedness, or the release of the Collateral or any
other collateral directly or Indirectly securing repayment of the same, shall
not have the effect of releasing or otherwise diminishing or reducing the actual
or potential liability of Grantor and/or any other party or parties guaranteeing
payment of the Indebtedness, who shall remain liable to Lender, and/or remain
liable to Lender, and/or of releasing any Collateral or other collateral that Is
not expressly released by Lender.
Grantor additionally agrees that Lenders acceptance of payments other than In
accordance with the terms of any agreement, or agreements governing repayment of
the Indebtedness, or Lender's subsequent agreement to extend or modify such
repayment terms, shall likewise not have the effect of releasing Grantor, and/or
any other party or parties guaranteeing payment of the Indebtedness, from their
respective obligations to Lender, and/or of releasing any of the Collateral or
other collateral directly or indirectly securing repayment of the Indebtedness.
In addition, no course of dealing between Grantor and Lender, nor any failure or
delay on the part of Lender to exercise any of the rights and remedies granted
to Lender under this Agreement, or under any other agreement or agreements by
and between Grantor and Lender, shall have the effect of waiving any of Lender's
rights and remedies. Any partial exercise of any rights and remedies granted to
Lender shall furthermore not constitute a waiver of any of Lender's other rights
and remedies, It being Grantor's Intent and agreement that Lender's rights and
remedies shall be cumulative In nature. Grantor further agrees that, upon the
occurrence of any Event of Default under this Agreement, any waiver or
forbearance on the part of Lender to pursue the rights and remedies available to
Lender, shall be binding upon Lender only to the extent that Lender specifically
agrees to any such waiver or forbearance In writing. A waiver or forbearance as
to one Event of Default shall not constitute a waiver or forbearance as to any
other Event of Default. None of the warranties, conditions, provisions and terms
contained In this Agreement or any other agreement, document, or Instrument now
or hereafter executed by Grantor and delivered to Lender, shall be deemed to
have been waived by any act or knowledge of Lender, Lender's agents, officers or
employees; but only by an Instrument in writing specifying such waiver, signed
by a duly authorized officer of Lender and delivered to Grantor.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth In this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given In writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment. Applicable Law. This Agreement has been delivered to Lender and
accepted by Lender In the State of Louisiana. This Agreement shall be
governed by and construed In accordance with the laws of the State of
Louisiana.
Page 10
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of
Lender's costs and expenses, Including attorneys' fees and Lender's legal
expenses, Incurred In connection with the enforcement of this Agreement.
Lender may pay someone else to help enforce this Agreement, and Grantor
shall pay the costs and expenses of such enforcement. Costs and expenses
Include Lender's attorneys' fees and legal expenses whether or not there Is
a lawsuit, Including attorneys' fees and legal expenses for bankruptcy
proceedings (and Including efforts to modify or vacate any automatic stay
or Injunction), appeals, and any anticipated post-judgment collection
services. Grantor also shall pay all court costs and such additional fees
as may be directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to Interpret or define the provisions
of this Agreement.
Notices. To give Grantor any notice required under this Agreement, Lender
may hand deliver or mail such notice to Grantor. Lender will deliver or
mall any notice to Grantor (or any of them if more than one) at any address
which Grantor may have given Lender by written notice as provided in this
paragraph. In the event that there is more than one Grantor under this
Agreement, notice to a single Grantor shall be considered as notice to all
Grantors. To give Lender any notice under this Agreement, Grantor (or any
Grantor) shall mall the notice to Lender by registered or certified mall at
the address specified In this Agreement, or at any other address that
Lender may have given to Grantor (or any Grantor) by written notice as
provided In this paragraph. All notices required or permitted under this
Agreement must be In writing and will be considered as given on the day It
Is delivered by hand or deposited In the U.S. Mail, by registered or
certified mall to the address specified In this Agreement.
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however. If the offending provision
cannot be so modified, It shall be stricken and all other provisions of
this Agreement In all other respects shall remain valid and enforceable.
Sole Discretion of Lender. Whenever Lenders consent or approval is required
under this Agreement, the decision as to whether or not to consent or
approve shall be in the sole and exclusive discretion of Lender and
Lender's decision shall be final and conclusive.
Successors and Assigns Bound; Solidary Liability. Grantor's obligations and
agreements under this Agreement shall be binding upon Grantor's successors,
heirs, legatees, devisees, administrators, executors and assigns. In the
event that there is more than one Grantor under this Agreement, all of the
agreements and obligations made and/or incurred by Grantors under this
Agreement shall be on a "solidary" or "joint and several" basis.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS PLEDGE AGREEMENT,
AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AUGUST 18, 1998.
GRANTOR:
AMERICAN FIRE RETARDANT CORPORATION
/s/ Xxxxxx X. Xxxxx
---------------------------------------------
By: XXXXXX X. XXXXX, EXECUTIVE VICE PRESIDENT
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